Transocean leads
Brazil rigs race
CIMC Yiulian eyes
Noble semisub job
Page 4
Page 8
THE INTERNATIONAL OIL & GAS NEWSPAPER
upstreamonline.com
VOL 19 • WEEK 9 • 28 FEBRUARY 2014
Teams battle for Ophir’s FLNG prize
Two consortia are battling to secure a prized design, engineering and construction contract for Ophir Energy’s
multi-billion dollar Block R floating liquefied natural gas project off Equatorial Guinea.
Page 5
Eyes on Kiev
Players keeping close
watch on Ukraine’s
gas market plans.
Pages 12 &13
Four legs for Mad Dog
Role model: the
Mad Dog 2
platform will be
an Atlantis
platform
lookalike
Photo: GVA
North Sea foil
Oil and gas sector
takes centre stage in
Scots independence
debate. Pages 14&15
$220.6
billion
The amount Brazil’s
Petrobras plans to
invest in its updated
five-year plan.
Page 50
BP HAS cast aside spar and TLP concepts and opted to develop its deepwater Mad Dog phase two project in the US Gulf using an integrated semisub
production platform designed by KBR and its subsidiary GVA.
Pages 2&3
Myanmar onshore round
set to break new ground
NEWS
2
COMMENT
10
POLITICS
12
WORLD
US state introduces
stringent emissions
rules for oil and gas
projects. Pages 34&35
Pages
ages 28 to 31
14
SHALE
34
LNG
40
GLOBAL OIL & GAS
CLASSIFIED 43
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Iraq bows to pressure
after Eni warns it will
quit country. Page 17
Colorado cap
Ghana
hana seeks progress
on co-operation path
Page 6
Zubair threat
FINANCIAL
50
2
28 February 2014
NEWS
BRIEFS
UGANDA
Albertine
acreage offer
UGANDA will launch an
acreage offering later this
year focused on the
Albertine graben.
Fred Kabagambe-Kaliisa,
permanent secretary at the
Ministry of Energy &
Mineral Development,
said: “Invitations to
prospective companies will
go out later this year...
especially for relinquished
areas where data exists and
has been upgraded, such as
Semliki and Taitai.”
Tullow Oil has
relinquished the Taitai
discovery area in Block 2 in
the Lake Albert area.
SINGAPORE
Marco Polo
books rigs
SINGAPORE’S Marco Polo
Marine has ordered up to
three newbuild jack-up rigs
at compatriot Sembcorp
Marine’s PPL Shipyard.
The owner ordered one
firm unit for $214.3 million
and left two optional
contracts at the yard.
The Pacific Class
400-design rig will be
equipped to operate in
water depths of up to 400
feet and to drill to depths
of up to 30,000 feet.
IRAQ
Weatherford
cuts back
WEATHERFORD plans to
sell off four non-core
businesses and wind down
operations in Iraq as part
of a larger plan to cut costs.
The global services giant
said it will divest its
pipeline and specialty
services, testing and
production services,
drilling fluids and
wellheads business units.
The company will
complete contracts in Iraq
“and exit the early
production facility
business for good,” it said.
The Mad Dog 2 semisub is dubbed “an
Atlantis look-alike”, with reference to the
large floater chosen by BP to develop its
deep-water Atlantis field in the US Gulf.
GULF OF MEXICO
BP opts to develop Mad D
UK giant in talks
with US engineer
while South
Korean yard
likely to take on
fabrication job
ERIK MEANS and
ANTHONY GUEGEL
Oslo and Houston
UK SUPERMAJOR BP has decided
to develop its challenging Mad
Dog phase two project in the
Green Canyon area of the deepwater Gulf of Mexico using an integrated semi-submersible production platform designed by KBR
and its Swedish subsidiary GVA.
BP is now understood to be negotiating a major front-end engineering design contract with
Houston-based KBR, with work
likely to start in the second quarter of this year and last 12 months.
BP’s timetable had previously
pegged FEED work to start in August, but sources now reckon it
will probably get rolling by May or
June.
A full engineering, procurement and construction contract
for Mad Dog 2 is expected to be
tendered towards the end of the
FEED contract period, and KBRGVA will be in an enviable position, potentially together with a
fabrication yard, for this lucrative
award.
The three major South Korean
shipbuilders — Hyundai Heavy
Industries, Daewoo Shipbuilding
& Marine Engineering and Samsung Heavy Industries — are already regarded as the natural contenders to carry out the
fabrication work on the giant
semisub.
If all goes according to plan, the
new platform could be completed
and installed by 2018.
Sources told Upstream that BP
gave notice late last week to rival
contractors Aker Solutions and
Decision made: BP chief executive Bob Dudley
Houston Offshore Engineering —
both of which had proposed tension-leg platform designs for Mad
Dog 2 — that it had decided instead to go for the semisub solution, with KBR designing the topsides and GVA handling the hull.
All three of these groupings —
Aker, HOE and KBR-GVA — had
performed pre-FEED work for BP
on their respective solutions late
last year after BP, in a bid to
achieve major cost savings, jettisoned its original plan to develop
Mad Dog 2 using a huge spar platform.
Sources said BP did not invite
GULF OF MEXICO
Houston
New
Orleans
TEXAS
LOUISIANA
RUSSIA
Licence for
Rosneft
RUSSIAN authorities have
signed a resolution
granting an exploration
and development licence to
Rosneft for the KayganskoVasyukanskaya-more
offshore structure northeast of Sakhalin Island.
Rosneft will have to pay
about $23.7 million for the
licence.
Atlantis
U S A
Green Canyon
Garden Banks
Main map
Holstein
Mad Dog
MEXICO
Keathley Canyon
Walker Ridge
bids for the FEED contract, choosing instead to make its preferred
choice based on the pre-FEED
work by the three camps.
The Mad Dog 2 semisub is
dubbed “an Atlantis look-alike”,
with reference to the large floater
chosen by BP to develop its deepwater Atlantis field in the US Gulf.
That unit has a nameplate topsides capacity of 27,000 tonnes,
whereas one source said the Mad
Dog 2 topsides is currently
planned to be “in the ballpark of
25,000 tonnes”.
This is considerably lower than
the 33,000-tonne topsides envis-
aged for the original spar platform
solution on Mad Dog 2.
Some of this weight reduction
could be attributable to KBR and
GVA being said to be working
closely together to design the
semisub as an integrated unit
from the outset.
Observers added, however, that
the size of the new semisub could
still change, with some sources
questioning whether dimensions
might rise again due to the extra
facilities needed to carry out BP’s
ambitious water-flood programme
on Mad Dog.
“It’s Atlantis with waterflood-
Na Kika 3 gets under way
SUPERMAJOR BP has started
production from the initial well
on its two-well Na Kika phase
three project in the deep-water
Gulf of Mexico, writes Blake
Wright.
The aim is to have the second
producer coming on stream by
the middle of this year. The Na
Kika 3 project included the
drilling and completion of the
Ariel-5 and Kepler-4 wells, and
subsea infrastructure to
tieback to the existing Na Kika
platform.
“The Na Kika phase three
project demonstrates BP’s
ongoing commitment to the
deep-water Gulf of Mexico,”
said Richard Morrison, BP Gulf
of Mexico regional president.
Initial production from Na
Kika, which is a series of subsea
fields tied back to a central
processing facility in
Mississippi Canyon Block 474,
began in November 2003.
The facility, which has a
throughput capacity of around
130,000 barrels per day of oil and
550 million cubic feet per day of
natural gas, is moored in more
than 6000 feet of water.
BP operates Na Kika with a
50% working interest and Shell
holds the remaining 50%.
28 February 2014
3
25,000
THE ESTIMATED
weight in tonnes of the
topsides for BP’s Mad Dog 2
semi-submersible.
