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McClendon boosts
Utica investment
Pieter Schelte set for
Yme topsides job
Page 39
Page 16
THE INTERNATIONAL OIL & GAS NEWSPAPER
upstreamonline.com
VOL 19 • WEEK 05 • 31 JANUARY 2014
Wuchuan set for Swiber vessel prize
Singapore-based Swiber Offshore is set to commission China’s Wuchang Shipbuilding Industry (Wuchuan) to
build a pipelay vessel with the aim of taking on bigger players in deep-water operations.
Page 3
Total steps
up drive at
Kaombo
Project: Total
chief executive
Christophe de
Margerie
Photo:
REUTRTS/
SCANPIX
FRENCH giant Total is taking
forward its challenging deepwater Kaombo project off Angola
by submitting to state oil
company Sonangol a list of its
recommended bidders to provide
two subsea production systems
and a pair of floating production,
storage and offloading vessels.
Pages 2&3
Field narrows in race for
Nasr oilfield tender
NEWS
2
COMMENT
10
POLITICS
12
14
SHALE
36
LNG
3
The number of
bidders in Cairn
India’s Ravva
re-tender.
Page 20
Chevron push
Re-tender on offer for
Gendalo-Gehem
production units off
Indonesia.
Page 6
Gas fix for US
Obama sees natural
gas as ‘bridge fuel’
for country’s
economy. Pages 12&13
EOG sets sights on
Goodland Lime play in
East Texas.
Pages 28&29
WORLD
Repsol Sinopec eyes
BM-C-33 acreage
development off
Brazil.
Page 4
Assets swoop
Devon confident in
Mississippian Woodford
Page 5
Campos plan
Pages 36&37
40
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Meeting challenges
you haven’t even thought of yet.
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Copyright © FMC Technologies, Inc. All Rights Reserved.
www.fmctechnologies.com
50
2
31 January 2014
NEWS
BRIEFS
SBM Offshore was also competing for the
job but Total’s recommendation is said
“not to be in its favour”.
Source on Total’s Kaombo project
ANGOLA
BRAZIL
Parque das
Conchas sale
ANGLO-Dutch supermajor
Shell has reached an
agreement with Qatar
Petroleum International to
sell it a 23% working
interest in the Parque das
Conchas heavy oil
development in Brazil for
$1 billion.
The sale takes place a few
months after Shell and
Indian partner Oil &
Natural Gas Corporation
exercised their preemption rights to prevent
Chinese group Sinochem
from acquiring a 35% stake
in Parque das Conchas
from Petrobras.
Shell payed about $1
billion to Petrobras to
increase its stake in the
field from 50% to 73%, but it
is now selling the 23%
interest to Qatar Petroleum
for the same price.
Parque das Conchas is
producing 50,000 barrels
per day of oil equivalent.
CANADA
Enbridge
Expansion
ENBRIDGE will spend
C$200 million (US$179
million) to expand its
Sunday Creek Terminal in
northern Alberta to
support growing
production from Cenovus
Energy’s Christina Lake oil
sands project.
The Canadian pipeline
operator will build
additional facilities
including a new site
adjacent to the terminal, a
new 350,000-barrel tank,
and carry out civil work for
a future tank.
“We are pleased to move
forward in supporting the
planned production
growth from the Christina
Lake project,” said
Enbridge.
MEXICO
PMI awarded
Pemex flotels
MEXICO’S state-run Pemex
has awarded its PMI
commercial subsidiary the
contract to build and
supply two flotels in a deal
that marks the company’s
first attempt to hand out a
major contract following
energy reform.
Pemex made the award
after PMI bid $314 million.
The 10-year lease on the
flotel begins in 2016. Pemex
described the process as
being “totally transparent”.
Challenge: Total chief executive Christophe de Margerie
Total and Sonangol review
French major advances its deepwater project off Angola with
Aker and Modec said to be in the running for subsea production
systems and pair of FPSOs
IAIN ESAU and
TAN HWEE HWEE
London and Singapore
FRENCH giant Total is taking forward its challenging deep-water
Kaombo project off Angola by submitting to state oil company
Sonangol a list of its recommended bidders to provide two subsea
production systems and a pair of
floating production, storage and
offloading vessels.
Industry sources, while cau-
tious about second guessing Sonangol’s final decisions, tipped
Aker to be Total’s preferred bidder
to win a $1 billion contract to provide Kaombo’s subsea production
systems, involving more than 60
trees and about 20 manifolds.
Tokyo-based Modec is thought
by observers to be Total’s recommended supplier of the FPSOs,
S
14
KAOMBO
IS LOCATED IN PROLIFIC BLOCK 32
Soyo
Manjercao Alho Cominhos
Colorau
Cola
Gindungo
Caril
Canela
Block
32
Gengibre
Main
map
Kaombo
Mostarda
Louro
Salsa
Atlantic Ocean
Luanda
ANGOLA
Luanda
Graphic: Total
each with the ability to handle
100,000 barrels per day of oil, 100
million cubic feet per day of gas
and store 2 million barrels of
crude.
“Modec stands a pretty good
chance of winning it,” said one
source.
Other sources said Italian player Saipem — despite its apparent
dissatisfaction about investment
returns in the FPSO business — is
not out of the running, having
submitted a strong local content
bid.
However, Saipem’s bid is understood to be more costly than Modec’s offer, which could perhaps
find favour with Sonangol, currently paying closer attention to
spiraling supply chain costs.
SBM Offshore was also competing for the job but Total’s recommendation is said “not to be in its
favour”.
The recommended bidder for
Kaombo’s umbilical, riser and
flowline packages is unclear, with
Subsea 7, Saipem and a TechnipHeerema Marine Contractors alliance all thought to be have been
chasing the order.
This package calls for some 80
kilometres of insulated flowlines
and risers plus the same amount
of umbilicals.
Sonangol could make decisions
on Total’s recommendations within three months, although it could
take longer than six months, suggested one Angola watcher, pointing out there is certainly no guarantee that the state player will
agree with Total’s recommendations.
Kaombo comprises two different clusters of widely dispersed,
marginal oil discoveries, which
on their own could not be developed.
By bringing these finds together under two separate developments, project economics have
improved, although Total was still
31 January 2014
3
$1 billion
THE VALUE of the
contract to provide subsea
production systems for
Total’s Kaombo project.
Swiber at Wuchuan
for pipelay vessel
INTERNATIONAL
AMBITIONS
TAN HWEE HWEE
and XU YIHE
Singapore and Houston
Photo: AFP/SCANPIX
wing Kaombo bidders
surprised by the high price commercial bids it received in late
2012 from the subsea and FPSO
players.
As a result, the operator spent
more than a year looking at various ways of bringing costs down
and, largely based on these efforts, made its preferences known
to Sonangol.
Some sources suggested that
Sonangol, which is undergoing a
change in key personnel, is now
looking more favourably on lower
costs bids compared to higher cost
local content offers in an effort to
get new projects moving.
The two FPSOs will be installed
in water depths of 1400 metres to
1900 metres, each tapping recoverable resources of about 300 million barrels of crude held in Oligocene and Miocene reservoirs.
The Kaombo North FPSO will
produce from about 35 subsea
wells on the Gengibre, Gindungo
and Caril discoveries, while the
Kaombo South floater will exploit
the Mostarda, Louro and Canela
finds through about 29 wells. The
Offshore Crane Technology
facebook.com/LiebherrMaritime
[email protected]
www.liebherr.com
nearby Salsa accumulation could
become a future satellite producer.
Start-up of Kaombo’s first FPSO
was originally targeted for mid2016 but, given ongoing delays,
production may only now start in
the second half of 2017 or early
2018.
The second FPSO will come on
stream about nine months later.
Oil will be offloaded into shuttle
tankers for export, while gas will
be piped to the Angola liquefied
natural gas plant at Soyo.
SINGAPORE-based Swiber Offshore is set to commission China’s Wuchang Shipbuilding Industry (Wuchuan) to build a
pipelay vessel with the intention
of taking on bigger players in
deepwater operations.
Wuchuan is set to be pronounced the victor in a newbuild tender against up to seven
yards in China alone. The five
finalists are said to have included Cosco Shipyard, Shanghai
Zhenhua Heavy Industry, CMHI
Yiulian and Rongsheng Heavy
Industries.
Wuchuan was helped in the
race by the pledge of financial
backing from parent China Shipbuilding Industry Corporation
(CSIC), sources said.
Swiber and Wuchuan are running through “some procedures”
and finalising the paperwork before signing a commercial contract, another source said.
The contract will involve the
turnkey delivery of a newbuild
construction vessel with S-Lay,
reel lay and flex-lay systems.
Swiber is understood to be in
talks with National Oilwell
Varco and Huisman for the sup-
ply of a crane with at least 4000
tonnes lift capacity to be fitted
on board the vessel. It will be
equipped with DP3 as well as a
10-point mooring system. Delivery from Wuchuan is targeted
for the end of 2016.
Swiber and Wuchuan have yet
to finalise the value of the newbuild contract, but industry
sources earlier valued the deal at
between $400 million and $500
million.
One source said the newbuild
is in the same class as Heerema
Marine Contractor’s deep-water
construction vessel Aegir.
Swiber wants to become an
international player capable of
performing offshore installation
in any waters worldwide, including harsh environments such as
the North Sea, the source said.
The Singapore-listed offshore
installation contractor is likely
to be eyeing more contracts in
the subsea umbilicals, risers and
flowlines sector currently dominated by European giants Technip and Subsea 7, following the
delivery of its newbuild.
Swiber has eight offshore installation vessels in its fleet, including the 3800-tonne heavylift
derrick barge Kaizen 4000.
These vessels are primarily active in the benign shallower waters off South-East Asia and Latin America.
Established in 1934, Wuchuan
specialises in support vessel fabrication. Its facilities in Qingdao
have built buoys for Brazilian
state oil company Petrobras.
BG gains Honduras permits
THE UK’s BG Group has obtained
an environmental permit to begin aerial gravity gradiometry
and other geophysical studies off
Honduras, according to a source,
writes Gareth Chetwynd.
“There are still one or two secondary permits to be issued, but
the survey should be starting in
the next few weeks,” the source
said.
Outstanding permits relate to
activities such as aerial photography.
BG has signed up for exploration and production rights on an
offshore block covering 35,000
square kilometres. BG managers
said the first phase of exploration, running from 2014 to 2015,
would require investments of
about $20 million.
The exploration will take place
off La Mosquitia, a remote jungle
region. BG has joined Honduran
government officials in consulting isolated fishing communities and has been defining social
projects in a region that is sometimes afflicted by crime related
to drug-running.
The main consultation workshops took place in October 2013.
With such a huge area to cover
with geological, geophysical and
seabed sampling studies, BG is
expected to home in on a chosen
area to shoot 3D seismic by late
2015 or early 2016. A second seismic campaign is likely in the
2015-2016 window.
Exploration rights run for four
years, extendable by two more,
with production rights for 20
years, renewable for five more.
The exploration contract was
the first of its kind in the Central
American nation.
NEWS
4
31 January 2014
Busy time
for player
in region
BRAZIL
Open: Repsol Sinopec
chief executive Jose
Maria Moreno
Photo: FABIO PALMIGIANI
Repsol Sinopec eye is on
Campos plan FEED work
Brazilian joint venture looking at a handful of options to develop
the entire BM-C-33 licence, focusing initially on Pao de Acucar
FABIO PALMIGIANI
Rio de Janeiro
CAMPOS RICHES
BRAZIL
B
R
A
Z
I
L
Rio de Janeiro
PA
R
AG
U
AY
Main map
Atlantic Ocean
Pampo
URUGUAY
Rio Grande
BM-C-33
Seat
Campos Basin
Gavea
nt
os
Ba
Pao de
Acucar
si
n
how to develop the trio of pre-salt
discoveries.
Repsol Sinopec chief executive
Jose Maria Moreno told Upstream
in July that the company was
considering the use of a large
FPSO with capacity to produce
between 100,000 and 150,000 barrels per day of oil and from 500
million to 700 million cubic feet
per day of gas.
However, the company is said
to be open to other development
scenarios, including the use of
more than one unit to produce
from Pao de Acucar and adjacent
discoveries.
Repsol Sinopec has discovered
more than 700 million barrels of
light 43 degrees API crude and 3
trillion cubic feet of natural gas in
the block, with the vast majority
concentrated in Pao de Acucar.
The company has already contracted Brazilian engineering
group Promon to carry out a feasibility study to determine the best
way to export natural gas from
BM-C-33.
The study will identify the best
location for the installation of a
gas treatment facility. It is understood that the options on the table
include the cities of Macae, Mage
and Sao Joao da Barra.
Nevertheless, Repsol Sinopec
is only expected to have a clearer
picture of which type and how
many production units it may
contract once an appraisal
programme in BM-C-33, which
Sa
REPSOL Sinopec is on the market
for front-end engineering and
design studies, as it searches for
the best solution to produce from
ultra-deepwater pre-salt reservoirs in the Campos basin off
Brazil.
Sources told Upstream that Repsol Sinopec issued a tender late
last year, and invited contractors
such as Technip, Doris Engineering, Fluor, Genesis, Mustang Engineering and WorleyParsons to
submit proposals for several types
of production units to be deployed
in Block BM-C-33.
The Brazilian joint venture, comprising Spanish company Repsol
and Chinese player Sinopec, is said
to be looking at a handful of options to develop the entire BM-C-33
licence, focusing initially on the
giant Pao de Acucar discovery, but
also looking at satellite structures
such as Gavea and Seat.
It is understood that contractors have the option to present
FEED solutions for floating production, storage and offloading
vessels, tension-leg platforms or
even spars.
If Repsol Sinopec chooses to
develop BM-C-33 with a spar, it
would be the first use of that type
of production unit in Brazilian
waters.
WorleyParsons and KBR carried
out independent conceptual
screening studies in late 2012, and
presented Repsol Sinopec with a
wide range of possibilities on
started in November, comes to an
end.
The company is presently drilling the Seat-2 appraisal well in
2665 metres of water using the
newbuild drillship Ocean Rig Mylos.
Despite only hitting marginal
quantities of hydrocarbons at the
original Seat well in 2009, followup 3D seismic studies shed more
light on the area, and Repsol Si-
SPANISH oil company Repsol
has prepared a busy programme
for the Western Caribbean in
2014 and 2015, with plans to
spud at least two offshore wells
and acquire plenty of seismic
data in Colombia and Aruba,
writes Fabio Palmigiani.
Repsol will participate first in
the drilling the Orca-1 wildcat
in the Tayrona block in
Colombia.
Jose Angel Murillas, Repsol
exploration director for
Northern Latin America, said
the well will be drilled by
operator Petrobras in the second
half of 2014.
Petrobras drilled one well in
Tayrona in September 2007,
Araza-1, but results were
inconclusive.
According to Murillas,
Petrobras will likely move a rig
from Brazil to Colombia in the
second quarter to spud Orca-1.
Orca-1 will be drilled in water
depths of 674 metres to a final
depth of 4775 metres.
The campaign will target
hydrocarbons in Lower Miocene
and Oligocene carbonate
reservoirs, which may hold
resources of 4 trillion cubic feet
of gas.
Repsol also has plans to spud
the Siluro-1 shallow-water
wildcat in Block RC-11 in
Colombia in 2015.
“Siluro-1 is very attractive
because of its proximity to the
coastline and existing
infrastructure, but it is much
smaller than Orca-1,” said
Murillas.
In parallel to drilling
activities, Repsol plans more
than 5000 square kilometres of
new 3D seismic in Colombia,
covering part of the Guajira
Offshore-1 block, and in Aruba.
Murillas said: “A single tender
is ongoing to contract all
planned seismic surveys. We
expect to map at least three to
five valid prospects to be drilled
between 2015 and 2018.”
Graphic: Repsol
nopec is now aiming toward the
centre of the carbonate reservoir
with the drilling of Seat-2.
If Seat-2 proves is a success, it
may reinforce the company’s
effort to look for different types of
production units to exploit BM-C33, according to one source.
Two more wells will be drilled
this year, with both likely to
appraise Pao de Acucar. A drillstem test is also planned.
Major steps up
drill activity
SPANISH player Repsol’s drilling
plans in the Caribbean are just
part of a step-up in activity that
will see the Spanish major
spend about $1.3 billion on
exploration this year.
The state-run outfit will focus
heavily on African acreage,
while spudding wells off Alaska,
and tapping a potentially vast
frontier play off the Canary
Islands as it sets aside some $910
million for drilling in 2014.
About 65% of the $1.3 billion
exploration budget is to go on
oil-led plays, with the
remaining 35% on pure gas
plays, exploration managing
director Marcos Mozetic said.
In Mauritania, the company
is two-thirds to its target zone
at a wildcat on the high-risk
Ouguiya prospect on Block Ta10
in the Taoudeni basin. In Libya,
Repsol is spudding the fourth
well in 16-well commitment
programme.
NEWS
31 January 2014
5
ABU DHABI
Contenders
in race for
Nasr field
packages
Samsung and GS said to have
dropped out of the running
VAHE PETROSSIAN
and TAN HWEE HWEE
London and Singapore
VIETNAM’S PTSC has roped in Brunei conglomerate Masshor Group
to carry out engineering, procurement and construction work on a
wellhead platform destined for
France’s Total-operated Maharaja
Lela Jamalulalam South (MLJS) gas
development off Brunei.
Masshor will deliver the jacket
of the MLJS-3 wellhead platform
from a new yard to be developed
in Muara, Brunei. The platform top-
sides will be fabricated at PTSC’s
yard in Vietnam.
Detailed design support will be
provided by France’s Technip.
The contracted work on the
MLJS-3 is scheduled to be completed by mid-2015.
The transportation and installation contract for the platform
and associated pipeline is said to
have gone to Malaysia’s SapuraAcergy.
Photo: NTB/SCANPIX
CE
MLJS platform work
Race: the field is narrowing for contracts for the Nasr development off Abu Dhabi
EE
is considered “similar in scope to
what they secured earlier”. The
delayed submission deadline for
technical bids for EPC2 is April.
Planning bids are Hyundai and
NPCC, Fluor and Technip.
The original list of potential
bidders for all Nasr packages last
year was nearly a dozen companies, including J Ray McDermott
and Australia’s Leighton Offshore, both of which indicated
early on that they were limiting
their role to working as subcontractors to the eventual main EPC
contractors.
There was talk last year that
Daewoo might prefer being a subcontractor for EPC-1, but it did in
the end submit its own bid.
The early phase of Nasr is being
developed by Larsen & Toubro under a $500 million contract
awarded in early 2011, which also
covers the early production facilities for the nearby Umm al
Lulu field.
The full field developments of
Nasr and Lulu are being carried
out separately. Nasr will eventually contribute 65,000 barrels per
day to Abu Dhabi’s capacity.
Adma-Opco is owned 60% by
Abu Dhabi National Oil Company,
with BP, Total and Jodco holding
the balance of shares.
Fluor carried out the front-end
engineering and design study for
both the Lulu and Nasr full-field
developments.
Technip carried out the FEED
for the joint development of the
early phases of Nasr and Lulu.
Nasr is about 30 kilometres northeast of the Umm Shaif complex.
Adma-Opco is trying to raise
its production capacity to nearly
1 million bpd from about 550,000
bpd.
GR
THE field of competitors for the
two main packages for Abu
Dhabi’s full field Nasr oilfield development has narrowed with
the departure of two South
Korean companies from the January submission of technical bids.
Three South Korean giants
remain in the race, with the local
National Petroleum Construction
Company (NPCC) also considered
a strong contender despite a
heavy workload.
The two engineering procurement and construction packages
issued by Abu Dhabi Marine Operating Company (Adma-Opco)
are EPC1 for seven new wellhead
towers, risers and infield pipelines, a 16-inch export line to Das
Island and another 10-inch line to
export excess gas, and EPC2 for
central processing facilities, platforms, flares, bridges, disposal
wells and infield composite cables.
EPC1 is estimated to be worth
$800 million, with EPC2 valued at
$1.4 billion.
A third package, EPC3, covers
brownfield modifications at Das
Island and hook-up of various
facilities on the island.
Sources said that Samsung Engineering and GS Engineering &
Construction dropped out of the
technical round for EPC1 in midJanuary. Price bids are due before
the end of the first quarter.
The main bidders were Hyundai Heavy Industries, Samsung Heavy Industries, Daewoo
Shipbuilding & Marine Engineering and NPCC.
Also submitting technical proposals were Petrofac, Technip
and Fluor, sources said.
One source said NPCC “seems
confident” of getting EPC1, which
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NEWS
6
31 January 2014
INDONESIA
Chevron gets going on
Gendalo-Gehem FPUs
US supermajor aims to make up for lost time by offering
compressed re-tender for delivery of two planned units
TAN HWEE HWEE
Singapore
CHEVRON aims to recover lost
time on the Gendalo-Gehem gas
condensate development off Indonesia by lining up a compressed
re-tender for the turnkey delivery
of two planned floating production units.
The US supermajor is aiming to
conclude the re-tender for a contract on the two FPUs, estimated
to make up about half the project
budget for Gendalo-Gehem development, by the end of March.
Its intent is to formalise an
award to the successful contender
in the second quarter, according
to sources.
The bid schedule is considered
ambitious in the Indonesian context, given the full tender cycle
usually takes at least six months
to complete.
Chevron is understood to have
conceded to a request from Indonesia’s upstream regulatory body,
SKK Migas, to start the re-tender
from scratch, meaning a prequalification exercise should normally
be carried out before the process
moves into full swing.
However, contractors already
pre-qualified either as lone bidders or within the same consortium in the previous tender held
in 2013, will be exempted from the
pre-qualification requirements.
The condition laid out for the
prequalification exercise effectively allows Chevron to cut the
administrative process should the
same contractors return.
The 2013 tender for the two
Gendalo-Gehem FPUs attracted
three bids.
After bids were opened, McDermott of the US was leading by
$600 million over the next contender with an offer of $2.7 billion.
Two other consortia — Hyundai
Heavy Industries with Italy’s
Saipem and Indonesia’s Tripatra
Engineering & Construction, Daewoo Shipbuilding & Marine Engineering with UK-listed Petrofac,
Malaysia’s RNZ and Indonesia’s Inti
Karya Persada Tehnik — responded
to Chevron’s 2013 bid call.
Chevron is racing against time
to conclude the re-tender for the
FPU contract, not least because it
hopes to avoid the need to call a
re-bid for a second key contract
covering subsea umbilicals, risers
and flowlines.
Aberdeen-based Subsea 7, in a
joint bid with Indonesia’s Timas
Suplindo, was declared the winner following a competitive tender for the contract involving the
procurement and installation of
the SURF package.
About 630 kilometres of pipelines, 80 kilometres of umbilicals
and up to 120 subsea flowline connections will be installed in up to
6000 feet of water.
In absence of any certainty over
the FPU delivery schedule follow-
Bid circuit
roaring
back to life
INDONESIA’S bid circuit is
roaring back to life, not only
with Chevron returning to the
market for the two floating
production units it wants for its
Gendalo-Gehem gas and
condensate development but
Pertamina Hulu Energi following
suit with a fresh tender for three
platforms panned out under the
phased expansion for the West
Madura Offshore (WMO) block.
Pertamina has issued a
prequalification call for three out
of seven new platforms planned
for WMO.
Contractors were invited to
register their interest as
Upstream went to press to
prequalify for the tender of an
engineering, procurement,
construction and installation
contract tied to a small
processing platform and two
wellhead structures in the
PHE-12 and PHE-24 fields.
The two new wellhead
platforms will be tied to the
existing processing platform in
the PHE-38 field.
The tender is expected to be
concluded in the second quarter
Chevron is
racing against
time... not
least because
it hopes to
avoid the need
to call a re-bid
for a second
contract
covering
subsea
umbilicals,
risers and
flowlines.
Ambitious bid schedule: Chevron chief executive John Watson
ing the re-tender, Chevron is said
to have secured a bid validity extension from Subsea 7-Timas Suplindo.
The pair quoted $1.9 billion for
the SURF contract, beating Chevron’s owner estimate by 16%.
McDermott’s low bid for the
FPU contract, by contrast, was
20% above the owner’s estimate.
Chevron declared the 2013 tender for the FPU contract a failed
bid on the basis of “a change to the
plan of development”.
The failed bid was called following challenges to the validity of
McDermott’s bid with respect to
its compliance with local content
regulations.
Questions were raised over the
bid qualification of the US contractor as a “domestic” rather than
“national” company.
The re-tender will mean that
the Gendalo-Gehem development
could be set back by at least a year.
Chevron initially planned to begin offshore installation work late
last year, but this is likely to slip
to late this year.
The Gendalo-Gehem gas condensate project involves the development of the Gendalo, Gehem,
Maha and Gandang discoveries.
The larger of the two newbuild
FPUs destined for the Gehem field
has a designed processing capacity of 700 million cubic feet per
day of gas and 25,000 barrels per
day of condensate.
The second floater earmarked
for the three other fields will process up to 420 MMcfd of gas and
30,000 bpd of condensate.
SKK Migas estimates a combined $7 billion will be required to
Photo: AFP/SCANPIX
develop some 4 trillion cubic feet
of gas reserves under Chevron’s
Indonesia Deepwater Development, comprising the GendaloGehem project and the planned
Bangka field development.
Chevron is expected to finalise
the award of two contracts worth
$250 million to France’s Technip
and Indonesia’s Meindo Elang Indah for the Bangka development.
France’s Technip was tipped to
land a contract valued at about
$180 million for the Bangka SURF
package, and Meindo another $70
million contract for the topsides
modification for the planned tiein to the West Seno FPU.
The Bangka tenders were concluded in July 2013 but the contract awards were held back following the exit of former SKK
Migas chief, Rudi Rubiandini.
of 2014, leading to the contract
award around mid-year.
The successful bidder will be
called on to supply a derrick
pipelay vessel with 3000-tonne
lifting capacity to carry out the
offshore installation scheduled
from June through to the end of
August 2015.
The current tender for the
three platforms is considered the
first phase of the WMO
expansion plan.
Pertamina is likely to follow up
with a separate tender in 2015 for
three to four wellhead platforms
scheduled to be installed one year
apart from the first platform trio,
sources said.
The additional platforms lined
up under the WMO phased
expansion will be instrumental
in lifting output in the offshore
block to 75,000 barrels of oil
equivalent per day by 2016.
Average production at WMO
stood at 50,000 boepd, including
some 22,500 barrels per day of
crude from the West Madura
field in late 2013.
A leaking hose on the
supporting floating storage
offloading vessel in the field has
reportedly resulted in a halt in
crude production at WMO.
PHOTO: TILLMANN FRANZEN
FOR JAMES,
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NEWS
8
31 January 2014
CHINA
Newfield targeting date
for first oil from Lufeng
US independent aiming for end of the year — 12 months late
— after opting for jacket repair rather than replacement
XU YIHE
Singapore
US INDEPENDENT Newfield is
aiming to produce first oil at its
Lufeng 7-2 field in the South China
Sea one year late at the end of 2014,
after having decided to repair
rather than replace the project’s
jacket that was damaged during a
floatover operation last August.
Partner CNOOC Ltd is also trying to get the delayed field back on
track this year, chief executive Li
Fanrong said.
Although more inspections are
needed to review options, the
company decided in a meeting in
Shenzhen, southern China, last
week that it would try to repair
the jacket, which was badly damaged above the waterline and has
a two-metre-long crack 10 metres
below it.
However, there is still uncertainty about whether there are
more cracks in the jacket further
down in the water beyond the
10-metre depth.
More inspection is needed,
especially of the section in depths
down to 29 metres, sources said.
However, the sources said that
the initial plan is to replace the
damaged part above water and
weld the crack underwater.
They added that China’s Offshore Oil Engineering Company
(COOEC) is contracted to carry out
more investigations, which are
expected to finish in April, while
French engineering giant Technip
and CNOOC’s deep-water task
force in Shenzhen have been
shortlisted as the contractors for
the repair work.
Newfield has scheduled to reinstall the topsides at the end of July
or early August, depending on
weather conditions.
It would be very difficult to find
a weather window after August,
sources said.
The first installation was originally set for 31 July last year, but
the COOEC derrick barge was
forced to escape tropical storms to
safe anchorage and returned for
operation in early August.
Sources said the operational
window including anchoring
requires up to nine days.
Newfield — headed by chief
executive Lee Boothby — is con-
Back on track: Newfield chief executive Lee Boothby
sidering a few vessel options for
the next operation, including
COOEC’s HYSY 221, and candidate
vessels from COSCO and Swiber.
Sources said Newfield is yet to
decide on its choice of the frontend engineering and design contractor for the next operation.
A consensus has been reached
by the project partners after consultation that the leg-lowering
system of the platform’s topsides
needs to be changed from a low
centre of gravity floatover using a
strand jack lowering system to a
system using middle-to-high
floatover.
“The lowering of the legs is to be
put higher,” said one source, adding that winches are now being
recommended to lower legs rather
than strand jacks, since winches
can lower faster and put legs back
when necessary.
Newfield has also recommendeded using a CCTV system as part
Photo: BLOOMBERG
of the central control during the
whole operation, and that a locking system should be provided to
prevent the leg from rotating.
Sources said that it is also being
recommended that a rapid ballasting system should be provided to
ballast a barge down quickly and
get legs engaged.
Improvements to fenders were
also suggested, to restrain barge
movement and ensuring the legs
are in capture radius.
CNOOC keen to take over Newfield’s stake in Lufeng 7-2
CHINA National Offshore Oil Corporation (CNOOC) is understood to
have grown increasingly keen to
take over the stake owned by
Newfield in the Lufeng 7-2 oil asset
in the South China Sea, a logical
move given that it has pre-emption rights over the asset.
Newfield has been marketing
the equity it holds in both the
Lufeng field and Caofeidian field
complex in Bohai Bay off northern
China since last year as part of its
plan to divest its Asian upstream
assets.
CNOOC has declined to comment on market speculation about
any possible purchase. Newfield
currently has a 12% stake in Caofeidian.
According to the model for
CNOOC’s production sharing contracts, a foreign company will
hold 100% working interest in an
offshore field during the exploration period but CNOOC is entitled
to a 51% stake during the development phaset period.
Last October, Newfield sold its
assets in Malaysia to local player
SapuraKencana Petroleum in a
deal worth $898 million, with the
proceeds to be used to pay down
some existing debt as well as for
general corporate purposes, Newfield said.
Lufeng 7-2 lies in 107 metres of
water in the Pearl River Mouth
basin of the South China Sea and
will produce 30,000 barrels per
day of crude at peak. The development involves a central processing platform with a subsea production system tied back to
existing production facilities at
the nearby Lufeng 13-1 field, operated by CNOOC.
Oil will be further processed at
the Nanhai Shengkai floating production, storage and offloading
vessel, which operates at Lufeng
13-1, about 15 kilometres away.
Drama of
floatover
operation
NEWFIELD decided to abort the
floatover operation for the
Lufeng 7-2 topsides to its jacket
in early August last year after
the strand jack failed, causing
substantial damage to the
topsides and the jacket.
The operation started on 7
August using derrick barge
Haitianlong and floatover barge
HYSY221 carrying the topsides
fabricated by China’s Offshore
Oil Engineering Company
(COOEC), which had arrived at
the location on 27 July.
The initial delay was caused
by two separate tropical storms,
Chebi and Mangkhut.
During the floatover, which
was operated by UK-based
offshore installation contractor
Abnormal Load Engineering
(ALE), the outer legs were
striking the jacket legs and
finally the strand wires broke
and one of the legs fell and
stabbed into the jacket,
according to an investigation
carried out by Singapore’s
Aqualis Offshore.
As a result, the barge was
locked by the leg.
The continuous impact
between barge, jacket and
topsides resulted in extensive
damage to the topsides and
jacket, the latter of which was
fabricated by Shenzhen Chiwan
Sembawang Engineering.
To avoid injuries, Newfield
evacuated all the installation
crew to the Haitianlong.
After three recovery
attempts, HYSY221 withdrew
from the jacket slot and was
towed to Dayawan anchorage on
11 August and then back to
Shenzhen Chiwan Sembawang
Engineering on 12 August.
The Aqualis Offshore report
was said to have attributed the
accident to a number of factors
including weather conditions,
barge motions, mooring
patterns, fendering systems and
stabbing cone.
Newfield awarded Lufeng 7-2’s
engineering, procurement,
construction, installation and
commissioning contract to
COOEC, with ALE as the supplier
and operator of the strand jack
system for the floatover
installation.
The LF7-2 jacket, fabricated by
SCSE, was originally preinstalled in a water depth of
about 106 metres. The topsides
are being repaired at SCSE in
Shenzhen.
The outer
legs were
striking the
jacket legs
and finally the
strand wires
broke and one
of the legs fell
and stabbed
into the
jacket.
NEWS
31 January 2014
9
Frontier
confident
of sample
SOUTH AFRICA
Protected: the ocean
at Table Mountain
National Park
Photo: AFP/SCANPIX
Rhino applies for TCPs
in sensitive acreage
Area of interest to little-known player is adjacent
to marine protected regions and tourist spots
IAIN ESAU
London
BRAZIL-based junior Cowan
Oil & Gas is planning a 3D seismic survey in blocks 2613A and
2613B off Namibia.
The survey would be either a
proprietary project or a multiclient project in partnership
with TGS. Cowan said it is in
talks with the US-based player.
The planned survey would
cover about 4000 square kilometres, in water depths of between 500 and 2000 metres,
and could start in March.
Cowan Oil & Gas is part of the
Cowan Group conglomerate.
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Spectrum’s 2D Multi-Client
Seismic Offshore Croatia.
Existing Italian Adriatic
Multi-Client Seismic
Dubrovnik
Monte
Spectrum has acquired a truly unique Multi-Client
seismic survey offshore Croatia. This is the only
seismic data available to license in this hugely
underexplored region which expects to see its first
offshore licensing round this year.
The survey, acquired under contract to the Ministry
of the Economy in Croatia, covers approximately
15,000 kilometres of long offset seismic data
with a 5 km x 5 km grid. It extends across most
of the Croatian Adriatic Sea and connects with
Spectrum’s reprocessed seismic data covering the
Italian Adriatic Sea.
Final PSTM data will be delivered at the beginning of
February with all processed data available in early
April. The Government of Croatia plans to hold
a licensing round over the country’s offshore
continental shelf in Q2 2014.
+44 (0)1483 730201
[email protected]
www.spectrumasa.com
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A New Oil Province at the Heart of Europe
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Kinetiko and local player Badimo
Gas, has also applied for three onshore exploration rights.
One covers the former Volksrust
TCP 47 in Free State, KwaZuluNatal and Mpumulanga, while the
remaining two, Amersfoort and
Secunda, are sited in Mpumulanga.
A significant exploration right
application was filed offshore with
the agency by ExxonMobil taking
in five deep-water blocks covering
more than 50,000 square kilometres off the east coast.
Singapore-based Silver Wave
Energy, a privately-owned player
with Burmese connections, has
applied for three exploration
rights.
The first covers 71,000 square
kilometres immediately south of
the unratified median line between South Africa and Mozambique, while the largest extends
more than 192,000 square kilometres off the west and south coast.
Silver Wave has also applied for
a much smaller exploration right
— 6700 square kilometres — off
the south coast.
Off the west coast, Oklahomabased minnow OK Energy has
submitted an exploration right
application for the Northern Cape
Ultradeep licence, immediately
south of the maritime border with
Namibia.
The company has already filed
tentative plans to carry out
seismic surveys on the licence,
assuming it is granted an exploration right.
A proposed 2D seismic survey
would run about 500 kilometres,
covering the entire 6903-square
kilometre licence.
This operation could take place
before May or between December
2014 and May 2015, and would be
followed — at an unspecified time
— by a 1000 square kilometre 3D
survey.
Cowan survey
a
A LITTLE-KNOWN company based
in East Africa has applied for two
technical co-operation permits
(TCPs) offshore and onshore South
Africa.
Rhino Oil & Gas, which
Upstream was told is controlled by
two South African businessmen,
has applied for a 12,000-square
kilometre TCP that hugs the
coastline of the Western Cape,
adjacent to sensitive marine
protected areas and major tourist
regions.
The proposed TCP would run
from Saldanha in the north,
around Cape Town and the Cape
of Good Hope, and on to Cape
Agulhas, the most southerly point
in Africa.
The area is adjacent to marine
protected regions including West
Coast National Park, Sixteen Mile
Beach, Tale Bay, Table Mountain
National Park, Helderberg and
Betty’s Bay.
Rhino has also applied to South
Africa’s Petroleum Agency for a
sizeable onshore TCP.
This permit is in the Eastern
Cape adjacent to the southern
border of Lesotho.
It is not clear whether Rhino is
looking for conventional hydrocarbons here, or if this is an
extension of the potentially shale
gas-rich Karoo basin.
TCPs, when granted, allow a
company to carry out desk-top
studies for one year, after which
they can choose to apply for an
exploration right.
Other TCP applications were
submitted recently by local player
Afro Energy for two separate
tracts of land — one straddling
Free State and Mpumulanga
provinces, and the other straddling Mpumulanga and KwaZuluNatal provinces.
Afro Energy, a joint venture
established by Australian junior
LONDON-listed junior Frontier
Resources International is confident that analysis of soil gas
samples from its Ovambo basin
licences onshore Namibia indicates the presence of a hydrocarbon generating source rock.
A soil gas survey covered 903
sites, and aimed to determine
whether a hydrocarbon generating source rock is present
and, if so, whether it has generated oil or gas.
Samples were analysed by USbased Exploration Technologies,
and showed the presence of
“anomalous, above background
levels of methane, ethane, propane and butane gases”.
10
31 January 2014
COMMENT
Ukrainian ambitions
difficult to achieve
T
HE resignation of
Ukrianian prime
minister Mykola
Azarov and his
Cabinet was a victory for
anti-government protestors.
However, the two-month
street stand-off, which has
plunged Ukraine into a state
of deep uncertainty,
continues.
In tendering his
resignation, Azarov talked of
the conflict threatening “the
economic and social
development” of the country.