Dog 2 with KBR semisub
Photo: REUTERS/SCANPIX
ing,” said one source. “What they
tried to jam on the spar they will
put on the semisub.”
BP is believed to be pleased with
the performance of the Atlantis
semisub in the US Gulf, which
may explain why it leaned in that
direction and away from the rival
TLP proposals.
Once convinced by KBR — after
months of review — that it could
squeeze the topsides onto another
GVA design, the contractors were
greenlighted to proceed.
BP’s trademarked LoSal waterflood technique — short for low
salinity — and associated equipment could push the total topsides
payload beyond 30,000 tonnes,
one industry source suggested.
LoSal has membranes to reduce
salt content, which helps to lessen
the swelling of the clays, thereby
flushing out more oil.
The technology is not so much
the challenge as ensuring there is
enough real estate for the kit. The
initial total number of wells
planned — 33, including 14 water
injectors capable of pumping
280,000 barrels of water per day
— may end up being scaled back.
Each well costs around $250
million to drill and complete,
sources said, so it becomes an easy
target for savings.
BP could resort to a phased ap-
additional finds such as Mad Dog
South will also be developed by
the new semisub.
When BP was studying the spar
it had envisaged production capacity of 120,000 to 140,000 barrels
of oil equivalent per day.
The entire Greater Mad Dog area
is believed to hold up to 4 billion
barrels of oil equivalent.
Danger of fatigue prompts riser rethink
BP IS studying alternative riser configurations
including a steel lazy-wave riser design for
mitigating fatigue from ocean currents and the
anticipated motions of the Mad Dog phase two
floating production semi-submersible in the
deep-water Gulf of Mexico.
The platform is expected to be moored on the
edge of the Sigsbee Escarpment in about 5000 feet
of water. Conventional catenary risers may be
ruled out, according to sources.
The concern is the potential for fatigue, not
only from normal platform movements, but also
from the mid and subsea currents — some of
Offshore Crane Technology
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proach to control costs, but the UK
supermajor is keen now on getting the platform built and on location in order to boost oil production from the existing Mad Dog
field.
Pressure is declining and the
longer BP waits to initiate waterflooding the less effective the programme could turn out to be. The
which approach five knots or more in velocity
— and eddies pinched off the Loop Current
phenomenon found in the deep-water US Gulf.
The only installation of a steel lazy-wave riser
in the US Gulf was carried out by Anadarko for the
Caesar-Tonga subsea tie-back to the Constitution
spar. The riser was outfitted with buoyancy
modules and strakes and fairings to help shed
vortex-induced vibration.
Technip was contracted for the design and
installation of that riser in 2012 and could be
called upon by BP to revisit the technology for
Mad Dog 2.
Bids for
ONGC
seismic
INDIA’S state-owned Oil & Natural Gas Corporation (ONGC)
has issued revised bid documents for a major 3D broadband seismic campaign valued
at more than $100 million.
Sources said ONGC has floated expressions of interest for a
shoot to take place off India’s
west coast and suggested
Petroleum Geo Services, Dolphin Geophysical, CGG and
WesternGeco will likely respond to the market inquiry.
The planned survey will cover 3925 square kilometres in
the western part of ONGC’s prolific Mumbai High asset and is
due to take place between October this year and May 2015.
Upstream reported this
month that ONGC cancelled its
previous 3D seismic invitation
to tender — then covering 2000
square kilometres — because
the lowest bidder, CGG, declined to negotiate on price.
Paris-based CGG had bid $67
million to $68 million to secure
the work but ONGC wanted the
company to lower its offer.
Under the revised tender exercise, ONGC almost doubled
the size of the 3D campaign and
wants it completed in a single
shooting season with the data
ready by February 2016.
This seismic survey will cover ONGC’s B-46, B-48, B-105 and
B-188 marginal fields in the
Mumbai High North-West area
as well as the WO-24-1, B-45
and B-192 discoveries in the
Cluster 7 region, currently being developed.
Most of these fields are in water depths of about 80 metres.
New Zhao
Dong plan
ROC Oil has submitted a new
plan to the Chinese authorities
that seeks to extend production out to 2023 at the Zhao
Dong oil complex in Bohai Bay,
writes Russell Searancke.
The “incremental development plan” was submitted in
late 2013 and Roc said it maximises production from the
fields until 2018.
After that, it proposes a detailed plan to enhance oil recovery from the fields until 2023.
This latter part of the plan will
require an extension of the production sharing contract.
NEWS
4
BP sends
drillship
to the US
UK SUPERMAJOR BP is mobilising the drillship Ensco DS-4
from Brazil to the Gulf of
Mexico to finish the last two
years of its contract, writes
Fabio Palmigiani.
The rig was originally chartered by BP to operate in the US
Gulf, but was later assigned to
Brazil following the Macondo
disaster in April 2010.
BP had been using the rig in
Brazil since mid-2011, when it
received approval to purchase
the Brazilian assets of US independent Devon Energy.
BP has drilled a total of eight
wells in Brazil over the last two
and a half years — Itaipu-2 and
Itaipu-3 in Block BM-C-32,
Talhamar, Grazina, Anu-1,
Benedito and Anu-2 in Block
BM-C-34 and the Pitanga duster
in Block BM-CAL-13.
The company had plans to
spud Itaipu-4 and Itaipu-5 in
BM-C-32 this year, and had the
option to carry out full assessment of BM-C-34 with a drillstem test at Anu-2 and the
drilling of five wildcats until
early 2018.
“The rig was contracted and
delivered to BP in the Gulf of
Mexico, so it’s just returning to
work where it was originally
chartered. There is nothing
magical about it and we are
getting full rate,” said Ensco
chief executive Daniel Rabun.
The Ensco DS-4 is chartered
for a dayrate of about $550,000
to BP until July 2016.
The decision to mobilise the
drillship to operate in the US
suggests that BP is taking a
break from its exploration programme in Brazil to focus on
promising acreage in the Gulf
of Mexico.
“The Ensco DS-4 going to the
Gulf of Mexico for drilling activity is a positive indicator for
demand in the region,” wrote
research company Cowen.
Ensco 7500
on market
ENSCO is seeking opportunities for the ultra-deepwater
semi-submersible rig Ensco
7500 following a series of
problems during its contract in
Brazil.
The drilling rig is chartered
to Petrobras until August 2014
for a zero dayrate — in January
both parties reached a mutual
understanding after the oil
company realised the unit was
not the best fit to drill development wells at the Papa Terra
field in the Campos basin.
“The Ensco 7500 is currently
idle as we market the rig, but
there are opportunities in
Brazil as well as some other
geographies around the world,”
said Ensco chief executive
Daniel Rabun.
With the drillship Ensco
DS-4 mobilising to the Gulf of
Mexico and the Ensco 7500
possibly heading to another
country, the UK-headquartered
drilling contractor will be left
with only five semisubs operating in Brazil.
28 February 2014
BRAZIL
On offer: the Transocean drillship Dhirubhai Deepwater KG1
Photo: TRANSCOCEAN
Transocean to the fore
in Petrobras rig tender
Drilling giant submits lowest bid as state-run Brazilian
player makes its return to the international market
FABIO PALMIGIANI
Rio de Janeiro
DRILLING contractor Transocean
has submitted the lowest bid and
emerged as the frontrunner in a
tender to supply Brazilian oil
giant Petrobras with one or more
rigs capable of operating in water
depths of 2400 metres.
Transocean easily beat the
competition after it proposed the
drillship Dhirubhai Deepwater
KG1 for a dayrate of $440,000.
According to a source, the
Transocean bid was 9.5% lower
than second place when factoring
in all the criteria.
The double-hulled, dynamically-positioned rig is presently contracted to Reliance Industries in
India until July 2014 for a dayrate
of $510,000.