There is no sign yet that
the upheaval is undermining
investment plans by foreign
oil majors, but severe
political turbulence will be
factored into the negative
side of the balance sheet for
all those as yet uncommitted
to drill there.
There were hopes that
ExxonMobil would sign a
production sharing
agreement with Ukraine at
the World Economic Forum
in Davos last week.
It did not happen,
although it looks more like
last-minute hitches on the
government’s side rather
than the US supermajor
getting cold feet.
Eduard Stavytsky, the Fuel
& Energy Minister, who has
warned of dangers to power
supply from the current
conflict, insisted a deal with
ExxonMobil would be cut
next month.
He had already delayed
one signing of the deal — to
explore conventional gas
deposits in the Black Sea —
because of unrest in
December.
Ironically, a cut-price gas
deal with Russia could be
seen as a central part of this
crisis.
Just before the Gazprom
deal was signed, Ukrainian
President Viktor Yanukovich
walked away from a wider
free trade agreement with
the European Union.
Many protesters saw this
episode as an example of
Yanukovich surrendering
Ukraine’s sovereignty to its
old colonial masters in
Moscow.
Stavytsky insists Ukraine
still wants to develop its
own oil and gas reserves and
reduce its 60% dependency
on Russian gas.
Late November, Eni of
Italy and EDF of France
signed a deal that could
bring $4 billion of new
investment if they are
successful with an oil and
gas search in the western
part of the Black Sea.
Earlier that month
Chevron signed what could
be worth $10 billion of new
spending over 50 years
under a shale gas production
sharing agreement in
Ukraine.
The move follows a first
shale deal with Shell penned
at the Davos summit last
year. That is worth anything
from $10 billion to $50
billion, according to
Ukrainian ministers.
Government officials in
Kiev have talked about these
two shale deals alone
Even if it has
attracted
some big oil
company
investment,
Ukraine
remains a long
way off selfsufficiency.
providing Ukraine with 16
billion cubic metres of gas
per annum by 2020.
These agreements may
have already paid dividends
in that Moscow has cut the
Gazprom price on the
controversial 10-year supply
arrangement it signed in
2009. That had an original
price tag of $400 per
thousand cubic metres, well
above the $370 average price
being charged to much
wealthier European nations.
Even if it has attracted
some big oil company
investment, Ukraine
remains a long way off
self-sufficiency.
First production from the
Yuzivska field, where Shell
will be working, will be 2018
at the earliest.
Ukraine is said to have
Europe’s third largest shale
gas reserves at 1.2 trillion
cubic metres, according to
the US Energy Information
Administration.
But can it be extracted
easily, safely and cheaply?
Every country wants to
emulate the shale gas
revolution seen in the US,
but many want to copy its
relatively benign political
system too. Ukraine wants
both. It will not be easy, as
shown by the smoke bombs
raining down in Kiev.
It is clear that the President recognises
the role natural gas is playing in meeting
our nation’s economic and environmental
needs.
American Natural Gas Alliance chief executive Marty Durbin
Natural gas future
is burning bright
Commodity is
now firmly in
the spotlight in
the US after
endorsement
from President
Barack Obama
I
T WAS a good week for
natural gas in the US. A
second brush with the
vaunted Polar Vortex
blanketed the Northeast,
Midwest and parts of the Deep
South with a fresh layer of ice
and snow.
The Arctic blast drove
temperatures into the sub-zero
Fahrenheit category for a good
swathe of the eastern part of the
country, which in turn drove
spot natural gas prices in some
regions, such as New York, to
astronomical heights — as high
as $90 per million British
thermal units.
Even Henry Hub gas spiked
over $5 per million Btu, a
four-year high, fueled by the
bitter cold and regional supply
fears.
When temperatures start to
rise, it’s expected gas prices will
settle back down near $4 to
$4.50.
Then, on 28 January,
President Barack Obama lauded
natural gas as “the bridge fuel”
that, if safely extracted, could
power the country’s economy
with less carbon pollution
impact on the environment.
Obama promised to cut red
tape to get more gas-fired
factories built and urged
Congress to put people to work
building fueling stations that
shift more cars and trucks from
foreign oil to American natural
gas.
Of course, Obama also took a
shot at fossil fuels with his
next breath — again chiding
Congress to employ a smarter
tax policy that would roll back
about $4 billion in tax breaks
for oil and gas companies.
Overall, the US gas lobby was
giddy over Obama’s comments,
as one would imagine.
Marty Durbin, chief
executive of the American
Natural Gas Alliance, said
Obama’s comments on natural
gas were welcomed.
“It is clear from tonight’s
speech that the president
Pledges: US President Barack Obama talks to the press
after giving his State of the Union address in Washington
on 28 January
Photo: AP/SCANPIX
recognises the role natural gas
is playing in meeting our
nation’s economic and
environmental needs,” said
Durbin.
“There is great promise for
natural gas in our transport
sector as trucks, trains and
cargo vessels transition to this
clean and abundant fuel. The
1.4 million well-paying jobs
that natural gas development
will support in 2015 can help
narrow America’s income
inequality.”
However, not everyone was
thrilled that Obama has taken a
liking to natural gas, especially
the environmental concerns
lobbying against hydraulic
fracturing — the extraction
method that is chiefly
responsible for the shale gas
resources that currently fill the
nation’s storage facilities.
Green group Earthworks said
Obama’s words and actions are
at odds when it comes to
fighting climate change yet
promoting gas drilling and
fracking. “The president’s ‘all of
the above’ energy policy is
simply ‘drill baby drill’ by
another name,” said Jennifer
Krill, executive director of
Earthworks.
“There is yet hope for
President Obama’s vision of a
clean energy future, if he turns
away from the oil and gas
industry and towards truly
renewable energy.”
Natural gas has come a long
way — from annoying
byproduct to fuel of the future
— and all in the space of just a
few short decades.
The shale surge in the US has
driven the commodity into the
spotlight, and while it will take
new infrastructure to get more
natural gas vehicles on the
road, more gas-fuelled power
generation and a true domestic
market for exportation, it is
clear that the future of
domestic natural gas has never
burned brighter.
31 January 2014
11
$6 billion
THE AMOUNT that
foreign oil companies are
owed by the Egyptian
government.
Turmoil
in store
for Egypt
SIDETRACK
B
High voltage: Statoil has been caught in the middle of a politically-charged debate about a costly plan to reduce
emissions on Norwegian fields
UPSTREAM/RYTIS DAUKANTAS
Brazil’s pragmatic approach likely to pay
off, but Argentina is facing a major crisis
I
N THE 1990s, when
Argentina’s dollaranchored economy was de
rigueur, Brazilians used to
get irritated by a market
tendency to lump the two
countries together.
The wry joke about
geographically challenged
Americans naming Buenos
Aires as the Brazilian capital
seemed less amusing in 2001 to
2003, when Argentina’s
financial crisis spilled over the
border.
Today, some critics accuse
Brazilian President Dilma
Rousseff of emulating her
Argentine counterpart Cristina
Fernandez de Kirchner’s heavily
interventionist policies and
penchant for doctoring
unfavourable data.
Rousseff’s administration has
sometimes been accused of
manipulating its own data and
undermining central bank
independence.
However, the pragmatic
streak that has run through
successive Brazilian
governments remains strong.
Brazil held three licensing
rounds for the oil sector in the
space of six months and
suddenly moved forward with
big privatisations in the sorely
neglected infrastructure sector.
Most Brazilian shipyards are
taking an increasingly practical
view on local content under the
watchful eyes of authorities
that seem more interested in
ramping up production quickly,
even if this means more foreign
help.
Argentina, on the other hand,
started the year with crippling
power cuts explained by 12
years of tough price controls
and low investment in the
energy sector.
Worse was to come, and the
country was this week
teetering on the brink of a
full-blown currency crisis.
The oil sector seemed at one
point to be leading the way
toward a more orthodox
scenario, because Kirchner’s
administration has begun to
give ground over price controls.
This change of heart came
after the expropriation of YPF,
which made the government
the country’s biggest producer.
A handful of oil companies,
such as Chevron, Total and
Wintershall, are investing in
Argentina again, but the
rumblings of a major economic
crisis could overshadow such
signs of progress, undermining
YPF’s ability to raise capital.
LETTERS TO THE EDITOR
THE INTERNATIONAL OIL & GAS NEWSPAPER
Editor-in-chief: ERIK MEANS
News editor: MARK HILLIER
Chief sub-editor: ANDREW KEMP
Upstream wants to hear from its readers, and all comments are welcome.
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G GROUP’S decision
to declare force
majeure on its
liquefied natural
gas exports from Egypt is
evidence of a worsening gas
supply crunch exacerbated
by unsustainable domestic
energy subsidies, writes
Nassir Shirkhani.
The move effectively ends
Egypt’s status as a gas
exporter, as total production
is hardly enough to meet
local demand.
Falling government
revenues coupled with the
reluctance of foreign
companies to invest in costly
offshore exploration are a
precursor to a worsening
energy shortage.
Increasing political
turmoil and violence are
putting more pressure on the
government’s ability to pay
international oil companies,
which are owed more than
$6 billion.
The government recently
paid $1 billion in arrears to
international oil companies,
but the funds came from
handouts from sympathetic
Persian Gulf countries such
as Saudi Arabia and the
United Arab Emirates, which
cannot be expected to
remain generous forever.
Tourism, a main pillar of
the Egyptian economy, is in
serious decline, further
squeezing revenues.
International oil
companies see little
incentive to invest while
they are not being paid and
their share of gas production
is diverted to domestic users.
The loss of gas exports
seriously undermines
confidence in Egypt as a
reliable partner.
BG said it is negotiating
with Egypt to find a solution
to the loss of exports, but the
military-backed authorities
are unlikely to listen in an
election year.
The company’s LNG
facilities at the port of Idku
therefore face the real
prospect of becoming idle.
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strictly prohibited.
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This edition was printed on 29 January 2014
12
31 January 2014
POLITICS
Ukraine
pause for
Russia
RUSSIAN President Vladimir
Putin and Prime Minister
Dmitry Medvedev have agreed
to take a pause before continuing financial and energy assistance to Ukraine, writes Vladimir
Afanasiev.
Speaking at a televised meeting with Putin, Medvedev said
the Russian government will
be able to resume help once it is
familiar with Ukraine’s new
ministers and government
policy.
Putin said that Russia should
await the appointment of new
government in Ukraine before
taking any further steps. However, he has urged Medvedev to
keep up communication with
Kiev.
Earlier this week, Ukraine’s
President Viktor Yanukovich
accepted the resignation of
Prime Minister Nikolay Azarov
and the Cabinet.
Yanukovich has also offered
controlling posts in the government to leaders of Ukraine’s
opposition in an apparent bid
to calm tensions.
In December, Russia’s statecontrolled gas monopoly
Gazprom reduced the gas price
for Ukraine’s Naftohaz Ukrainy
by 34% to $269 per thousand
cubic metres from 1 January.
In exchange, Ukraine’s government committed to increase gas imports from Russia
this year.
However, according to recent
pronouncements in Kiev, the
country is planning to keep its
gas imports this year unchanged from 2013.
Technically, Russian gas
prices may rebound to more
than $400 per thousand cubic
metres as soon as 1 April, because of a Russian requirement
that Ukraine’s state-run importer Naftohaz Ukrainy and
Gazprom have to sign a special
reduced pricing addendum to
their long-term gas supply contract each quarter.
Lebedev gets
his freedom
RUSSIA’S Supreme Court has
ordered that Platon Lebedev, a
close associate of recently freed
former Yukos chief executive
Mikhail Khodorkovsky, should
be freed from a labour camp.
According to the court,
Lebedev’s sentence has been
reduced to reflect the recent
softening of punishment for so
called “economic crimes” and
this means he has now fully
served his second sentence.
Lebedev is expected to leave
Russia as the Supreme Court
has refused to cancel an earlier
court ruling for both men to
pay $500 million in back taxes.
It’s not just oil and natural gas
production that’s booming.
We’re becoming a global
leader in solar, too.
US President Barack Obama
US
Policy: US President Barack Obama delivers his State of the Union address in Washington
Obama sees gas as crucial t
US President still seeking to cut tax breaks
for Big Oil, but sees natural gas as ‘bridge fuel’
BLAKE WRIGHT
Houston
US PRESIDENT Barack Obama
touted natural gas as “the bridge
fuel that can power our economy”
while remaining vigilant about
slamming the door on Big Oil tax
breaks during his fifth State of the
Union address on 28 January.
While energy was not the spotlight issue it had been in previous
years, Obama did take a few minutes in the one-hour-plus speech
to address what he believes is the
good and bad of the nation’s current energy policy.
“The all-of-the-above energy
strategy I announced a few years
ago is working,” he told the joint
gathering of Congress. “And today,
America is closer to energy independence than we’ve been in decades.”
Obama said he would “cut red
tape” to get estimated investments totaling $100 billion for
the construction of new factories
that use natural gas, and urged
Congress to help by putting people
to work building fueling stations
that “shift more cars and trucks
from foreign oil to American natu-
ral gas”. Shying away from topics
such as hydraulic fracturing and
the Keystone XL pipeline project,
Obama did take yet another shot
at Big Oil and the tax breaks that
he has been trying to roll back for
years.
“It’s not just oil and natural gas
production that’s booming,” he
said. “We’re becoming a global
leader in solar, too. Every four
minutes, another American home
or business goes solar, every panel
pounded into place by a worker
whose job can’t be outsourced.
Let’s continue that progress
with a smarter tax policy that
stops giving $4 billion a year to
fossil fuel industries that don’t
need it, so that we can invest
more in fuels of the future that
do.”
American Petroleum Institute
chief executive Jack Gerard said
that Obama has called for increased taxes on the oil and natural gas industry to close the income gap and create jobs.
“Punishing energy companies
by raising taxes is not sound en-
Exploration and production is ‘business as usual’ in Thailand
THE increasingly violent protests
that have taken the life of an antigovernment protest leader and
injured others in Thailand have
not yet taken their toll on exploration and production operations
in the country, writes Amanda
Battersby.
National upstream company
PTTEP said all of its production
operations were continuing without disruption, while another independent with onshore assets in
Thailand said it was “business as
usual”. However, PTTEP has
moved out of its main Bangkok
headquarters that it shares the
complex with state-owned PTT
and the Ministry of Energy.
PTTEP staff are working remotely but say that they are maintaining communications via
phone and email.
Meanwhile, Prime Minister
Yingluck Shinawatra — who the
protesters want to step down —
announced that Thailand will still
go to the polls on Sunday 2 Febru-
ary. The main opposition party
has already said it will boycott
these elections, while antigovernment protesters have managed to block voters from casting
early ballots in polling stations in
the capital and further beyond.
“We have to go forward with the
election. The election commission
will organise the election under
the framework of the constitution
and try to avoid any violence,”
Deputy Prime Minister Pongthep
Thepkanchana said. Although
exploration and production operations have yet to be directly affected by the latest wave of protests that have lasted for three
months, the political uncertainty
and the fact that many government agencies are unable to access their buildings will likely at
some point hit approvals needed
from the Energy Ministry.
There had been talk of a new
licensing round but this is now on
hold because of the ongoing
political crisis.
31 January 2014
13
34%
THE REDUCTION in the
price of gas sold by Russia’s
Gazprom to Ukraine’s Naftohaz
Ukrainy in effect until 1 April.
Libyan autonomist leader hopeful
of country resuming oil exports
THERE are renewed hopes of
Libya being able to resume oil exports in the near future following
optimistic comments by a senior
leader of the autonomy movement
which has seized ports in the east,
but oil markets cautioned against
being over-optimistic.
“I see progress with the state,
the government, the General
National Congress assembly,”
Reuters quoted Abb-Rabbo alBarassi, prime minister of the
self-declared eastern region government, as saying.
“I think it won’t take longer
than two weeks to reach a deal,
God willing. Maybe even less than
that,” he said.
Libyan Prime Minister Ali
Zeidan and the autonomy movement led by federalists such as AlBarassi and former oil security
guard Al-Ibrahim Jathran have
been involved in a war of words
DEAL IN
THE WORKS
Government keen to
settle disputes
VAHE PETROSSIAN
London
since the federalists seized three
main ports late last summer accounting for 600,000 barrels per
day of exports.
Libyan production of about
1.5 million bpd early last year is
believed to have plummeted to
about 500,000 bpd, with the government warning that it may
soon run out of funds.
Zeidani has made frequent
threats of tough action against
the militia groups, including
sending in the navy to prevent
foreign tankers from loading at
rebel-controlled ports, but the
confrontation has so far been limited to a war of words.
Al-Barassi said that the government side was now using softer
language and both sides were
keen to settle the dispute.
The government has agreed to
demands for investigating corruption and jointly supervising oil
sales, but a third demand for sharing oil revenues among the three
pre-Gaddafi regions of Cyrenaica
in the east, Tripolitania in the
west and southern Fezzan was
problematic for the government
because of fears of secession.
Al-Barassi’s group is now trying
to address Zeidan’s concern over
the third demand, Reuters quoted
him as saying.
Fragile South Sudan ceasefire still holding
Photo: AFP/SCANPIX
to US economy
ergy policy, and could lead to less
energy, less government revenue,
and fewer jobs,” said Gerard. “The
oil and natural gas industry already contributes $85 million a
day to the federal government — a
larger contributor of government
revenue than any other industry
in the US.”
Obama also promised new
standards on the amount of carbon pollution that power plants
can release into the air, but offered
that more urgency is needed to
achieve and maintain a cleaner,
safer planet.
“The debate is settled,” he said.
“Climate change is a fact. And
when our children’s children look
us in the eye and ask if we did all
we could to leave them a safer,
more stable world, with new
sources of energy, I want us to be
able to say yes, we did.”
A TENTATIVE peace is holding in
South Sudan despite accusations
from the country’s army of multiple breaches by rebels of a ceasefire agreement brokered late last
week.
The administration of President
Salva Kiir and representatives of
former vice president Riek Machar
signed a truce in the Ethiopian
capital, Addis Ababa, on 23 January after weeks of heavy fighting
threatened to plunge the oil-rich
nation into civil war.
Guns were to fall silent on 24
January, with Kiir also vowing an
amnesty for 11 political prisoners
aligned with former aide Machar,
but only after a proper investigation was conducted by South
Sudan’s judicial system.
In a message on the government’s official Twitter account on
24 January, Kiir wrote: “I am
pleased to tell people of South Sudan that the conflict, that was
uncalled for, will be resolved
through peaceful dialogue.”
However, a following message
from army spokesperson Colonel
Philip Aguer read: “There have
been multiple violations of (the)
ceasefire by rebels who (on) Sunday launched large-scale attacks
on our positions.” Fighting first
started in the capital, Juba, in
mid-December after Kiir accused
Machar of plotting a coup to oust
him — something the latter has
denied. It spread to outlying
states, with around a fifth of production shut in as rebels seized
key towns in oil-producing states.
Government troops earlier this
month regained control of the
towns of Bentiu in Unity state and
Bor in Jonglei state.
Talks in Addis Ababa, which
had stalled on the issue of the
political detainees, were adjourned until 7 February.
Ruler of Abu Dhabi stable following stroke
SHEIKH Khalifa bin Zayed alNahyan, the ruler of Abu Dhabi
and president of the United Arab
Emirates, has suffered a stoke but
remains in a stable condition following surgery.
His poor health is unlikely to
leave a leadership gap in the key
Persian Gulf oil producer since the
ruling al-Nahyan family has already put in place a firm succes-
sion plan. An official statement
said Sheikh Khalifa, 65, “suffered
a stroke on 24 January. He immediately underwent a surgical operation. His health is now stable”.
Sheikh Khalifa, who has been in
poor health, has for years assumed a lower profile in state affairs, with most day-to-day decision-making entrusted to his
half-brother, Sheikh Mohammed
bin Zayed al-Nahyan, the crown
prince of Abu Dhabi.
Observers expect a smooth transition of power to the current
crown prince, who will take over as
ruler of Abu Dhabi and UAE president in the event of Khalifa’s death.
Sheikh Khalifa came to power in
2004 after the death of his father,
the founder of the UAE, Sheikh
Zayed bin Sultan al-Nahyan.
14
31 January 2014
WORLD
Oxy Qatar
extension
to jack-up
We are discussing, really seriously, ways of
making use of the oil that has been produced in
Kurdistan regardless of our views on the legal
validity of those contracts.
Iraq Deputy Prime Minister for Energy Affairs Hussein Shahristani
IRAQ
AL WAJBA
DRILLING RIG
OCCIDENTAL Petroleum Qatar
(Oxy Qatar) has awarded a
$230 million contract to Gulf
Drilling International (GDI) for
a five-year extension of the
lease for the jack-up drilling rig
Al Wajba for use at the Idd El
Shargi and Al Rayyan fields,
writes Vahe Petrossian.
The new contract period
starts from January 2015.
The Idd El Shargi North
Dome (ISND) oilfield is about to
undergo a $3 billion expansion,
which is now in the initial tendering stage.
GDI has two jack-ups working for Oxy Qatar, the Al Wajba
and Al Rayyan.
“The signing of this extended-term contract for the Al
Wajba drilling rig will support
our development plans over
the next five to six years,”
said Steve Kelly, president
and general manager of Oxy
Qatar.
Persian Gulf contractors are
still waiting for tender invitations from Oxy Qatar for up to
$3 billion worth of work on the
latest expansion phase of the
ISND oilfield.
The planned tender issue —
expected to involve six packages, and originally due out in
late 2013 — followed an agreement between Oxy and Qatar
Petroleum over the phase five
field development plan of ISND.
The six packages comprise
processing platforms, a wellhead platform plus jacket, pipelines, infield flowlines, Halun
island modification and an
accommodation platform.
More than 200 wells are to be
drilled, comprising production, water injection and water
source wells, to improve recovery rates and lengthen the life
of the field.
The plan also calls for the installation of platforms, wellhead jackets, fluid processing
equipment, pipeline debottlenecking and water source
projects.
ISND lies in 105 feet of water.
It was discovered in 1961 and
went into production in 1963.
A high depletion rate caused
production to crash to 20,000
barrels per day in 1994, when
Occidental took over and, using
advanced drilling systems,
raised output to its peak of
140,000 bpd within four years.
There have since been other
output falls, followed by expansion programmes taking
production closer to 100,000
bpd
Occidental is the second biggest crude producer in Qatar.
Iraq holds its breath for K
Deputy Prime Minister for Energy Affairs Hussein Shahristani criticises KRG
for keeping central government in the dark about the nature of its PSCs
NASSIR SHIRKHANI
London
THE Iraqi government is waiting
to see if the Kurdistan Regional
Government (KRG) endorses its
latest proposals aimed at resolving a long standing dispute over
oil exports from the autonomous
region.
Iraq Deputy Prime Minister for
Energy Affairs Hussein Shahristani said both revenues from oil
sales and exports must be handled
by the federal authorities.
Revenues will then be distributed to parts of Iraq, including the
KRG which is entitled to 17% of the
national revenues.
Plans by the KRG to begin independent exports through a pipeline to Turkey have infuriated
the central government, which
claims sole authority over the
country’s oil sales.
“KRG is part of a federal system.
Oil and gas in any part of Iraq is,
according to the constitution, the
property of the Iraqi people,” said
Shahristani.
The Iraqi central government
had no objection to payments by
the KRG to international oil com-
panies operating in the region,
provided the money came from its
17% share.
As such, central government
will not raise the issue of the
legality of the 50-plus production
sharing contracts the Kurdish
government has signed with international players, the minister
added. However, Shahristani crit-
Regions contribute to big forecast increase in capacity
IRAQ is projecting a significant increase of
more than 50% in oil production capacity
next year, on the back of increasing output
from the Basra region and the autonomous
Kurdistan region, writes Nassir Shirkhani.
Iraq Deputy Prime Minister for Energy
Affairs Hussein Shahristani projects
capacity will soar to 4.7 million barrels per
day in 2015, from the current level of 3
million bpd.
Capacity is then expected to climb to 9
million bpd in 2020 as international oil
companies complete development projects
in the south and north of the country,
including Kurdistan.
Shahristani said violence has had no
effect on the developments of the giant
Basra fields, which lie in Iraq’s Shia
heartland, where Sunni rebels linked to
al-Qaeda have had little success in
hampering operations by oil companies.
Iraq’s output is expanding, while supplies
elsewhere are tight, removing the risk that
higher Iraqi production will cause a glut,
said Shahristani.
However, he said the Syrian civil war has
hampered upstream activities in the west
of Iraq and encouraged al-Qaeda to step up
attacks in Iraq against the main KirkukCeyhan pipeline to Turkey.
“The ongoing conflict in Syria has
resulted in an increasing number of
terrorists using vast desert areas between
Syria and Iraq to establish bases from which
they have carried out attacks against the
civilian population and economic targets
and infrastructure. Attacking the energy
sector has been among their top priorities
to deprive the country of its main revenue
source.
“The attacks have been focussed on oil
export pipelines, power generation and
transmission lines,” said Shahristani.
“The Iraqi Turkish pipeline was blown up
54 times during 2013, averaging once a
week, yet we managed to repair and use
that pipeline and pump on average 250,000
bpd last year,” he added.
Security concerns had hindered the
development of Qayara and Najmah
oilfields, operated by Angolan state oil
company Sonangol in the al-Qaeda
heartland of Nineveh province in the
country’s north-west.
31 January 2014
15
11.5%
THE AMOUNT of natural
gas In Amenas produced for
Algeria before the terrorist
attack on the facilities.
Transparency
call: Iraq’s
Deputy Prime
Minister for
Energy Affairs
Hussein
Shahristani
Algeria’s amended hydrocarbon
law due to come into effect soon
REVISED
LEGISLATION
Internationals will still
pay “special” tax
NASSIR SHIRKHANI
London
Photo: AFP/
SCANPIX
KRG decision
icised the KRG for keeping the
central government in the dark
about the nature of its PSCs,
which central government has
consistently branded as being
illegal.
“We in the government of Iraq
don’t have a single copy of any of
contracts that the KRG has signed.
That’s how transparent those contracts have been,’’ he said.
Nonetheless, Iraq needs Kurdish oil to help reduce a budget
deficit in 2014.
Kurds are expected to provide
400,000 barrels per day of the
projected oil sales of 3.4 million
bpd this year, otherwise Baghdad
will be forced to withhold payments to the region.
“We are discussing, really
seriously, ways of making
use of the oil that has been
produced in Kurdistan regardless
of our views on the legal validity
of those contracts,” said Shahristani.
“The oil that is being produced
should be exported by Somo,
which is the state oil marketing
organisation of Iraq.
“The revenues generated should
be distributed to all Iraqis. These
principles have been agreed with
the KRG representatives.
“The remaining issue is they
have asked for time to discuss it
with their partners.
“This seems to be very fair and
reasonable. This will avoid any
discussion of the type of the contracts because those discussions
may take a long time and may or
may not lead to any resolution of
the differences.
“So we have suggested they
should export the oil they produce
and pay the companies as much as
they want from their 17%.
“We are waiting for the final acceptance of this proposal so that
we can pass the budget of 2014,’’ he
added.
The KRG has previously rejected
central government’s assertions it
should pay international players
from its 17% share of the national
revenues.
Search the archive:
KRG
ALGERIA’S amended hydrocarbon law, aimed at making
the country a more attractive
upstream investment destination, is set to come into effect in
the coming weeks.
Ali Hached, senior adviser to
Algeria’s Oil Minister Youcef
Yousfi, said the revised legislation removes a much-detested
windfall tax imposed on foreign
operators at the time of high oil
prices.
However, Hached said international oil companies would still
be required to pay what he called
a special tax in the event of
excessive profits.
“There will be a special tax
when companies make a lot of
money,’’ he told Upstream.
Yousfi had signed the amendments and sent them to Prime
Minister Abelmalek Sellal for final approval.
Algeria moved last year to
amend its hydrocarbon law to
Signed: Algeria’s Oil Minister Youcef Yousfi
Photo: REUTERS/SCANPIX
sweeten terms for foreign investors, which have shunned the
country in recent years. Taxes are
now linked to profits instead of
turnover as part of the amendments.
However, to the dismay of
investors, national oil company
Sonatrach will remain a majority partner in all upstream
projects.
Hached hopes the incentives
will encourage internationalplayers to take part in the latest
exploration round unveiled last
week. The offer of 31 onshore
blocks comes a year after Islamist militants killed 40 people in
an attack on the In Amenas gas
plant operated by BP and Statoil.
The pair have yet to return to the
site, which they deem unsafe.
Algeria has held roadshows in
London, Houston and Jakarta to
promote the blocks.
Algeria’s last three exploration
rounds attracted only tepid
interest from international
players — raising questions
about whether the country has
enough new projects coming on
stream to maintain output levels
in its fields.
Crude output has fallen below
1.2 million barrels per day from
its peak of 1.4 million bpd.
Gas production has also suffered
as a result of low investment.
Return:
signs of
damage
cause by
seige at In
Amenas
plant
Photo:
REUTERS/
SCANPIX
In Amenas plant gets ready to run again
ALGERIA’S In Amenas gas plant
is expected to be fully operational within weeks — marking the
end of supply disruptions that
followed last year’s terrorist
attack on the facilities in the
Sahara.
Ali Hached, senior adviser
to Algeria’s Oil Minister Youcef
Yousfi, said work on the last
of the plant’s three processing units was nearing completion.
“Two thirds of capacity is already on stream and the last unit
will start in a few weeks, so
In Amenas will be back at full
capacity in a few weeks,’’ he said.
In Amenas, which has a
processing capacity of about 30
million cubic metres per day, was
currently pumping at about 20
MMcmd, he added.
In Amenas produced about
11.5% of Algeria’s natural gas output before the attack.
Full resumption would increase Algeria’s gas sales to the
key European market.
Forty oil workers were killed at
In Amenas in January last year
after the Islamist militants took
expatriates hostage during a
four-day siege that ended when
Algerian forces stormed the site.
UK supermajor BP, which
operates the field in partnership
with Statoil and Algeria’s Sonatrach, said in October expansion
projects for In Amenas and In
Salah plants would not get going
in 2014, as planned. BP has yet
to send foreign contractors back
to In Amenas, although Algerian
officials said new security reinforcements and a landing pad
were in place at the desert
complex.
BP expects to return personnel
to the Algerian sites once agreed
security measures are in place.
Hached said foreign companies
were gradually returning their
staff to sites deep in the desert,
starting with oil and gas producing hub of Hassi Messaoud.
In Amenas and In Salah should
follow soon.
The terrorist attack has
hampered new upstream work
by international oil companies
in Algeria seen as high risk in
security and investment terms.
WORLD
16
First oil
from ACG
platform
THE BP-led Azerbaijan International Operating Company
(AIOC) has started production
from facilities at the AzeriChirag-Gunashli (ACG) field in
the Caspian Sea as part of its $6
billion long-term plan to
optimise output from the
giant reservoir, writes Kama
Mustafayeva.
Production started at the
newly-completed West Chirag
platform from well J05 at a rate
of 3000 barrels per day. Output
will increase to about 60,000
bpd through 2014 as five other
wells, which are already
drilled, come online.
Another eight pre-drilled
wells will start pumping over
the next two years. Further
drilling will take place later in
the decade.
The Chirag Oil Project (COP)
was launched in 2010. More
than $4 billion has so far been
spent.
“This major investment will
contribute to optimising recovery from the ACG field,” BP said.
The oil from J05 will be exported to the Sangachal terminal via a new in-field pipeline
linked to an existing 30-inch
subsea export pipeline.
“To date, the ACG field has
produced over 2.3 billion barrels
of oil and with future continual
major investments in new technologies and facilities, like the
one we have today started up, it
will continue to produce as a
world-class reservoir for many
decades,” said Gordon Birrell,
BP’s Regional President for Azerbaijan, Georgia and Turkey.
The West Chirag platform
was installed in a water depth
of about 170 metres between
the existing Chirag and Deepwater Gunashli platforms. The
design oil capacity of the new
platform is 183,000 bpd. The
gas export capacity is 285 million cubic feet per day.
ACG participating interests
are operator BP on 35.8%, Socar
on 11.6%, Chevron on 11.3%, Inpex on 11%, Statoil on 8.6%,
ExxonMobil on 8%, TPAO on
6.8%, Itochu on 4.3% and ONGC
Videsh on 2.7%.
Buchan A
evacuated
TALISMAN Sinopec Energy UK
(TSEUK) has downmanned its
Buchan Alpha installation UK
North Sea for the third time
since the start of December due
to severe weather forecasts.
Production was shut down
on 23 January and the removal
of 75 workers was completed on
26 January, TSEUK confirmed.
Buchan A is not allowed to
operate if waves are greater
than 6.75 metres because of
concerns about the structural
integrity of the pentagonaldesign platform.
“As per the installation’s
Safety Case, we began the
planned procedure... as a result
of severe weather forecasts and
in advance of the sea state exceeding the stated level over
the weekend,” TSEUK said.
31 January 2014
NORWAY
Giant in demand: Allseas’ Pieter Schelte under construction at Daewoo
Photo: ALLSEAS
Peter Schelte to take on
Talisman’s giant Yme job
Allseas’ twin-hull behemoth currently under construction at
Daewoo in South Korea to remove topsides at Norwegian field,
as partners work on new development plan for project
OLE KETIL HELGESEN
Stavanger
TALISMAN Energy has lined up the
world’s largest vessel, the twinhull behemoth Pieter Schelte, to
remove the Canadian operator’s
biggest headache — its condemned
Yme jack-up production platform
off Norway.
A company spokesperson said
Talisman has informed the authorities that it plans to use Allseas’ purpose-built installation
and
decommissioning vessel “during
the summer of 2015”.
She added that “it is the platform topsides that will be removed”, but declined to reveal the
budgeted cost of the operation.
The 382 metres long and 124 metres wide vessel is currently under
construction at South Korean
shipyard Daewoo Shipbuilding &
Marine Engineering.
Delivery is expected in the second half of 2014, and it should be
ready for offshore operations by
the end of the year.
However, sources suggest the
Yme lifting work could turn out to
be Pieter Schelte’s maiden contract.
Allseas won a contract from
Shell last year to use the Pieter
Schelte for the removal of three
large platform topsides on the
Brent field in UK waters, with an
option for a fourth, but that work
is scheduled to begin later in 2015
or 2016. Allseas declined to comment on the Yme contract with
Talisman.
The Pieter Schelte is designed to
significantly reduce the amount
of offshore work associated with
platform installation and decommissioning, given its ability to
handle massive structures in single-lift operations.
For platform removal work, the
legs of the topside support structure are cut before the vessel
arrives on location, and further
preparations are performed as required from the platform deck or
using a support vessel.
Once complete, the horseshoeshaped vessel is positioned around
the targeted platform, hydraulic
clamps mounted on eight horizontal lifting beams at the bow of the
Pieter Schelte are slid into place,
and the topsides are raised as the
vessel ballasts up.
The Pieter Schelte has a nameplate topsides lifting capacity of
48,000 tonnes and a jacket lifting
capacity of 25,000 tonnes.
Talisman’s Yme project has been
derailed by massive cost overruns
and
delays,
and
has
generated huge losses for all the
primary parties involved.
After numerous efforts to get the
newbuild platform in working con-
Condemned:
the Yme
platform
Photo:
TALISMAN
dition, the Yme licence partners
and main contractor SBM Offshore
agreed to remove the facility from
the field, and it is earmarked for
scrapping.
Talisman is now working on a
new development plan based on
another jack-up production platform on Yme.
It remains to be seen whether
the partners will find profitability
in development of the estimated 60
million to 70 million barrels of oil
in the field.
“The business case for future development is based on using
already-installed equipment —
tank, caisson, subsea installations,
pipelines, umbilical and wells,” the
Talisman spokesperson said.
“The Yme evaluation is still
ongoing, which will lead to an
updated plan for development and
operation. It is therefore too early
to release any details on the alternative development solutions at
this point, or the profitability.”
Talisman is under much greater
scrutiny than usual and is being
forced to report on every milestone it reaches and decisions it
takes on the revised Yme development scheme.
In a recent letter to the Norwegian Petroleum & Energy Ministry, Talisman wrote that sanctioning and concept selection of
the Yme Future Development
Project is planned within the first
quarter of 2014, and that front-end
engineering and design studies
are to start immediately after concept selection, targeting completion by the end of this year.
WORLD
31 January 2014
17
MAURITANIA
Tullow sizes up Banda bidders
Saipem and Entrepose said to be in
running for Africa specialist’s $100
million gas facility in Mauritania
IAIN ESAU
London
LONDON-listed independent Tullow Oil has shortlisted bidders
from Italy and France to build a
$100 million gas processing plant
onshore Mauritania to handle production from the Banda field, a
long-distance subsea tieback to
shore.
According to industry sources,
Milan-based Saipem is up against
Entrepose Contracting of France
in a battle to build the facility.
This contract will also involve
the installation of a six-kilometre
onshore section of Banda’s gas export pipeline.
Saipem has significant experience of onshore pipeline work
while Entrepose, owned by the
Vinci Group, would call on its
Spie-Capag associate company.
The plant, which will be located
just outside Nouakchott and operated by Tullow, will be designed to
handle 65 million cubic feet per
day of gas.
The status of the biggest Banda
contract up for grabs is not so
clear-cut, with a well-placed
source saying Tullow has yet to
decide on its preferred bidders.
This package covers the engineering, procurement, installation and commissioning of 74
kilometres of offshore pipeline—
including shore approach and
landfall work — plus the installation of Banda’s 74-kilometre umbilical.
Tullow is understood to be evaluating bids from four groups for a
contract that is estimated to be
worth at least $200 million.
An informed source said the operator “currently has a long shortlist of four and working is working
on finalising that now”.
The prime contenders in this
contract race are believed to be Italy-based Micoperi, working with
Tideway, and Norway-based Cecon
allied to Van Oord.
The remaining runners are two
from the other bidders including
an Emas-led group, Saipem, an
Allseas and Boskalis joint venture
and possibly Sea Trucks.
Tullow is also understood to
have shortlisted contenders to
supply Banda’s umbilical and its
subsea production system.