The tender marked the first
time Petrobras has returned to the
international rig market after an
absence of more than two years,
as the company tries to secure
ultra-deepwater units in the short
term to cover possible delays on 28
newbuilds due to be delivered by
Sete Brasil from 2015 to 2020.
Queiroz Galvao Oil & Gas (QGOG)
finished second in the tender with
the newbuild drillship Brava Star
for a dayrate of $530,000, followed
by Seadrill with the cylindrical
semi-submersible rig Sevan
Developer for $490,000.
Despite a lower dayrate proposed for the Sevan Developer,
formerly known as Sevan 4, QGOG
ended up ahead in the competition with a cheaper mobilisation
fee and the fact that the Brava Star
is a dual-derrick rig, offering reductions in drilling time and costs
for both exploration and development wells.
“When Petrobras put everything on the balance to equalise
all proposals, the dual-activity
was one of the reasons that catapulted the Brava Star to the second spot,” said another source.
He said QGOG proposed the lowest mobilisation fee in the tender,
at about $30 million for the Brava
Star, while Transocean proposed
a mobilisation rate of more than
$50 million for the Dhirubhai
Deepwater KG1.
Seven other rigs were offered in
the tender, including three from
Ensco, another two from Seadrill
and one from Maersk Drilling.
Pacific Drilling finished last
with the drillship Pacific Meltem,
currently under construction at
Samsung Heavy Industries in
South Korea, for a dayrate of
$634,000.
Petrobras asked companies to
present only units with modern
DP-2 or DP-3 dynamic positioning,
either semisubs or drillships,
with planned start-up in the
fourth quarter of 2014.
All 10 bids submitted in the tender were for periods of three years,
with options to renew the contracts for the same time.
Petrobras relaxed some of the
bidding rules in the middle of the
process after contractors complained that plans to remove a key
clause would have exposed them to
extra risks in the event of well kicks
and blowout spill situations. Petrobras then relented and kept the
relevant clause in for the tender.
“Companies were afraid at first,
but then Petrobras listened to contractors and made the bidding
more attractive to rig players,”
said one source.
He also said the results of the
tender put additional pressure on
four contractors seeking the
extension of charters on six ultradeepwater rigs. Negotiations
between Petrobras and contrac-
tors have been going on for almost
a year now and have revolved
mainly around dayrates.
The rigs for which Petrobras is
seeking renewal terms are Pacific
Drilling’s drillship Pacific Mistral,
Diamond Offshore’s semisub
Ocean Valor, Seadrill’s semisubs
West Eminence and West Taurus,
and Ocean Rig’s drillships Ocean
Rig Corcovado and Ocean Rig
Mykonos.
All six contracts are due to
expire in 2015. The rigs are chartered on dayrates ranging from
$440,000 to $460,000, with the exception of the West Eminence and
West Taurus, contracted for
$615,700 and $647,500, respectively.
The source also revealed that
Petrobras received bids early in
February in a market enquiry to
assess the possibility of chartering rigs capable of drilling off Brazil in water depths of 1000 metres.
Companies that participated in
the tender for ultra-deepwater
rigs were also said to have submitted offers in the market enquiry,
but the outcome is unknown at
this point, as Petrobras has not
disclosed the results yet.
NEWS
28 February 2014
5
EQUATORIAL GUINEA
Consortia head to head
for Ophir’s FLNG project
Bumi-Keppel-IHI in face-off against Excelerate and
Samsung Heavy Industries for multi-billion dollar prize
TAN HWEE HWEE
and IAIN ESAU
Singapore and London
TWO consortia are facing off to
secure a prized design, engineering and construction contract
from London-listed independent
Ophir Energy, covering its multibillion dollar Block R floating liquefied natural gas project off
Equatorial Guinea.
Industry sources said a consortium of Kuala Lumpur-listed Bumi
Armada, Singapore-based Keppel
and Japan’s IHI is doing battle
with a pairing thought to consist
of Texas-based Excelerate and
South Korean giant Samsung
Heavy Industries.
The operator aims to select its
preferred bidder — under a memorandum of understanding — by
the third week of March, with one
source close to Ophir tipping
Bumi-Keppel-IHI as having an
edge.
The contract is expected to cover pre-front end engineering and
design and FEED studies, plus an
eventual build, own and operate
order.
Bumi and Excelerate have
signed separate letters of intent
with Ophir and the Malabo-based
government to indicate their commitment to working on the FLNG
scheme.
A final investment decision is
expected to be made on the project
by mid-2015, with first LNG exports starting in 2018, ahead of
gas exports from East Africa and
the US.
Excelerate and Samsung have
proposed a newbuild FLNG vessel.
However, their rivals have pitched
a converted unit, which sources
suggested is attractive to Ophir
and carries a price tag of about $2
billion.
In terms of liquefaction technology, Bumi is understood to be
offering a self-supporting prismatic type B (SPB) containment
system, with Excelerate focused
on a membrane process.
As Upstream went to press,
sources indicated Excelerate had
not asked for either price indication or a delivery slot for its proposal, pointing out that it is not
necessarily a given that Samsung
would build the vessel.
Ophir is understood to be eyeing a 2 million to 2.5 million tonne
per annum FLNG unit which will
be fed with gas from seven subsea
wells. The vessel’s minimum ca-
Cardona
success
for Stone
US INDEPENDENT Stone Energy has logged new drilling success at its Cardona discovery in
the Mississippi Canyon area of
the Gulf of Mexico with the latest well encountering 84 feet of
net oil pay.
The Block 29 number-4 hit
the pay in the previously-discovered zone.
The company currently is
running casing to protect the
sand while drilling the exploration section of the well.
The success extends the productive zone of the Block 29
TB-9 well to the adjacent fault
block to the north.
Plans are to flow the Cardona
well to the company’s Pompano platform, with first production in early 2015.
The current well is expected
to complete drilling operations
in next month.
Following the current well,
Stone plans to drill its Cardona
South prospect, also in Block
29.
Double-up for
Zola resource
CONTINGENT resources at the
Apache-operated Greater Zola
complex off Western Australia
have nearly doubled, according
to joint venture partner Tap
Oil.
Tap said the gross proven
and probable contingent resource at the Zola, Antiope and
Bianchi gas discoveries in
Block WA-49-R had been newly
assessed at 638 petajoules (601
billion cubic feet of gas).
The addition was due mainly
to the inclusion of resources
from the July 2013 Bianchi discovery.
These contain nearly 160 Bcf
of proven and probable contingent resources.
Three-well campaign: Vantage Drilling’s drillship Titanium Explorer
pacity is based on about 2.6 trillion cubic feet of gas so far discovered in Block R, and a feedstock of
about 400 million cubic feet per
day.
The upper capacity limit
depends on the success of a threewell drilling campaign which is
due to start in May or June, which
aims to add a further 2 Tcf of resource.
Vantage Drilling’s Titanium Explorer drillship will first spud the
420 billion cubic foot Silenius East
exploration probe, followed by
appraisal wells at the Fortuna and
Tonel North discoveries.
Block R’s gas is biogenic and
needs minimal processing, which
will reduce the cost of an FLNG
vessel. Ophir plans to lease the
FLNG vessel to reduce its capital
spending commitments, which
are expected to run to about $1 billion to first gas, rising to perhaps
$1.5 billion later on.
Petrofac is putting together an
overall Block R development plan.
Ophir has an 80% stake in Block
R and will begin to seek farminees
in mid-2014, when it will also start
to make inquiries for long-term
offtakers to underpin the project.
As well as buying Block R’s output, Ophir will look favourably on
them taking equity in the
upstream asset.
Ophir could potentially tap Singapore-based Pavilion Energy for
marketing support. As a new LNG
Photo: VANTAGE DRILLING
player backed by Singapore’s sovereign wealth fund, Temasek
Holdings, Pavilion Energy is
building up a portfolio of gas-rich
assets, including interests picked
up from Ophir in three blocks off
Tanzania.