For the latter package, comprising up to four wells, Tullow has
chosen Dril-Quip of the US and
Aberdeen-based Proserv.
Norway’s Aker Solutions and
Edinburgh-based JDR are battling
to secure the umbilical package.
All key contracts are due to be
awarded by the end of March.
Drilling of two development
wells, located in 230 metres of water, will take place in the second
half of 2015 with first gas set to
flow in early 2016.
Under a 60 MMcfd, 20-year supply deal, Banda’s 1 trillion cubic
feet of gas resource will be used as
feedstock for a power plant, to be
operated by state-owned utility
SPEG.
This plant will supply power via
a new transmission line to Nouadhibou and Tasiast, the site of a
Kinross-operated gold mine.
Mauritania’s government is also
considering exporting up to 100
megawatts of power to Senegal
and Mali through an existing
transmission network.
Potential: the Tullow facility will be located just outside Nouakchott
Photo: BARRY MORGAN
WORLD
18
31 January 2014
Money
paid to
officials
MIDDLE EAST
Potential for modification: SapuraKencana’s semi-tender, West Pelaut
Brunei Shell eyeing up
the offshore options
Possibilities include construction of semisub tender assist unit
— or modifying SapuraKencana’s semi-tender West Pelaut
TAN HWEE HWEE
Singapore
BRUNEI Shell Petroleum (BSP) is
studying the offshore drilling options available for a long-term
work-over programme lasting up
to ten years in near-shore to shallow waters off the South-East
Asian country.
Among the options being considered is the design and construction of a semi-submersible
tender assist drilling unit, to be
purpose-built for development
and work-over wells off Brunei.
In addition to drilling in water
depths ranging from four metres
to 120 metres, the semi-tender
would also be equipped with
heavy lift cranes to remove flare
booms and helidecks.
The 50:50 joint venture between
Shell and the Brunei Sultanate,
has recently sounded out the market for a suitable rig design.
The rig is primarily intended for
a long-term work-over programme
lined up in BSP’s Champion field
and other offshore developments.
However, a rig design contest is
understood to have recently
stalled over concerns voiced about
the intellectual property rights to
the winning design.
BSP has also stopped short of
committing the award of a longterm drilling contract to the party
offering the winning rig design,
prompting speculation that the
field operator could be assessing
other rig options for its work-over
programme. Those options include potentially modifying
SapuraKencana’s semi-tender,
West Pelaut, for work-over purposes.
West Pelaut has been on charter
with BSP since its delivery from
Singapore-based Keppel Fels in
1994.
The contract on West Pelaut
was due for renewal following
the expiry of a three-year extension granted by BSP in December
2010.
If BSP decides to go with West
Pelaut for the work-over programme, one source said the field
operator may have to seek a sec-
ond semi-tender for its remaining
development drilling needs off
Brunei.
The field operator has separately floated a tender for a jack-up
drilling contract lasting for 10
years from a planned award this
year.
The contract will carry an option for BSP’s state-owned partner, Petroleum Brunei, to acquire
the jack-up from the successful rig
owner at the end of the 10-year
charter.
In recent years, Petroleum Brunei has exhibited a strong desire
to build its own drilling fleet in
line with a national drive to develop the local oilfield services
Bids invited for two-year contract at Champion oilfield
BRUNEI Shell Petroleum is inviting bids for a two-year contract for
the installation of offshore platforms and pipelines primarily tied
to the waterflood project at its
flagship Champion oilfield.
BSP is after a vessel with
2000-tonne lifting capacity to install at least eight topsides, of
which as many as half a dozen are
destined for the Champion waterflood project now under construction.
The two-year contract, from
2015 through to 2017, will also potentially extend to associated
pipelines at the Champion field. At
least five contractors, including
McDermott of the US, Italy’s
Saipem, Japan’s Nippon Steel, Malaysia’s TL Offshore and China’s
Offshore Oil Engineering Company (COOEC), have been invited to
submit bids by 7 March.
McDermott and COOEC have
already won the first two contracts linked to the Champion waterflood project.
COOEC is carrying out the engineering, procurement and construction of the six platforms —
four wellhead, one drilling plus a
gas compression structure — under a contract awarded by BSP last
year.
McDermott is expected to mobilise its DB30 construction vessel
from later this year to install the
jackets of the six planned Champion platforms. The jacket installation work is scheduled for completion in the third quarter of
2016.
The two-year offshore installation contract on offer from BSP
will include at least two further
platforms under the field operator’s work programme. The select-
ed contractor is expected to mobilise a fleet of offshore support
vessels being tendered out separately by BSP.
Local contractors teaming up
with foreign vessel owners are
understood to have submitted
bids for up to three contracts for
the supply of a marine spread
comprising 16 vessels.
The contracts, lasting for fixed
five-year terms plus two-year extensions, will include the supply of
a combination of diving support
vessels, landing trucks, work
boats, fast crew vessels and barges.
INDONESIA’S national oil and
gas company Pertamina has admitted paying money to government officials.
The news is the latest twist in
the ongoing corruption scandal
that already implicates management at upstream regulator
SKK Migas and the Ministry of
Energy & Mineral Resources.
Pertamina president director
Karen Agustiawan revealed to
Corruption Eradication Commission (KPK) investigators
that she had been approached
by disgraced former SKK Migas
executive chairman Rudi Rubiandini to ask for Pertamina to
contribute funds alongside the
ministry headed by Jero Wacik.
“The money would be given
to House lawmakers who, I believe, were in the budget committee,” local media quoted her
as telling KPK officials.
Agustiawan added that the
suspended SKK Migas head and
Wacik had both asked her for
other monies that she claims
she did not pay.
She categorically denied that
Pertamina had ever made any
payments to Commission VII,
which oversees energy matters
in Indonesia.
“I want to emphasise that I
did not give a single penny to
the House’s Commission VII. I
will never let my office be used
as an automated teller machine,” she said.
Rubiandini is on trial for allegedly accepting bribes totalling more than $2 million.
Agustiawan’s
mammoth
questioning session on Monday
came about because she had
been called as a witness in the
case against the ministry’s secretary general Waryono Karyo.
She further claimed that Rubiandini had asked her to give
Pertamina’s payment to Waryono, but Agustiawan said that
she declined this request, preferring to give the $150,000 direct to the House.
SKK Migas is alleged to have
also put up $150,000 to help
smooth deliberation of the
budget.
Rubiandini claimed he had
paid monies to Commission VII
in earlier testimony at the Jakarta Corruption Court, although its chairman, Sutan
Bhatoegana denies this.
Bid to extend
contract
INDIA’S Ministry of Petroleum
& Natural Gas is seeking a
year’s extension for Sudhir Vasudeva who is due to retire as
chairman of Oil & Natural Gas
Corporation (ONGC) next month.
Sources suggested that the
Indian government is likely to
decide soon whether or not to
allow Vasudeva to stay on beyond his scheduled retirement
on 28 February.
Petroleum Minister Veerappa Moily is said to want Vasudeva’s term to be extended,
believing that he can bring
continuity to various measures
being implemented by ONGC.
WORLD
31 January 2014
19
NORWAY
Evaluation:
Norway
member of
parliament
Kjell Ingolf
Ropstad
Photo: NTB
SCANPIX
Statoil close to decision
on Johan Sverdrup plan
Some players believe a 200 MW cable would be technically feasible,
and could provide an economically viable power solution
BEATE SCHJOLBERG
Oslo
NORWEGIAN player Statoil and its
partners at the Johan Sverdrup
discovery are approaching a
concept decision for the giant
North Sea oilfield, as politicians
continue to push for a power
solution to supply several nearby
fields with electricity from the
mainland.
It now seems clear that the
first phase of the Johan Sverdrup
development is set to be powered
through a single cable to the
multi-platform field centre, after
a plan for two cables running to
a separate power-hub platform
for several fields proved too
expensive.
However, the capacity of the
cable remains uncertain.
Statoil’s favoured option is
believed to be a 78 megawatt cable
to supply Sverdrup alone. To ensure security of supply and avoid
further delays to the development
planning, this solution would require installation of two back-up
gas turbines with a combined
capacity of 78 MW, sources told
Upstream.
However, some players within
and outside Statoil argue that
a 200 MW cable would be technically feasible, and could provide
an economically viable power
solution for the entire Utsira High
area.
This option could stall further
the already delayed development
schedule, as it would require additional work, such as amended
plans for the riser platform to
accommodate the extra weight
and space needs.
“It is now that the decisions for
an area electrification are being
made, and it is important that all
options for electrification of the
Utsira High are evaluated,” said
Norwegian member of parliament
Kjell Ingolf Ropstad, who represents the Christian People’s Party.
“When a hub solution looks
like it will be too expensive, it is
obvious that we need to know
what it will cost to bring 200 MW
to Johan Sverdrup, and whether
this is possible when it comes to
weight and space,” Ropstad said.
The Edvard Grieg, Ivar Aasen
and Gina Krog developments,
which are due on stream in the
next few years, were all expected
to be wholly or partially powered
from shore through Johan
Sverdrup.
The Krog and Grieg platforms
are being equipped to switch to
mainland electricity, with the latter platform also supplying Aasen.
In an answer to a written
question from Ropstad regarding
the possibility of a 200 MW cable,
Norway’s Petroleum & Energy
Minister Tord Lien this week said
that operator Statoil and its partners “are discussing, reviewing,
evaluating and qualifying a
number of issues, including those
mentioned by the representative”.
“Based on the existing framework conditions, the companies
must establish a development solution on a commercial basis, including evaluating which power
solution is best for each development. This is also the case for
Sverdrup and the fields on the
Utsira High,” the minister wrote.
Ropstad said he is concerned
that cost-effective solutions may
fall by the wayside, as the dozen
or so players involved in the four
Utsira High developments fail to
agree on how the cost should be
split between the licences.
Having previously pushed back
a concept selection from Decem-
ber, Statoil and partners Lundin,
Petoro, Det Norske Oljeselskap and
Maersk Oil, now aim to decide on
a concept proposal from Statoil
before the middle of February.
Statoil is working operator
for Johan Sverdrup until a development plan is ready in a year’s
time.
The current schedule calls for
sanction by parliament by the middle of 2015 and first oil in late 2019.
More gas
via Nord
Stream
GAS shipments through the
Gazprom-led Nord Stream pipeline to Europe increased last
year, but the Russian gas monopoly acknowledged they were
still signficantly below capacity, writes Vladimir Afanasiev.
Nord Stream pumped about
23.6 billion cubic metres of
Russian gas to Germany last
year, compared with 11.8 Bcm
in 2012.
However, this was still well
below the annual capacity of
55 Bcm that the twin-leg pipeline can handle.
Nord Stream reported a
50% increase in revenues to
$800 million in January to
September of last year.
However, its net income fell
by more than 41% to $69 million in this period, according to
Gazprom.
Nord Stream was completed
in 2012, at an estimated cost
of about $20 billion, with
Gazprom holding a 50% controlling interest in the venture.
Germany’s Wintershall and
E.ON, France’s EdF and Netherlands’ Gasunie own the
remaining interest in the
operator.
Despite its under-utilisation,
Gazprom and its partners have
commissioned Nord Stream to
investigate the possibility of
laying third and fourth
legs of Nord Stream across
the Baltic, and extending its
reach to the UK.
Search the archive:
Gazprom
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WORLD
20
COSL set
to build
new units
CHINA Oilfield Service Ltd
(COSL), the country’s top offshore service provider, has
budgeted up to 8 billion yuan
($1.3 billion) of investments for
2014, in part to finance the construction of up to 26 offshore
units including rigs and support vessels, writes Xu Yihe.
The company, which is a unit
of China National Offshore Oil
Corporation, said it has
clinched 90% of the service
contracts it needs for its fleet in
2014.
New units being built include four jack-up rigs, under
fabrication at Dalian Shipbuilding Industry Offshore
(DSIC Offshore) and China Merchant Heavy Industry, two
deep-water semi-submersible
drilling rigs being built at
DSIC Offshore and CIMC
Raffles, 15 offshore support
vessels, two supply vessels, one
12-stream seismic vessel, two
deep-water geological survey
vessels, and two deep-water
supply vessels.
These units, being built at
Chinese yards, are scheduled
for delivery between 2014 and
2016.
The latest addition, the
semisub Hai Yang Shi You 982,
being built to the A5000 design
of Norway’s Agility Group at
DSIC Offshore, is a high-specification unit capable of working in 5000 feet of water and
with a drilling capacity of
30,000 feet.
In early January, the company extended a term contract
with Mexico player Pemex for
the COSL 4 modular rig for
more than four years.
The 2000-horsepower rig,
booked on a 1700-day deal, is
one of four modular rigs and
three jack-ups that COSL has
under contract to the Mexican
state company.
COSL said that it will build
one more 3000HP module rig
for operation in Mexico.
Shan claims
are rejected
MYANMAR’S Ministry of
Energy has rejected claims
from villagers in Myanmar’s
Shan state that a China National Petroleum Corporationoperated gas export pipeline is
causing earth tremors.
Locals living near to the
pipeline that transports gas
from Daewoo International’s
Shwe project off Myanmar to
neighbouring China, which
started commercial operations
last July, have claimed it is
causing tremors and they are
concerned that it could explode.
The ministry said that the
pipelines had been built to
international standards and
can withstand pressure of
more than 2000 psi.
Furthermore, the pipeline is
reportedly operating at less
than a quarter of this pressure,
according to an inspection
team report.
31 January 2014
INDIA
Project: an existing platform at the Ravva field in Andhra Pradesh, India
Photo: CAIRN INDIA
Three players submit
bids for Ravva re-tender
Larsen & Toubro, Swiber and TL Offshore in hunt for
wellhead platform and facilities award from Cairn India
NISHANT UGAL and
TAN HWEE HWEE
New Delhi and Singapore
THREE offshore contractors have
bid in a re-tender by Cairn India
for a wellhead platform and associated facilities required for its
Ravva field off India’s eastern
coast.
Sources told Upstream that Indian engineering giant Larsen &
Toubro (L&T), Singapore based
Swiber and Malaysia’s TL Offshore
submitted bids earlier this month
for the Ravva project.
Technical bids were submitted
on 15 January followed by price
bids on 20 January, sources added.
Cairn decided to re-tender the
Ravva project last December and
invited pre-qualified bidders L&T,
Swiber, Gunanusa, Leighton, TL
Offshore and SEW to participate.
However, the consortium of
Hyderabad-based SEW Infrastructure and Indonesia’s Gunanusa,
which emerged as the lowest bidder in the previous Ravva tender,
chose to stay away this time
around.
Sources suggested that SEW has
decided not to bid for oil and gas
projects in India for the time being, owing to the intense competition in the domestic market.
“SEW had done a lot of bid work
on the Cairn project, but they preferred to stay away as the company has decided not to participate
in oil and gas projects at least for
another six to eight months,” one
industry source claimed.
In July last year, the SEW-Gunanusa consortium emerged as the
lowest bidder and quoted $60.1
million for the offshore job, while
L&T was the second lowest at
$61 million.
However, the previous Ravva
tender was cancelled by Cairn as
approvals were not in place by India’s upstream regulator Directorate General of Hydrocarbons,
sources claimed.
Australian contractor Leighton,
which was earlier qualified by
Cairn, also stayed away from the
re-tender process, sources suggested.
The Ravva work-scope involves
engineering, procurement, construction and installation of one
new unmanned wellhead platform, inter-connecting infield
subsea pipelines and modifications to the existing wellhead
platforms at Ravva.
Cairn is also looking for between 15 and 20 kilometres of
subsea pipelines in three segments.
Cairn is likely to award the con-
tract in another month or two and
has slightly relaxed the completion schedule of the project to 12
months, a source claimed.
Existing facilities at Ravva include eight unmanned wellhead
platforms, in-field pipelines, an
onshore processing terminal and
a marine export terminal including single point mooring
system.
Cairn plans to install the additional platform and pipelines, as a
part of the contingent resource
development project, also known
as PKGM-1.
Cairn India is the operator of
the Ravva block and holds a 22.5%
stake. Block partners include Oil
& Natural Gas Corporation with
40%, Videocon Petroleum on 25%
and Ravva Oil with the balance of
12.5%.
Tax department investigation stalls divestment process
CAIRN Energy, the former parent of Cairn
India, is being investigated by India’s
Income Tax Department in relation to some
earlier accounts — a move that has
effectively stopped it completely divesting
its entire equity.
The matter focuses on income tax
assessments for the financial year ending 31
March 2007.
“Cairn is co-operating to provide the
necessary documentation and information
as requested,” said the company.
While the discussions are ongoing, the
Income Tax Department has instructed
Cairn Energy to keep its shares in Cairn
India.
Indian media claimed that the
government was wrong to stop Cairn
Energy’s share divestment even if it is
looking into the company’s tax affairs.
Cairn Energy floated its subsidiary in
2007 and then three years ago it sold Cairn
India for $6.5 billion to London-listed
Verdanta Resources to focus its on
upstream operations in areas including
Greenland.
Both Cairn and Verdanta’s shares took a
hit from the news of the tax probe and
Cairn said it would update the market in
due course.
WORLD
31 January 2014
21
US
BP pair fail in court plea
to drop Macondo charges
Former senior officials face trial as judge rules
against dismissing 23 criminal counts
KATHRINE SCHMIDT
Houston
TWO former senior officials of UK
supermajor BP who were in charge
of the semi-submersible Deepwater Horizon when it exploded
in the Gulf of Mexico in April 2010
will face a criminal trial after
their lawyers failed to convince a
US judge to drop charges of manslaughter.
Lawyers for Robert Kaluza, 62,
of Henderson, Nevada and Donald
Vidrine, 65, of Lafayette, Louisiana, petitioned US district judge
Stanwood Duval in June to dismiss 23 criminal counts against
both of them.
BP’s officials in charge of the
Deepwater Horizon were accused
by the US Department of Justice of
misinterpreting key tests and
other management failures leading up to the Macondo blowout
that killed 11 workers and spilled
nearly 5 million barrels of crude.
Both have pleaded not guilty to
the charges, which could see them
face heavy prison sentences.
They face eight years on each
involuntary manslaughter count
and up for a year for an additional
charge of violating the US Clean
Water Act.
Eleven charges each of seaman’s
manslaughter were dismissed in
December.
Lawyers for the men argued
that the “standard of care” allegedly violated in the manslaughter
charges was “unconstitutionally
vague”.
However, Duval said in a 12page decision that if prosecutors’
allegations are true, “an ordinary
person would reasonably understand that the improper administration of the negative testing... in
light of the inherent danger in
deep-water drilling would subject
one to criminal sanctions”.
“Though a criminal may not
foresee certain consequences, the
law may still hold him or her accountable for negligent actions,”
Charges: the Deepwater Horizon blowout in US Gulf in April 2010
the judge wrote. Lawyers for the
Department of Justice did not immediately respond to requests for
comment. Attorneys for Kaluza
and Vidrine declined to comment.
A trial is reportedly scheduled for
11 June. US prosecutors had origi-
nally also won indictments on 11
charges of seaman’s manslaughter
for each of the men.
However, those charges were
dismissed in December on the argument when the judge said the
two performed “no function re-
Photo: AFP/SCANPIX
lated to the navigation of the
Deepwater Horizon”.
Another argument, that the
rig lay outside US territorial waters and was thus out of the
reach of the court, was rebuffed
by Duval.
BSEE’s Salerno challenges industry to up its safety game
US BUREAU of Safety & Environmental Enforcement (BSEE) director Brian Salerno challenged fellow regulators and industry
representatives gathered in New
Orleans this week to “up our
game” and question what more
can be done to toughen offshore
safety standards.
“All of us have a moral obliga-
tion to ensure the safety of offshore workers,” Salerno said to
about 300 delegates assembled at
the start of the two-day 2014 BSEE
Domestic & International Standards Workshop on 28 and 29 January.
International regulators from
the UK, Norway, Mexico, Canada,
Brazil, New Zealand and Colombia
were on hand for the workshop,
some delivering their own presentations.
Salerno said regulators necessarily rely on industry standards
for new codes but he wondered if
it is still “timely” enough to encompass new technological innovations.
He also questioned whether in-
dustry standards are “sufficiently
rigourous”, hinting that minimum standards may not be provide enough of a margin of safety
for frontier realms such as deepwater and the Arctic ocean.
“None of us wants to see a dramatic offshore failure,” Salerno
said. “It all starts with appropriate
standards.”
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www.doris-engineering.com
Petrobras
put rigs
on market
BRAZILIAN state-controlled oil
company Petrobras has issued
an international tender for the
sale of five cantilever jack-ups
and one semi-submersible
drilling rig.
Petrobras is due to receive
commercial proposals on 28
April for jack-ups P-I, P-III,
P-IV, P-V and P-VI, plus the
semisub P-IX.
Interested parties must submit all required documents by
18 April and will be allowed to
visit and inspect the rigs by
that date.
The bidding rules state that
all six rigs are in laid-up conditions.
In case a consortium is
formed to bid for the units, the
companies that forged that
partnership cannot submit a
solo offer for any of the rigs.
The winning bidder will take
ownership of the rig within 30
days, starting on 30 May, after
integral payment of the unit is
made to Petrobras.
The delivery of the rigs will
be made at the Sao Roque do
Paraguacu shipyard and the
Aratu naval base in Bahia state.
The Sao Roque do Paraguacu
facility built and delivered to
Petrobras two jack-ups rigs,
P-59 and P-60, in 2012.
The five jack-ups rigs on sale
were built between 1968 and
1982 and are capable of operating in maximum water depths
ranging from 30 metres to 79.3
metres. The units were mainly
used by Petrobras to carry out
completion and workover operations.
The anchor-moored semisub
P-IX is a more powerful rig that
can operate in up to 700 metres
of water and is fully suited to
carry out drilling, completion
and well intervention.
The divestment takes place
as Petrobras is greatly reducing
its drilling operations in shallow waters to focus on finding
hydrocarbons in the ultradeepwater sections of the Santos, Campos, Espirito Santo and
Sergipe-Alagoas basins.
3D shoot
off Brazil
EUROPEAN players CGG and
Spectrum have started a joint
3D multi-client seismic programme in Brazil’s northern
equatorial margin.
The 11,330 square kilometre
survey is being acquired by the
vessel Oceanic Endeavour in
the highly-prospective Foz do
Amazonas basin, where a total
of 14 blocks were grabbed in the
country’s 11th oil and gas
licensing round held last May.
WORLD
22
31 January 2014
ASIA
Keppel puts bottom line
at top of agenda for jobs
Group’s 2013 net
profit down
26% year-onyear to S$1.412
billion but order
book still healthy
AMANDA BATTERSBY
Singapore
SINGAPORE’S Keppel Offshore &
Marine is looking to win new
orders with a focus on projects
that can deliver for its bottom line
and is promising to find space at
its busy yard for clients willing to
pay a premium.
Speaking at the 2013 results
announcement, Keppel chief
executive Loh Chin Hua said:
“While we are keen to win as
much business as possible, to us
the bottom line is even more
important than the top line. So we
would only take on projects where
we believe we can reliably make a
profit.
“It’s not just about winning
orders, but making sure we win
orders when we can eventually
make money.”
With this strategy in mind, the
contractor has decided not to bid
for a contract to deliver up to five
drillships for rig giant Transocean
after giving the matter serious
consideration.
“We were invited, we studied it
in detail and we decided — for the
time being — to let it go,” said
Keppel O&M chief executive Tong
Chong Heong.
Keppel O&M in 2013 secured
about S$7 billion (US$5.49 billion)
of new contracts from new and
repeat customers and its net
orderbook stood at about S$14.2
billion as of 31 December 2013,
with earnings visibility extending into 2019.
Rig builder Keppel Fels had a
bumper year and ended 2013
strongly with an order from
Transocean to build five KFELS
Super B Class jack-up rigs for
US$1.1 billion, with deliveries
scheduled from the first quarter of
2016 through to the third quarter
of 2017.
Transocean also has options for
another five similar rigs.
Keppel intends to continue to
PAPUA New Guinea’s Oil Search
is continuing to chase satellite
oil targets near its producing
fields.
The company is currently
drilling the Mananda-7 appraisal well, which if successful will be tied back along with
the Mananda-5 and Mananda-6
discoveries to the existing production facility.
Oil Search then plans to
move Rig 104 to the Kutubu oilfield area to drill the Agogo
AFL-A well and Usano UFL-A
well, both of which can be tied
in.
There is also a potential satellite well this year at the Moran field.
Oil Search’s production in
the quarter ended 31 December
2013 averaged 19,210 barrels per
day of oil plus 15.4 million cubic
feet per day of gas.
Bentara on
Roc menu
Eyes ont he future Keppel chief executive Loh Chin Hua speaks at the company’s results
announcement
Photo: BLOOMBERG
focus on its three core areas
including offshore and marine
and will also continue to invest
strategically in research and
development, said Loh.
Keppel has already received an
“encouraging response” from the
market to its Can Do drillship,
which comes with a double blowout preventer the meets postMacondo safety standards, said
Loh.
OSK Research forecasts new
orders this year at S$6.5 billion
that could include these five jackups for Transocean, six jack-ups
for Mexican state oil company
Pemex, a converted floating liquefied natural gas vessel for Golar
LNG and a potential sale of the
Can Do drillship.
However, Tong said that the
company would “probably wait
one year before actively marketing the drillship to get a premium
price”.
Keppel Fels has jack-ups on
order through to 2016 but “depending on how much you will pay,
I will find a slot for you”, added
Tong. “If you pay a premium, I
will try to get you in sooner.”
Of the competition from yards
including those in China, Loh
said that Keppel had “certain
strengths” and that national oil
companies, including those in
Brazil and Mexico, were increas-
ingly looking for “some local content”.
Keppel’s planned joint venture
yard in Mexico with Pemex will
initially focus on jack-ups, but Loh
sees future potential including
deeper draft semi-submersibles and
floating production, storage and
offloading vessel repairs.
Keppel Corporation’s 2013 net
profit was down 26% year-on-year
to S$1.412 billion with the offshore
and marine division, Keppel
O&M, contributing about the
same net profit as 2012.
Keppel O&M also increased its
operating margins for last year to
14.7% from 13.5% the previous
year.
BG Group aims to restart Cooper basin drilling campaign
BG GROUP of the UK is expecting
to soon restart its initial four-well
unconventional gas exploration
campaign in Australia’s Cooper
basin, writes Russell Searancke.
The company’s first foray into
Australian shale and tight gas
began last September, and the
current status is that the top holes
of three wells have been drilled.
The Weatherford 826 drilling rig
is being upgraded with highpressure high-temperature equipment, and co-venturer Drillsearch
Oil Search
drills at
Mananda
Energy said drilling of the
bottom-hole sections through
multiple reservoir formations will
begin with the Charal-1 well in
mid-February.
So far, Charal-1 has been drilled
to 2451 metres, Anakin-1 to 2530
metres, and Padme-1 to 2402 metres.
Once the bottom holes are completed, to total depths of about
4000 metres, there will be a period
of stimulation and testing for each
of them. BG and Drillsearch also
plan another six appraisal and
delineation wells that Drillsearch
has indicated will form “the
nucleus of an initial unconventional production pilot”.
BG owns a 60% interest in Block
ATP-940-P, while Drillsearch has
a 40% operating stake.
The primary reservoir targets of
the drilling programme are the
shales of the Permian Roseneath
and Murteree formations and the
sandstones of the Permian Patchawarra formation. The secondary
targets are the sandstones of the
Permian Daralingie, Toolachee
and Epsilon formations and Tirrawarra sandstone.
BG is currently building the
Queensland Curtis liquefied natural gas project in nearby Gladstone.
Australia’s LNG export projects
are widely regarded as having
provided the incentive for exploration companies to pursue the
country’s shale gas and tight gas
resources.
ROC Oil expects Malaysian
authorities to approve a field
development plan for the offshore Bentara oilfield before
the end of March.
Bentara is one of four fields
in the Balai Cluster off Sarawak
that already has production
facilities due to a recent
extended well test as part of
the pre-development phase.
Roc said the field development plan is based on two
phases, and that approval of
the plan by national oil company Petronas is expected in
the current quarter.
Roc is a 48% shareholder in
BC Petroleum along with Malaysian companies Dialog
Group on 32% and Petronas
Carigali on 20%.
Central waits
for Surprise
AUSTRALIA’S Central Petroleum is waiting on final permitting before it can bring in production equipment for the first
oil discovery in the Northern
Territory in decades.
The Surprise discovery has a
recoverable resource of nearly
6 million barrels of oil, and
Central aims to bring it on
stream in May, with oil being
trucked to market.
Permitting delays and heavy
rain in this remote region have
pushed back the schedule
slightly.
East Spar shoot
APACHE has started the acquisition of an electromagnetic
survey at its East Spar gas field
off Western Australia.
The survey is being done
using EMGS’ vessel Boa Thalassa under a US$5 million contract.
Apache indicated previously
that the purpose of the survey
is to evaluate the potential for
any bypassed compartments of
the East Spar field.
WORLD
31 January 2014
23
AUSTRALIA
Major project on horizon
for Western Australia
Laverda-Ragnar,
Tallaganda and
Zola in spotlight
for development
as partners look
to firm up plans
BHP'S TALLAGANDA OPTION
BHP Billiton acreage
Liquids field
Gas field
Tallaganda
RUSSELL SEARANCKE
Oslo
Stybarrow
Main map
THERE are hopes in Western
Australia that a major new offshore field development could be
launched this year, with seasoned
players including BHP Billiton,
Woodside Petroleum and Apache
pegged as potential operators.
So far this year, there have been
suggestions that BHP and Woodside have, separately, taken tentative steps in the market to check
the economics and suitability of
certain production facilities for
unspecified fields.
Various studies and conceptual
design work are also being carried
out by other parties associated
with the oil and gas companies.
In the past couple of years,
operators in Australia have
struggled to make new field
developments financially viable
because of the country’s high-cost
environment, the regulatory and
approvals process, and the wellpublicised struggles being felt by
projects already in the construction phase, said sources.
Reservoir and reserves issues
are also a contributing factor.
Even BHP Billiton and Apache,
which have well-established
reputations in the country as
“fast-track” operators, have been
hesitant to go after operated
opportunities.
Apache has the sizeable Zola gas
discovery in 285 metres of water,
16 kilometres south-west of the
giant Gorgon field along the same
structural arch.
A subsequent well last year,
Bianchi-1, was also a success, hitting 112 net metres of gas pay.
Sources said that when Zola was
discovered in 2011, the initial idea
was to make significant progress
with a field development by the
end of 2013.
Co-owner Tap Oil said recently
that appraisal and development
options are being studied.
The Greater Zola complex is said
to hold up to 3 trillion cubic feet of
gas on a contingent basis.
The joint venture comprises
Apache on 30.25%, Santos on
24.75%, OMV on 20%, JX Nippon on
15% and Tap Oil on 10%. Mean-
Coral
Sea
AUSTRALIA
Pyrenees
Macedon
Indian
Ocean
Southern Ocean
Onslow
Macedon
Gas Plant
AUSTRALIA
Tasman Sea
Graphic: BHP Billiton
PNG halts
plans for
new well
PAPUA New Guinea’s oil and
gas regulator has scuppered
the immediate drilling plans of
a local operator.
The unnamed operator had
intended to use New Guinea
Energy’s 50%-owned SL7 heli
rig, but the PNG Department of
Petroleum & Energy had not
endorsed the use of the rig,
so the operation with it has
been terminated, said New
Guinea.
The plan had been to mobilise the rig in the fourth quarter of 2013 for a single well with
an option for a second probe,
all told a commitment of up to
300 days.
It is understood that drilling
was planned in the area made
well known by the ElkAntelope discoveries.
Extension
for Jasmine
MUBADALA Petroleum has
exercised an option to extend
its lease on the Jasmine
Venture floating production,
storage and offloading vessel in
the Gulf of Thailand.
The FPSO will now stay at
the Jasmine field in Block B5/27
for up to four more years, vessel
owner Petrofac said.
Petrofac bought the Jasmine
Venture FPSO from Mubadala
in June 2011 for $70 million.
The FPSO is capable of
processing 50,000 barrels per
day of liquids, including 20,000
bpd of oil.
It can also store 800,000 barrels of oil.
Up and running: the Nganhurra FPSO at Woodside’s Enfield
field off Western Australia
Photo: WOODSIDE PETROLEUM
while, BHP Billiton has the big
Tallaganda-1 gas discovery in 1141
metres of water in the Exmouth
region.
BHP has said previously that
“Tallaganda is our biggest discovery in 2012 and opens up a large
area of captured acreage with
many potential follow-up opportunities”.
One of those opportunities is
the Bunyip-1 oil prospect. which
is currently being drilled.
Sources said that if Bunyip is
successful, then a unitised field
development could materialise.
The Tallaganda discovery straddles Block WA-351-P and Block WA335-P, while the Bunyip prospect
sits in the latter.
The co-owners of WA-351-P are
BHP on 55%, Apache on 25% and
Tap on 20%, while the WA-335-P
joint venture is BHP, Apache and
Kuwait Foreign Petroleum Exploration Company.
BHP said in a petroleum presentation last December that Western
Australia is a core area along with
the Gulf of Mexico. The company
said that, in addition to drilling
Bunyip, it plans to evaluate and
test near-field opportunities, and
complete a regional geology study
that targets large oil plays.
The third operator of a potential
new project is Woodside Petroleum, which has the LaverdaRagnar oil and gas play in its nearterm sights, and a cluster of
deep-water gas discoveries in Block
WA-404-P in the Greater Pluto area.
At Laverda-Ragnar in the
Exmouth area, Woodside indicated recently that success with this
quarter’s Toro-1 exploration well
will dictate the direction of any
development of this play.
In Woodside’s 100%-owned
Block WA-404-P, there are five
discoveries — Martin, Martell,
Noblige, Larsen and Remy.
Woodside renewed the permit
last July, and has a commitment
before July 2015 to acquire 700
square kilometres of 3D seismic.
Hindustan swoops for stake in BassGas
AWE has sold an 11.25% interest in the producing
BassGas project off south-east Australia to India’s
Hindustan Petroleum for A$85 million (US$74
million) in cash.
AWE retains a 35% interest in the project, which
contains the producing Yolla gas and condensate
field.
Other owners in the acreage are operator Origin
Energy with a 42.5% stake and Toyota Tsusho with
11.25%.
The field produced about 2.6 million barrels of
oil equivalent in the year to June 2013, and has
proven and probable reserves of 60 million boe.
In addition, there are several satellite
discoveries, including Trefoil, White Ibis and
Rockhopper.
Ministério de
Minas e Energia
“PETROBRAS WILL PERFORM
INTERNATIONAL AUCTION TO SALE THE
UNITS P-I , P - III , P - IV , PV , P - VI AND P - XIV “
PETROBRAS will perform international auction to sale the Units Petrobras-I (P-I),
Petrobras-III (P-III), Petrobras-IV (P-IV), Petrobras-V (P-V), Petrobras-VI (P-VI) and
Petrobras-XIV (P-XIV). The forecasted date for Tender publication and acess to completed
Call for Tenders (International Call for Tenders Nº. 1474404140) will be from 01/28/2014,
on PETROBRAS website (www.petrobras.com.br - Business Center).
The Units will be sold by performing electronic auction, scheduled to take place in
04/28/2014 at 10:00h (of Rio de Janeiro time, Brazil), on the Electronic Commerce
Website PETRONECT (www.petronect.com.br).
The interested parties should contact the PETRONECT until the date 04/18/2014, by
the telephone number 0800 282-8484 (Brazil), +1 866 791-9432 (USA), +1 713 8082599 (Other Countries), or through the Web Service available at the PETRONECT
website (www.petronect.com.br) - Contact Us option. The deadline for submission the
documentation required in the bidding and for the visitation of the Rigs that will be sold by
interested parties it’ll until 04/18/2014.
All information about the Units to be auctioned, the materials on board, rules and
requirements for participation in the auction, documentations, Call for Tenders and
Addendums may be obtained through the Tender to be published on PETROBRAS
website. All documentation will also be available in PETRONECT website, in case of
divergences, should prevail the terms and conditions contained in this last.
Bidding Committee
International Call for Tenders Nº 1474404140
E&P SERV - Procurement Service Unit
PETRÓLEO BRASILEIRO S.A
Houston, January 31st, 2014
6.6 billion
Amount in dollars of estimated potential loss for
companies in Norway’s Gassled joint venture if a
proposed 90% tariff reduction on gas transit is upheld.
BY THE NUMBERS
24
STATE OF THE UNION
31 January 2014
5
Photo: AFP/SCANPIX
The number of times
US President Barack
Obama said ‘oil’ in
his State Of The
Union speech this
week.
Photo: MAERSK
28
The drop, in percent, of
the number of wells
drilled on the UK
continental shelf in
2013 versus the
previous year
523
10,900,000
Amount in dollars to be paid by two Hong Kong
asset management firms to settle charges levied
by the US Securities & Exchange Commission over
insider trading ahead of CNOOC’s 2012 bid for
Canadian producer Nexen.
Montage by Upstream
The estimated
value,
measured in
billions of
dollars, of
subsidies
granted in
2011 for the
search for
and extraction
of fossil fuels
worldwide.
WORLD
31 January 2014
25
CANADA
First Nations walk away
from JOSM programme
Aboriginal groups
vote with their
feet in frustration
at monitoring of
oil sands
TONYA ZELINSKY
Calgary
MORE First Nation groups in
northern Alberta have walked
away from a federal-provincial oil
sands monitoring programme citing frustrations with its management.
The departure by the Fort McKay
First Nation (FMFN), and its Metis
community, comes some months
after other regional bands Athabasca Chipewyan First Nation
(ACFN) and Mikisew Cree First Nation left the Joint Oil Sands Monitoring (JOSM) programme under
similar circumstances.
FMFN manager for environment and regulatory affairs Dan
Stuckless said the band experience was not being considered
and its concerns not addressed.
In Fort McMurray recently at an
aboriginal-focused oil sands conference, Stuckless listed “governance, development of the programme, technical, and inclusion
of traditional knowledge” among
the reasons the band left.
“What it comes down to is making sure the proper checks and
balances are in place,” he said.
The ACFN cited some of the
same reasons for its departure in
October.
“A lot of the issues we have had
with JOSM are in the terms of reference for inclusion of First Nations within the programme’s
mandates,” an ACFN spokeswoman told a regional newspaper.
“Our biggest concern is that under current direction, JOSM does
not meaningfully include First Na-
Checks and balances: oil sands near Fort McMurray, Alberta
tions, our traditional knowledge or
our treaty rights into its mandate.”
Implemented in spring 2012,
JOSM was meant to beef up monitoring of the Canadian oil sands by
both the federal and provincial
governments. The C$50 million
(US$45 million) venture was to be
comprised of both levels of government, industry, stakeholders, community members, and First Nations in the Regional Municipality
of Wood Buffalo, located at the
heart of the Athabasca Oil Sands.
At the time, the Alberta govern-
ment said the programme would
include monitoring of “more sites
for more substances more frequently” and provide “improved
understanding of the long-term
cumulative effects” of development.
Monitoring in the oil sands region was called into question in
2010 when an independent scientific study revealed discrepancies
in previous oil sands reporting by
either government or industry.
As a result, both the federal and
provincial governments launched
Photo: REUTERS/SCANPIX
a joint review of the existing system in early 2011 with the mandate of creating a new monitoring
programme that would include
input from all sources.
Alberta Environment could not
say if the bands that have quit
would return to JOSM but added
that the conversation is ongoing.
First Nation and aboriginal
groups that remain within JOSM
include the Fort McMurray First
Nation, and Metis locals from Fort
McMurray, Conklin and Fort Chipewyan.
First Nation fights Northern Gateway pipeline approval
A FIRST Nation in western Canada is
challenging a federal joint review panel’s
recommendation in favour of the proposed
Northern Gateway pipeline, claiming it was
unconstitutional.
The Gitga’at First Nation filed a judicial
review application with the Federal Court of
Appeal because it believes the National
Energy Board-Canadian Environmental
Assessment Agency joint review panel did
not meet its constitutional obligations to
First Nations when it recommended
approval of the controversial pipeline
project in mid-December.
The panel “erred in law” by failing to
consider all the evidence provided by the
Gitga’at, which alleges its culture and way
of life would be threatened if the project
went through.
“The (panel) came to our community and
we bared our souls to them,” said Gitga’at
chief councillor Arnold Clifton.
“We gave testimony and shared an
important feast with them to demonstrate
our connection with our territory through
food. Clearly they didn’t listen to us. It’s like
they were never here.”
The Gitga’at nation encompasses 7500
square kilometres that includes all
approach routes for the tanker traffic along
AN explosion on a TransCanada natural gas pipeline in
central Canada has left 4000
people without heat during a
record cold snap.
The pipeline exploded and
caught fire in a rural area of
Manitoba on 25 January.
The National Energy Board
said Line 2 of the sweet natural
gas line was isolated and shut
down while it was depressurised in order to contain the 12hour blaze near Otterburne,
Manitoba, about 25 kilometres
south of the province’s capital,
Winnipeg.
No injuries were reported
and it is not believed the rupture will cause any harm to local residents.
About 4000 people were left
without heat as a result of the
incident and were forced to
deal with frigid temperatures,
up to minus 20 degrees Celsius,
for at least three days while authorities tried to remedy the
problem.
Line 2 is a part of TransCanada’s larger natural gas
Canadian mainline system. In
2013 it announced plans to convert a portion of the Canadian
Mainline to transport crude
from Alberta and Saskatchewan to refineries in eastern
Canada.
Environmental Defence said
the 25 January incident calls
into question TransCanada’s
safety record and ability to ensure security along the mainline.
The NEB said its emergency
response team is on hand to
monitor and assess TransCanada’s immediate response.
It does not expect any lasting
environmental effects to
occur.
CN train in
derailment
CN RAIL has reported its second train derailment in three
weeks in the Canadian Maritimes.
The latest incident occurred
on 26 January in the Edmundston area of Saint-Basile when
at least five cars derailed, including one allegedly carrying
propane.
Earlier this month, the village of Plaster Rock was shaken
when a massive fireball lit up
the sky after a train with five
rail cars carrying crude derailed.
No injuries have been reported in the Edmundston crash.
Calls to regulate safety on
crude train cargoes:
Page 38
LEADERS IN CORROSION RESISTANT FLOWLINES
CO2
HP/HT
H2S
the Port of Kitimat assorted with Northern
Gateway.
The C$6.5 billion (US$5.85 billion) project
proposed by Enbridge includes a nearly
1200-kilometre twinned pipeline between
central Alberta and British Columbia
tidewater. It includes increased tanker
traffic at the Port of Kitimat to export crude
and import condensate.
The judicial review application said the
Gitga’at would be vulnerable to
environmental threats associated with the
proposed project and traditional food
harvested from the sea would be
significantly affected in the event of a spill.
Pipeline
explosion
cuts heat
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WORLD
26
31 January 2014
BRAZIL
Operational issue halts
Petrobras Carcara probe
Rig removed
from BM-S-8,
and well plugged
and abandoned
by state player
Ensco 7500
dayrate deal
Different location: Petrobras chief executive Maria das Gracas Foster
Photo: REUTERS/SCANPIX
whether the Norbe VIII will be
used again, when the campaign
starts.
The second drilling phase —
when the rig will finally enter the
carbonate reservoir below the
thick salt layer — was originally
due to begin early in the third
quarter, but may now start late in
the fourth quarter.
According to QGEP, the delay
means Petrobras will only
complete drilling of the Carcara
appraisal well and run a subsequently drillstem test at the probe
in the middle of next year.
It has been suggested that
Petrobras will utilise the cylindri-
cal semi-submersible rig Sevan
Driller to handle the expected
high pressure at the formation,
during the second drilling phase.
The rig was used in the maiden
Carcara find.
Despite the rescheduling, Petrobras still expects to spud a new
exploration well on BM-S-8 in the
middle of 2015.
The drilling of Guanxuma will
target hydrocarbons in the western part of the licence, about 30
kilometres from the original
Carcara find, and will begin
immediately after the conclusion
of the appraisal well.
Commercial output from Car-
Plan: drillship Norbe VIII
Photo: DAEWOO
cara is due to start in 2018 by
means of a floating production,
storage and offloading vessel, likely a unit with a capacity of 150,000
barrels per day of oil.
Libra gets investment approval for initial activities
BRAZIL’S state player Petrobras
and its four international partners
in the massive Libra pre-salt field
in the Santos basin have approved
investments of between $400 million and $500 million this year
to carry out initial exploration
activities in the area, writes Fabio
Palmigiani.
The work plan calls for the drill-
Semisub Paul Wolff to
be taken out of Brazil
US DRILLING contractor Noble
is evaluating the possibility of
carrying out extensive maintenance and upgrade work on the
semi-submersible rig Noble
Paul Wolff this year and plans
to take the unit out of Brazil.
“The Noble Paul Wolff needs
a real shipyard to pull thrusters and do some of the work,
and it has been very hard to get
that work done in Brazil in any
kind of reasonable timeframe,”
said Noble chief executive David Williams.
The rig was chartered by
Petrobras until November 2014
for a dayrate of $428,000, but
Noble recently brought forward
the end of its contract to April
in order to carry out a five-year
class survey, repairs and general maintenance.
“We will probably take it to
the Far East and do some evaluation of the rig and the market,
but the project is still under review, pending final costs and
contract opportunities for the
rig beyond its commitment in
Brazil,” he said.
Williams added that the rig
will likely be out of service for
the remainder of 2014 and maybe until mid-2015 if Noble does
move forward with the refurbishment project.
Research firm Cowen & Company predicts Noble will skip
the yard work and stack the
Noble Paul Wolff if demand for
the rig does not materialise
outside of Brazil.
FABIO PALMIGIANI
Rio de Janeiro
BRAZILIAN state-controlled oil
company Petrobras has faced
unexpected operational issues
during the drilling of its Carcara
appraisal well in the Santos basin
pre-salt province, forcing it to prematurely suspend the ambitious
programme.
Drilling of Carcara-2 in Block
BM-S-8 started on 14 December in
2022 metres of water, using the
drillship Norbe VIII, owned by
Odebrecht Oil & Gas.
Due to the need for a rig with
equipment suitable for drilling
deep reservoirs with a high level
of operational efficiency and safety, the campaign at Carcara-2 was
to be carried out in two separate
phases.
The consortium — which also
includes Galp Energia, Queiroz
Galvao Exploration & Production
(QGEP) and Barra Energia —
planned to use the Norbe VIII to
drill Carcara-2 nearly up to the
reservoir, but not enter it.
However, Petrobras — headed
by chief executive Maria das
Gracas Foster — experienced problems during the initial drilling
phase, and on 5 January decided
to remove the rig from BM-S-8,
and Carcara-2 was plugged and
abandoned.
The Carcara discovery well took
more than a year to drill to a final
depth of about 6700 metres. It
identified a pre-salt column of at
least 471 metres of light 31 degrees
API crude.
Carcara-2 was to be drilled in
the flank of the accumulation
to reduce uncertainties, and to
better characterise the size of the
reservoir.
One source told Upstream that
the operational issue at Carcara-2
had nothing to do with the reservoir conditions or the geology in
the area.
Petrobras and its partners plan
to start the first drilling phase of
the Carcara appraisal well, by
March, at a different location from
where the failed well was drilled.
It is unknown at present
Noble rig
set for
revamp
ing of two exploration wells and
seismic reprocessing for the
entire block, in addition to studies
for the acquisition of a new seismic survey using high-end technology and an extended well test
— earmarked for late 2016.
Starting in the second half of
2014, Petrobras will spud the two
wells in Libra. The programme is
expected to last many months and
is due for completion during the
first half of 2015.
Petrobras secured the Libra area
last year by offering the minimum signature bonus of 15 billion
reais ($6.25 billion) and a 41.65%
share of the profit oil to the federal government.
The player operates Libra with a
40% stake. European giants Shell
and Total hold 20% each, while Chinese state-run players CNOOC Ltd
and China National Petroleum Corporation each have 10%.
The Libra exploration period expires in December 2017, four years
after signing of the contract.
Petrobras has said it expects
first oil from Libra in 2020.
UK-BASED drilling contractor
Ensco has reached an agreement with Brazil’s Petrobras to
cut the dayrate of the semisubmersible rig Ensco 7500 to
zero for the remainder of its
contract.
The rig was originally chartered until August 2014 for a
dayrate of about $320,000, but
the two parties reached a mutual understanding to keep the
unit with Petrobras on a zero
dayrate starting in January.
“We mutually agreed with
the customer that the rig is not
the best fit for the remainder of
their programme in the Papa
Terra field,” said Ensco, adding
that the company is exploring
other opportunities with
Petrobras that are a better fit
for the use of the rig in Brazil.
Besides the Ensco 7500, the
contractor has six other units
operating in Brazilian waters,
comprising five semisubs with
Petrobras and one drillship
with UK supermajor BP.
Meanwhile, the semisubs
Ensco 6001 and Ensco 6002,
both of which are operating in
Brazil, will undergo shipyard
upgrades for 65 days in the second half of 2014 during which
time they will be on reduced
dayrates.
WORLD
31 January 2014
27
Technip
nets deal
off Dubai
MIDDLE EAST
Talks: Iran’s president Hassan Rouhani and oil minister Bijan Zanganeh
Photo: AFP/SCANPIX
Iran knuckles down to
new investment formula
Consultations with foreign oil companies will take at least
six months as country aims to open up energy sector
VAHE PETROSSIAN
London
IRAN and foreign oil companies
are preparing for consultations
that will take at least six months
for a new investment formula that
will be acceptable to both sides.
Iran’s plans to open up its energy sector to wider foreign investment as US and European Union sanctions are lifted were
discussed in broad terms by Oil
Minister Bijan Zanganeh and
President Hassan Rouhani during
presentations to senior executives
and politicians at last week’s annual World Economic Forum gathering in Davos.
A key date for finalising a new
investment formula acceptable to
all sides is September, two months
after a road show in London,
where an Iranian team plans to
lay out fresh proposals to replace
the 20-year-old buy-back formula,
and listen to proposals from international oil companies.
Iran and the big powers start
negotiations next month on a final deal on Iran’s nuclear programme, in the expectation of an
agreement within six months —
opening the way for a full lifting
of international sanctions against
the Iranian oil and gas sector and
wider economy.
“It was an impressive presentation,” a western oil executive was
quoted by Reuters as saying after
closed-door meetings by Rouhani
and Zanganeh with foreign companies in Davos.
“They said they are working on
a new model to work with investors and are happy to see us. They
not only need money but technologies.
“They are happy to have consultations about how new contracts
shall work. They want to decide by
September,” the executive said.
“The message was — look at us,
our geological risks are minimal,
reserves are huge, come and we
will create competitive terms.
Your return on investment will be
acceptable,” another executive
was quoted as saying.
The Oil Ministry’s website said
Rouhani had estimated the
amount of foreign investment
needed by the oil and gas sector at
$110 billion — with another $75
billion required in petrochemicals
and $33 billion in the country’s
railway infrastructure.
Companies attending the briefings included Eni, Total, BP, Lukoil and GazpromNeft.
Reflecting the mood among his
colleagues, Eni chief executive
Paolo Scaroni said the Italian major would return to Iran, but first
US and EU sanctions would have
to be lifted and, secondly, contract
terms would have to be better
than in the past.
“I made it clear some time ago
I’m not going back to Iran under
old contract terms even if all sanctions are lifted,” said Scaroni, who
was the first Western chief executive to meet publicly with Zanganeh at the Opec ministerial
gathering in Vienna in December.
Eni carried out several projects,
including phases 4 & 5 of the
South Pars gas field, under buyback terms which Iran now concedes did not offer sufficient incentives to investors.
A special committee set up by
Zanganeh in August is considering new formulae such as service
contracts and, possibly, produc-
tion sharing agreements. Total
and Lukoil also took part in several buy-back projects, such as
South Pars, Doroud and Anaran in
the 1990s and earlier this century.
BP was involved in inconclusive
negotiations for onshore work in
Khuzestan province, while Shell,
whose chief executive Ben van
Beurden did not attend the Davos
briefings, carried out the Soroush
development.
The only foreign companies carrying out any work in Iran since
the intensification of sanctions in
2012 are China National Petroleum
Corporation and Sinopec.
Zanganeh has said he wants to
restore Iran’s historic crude production capacity of about 4 million barrels per day as quickly as
possible, and will do so within six
months of the international sanctions being lifted.
The country’s sustainable capacity is estimated at 3 million to
3.5 million bpd, with many experts doubtful that the 4 million
bpd target can be achieved in less
than a year, and probably much
longer.
FRANCE’S Technip has won a
contract estimated to be worth
about $200 million for the fasttrack completion of the Jalilah
B field development project
90 kilometres off Dubai, writes
Vahe Petrossian.
The development for Dubai
Petroleum Establishment is to
be completed in the second half
of this year.
Technip’s scope of work
covers the construction and
installation of the Jalilah B
platform in 60 metres of water,
a 900-tonne deck, a 500-tonne
jacket, as well as 13 new risers
on existing platforms, said
Technip.
About 110 kilometres of pipelines ranging from six to 24
inches in diameter will also be
installed.
Technip will employ three of
its specialised vessels, including the G1201 flagship S-Lay
installation vessel, for deepwater and shallow-water work.
“We are delighted to be
awarded this new project, a
few months after the successful completion of our first
subsea project in the Middle
East for DPE, for the South
West Fateh and Falah fields,”
said Vaseem Khan, senior vice
president of Technip in the
Middle East.
“This award reflects our clients’ trust in our capabilities to
safely and successfully execute
complex projects in one of the
most congested fields in the
United Arab Emirates.
“Technip can build on its differentiating assets, such as the
G1201, gained from the acquisition of Global Industries in
2011,” he added.
Record TCO
production
THE Chevron-led Tengizchevroil (TCO) venture developing
the Tengiz field in western
Kazakhstan produced a record
27.1 million tonnes of crude —
about 540,000 barrels per day
— last year, up nearly 12% from
24.2 million in 2012.
“Last year’s TCO payments to
Kazakhstan totalled just under
$15 billion, (also) a new record
for TCO,” said TCO general
director Tim Miller.
The venture’s Future Growth
Project will add another 12 milliion tonnes of crude per annum
to current production levels.
The partners are considering
options for the expansion, and
will soon move to the design
stage with the aim of first production in 2019, according to
Kazakh Oil Minister Uzakbay
Karabalin.
TCO — the largest oil producer in Kazakhstan — accounted for one third of overall
output of 81.7 million tonnes
last year.
Besides major stakeholder
and operator Chevron, supermajor ExxonMobil, Kazakh
state oil company KazMunaiGas, and Russia’s Lukarco are
partners in developing the
Tengiz and Korolev fields.
28
31 January 2014
WORLD FEATURE
It’s a solidly economic play.
We are just determining its scale.
Devon Energy chief operating officer Dave Hager, on
the Mississippian Woodford trend
OKLAHOMA SHALE
Hot ticket: roughnecks preparing pipe for a Devon Energy well targeting the Mississippian Woodford trend near Perry, Oklahoma
Devon quietly confident that p
Company’s 400 wells and 650,000 acres in Mississippian Woodford trend
signify belief in what could be one of the most prolific US shale plays yet
TOM DARIN LISKEY
Perry, Oklahoma
L
OCATED on the outskirts
of the sleepy town of Perry, Oklahoma, roughnecks on a drilling rig are
preparing to begin the horizontal
segment of a Devon Energy-operated well targeting the Mississippian Woodford trend.
The crew has been working
around the clock on the well pad
set amid the wheat fields of northcentral Oklahoma.
This well and others on the pad
— and the Mississippian Woodford trend they are targeting —
may just be one of the hottest tickets in the US shale boom.
“This is one of the emerging areas we have in our portfolio,” the
Oklahoma City-based company’s
chief operating officer Dave Hager
says. “It’s a solidly economic play.
We are just determining its scale.”
Devon is putting its money where
its mouth is to do just that. While
not saying how much more it plans
to spend in the Mississippian
Woodford this year and next, the
company has already ploughed
substantial amounts of cash into
the Oklahoma tight oil trend.
The Mississippian Woodford
trend lies east of the Nemaha
Ridge, where the Woodford shale
lies below the Mississippi Lime.
The lime is a tough carbonate formation covering 17 million acres
in northern Oklahoma and southern Kansas.
Feel good factor Early expecta-
tions that horizontal drilling
would unlock sustainable production from these limestone reser-
voirs has failed to become a reality. What Devon is investigating is
if drilling both formations will
help to crack the code.
Yet it was not dumb luck that
led the company to the trend.
“We’ve been active in the state
and through our regional work we
recognised the prospectivity of
both formations,” says Hager. “We
did regional-technical work and
we purposely leased our acreage in
areas that we thought were most
prospective for the Woodford.”
Devon spudded its first Mississippian Woodford well in 2011.
Since then the company has spudded some 400 wells in the trend.
“We studied our results from
the (first) well before determining
Water reuse and no flaring among eco initiatives
DESPITE its exploration push in the
emerging Mississippian Woodford trend in
Oklahoma, Devon Energy has not put
environmental issues on the back burner.
Instead of flaring natural gas from new
wells, the company has been investing in
field infrastructure such as pipelines to
ensure the fuel gets to consumers.
“We’ve got a lot of infrastructure going
in,” says chief operating officer Dave Hager.
Last year alone, the company installed
hundreds of miles of new pipeline. More is
planned for 2014 as the company brings new
wells into production.
The company is also taking an innovative
approach to reusing produced water in
hydraulic fracturing jobs — when possible.
The decision has been applauded in this
draught prone but agriculturally rich state.
“We are using our produced water in the
treatment of our wells and hydraulic
fracturing,” says Hager.
Reusing produced water is not the only
innovation Devon is studying.
The company is also keen on the idea of
using natural gas-fired engines developed
by General Electric on well pads, which will
help cut diesel fuel expenditures. Natural
gas also burns cleaner than other fossil
fuels.
31 January 2014
29
165,000
THE NUMBER of barrels
of oil per day produced by
Devon Energy in the third
quarter of 2013.
Push to increase output places
player among growth drivers
DEVON Energy’s drive to increase
oil output — from South Texas to
the Rocky Mountains — continues
to help fuel growth in North
America.
According to the latest data
available, Devon produced 165,000
barrels per day in the third quarter of 2013. That was a 16% rise
compared to a year earlier. Total
production topped 691,000 barrels
of oil equivalent.
“We have five core areas,” explains chief operating officer
Dave Hager. They are the Permian basin, the Barnett shale and
the Eagle Ford play in Texas, as
well as the Anadarko basin in
Oklahoma and oil sands in Canada.
“A lot of our capital is going to
Eagle Ford and Permian,” he says.
“The capital is for oil development.”
Last year, the company spent
$1.6 billion in the Permian, with
between 25 and 30 rigs working
the different plays in the basin.
The company is targeting the
Bone Spring and Wolfcamp plays.
“We’ve been ramping up our activity there in the past few years,”
he says.
Meanwhile, in the Powder River basin in Wyoming, Devon has
made some upstream gains after
FIVE CORE
AREAS
$1.6 billion spent in
Permian basin
it switched from coalbed methane drilling to more profitable oil.
“We are drilling wells there targeting the Frontier, Parkman and
Turner formations,” Hager says.
Oil production jumped 34% in
the third quarter, versus a year
earlier, to 11,000 bpd. The company also completed nine oil wells,
two of which reached the Frontier
formation by the close of the third
quarter.
“The Rockies oil proves some
potential for growth,” Hager says.
While the play remains interesting for the company, Hager
does not believe it is as important
as some of Devon’s other investments.
“It will probably not rise to the
scale of the other plays we have,”
he says.
The company had three to four
rigs running in the basin last
year, and Hager says Devon will
most likely maintain a similar
number of units operating in the
basin.
“We will have some activity
there in 2014,” he says.
In other areas of the US upstream, Devon has what it calls
“liquids rich optionality”.
That’s the window where it can
target more profitable liquids in
plays like the gas-prone Cana
Woodford in Oklahoma and the
Barnett shale in Texas.
At a general level, Devon is
waiting for natural gas prices to
rise in the North Texas Barnett
shale play. The Barnett remains
one of Devon’s core areas and the
company does not have any plans
to divest the area.
“As prices allow, we have a large
inventory of production opportunities,” says Hager.
Devon, which is the single largest producer in the Texas shale,
posted net production of 1.4 billion
cubic feet of natural gas equivalent per day during the third quarter of 2013. Liquids production
increased to 58,000 bpd, a 15% increase compared to the third quarter of 2012 despite the slowdown
in operating rigs across the play.
Devon’s shale position covers
600,000 acres and spans Denton,
Johnson, Parker, Tarrant, and
Wise County.
Experience built in Cana Woodford
Photo: TOM DARIN LISKEY
play will pay
if it was going to work commercially,” he says. “We feel good
about it, but more wells need to be
drilled.”
Confident Devon’s exploration
campaign has not gained the national attention of the Eagle Ford
in Texas or the Bakken shale in
North Dakota. The below-theradar nature of the play has likely
helped Devon to quietly build up
about 650,000 acres. The company
has leases across some of the best
parts of the new trend.
“Success is still being determined but we are very confident
that we have an economic play,”
says Hager.
In some areas, the Woodford
and Mississippi Lime overlap. The
company has been drilling batches of wells from pads targeting
both formations, but Devon points
out it is not taking a
cookie-cutter approach.
“It may be dual or separate wells
that are producing from the Mississippi or Woodford,” explains
Hager.
So far the plan has paid off for
Devon. Initial rates on some of the
wells have been as high as 300 to
350 barrels of oil per day during a
30-day initial production period. “It’s not just the characteristics,
but what we like about the Woodford is that you tend to get less
variability than you get in the
Mississippian,” he says. “The
Woodford is also drilling quicker
than the Mississippian, so well
costs will be a little bit lower.”
Devon hopes to eventually get
well costs down to $3 million to
$3.5 million per probe.
“As we learn more, it drives
efficiencies,” Hager says.
WHILE much of the focus on Devon Energy’s
exploration focus in Oklahoma is on the
Mississippian Woodford trend, the company’s
learning curve began in the state’s Cana Woodford
asset.
Over the past decade, the liquids-rich Cana
Woodford asset in the Anadarko basin has become
one of the main pillars in Devon’s production
platform, hosting an estimated 11.4 trillion cubic
feet equivalent in total resources.
According to the company’s earnings report for
the third quarter of 2013, production there
averaged a record 57,000 barrels of oil equivalent
per day.
Devon has also been able to boost margins in
the play.
Flying the flag: Devon Energy has spudded over 400 wells in the Mississippian Woodford
trend since 2011
Photo: TOM DARIN LISKEY
WORLD
30
31 January 2014
AFRICA
Cobalt’s Bicuar hits new
pre-salt play off Angola
Probe drilled to
total depth in
only 59 days,
about 63 days
ahead of
schedule
IAIN ESAU
London
US INDEPENDENT Cobalt International Energy has established a
new pre-salt oil play off Angola
with its Bicuar-1A probe in Block
21.
The probe, which was a re-spud
of a well drilled previously, but
which experienced technical
problems, found significant volumes of mobile oil in the Kwanza
basin’s Syn-rift zone.
Cobalt estimates it holds
between 150 million and 300 million barrels of oil.
Cobalt targeted the Syn-rift play
in its previous pre-salt wildcats in
Block 21, but had little success.
At Cameia, this syn-rift play
had a good reservoir while at
Mavinga it had hydrocarbon indications.
However, the primary target of
these two probes wells, as well as
the Lontra-1 well in Block 20, a
shallower pre-salt play proved to
be prolific.
Lontra is estimated to hold
between 250 million and 500 million barrels of oil plus large volumes of gas.
Bicuar lies south-east of Cameia
with Mavinga located just to the
north-west.
Bicuar-1A was drilled to a measured depth of 5739 metres and hit
about 56 metres of net pay from
multiple pre-salt intervals.
Results of an extensive open
hole logging, coring and fluid acquisition programme, confirmed
the existence of both oil and condensate in multiple intervals.
“No free gas zones or water contacts were observed,” said the
operator.
After running production casing, the well was temporarily
abandoned.
Following full processing and
integration of all subsurface data,
the Block 21 partners will evaluate
additional activities necessary to
assess Bicuar’s commerciality.
This could take the form of a
drill stem test or an appraisal
well.
The well was drilled by to total
LONDON-based Ophir Energy is
set to spud what will be a closely watched pre-salt wildcat off
Gabon in mid-February.
Vantage’s Titanium Explorer
drillship will spud the Padouck
Deep probe in the Ntsina licence, said Mike Fischer,
Ophir’s senior vice president,
adding that the rig is en route
from the Gulf of Mexico.
Speaking to analysts, he said
the probe has a 20% chance of
success and is targeting about 1
billion barrels of recoverable resource potential in up to three
reservoirs.
On completion of Padouck
Deep, the drillship will mobilise south to drill the Affanga
Deep prospect in the Gnondo
licence.
This will target conventional
Maastrichtian-Cenomanian
sands in a structure Marathon
attempted to drill some years
ago.
Potential resources here
stand at some 200 million barrels, with about 15 follow-on
prospects identified.
Vantage’s rig will then head
north to the pre-salt play to drill
the 500-million-barrel Okala
prospect in the Mbeli licence.
Fischer said if either pre-salt
well is successful, there are
follow-up targets holding total
potential resources of more
than 2 billion barrels.
Follow-up probes could start
being drilled in the third quarter of this year.
Ophir has also been provisionally awarded four deep-water
blocks — A3, A4, A5 and A6 —
west of Gnondo, Mbeli and Ntsina.
Refinery
possibility
Excitement: Cobalt Energy chief exploration officer James Farnsworth
depth in only 59 days, about 63
days ahead of schedule.
Cobalt’s chief exploration officer
Jim Farnsworth said the Syn-rift
discovery in Bicuar “validates the
presence of a viable seal and trap
with quality reservoir rocks in the
deeper reservoir section”, and
cited analogues to this new Angolan play as already existing in Brazil on the other side of the Atlantic
Ocean’s conjugate margin.
“These characteristics have
been present in similar features in
the Campos basin of Brazil and
will be key to expanding the potential of the broader Kwanza basin pre-salt (play),” he said.
He also expressed excitement
over “how quickly Bicuar-1A was
drilled... continued performance
of this type would allow us to drill
wells at nearly half the cost we
had anticipated”.
Cobalt did not report results
from Bicuar-1A’s shallower target,
which proved such a success at
Cameia and Mavinga. In Block 20,
Photo: COBALT
Cobalt is drilling ahead on its
Orca-1 wildcat targeting the
Baleia structure, the eastern edge
of which was intercepted by a
probe back in 1996.
The Orca structure is thought to
be similar in size to Bicuar.
Drilling results are expected
this quarter.
Cobalt has a 40% stake in Block
21 and is partnered by stateowned Sonangol P&P, as well
Angolan players Naskapi Oil & Gaz
and Alper Oil.
Simba aims to farm out share in Guinea onshore blocks
TORONTO-listed junior Simba
Energy has signed a letter of
intent to farm out part of its stake
in blocks 1 and 2 onshore Guinea
to an unnamed private investor
group.
Under the terms of the provisional deal, the Calgary-based
farm-in companies can earn up to
Ophir to
spud off
Gabon
a 45% interest in the production
sharing contract for a total investment of US$6.5 million.
These funds would go towards a
full tensor gravity gradiometry
survey, which would give the
farm-in companies a 25% stake in
the acreage.
If it then paid for a 2D seismic
survey, the group’s stake would
increase to 45%.
Simba chief executive Robert
Dinning said: “This LoI provides
immediate recovery of expenses
to Simba and accelerates the completion of an (full tensor gravity)
airborne survey”.
“These blocks are highly pro-
spective given the exploration
work completed to date, and
should provide Simba with drillready targets later this year,” he
said.
He added that the definitive
agreements are expected to replace the LoI before the end of this
year’s first quarter.
NIGERIAN independent Waltersmith is evaluating the possibility of building a 5000 barrel per day refinery on OML 16
in the Niger Delta.
Chief executive Abdulrazaq
Isa said this would mitigate the
impact of vandalisation of
third-party assets that affect
production from the company’s
Ibigwe field which was running at 8000 bpd recently.
The refinery would ensure
cash flow from Ibigwe that
would allow Waltersmith to
explore deeper structures on
the field and meet its commitments in gas-rich OML 34
where it holds in minor stake
in the ND Western joint venture.
The company also has plans
to take part in marginal field
rounds and will look at acquisitions of assets close to its existing acreage.
Up for grabs will be Shell’s
remaining stake in OML 16,
said Isa, who added that Waltersmith is considering plans
to take the company public or
attracting a strategic investor.
Waltersmith farmed into
OML 16 a decade ago and pays
royalties to Shell which remains the leaseholder.
U P S T R E A M M E D I A PA C K 2 0 1 4
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Fr cor ns
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WORLD
32
Rains hit
output in
Indonesia
31 January 2014
ASIA
LOW LIQUIDS
PRODUCTION
HEAVY monsoon rains and
high seas have hit oil and
gas production at some fields
off Indonesia, writes Amanda
Battersby.
Upstream regulator SKK Migas said liquids production in
the coming days could be as
low as 770,000 barrels per day,
as output was hit at fields
including Mudi and the West
Madura Offshore (WMO) block,
both off East Java.
Pertamina was forced last
week to halt crude production
from WMO, after the weather
caused a leak in the hose that
takes oil to the floating storage
and offloading vessel.
This suspension wiped more
than 20,000 bpd of oil off
Indonesia’s tally, while gas
production was also considerably lower at WMO.
The weather last week also
stopped oil being offloaded
from the FSO on the Mudi field.
This week’s weather forecast
for much of the archipelago,
including Java — the most
populous island — was for
continuing heavy rain.
Meanwhile, Indonesia is
expected to revise downward
its 2014 oil plus condensate
production forecast to an
average 820,000 bpd, from the
previous 870,000 bpd.
The main reason for this
revision is because it seems
Pertamina-ExxonMobil’s already delayed Cepu full field
development will not now
come on stream until the
fourth quarter. The most recent
target had been May this year.
Other factors negatively
affecting production levels
include the lack of investment
to help slow the output slide at
mature fields.
In addition, exploration activity levels have not been as
high as was projected, while
some operators are holding off
investing at existing assets, as
players are uncertain whether
extensions will be granted for
these blocks.
Indonesia was once Asia’s
sole member of Opec. However,
it pulled out because of
dwindling production — the
official line is still that this is
a temporary move — and the
republic has been a net importer of oil for several years.
Disappointment: Pakistan’s
Petroleum & Natural Resources
Minister Shahid Khaqan Abbasi
Photo: REUTERS/SCANPIX
Local players to the fore
in Pakistan block round
Petroleum & Natural Resources Ministry hopes others will follow lead
of OGDC and PPL, which have acquired blocks in troubled Balochistan
NISHANT UGAL and
AMANDA BATTERSBY
New Delhi and Singapore
EIGHT local companies and two
foreign players have been provisionally awarded 50 exploration
blocks in Pakistan, in the first
such awards for about four years.
The acreage comes with a minimum commitment investment of
$371 million, according to local
sources.
The blocks — 21 in Balochistan,
15 in Punjab, six in Sindh province
and eight in Khyber Pakhtunkhwa
— were awarded after Islamabad
revised its licensing model to
give provincial administrations a
greater say in resources projects.
“These blocks have been awarded after consultation and a unified
model petroleum concession
agreement framed in this regard,”
said Minister for Petroleum &
Natural Resources Shahid Khaqan
Abbasi.
State-owned Oil & Gas Development Corporation (OGCD) picked
up 29 blocks, 10 were awarded to
compatriot Pakistan Petroleum
(PPL), three to Pakistan Oilfields,
two to the Al-Haj Group, while the
other recipients included Austria’s
OMV, Mari Gas, Canada’s Tallahassee and Ocean Petroleum.
Abbasi said he hoped other companies would follow the lead of
OGDC and PPL, which have acquired new blocks in Balochistan
— where security issues have
previously affected upstream
operations — and also take up
exploration in the restive province.
Companies submitted 66 bids
for 50 of the 60 onshore blocks that
had been offered in March of last
year.
The blocks awarded cover a
combined area of more than
103,000 square kilometres.
Thirty-four of the awarded
blocks are designated as zone one
acreage — categorised as high risk
and high cost, 19 are in zone two
— rated medium risk and medium
cost — and seven are categorised
as zone three — low risk and low
cost.
Pakistan applies different
terms, depending on the designation of blocks, which take into
account prospectivity and exploration risk.
There was a lacklustre response
from foreign companies to the
latest round, despite sweeteners
— such as the updated exploration
and production policy increasing
the maximum wellhead gas price
for onshore production to $6 per
million British thermal units.
Expressing the government’s
disappointment at the low
level of interest from foreign
players, Abbasi said that he
would encourage local outfits to
form joint ventures with foreign
companies for the exploration
work.
Pakistan’s Petroleum Ministry
believes it will take at least three
years to reap the benefits from
these blocks.
The country plans to offer a
total of 85 blocks, including the 60
from last year’s licensing round,
by 2017.
Abbasi added that he would
also review the status of existing exploration blocks, where
operators have failed to meet
agreed work programmes. These
could then be offered to new
bidders.
At least seven blocks are understood to be under consideration by
Abbasi.
Foreign companies invested
$2 billion in oil and gas upstream
ventures in Pakistan over the past
three years, reported Pakistan’s
Daily Times newspaper.
Pirkoh targeted in latest spate of militant attacks
Crude halt: Pertamina fuel
truck
Photo: BLOOMBERG
ARMED militants have attacked a
gas pipeline from the Pirkoh field
in Pakistan’s restive Balochistan
province — the latest in a decade
of similar incidents that have
already claimed lives, writes
Amanda Battersby.
The militants attacked a 16-inch
or 18-inch — depending on the
source — gas pipeline in the Dera
Bugti district, and gas supply to
customers in the provincial capital, and other nearby districts,
was suspended. No-one has yet
claimed responsibility for the attack, although previous incidents
have been the work of some Baloch separatist groups.
These groups have been pushing for greater autonomy for
the province, and a share in its
natural resources.
Recent changes to Pakistan’s
Petroleum Law gives provinces
more say over upstream operations in onshore blocks that were
awarded from last year’s licensing
round. However, some parties
want a guaranteed share of revenues to flow to the relevant province.
While no fatalities or injuries
have been reported in the latest
attack, history suggests there will
be further incidents before the
end of the year, and that more
lives could be lost.
The government maintains
that military action would only
be used as a last resort
against militants within its borders.
A source said that, since 2005,
there have been 204 known
attacks on gas pipelines and gas
field installations in Balochistan,
which have killed at least 16
people and injured 31 or more.
In 2011, more than 50 such
incidents were recorded, although
the previous year witnessed only
three attacks.
WORLD
31 January 2014
33
INDIA
OIL plans rig tender for
Cauvery basin drill drive
Programme to include three firm
wells, with first to be spudded by
August or September
NISHANT UGAL
New Delhi
OFFSHORE drilling contractors
are getting set for a tender by
state-owned Oil India (OIL) to
charter a semi-submersible or an
anchor-moored drillship required
for its drilling campaign in Cauvery basin Block CY-OSN-2009/2
off the country’s eastern coast.
Drilling sources said six contractors responded to an Expression of Interest issued by OIL in
October and are now waiting for
the tender process to begin.
“The tender should be out very
soon. OIL is deciding whether
they will float a limited tender to
selected qualified contractors or
an open tender instead,” one
source said.
A total of eight drilling units
were offered to OIL by the six contractors following the EoI.
US drilling giant Transocean is
already being tipped as a top contender for the drilling job and has
offered the semisubs MG Hulme Jr
and GSF 140, sources said.
Three other US contractors are
also in the mix — Noble Drilling
has offered the semisub Noble
Homer Ferrington through Indian
contractor Deepwater Drilling,
Diamond Offshore has offered the
semisub Ocean Quest, and
Atwood Oceanics has offered the
semisubs Atwood Falcon and
Atwood Hunter.