Pavilion is expected to play a
key role in securing the LNG imports needed for Singapore to become a major LNG trading hub in
the Asia Pacific region.
A site selection study is underway for a second import terminal
earmarked for the eastern part of
Singapore while SLNG, the country’s first LNG terminal, looks set
to be expanded to boost its capacity to 9 million tpa from 6 million
tpa.
Output boost
for Shoreline
NIGERIAN independent Shoreline Natural Resources and its
technical partner Heritage Oil
have boosted output from OML
30 in Nigeria’s Delta State by
17% over the past year, with
net production running at
15,600 barrels per day.
Heritage’s chief executive
Tony Buckingham said OML 30
will be “a platform to grow and
obtain additional interests in
Nigeria and in other core
areas.”
OML 30 was one of four
blocks sold by Shell in 2011 as
part of its ongoing Niger Delta
divestment programme.
NEWS
6
Offshore
winners
face delay
THE announcement of the
winners of offshore blocks
offered in Myanmar’s first
licensing round is still some
way off, and there are signs that
some of the industry heavy
hitters that submitted bids
might be getting cold feet, writes
Amanda Battersby.
Some within industry had
been hoping the announcement
would coincide with this week’s
Myanmar Oil & Gas Week, but
sources close to the government
said it would likely not be until
April at the earliest — one year
after the round was launched.
“Don’t ask me when it will be
announced,” said Wah Wah
Thaung, executive officer at the
planning department of
state-owned Myanma Oil & Gas
Enterprise (MOGE).
Ken Tun, chief executive of
Myanmar company Parami
Energy, said this delay could
harm Myanmar’s investment
attractiveness.
He noted that neighbour
Bangladesh had launched its
offshore round after Myanmar,
yet had already announced
winners.
Despite the initial high level
of interest and bids being made,
several operators have told
MOGE that they do not consider
six months to be sufficient time
to prepare the environmental
and social impact assessments
as required under existing
production contract sharing
terms.
Wah Wah Thaung admitted
this to delegates at ITE’s
Myanmar Oil & Gas Week
adding that she had conveyed
these concerns to the Ministry
of Energy.
Another “huge concern” is a
clause in the model PSC that
affords Myanmar certain
“unalienable rights” as this
effectively undermines the now
revised Foreign Investment Law
that affords companies the right
to international arbitration for
dispute resolution, according to
Jean Loi, managing partner at
law firm VDB Loi in Myanmar.
Another issue is that bidders
are only allowed to bid for a
maximum of three blocks from
the 30 tracts that compromise
the maiden offshore licensing
round.
On a positive note, Loi said
she knows of operators that
requested amendments to some
contract terms during contract
negotiations with MOGE and
the national outfit responded
favourably.
MOGE is also said “not to be
unreasonable” with regard to
companies relinquishing
acreage after disappointing
initial exploration without their
completing the entire
commitment work programme.
Another factor is that MOGE’s
expectation of the signature
bonus for deep-water
exploration blocks might not be
“that high” because of the
exploration risk, added Loi.
MOGE received 64 proposals
from 30 companies for its 2013
offshore offering — 42 for
shallow-water blocks and 22 for
deep-water blocks.
28 February 2014
MYANMAR
On the rise: a hot air balloon flies over a temple in Mandalay, Myanmar
Photo: AFP/SCANPIX
Myanmar onshore round
set to break new ground
Licensing exercise may feature acreage for unconventional exploration,
with energy authorities planning to learn from Thai contract models
AMANDA BATTERSBY
Yangon
MYANMAR plans to launch an
international onshore licensing
round this year that for the first
time could include acreage being
offered for unconventional exploration.
Much debate is going on regarding whether to offer some of the
onshore blocks that were historically reserved for Myanma Oil &
Gas Enterprise (MOGE) but where
the national company has either
been unsuccessful in its exploration forays or has reached a technological impasse.
Such blocks could be included in
the third onshore round as Nay
Pyi Taw is keen to maximise upstream activity, said MOGE executive geologist Kyaw Kyaw Aung.
Blocks PSC-P (Myaungmya),
PSC-Q (Payagon), MOGE-6 (Indaing) and MOGE-7 (Myanaung East)
are reserved for MOGE until this
year but these could be offered
with unconventional production
sharing contracts in the 2014 onshore round.
MOGE and other government
energy officials plan to visit Thailand to learn the contract model,
terms and conditions for uncon-
ventional exploration. “Once the
managements come to know
about the PSC model and terms
and conditions of unconventional
exploration, the blocks occupied
by MOGE could probably be released with an unconventional
PSC contract in 2014,” said Kyaw
Kyaw Aung.
However, there will be no tender invitations for enhanced oil
recovery or improved petroleum
recovery contracts on MOGE’s
blocks RSF-1, 6, 8, MOGE-2, 5 and
IOR-1 in the upcoming onshore
bid round.
“As the Ministry of Energy is
quite interested in unconventional exploration and production
nowadays, foreign companies
should pay attention in presenting [such] new techniques,” said
Kyaw Kyaw Aung.
The government wants such
technologies to be transferred to
the national oil and gas company,
he said.
MOGE earlier signed a landmark
memorandum of agreement with
Daewoo to perform a feasibility
study into unconventional exploration, said to be shale gas, on on-
shore blocks RSF-7 and MOGE-8.
Kyaw Kyaw Aung took pains to
explain it did not mean MOGE
would be awarding without international tender two production
sharing contracts to Daewoo —
the agreement only covers the
feasibility study.
Australian company Tamboran
has applied to carry out a feasibility study into unconventional exploration in the HtaukshabinKanni areas but to date has not yet
received permission from the
Ministry of Energy.
Eight blocks — PSC-C2 (ShweboMonya), PSC-L (Sittwe), PSC-M
(Kyaukphyu), PSC-S (Hsipaw-Lashio), PSC-T (Lashio East), PSC-U
(Kalaw), PSC-V (Loikaw) and IOR-3
(Tetma) — that were without takers in the 2013 second onshore bid
round will definitely be included
in the third round, added Kyaw
Kyaw Aung.
It is not yet known whether all
or how many of the 30 offshore
blocks offered in the April 2013
round for which bids are still
being evaluated will ultimately be
awarded.
If all 30 are taken up this
will leave just three shallowwater blocks — A-2, M-1 and M-10,
the last of which was relinquished
by China National Offshore Oil
Corporation (CNOOC) — still available.
Kyaw Kyaw Aung said Block
M-10 is “the most interesting” of
these three shallow-water tracts
because it is located near to Block
M-9 where PTTEP will soon begin
flowing gas from the Zawtika
project.
CNOOC drilled six wells to
depths of between 6000 and 7000
feet, but the structures hit were
not commercial and the Chinese
operator was also unable to farmdown the block.
Essar drilled one well on Block
A-2 but did not perform production testing.
Rimbunan drilled one exploration well without testing on
Block M-1, then acquired additional 2D seismic data before relinquishing the acreage without
sinking a second well.
Government officials said they
expected the second offshore
licensing round would be possible
in early 2015.
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NEWS
8
Change
on way for
Petronas
A SUCCESSION plan is being
lined up at Petronas’ twin towers for Shamsul Azhar Abbas,
the chief executive of the Malaysian national oil company,
whose contract is due to expire
by 2015, writes Tan Hwee Hwee.
Shamsul has recently taken
more of a back seat, handing
over day-to-day operations to
Wan Zulkiflee Bin Wan Ariffin,
who was appointed as chief
operating officer in 2013, sources said.
Wan Zulkiflee, who also
serves as executive vice president of downstream, is among
those seen as a candidate to potentially succeed Shamsul in
the top job.