Also, Russia’s ArcticMorNefteGazRazvedka has offered the drillship Deep Venture and domestic
contractor Essar has offered its
semisub Essar Wildcat, sources
added.
Drilling sources suggest that
while the EoI has received a large
response, fewer drilling contractors are likely to participate in the
final tender.
“We believe the actual bidders
will be less than the number of
contractors who have responded
to the EoI,” one source said.
OIL is initially looking at a firm
three-well drilling programme as
per the block’s minimum work
programme and could drill three
more probes, depending on results.
The exploration wells are likely
to be drilled in water depths of
between 400 and 900 metres, with
the first well be spudded by
August or September, one source
claimed.
Tenders for associated drilling
services are likely to be floated
On the menu: Transocean has offered the MG Hulme Jr
Photo: FRIEDE & GOLDMAN
alongside the rig tender as OIL
does not want to delay the drilling
campaign.
OIL is looking at a rig capable of
drilling exploration and development wells to drilling depths of
5800 metres.
Pre-qualified bidders should
have a minimum five years’
experience in operating deepwater rigs in water depths greater
than 400 metres. OIL is essentially
an onshore drilling player and has
no experience of deep-water
exploration.
Sources claim the Cauvery
basin deep-water drilling campaign is critical to the company’s
plans as it aims to get a foothold
in the offshore sector.
OIL holds a 50% operating stake
in the Cauvery basin block, with
compatriot Oil & Natural Gas Corporation holding the other 50%.
Tui Area
duo in
spotlight
AWE and its two joint venture
partners are preparing to start
a drilling hunt for extra crude at
the Tui Area fields off New Zealand, writes Russell Searancke.
Two wells are planned using
the semi-submersible drilling
rig Kan Tan IV — the Pateke-4H
appraisal and development
well, and the Oi-1 exploration
prospect.
Pateke-4H will test the Pateke
North field extension and has
potential to add between 2 million and 4 million barrels of
recoverable oil, if successful.
Oi-1 is a much larger proposition, with potential mean
recoverable resources of 15 million barrels and with a similar
structural style and the same
reservoir target as the producing Tui fields, according to
joint venture partner Pan
Pacific Petroleum.
Pan Pacific is so excited
about the Oi prospect that it
increased its stake in the well
to 50%, leaving AWE with
31.25% and New Zealand Oil &
Gas (NZOG) 18.75%.
If Oi is a success, then AWE
and NZOG have an option to
increase their equity through a
buy-back of equity from Pan
Pacific.
Both Oi and Pateke-4H are
located within tie-back distance of the Umuroa floating
production, storage and offloading vessel at the Tui field.
If successful, Pateke-4H
could be completed using the
Frigstad-operated Kan Tan IV
and tied in to the FPSO Umuroa
in late 2014 with first oil in early 2015, Pan Pacific indicated
recently.
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WORLD
34
31 January 2014
Air safety
briefing
concerns
UK
Bid to head off
North Sea
crisis with
new licence
round
Fresh acreages up for grabs as
government tries to halt falling
output and turn around decline
High interest: UK
Energy Minister
Michael Fallon
Photo: AFP/SCANPIX
ROB WATTS
London
THE UK has launched its 28th offshore licensing round as it bids to
halt falling output and turn
around a worrying decline in exploration activity.
The government said it expects
a high level of interest after awarding a record number of licences in
the previous 27th round.
“There continues to be an extremely high level of interest in
North Sea oil and gas, which is unsurprising when there could be as
many as 20 billion barrels of oil
still buried deep within the seabed,” Energy Minister Michael
Fallon said.
Submissions have to be made to
the UK government by 25 April.
The 27th round saw 219 licences
awarded in two tranches in
October 2012 and November last
year.
That round also saw the entry of
21 new explorers, bringing the
number of North Sea exploration
players to more than 50, according
to the Department of Energy &
Climate Change (DECC).
Last year, 36 new offshore
projects were approved, generating around £6.5 billion ($10.8 billion) in tax revenue and another
£5 billion through taxes on the
wider supply chain, the government said.
The new round comes at a pivotal time for the UK North Sea.
Recently published analysis by
Edinburgh-based Wood Mackenzie said the UK faces a race against
time to find and develop new
fields.
“The year ahead could prove to
be pivotal, with an improvement
in exploration success and production performance crucial to
ensuring the longevity of the sec-
tor,” said Lindsay Wexelstein,
head of UK upstream research for
Wood Mackenzie.
According to Wood Mackenzie,
just 52 exploration and appraisal
wells were spudded in 2013, down
from 67 the year before.
Industry association Oil & Gas
UK said UK exploration is facing a
crisis.
Chief executive Malcolm Webb
said: “We are just not drilling
enough wells in UK offshore waters and those that we are drilling
are not finding enough oil and gas.
This worrying trend has been
growing for some time.
“Our members tell us that drilling rig availability and the ability
of smaller companies to secure
equity capital are major hurdles.
“In any event, it is clear that we
now face a crisis which demands
urgent concerted action by DECC,
HM Treasury and the industry, if
we are to maximise economic recovery of our offshore oil and gas
resource and sustain future production.”
The UK government last year
launched an independent review
of the North Sea, the first in more
than 20 years, after output fell by
a third from 2010 to 2012.
Led by Ian Wood, former chairman of FTSE 100 oil services company Wood Group, the review outlined a plan to maximise the
remaining value of the North Sea
and to pump an extra 3 billion to
4 billion barrels of oil equivalent
than would otherwise be extracted over the next 20 years.
In his findings late last year,
Wood recommended establishing
an “arm’s length” regulatory body
that would drive collaboration between different companies.
No fracking plans for Balcombe, Cuadrilla tells residents
UK ONSHORE player Cuadrilla Resources has decided after sample
analysis that its Lower Stumble
oil discovery in southern England
will not require hydraulic fracturing as it is “naturally fractured”,
writes Bill Lehane.
The company has written to local residents in the nearby West
Sussex village of Balcombe advising them it has applied for permission to flow test the well in a
three- to five-week operation that
would be “significantly smaller in
scope” than last summer’s drilling programme at the site.
In the letter on 23 January,
Cuadrilla Resources said “the
presence of these natural fractures and the nature of the rock
means that we do not intend to
hydraulically fracture the exploration well at Lower Stumble now
or in the future”.
West Sussex Council said it had
begun a 50-day public consulta-
tion period on the application and
aimed to make a decision by late
April. The company hit oil last
September at the prospect, where
ConocoPhillips made a sub-commercial find in 1986.
Cuadrilla’s probe uncovered oil
pay after it was drilled to a vertical depth of 2350 feet with a 1700foot horizontal section through a
Kimmeridge Micrite limestone
clay formation.
Campaigner Brenda Pollack of
Friends of the Earth welcomed the
development but said “while residents will undoubtedly be relieved that Cuadrilla has ruled out
fracking at its Balcombe site, the
community still faces the prospect of significant industrial activity on its doorstep”.
The drill site was the scene of 65
days of protests against the use of
hydraulic fracturing in the UK
last summer, during which 120
demonstrators were arrested.
UK NORTH Sea helicopter operators have been told to update pre-flight safety briefings
so passengers recieve clearer
information about emergency
breathing systems (EBS), writes
Rob Watts.
The special bulletin from the
Air Accidents Investigation
Branch (AAIB) follows investigations into the crash of a CHCoperated AS332 L2 Super Puma
helicopter on 23 August off
Shetland, which killed four of
the 18 people on board.
AAIB raised concerns that
briefings do not adequately describe the functionality of all
types of EBS currently in use as
part of passengers’ emergency
equipment.
EBSs allow helicopter passengers to breathe under water
for a short period of time in an
emergency.
Some types employ a rebreather that allows the user to
re-use the air from their lungs
for a limited period initiated by
an input breath before entering
the water.
Other hybrid systems consist of a re-breather in conjunction with a small canister of
compressed gas, which is automatically discharged into the
device when it comes into contact with water.
AAIB said that pre-flight
briefings do not adequately
highlight that an EBS may be a
hybrid and therefore would not
require an input breath before
use.
It said this might affect decision making in an emergency.
AAIB said: “The operators
have undertaken to amend
their pre-flight briefing material to include information
that the hybrid system contains its own air supply, which
is discharged automatically,
making the system usable
even if the wearer has not taken a breath before becoming
submerged.”
Separately, UK MPs on the
cross-party Transport Committee held an open evidence
session to investigate North
Sea helicopter safety on Monday.
The lawmakers’ investigation, held at the University of
Aberdeen, was prompted by
last year’s crash.
•• A fatal accident inquiry into
the circumstances of a North
Sea helicopter crash nearly five
years ago that left 16 men dead
continued in Aberdeen this
week.
The Bond Offshore-operated
AS332 L2 Super Puma crashed
into the sea off Peterhead in
fine weather on 1 April 2009 returning to the mainland from
the BP-operated Miller platform.
The FAI is being held in the
presence of Grampian Highlands & Islands Sheriff Principal Derek Pyle.
Search the archive:
CHC
WORLD
31 January 2014
35
US
Shell’s Arctic ambitions
hurt by court decision
Appeals court
says government
did not properly
assess risks and
ponders validity
of supermajor’s
Arctic leases
NOAH BRENNER
Houston
SHELL has been dealt a legal setback in its quest to drill off Alaska
in the coming summer after a US
appeals court found the government did not properly assess environmental risks when it issued
drilling leases in Arctic waters.
The Ninth District Court of Appeals sided with the plaintiffs in
the case, who argued that the US
Interior department based its
evaluation of the environmental
impacts of drilling on an estimate
that 1 billion barrels of oil could be
produced from the fields and that
estimate was not backed by facts.
The appeals court dubbed the
estimate “arbitrary and capricious” and remanded the case to a
lower court for further review,
calling into question the validity
of the leases Shell won during a
2008 federal auction.
The case is a blow for Shell. The
company had hoped to return to
drilling in the shallow waters of
the Chukchi Sea this summer after
an ill-fated drilling campaign last
year that ended with its Kulluk rig
running aground on an island off
Alaska after breaking loose from a
tug boat that was towing it.
Despite that setback, Shell re-
CANADA’S Husky Energy is in
the market for up to 40 surface
wellheads and christmas tree
equipment for its White Rose
Extension Project off Newfoundland, writes Iain Esau.
The project is centred on a
concrete gravity base wellhead
platform — which has yet to be
formally approved as the development concept design — to
exploit the West White Rose
discovery.
Although this platform will
have only 20 well slots, Husky
intends to use conductor-sharing technology to allow two
wells to be drilled in each conductor.
Specifically, the expression
of interest-prequalification exercise covers 20, 36-inch diameter, low-pressure conductorsharing wellheads plus 40
wellheads rated to handle 6500
pounds per square inch and 40
christmas tree assemblies.
Responses must be with
Husky by 12 February.
Apache pipe
springs leak
Bad omen: Shell’s Kulluk rig after it ran aground last year near Kodiak Island, Alaska
Photo: AP/SCANPIX
signed a contract with offshore
driller Noble to lease its drillship
Noble Discoverer and send the
vessel back to Alaska as soon as
the sea ice breaks up enough to
permit drilling.
The group of plaintiffs, which is
represented by environmental organisation EarthJustice, called
the ruling “a victory for the Arctic
Ocean” and questioned whether
federal officials would allow Shell
to proceed with its campaign.
“The Obama administration must
now take seriously its obligation
to re-think whether to allow risky
industrial activities in the Chukchi Sea,” the groups said.
“As Shell’s problems have clearly
demonstrated, companies are not
ready to drill in the Arctic Ocean.”
Shell was tight-lipped about the
court’s decision.
“We’re reviewing the opinion,”
a Shell spokeswoman said. The
Anglo-Dutch supermajor has
come under pressure to rein in
spending after new chief executive Ben van Beurden warned investors that fourth quarter earnings would be down by as much as
70% and would come in well below
analyst estimates for the period.
The case is now back in the US
District Court in Anchorage,
Alaska, for further adjudication.
Crescent Point hoping for strong year as production rises
PRODUCTION at Crescent Point
Energy exceeded expectations in
2013 with an exit rate of 126,500
barrels of oil equivalent per day,
ahead of its previous guidance of
124,000 boepd, writes Tonya Zelinsky.
The Calgary-based junior is optimistic the upward momentum
will continue this year with its
Husky in
hunt for
Rose gear
activity in the light oil plays
across western Canada in Saskatchewan and Alberta and in
North Dakota and Utah in the US.
“We’re pleased with our firstquarter results so far and feel
we’re in a great position to deliver
another strong year to our shareholders,” said chief executive
Scott Saxberg. “In recent years,
we’ve grown significantly in the
US. We’ve acquired assets in the
Uinta basin in Utah and the
Bakken resource play in North
Dakota.”
As of 22 January, Crescent Point
began trading on the New York
Stock Exchange. It currently oper-
ates 24 drilling rigs, 19 of which
are in the Saskatchewan Bakken
and Shaunavon plays.
Crescent Point’s budget for 2014
is C$1.75 billion (US$1.57 billion)
and it is expected to maintain an
average production rate of 126,500
boepd. It is forecasting an exit rate
of more than 135,000 boepd.
APACHE Canada has reported a
produced water leak from one
of its pipelines in north-central
Alberta, Canada.
The water injection pipeline
leak was discovered 21 January
at Apache’s Belloy field operating area northwest of Whitecourt. The line was shut in and
isolated.
Apache estimates about 1600
cubic metres was released with
no impact to public health or
wildlife. However, the produced water did affect an unnamed creek but is not expected to harm any fish-bearing
waterways.
Environmentalists are on
site mapping the affected area,
sampling the produced water,
and beginning clean up.
The produced water comes
from formation fluids extracted during operations.
The cause of the leak is being
investigated.
Search the archive:
Apache
36
31 January 2014
SHALE
AND UNCONVENTIONAL OIL & GAS
Antero’s
Utica
boost
ANTERO Resources reported
strong results from its latest
drilling in the Utica shale
play in the US, where its
latest wells have had average
initial production rates of
more than 32 million cubic
feet of natural gas equivalent
per day, writes Noah Brenner.
The newly-public company
brought on five wells in Noble
County, Ohio, where it is
chasing the wet gas fairway
of the emerging shale play.
The best of the wells, the
Milligan 2H, produced at a
peak 24-hour rate of 40.2
MMcfed — 66% liquids — from
a 6000-feet lateral.
The rates assume full
ethane recovery, even though
currently Antero is keeping
ethane in the gas stream
because of continued low
prices for the commodity.
Antero said its initial 11
Utica wells continued to
produce at a 30-day average
rate of 14.7 MMcfd, even
though ethane is not being
recovered from the stream
and the wells are producing
into line pressures of 1100 psi
due to lack of midstream
compression in the play.
The company has
contracted to have
compressor stations, each
with a capacity of 120 MMcfd,
servicing its wells in Noble
and Monroe counties.
Analysts were impressed
with both tranches of wells.
“Utica wells in the fourth
quarter continue to impress
as the company makes its
case that the Utica core is the
north-east portion of Noble
County,” Capital One
Southcoast analyst Craig Velie
said.
Utica wells
in the fourth
quarter
continue to
impress.
Athlon buys
in Permian
ATHLON Energy laid out
$88 million to buy rights to
more than 5600 acres in the
northern Permian basin, in
the US, where it announced
strong results from an early
horizontal drilling
programme.
The Permian pure-play said
the acreage is near its
existing operations in
Midland, Upton, Martin, and
Andrews counties in Texas.
EOG is believed to control more than
250,000 acres around Smith, Anderson,
Cherokee and Henderson counties, leased
through a series of shell companies.
US
EOG has Goodland Lime
US independent buys out package of assets from
Terrace Energy to add acreage in East Texas basin
NOAH BRENNER
Houston
EOG RESOURCES is doubling
down on its stealth tight oil exploration programme in East Texas,
where industry insiders see the
US independent trying to crack
the Goodland Lime and potentially other stacked targets in the basin.
The US independent bought out
a package of assets from privatelyheld Terrace Energy for an undisclosed sum as it adds acreage in
the oil-rich East Texas basin. EOG
took the majority of a 53,000-acre
asset package spanning the border
of Leon and Houston counties, according to sources with direct
knowledge of the deal and land
records in those two counties.
The package had been marketed
since late August with the help of
Australian investment bank Macquarie Tristone.
Offer documents seen by
Upstream showed that the full offering included 53,600 acres in
Houston and Leon counties and another 5900 acres in Smith County.
Upstream understands that
EOG took all the acreage in Leon
County and the majority of the
acreage in Houston County, much
of which was a contiguous block
along the border of the two, but did
not buy the Smith County portion.
Targets there could include the
Woodbine and Eaglebine play that
EOG is chasing to the south in
Madison, Walker and Grimes
counties, as well as tight oil targets such as the Buda, Glen Rose
and Kiamichi Shale formations.
However, industry insiders said
they believe EOG is targeting the
package as part of its exploration
of the Goodland Lime, a littledrilled horizontal tight oil target
where it has recently permitted
US independent upping stakes in emerging Eaglebine play
THE Goodland Lime is not the
only tight oil play that EOG Resources seems to like in East Texas.
The US independent is upping
its stake in acreage in the emerging Eaglebine play centered
around Madison, Walker and
Grimes counties by buying out
joint venture partner Range Resources for an undisclosed sum,
continuing a pattern of adding incremental acreage to its position.
Sources confirmed that EOG has
an agreement to take over the 25%
stake held by fellow independent
Range Resources in a joint venture covering more than 100,000
acres.
Land records indicate the deal
closed in the middle of January.
Range was an early entrant into
the Eaglebine, but the play could
not compete within its portfolio,
which includes large parcels in
the heart of the wet gas fairway of
the Marcellus Shale play in Pennsylvania. US junior ZaZa Energy
bought into Range’s position and
subsequently signed a farm-in
deal for EOG to take as much as a
75% stake in 100,000 acres in the
play, but Range had retained a 25%
stake in the holdings.
EOG was supposed to make
staged investment decisions after
seeing initial well results from its
operations, but it quickly accelerated activity and announced in
October it would fully fund the
farm-in to gain its full 75% stake
in the play. Shortly before that an-
nouncement, EOG revealed that it
had bought an additional 19,000
acres in the play in a bolt-on package.
Initial drilling results in the
Woodbine from EOG and offset operators such as Halcon Resources,
Encana and Devon Energy have
been inconsistent as companies
have worked to delineate a series
of stacked targets that include the
Woodbine Sands, the Glen Rose
and an eastern extension of the
Eagle Ford shale.
31 January 2014
37
1.5 Bcm
Bit busy: US
independent EOG
Resources has
bought out a
package of assets
from privately-held
Terrace Energy for
an undisclosed sum
as it adds acreage
in the oil-rich East
Texas basin
Photo: EOG
in its sights
additional exploration drilling after sinking one vertical and one
horizontal wildcat.
The company is believed to control more than 250,000 acres
around Smith, Anderson, Cherokee and Henderson counties that
is leased through a series of shell
companies.
Sources watching that play said
they believe EOG is chasing the
same trend to the south-west
with this latest buy. Meanwhile,
the company has begun permitting work on two new wildcats 22
miles (35 kilometres) apart as it
tries to delineate the trend.
EOG is awaiting approval for the
permit to drill the Autry 1 and Mathis 1 vertical wells, both in
Anderson County.
Both wells have a total depth
proposed at 14,000 feet, which
would land the probes well below
the Goodland Lime interval, but
in past exploration EOG has permitted its vertical wildcats deeper
than the intended target and then
stopped the wells short in order to
mask its interest. Geological information from the verticals is
expected to inform a future horizontal drilling campaign, and the
bores can be used for micro-seismic monitoring of completions
The wells follow up the Cowan
1 and Cowan 1H in Smith County,
where EOG drilled a vertical well
and then offset it with its first
horizontal in the play.
Initial production from the
Cowan 1H was around 235 barrels
per day of oil, according to state
records, but sources disagree on
the true potential of the well.
EOG’s interest has already
brought other operators into the
Goodland Lime play.
Jamex Resources at first permitted the Herrington 1 well in
Anderson County as a vertical
wildcat, but amended its plans
and drilled a 7000-foot lateral section into a formation believed to
be the Goodland Lime.
Local sources there indicate
Jamex plans to fracture that well
in March.
CHINA’S SHALE
gas target this year.
Veering gas prices hit multi-year
highs as US suffers bitter winter
US NATURAL gas futures prices
are swinging wildly but continue
to touch multi-year highs as the
nation tries to keep warm during
one of the coldest winters in
recent memory.
The front month future contract
on the New York Mercantile Exchange traded between $4.86 and
$5.11 at press time as gas brokers
focused on bitterly cold weather
across much of the US that has
drawn massive amounts of gas
from storage.
The Climate Prediction Center
is forecasting temperatures to
stay well below normal until 11
February.
“(The) gas bulls have been unleashed due to a cold winter so far
(10% colder than normal as measured by heating degree days) and
the prospect of more cold weather
during the heart of winter (late
January and early February),” analysts at Tudor Pickering Holt said
in a note to clients.
As the front month futures
contract transitions from February to March, traders will increasingly look at overall storage
figures that point to an undersupplied market and could underpin a longer rally.
Analysts at consultancy Bentek
Energy said they expect storage
withdrawals of 237 billion cubic
feet of gas and 281 Bcf for the last
two weeks of January.
Analysts at Tudor Pickering
Holt are predicting that storage
levels at the end of winter will be
around 1.1 trillion cubic feet, well
below the 10-year average of 1.6
Tcf.
“Supply growth in 2014 will help
alleviate the low storage levels,
but gas price should be supportive
at the high end of our range
(around $4.50 per thousand cubic
feet) into the second half of 2014…
if not higher,” the analysts said.
WEATHER
WARNING
Temperatures to stay
down ‘until 11 February’
The cold has not only boosted dry
gas prices but it has also helped
boost the price that operators get
for natural gas liquids.
A “barrel” of NGLs includes a variety of hydrocarbons including
ethane, propane, butane and natural gasoline.
A cool wet autumn cut into
propane supplies as farmers used
more of the fuel to dry their
crops.
At the same time, the US is exporting a record amount of the
fuel and those factors, combined
with the latest Arctic blast, caused
prices to hit a 14-year high at the
hub in Conway, Kansas — one of
two trading hubs used to base fuel
prices across the US.
Propane on the spot market
spiked from $1.39 on 14 January to
$4.49 per gallon in less than two
weeks, and an overall upward
trend in prices has helped lift the
average NGL prices 30% off their
June lows to more than $40 per
barrel.
US chill: freezing weather hits Chicago
Photo: AFP/SCANPIX
China bids to ramp up production
CHINA plans to aggressively ramp
up its shale gas production in 2014,
as major pilot projects listed by
the government have now entered
the development stage, a government official said.
The official with China’s National Energy Administration (NEA)
said the government is targeting
1.5 billion cubic metres of shale
gas this year, a significant jump
from last year’s 200 million cubic
metres.
Under its 12th five-year plan, China has a shale gas production target
of 6.5 Bcm per annum by 2015.
NEA’s confidence is based on recent breakthroughs made by Sinopec at Fuling block in Sichuan
basin, where the operator has
launched a major development
campaign to produce 2 Bcm per
annum of shale gas by 2015.
Sources reported the NEA official as saying that the government is encouraging Sinopec and
China National Petroleum Corporation (CNPC) to speed up the de-
velopment at Sichuan province
and Chongqing city.
Sinopec is working on three
blocks at Sichuan basin, where 26
horizontal wells have been completed including 13 at Fuling
block, of which nine were fractured, three at Pengshui block and
two at Jiannan block.
The Jiaoye 1HF well at Fuling
block flowed 110,000 cubic metres
per day when fracked last year.
Production is currently maintained at 65,000 cubic metres per
day.
The most productive well at Fuling was Jiaoye 8-2HF, which
flowed 800,000 cubic metres per
day, the highest volume in China
from a single shale well.
CNPC, along with its partners
Sichuan Energy Group and the local Yibin government, has also
earmarked 1.5 billion yuan ($246
million) this year for operations at
its Weiyuan-Changning shale gas
block, with plans to drill up to 30
exploration and appraisal wells
there. A total of 32 wells were
drilled at the block last year. Last
year, CNPC formed a joint venture
with Sichuan Energy and the Yibin government, the Sichuan
Changning Natural Gas Company,
which is 55% held by CNPC, 30% by
Sichuan Energy, 10% by the Yibin
government and 5% by Guolian
Industrial Investment Fund.
The joint venture led by CNPC
Southwest Oil and Gas Field Company vice president Xie Jun aims
to produce 1 Bcm of shale gas by
2016, to rise to 3 Bcm by 2020.
Sichuan is home to 27 trillion
cubic metres of shale gas in place,
accounting for 25% of China’s total.
The local Sichuan government
hopes that CNPC and its partners
will focus on the exploration and
development of three shale gas
blocks in Sichuan before 2020,
when it has targeted a production
of 52 Bcm per annum, accounting
for one third of the national target.
SHALE
38
Santos in
Cooper
action...
AUSTRALIAN independent
Santos has begun three separate shale gas projects in
the country’s onshore Cooper
basin following recent drilling
successes,
writes Russell
Searancke.
The three projects are called
Aurora, Roswell and Fortuna,
according to joint venture partner Beach Energy.
Aurora comprises the Moomba-192 vertical well and the
Moomba-193 Murteree shale
horizontal well, and is one
kilometre away from Australia’s only producing shale well
Moomba-191, which is currently producing about 2 million
cubic feet per day of gas.
The Roswell project is made
up of the Roswell-1 and
Roswell-2 shale wells, while
the Fortuna project consists of
the Moomba-194 and Moomba-195 wells.
Various operational activities are ongoing to push all
three projects towards commercialisation, added Beach.
A commercial advantage
they have is their existing
production infrastructure in
the area, comprising pipelines
and the Moomba processing
plant.
A separate shale play owned
by the same joint venture is
called the Basin Centred Gas
play.
Three vertical wells have
been drilled so far, namely
Langmuir-1, Gaschnitz-1 and
Van der Waals-1.
Santos said a 10-stage fracture stimulation has been completed at Langmuir-1, and the
well is on clean-up flow.
Gaschnitz has been flow
tested at up to 1.5 MMcfd of
gas, and the drilling of more
wells is being considered for
2014.
... and so is
Chevron
CHEVRON and its joint venture
partners are busy with flow
testing and other activities in
the shale play in Australia’s
Cooper basin.
The potential of the area
gained credibility last year
when Chevron farmed in to
two Beach Energy-operated
permits called PEL 218 and ATP
855, which they have named
the Nappamerri Trough natural gas project.
Chevron holds 30% of PEL 218
and 18% of ATP 855, with Beach
on 70% of the former and 45.9%
of the latter.
Icon Energy owns the remaining equity in ATP 855.
Up to six vertical wells and
one horizontal well will be
drilled in the project area by
the end of June 2014.
Fracture stimulation of
between six and nine wells is
also planned and a further 12 to
13 wells are to be flow tested,
according to Beach.
The end goal is to drive down
well costs and move to pilot
production and appraisal in
2015.
31 January 2014
AMERICAS
Safety call: action is being urged to prevent a repeat of the Lac Megantic tragedy in Quebec
Photo: AP/SCANPIX
Calls to regulate safety
on crude train cargoes
US and Canadian authorities join in urging
action following number of accidents
NOAH BRENNER
Houston
US SAFETY officials are calling for
new regulations that would increase inspections of trains carrying crude and route such cargoes
away from populated areas.
The US National Transportation
Safety Board (NTSB) made the recommendations jointly with the
Transportation Safety Board of
Canada after a rash of accidents
involving trains carrying crude
oil.
In a letter to the US Department
of Transportation, the NTSB called
for three major changes to oversight of the crude-by-rail busi-
ness, which has climbed by more
than 400% since 2005, according
to industry figures.
The first recommendation is
that rail cars carrying crude
should be routed to avoid populated areas in order to minimise
the likelihood of a repeat of the
Lac Megantic tragedy, when more
than 45 people were killed in Quebec after an explosion caused by
the derailment of a train carrying
crude.
Second, the agency is asking
safety regulators to ensure that
rail carriers have emergency re-
sponse plans in place that cover
scenarios where all the crude on a
train might spill during an accident.
Finally, the NTSB is calling for
audits of crude cargoes to ensure
that they are properly labelled and
are following the appropriate precautions.
The agency is currently analysing the crude grades that are produced in plays such as Bakken and
Eagle Ford and preliminary findings indicate they may be more
prone to fire and explosions than
traditional crude grades, and
therefore carriers may need to follow precautions previously reserved for more explosive products.
“The large-scale shipment of
crude by rail simply didn’t exist
ten years ago, and our safety regulations need to catch up with this
new reality,” NTSB chairman Deborah Hersman said when making the recommendations.
“While this energy boom is
good for business, the people and
the environment along rail corridors must be protected from
harm.”
Yoho sells Montney shale acreage to Storm for $79 million
YOHO Resources has sold its
Montney shale gas acreage in
north eastern British Columbia,
Canada for C$87.7 million (US$79
million) to Storm Resources.
The two Canadian juniors
signed a deal earlier this month
when Storm agrees to acquire 29
sections, or 7500 hectares, of undeveloped land in the liquids-rich
natural gas Umbach-Nig area of
the Montney.
Storm will pay C$30 million in
cash plus 13.6 million common
shares at C$4.23 per common
share to Yoho shareholders.
The deal includes two horizontal wells producing 359 barrels of
oil equivalent per day.
The land increases Storm’s holdings in the Montney to 140 net
sections and is contiguous with
its existing Umbach South lands.
Yoho said the cash consideration would go to bank indebtedness and funding further explora-
tion and development drilling on
its Duvernay acreage in the Kaybob area in Alberta and British
Columbia.
It expects the divestiture to result in a short-term decrease in
production volumes but expects it
will be restored by the first quarter of 2015.
Average production for 2014 is
forecast to range between 2100
and 2200 boepd.
In 2014 Storm said it expects
two to three horizontal wells will
be drilled on the acquired land,
with additional wells planned for
2015.
Major outlays will include C$47
million at Umbach to drill 10 horizontal wells and C$19 million to
expand infrastructure at Umbach.
Storm is forecasting average
production to increase to between
7500 and 7900 boepd by the fourth
quarter of 2014, up from about 4750
boepd in the same period of 2013.
SHALE
31 January 2014
39
US
McClendon boosts his
Utica play investment
AEU is revealed
as ‘undisclosed’
buyer as it gets
chunk of Ohio
shale acreage
from Hess
LANDOWNER
COMPLAINTS
Claims echo earlier
Chesapeake cases
NOAH BRENNER
Houston
AUBREY McClendon’s American
Energy Utica (AEU) has paid $924
million to buy 74,000 acres in the
dry gas window Utica shale in
Ohio from US giant Hess, boosting
McClendon’s already massive investment in the emerging play.
Hess announced that it had a
deal in place to sell the acreage to
an “undisclosed” company as part
of its quarterly earnings call
and sources with direct knowledge of the transaction confirmed
McClendon’s AEU as the mystery
buyer.
AEU is an affiliate of American
Energy Partners, which McClendon founded months after being forced out as chief executive of
Chesapeake Energy by activist
investors.
The Hess deal increased AEU’s
already substantial Utica portfolio
and provided Hess with an
avenue to monetise assets that it
says did not meet its investment
criteria as part of a broader push
to clean up its portfolio and buyback shares.
“While our wells in the dry gas
portion of the Utica were highly
productive, we concluded that the
potential returns from such an
investment at current and projected natural gas prices no longer
justified retaining this acreage as
a strategic part of our overall liquids-based asset portfolio,” chief
executive John Hess told investors.
The sale acreage lies primarily in
eastern Belmont and Jefferson
counties but could include a small
portion of south-east Harrison
County, according a Hess map of its
Utica position.
Under the terms of the deal, Hess
will spend about $50 million to
drill four more wells in the sales
area in order to hold acreage in
danger of expiring, Hess told investors.
While the Utica is the primary
draw, industry insiders told Upstream that McClendon may be
eyeing the gas potential of the
Marcellus Shale as well, which has
produced strong wells along the
Ohio border with Pennsylvania
and West Virginia.
Hess will keep about 42,000
acres in what it considers the wetgas window of the play in Noble,
Guernsey and western Belmont
and Harrison counties, where chief
operating officer Greg Hill said returns are comparable to those of
the company’s strong Bakken position.
McClendon raised $1.7 billion
Company
accused of
not paying
Move: Aubrey McClendon, founder and chief executive of American Energy Utica
Photo: AP/SCANPIX
from private equity investors for
an initial foray into Utica — his return to the oil business after parting ways with Chesapeake Energy.
He used the cash to build a sizeable position in the southern wet
gas fairway of the play by buying
assets from Enervest and Shell,
striking a joint venture with local
operator Red Hill Development and
leasing from individual landowners.
While it is not clear how much of
that money has been spent, the
structure of the deal, which
allows AEU to pay two-thirds of
the price — about $600 million —
upfront and the remaining
$300 million in the third quarter,
hints that McClendon’s overall
spending could be exceeding that
initial $1.7 billion and is likely approaching $2 billion or more.
With little if any cash flow from
production, AEU could be heading
back into the capital markets for
additional cash to complete the
Hess purchase.
In a separate move, McClendon
raised a $500 million war chest
from private equity player The Energy & Minerals Group (EMG) to
diversify his burgeoning oil empire
with a new company focused on
taking non-operated working interests.
Headquartered in Oklahoma
City, American Energy–NonOp
(AENO) is looking for non-operated
stakes in onshore basins across the
US. AENO will be a sister company
to McClendon’s American Energy
Partners, much like AEU which
was also backed by EMG.
•• AMERICAN Energy Utica (AEU)
has wasted no time getting to work
on its newly acquired acreage in
the play in Ohio, US.
The Aubrey McClendon-led venture has permitted a total of 12
wells to date, according to results
from a database kept by Ohio regulators.
The wells all lie in Harrison
county, in what is believed to be
the southern wet gas fairway of
the play.
According to drilling reports from
Ohio, work has begun on two
wells.
AUBREY McClendon’s American
Energy Utica (AEU) is officially
setting up in Ohio, US, where it
plans to open its first office, but
some landowners are accusing the
company of not paying them for
their leases — a charge that led to
several lawsuits during McClendon’s time at Chesapeake Energy.,
writes Noah Brenner
AEU, a unit of McClendon’s
private equity-backed American
Energy Partners (AEP), is taking
up residence in Cambridge, Ohio,
according to local media reports.
The location lies in the heart of
the emerging wet gas fairway of
the play, where McClendon’s new
venture has taken on a position
believed to exceed 100,000 acres.
AEU — of which McClendon is
founder and chief executive — has
amassed the position through a
joint venture with producer Red
Hill Development, a buyout of leasehold from competitors Enervest and
Shell, and organic leasing.
Many landowners have welcomed McClendon’s return after
he parted ways as chief executive
with shale giant — and Utica
pioneer — Chesapeake Energy
because it has boosted lease prices
in the area. However, some are
complaining he brought with him
the practise of not making lease
payments on time.
Some landowners who signed
with Great American Energy — a
front company McClendon used to
begin leasing in the play — now
say they have not been paid within the timeframe stipulated in
their leases.
Upstream understands Great
River offered a bonus of about
$6400 per acre, of which $1000
was paid up front. Correspondence seen by Upstream suggests
many landowners who signed
with Great River have not been
paid the remainder of their money
within the 150-day timeframe
specified in their lease, and they
are now planning to file formal
complaints against AEP.
According to language of a
standard Great River lease seen by
Upstream, the company has 30
days after receiving the letter to
pay the remainder.
Allegations of operators being
late on their lease payments — or
not paying at all — are common
during the initial land grabs in
new shale plays.
Operators often point out that
they must vet more than 100
years of land records to ensure the
person who signed the lease actually owned the mineral rights,
and many ownership claims are
found to be bogus.
However, during McClendon’s
tenure at Chesapeake, the company was accused of being among the
worst violators, and of using delays
to appraise portions of a new play,
and then never paying out for leases if the area did not live up to expectations, leading to lawsuits.
40
31 January 2014
LNG
North
America
on radar
THE United Arab Emirates is
considering possible investment in US and Canadian shale
gas projects that could help the
Persian Gulf state meet its
increasing energy needs
through liqeufied natural gas
imports, writes Nassir Shirkhani.
The UAE’s potential gas
imports from North America
follow a series of deals between
the US and Asian countries
keen to meet their energy
needs from rising US shale gas
production.
“We may follow the same
trend of considering investments in the US and Canada to
bring some of that gas back
home,” UAE Oil Minister Suhail
al-Mazroui said at an energy
conference in London.
State-controlled Abu Dhabi
National Energy Company
(Taqa) has already invested in
Canada’s oil and gas sector.
However, new supplies are
needed to meet fast growing
domestic and industrial needs
for cleaner energy.
As such, Abu Dhabi’s Taqa
and state-owned Mubadala are
keen to invest in shale gas
projects abroad.
“We have a team in Mubadala as well as in Taqa looking at
the optionality. Any investment needs to go through the
vetting of the board of directors, not to me as an energy
minister,” Mazroui said, adding that it was premature to
give any volume estimates of a
potential deal.
Taqa operates acreage in
both Canada and the US
through an operation centred
in Calgary that produced nearly 86,000 barrels of oil equivalent per day during 2012.
Despite its biggest emirate,
Abu Dhabi, remaining an LNG
exporter, the UAE is already an
LNG importer into Dubai via a
floating storage and regasification unit and a larger facility is
planned to be built in Fujairah
by EmiratesLNG, a joint
venture of Abu Dhabi’s International Petroleum Investment Company with Mubadala, that will have capacity of
9 million tonnes per annum.
Front end engineering and
design work on the Fujairah
facility was carried out by
France’s Technip and it is expected to come on stream in
2015.
Al-Mazroui’s
comments
highlight the UAE’s potential
interest in further shale and
LNG investment, but final decisions on energy policy in the
country are taken by the Supreme Petroleum Council in
Abu Dhabi.