Anuar Taib, who joined as
president of upstream unit
Petronas
Carigali
from
Sarawak Shell, is also considered a strong contender.
The third candidate more recently identified within Malaysian circles is Ahmad Nizam
Salleh, who until recently was
chief executive of South Africabased Engen.
Two other previously named
potential contenders are Petronas’ vice president of corporate
strategic planning, Arif Mahmood, and Petronas Lubricants
chief executive Amir Hamzah.
Arif orchestrated the acquisition of Canada’s Progress
Energy Resources.
Shamsul has already announced his intention to retire
when his contract expires in
2015.
However, recent movements
made by Petronas’ board have
sparked speculation his retirement could be brought forward
to the first half of 2014.
A new face at Petronas’ top
office will likely herald a major
reshuffle within the management team, including the executive vice presidency for exploration and production
business presently held by Wee
Yiaw Hin.
Wee, a former Shell and Talisman executive, was brought
in by Shamsul to lead the challenge of reversing falls in domestic oil and gas production.
Buyers line
up for deal
MALAYSIA’S Petronas is set to
sell a 25% share of its Canadian
shale-liquefied natural gas
position to Indian and other
Asian buyers, according to
chief executive Shamsul Azhar
Abbas.
“I am pleased to announce
that we have just finalised a
further 25% equity participation from an Indian party and
an established Asian LNG buyer,” Shamsul said, according to
Reuters.
Shamsul said he could not
name the companies before the
signing of the deal, which is
planned for next week.
However, Indian Oil Corporation has been cited as a
potential buyer of a 10% stake
since last year.
28 February 2014
RIG MARKET
Options: Huisman’s production facility in Zhangzhou, China
Photo: HUISMAN
CIMC Yiulian tipped for
Noble semisub contract
Chinese yard emerges as frontrunner to build unit for US player,
while drilling equipment package goes to Dutch specialist Huisman
XU YIHE
Singapore
CHINESE yard CIMC Yiulian is in
pole position to secure a landmark
contract from drilling contractor
Noble Drilling Services to build a
semi-submersible rig for $200 million to $250 million.
Sources said that although a final contract is still pending, Noble
has agreed terms with Shenzhenbased Yiulian after having floated
a tender last year that also drew
participation from China’s Cosco
Shipyard, Shanghai Waigaoqiao
Shipbuilding and Singapore’s
Jurong Shipyard.
The deal could be finalised soon
after Noble signs a charter agreement, which many sources said is
one of the key parameters for
Noble to start the project.
They added that Yiulian
emerged as a strong contender by
offering a very competitive price
and has agreed to be the lead contractor on a turnkey basis.
Yiulian’s offer does not include
the drilling equipment package,
which will be supplied by Dutch
heavy lift equipment specialist
Huisman.
Other bidders including Cosco
would prefer to act as a subcontractor with a workscope of
building only the hull, while leaving the integration and completion
to be carried out by Huisman.
Noble is keen to commission
Yiulian as the lead contractor responsible for project financing,
which other yards considered
harbours excessive financial risks.
Sources also pointed out that another possible option is to complete
integration in Zhangzhou in Fujian
province, where Huisman owns
and operates offshore fabrication
facilities.
Once a deal is signed, Yiulian is
expected to complete the unit in 33
months, sources said, adding that
Yiulian is currently carrying out
workshop design. The newbuild
Eva Plus, a Zentech-Noble design
rig, will be classed by ABS and be
able to work in water depths of
1500 feet (457 metres) with drilling
depths of 30,000 feet (9754 metres).
The unit will have three lifting
cranes, with two on deck having a
capacity of 100 tonnes each.
The living quarters are built to
accommodate 154 people.
Upstream earlier reported that
Noble had been doing the rounds
presenting the concept to oil companies and was unlikely to place
speculative orders, preferring instead to first line up charters with
oil companies.
Including the Paul Wolff, Noble
has five EVA-design rigs in its fleet.
All were built in the early-1980s as
three-column submersibles for operations in shallow water.
However, during the 1990s
Noble, reacting to a surge in demand for deep-water rigs, opted to
spend billions of dollars converting
the five EVA rigs to semisubs capable of operating in maximum
depths of between 1200 and 2800
metres of water.
Yiulian has so far specialised in
jack-up rigs, especially of the CJ46
design.
The yard has booked deals to
build up to 18 jack-ups, including
12 CJ46, four CJ50 and two JU2000E
design rigs.
Noble contracted China’s Dalian Shipbuilding Industry Offshore (DSIC Offshore) to upgrade
a semi-submersible drilling rig in
2008.
DSIC Offshore delivered the unit
upon mechanical completion for
integration and overall completion
at a yard in Brazil in 2009.
The Chinese yard in Dalian also
built and delivered three JU2000E
jack-up rigs to Noble — Noble
Roger Lews, Noble Hans Duel and
Noble Scott Marks, respectively, in
2007, 2008 and 2009.
Heerema Marine Contractors takes out Liwan 3-1 award
ITALY’S Saipem is understood to
have awarded Dutch oilfield services provider Heerema Marine
Contractors a lump-sum deal for
pipeline installation at the Husky
Energy-operated Liwan 3-1 deepwater gas development in the Pearl
River Mouth basin of the South
China Sea, writes Tan Hwee Hwee.
A letter of intent is was issued
to the Dutch player for the installation of about 37 kilometres of 22inch deep-water pipeline in 1500
metres of water at the Liwan 3-1
project using Heerema’s newbuild
J-lay vessel Aegir.
Aegir will take over from
Saipem’s pipelay crane vessel
FDS-2, which is said to have demobilised from Liwan for other
commitments.
Aegir is due to mobilise towards
the end of May for the
Liwan job from Anadarko’s Lucius
field in the Gulf of Mexico.
The deep-water J-lay vessel is
expected to arrive at Liwan in
early June for an offshore installation campaign lasting through
early August.
The scheduled pipeline installation at Liwan will be Aegir’s first
campaign in Asia.
Aegir will next move on to the
Inpex-operated Ichthys gas development off Australia’s Northern
Territory.
The deep-water construction
vessel will transport and install
subsea pipelines and moorings for
the planned floating production,
storage and offloading vessel and
central processing facility at the
Ichthys project.
The lump-sum deal for Liwan is
Aegir’s third contract win in the
Asia Pacific region, after earlier
awards from Inpex and Shell for
work on the Ichthys project and
the Malikai tension-leg platform
development off Australia and
Malaysia, respectively.
NEWS
28 February 2014
9
MIDDLE EAST
New tender for NEB 3 project
Adco launches exercise for offshore Al-Dabbiya field
— part of North East Bab 3 development that aims
to boost company’s output by 110,000 bpd by 2018
VAHE PETROSSIAN
London
ABU Dhabi Company for Onshore
Operations (Adco) has received
technical proposals in a tender for
the offshore Al-Dabbiya field as it
finalises its selection of a contractor for the onshore Rumaitha and
Shenayel fields that make the up
rest of the $1 billion North-East
Bab 3 (NEB 3) development.
The Al-Dabbiya technical bids
will be evaluated over the next
two months and price offers will
be invited in May or possibly later
if there is an extension of the
schedule, a source said.
Al-Dabbiya covers a series of
low-lying islands in an environmentally sensitive coastal region
of Abu Dhabi.
The key facilities will require
construction of artificial islands.
The third phase of the NEB
development, for which Mott
MacDonald is acting as management consultant, aims at raising
Abu Dhabi’s production capacity
by 110,000 barrels per day by 2018.
MacDonald earlier this year
helped evaluate and select the winning proposal for the Rumaitha
and Shenayel fields — following
technical and price submission by
eight bidders late last year.
The selection has yet to be confirmed and announced by Adco.