Search the archive:
Abu Dhabi
[The request to submit revised bids] was a
signal, said sources, that GDF Suez wanted
to extract more value from the process.
AUSTRALIA
Make my day: GDF Suez chief executive Gerard Mestrallet
Leaders in Bonaparte race
French operator GDF Suez requests that two competitors for
sought-after FLNG contract in Australia submit revised final bids
RUSSELL SEARANCKE
and TAN HWEE HWEE
Oslo and Singapore
THE two contenders for the prized
contract at the Bonaparte floating
liquefied natural gas project in
Australia have been forced to go
one more round of bidding.
The two competing sides are
KBR with Hyundai Heavy Industries and Technip allied to Daewoo
Shipbuilding & Marine Engineering.
Both parties had submitted
their technical and commercial
bids to Bonaparte operator GDF
Suez before the end of 2013, and
there was very little to separate
the two following initial evaluation, said sources.
It could not be confirmed if the
commercial terms presented in
the two competing bids exceeded
GDF Suez’s expectations.
However, the French operator
requested that both parties submit revised and final bids. This
Inpex draws up shortlist for remaining Ichthys contracts
INPEX is understood to be working on a shortlist of contractors
for the final major onshore turnkey contracts at the Ichthys liquefied natural gas project in Australia, writes Russell Searancke.
There are at least four companies
in the running for the lucrative job
that covers the mechanical, electrical and instrumentation works,
which the Japanese operator is offering in two packages.
These are essentially the instal-
lation and assembly of the two
Ichthys LNG trains, each of which
will produce 4.2 million tonnes
per annum of LNG from 2016.
The bidders are believed to include Australian companies AusGroup AGC, Monadelphous, Thiess
and United Group, plus highlyqualified overseas-owned players
Kentz and Consolidated Contractors. Monadelphous, United and
Kentz have previously secured
other types of work at Ichthys.
UK-based Kentz is a proven bighitter in electrical and instrumentation work, having already completed a US$170 million contract for
the Pluto LNG train and associated
plant, and is currently executing a
US$810 million package at the Gorgon LNG project as its commitment
in a joint venture with CB&I.
The Ichthys workscope involves
having to receive, install, hook up
and complete the LNG process
modules, which are scheduled to
start arriving in 2014 from offshore yards in Asia.
It is understood there are 220
LNG modules weighing some
180,000 tonnes that are being
built in South-East Asia and will
eventually be shipped to the Blaydin Point LNG site near Darwin.
The modules are being built by
STP&I in Thailand, China’s Offshore Oil Engineering Company,
Thailand’s Cuel and Atlantic Gulf
& Pacific of the Philippines.
31 January 2014
41
2.4 million
THE AMOUNT of tonnes
per annum of LNG the
Bonaparte facility has been
designed to produce.
Shell chases import
project in east India
KAKINADA FSRU
SCHEME
Gail and GDF Suez
in negotiations
AMANDA BATTERSBY and
NISHANT UGAL
Singapore and New Delhi
Photo: BLOOMBERG
face fresh bid round
SHELL is keeping its sights
trained on a liquefied natural gas
import project on India’s east
coast and is in talks with potential new partners for the venture
that would complement the
company’s existing Hazira LNG
receiving terminal on the west
coast.
The Anglo-Dutch supermajor
is understood to be in negotiations with India’s Gail, GDF Suez
of France and the Andhra
Pradesh state authorities for a
proposed LNG floating storage
and regasification unit that
would be installed off Kakinada.
Shell earlier teamed up with
Reliance Power and struck a deal
with Kakinada Seaports for the
project, although the latter
pulled out last year, leaving Shell
with a 100% interest.
Shell’s Kakinada project is envisaged with an initial capacity
of 5 million tonnes per annum
that could be expanded to 10
million tpa.
Having to renegotiate the
partnership has pushed back the
target start up date of late 2014.
However, Shell has done a lot of
work on the FSRU’s technical
scope and already has a Port
Services Agreement that spells
out commercial arrangements
underlying development and operation of the required port facilities.
Separately, India’s Gail in 2012
signed a memorandum of understanding with the government
of Andhra Pradesh to build an
LNG import project envisaging
an FSRU with capacity of between 3.5 million and 5 million
tpa to be located between Kakinada and Vishakhapatnam.
Upstream was told that Shell’s
project is not related to Vessel
Gasification Solutions’ recently
announced Krishna Godavari import project, also off Kakinada.
US-based VGS has contracted
Wison Offshore & Marine of China to build a floating regasification unit to be installed alongside a permanent floating LNG
storage unit. Exmar will operate
and manage the KG LNG project.
India’s east coast states are energy hungry and there is a ready
demand for gas for power generation and in the industrial sector
— demand that is higher than
projected because of the dismal
production rates to date from Reliance Industries’ Block D6 in the
Krishna Godavari basin.
Industry experts and sources
agree that just how many of the
proposed LNG FSRU projects in
India actually get off the drawing
board is dependent on the development of onshore gas pipelines.
India plans to more than double its pipeline network to 30,000
kilometres by 2017. However,
problems with land acquisition
threaten many projects associated with LNG facilities.
Petronet LNG’s recently commissioned Kochi terminal is operating at less than 10% of its
planned 5 million tpa capacity
due to delays in associated pipeline projects.
Next phase in process for
third train at Sakhalin 2
was a signal, said sources, that
GdF wanted to extract more value
from the process, with one source
suggesting the company had
“adopted a robust contracting
strategy”.
Another implied its bid evaluation criteria was slightly different
to that of a pure oil and gas company.
At stake is the front-end engineering and design contract
which, providing a final investment decision is reached in 2015,
will evolve into the engineering
procurement, construction, installation and commissioning of
the floating LNG vessel.
Sources said KBR and Technip
had submitted their final revised
bids last week.
A final round of clarifications
and negotiations will take place in
Perth in February, with an out-
come in April. Both groups completed pre-FEED concept studies
in the middle of last year.
The steel double-hull floating
facility will measure about 400
metres in length and 70 metres in
width. It has been designed to
produce 2.4 million tonnes per annum of LNG.
The liquefaction process will be
based on dual mixed refrigerant
technology by US company Air
Products & Chemicals, while the
LNG containment system will be
a membrane-type.
GDF Suez had previously decided the FEED would be done on an
open-book basis and then would
transfer to a lump-sum contract
for the construction phase.
The vessel will be permanently
moored in about 100 metres of
water about 250 kilometres west
of Darwin in the Timor Sea. Two
leading global suppliers of turret
mooring systems — SBM Offshore
and National Oilwell Varco subsidiary APL — are understood to
be competing for the Bonaparte
turret.
GDF is targeting a final investment decision in 2015, and first
gas in 2019.
The French company owns 60%
of the project and Santos holds
40%, but sources said GDF is aiming to divest 10% or 20% of its
interest.
The project will develop the
Petrel, Tern and Frigate fields as
an all-subsea solution, with subsea production systems and 60
kilometres of pipeline linking the
FLNG vessel to the fields.
KBR subsidiary Granherne previously did early upstream design
work and Doris Engineering did
an early midstream study.
THE two main shareholders in
the Sakhalin 2 consortium in
Russia’s far east — domestic gas
monopoly Gazprom and AngloDutch supermajor Shell — have
instructed operator Sakhalin
Energy to proceed to the next
phase of a project to build a
third liquefaction train at the
LNG plant in the south of
Sakhalin Island.
Gazprom said Sakhalin Energy
will now begin the process of
seeking approvals from its board
of directors and Russian authorities to procure and pay for the
front-end engineering design
study of the third train.
The Sakhalin 2 oil and gas development is operated under a
production sharing agreement
with the Russian government,
obliging the operator to agree
major investment spending
with representatives of central
and regional authorities.
The third train is expected to
have an annual output capacity
of 5 million tonnes per annum of
LNG, and be similar to the existing two trains at the LNG plant
in the port of Prigorodnoye.
Gazprom, which has a 51%
stake in Sakhalin 2, has recently
intensified its efforts to build the
train after years of procrastination.
According to industry observers in Moscow, the catalyst for
Gazprom’s rush is the plan by its
rival, state-controlled Rosneft,
to build an LNG plant, also in the
south of Sakhalin Island.
Sakhalin Governor Aleksandr
Khoroshavin said earlier this
week that the planned capacity
of Rosneft’s LNG plant may double to 10 million tpa.
This may happen if Rosneft
and its partner on Sakhalin,
ExxonMobil, are successful in
finding additional gas reserves
on their blocks near the island,
according to Khoroshavin.
LNG
42
Bill move
for Alaska
proposal
NEW legislation to move
Alaska’s first proposed liquefied
natural gas export project
forward in the US has been
introduced in the state legislature, writes Tonya Zelinsky.
Governor Sean Parnell introduced the bill last week, when
the legislature returned to session, in the hope of advancing
plans for the South Central LNG
project, proposed by the state’s
big three producers — ExxonMobil, BP, and ConocoPhillips.
The bill came less than a
week after the producers
signed a commercial agreement with the state’s department of Natural Resources
& Revenue, the Alaska Gasline
Development
Corporation
(AGDC) and TransCanada, to
develop the South Central LNG
export facility.
“With this legislation, we’re
taking a vital step toward
building an Alaska gas line,”
said Parnell.
The estimated US$45 billion
to $65 billion project would
include a natural gas pipeline
in state, and a pipeline from
the North Slope to tide-water in
the Nikiski area of the Kenai
Peninsula.
Parnell’s bill would give the
state an equity position in the
project, and expand the role of
the AGDC by creating a separate subsidiary with the sole
purpose of a building the instate line.
“A natural gas project of this
scope is a new chapter in state
resource development, and it
will be enhanced by the state’s
equity participation in either
project,” said Parnell.
“Given the momentum, we
must act now to ensure that
our laws provide the appropriate authorities and tools to
allow the state to advance
these critical projects.”
The bill includes the ability
of the Natural Resources & Revenue department to negotiate
terms of the project’s services,
modify certain lease terms on
natural gas properties, and
provisions related to oil and gas
production tax.
Third terminal
for Petrobras
BRAZILIAN state player Petrobras has inaugurated its third
liquefied natural gas regasification terminal in the country,
bringing greater flexibility to
the market in order to meet increasing domestic demand.
The new LNG terminal, in
the Bay of All Saints archipelago in Bahia state, cost about
1 billion reais ($420 million),
and is capable of regasifying 14
million cubic metres per day of
gas.
With the third terminal now
in operation, Petrobras’ LNG
regasification capacity has
increased from 27 MMcmd to 41
MMcmd.
Petrobras already had LNG
terminals on stream at Pecem,
in Ceara state, and Guanabara
Bay, in Rio de Janeiro state.
31 January 2014
US
Lease option: a strip mall in
Brownsville, Texas
Photo: BLOOMBERG
Texas LNG eyes smaller
buyers in export plan
Company chief executive Vivek Chandra sees potential in targeting outfits,
ignored by larger developments, that want flexible cargoes
BIANCA BARTUCCIOTTO
Perth
AUSTRALIAN consultant-turnedTexas LNG chief executive Vivek
Chandra is pursuing a 2 million
tonnes per annum barge-based
liquefied natural gas export
project in the US that aims to target smaller buyers ignored by bigger developments.
“I think the smaller buyers and
the up-and-coming buyers are
really struggling to get the attention of LNG sellers,” said Chandra.
“The big guys really only want
to deal with the traditional buyers, the Korean and Japanese big
players.
“So, there are now smaller buyers who want flexible cargoes, so
those people are calling me all
the time, in my LNG consultant
capacity, looking for gas.”
Chandra added that he did not
see securing buyers as a major
challenge, but rather that finding
investors would be key to driving
forward a development that is
currently targeting first exports
in 2018.
He is now on tour in Asia,
talking to potential investors in
Japan and South Korea.
Chandra is targeting a project
that seeks to avoid the cost and
scale challenges of bigger developments.
“I’m going to keep the size controllable,” he said.
“When you start being a larger
project, your complexities go up,
costs go up, and you need to have
the larger buyers.”
The concept for the project
involves a liquefaction barge to
be fabricated off site, before it is
permanently grounded.
Chandra recently submitted an
application to the US Department
of Energy to export to free trade
agreement (FTA) and non-FTA
countries, with approval expected
within four months.
He has also shored up a site in
Texas, where he will eventually
bunker his LNG facility about
five to 10 kilometres from the
Mexican border.
The company executed an
exclusive lease option agreement
in December to secure land in the
port of Brownsville in Texas.
According to Chandra, the
concept comes from more than
20 years he has spent in the
LNG industry, such as time as an
executive at Australian player
Nexus Energy.
As a consultant for Australiabased Kerogen Consultants,
Chandra developed an LNG project
success index which used a
number of criteria to assess the
success of individual LNG projects.
Chandra’s system ranks LNG
projects based on factors including
proven reserves, costs, country
particulars, security of the country, native rights and technology.
“My twist to this is I developed
this LNG project success index,
and this index to me was a really
good way for me to look at all
the weaknesses of the projects,”
he said.
“So, now that I can see what
everyone else’s weaknesses were,
I took it upon myself to come up
with a project that minimises
those risks. I worked backwards.”
Chandra said his aim with
Texas LNG was to get the highest
score possible.
“How do I get the highest score?
By doing the things I’ve been telling
everyone else they should do.”
Chandra said he would expand,
not by adding another train at the
same site, but at other locations
because selling his idea to other
parties was more economical than
expanding in a single area.
“We are in discussion with another party, which has another
site that may be interested in replicating our model there,” he said.
LNG
31 January 2014
43
TANZANIA
Talks ahead as Tanzania
chooses LNG plant site
BG Group, Ophir,
ExxonMobil and
Statoil to take
stakes in new
company to
operate facility
IAIN ESAU
London
TANZANIA’S government and operators of major offshore gas discoveries have agreed where to site
an onshore liquefied natural gas
plant, according to a senior official
at state-owned Tanzania Petroleum Development Corporation
(TPDC).
Wellington Hudson, TPDC’s
principal petroleum geologist,
told delegates at an Oliver Kinross
conference in London that “a site
has been agreed by the government and developers” but declined to identify the location.
Upstream has been told by multiple sources that the selected location is in or near Lindi, the chief
town of the Lindi Region, although this could not be confirmed officially.
Hudson said: “Land acquisition
and compensation discussions are
going well between the government and developers.”
It is expected that TPDC will
have the initial title to the land —
which is owned by the central
government — and then lease or
sell it to an LNG consortium that
will operate the facility.
Hudson said there are also negotiations ongoing with the government in Dar es Salaam about the
preferred structure of the consortium that will own and operate
the LNG facilities.
“The host government agreement and negotiations start this
year and are due to be completed
by the end of 2014,” he said.
Upstream understands that BG
Group and Ophir Energy, partners
in blocks 1, 3 and 4 off Tanzania,
have agreed to take stakes in the
yet-to-be-formed LNG company
alongside Statoil and ExxonMobil,
partners in Block 2, and TPDC.
Which company will be the lead
partner in the consortium is unclear because the three majors all
have significant LNG experience.
The distribution of gas resources
Moving forward: Tanzania’s President Jakaya Kikwete
held by BG Group and Statoil is
roughly equal, between 18 trillion
and 19 trillion cubic feet in place.
Initial expectations are that the
LNG facility will have four trains
with room for expansion. When an
LNG plant in Tanzania was first
proposed after BG Group’s first
batch of significant gas discoveries, the start-up date was estimated to be 2018.
However, LNG exports are now
Photo: REUTERS/SCANPIX
only expected to start in 2021 at
the earliest as the government
and oil companies get to grips
with factors — including legislation — that will underpin any
project.
BG Group and Ophir eye 2021 finish for two LNG trains
BG GROUP and Ophir are planning a phased
approach to building their 5 million tonnes
per annum LNG trains in Tanzania.
Ophir project director Andrew Brown told
analysts that front-end engineering and
design work will run from late this year to
2016, ahead of a final investment decision in
late 2016.
Train 1 would then be built through to
mid-2020, targeting first cargoes in late
2020. Construction of the second train is
due to begin in mid-2017 and be completed
in mid-2021.
Brown’s presentation suggested supplies
for two trains could come from resources
discovered solely in Block 1 or held together
in blocks 1 and 4.
FEED work on the offshore development
in blocks 1 and 4 will start in 2015 and
continue well into 2016.
Brown said these would be “simple”
clustered subsea developments.
Before being fed into the LNG trains, the
gas would be pre-treated and compressed
either at an onshore plant or on a floating
production, storage and offloading vessel.
There is also thought to be enough gas
resource to underpin a third liquefaction
train and drilling plans for this year are
being formulated.
BG Group plans to drill up to four wells in
blocks 1 and 4 this year. The first target is
Taachui, a 1.3 trillion cubic foot structure in
Block 1 followed by Kamba — a 750 billion
cubic feet structure — in Block 4, a well test
at Mzia in Block 1 and a likely deeper water
probe in the east of Block 1.
Ophir plans to farm out a key stake in
Blocks 1, 3 and 4 to India’s Pavilion Energy.
There are reports that Gail India is
interested in farming into the acreage —
possibly taking Ophir’s entire 20% stake.
Barossa
appraisal
campaign
CONOCOPHILLIPS is about to
begin a much-anticipated
three-well appraisal campaign
on the Caldita-Barossa gas field
off northern Australia as it
seeks to build liquefied natural
gas volumes.
It is understood the US major
has taken, or is about to take,
possession of the semi-submersible rig Nanhai VI, which
it has hired through Australian
co-venturer Santos for the trio
of wells. The rig can operate in
a water depth of 1500 feet.
The drilling programme has
become a key part of ConocoPhillips’ ambitions to find
enough new gas volumes to underpin an expansion of its Darwin LNG plant.
Either a new train at Darwin
LNG, a backfill for the existing
train or a floating LNG project
are the three options that have
been covered in concept evaluation, according to Santos.
Santos vice president for
Western Australia and Northern Territory John Anderson
said last month that ConocoPhillips had done “lots of good
quality work” on Caldita-Barossa, and that the drilling campaign was “timely and has become even more valuable” now
that Darwin LNG is “looking
for a solution”.
The Barossa-2, Barossa-3 and
Barossa-4 appraisal wells will
be flow tested.
One is a crestal well, another
is updip of the existing Lynedoch-2 well and will test the
reservoir extent and the third
is a northern extension, which
will have similar characteristics as well as tests for resource
upside, Santos indicated.
The programme is expected
to take the best part of a year
and, assuming success, prefront end engineering and design work is expected to begin
next year, added Santos.
The Barossa field in Block NT/
P69 was discovered in 2007, and
is understood to be a significant
resource but with a high carbon
dioxide content of up to 16%.
The joint venture split for
both permits is operator
ConocoPhillips on 37.5%, SK Energy on 37.5% and Santos on 25%.
Oil Search
in PNG talks
OIL Search said it remains in
discussions over a potential involvement in the Elk-Antelope
resource in Papua New Guinea,
which could underpin a new
liquefied natural gas development.
The Elk-Antelope gas fields in
Block PRL 15 were the subject
of a major farm-in agreement
last month between French energy major Total and Canadian
company InterOil.
At the time, Oil Search said it
was in discussions over an involvement despite Total’s entry.
The company reiterated this
week that it is “in ongoing discussions with the key stakeholders regarding a potential
involvement in the licence”.
QUOTE OF THE WEEK
These guys seem permanently over-optimistic. We thought the new
chief executive would be prudent in what he said and he has been found
wanting a bit.
One investor lashes BG Group and chief executive Chris Finlayson (pictured, right) after the UK major warned of a production shock
in the fourth quarter.
CUTTINGS
44
31 January 2014
Going with
the flow…
SUPERMAJOR
MALFUNCTION
•
Ecopetrol has appointed
Gonzalo Restrepo Lopez
president and Roberto Steiner
Sampedro vice president of the
board
•
Dana Petroleum has named
Hugh McClure director of
capital development projects
•
•
Allan Campbell has resigned
as chief executive of AJ Lucas
Ron Bryant has quit as chief
operating officer and president
of Touchstone Exploration
•
Martin Arch has replaced
Jonathan Morley-Kirk as chief
financial officer at Longreach
Oil & Gas
•
Tim Duggan has been named
chief operating officer of E&P at
Consol Energy
UK giant’s inboxes
inundated with
e-mails after
‘Reply All’ shocker
As BP boss, Bob Dudley’s e-mail inbox
is probably perennially full. But
hundreds of staff at the UK supermajor
were recently hit with a flood of
communiques after what appears to
have been a simple administrative error.
It started when one employee
emailed a colleague to have another
worker removed from BP’s “OMS
Navigators Users” list of e-mail
recipients, online gossip site Gawker
reported. Instead of sending it to one
person, however, the e-mail went to
everyone on the list, setting in motion a
chain of events that soon clogged up
inboxes across the company.
It was not long before recipients fell
into the trap themselves, also hitting
“Reply All” with comments like, “Please
stop copying everyone please” and, “Do
we all really need to be cc’d in on
this??”
While some people got hot under the
collar – “CAN YOU ALL STOP
SELECTING ‘REPLY ALL’ ...... just reply to
Patsy” – others brought a degree of
levity to the impromptu worldwide
mailathon.
“Keep me in the loop please, I love
this madness!” wrote one, with another
tapping, “Keep calm and keep replying
all!!!”
The sorry saga was enough to drive
some to drink, one employee clocking
off with: “To the whole BP family who
have taken the time to email me today,
have a wonderful weekend - I’m off to
the pub.”
•
Jon Ozturgut has replaced
William Jasper as chief
operating officer of InterOil, with
Donald Spector replacing
Collin Visaggio as chief
financial officer
•
BP in largescale mail fail
BARRELS OF
BRAZZAVILLE CLASS
There are plenty of oil players looking to
tap the black stuff off CongoBrazzaville, but one major international
liquids stalwart is intent on showing the
emerging African producer is made of
more than just oil.
Irish brewery giant Guinness has just
launched a fresh, eye-catching advertising campaign featuring the
Sapeurs – The Society of Elegant Persons of Congo – and its palette
stretches far beyond its usual black and white.
In the ad, Sapeurs finish mundane daily tasks before turning to the
serious business of polishing shoes, donning brightly-coloured suits and
hats, not forgetting the finishing touches such as cufflinks, fedoras and
canes.
“Their life is not defined by occupation or wealth, but by respect, a
moral code and an inspirational display of flair and creativity,” Guinness
says in the latest glitzy installment in its “Made of More” advertising
campaign.
Africa is a major market for Guinness, and the Sapeurs could help it sell
stout on the continent by the barrel load. But Cuttings – partial to the odd
pint – reckons any attempt to find the black stuff on draft in CongoBrazzaville, as featured in the ad, would bite the dust.
TSARBUCKS
Rosneft supremo Igor Sechin has built up the
Russian oil giant by creaming off profits while
giving rivals a roasting – but its latest business
venture really takes the biscuit.
As well as selling crude, the company will be
offering another black stimulant to punters at
the upcoming Winter Olympics in Sochi by
running coffee bars in an unusual break from its
core business.
It follows a deal signed by Olympics sponsor Rosneft with
Italian motorway snackbar outfit Autogrill to promote the
latter’s Acafe brand at new service stations
around the Russian city on the Black Sea coast.
It may be a sweet arrangement for Autogrill
to expand its Russian footprint but other
foreign players, like BP, have had their fingers
burned after landing in hot water with the
country’s former energy tsar.
Given Sechin’s fearsome reputation for
crushing competitors, he could also prove a
tough customer in the coffee bar business to leave the
Italians cafe au lait and a dollar short.
Rangeford Resources has
named Colin Richardson
president and Michael Farmer
chairman
FLOATING PHANTOM
MENACE
Operators of
oil rigs are
always on
the
lookout for
any threat
to lucrative
production.
But are
North Sea
drillers really
being spooked by a ghost
ship?
Recent reports have
suggested a runaway elderly
cruiseship may be headed
towards Ireland or the UK, and
could pose a threat to
shipping or the offshore
industry.
The 100-metre-long Lyubov
Orlova was en route from
Canada to the Dominican
Republic a year ago when its
tow line snapped and it was
cut adrift, with no crew or
active monitoring system.
UK tabloids have said that
the liner, which was
conducting Arctic tours until a
few years before it vanished, is
infested with rats – though
quite how they know this is
still the case is beyond
Cuttings.
If the eerie vessel does
venture onto any North Sea
oilfields, it is the 1600 tonnes
of unhelmed metal, rather
than any rodent infestation,
that is bound to have rig
workers abandoning ship.
31 January 2014
JOB OPPORTUNITIES
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JOB OPPORTUNITIES
31 January 2014
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31 January 2014
JOB OPPORTUNITIES & CONFERENCES
CHARTERING DIRECTOR
Brightoil Shipping (BOSS) is a division of the Brightoil Group. We own and operate a modern fleet of
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31 January 2014
FINANCIAL
Rig rate
boost for
Noble
HIGHER rig rates buoyed offshore driller Noble Corporation
to strong earnings during the
fourth quarter of 2013, as leading indicators point to less robust short-term activity, writes
Blake Wright.
The contractor posted net income for the period of $174 million, or $0.68 per share, compared with $127.6 million, or
$0.50 per share, for the same
period a year ago.
The most recent quarter included an impairment charge of
$36 million related to its floating production, storage and
offloading vessel Seillean. Excluding the impairment charge,
net income would have totalled
$210 million, or $0.82 per share.
Revenue jumped to $1.17 billion for the period from $966
million for the fourth quarter
of 2012.
The average rate earned by a
Noble rig in the fourth quarter
rose to $212,000 per day from
$194,600 per day in the third
quarter.
“Contract drilling revenues
continued to grow during the
fourth quarter with full or partial contributions from three
new ultra deep-water drillships
and the first of our six JU3000N
high-specification jack-ups,”
said Noble chief executive David
Williams.
“Building on an exceptional
quarter... we also saw the delivery of two more JU3000N jackups — the Noble Regina Allen in
December, followed by the Noble Houston Colbert in early
2014. These fleet additions,
along with the remaining six
projects, of which five rigs are
expected to complete construction in 2014, are redefining our
company, creating a premium
fleet of offshore drilling rigs.”
Williams said Noble is progressing with the planned spinoff of its “standard capability”
assets, receiving a private letter
ruling from the Internal Revenue Service and the filing last
quarter of a registration statement relating to the proposed
initial public offering of the
new company. The spin-off is
planned for the end of the year.
Noble believes the offshore
drilling industry is entering a
“pause”, citing “fewer floating
rig contract opportunities” today than a year ago.
“We expect to have additional contract opportunities under
review as the year progresses,
but it is increasingly clear that
the first half of 2014 is likely to
be characterised by lower rig
utilisation,” said Williams.
“[This] is likely to be more
pronounced for floating rigs
with limited technical features.
Noble’s exposure to a weaker
floating rig sector is limited in
2014, with only 22% of our operating days available.”
The eventual relinquishment of some of
these areas will not affect our business
plan.
OGP responds to the ANP appraisal ruling
BRAZIL
Legal conundrum: Brazilian tycoon Eike Batista
Photo: REUTERS/SCANPIX
Batista and OGP battle
to stay one step ahead
ANP refusal to extend discovery appraisal period is latest blow as
bankruptcy court hears financial restructuring plan
GARETH CHETWYND
Rio de Janeiro
EMBATTLED Brazilian businessman Eike Batista and the rump
companies left over from the collapse of his EBX group are battling
to stay on top of a legal conundrum as creditors and regulators
tighten their grip.
In the latest setback, Brazilian
hydrocarbons regulator ANP rejected a request by renamed oil
company Oleo e Gas Participacoes
(OGP) to extend time limits for appraising oil and gas dicoveries on
eight blocks.
These included Tubarao Areia,
Tubarao Tigre and Tubarao Gato
on Block BM-C-41 in the Campos
basin and blocks where wildcats
such as Itacoatiara, Viedma, Tulum and Vesuvio detected hydrocarbons.
In the Santos basin, OGP relinquishes BM-S-59 and BM-S-56,
where the Natal and Belem wildcats detected hydrocarbons.
More concessions will expire in
August 2015, unless commerciality is declared.
OGP, formerly known as OGX,
had hoped to keep the areas under
appraisal during a financial restructuring plan that is the subject of proceedings in a Rio de
Janeiro bankruptcy court.
OGP said it had been hoping to
find new partners for the areas,
but played down the impact of the
ANP decision. “The eventual relinquishment of some of these areas
will not affect our business plan...
because their value was not included in any of our projections,”
the company said.
Commerciality was actually declared on the three discoveries on
BM-C-41, but OGX subsequently
told the ANP that a viable development solution would require more
advanced technology than previously contemplated. The ANP
turned down that request.
The ANP is also scrutinising
OGP’s financial capacity in order
to decide whether it can retain its
Campos basin concessions, where
the Tubaro Azul and Tubarao
Martelo fields are located.
The EBX group suffered a domino-like collapse when Tubrao Azul
failed to live up to much-hyped
expectations.
Batista, his father Eliezer Batista and other board members are
facing legal action by OGP’s minority shareholders, who allege
misrepresentation and mismanagement ahead of the financial
and operational failures.
A preliminary agreement with
bondholders was struck in Decem-
ber, covering $5.8 billion in debt,
convertible into equity and leaving
Batista with a stake of 9.4%.
OGP is seeking a lifeline via
bonds classified as debtor in possession and this week obtained
court permission to use its remaining assets as guarantees for those
loans.
OGP has been in talks with
bondholders for an additional $215
million in cash to continue investments at Tubarao Martelo,
which started production in
December.
However, another group of OGP
bondholders claiming to have
been left out of the restructuring
talks is considering yet another
lawsuit to be included in the
process.
The ANP’s decision on whether
to allow OGP to retain its producing assets will include deliberations over claims by OGX’s former
concession partners that they too
are owed money.
Perenco and Sinchem say they
covered OGX’s drilling commitments on Blocks ES-M-472, ES-M529 and ES-M-531 in Espirito Santo, while OGP has outstanding
commitments on the AtlantaOliva development in the Campos
basin, according to operator
Queiroz Galvao Exploration &
Production.
Bankruptcy proceedings affecting Batista’s offshore industries
company OSX are also spawning
lawsuits.
Spanish construction company
Acciona SA recently obtained a
court order preventing the sale of
shares of OSX Leasing, a Dutchbased subsidiary not covered by
the Brazilian proceedings
Batista’s lawyers have argued
that the two bankruptcy proceedings should be considered by the
same judge, but Acciona blocked
this move.
Acciona claimed to be owed
about 300 million Brazilian reais
($127 million) on a shipyard project,
while Argentina’s Techint said it is
owed about 1 billion reais from a
wellhead platforms contract.
In the banking sector, Banco
Votorantim and the Brazilian unit
of Santander are owed another $1
billion in direct loans. OSX has
filed for protection from creditors
on liabilities of 5.34 billion reais.
OSX’s most liquid assets are the
three floating production, storage
and offloading vessels it had built,
but they are at the centre of a tugof-war that may undermine attempts to roll the bond debts.
31 January 2014
51
$10 billion
THE AMOUNT the US
Federal Reserve is expected
to reduce its monetary
stimulus by per month.
US oil price sees little movement
Brent falls 3%
during January
after consecutive
rises in the
previous three
months
Unrest:
Libya’s
Deputy Prime
Minister and
Interim
Interior
Minister
Sadiq
Abdulkarim
VAHE PETROSSIAN
London
OIL prices remained roughly the
same this week in London, but
were almost $2 per barrel higher
in New York, despite a big US
crude inventory increase and expectations that the Federal Reserve would further limit its monetary stimulus programme.
Benchmark Brent prices rose
$0.30 to $107.71 per barrel in late
afternoon trading on Wednesday.
This was slightly above the level at
the same time the previous week.
Brent has fallen by 3% during
January — after consecutive increases in the previous three
months.
In New York, US light fell by
$0.11 to $97.30 in mid-day trading
on Wednesday. Prices had been at
well under $96 per barrel at the
same time the previous week.
US prices fell 1.3% over January,
having gained 6% in December.
The US Energy Information
Administration released data midmorning showing a big increase
Photo:
REUTERS/
SCANPIX
OIL PRICE
COMMENTARY
of 6.4 million barrels in crude
inventories to 357.6 million barrels
the previous week.
A Reuters poll of analysts had
predicted an increase of 2.3 mil-
lion barrels. The industry’s American Petroleum Institute released
its own data the previous day
showing an increase of 4.7 million
barrels.
However, distillate and gas
stocks fell during the period —
distillates were down 4.6 million
barrels at 116.2 million barrels,
while gas stocks slipped by
820,000 barrels to 234.45 million
barrels.
Most attention this week was
focused on the conclusion of a
meeting of the Federal Reserve,
BRENT SPOT PRICES
BRENT FORWARD PRICES
OPEC BASKET
110
110 US$/bbl
107
105
106
109
108
107.84
US$/bbl
107
106
105
One Week Ago: 109.40
16 Jan
23 Jan
One Month Ago: 111.21
29 Jan
One Year Ago: 115.65
100
104
103
90
1M 2M 3M 6M 9M 12M 15M 18M 21M 24M 27M 30M 33M
WTI SPOT PRICES
WTI FORWARD PRICES
98
100
96.70
US$/bbl
96
94
One Week Ago: 96.58
15 Jan
23 Jan
One Month Ago: 99.80
29 Jan
One Year Ago: 97.70
15 Jan
22 Jan
24 Jan
17 Jan
Net change
% change
US Stocks ('000 bbls)
Crude Oil
Total Motor Gasoline
Reformulated Gasoline
351,224
235,265
40
350,234
233,142
38
990
2123
2
0.28
0.91
5.26
90
Inputs ('000 bbls/day)
Input to dist.
Refinery runs
15,408
15,216
16,035
15,731
-627
-515
-3.91
-3.27
85
US Production ('000 bbls)
Total Motor Gasoline
Reformulated Gasoline
Conventional Gasoline
8475
2890
6048
8325
2781
6093
150
109
-45
1.80
3.92
-0.74
Imports ('000 bbls)
Crude Oil (excl. SPR)
Products
7544
1659
6889
1378
655
281
9.51
20.39
95
75
1M 2M 3M 6M 9M 12M 15M 18M 21M 24M 27M 30M 33M
HENRY HUB NATURAL GAS SPOT PRICES
HENRY HUB NATURAL GAS FORWARD PRICES
67
6.0
5.2
66
5.5
UK DAY AHEAD NATURAL GAS PRICES
28 Jan
US DEPARTMENT OF ENERGY OIL STOCK DATA
80
8 Jan
8 Jan
US$/bbl
92
90
US$
104.67
105
95
9 Jan
spirited defence of his efforts to
resolve the Iranian nuclear dispute peacefully. In Iraq, a major
export pipeline was again blown
up by unknown attackers.
In Libya, where talks are taking
place on ending the takeover of
ports by autonomy-seeking gunmen, an assassination attempt
was reported on Wednesday
against Deputy Prime Minister
Sadiq Abdulkarim, who is also Interim Interior Minister. Abdulkarim was not hurt after shots were
fired at his car.
due to finish as Upstream went to
press, which was widely expected
to reduce its monetary stimulus
by another $10 billion per month.
Earlier, there was considerable
market concern over turmoil in
emerging economies, such as Turkey. However, Ankara moved fast
to announce a massive increase in
interest rates — helping restore
some confidence.
Events in the Middle East and
North Africa both lent support to
and constrained crude prices. US
President Barack Obama made a
US$/MMBtu
5.0
65
5.0
64
4.5
63
4.8
5.20
US$/MMBtu
4.4
4.2
4.0
63.00
GBp/therm
9 Jan
16 Jan
23 Jan
29 Jan
4.6
4.0
23 Dec
13 Jan
29 Jan
3.8
1M
3M
9M
15M
21M
27M
33M
39M
45M
51M
60M
Source: Bloomberg
FINANCIAL
52
COMPANY FORECAST
BG shares hit hard
by output warning
and force majeure
1500
Net change from last week: -48.60
1427.78
1400
1300
1200
1 March 2013
29 January 2014
Source: Bloomberg
PHILADELPHIA OIL SERVICE INDEX*
300
Net change from last week: -13.40
280
ROB WATTS
London
260
264.11
240
220
200
1 March 2013
29 January 2014
*The Philadelphia Oil Service Index is a price-weighted index composed of the common
stocks of: Baker Hughes, Cameron International, Global Industries, Halliburton, Lufkin,
National Oilwell Varco, Noble, Oceaneering, Rowan, Schlumberger, Smith, Tidewater,
Transocean, and Weatherford. The index was set to an initial value of 75 on 31 December
1996; options commenced trading on 24 February 1997.
Source: Bloomberg
INDICES
Company
Last price Ch net 5 d Ch net 5 d% Vol Avg 5 d Ch 1 yr %
Dow Jones Ind.
15,794.43
-578.9
-3.54
109,387,718
S&P 500
1784.42
-60.4
-3.28
585,216,960
18.34
Nasdaq Comp.
4065.04
-178.0
-4.19
545,893,261
28.90
FTSE 100
6513.87
-312.5
-4.58
741,109,440
2.76
Oslo OBX
492.01
-23.5
-4.55
86,534,682
13.85
Amex Oil Index
Disappointed: BG Group chief executive Chris Finlayson
Photo: BLOOMBERG
higher royalties, combined with
the output decline, would lead to
higher unit operating costs in 2014.
Contributions from the US are
affected by a reduced rig count.
Production will increase in the
UK, despite a slower boost at
its Jasmine project and a longer
planned shutdown at the Nexenoperated Buzzard field.
Investec analyst Neil Morton
said: “Egypt is a major culprit, and
beyond BG’s direct control, but
the underlying message is that
guidance is fiendishly difficult to
get right, and BG’s internal communication could be improved.”
Edison Investment Research
analyst Neil Shah said: “The
announcement is a big disappointment, given the new chief
executive had implemented a
strategy that looked to put BG on
a steadier course. It continues to
highlight the volatility of a significant Middle East presence.”
BG has cut its output forecasts
three times in the last 18 months,
including abandoning a goal to
produce 1 million boepd by 2015.
First exports from Queensland
Curtis LNG in Australia are now
expected from the fourth quarter,
in line with guidance, with the
second train expected on stream
six months later.