The package for the onshore
Rumaitha and Shenayel fields, 30
kilometres south of Al-Dabbiya,
covers a new processing plant and
a new gathering system involving
17 clusters and injection facilities.
Technip carried out the frontend engineering and design studies for both the onshore and off-
shore facilities. A partnership of
France’s Technip and Abu Dhabibased National Petroleum Construction Company (NPCC) built
facilities in 2006 for an existing
110,000 barrel per day capacity in a
$600 million contract.
The NEB 3 development is part
of Adco’s plan to increase overall
output to 1.8 million bpd from
1.4 million bpd by 2018.
The overall expansion plan
involves North East Bab, Bab
itself, Qusahwira, Ruwais and
Bida al-Qemzan.
The emirate’s total capacity is
being increased to 3.5 million bpd
by Adco’s parent company Abu
Dhabi National Oil Company.
Search the archive:
Adco
Teaming up
for Kepodang
INDONESIA’S state-owned gas
utility Perusahaan Gas Negara
(PGN) is reportedly teaming up
with local conglomerate Bakrie
Group on building the planned
export pipeline connecting the
Petronas-operated Kepodang gas
development to Tambak Lorok.
PGN could not be reached for
confirmation over media reports
about the partnership for the
210-kilometre pipeline, but Bakrie
Group was long known to be
struggling to put together the
necessary funding for the project.
PGN’s involvement will breathe
fresh hope into the stalled pipeline project widely considered as
holding back progress towards the
targeted first gas production at
the Kepodang development before
the end of 2014.
Citing a SKK Migas official, an
Indonesian business daily said
work on the Kepodang export
pipeline will begin in March 2014,
with the aim of completing installation in mid-2015.
However, Upstream understands PGN and Bakrie Group are
still working towards securing a
pipelay vessel for the Kepodang
export pipeline.
The Kepodang gas development
also includes a wellhead platform
and a central processing platform,
which its field operator has awarded separately to McDermott of the
US.
Calgary
Houston
London
Jakarta
February 27th and 28th
One on one meetings and
data room availability
March 3rd through March 6th
One on one meetings and data
room availability
March 6th Road Show presentation
March 17th and March 18th
One on one meetings and data
room availability
April 4th Road Show
presentation
Hilton Américas
1600 Lamar St, Houston,
TX 77010, USA
Grosvenor House,
JW Marriott Hotel
86-90 Park Lane, London
(Open to the general public)
(Open to the general public)
Calgary Marriott
Downtown Hotel,110 9th
Avenue SE, Calgary,
Alberta, Canada
JW Marriot Hotel Jakarta
Jalan DR Ide Anak Agung
Gde Agung Kav E.1.2 No
1&2, Kawasan Mega Kiningan
Jakarta 12950 Indonesia
Shedule your meeting today: rondacolombia2014@anh.gov.co - www.rondacolombia2014.com - 018000953000
10
28 February 2014
COMMENT
Scotland forces focus
on oil and gas sector
T
HE UK political
establishment in
London has
suddenly discovered
Scotland and North Sea oil, it
seems.
This week UK Minister
David Cameron held his first
Cabinet meeting in Scotland
and used the occasion to
promise a £200 billion ($333
billion) energy revolution
— a far cry from the £10
billion windfall tax grab this
time three years ago.
Both Scotland and oil have
received less than their fair
share of attention in the past
and the new focus is
welcome.
The reason for this
awakening largely stems
from the sudden realisation
that later this year Scotland
could vote for independence.
The UK government is now
desperate to prove that it
takes oil and gas — largely
located in Scottish waters
— very seriously.
A political schism between
the two nations — joined
politically since the Act of
Union in 1707 — would have
a dramatic impact on the UK
as a whole, currently also
made up of Wales and
Northern Ireland.
A secession by Scotland
would certainly reinvigorate
a Welsh nationalist party,
and what then for the once
mighty Great Britain? Would
that seat on the United
Nations Security Council
still be available?
The political and economic
implications are profound,
but few believed in recent
times Scotland would go it
alone.
The latest opinion polls
also suggest it is still
unlikely, as the practical
obstacles mount for
Scotland’s First Minister and
Scottish National Party
leader Alex Salmond.
However, the polls also
show that support for
independence is gaining
ground and Cameron is
becoming aware that he has
a serious fight on his hands.
The key to Scottish
economic independence is
centred on oil and gas
reserves, with more than
90% generally considered to
fall inside Scottish waters.
There may be little room
for bickering between the
two newly-separated
nations if independence does
happen, but the oil industry
has already expressed
concerns about the added
bureaucracy and the
potential for restructured
and separate tax regimes.
Would an independent
Scotland be more
sympathetic to the needs of
the hydrocarbons sector?
You might have thought
so, but what if its shrunken
tax and business base was
strapped for cash?
Could it kill the golden
goose in a rash tax grab
itself?
In the meantime, the UK
government has belatedly
woken up to the need for
The key to
Scottish
economic
independence
is centred on
oil and gas
reserves, with
more than
90% generally
considered to
fall inside
Scottish
waters.
political attention to focus
on the North Sea’s falling oil
and gas production.
Last summer, Energy
Secretary Ed Davey
commissioned former
oil-services leader and Wood
Group founder Ian Wood to
review the sector.
His report was also out
this week and the £200
billion promise from
Cameron was based on
Wood’s findings.
Wood is basically calling
for a new regulator to
co-ordinate more
collaboration and
integration between
government and industry.
He had no brief to
investigate fiscal issues, but
the new regulator is
specifically tasked with
advising the Treasury.
Equally, the Wood Report
is heavy on oil company
obligation, but is light on
incentives.
There will also be
questions about where the
new regulator will recruit
the relevant skilled staff in
times of shortages.
However, this kind of
attention can only be good.
It is only a pity it took a
wider political threat to
bring it about.
Russia’s tough rhetoric against
Ukraine’s new leaders... may quickly
break the historic ties between these
two Slavic countries.
Russia must heed
voice of Ukraine
Populist ousting
of Yanukovich
irks Moscow, but
its opposition
now risks loss
of goodwill for
many years
T
HE abrupt ousting of
Ukraine’s President
Viktor Yanukovich and
the imminent
formation of a new government
and administration in Kiev is
quickly becoming another bone
of contention between Russia
and the West.
With relations between the
two sides already tense because
of Russia’s support for Syria,
the opposition victory in
Ukraine has dealt a blow to
Russian hopes of turning its
neighbour into a full political
and economic ally, if not a
subordinate.
Russian government officials
and experts had failed to
predict the wide popular
support for the opposition in
Ukraine and the sharp reaction
from ordinary Ukrainians to
tough police actions in the
streets of Kiev, which are often
seen in Moscow these days.
The Kremlin responded by
turning to the usual rhetoric of
blaming the West and accusing
its intelligence agencies of
masterminding and financing
opposition protests in Ukraine.
While the West welcomed the
change of power in Kiev,
Moscow has repeatedly
questioned the legitimacy of
Ukraine’s new leaders, led by
interim President Aleksandr
Turchinov, describing events in
the country as an “armed
mutiny”.
Earlier this week, Moscow
suspended financial assistance
and recalled its ambassador
from Kiev, refusing to
acknowledge allegations of the
economic harm that
Yanukovich and his circle of
relatives and friend had done to
Ukraine and its economy.
Russia’s Duma lower chamber
of parliament has also called for
authorities in Ukraine’s
Crimean Peninsula to hold a
referendum on whether the
region should become a part of
Russia, fuelling separatism
claims that are dividing
New order: anti-government protesters in Kiev
Photo: REUTERS/SCANPIX
Ukrainian society. However,
the Kremlin has stopped short
of using another traditional
weapon against Ukraine — gas
supplies.
So far, Russian gas exports to
Europe via Ukraine have been
uninterrupted, while a recent
slump in gas sales in Ukraine
has been explained by warm
weather, with temperatures in
February above normal.