BG said earnings would fall 33%
to about $2.2 billion for 2013, due
to a $2.4 billion post-tax impairment charge to reflect the difficult
operating environment in Egypt,
as well as lower future gas prices
in the US.
Excluding impairment charges,
2013 earnings are expected to
be about $4.4 billion, ahead of a
company-supplied analyst forecast of $4.2 billion.
Asset sales help boost results for Hess
HESS profits in the fourth quarter
of 2013 jumped on the back of asset
sales it completed at the end of
last year in Indonesia and cost
cutting efforts that will continue
into 2014, writes Noah Brenner.
The US giant reported quarterly
net income of $1.9 billion, up from
$374 million a year earlier but earnings adjusted for upstream and
downstream divestments totalled
$319 million, down from $409 million in the fourth quarter of 2012.
AMEX OIL INDEX
*The Amex Oil Index is a price-weighted index composed of the common stocks of:
Anadarko, BP, Chevron, ConocoPhillips, ExxonMobil, Hess, Marathon Oil,
Occidental Petroleum, Repsol, Royal Dutch Shell, Sunoco, Total and Valero Energy.
Production this
year could fall as
much as 14% to
633,000 boepd
for UK company
BG GROUP shares took a hammering this week after it warned
production would be lower this
year and in 2015, due to woes in
Egypt and lower output in the US.
Heaping pressure on BG’s new
management team — led by
chief executive Chris Finlayson
— shares in the UK-based player
plummeted 15% to as low as 1082
pence in the middle of the week,
after the surprise announcement.
BG has issued force majeure on
its liquefied natural gas export
obligations from Egypt, after
agreements covering pooling
arrangements for BG’s share of
output were not honoured amid
high levels of gas being diverted
to the domestic market.
The company, which expects to
report its full-year results next
week, said it expected 2013 output
to average towards the low end
of its guidance range, at about
633,000 barrels of oil equivalent
per day.
Output could fall as much as
14% to 590,000 boepd for 2014.
BG also cut forecasts for 2015,
slashing previous guidance of
775,000 to 825,000 boepd, to
710,000 to 750,000 boepd — a 9%
cut at the mid-point.
Finlayson said: “Despite the
good progress we have made in
2013, we face short-term issues
which are reflected in our revised
2014 guidance.
“This is very disappointing. We
have elected to issue force majeure notices in Egypt, reflecting
the ongoing diversions of gas
volumes to the domestic market.”
Finlayson added that, even with
expansion projects in Brazil and
Australia on budget and on schedule, its growing asset base and
31 January 2014
Hess is cutting back its capital
spending in 2014 by nearly $1 billion and will focus its drilling efforts in the Bakken tight oil and
Utica shale plays in the US.
The US giant plans to spend $5.8
billion worldwide, down from a little under $6.8 billion last year.
It will invest $2.2 billion on
development in Bakken and $550
million in the wet gas window of
Utica, where Hess will use newfound efficiencies to drill more
wells despite a relatively flat
budget.
Hess will lay out an additional
$350 million for midstream development in the Bakken.
It will spend $550 million in the
US offshore sector to begin production at Tubular Bells, and $150 million for additional drilling at Shenzi.
International investments will
focus on development drilling off
Equatorial Guinea, Norway and
Thailand.
13.19
1427.78
-48.6
-3.29
20,717,991
4.33
264.11
-13.4
-4.82
10,673,694
6.52
Philadelphia Oil Service
Source: Bloomberg
WINNERS & LOSERS THIS WEEK
Company
Exch
Curr
Last price
Vol 5 d
Sterling Energy
LN
GBp
54.13
988,482
197.3
28.9
Drillsearch Energy
AT
AUD
1.52
2,830,154
576.9
10.1
Camac Energy
UA
USD
1.60
546,977
254.2
6.7
ION Geophysical
UN
USD
3.19
403,271
521.1
5.3
Isramco
UR
USD
127.40
1113
346.2
5.3
Eurasia Drilling-GDR
LN
USD
33.00
313,683
4844.0
-22.0
BG Group
LN
GBp
1035.00
13,337,480
58,456.6
-21.1
Cairn Energy
LN
GBp
213.70
3,934,489
2096.3
-19.5
Circle Oil
LN
GBp
20.88
1,399,987
194.8
-15.7
OGX
BS
BRL
0.28
114,521,000
358.8
-15.6
*Market Cap in million US$
Mkt Cap* Ch 5 d%
Source: Bloomberg
DOLLAR RATES
Code
Currency
1Yr ago
Ch 1 Yr %
ARS
AUD
Argentine Peso
Australian Dollar
8.032
1.142
-13.300
-1.107
4.974
0.955
-38.1
-16.4
BRL
Brazil Real
2.440
-2.738
1.986
-18.6
CAD
CHF
CNY
Canadian Dollar
Swiss Franc
China Renminbi
1.114
0.895
6.055
-0.512
1.843
-0.056
1.001
0.921
6.226
-10.2
2.9
2.8
COP
Colombian Peso
2017.01
-1.426
1773.68
-12.1
DKK
EUR
GBP
Danish Krone
Euro
British Pound*
5.464
0.732
1.656
0.818
0.827
-0.072
5.529
0.741
1.576
1.2
1.2
5.1
HKD
ILS
Hong Kong Dollar
Israeli Shekel
7.765
3.490
-0.086
0.086
7.758
3.728
-0.1
6.8
INR
JPY
Indian Rupee
Japanese Yen
62.408
102.1
-0.933
2.360
53.775
90.7
-13.8
-11.1
KZT
KRW
Kazakhstan Tenge
South Korean Won
155.48
1070.03
-0.219
-0.249
150.86
1082.60
-3.0
1.2
MYR
NOK
Malaysian Ringgit
Norwegian Krone
3.336
6.171
-0.378
-0.107
3.078
5.496
-7.8
-10.9
PHP
PKR
RUB
SEK
SGD
SKK
THB
TRY
ZAR
Philippines Peso
Pakistani Rupee
Russian Rouble
Swedish Krona
Singapore Dollar
Slovakia Koruna
Thai Baht
Turkish Lira
South African Rand
45.215
105.390
35.246
6.456
1.276
22.055
32.920
2.265
11.2346
-0.033
0.021
-3.665
0.463
0.204
0.833
0.003
-0.265
-3.206
40.722
97.663
30.046
6.371
1.234
22.3273
30.0
1.768
9.0271
-9.9
-7.3
-14.8
-1.3
-3.3
1.2
-9.5
-21.9
-19.6
*All currencies in USD except GBP
Last
Ch 5 days %
Source: Bloomberg
FINANCIAL
31 January 2014
53
% change
5 days
% change
1 year
High
Low
Last 12 months
Avg vol
5 days
Market Cap
Mill. USD
INTEGRATED OIL & GAS COMPANIES
Currency
Price
29 Jan
2014
Exchange
Currency
Company
Exchange
The share prices, provided by Bloomberg, are taken at the time of going to press. All quotes are in local currencies except market cap, which is in million USD. Upstream assumes no liability for the information provided here.
Double Eagle
UW
USD
2.19
-0.9
-56.5
6.20
1.90
199,780
24.86
Dragon Oil
LN
EUR
598.00
-3.5
4.6
669.00
544.00
580,586
4,868.78
Drillsearch Energy
AT
AUD
1.52
10.1
18.8
1.64
0.91
2,830,154
576.90
Dundee Energy
CT
CAD
0.31
-6.2
-32.4
0.55
0.28
18,584
51.47
Egdon Resources
LN
GBp
26.75
-19.9
164.2
43.38
7.75
2,882,512
58.85
216.53
Company
Price
29 Jan
2014
% change
5 days
% change
1 year
High
Low
Last 12 months
Avg vol
5 days
Market Cap
Mill. USD
BG Group
LN
GBp
1,035.00
-21.1
-10.1
1,355.50
1,027.50
13,337,480
58,456.56
BP
LN
GBp
476.90
-3.4
0.3
499.90
426.55
27,401,140
146,151.05
Cenovus Energy
CT
CAD
28.92
-2.5
-14.8
34.13
28.32
2,904,234
19,600.66
Chevron
UN
USD
116.38
-3.4
-0.7
127.82
113.54
1,491,099
223,761.18
Elan Oil & Gas
LN
GBp
96.63
-4.3
-22.4
132.50
87.00
201,253
ConocoPhillips
UN
USD
65.96
-3.5
7.0
74.57
56.38
1,086,947
80,795.26
Endeavour Interntional
UN
USD
6.49
-5.8
26.0
7.50
2.36
648,654
306.33
CPCC
CG
HKD
4.49
-3.4
-17.9
5.95
4.05
30,652,080
87,791.83
Energen
UN
USD
70.36
-2.8
49.3
89.90
44.46
209,525
5,114.15
Ecopetrol
CX
COP
3,425.00
-2.7
-38.8
5,698.13
3,330.00
8,706,692
70,166.76
Energy XXI (Bermuda)
UW
USD
23.52
-2.6
-32.5
35.10
21.49
1,538,251
1,653.97
EnCana
CT
CAD
20.02
-0.9
1.8
20.98
17.40
3,179,594
13,286.92
Enerlabs
UV
USD
0.60
-7.7
445.4
0.90
0.11
3,996
5.79
Eni
IM
EUR
16.73
-4.5
-13.4
19.31
15.16
13,583,810
83,052.70
EnQuest
LN
GBp
130.20
-4.7
0.3
145.50
116.70
986,875
1,731.36
ExxonMobil
UN
USD
95.80
-2.1
4.4
101.74
84.79
3,230,411
418,590.99
EOG Resources
UN
USD
165.65
-3.4
30.6
188.26
112.09
454,482
45,259.21
Galp Energia
PL
EUR
11.77
-1.2
-3.3
13.40
10.76
1,178,503
13,326.88
Equal Energy
CT
CAD
5.84
-1.0
91.5
6.06
2.95
63,543
186.74
Gazprom
RX
RUB
147.80
1.1
1.2
265.00
102.06
84,205,100
99,670.57
ERHC Energy
UV
USD
0.05
1.5
-33.2
0.09
0.03
155,195
40.38
Hess
UN
USD
77.34
-0.9
13.6
85.15
61.32
2,164,570
26,121.57
Europa Oil & Gas
LN
GBp
7.88
-6.0
-19.7
13.53
5.75
1,719,872
26.73
Husky Energy
CT
CAD
32.42
-3.6
1.2
33.85
26.97
785,437
28,605.47
Falkland Oil & Gas
LN
GBp
25.00
-2.0
-27.5
35.00
23.25
699,881
220.90
Imperial Oil
CT
CAD
45.98
-1.3
4.4
47.57
38.58
555,027
34,961.94
First Australian Rsc.
AT
AUD
0.04
-4.8
2.6
0.05
0.02
2,979,569
87.65
KazMunaiGas E&P
KZ
KZT
14,730.00
0.0
-9.1
17,000.00
12,980.77
85
6,652.65
Fitzroy River
AT
AUD
0.41
-8.9
35.0
0.45
0.29
12,316
32.63
Lukoil
RX
RUB
1,960.90
-2.0
-1.9
2,140.00
1,781.30
1,586,412
47,510.75
Forest Oil
UN
USD
3.14
-9.2
-53.4
7.40
3.13
641,329
375.75
MOL
HB
HUF
13,580.00
-5.0
-27.4
18,800.00
13,500.00
86,719
6,293.90
Freeport-McMoran
UN
USD
32.79
-5.0
-3.1
38.09
26.34
14,932,991
34,041.11
Murphy Oil
UN
USD
60.80
-4.1
10.4
66.19
50.90
322,907
11,364.80
FX Energy
UW
USD
3.55
-8.1
-14.9
6.18
2.48
243,791
189.07
Occidental
UN
USD
87.78
-3.5
3.1
99.42
77.21
768,376
70,755.94
Gas Plus
IM
EUR
4.55
-7.8
-8.4
5.25
4.32
14,631
279.13
11.27
OMV
AV
EUR
33.80
-1.1
9.4
39.69
29.20
448,115
15,110.44
Gasco Energy
UV
USD
0.02
66.7
-73.4
0.08
0.00
1,177,767
Pakistan Petroleum
PK
PKR
219.89
0.0
47.5
222.85
143.09
1,701,280
4,115.43
Glen Rose Petroleum
UV
USD
0.12
71.4
-50.0
0.24
0.04
1,801
3.89
Pecom Energia
AF
ARS
5.30
-2.8
29.3
6.49
2.77
360,071
1,334.80
Global Energy Development
LN
GBp
79.00
-7.1
-22.9
110.50
65.50
24,111
47.26
Petrobras
BS
BRL
13.79
-6.8
-28.7
20.35
13.50
8,820,180
76,295.04
Global Petroleum
AT
AUD
0.10
6.4
-25.9
0.14
0.08
64,588
17.48
PetroChina
HK
HKD
7.62
-5.1
-31.6
11.32
7.62
102,621,800
222,604.78
Goodrich Petroleum
UN
USD
16.07
-7.8
62.4
28.53
9.49
303,624
703.57
Polish Oil & Gas
PW
PLN
4.61
-10.1
-16.8
6.76
4.58
6,109,400
8,810.82
Gulfsands Petroleum
LN
GBp
40.63
-2.1
-61.3
115.75
40.50
23,762
79.34
Repsol
SQ
EUR
17.63
-5.0
2.8
19.94
15.14
8,066,594
31,888.72
Halcon Resources
UN
USD
3.47
-2.5
-55.2
8.20
3.16
4,348,771
1,442.79
Royal Dutch Shell
LN
GBp
2,125.50
-2.5
-8.0
2,323.50
1,975.00
5,380,991
229,014.62
Harvest Natural Resources
UN
USD
4.48
-3.4
-53.3
10.03
2.46
117,075
181.03
Sasol
SJ
ZAr
53,942.00
-0.6
41.5
56,067.00
36,696.00
1,743,294
31,212.66
Heritage Oil
CT
GBp
3.23
2.9
-0.6
3.44
2.15
2,485
870.62
Sinopec
HK
HKD
6.17
-4.2
-14.9
7.36
5.02
99,014,070
87,791.83
Hibiscus Petroleum Berhad
MK
MYR
2.04
-4.2
36.0
2.74
1.33
2,096,200
312.35
SNP Petrom
RE
RON
0.47
-3.5
3.6
0.49
0.40
4,198,400
8,000.96
HKN
UV
USD
78.00
0.0
-2.5
95.25
65.00
0
31.35
Statoil
NO
NOK
148.70
-3.3
2.6
156.00
122.90
2,877,873
76,825.53
HRT
BS
BRL
1.11
-9.8
-75.3
4.85
0.65
18,371,380
133.37
Suncor
UN
CAD
32.72
-4.6
-5.0
37.00
26.83
3,753,060
48,678.06
Hyperdynamics
UN
USD
6.01
-6.5
36.8
6.94
3.01
227,924
126.70
Surgutneftegaz (ADR 1:50)
GF
RUB
5.80
-3.6
-23.5
7.85
5.33
1,378
28,304.99
Icon Oil
AT
AUD
0.15
-3.3
-31.0
0.24
0.13
335,036
78.27
Tatneft-cls
RX
RUB
197.14
-1.2
-11.4
225.99
97.80
2,187,386
12,234.89
Infinity Energy Resources
UV
USD
1.10
-23.6
-46.9
3.75
0.95
44,105
23.59
Total
FP
EUR
42.36
-4.4
5.5
45.67
35.18
4,648,356
137,581.41
Inpex
JT
JPY
1,248.00
-5.2
-5.6
1,355.00
995.00
3,702,640
17,869.19
YPF Sociedad
AF
ARS
271.65
-12.0
107.9
342.00
103.00
143,539
13,343.89
International Frontier
CV
CAD
0.10
0.0
26.7
0.16
0.05
301,700
5.42
InterOil Corporation
UN
USD
51.09
-5.5
-14.5
106.44
43.85
781,809
2,493.07
InterOil Exploration & Prod.
NO
NOK
1.70
-11.0
-40.7
3.84
0.93
1,658,181
69.39
Isramco
UR
USD
127.40
5.3
26.7
153.00
83.15
1,113
346.23
INDEPENDENT OIL & GAS COMPANIES
Abraxas
UR
USD
3.13
-4.1
46.7
3.96
1.93
923,291
290.20
Afren
LN
GBp
149.00
Alexander Energy
CV
CAD
0.76
-8.0
2.1
170.80
118.20
4,128,848
2,710.19
Ivanhoe Energy
CT
CAD
-10.0
340.3
0.92
0.13
1,602,099
146.02
Jerusalem Oil
IT
ILs
Aminex
LN
GBp
1.27
-8.0
-68.1
Anadarko Petroleum
UN
USD
80.86
-3.3
0.5
5.90
1.26
3,522,464
17.22
JKX Oil & Gas
LN
98.47
73.66
1,116,614
40,729.39
Karoon Gas
AT
Antares Energy
AT
AUD
0.52
-6.4
-3.7
0.59
0.27
235,278
115.12
Key Petroleum
Antrim Energy
CT
CAD
0.09
28.6
-83.0
0.56
0.06
675,804
14.91
Apache Corporation
UN
USD
81.26
-3.8
-4.8
94.84
67.91
581,572
32,449.92
Apco Argentina
UR
USD
14.50
ARC Resources
CT
CAD
27.68
-5.9
7.8
17.64
8.89
7,344
426.90
-2.8
14.5
29.95
23.19
1,094,824
7,794.69
Arsenal Energy
CT
CAD
Atlantic Petroleum
DC
DKK
4.89
-2.6
-24.8
6.80
3.74
25,516
120.50
-4.7
-34.9
187.50
118.00
6,186
ATP Oil & Gas
UV
USD
Australian Worldwide Expl.
AT
AUD
0.03
5.7
-65.6
0.32
0.01
350,407
1.54
1.30
-2.3
4.8
1.47
1.11
2,234,724
595.65
Barnwell Industries
UA
Bass Strait Oil
AT
USD
3.00
-8.8
-10.4
3.89
2.90
380
24.83
AUD
0.01
0.0
-53.3
0.02
0.01
900,623
3.18
Beach Petroleum
AT
AUD
1.44
2.1
-0.3
1.51
1.09
6,924,126
1,608.06
BHP Billiton
AT
AUD
36.87
-2.8
-2.0
39.34
30.43
8,116,575
167,104.80
0.56
-5.1
-77.0
2.58
0.37
103,046
57.66
13,990.00
-3.5
74.9
14,630.00
7,530.00
7,460
696.02
GBp
70.25
-1.1
13.3
81.00
48.00
98,871
199.86
AUD
3.54
-6.6
-42.4
7.37
3.45
717,158
793.92
AT
AUD
0.01
-7.7
-50.0
0.03
0.01
178,363
5.97
KFG Resources
CV
CAD
0.05
12.5
0.0
0.08
0.02
3,200
2.04
Lakes Oil
AT
AUD
0.01
0.0
-28.6
0.01
0.00
1,835,857
44.27
Lions Gate Energy
CV
CAD
0.03
20.0
-40.0
0.06
0.02
6,600
0.79
Long Run Exploration
CT
CAD
5.06
-6.5
16.0
6.08
3.63
325,769
500.58
70.51
Loon Energy
CV
CAD
0.06
10.0
-21.4
0.10
0.02
1,820
0.98
81.56
Lundin Petroleum
SS
SEK
115.70
-5.5
-30.3
168.00
115.10
1,276,112
5,696.58
Magellan Petroleum
UR
USD
1.08
0.0
-1.8
1.32
0.97
16,003
48.98
Magnum Hunter Resources
UN
USD
7.98
-8.8
92.3
8.81
2.37
4,642,800
1,360.92
Marathon Oil
UN
USD
33.19
-3.5
-2.2
38.17
29.47
1,063,793
23,121.29
Mart Resources
CV
CAD
1.23
-2.4
-34.2
2.31
0.98
222,110
393.28
Max Petroleum
LN
GBp
1.93
-9.2
-53.0
4.85
1.80
1,938,058
69.37
Medco Energi
IJ
IDR
2,460.00
3.1
54.7
3,000.00
1,550.00
1,419,020
673.61
36.53
Blue Dolphin Energy
UV
USD
5.45
2.4
-8.4
9.97
4.15
717
57.67
Mediterranean Oil & Gas
LN
GBp
5.13
-4.7
-51.2
12.25
4.88
784,763
Bounty Oil & Gas
AT
AUD
0.02
0.0
-28.6
0.03
0.01
102,082
12.34
Metalore
CT
CAD
2.46
-0.4
-36.1
4.15
2.33
65
3.92
BPI Industries
UV
USD
0.00
-40.0
220.0
0.00
0.00
16,054
0.04
Naphta Explorations
IT
ILs
2,395.00
-0.8
39.2
2,500.00
1,682.00
26,830
668.33
BPZ Resources
UN
USD
2.03
-6.5
-37.9
3.29
1.59
161,603
238.58
New Zealand Oil & Gas
NZ
NZD
0.79
0.0
-11.2
0.96
0.75
136,892
269.38
C Williams Energy
UN
USD
67.24
-6.4
67.2
85.05
35.30
25,386
817.94
Newfield Exploration
UN
USD
24.33
-6.3
-17.1
32.55
19.57
521,257
3,307.79
Cabot Oil
UN
USD
40.14
0.5
52.1
40.61
25.76
1,085,466
16,929.02
Nighthawk Energy
LN
GBp
8.35
-12.1
103.7
12.25
2.80
3,230,623
131.35
Cairn Energy
LN
GBp
213.70
-19.5
-25.3
309.60
207.20
3,934,489
2,096.32
Niko Resources
CT
CAD
2.61
1.6
-74.0
10.65
1.12
308,779
204.56
Cairn India
IS
INR
321.75
0.0
-1.0
339.30
267.70
2,327,586
9,772.74
Noble Energy
UN
USD
63.43
-3.5
16.1
78.00
52.63
643,505
22,778.16
Callon Petroleum
UN
USD
6.61
-1.9
25.5
7.60
3.21
59,530
265.88
Noreco
NO
NOK
0.15
-6.3
-91.3
1.78
0.13
86,922,930
137.47
Calvalley Petroleum
CT
CAD
1.67
-4.0
-18.1
2.19
1.38
28,472
117.21
Northern Petroleum
LN
GBp
29.50
-6.3
-47.8
58.00
27.00
192,231
46.61
Camac Energy
UA
USD
1.60
6.7
133.2
1.73
0.45
546,977
254.25
Norwest Energy
AT
AUD
0.01
18.2
-73.5
0.05
0.01
780,311
12.57
Canadian Natural Rsc.
CT
CAD
35.90
-0.6
14.8
36.42
28.44
4,305,699
34,999.85
Nuvista Energy
CT
CAD
7.46
-0.9
36.8
8.40
5.16
571,148
902.62
Candax Energy
CT
CAD
0.01
0.0
-66.7
0.04
0.01
157,340
9.58
Oando
SJ
ZAR
150.00
-10.7
117.4
225.00
15.00
70,918
911.18
Carboclor
AF
ARS
2.30
2.7
97.4
2.70
0.99
73,374
26.23
OGX
BS
BRL
0.27
-15.6
-94.3
4.83
0.11
114,521,000
358.80
Carrizo Oil & Gas
UW
USD
43.23
-1.4
103.3
47.84
20.15
346,839
1,964.93
Oil & Natural Gas Corp.
IS
INR
277.05
-4.3
-18.1
353.00
234.40
171,431
37,675.81
Central Petroleum
AT
AUD
0.39
4.1
-35.8
0.88
0.33
197,663
104.36
Oil Search
AT
AUD
8.25
-0.4
13.0
8.98
6.86
6,005,559
9,715.12
Cheniere Energy
UA
USD
44.00
-3.8
110.0
46.90
19.64
3,507,478
10,520.98
Oriental Petroleum
PM
PHP
0.02
-5.6
-22.7
0.03
0.02
8,680,000
78.80
Chesapeake Energy
UN
USD
26.97
-0.7
42.0
29.05
18.21
1,954,465
17,917.75
Origin Energy
AT
AUD
13.98
-1.5
12.3
14.90
11.00
2,241,172
13,495.42
Chinook Energy
CT
CAD
1.32
-8.4
-8.4
1.53
0.80
192,793
251.60
OSX
BS
BRL
0.67
-10.7
-93.2
10.25
0.39
984,240
86.00
Cimarex Energy
UN
USD
97.26
-8.0
51.9
113.03
62.54
156,395
8,447.64
Otto Energy
AT
AUD
0.09
-6.0
-6.0
0.12
0.07
1,184,597
94.70
Circle Oil
LN
GBp
20.88
-15.7
25.6
25.75
15.25
1,399,987
194.83
PA Resources
SS
SEK
9.90
-3.9
-82.0
70.00
7.60
252,912
173.51
CMS Energy
UN
USD
26.79
-0.6
4.8
29.94
25.29
495,662
7,152.69
Pacific Rubiales Energy
CX
CAD
31,660.00
-1.9
-23.9
45,680.00
28,220.00
1,431,688
5,122.41
CNOOC Ltd
HK
HKD
12.18
-5.3
-25.7
16.52
12.04
100,049,800
70,040.18
Pakistan Oilfields
PK
PKR
523.15
0.8
15.2
536.99
425.00
261,160
1,174.65
CNPC Hong Kong
HK
HKD
13.02
-7.4
-21.0
17.04
10.54
20,711,740
13,520.21
Pan Pacific Petroleum
AT
AUD
0.11
0.0
4.8
0.13
0.09
40,047
56.76
Comstock Resources
UN
USD
17.19
-4.7
15.8
18.91
12.85
273,479
820.17
Pancontinental O&G
AT
AUD
0.05
-2.0
-54.3
0.13
0.05
4,011,674
48.43
Continental Energy
UV
USD
0.05
5.1
-5.6
0.14
0.01
105,658
4.70
Cooper Energy
AT
AUD
0.51
0.0
-15.8
0.60
0.35
247,421
145.75
Cosco Capital
PM
PHP
8.00
-3.6
-49.0
18.90
7.87
7,753,480
1,311.25
Crew Energy
CT
CAD
6.98
-0.4
16.6
7.48
4.99
1,359,052
760.76
Curlew Lake
CV
CAD
0.03
0.0
-70.6
0.09
0.02
5,000
0.42
Denbury Resources
UN
USD
16.02
-3.3
-14.4
19.65
15.62
5,627,118
5,876.19
Panhandle Royalty
UN
USD
38.58
-2.9
31.9
40.40
26.83
25,596
320.97
Panoro Energy
NO
NOK
3.08
-1.0
11.6
3.64
2.35
1,008,131
117.05
Paramount Resources
CT
CAD
41.80
-2.4
29.5
44.00
31.68
137,217
3,633.22
PDC Energy
UW
USD
50.34
-0.7
34.0
73.93
37.01
1,120,706
1,793.70
Penn Virginia
UN
USD
11.89
-3.6
178.0
12.49
3.56
453,669
776.98
Penn West
UN
CAD
7.24
-2.0
-30.1
13.16
7.03
5,799,021
3,550.86
28.07
Det Norske Oljeselskap
NO
NOK
65.65
-4.3
-24.3
94.00
62.15
502,069
1,496.72
Petrel Resources
LN
GBp
17.00
15.3
-16.0
22.50
10.50
152,651
Devon Energy
UN
USD
58.70
-2.8
3.1
66.92
50.81
3,092,120
23,834.23
Petrichore Energy
CV
CAD
0.54
0.0
134.8
0.56
0.16
8,201
7.71
DNO International
NO
NOK
20.27
-10.3
120.4
25.34
8.78
8,483,882
3,360.75
Petrobank Energy
CT
CAD
0.36
-1.4
-59.6
1.00
0.31
79,895
31.45
Exchanges
in the list
AF
AU
AV
BB
BS
Argentina
Australian
Vienna
Brussels
Sao Paulo
CG
CS
CT
CV
DC
Shanghai
Shenzhen
Toronto
Canadian Venture
Copenhagen
FP
GF
HB
HK
IB
Paris
Frankfurt
Budapest
Hong Kong
Bombay
IJ
IM
IR
IT
JT
Jakarta
Milan
Reykjavik
Tel Aviv
Tokyo
KP
KZ
LN
MK
NA
Korea
Kazakhstan
London
Kuala Lumpur
Amsterdam
NO
NZ
PK
PM
RM
Oslo
New Zealand
Karachi
Philippines
Russia MICEX
RR
SJ
SK
SP
SQ
Russia RTS
Johannesburg
Bratislava
Singapore
Continuous
SS
TB
TI
UA
UN
Stockholm
Bangkok
Istanbul
American
New York
UQ
UR
UU
UV
VX
NASDAQ N-Mkt
NASDAQ Sm-Cp
OTC BB
OTC US
London Virt-x
FINANCIAL
PetroCeltic International
LN
GBp
173.00
-4.9
-4.2
189.50
129.00
367,175
503.80
PetroFrontier
CV
CAD
0.21
-4.5
-39.1
0.39
0.14
73,106
14.99
Petromin Resources
CV
CAD
0.04
0.0
-56.3
0.08
0.03
10,260
2.23
Petroquest Energy
UN
USD
3.99
-5.9
-23.7
5.29
3.55
527,389
257.29
Petsec Energy
AT
AUD
0.08
-12.1
-61.9
0.22
0.08
47,311
16.21
Philodrill
PM
PHP
0.04
0.0
-18.2
0.05
0.03
23,600,000
152.88
Pioneer Natural Resources
UN
USD
168.94
-8.2
43.9
227.02
109.25
304,043
23,419.59
Premier Oil
LN
GBp
277.50
-1.6
-25.9
405.00
274.60
2,558,450
2,433.01
PrimeEnergy
UR
USD
55.70
5.1
122.7
55.89
24.63
143
134.01
ProAm Exploration
CV
CAD
0.01
0.0
-75.0
0.03
0.01
19,600
0.07
PT Energi Mega Persada
IJ
IDR
71.00
-5.3
-22.8
146.00
62.00
53,651,640
260.45
PTT Expl. & Prod.
TB
THB
157.00
-0.6
-5.7
174.00
141.00
6,422,260
18,929.96
QEP Resources
UN
USD
30.64
-2.2
1.5
34.23
26.27
414,074
5,487.79
% change
5 days
% change
1 year
High
Low
Last 12 months
Avg vol
5 days
Market Cap
Mill. USD
Currency
Currency
Price
29 Jan
2014
Company
31 January 2014
Exchange
Exchange
54
Price
29 Jan
2014
Farstad Shipping
NO
NOK
130.00
-3.0
-7.1
143.50
116.00
4,939
821.48
Fluor
UN
USD
77.00
-7.8
16.9
83.93
53.50
1,671,357
12,596.12
FMC Technologies
UN
USD
49.02
-4.9
4.2
59.79
46.06
410,028
11,609.40
Foster Wheeler
UW
USD
30.11
-2.0
12.7
33.08
19.29
3,018,385
2,963.61
Goodtech
NO
NOK
16.70
-1.8
7.7
19.50
14.00
10,869
88.02
Great Offshore
IS
INR
61.80
-12.0
-26.0
95.05
34.00
51,544
36.58
Gulf Island Fabrication
UW
USD
20.62
-10.3
-13.2
26.82
18.76
29,534
298.33
Gulfmark Offshore
UN
USD
42.28
-7.4
20.6
53.89
34.14
274,131
1,148.48
Halliburton
UN
USD
48.04
-4.9
17.5
56.52
36.77
2,282,892
40,757.28
Helix Energy Solutions
UN
USD
20.75
-9.4
-11.7
27.58
20.33
1,007,389
2,195.38
Hitachi Zosen
JT
JPY
781.00
-8.9
10.0
985.00
640.00
1,093,120
1,217.53
Honghua
HK
HKD
2.20
-5.6
-34.7
4.25
2.10
11,304,640
917.82
Hyundai Heavy Industries
KP
KRW
224,500
-5.5
2.5
291,500
172,000
228,184
15,875.17
Company
% change
5 days
% change
1 year
High
Low
Last 12 months
Avg vol
5 days
Market Cap
Mill. USD
Queiroz Galvao Exploracao
BS
BRL
9.00
-6.5
-33.2
13.79
8.84
1,260,340
980.23
Hunting Plc
LN
GBp
781.00
-3.1
-6.0
947.00
719.00
263,627
1,911.62
Questerre Energy
CT
CAD
1.26
-5.3
37.0
1.58
0.70
65,332
299.02
Ingersoll-Rand
UN
USD
58.66
-5.0
42.9
63.42
40.63
537,714
16,916.44
Jacobs Engineering
UN
USD
62.01
-7.1
26.9
66.88
46.93
249,795
8,184.66
Jereh Oilfield Services
CS
CNY
78.50
-2.7
71.5
85.29
44.10
2,189,154
7,740.37
Quicksilver Resources
UN
USD
3.08
-5.0
8.1
3.54
1.44
613,713
543.75
Quoram
LN
GBp
0.12
-22.6
-79.1
0.61
0.12
10,819,490
1.92
Range Resources
UN
USD
86.22
-1.3
26.8
88.63
66.03
391,359
14,095.11
Kawasaki Heavy
JT
JPY
474.00
-2.7
79.5
496.00
261.00
17,575,800
7,759.49
Reliance Industries
IS
INR
836.75
-4.1
-6.9
927.90
765.00
195,157
42,979.41
KBR
UN
USD
31.96
-3.4
-0.2
36.70
27.60
2,184,782
4,737.20
Resource America
UW
USD
8.72
-3.1
10.4
10.30
7.31
8,853
176.75
Keppel Corp.
SP
SGD
10.54
-4.2
-6.2
11.51
10.01
5,550,400
14,939.45
Rio Bravo Oil
UU
USD
0.99
0.0
52.3
1.05
0.60
80
32.18
Key Energy
UN
USD
7.12
-10.0
-16.9
9.55
5.61
1,720,691
1,084.55
Roc Oil
AT
AUD
0.46
2.2
-2.1
0.64
0.33
488,118
276.81
Lamprell
LN
GBp
148.00
-6.6
14.3
183.00
119.50
227,170
638.39
Rockhopper Exploration
LN
GBp
136.25
-10.8
-14.3
163.25
111.00
829,270
641.65
Logan International
CT
CAD
6.10
-0.2
56.8
8.18
3.38
5,284
183.08
Rocksource
NO
NOK
1.01
-9.8
-15.8
2.20
0.84
326,759
14.25
Rosneft Oil
RX
RUB
244.20
-2.6
-9.9
275.50
178.92
6,628,140
73,723.62
Royale Energy
UR
USD
2.57
-6.9
-5.5
3.68
1.95
25,478
37.61
RWE (GF)****
GY
EUR
26.71
-3.5
-7.0
30.95
20.48
15,046
22,220.94
Santos
AT
AUD
13.50
-6.3
11.2
15.80
11.35
3,677,198
11,504.28
Senex Energy
AT
AUD
0.70
-0.7
-1.4
0.90
0.48
3,400,515
702.60
Serica Energy
LN
GBp
13.00
-1.9
-52.7
29.46
12.75
316,484
Sinophil
PM
PHP
0.30
-1.7
-10.6
0.42
0.26
Soco International
LN
GBp
412.20
-0.2
17.6
419.10
Softrock Minerals
CV
CAD
0.02
0.0
-40.0
0.04
Sonde Resources
CT
CAD
0.51
0.0
-46.7
1.05
South Sea Petroleum
HK
HKD
0.06
-3.4
-46.2
Southwestern Energy
UN
USD
41.32
-1.7
21.5
St Mary Land
UN
USD
82.78
-5.5
41.3
94.00
Serinus Energy
CT
CAD
3.60
-4.0
-
4.97
Stealth Ventures
CV
CAD
0.03
-16.7
-37.5
0.10
Sterling Energy
LN
GBp
54.13
28.9
39.7
55.00
Sterling Resources
CV
CAD
0.70
-1.4
-4.1
0.86
Stone Energy
UN
USD
30.76
-9.0
33.9
37.94
Lupatech
BS
BRL
0.69
0.0
-67.1
2.17
0.37
1,892,300
44.66
Markwest Energy Partners
UN
USD
69.86
0.2
30.0
75.79
53.25
590,088
11,960.44
Matrix Composites & Eng.
AT
AUD
1.10
-1.8
-41.3
1.90
0.60
56,076
91.18
Matrix Service
UW
USD
26.23
-5.2
81.8
27.89
12.53
67,879
687.58
McDermott International
UN
USD
8.40
-7.1
-33.8
13.47
6.68
978,300
1,987.31
Mermaid Marine
AT
AUD
2.94
-3.9
-26.7
4.27
2.84
775,442
599.59
53.88
Mitcham Industries
UW
USD
15.17
-8.1
0.3
18.39
13.81
17,522
194.14
284,000
51.76
Mitsui Eng & Shipbuild
JT
JPY
214.00
-8.9
49.7
237.00
135.00
9,181,400
1,741.22
309.91
281,754
2,266.05
Modec Inc.