A sharp contrast to the
Kremlin’s pronouncements on
Ukraine’s power shift was seen
in the reaction from European
Union officials and the US.
German Chancellor Angela
Merkel was reported to have
called opposition leader Yulia
Tymoshenko, released from a
prison cell over this past
weekend, and urged her to
work for unity of the country.
Meanwhile, Poland has risen
as a regional political and
diplomatic power, acting as a
mediator between Kiev and
other European countries, also
to the displeasure of Moscow.
On the economic front, the
EU Commissioner for Economic
Affairs, Olli Rehn, said that
substantial financial aid for
Ukraine could be on the agenda.
US Treasury Secretary Jacob
Lew said that the best approach
would involve “international
support through the
International Monetary Fund
and bilateral support”.
Ukraine’s finance ministry
said that $35 billion may be
needed over the next two
years, with Turchinov calling
for a quick financial support to
assist authorities in stabilising
its domestic currency, the
hryvna.
Russia’s tough rhetoric
against Ukraine’s new leaders,
its apparent public support of
separatist movements, the
refusal to provide earlier agreed
financial assistance and its
criticism of the West, however,
may quickly break the historic
ties between these two Slavic
countries.
From here on in, Russian
President Vladimir Putin is
losing more than he is gaining
by refusing to acknowledge the
choice of the majority of the
Ukrainian population.
If the Kremlin continues to
pursue the same approach
towards Ukraine, this country
may become lost to Russia for
many years.
28 February 2014
11
$35 billion
THE AMOUNT of
financial aid Ukraine says
it may need over the next
two years.
Chevron’s
pizza PR
problem
SIDETRACK
I
Battle of Britain: North Sea oil and gas reserves are at the heart of the debate over Scottish independence from the UK
UPSTREAM/RYTIS DAUKANTAS
Scaroni’s outburst gets results in Iraq but
time will tell if the change is permanent
B
YZANTINE bureaucracy
has long stifled the
growth of Iraq’s oil
industry, to the chagrin
of international oil companies
which embraced tough terms to
develop its giant fields.
Some companies, such as
Statoil and ExxonMobil, have
left or reduced their exposure to
a country that has failed
miserably to cut red tape and
create a secure environment for
foreign investors.
The more patient are having
second thoughts about their
commitments to oilfield
developments, and are voicing
their anger publicly.
A normally sober-headed
Paolo Scaroni, chief executive
of Italy’s Eni, could hardly hide
his emotions earlier this month
in denouncing persistent
bureaucratic hurdles in the way
of approving key contracts.
Eni is running far behind
with the development of the
Zubair field because the Iraqi
Cabinet takes a painfully long
time to sanction expenditures.
Eni can no longer take it and
would be happy to quit Iraq,
Scaroni warned. “We are asking
ourselves, is it worth it to stay
in Iraq?” Scaroni said.
“Either you remove the
obstacles, or we remove
ourselves,” he says he told Iraqi
officials, including powerful
Deputy Prime Minister for
Energy Hussein Shahristani.
Scaroni’s outbursts seem to
have finally found a sympathetic
ear in the Iraqi Cabinet, which
moved to approve two Zubair
packages worth $1 billion.
“We respect Eni and take their
opinions seriously. We want
them to stay,” said an Iraqi
official.
Eni is not the only company
faced with long delays in
rehabilitating Zubair, where
expansion has progressed at a
snail’s pace since 2009.
BP also had to lay off contract
workers at its Rumaila field
because the Oil Ministry has
failed to approve contracts
aimed at expanding production.
Companies complain of
numerous delays in the
approval of visas for
expatriates, as the Iraqi
government pressures them to
employ poorly-trained locals.
It remains to be seen if the
latest step by the Cabinet to
approve contracts for Eni is the
beginning of a new era — or
simply a move to stave off the
departure of yet another major
company from Iraq.
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T HAS not yet been
determined what
caused Chevron’s
Lanco-7H well in
Pennsylvania in the US to
blow out and burn for days,
killing one worker. However,
the fallout from an ensuing
public relations blunder was
almost entirely the
company’s own doing, writes
Luke Johnson.
It was a well-intentioned
mistake. In the days
following the blowout,
Chevron representatives
went door-to-door to check
in with local residents, give
an update on the stillburning well and answer
questions.
As a “token of appreciation”
to locals put out by the traffic,
noise and inconvenience of a
gas-fed well fire in their back
yards, Chevron offered their
“neighbours” coupons for a
free large pizza and a large
drink.
It was a nice enough
gesture, intended to not only
placate angry residents but to
express gratitude to Bobtown
Pizza, which had provided an
operational headquarters for
Chevron during its response
to the blast.
Unfortunately for
Chevron, a local blogger got
hold of one of the 100 or so
vouchers and posted it
online with a headline about
a peace offering that seemed
paltry and frivolous given
the gravity of the situation.
Days later, Chevron was
being pilloried around the
world, excoriated for a move
that struck many as
shockingly tone deaf.
Everyone loves free pizza,
but Chevron probably should
have been more aware of the
stakes. Anti-frackers keep a
close eye on industry
missteps — real and
perceived — and this is one
that could have been easily
avoided.
The fires are out and the
wells are capped, but public
resentment will likely
smoulder for some time.
© All articles, pictures and graphics
appearing in Upstream are
protected by copyright.
Any unauthorised reproduction is
strictly prohibited.
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This edition was printed on 26 February 2014
12
28 February 2014
POLITICS
Nigeria in
financial
turmoil
NIGERIAN Minister of Finance
Ngozi Okonjo-Iweala has demanded a full independent investigation into claims of unaccounted oil funds misplaced
by the Nigerian National Petroleum Corporation (NNPC),
writes Barry Morgan.
The move highlights anxiety
at the highest levels of government over last week’s suspension of Bank of Nigeria Governor Lamido Sanusi.
Iweala said she understood
her own ministry’s efforts at
reconciling accounts had demonstrated a shortfall in remittances of $11 billion, but conflicting claims by Sanusi
suggested discrepancies of
some $20 billion.
“I therefore want to see the
truth from an investigation by
the auditor general as a matter
of extreme urgency undertaken by independent external
auditors.”
The controversy is the latest
in a series of blows to the
credibility of Nigeria’s financial system at a time when local and foreign lenders are being asked to bankroll
development ventures in the
wake of Shell’s ongoing divestment programme.
The debt-equity markets are
already saturated with applications from indigenous players
angling to shore up financial
credibility ahead of bid submissions, and the current turmoil makes their task harder,
according to the chief executive of one UK-based explorer.
NNPC group managing director Andrew Yakubu this
week vigorously defended the
state company before the
House Committee on Upstream
Petroleum against charges that
officials had connived with
Swiss oil traders to market
crude below market price and
pocket the difference.
The Nigerian Extractive Industries Transparency Initiative (NEITI) earlier hinted that
about $8 billion was lost annually through crude swaps
whereby oil was lifted in exchange for refined products.
Yakubu defended local and
international traders, several
of which are currently bidding
for strategic acreage under
Shell’s latest divestment exercise in the eastern Niger Delta.
Against this backdrop, lawmakers bemoaned delays to the
reforming Petroleum Industry
Bill, designed to restructure
the sector and impose transparency.
Rivers State Governor Rotimi
Amaechi this week blasted the
federal government for refusing to allow his office to import
two US helicopters for deployment in illegal oil bunkering
surveillance, hinting at official
collusion in oil theft.
The oil workers will be on the
streets to defend the revolution.
We do not fear fascism.