JT
JPY
2,913.00
-1.9
37.7
3,970.00
1,909.00
183,200
1,323.67
0.01
0
0.32
MTQ Corporation
SP
SGD
1.54
0.3
46.4
1.63
0.98
27,000
153.31
0.38
30,602
25.64
Mullen Group
CT
CAD
27.00
-6.7
16.7
29.74
19.84
254,058
2,198.81
0.11
0.05
31,495,240
58.70
National Oilwell
UN
USD
73.10
-5.7
-1.3
84.71
63.08
5,565,962
31,311.25
42.85
31.92
768,750
14,537.93
Nature Group
LN
GBp
27.00
4.3
12.5
46.50
23.00
98,540
35.46
54.95
670,509
5,542.60
Neptune Marine
AT
AUD
0.05
9.3
46.9
0.05
0.02
278,080
76.20
2.65
18,488
253.76
0.02
22,213
0.24
33.00
988,482
197.32
Oil States International
UN
0.46
335,445
194.03
OMZ Uralmash-Izhora
RX
17.38
171,399
1,538.81
Petrofac
LN
PHI
ProSafe
RPC
Saipem
Newpark Resources
UN
USD
11.27
-9.7
30.6
13.63
8.17
147,119
984.67
Oceaneering International
UN
USD
68.20
-8.8
8.4
87.64
58.08
289,562
7,381.23
USD
93.32
-6.7
19.4
113.64
71.36
682,134
5,148.03
RUB
39.59
0.6
23.7
54.24
25.00
45,220
327.15
GBp
1,157.00
-6.8
-33.4
1,744.00
1,080.00
869,498
6,630.46
UW
USD
34.55
-8.2
3.9
40.57
23.43
508
561.13
NO
NOK
43.22
-5.6
-16.9
61.70
42.22
626,969
1,652.48
UN
USD
17.40
-8.8
18.1
19.38
12.42
141,834
3,811.29
IM
EUR
17.48
3.3
-42.6
30.91
12.13
3,138,370
10,540.70
Sun Resources
AT
AUD
0.03
-7.4
-50.0
0.06
0.02
1,585,832
57.96
Swift Energy
UN
USD
13.14
-2.0
-17.2
16.87
10.90
329,318
570.65
Talisman Energy
CT
CAD
12.18
-6.7
2.4
13.83
10.68
3,157,044
11,319.36
Tap Oil
AT
AUD
0.50
-2.0
-25.0
0.73
0.43
384,703
105.11
Taurus Petroleum
KA
SEK
1.45
-4.6
12.4
2.67
0.80
472,268
13.41
Samsung Heavy Ind.
KP
KRW
33,700.00
-6.0
-11.4
45,800.00
29,800.00
1,596,419
7,239.29
Tengasco
UA
USD
0.43
-7.2
-39.9
0.72
0.35
11,217
25.97
SBM Offshore
NA
EUR
14.41
-6.8
23.4
16.18
10.04
1,051,772
4,107.57
Tethys Oil
SS
SEK
71.50
-5.3
19.2
77.00
56.50
168,247
393.59
Schlumberger
UN
USD
87.07
-4.5
8.9
94.91
69.08
1,395,269
114,693.61
Tri-Valley
UV
USD
0.01
150.0
400.0
0.03
0.00
113,525
0.34
Scomi Group
MK
MYR
0.37
0.0
5.7
0.46
0.30
1,501,780
171.80
Tudor Corporation
CV
CAD
0.01
0.0
-50.0
0.03
0.01
960
0.14
Seacor
UN
USD
83.16
-3.6
19.1
99.00
67.76
216,784
1,691.92
TUI
GY
EUR
12.42
-2.1
56.9
13.06
7.45
23,326
4,283.82
SembCorp Marine
SP
SGD
4.10
-2.8
-13.5
4.81
4.06
4,842,800
6,702.48
Tullow Oil
LN
GBp
823.00
-8.4
-30.0
1,270.00
818.00
2,396,687
12,407.14
Sevan Marine
NO
NOK
22.70
-3.0
8.1
28.60
16.50
189,759
193.49
Tuscany Energy
CV
CAD
0.34
-4.3
-23.9
0.60
0.20
20,196
5.82
ShawCor
CT
CAD
39.40
-1.1
0.2
46.77
36.63
270,794
2,117.89
Ultra Petroleum
UN
USD
23.35
1.5
30.6
24.19
15.26
4,577,910
3,578.15
Shenzhen Chiwan
CS
HKD
15.23
0.2
9.1
16.58
11.38
250,528
452.33
Unit Corporation
UN
USD
50.29
-2.6
4.1
52.77
40.51
64,492
2,469.56
Shinko Plantech
JT
JPY
793.00
-1.5
6.7
866.00
665.00
132,600
359.59
Urals Energy
LN
GBp
6.50
6.1
4.0
11.25
3.93
605,933
27.18
Siem Offshore
NO
NOK
9.95
-4.3
19.9
10.50
7.01
98,818
627.77
W&T Offshore
UN
USD
14.61
-6.6
-15.2
19.88
10.39
753,947
1,100.55
SNC-Lavalin
CT
CAD
46.35
-3.7
4.0
49.87
39.47
427,576
6,312.59
Wentworth Resources
NO
NOK
4.64
-2.1
-10.5
6.13
3.69
284,614
115.68
Solstad Offshore
NO
NOK
117.00
-2.5
10.9
124.00
90.00
5,279
733.40
Wessex Exploration
LN
GBp
0.32
-1.5
-92.8
4.48
0.30
2,015,792
3.84
Subsea 7
NO
NOK
113.30
-5.3
-16.2
139.19
96.76
1,230,015
6,460.84
Westmount Energy
LN
GBp
19.50
0.0
-23.5
26.00
13.00
2,037
3.14
Superior Energy
UN
USD
23.97
-6.6
-4.0
29.19
22.90
435,412
3,819.59
Whiting Petroleum
UN
USD
57.75
-6.2
18.8
70.57
42.44
1,650,360
6,843.97
Swiber Holdings
SP
SGD
0.64
0.8
-11.2
0.81
0.59
1,021,200
303.84
Woodside Petroleum
AT
AUD
37.85
-1.4
6.8
39.54
33.30
1,996,091
27,336.79
Team Incorporated
UN
USD
43.38
-7.3
-1.9
48.09
32.33
78,507
881.79
Yangarra Resources
CV
CAD
0.64
3.2
113.3
0.65
0.24
663,017
84.43
Technip
FP
EUR
64.08
-3.4
-23.1
92.49
60.20
478,294
9,949.75
Zargon Oil & Gas
CT
CAD
7.81
-6.6
-3.9
9.40
6.00
58,763
210.90
Teekay
UN
USD
53.90
-0.8
50.5
54.84
32.49
436,630
3,808.63
ZaZa Energy
UR
USD
1.10
12.2
-33.1
1.98
0.62
301,510
118.02
Tenaris (ADR 1:10)
UN
USD
43.75
-3.3
3.5
49.87
38.47
2,602,978
25,847.85
Tidewater
UN
USD
52.18
-5.8
5.9
63.20
45.19
146,116
2,587.31
Total Energy Trust
CT
CAD
19.71
0.8
30.6
20.83
13.13
29,891
549.50
Toyo Kanetsu
JT
JPY
300.00
-5.4
51.5
426.00
193.00
872,200
407.51
Trican Well Service
CT
CAD
12.84
-1.1
-6.0
16.23
11.97
354,448
1,715.88
318.50
OILFIELD SERVICES, ENGINEERING & CONSTRUCTION
Aban Offshore
IS
INR
387.00
-8.3
10.8
448.10
188.25
851,591
267.69
ABB
VX
CHF
22.67
AGR Group
NO
NOK
4.40
-2.9
18.4
24.80
18.50
10,925,800
58,670.87
TSC Offshore
HK
HKD
3.58
3.8
114.4
3.80
1.58
1,010,800
0.0
-51.3
9.50
3.00
128,709
88.51
TTS Marine
NO
NOK
6.37
-1.7
-31.9
9.60
5.71
21,314
Aker
NO
NOK
89.39
192.50
-4.9
-18.1
238.00
167.00
63,183
2,257.39
Wah Seong
MK
MYR
1.91
0.0
14.0
2.17
1.57
712,600
439.12
Aker Solutions
NO
Amec
LN
NOK
97.30
-2.7
-21.0
123.90
78.60
882,798
4,319.68
Weatherford International
UN
USD
13.64
-7.7
3.9
17.38
11.11
1,133,047
10,486.86
GBp
1,042.00
0.4
-5.2
1,210.00
961.00
2,357,422
5,138.03
Willbros Group
UN
USD
8.38
-8.6
25.0
10.45
6.13
44,549
AP Moller-Maersk
DC
417.65
DKK
62,150.00
-4.5
37.1
67,350.00
39,960.00
6,219
49,150.27
Wilson Sons
BS
BRL
28.16
-3.3
-9.2
33.49
21.72
107,160
Badger Explorer
822.72
NO
NOK
7.90
-7.8
7.8
11.20
4.75
640
23.73
Wood Group
LN
GBp
651.50
-3.6
-20.9
927.00
610.00
1,424,636
4,048.34
Baker Hughes
UN
USD
55.70
-1.9
21.5
58.83
42.61
915,173
24,692.10
WorleyParsons
AT
AUD
16.64
-2.0
-35.5
27.45
15.08
726,711
3,604.40
Baker Technology
SP
SGD
0.27
-3.6
-7.9
0.38
0.25
780,000
184.57
Blom
NO
NOK
11.25
-3.4
-94.2
239.00
8.15
4,061
18.36
Bolt Technology
UW
USD
20.62
-2.6
37.4
22.76
14.36
80,404
178.61
Boskalis Westminister
NA
EUR
35.91
-0.2
5.3
38.64
26.92
451,731
5,899.37
Akita Drilling
CT
CAD
14.97
-3.5
32.7
16.61
10.55
4,385
244.45
Brunel International
NA
EUR
44.77
-6.4
12.8
48.20
28.57
39,978
1,489.62
Atwood Oceanics
UN
USD
46.75
-7.4
-12.2
59.49
43.92
168,139
3,000.40
Bumi Armada
MK
MYR
4.04
1.0
6.3
4.18
3.64
4,271,780
3,538.62
CGG
FP
EUR
11.48
-6.6
-48.8
22.60
11.36
1,062,578
2,772.74
BW Offshore
NO
NOK
6.65
-6.6
16.3
8.70
5.00
675,243
741.31
Dawson Geophysical
UW
USD
32.60
-3.1
23.3
40.67
26.03
12,833
262.86
Cameron International
UN
USD
56.95
-4.0
-7.8
67.41
52.50
735,004
13,546.73
Delek Drilling
IT
ILs
1,819.00
-1.6
22.3
1,991.00
1,416.00
483,188
2,853.10
Cape
LN
GBp
265.00
-2.9
17.0
330.00
213.00
283,133
531.68
Diamond Offshore
UN
USD
49.21
-10.1
-31.9
73.52
49.21
343,428
6,841.93
Cecon
NO
NOK
1.35
3.8
-50.7
2.80
0.90
1,000
39.66
EMGS
NO
NOK
6.85
-8.5
-39.6
11.46
6.39
723,149
221.69
Chicago Bridge & Iron
UN
USD
76.57
-7.7
49.5
83.42
50.41
1,460,732
8,227.54
Ensco International
UN
USD
50.43
-8.3
-21.2
65.82
50.22
678,657
11,775.07
China Oilfield Services
HK
HKD
21.35
-11.0
22.0
26.00
13.04
15,391,150
15,565.35
Ensign Energy Services
CT
CAD
16.25
-0.7
-3.0
18.44
15.19
130,840
2,234.51
COOEC
CG
CNY
8.60
0.2
41.4
9.69
6.01
28,780,080
6,279.61
Entek Energy
AT
AUD
0.03
-2.9
-45.2
0.08
0.03
151,600
15.22
Core Laboratories
UN
USD
186.33
-2.0
56.0
199.99
116.89
47,877
8,452.92
Eurasia Drilling-GDR
LN
USD
33.00
-22.0
-12.8
46.50
32.60
313,683
4,843.98
Daewoo Heavy Industries
KP
KRW
13,050.00
-0.4
-21.1
17,000.00
10,100.00
2,306,915
2,518.97
Fred. Olsen Energy
NO
NOK
230.00
-3.7
-9.1
300.40
223.32
86,193
2,485.45
Daewoo Shipblg & Mar. Eng.
KP
KRW
34,500.00
-6.0
15.0
38,850.00
23,000.00
1,167,338
6,143.68
Fugro
NA
EUR
40.24
-3.9
-12.4
49.72
34.71
401,762
4,648.19
Deep Sea Supply
NO
NOK
10.25
-8.5
-1.4
12.50
8.80
216,304
211.25
Geospace Technologies
UW
USD
80.72
-7.3
-11.5
113.73
65.31
208,660
1,043.20
DOF
NO
NOK
31.00
-3.1
20.2
34.50
23.00
20,668
557.79
Grand Gulf Energy
AT
AUD
0.01
-10.0
-40.0
0.02
0.00
143,200
5.90
Dril-Quip
UN
USD
100.32
-7.4
22.4
121.00
76.49
105,457
4,080.31
Greencastle Resources
CV
CAD
0.08
-5.9
0.0
0.11
0.05
28,400
3.31
Eidesvik Offshore
NO
NOK
33.60
-0.9
-1.5
37.60
32.70
6,371
164.14
Helmerich Payne
UN
USD
85.53
-2.9
36.7
88.10
55.79
236,778
9,227.70
Envir Group
AT
AUD
0.06
0.0
24.4
0.06
0.02
0
7.96
Hercules Offshore
UW
USD
5.01
-12.9
-26.6
7.96
4.62
7,201,411
800.34
EOC Limited
NO
NOK
4.82
-1.6
20.5
7.49
2.62
80,724
86.65
ION Geophysical
UN
USD
3.19
5.3
-53.6
7.68
2.81
403,271
521.08
Ezra Holdings
SP
SGD
0.97
-10.2
-19.2
1.51
0.82
11,532,400
744.21
Major Drilling
CT
CAD
7.99
-3.7
-20.0
10.70
6.41
117,337
567.16
RIG AND SEISMIC COMPANIES
FINANCIAL
Nabors Industries
UN
USD
16.98
-2.5
1.7
18.33
14.34
3,199,568
5,013.40
Neon Energy
AT
AUD
0.06
-6.6
-76.3
0.43
0.05
11,764,560
27.63
Noble Drilling
UN
USD
31.98
-11.8
-19.6
42.33
31.70
1,229,641
8,106.50
Northern Offshore
NO
NOK
9.99
-1.6
0.4
10.90
8.11
82,192
264.88
Pacific Drilling
UN
USD
9.99
-8.3
-3.8
12.24
8.90
70,400
Parker Drilling
UN
USD
7.63
-7.5
36.4
8.67
3.75
Patterson-UTI Energy
UW
USD
25.00
-3.4
23.9
26.07
18.83
% change
5 days
% change
1 year
High
Low
Last 12 months
Currency
Currency
Price
29 Jan
2014
Company
55
Exchange
Exchange
31 January 2014
Price
29 Jan
2014
Enterprise Product Partners
UN
USD
64.06
-2.5
13.7
66.92
54.30
1,128,187
59,851.57
Equitable Resources
UN
USD
89.92
-2.6
48.8
94.35
57.87
246,589
13,543.37
Fuchs Petrolub
GY
EUR
57.79
-5.6
11.0
63.10
48.92
1,360
6,087.51
Fuji Kosan
JT
JPY
711.00
-4.7
14.5
753.00
517.48
29,720
60.87
2,100.00
General Sekiyu
JT
JPY
901.00
-3.3
13.9
1,099.00
775.00
1,617,400
4,986.09
140,910
918.27
Genesis Energy
UN
USD
53.99
0.7
34.5
55.99
39.30
141,309
4,786.27
690,208
3,612.94
Hindustan Petroleum
IS
INR
240.20
1.3
-27.8
343.05
158.45
84,290
1,292.87
IRPC
TB
THB
3.10
-2.5
-30.8
4.66
2.94
22,441,540
1,923.91
Kinder Morgan
UN
USD
79.04
-4.5
-11.9
92.97
77.14
235,141
34,566.33
Manali Petrochem.
IS
INR
7.65
-4.1
-26.9
11.45
5.74
31,223
20.91
Metrogas
AF
ARS
1.14
-6.6
31.0
1.82
0.64
50,836
81.08
National Fuel Gas
UN
USD
73.98
0.5
35.6
74.11
53.89
84,096
6,190.49
Nippon Seiro
JT
JPY
272.00
0.7
16.7
298.00
227.00
27,800
59.66
Pakistan State Oil
PK
PKR
330.65
-4.1
73.0
373.50
183.65
1,107,680
775.19
Avg vol
5 days
Market Cap
Mill. USD
Company
% change
5 days
% change
1 year
High
Low
Last 12 months
Avg vol
5 days
Market Cap
Mill. USD
Petroleum Geo-Services
NO
NOK
66.50
-8.0
-32.5
99.00
63.80
1,038,714
2,346.75
Petrolia Drilling
NO
NOK
8.50
0.0
37.5
9.95
5.15
29,691
37.51
Pioneer Drilling
UN
USD
7.98
-6.9
4.6
9.91
6.46
406,683
499.05
Precision Drilling
UN
CAD
8.70
-3.5
-4.2
11.21
7.29
2,148,112
2,412.39
Rompetroll Well Services
RE
RON
0.50
-5.1
42.0
0.54
0.35
389,400
41.96
Rowan Co.
UN
USD
31.95
-5.0
-8.7
38.64
30.22
528,570
3,971.84
SeaBird Exploration
NO
NOK
2.37
-9.2
-74.4
10.15
2.35
324,170
18.66
Seadrill
NO
NOK
223.90
-9.8
3.3
289.40
201.10
1,159,912
17,023.44
Penn Octane
UV
USD
0.01
-62.4
-88.9
0.10
0.01
510
0.15
Songa Offshore
NO
NOK
2.81
-3.8
-53.3
8.28
2.65
986,499
397.89
Petrol Ofisi
TI
TRY
4.11
-5.1
-32.6
6.38
3.75
227,169
1,057.44
Spectrum
NO
NOK
37.00
-2.6
-14.9
66.00
30.40
30,622
252.47
Petrolub International
JT
JPY
463.00
-2.5
21.5
484.00
376.00
12,540
104.16
TGS
NO
NOK
167.70
-3.1
-18.0
231.00
138.90
346,576
2,812.89
Petron
PM
PHP
14.06
-1.5
25.8
16.30
10.98
1,122,580
2,917.53
Thalassa Holdings
LN
GBp
299.50
-2.9
434.8
314.00
56.00
77,620
124.33
Petronas Dagangan
MK
MYR
30.50
-0.1
35.8
31.82
21.04
415,880
9,052.45
Transocean
UN
USD
43.88
-6.4
-24.0
59.50
43.60
1,014,179
15,811.90
Petronas Gas
MK
MYR
22.98
-0.5
22.8
25.00
13.36
619,460
13,584.87
Trinidad Drilling
CT
CAD
9.17
-1.4
28.0
10.84
6.46
692,164
1,137.98
Questar Oil & Gas
UN
USD
23.37
1.5
0.4
26.01
21.44
276,815
4,089.64
Vantage Drilling
UA
USD
1.71
-6.6
-10.0
2.06
1.55
1,902,301
519.23
San Ai Oil
JT
JPY
498.00
-4.8
24.5
530.00
351.00
82,400
360.83
Shell Pakistan
PK
PKR
205.44
0.0
57.9
241.88
117.26
228,240
166.95
Showa Shell
JT
JPY
1,002.00
-2.7
89.1
1,150.00
512.00
1,391,220
3,697.29
Siam United Services
TB
THB
3.02
-1.9
-17.0
7.40
2.66
3,292,040
100.89
PIPELINE AND DOWNSTREAM COMPANIES
Adams Resources
UA
USD
65.61
-3.8
77.6
70.95
35.69
1,257
276.72
Ashland
UN
USD
94.23
-3.6
17.1
100.84
72.11
220,197
7,300.02
South Indupa
AF
ARS
2.82
-2.1
79.6
6.66
1.40
90,506
145.99
Bharat Petroleum
IS
INR
354.70
3.2
-13.4
429.00
256.00
59,722
4,076.71
South Jersey Ind.
UN
USD
53.68
-3.3
-1.2
62.27
53.47
41,525
1,728.87
Buckeye Partners
UN
USD
72.71
0.0
39.3
73.71
51.41
54,870
9,017.32
Syntroleum
UR
USD
3.39
-11.5
-27.1
7.74
2.40
22,479
33.79
Caltex Australia
AT
AUD
18.96
-2.0
-5.2
23.77
16.80
766,951
4,487.49
Tamilnadu Petro.
IS
INR
8.29
0.4
-32.2
12.99
7.00
21,763
11.86
Centrica
LN
GBp
312.70
-3.0
-11.0
403.20
311.90
9,384,850
26,321.05
Tesoro Petroleum
UN
USD
51.95
-1.4
8.2
65.75
40.91
465,840
6,905.96
Chennai Petroleum
IS
INR
67.50
-3.6
-52.8
144.45
52.00
51,446
159.77
Toa Oil
JT
JPY
176.00
-13.7
79.6
270.00
94.00
1,313,000
214.44
Cosmo Oil
JT
JPY
204.00
-0.5
-5.1
248.00
165.00
3,531,200
1,693.25
TPL
CT
CAD
47.65
-2.4
-2.2
51.21
43.94
1,218,714
30,219.74
Dialog Group
MK
MYR
3.30
-1.5
40.4
3.60
2.28
3,897,900
2,394.59
Transportadora d Gas
UN
ARS
1.89
-9.4
-1.5
2.93
1.52
37,820
300.97
DuPont
UN
USD
60.71
-3.7
26.6
65.00
46.02
1,219,344
56,223.71
Tupras
TI
TRY
36.36
-13.4
-28.4
56.25
35.50
2,220,148
4,056.51
Dynegy
UN
USD
20.50
-1.9
1.5
25.16
18.11
94,115
2,053.03
Turcas Petroleum
TI
TRY
2.27
-6.2
-40.1
4.07
2.26
710,154
227.55
Enbridge
CT
CAD
46.32
-1.8
4.1
49.17
41.74
945,853
34,442.96
Valero Energy
UN
USD
51.31
0.8
28.4
53.64
33.00
1,496,751
27,701.13
Energy Transfer Partners
UN
USD
54.09
-0.5
15.4
57.31
45.16
846,726
20,590.44
Williams Companies
UN
USD
39.92
2.6
14.5
40.10
31.25
1,260,109
27,309.80
WORLD OIL PRODUCTION
IEA Monthly Oil Market Report
OPEC
Saudi Arabia
Iran
Iraq
UAE
Kuwait
Neutral Zone
Qatar
Angola
Nigeria
Libya
Algeria
Ecuador
Venezuela
TOTAL CRUDE OIL
TOTAL NGLs1
TOTAL OPEC
OPEC Incl. Angola & Ecuador6
2013
9.40
2.68
3.07
2.76
2.55
0.52
0.73
1.72
1.95
0.90
1.15
0.51
2.49
30.44
6.40
36.84
36.84
2014
17.22
10.34
2.89
3.98
0.01
3.29
0.86
1.84
0.59
0.49
0.42
0.07
21.00
13.85
10.88
2.97
7.71
4.18
0.66
0.90
0.84
1.14
0.14
4.18
2.12
0.63
1.01
0.42
1.36
0.95
0.06
0.14
0.21
2.33
0.70
0.24
1.40
29.56
2.18
1.99
54.73
54.73
91.57
WORLD OIL SUPPLY AND DEMAND
Million bbl per day
3Q13
9.84
2.64
3.04
2.80
2.56
0.52
0.73
1.71
1.97
0.62
1.15
0.52
2.52
30.61
6.45
37.06
37.06
4Q13
9.51
2.71
3.06
2.73
2.53
0.52
0.72
1.64
1.91
0.30
1.14
0.52
2.46
29.77
6.42
36.19
36.19
Oct 13
9.49
2.68
3.03
2.78
2.52
0.52
0.73
1.70
1.92
0.45
1.14
0.52
2.49
29.96
6.42
36.38
36.38
Nov 13
9.49
2.71
3.10
2.66
2.52
0.52
0.72
1.59
1.89
0.22
1.13
0.52
2.46
29.51
6.42
35.93
35.93
Dec 13
9.56
2.75
3.07
2.76
2.55
0.52
0.72
1.62
1.92
0.23
1.15
0.53
2.44
29.82
6.42
36.24
36.24
18.42
11.35
2.88
4.18
0.01
3.16
0.76
1.81
0.59
0.55
0.45
0.09
22.13
17.41
10.54
2.88
3.98
0.01
3.17
0.78
1.80
0.60
0.51
0.43
0.07
21.09
17.99
10.94
2.89
4.15
0.01
3.30
0.83
1.87
0.60
0.51
0.45
0.07
21.81
17.55
10.72
2.91
3.91
0.01
3.18
0.79
1.79
0.60
0.51
0.45
0.06
21.24
18.18
11.01
2.88
4.28
0.01
3.38
0.87
1.90
0.60
0.51
0.45
0.07
22.07
18.25
11.08
2.89
4.28
0.01
3.36
0.84
1.92
0.60
0.51
0.44
0.07
22.12
13.92
10.95
2.97
7.76
4.28
0.65
0.90
0.79
1.14
0.14
4.36
2.21
0.62
1.12
0.41
1.33
0.96
0.03
0.14
0.21
2.54
0.66
0.24
1.64
30.05
2.21
2.04
56.43
56.43
13.78
10.85
2.93
7.50
4.05
0.64
0.89
0.82
1.10
0.14
4.19
2.12
0.63
1.02
0.42
1.36
0.96
0.05
0.14
0.21
2.35
0.69
0.24
1.41
29.33
2.20
2.35
54.98
54.98
92.04
14.01
10.99
3.02
7.67
4.22
0.63
0.90
0.81
1.10
0.14
4.22
2.17
0.63
1.01
0.41
1.34
0.96
0.03
0.14
0.21
2.44
0.68
0.24
1.52
29.82
2.18
2.09
55.90
55.90
92.08
13.99
10.97
3.02
7.67
4.24
0.61
0.89
0.81
1.12
0.14
4.21
2.18
0.64
0.99
0.40
1.36
0.96
0.04
0.14
0.21
2.40
0.68
0.24
1.48
29.78
2.13
2.24
55.39
55.39
91.77
14.03
10.99
3.03
7.65
4.20
0.65
0.91
0.81
1.08
0.14
4.20
2.13
0.63
1.02
0.42
1.34
0.96
0.03
0.14
0.21
2.46
0.68
0.24
1.54
29.83
2.20
2.23
56.32
56.32
92.25
14.01
11.00
3.01
7.68
4.23
0.64
0.91
0.80
1.10
0.14
4.26
2.19
0.62
1.02
0.42
1.32
0.95
0.03
0.12
0.21
2.46
0.68
0.24
1.54
29.86
2.20
1.81
55.99
55.99
92.23
6.61
NON-OPEC2
OECD
North America6
United States5
Mexico
Canada
Chile
Europe7
UK
Norway
Others
Pacific8
Australia
Others
TOTAL OECD
NON-OECD
Former USSR
Russia
Others
Asia
China
Malaysia
India
Indonesia
Others
Europe
Latin-America
Brazil5
Argentina
Colombia
Others
Middle East3
Oman
Syria
Yemen
Others
Africa
Egypt
Gabon
Others
TOTAL NON-OECD
Processing gains4
Global Biofuels5
TOTAL NON-OPEC
Non-OPEC: Historical Composition6
TOTAL SUPPLY
1. Includes condensates reported by OPEC countries, oil from non-conventional sources, e.g. Venezuelan Orimulsion (but not Orinoco
extra-heavy oil), and non-oil inputs to Saudi Arabian MTBE. Orimulsion production reportedly ceased from January 2007.
2. Comprises crude oil, condensates, NGLs and oil from non-conventional sources
3. Includes small amounts of production from Israel, Jordan and Bahrain.
4. Net volumetric gains and losses in refining and marine transportation losses.
5. As of the July 2010 OMR, Global Biofuels comprise all world biofuel production including fuel ethanol from the US and Brazil.
6. As of August 2012 OMR, OECD Americas includes Chile.
7. As of August 2012 OMR, OECD Europe includes Estonia and Slovenia.
8. As of August 2012 OMR, OECD Asia Oceania includes Israel.
IEA Monthly Oil Market Report
DEMAND OECD
1
North America
Europe2
Asia Oceania3
TOTAL OECD
2012 1Q13
23.6
23.7
13.7
13.2
8.6
8.9
45.9
45.8
DEMAND NON-OECD
FSU
Europe
China
Other Asia
Latin America
Middle East
Africa
TOTAL NON- OECD
TOTAL DEMAND4
SUPPLY OECD
1,7
North America
Europe2
Asia Oceania3
TOTAL OECD
SUPPLY NON-OECD
FSU
Europe
China
Other Asia5
Latin America5,7
Middle East
Africa5
TOTAL NON- OECD
Processing Gains6
Global Biofuels7
TOTAL NON- OPEC5
Non-OPEC: Historical Composition5
SUPPLY
OPEC
8
Crude
NGLs
TOTAL OPEC5
OPEC: Historical Composition2
TOTAL SUPPLY9
2Q13 3Q13 4Q13
23.8
24.1
24.3
13.8
14.0
13.6
7.9
8.1
8.6
45.5
46.2
46.6
Million bbl per day
2013 1Q14 2Q14
24.0
24.0 23.9
13.6
13.3 13.6
8.4
8.8
7.7
46.0
46.0 45.2
3Q14 4Q14 2014
24.1
24.3 24.1
13.9
13.7 13.6
8.0
8.4 8.2
46.0
46.4 45.9
4.5
0.7
9.8
11.3
6.4
7.7
3.7
44.0
90.0
4.3
0.6
10.0
11.7
6.4
7.5
3.8
44.3
90.1
4.5
0.7
10.0
11.7
6.6
7.9
3.8
45.2
90.7
4.8
0.7
10.1
11.3
6.7
8.3
3.7
45.7
91.9
4.9
0.7
10.2
11.7
6.7
7.6
3.8
45.5
92.1
4.6
0.7
10.1
11.6
6.6
7.8
3.8
45.2
91.2
4.4
0.7
10.3
11.9
6.5
7.6
3.9
45.3
91.4
4.7
0.7
10.4
12.0
6.8
8.1
4.0
46.6
91.9
4.9
0.7
10.5
11.6
6.9
8.5
3.9
47.1
93.1
4.9
0.7
10.7
12.0
6.9
7.8
4.0
47.1
93.5
4.7
0.7
10.5
11.9
6.8
8.0
3.9
46.5
92.5
15.9
3.5
0.6
19.9
16.8
3.4
0.4
20.6
16.7
3.3
0.5
20.5
17.4
3.2
0.5
21.1
18.0
3.3
0.5
21.8
17.2
3.3
0.5
21.0
18.2
3.3
0.5
22.0
18.3
3.2
0.5
22.0
18.4
3.0
0.6
21.9
18.8
3.2
0.6
22.6
18.4
3.2
0.5
22.1
13.6
0.1
4.2
3.6
4.2
1.5
2.3
29.5
2.1
1.9
53.4
53.4
13.8
0.1
4.2
3.7
4.1
1.4
2.2
29.6
2.2
1.5
53.8
53.8
13.8
0.1
4.2
3.6
4.2
1.3
2.3
29.5
2.2
2.0
54.2
54.2
13.8
0.1
4.0
3.5
4.2
1.4
2.4
29.3
2.2
2.4
55.0
55.0
14.0
0.1
4.2
3.4
4.2
1.3
2.4
29.8
2.2
2.1
55.9
55.9
13.8
0.1
4.2
3.5
4.2
1.4
2.3
29.6
2.2
2.0
54.7
54.7
14.0
0.1
4.3
3.5
4.3
1.3
2.5
30.0
2.2
1.7
55.8
55.8
13.9
0.1
4.3
3.5
4.3
1.3
2.5
30.0
2.2
2.0
56.2
56.2
13.8
0.1
4.3
3.5
4.4
1.3
2.6
30.0
2.2
2.4
14.0
0.1
4.3
3.5
4.5
1.3
2.5
30.2
2.2
2.1
57.1
57.1
13.9
0.1
4.3
3.5
4.4
1.3
2.5
30.1
2.2
2.0
56.4
56.4
31.3
6.3
37.6
37.6
91.0
30.5
6.3
36.8
36.8
90.6
30.9
6.4
37.3
37.3
91.5
30.6
6.5
37.1
37.1
92.0
29.8
6.4
36.2
36.2
92.1
30.4
6.4
36.8
36.8
91.6
6.5
6.5
6.7
6.7
6.6
29.9
29.7
29.4
STOCK CHANGES AND MISCELLANEOUS REPORTED OECD
Industry
Government
TOTAL OECD
Floating storage
Oil in transit
Miscellaneous to
balance10
TOTAL STOCK CHANGE
& MISCELLANEOUS
Memo items:
Call on Opec crude +
Stock ch11
0.2
0.0
0.2
0.2
0.1
0.3
-0.1
0.0
-0.1
0.4
0.1
0.4
0.0
0.2
-0.1
0.2
0.8
0.1
1.0
-0.4
1.0
0.5
0.8
0.1
0.0
0.4
30.3
30.0
30.1
30.5
29.8
30.1
29.0
29.1
4. Measured as deliveries from refineries and primary stocks, comprises inland deliveries, international marine bunkers, refinery fuel, crude
for direct burning, oil from non-conventional sources and other sources of supply.
5. Other Asia includes Indonesia throughout. Latin America excludes Ecuador throughout. Africa excludes Angola throughout. Total
Non-OPEC excludes all countries that were members of OPEC at 1 January 2009. Total OPEC comprises all countries which were OPEC
members at 1 January 2009.
6. Net volumetric gains and losses in the refining process and marine transportation losses.
7. As of the July 2010 OMR, Global Biofuels comprise all world biofuel production including fuel ethanol from the US and Brazil.
8. As of the March 2006 OMR, Venezuelan Orinoco heavy crude production is included within Venezuelan crude estimates. Orimulsion fuel
remains within the OPEC NGL and non-conventional category, but Orimulsion production reportedly ceased from January 2007.
9. Comprises crude oil, condensates, NGLs, oil from non-conventional sources and other sources of supply.
10. Includes changes in non-reported stocks in OECD and non-OECD areas.
11. Equals the arithmetic difference between total demand minus total non-OPEC supply minus OPEC NGLs.
HEAD TO HEAD
56
31 January 2014
Evangelos
sees the
rig light
Big step: Central Shipping Monaco chief executive Evangelos Pistiolis
Photo: EOIN O’CINNEIDE
Tanker specialist Evangelos Pistiolis has become only the third Greek shipowner
to move into offshore rigs — but where he goes, others tend to follow
EOIN O’CINNEIDE
London
E
VANGELOS
Pistiolis
knows a thing or two
about timing. The Greek
shipowner once offloaded the vast majority of his
fleet right before the global
economic meltdown sparked by
the collapse of US bank Lehman
Brothers in 2008.
The 41-year-old is now making
his debut in the rig-owning sector, having recently ordered two
jack-up rigs at China’s Yantai
CIMC Raffles Offshore for $240
million apiece, with options for
four more. To be built to Friede &
Goldman JU2000E design, the
units are scheduled to be delivered at the end of 2015.
The tanker specialist became
only the third Greek shipowner to
venture into offshore rigs — following in the footsteps of Ocean
Rig’s George Economou and Metrostar’s Theodore Angelopoulos,
who owns ultra-deepwater drillships in a joint venture with Norway’s Odfjell Drilling.
With Greeks controlling more
than a fifth of the world’s merchant shipping fleet, and many
still cash rich despite the market
downturn, it is perhaps surprising that more have not flooded
the offshore space. However, Pistiolis believes this is the right
time to take the plunge into the
rig market. “I was involved in offshore from the anchor-handling
side,” he says, having now ended
his shareholding in a Greek company that owned three offshore
support vessels.
“Everything has to do with timing. Not only timing as to when
to enter the market — which I believe now is a good time to do —
but also as to when you feel ready
to take such a big step.”
Foresight Moving early and at
pace has characterised Pistiolis’
shipowning career. Pulling the
plug half-way through a mechanical engineering degree in
Munich, the son of a construction firm owner moved to Southampton in the UK to study shipping operations between 1995
and 1999.
He bought his first ships —
two small container vessels —
before he had even graduated. A
third boxship followed before he
bought his first products tanker
from the compatriot Niarchos
shipping dynasty — all while
completing national service in
the Greek Navy.
“I was for many years living a
double life — in a good sense,” he
says. By 2004, his private company Primal Tankers had seven
ships, so the young chief execu-
Everything
has to do
with timing.
Not only
timing as to
when to enter
the market...
but also as to
when you
feel ready to
take such a
big step.
tive launched an initial public
offering on New York’s Nasdaq
exchange through Top Tankers
— which later became TopShips.
“We went from seven ships to
35 within a very short period of
time. Then I started again reducing the company because I quite
early had foreseen the crisis that
was coming at the end of 2007
and beginning of 2008. So, in six
months I sold about 22 ships,
very aggressively, while everyone else was buying.”
Pistiolis eventually started or-
dering ships again through family-owned company Central
Shipping Monaco — the vehicle
that has signed for rigs in China.
Apart from CIMC, Pistiolis
looked at other Chinese yards,
including Shanghai Waigaoqiao
Shipbuilding, as well as Keppel
Fels in Singapore.
“I like very much the age profile of the jack-ups,” he says,
adding that his company started
to look at orders around the third
quarter of last year.
“I like the industry a lot — it is
fast moving, which I like from
tankers as well. I am very motivated, like I was when I started
with tankers in the IPO.”
Growth phase Central has or-
dered on speculation, but the
company has started to line up
potential charterers as well as
managers and an operations
team. As for potential drilling
destinations, Pistiolis namechecks Mexico, Central America,
Colombia, Venezuela, Saudi Arabia and the United Arab Emirates.
He envisages a dayrate of
around $200,000 being achievable.
“For us, since we are in the
growth phase, we would prefer
to have something longer rather
than shorter so we can capitalise
on it, in the sense of having
them out of our mind and being
able to move on to do further
deals in the industry,” he says.
Pistiolis admits the company
has yet to decide on financing for
the order, with one possibility
being to roll them into alreadylisted TopShips — particularly if
he sees scope to order more rigs.
“The difference between private and public at this stage is,
what do you want to do — do you
want to stay with two, do you
want to make them four, or do
you want to make them 20? The
true answer is, I don’t know yet.
But if we want to really grow and
grow fast, I guess you need to go
to the public markets.”
Pistiolis says he was the first
to kick off a five-year run of
largely Greek shipowners going
public, so will his latest move
start a rig-ordering trend in
Athens and Piraeus?
“It could. I was quite substantially followed on the IPO. Quite
a few (Greek shipowners) are
cash rich, they have proven to be
very versatile at adapting to new
markets and new ideas, and to
join something that is making
good money.
“I’m sure they have looked at
it before — I mean, I haven’t reinvented the wheel.”