Venezuelan Energy Minister Rafael Ramirez
UKRAINE
Aftermath: a memorial for the victims of the recent violence in Kiev
Independent gas players on
With former president Yanukovich apparently on the run and
protesters still in the streets, the country’s interim energy minister
is facing some major decisions regarding Ukraine’s gas supply
VLADIMIR AFANASIEV
Moscow
DRASTIC political changes in Kiev
and the resumption of rapprochement between Ukraine and Europe have already invoked cautious hopes that the nation’s
state-dominated energy sector
will open up to independent players.
Ukraine’s interim Energy Minister Eduard Stavitsky expressed
hope that the new authorities will
foster the liberalisation of the domestic gas market to reduce the
country’s exposure to fluctuations
in Russian gas prices.
Speaking to the Kiev-based
Kommersant Ukrainy daily,
Stavitsky said the new government should promote the arrival
of independent gas suppliers to
the domestic market.
In addition, the opening of
Ukraine’s vast underground gas
storage facilities in the west of the
country to European gas players
could create a new gas hub.
This would in turn reduce the
monopolistic role of state-owned
gas operator Naftohaz Ukrainy to
just co-ordination and supervision, according to Stavitsky.
He added that the emergence of
independent gas suppliers in
Ukraine’s domestic market would
increase their bargaining power
in negotiations with Russia’s state
controlled monopoly Gazprom.
Despite the Kremlin’s negative
feedback on the opposition seizing
power in Kiev, Stavitsky expressed the belief that economic
reason between Ukraine and
Gazprom will prevail over politics.
Ukraine hopes that Gazprom
will extend the discount on gas
supplied to Ukraine into the second quarter, he said.
Naftohaz is currently importing
Russian gas at about $269 per thousand cubic metres, compared with
last year’s average price of $410 per
thousand cubic metres under the
agreement between the company
and Gazprom.
The agreement was signed in
December after the refusal of thenpresident Viktor Yanukovich to
sign an association agreement
with the European Union. The discounted Russian gas price will
have to be re-confirmed in March
in negotiations between the two
companies, otherwise it will automatically return to last year’s level.
However, government officials
in Moscow have indicated this
week that they have yet to recognise any legitimate power in Kiev
with whom they can hold talks.
Stavitsky revealed that despite
a wave of domestic non-payments
for supplied gas and uncertainty
about the state’s financial reserves, Naftohaz has been able to
pay $1.68 billion to Gazprom to reduce its $3.3 billion debt in the
Foreign oil workers evacuated as South Sudan peace talks fail
TALKS in the Ethiopian capital
Addis Ababa designed to hammer
out a peace accord between South
Sudan’s warring factions have
broken down, writes Barry Morgan.
Regional pressure to accept an
arrangement that excluded both
President Salva Kiir and former
vice president Riek Machar from
power was rebuffed. Fighting continued in Jonglei State with the
South Sudan Liberation Army
(SPLA) claiming to have killed 200
rebels loyal to Machar at Gadiang,
and to have retaken the town.
In Upper Nile State, aid workers
fled the town of Malakal as factions vied for control of the strate-
gic capital. The SPLA this week
admitted to conducting a “tactical
retreat” from Malakal while the
government evacuated foreign
technical engineering workers
from the oilfields.
Upper Nile State Minister for
Mining and Petroleum Francis
Ayul insisted that not all oil work-
ers had been evacuated and that
trained local workers would remain to maintain production operations.
Output from the Upper Nile’s
Adar Yale fields as well as Unity
State’s Heglig field complex has
dropped off significantly since
conflict erupted in mid-December.
28 February 2014
13
$269
THE AMOUNT per thousand cubic
metres that Ukraine is currently paying for
Russian gas under a deal signed by ousted
president Viktor Yanukovich last December.
Current model unviable says Moily
in defence of Indian gas-price rise
Photo: REUTERS/SCANPIX
on Kiev watch
INDIA’S Petroleum Ministry has
written to Prime Minister Manmohan Singh justifying the increase in gas prices from 1 April
and has claimed the government
cannot terminate the contract for
Reliance’s D6 deep-water block.
Indian Petroleum Minister
Veerappa Moily cited arbitration
as the primary reason for the ministry’s inability to cancel Reliance’s contract in his letter to
Singh on 14 February.
“In view of the contractual provision under the PSC (production
sharing contract), the government will not be able to terminate
the contract on account of a shortfall in production as the matter is
pending before the arbitral tribunal,” Moily wrote in his letter to
Manmohan Singh.
The United Progressive Alliance
(UPA) government led by Singh is
facing heat from opposition parties over the issue.
With elections due in a few
months, the government fears gas
pricing is likely to spiral in to a
major poll issue.
The Aam Aadmi Party (AAP) led
by anti-corruption activist Arvind
Kejriwal has demanded that gas
prices should not be increased.
Kejriwal has alleged a “gas scam”,
claiming the government is favouring Reliance.
Responding to Kejriwal’s allegations, Moily said that the existing
contract does provide for termination if there’s a default by the contractor. However, in 2012 the pe-
‘GAS SCAM’
ALLEGATIONS
Claims Reliance contract
cannot be cancelled
NISHANT UGAL
New Delhi
troleum ministry fined Reliance
$1.005 billion for lower gas output
from the D6 block in the Krishna
Godavari basin, which is presently under arbitration.
In his letter, Moily explained
the rationale behind the price
rise, claiming it was economically
unviable for companies such as
Reliance and Oil & Natural Gas
Corporation (ONGC) to produce gas
at the current price of $4.2 per
million British thermal units.
The AAP has claimed that the
cost of gas production works out
at $1 per million Btu but Moily
countered that ONGC’s average
production cost in the previous
financial year was $3.6 per million
Btu and the latest deep-water
finds would cost more than $4.2
per million Btu to produce.
Moily added that state-owned
players such as ONGC and Oil
India contribute close to 80% of
the country’s gas production and
would end up as the biggest
beneficiaries once prices rise.
Gas prices in India are poised to
almost double from 1 April to
about $8.4 per million Btu, in line
with recommendations made by a
committee headed by Chakravarthi Rangarajan, who chairs the
prime minister’s Economic Advisory Council.
Response: Indian Petroleum Minister Veerappa Moily
Photo: AFP/SCANPIX
Maduro appeals to Venezuelan protesters
fourth quarter of 2014 and in
January.
He said Ukraine may import up
to 35 billion cubic metres of Russian gas this year if Gazprom extends the price discount beyond
the first quarter, thus returning
to its position as one of Gazprom’s
largest customers outside Russia.
However, Stavitsky said that
Ukraine will continue its efforts
to find alternative gas supplies,
fostering the development of unconventional gas in tight sandstone at home and imports of gas
from Europe.
He said Anglo-Dutch supermajor Shell is expected to drill
three deep exploration wells on
its blocks in the Kharkiv region
this year to test the potential of
tight sandstone.
VENEZUELA’S President Nicolas
Maduro has issued a call for a national “peace conference” as his
administration tries to break
the stalemate of widespread protests that threaten to further stagnate the economy, writes Tom
Darin Liskey.
The Opec nation has been roiled
by protests for much of the month.
Demonstrators have made barricades to cut off thoroughfares
across the country and have released pictures of alleged police
brutality on social media outlets.
Maduro has previously refused
to talk with opposition movement
leaders and has suggested that the
protests are nothing more than a
veiled coup attempt.
Despite Venezuela’s vast oil
wealth, tensions are growing as
stores run short of everyday consumer goods.
Even so, key economic leaders
in the country are digging in their
heels.
Energy Minister and head of
state-run giant PDVSA, Rafael
Ramirez, said the country’s oil
workers remain firm in their support for the Maduro regime. “The
oil workers will be on the streets
to defend the revolution. We do
not fear fascism,” he said.
However, opposition leaders and
demonstrators show little sign of
budging from their barricades.
Many are answering the call of
jailed opposition leader Leopoldo
Lopez, who said, “he who tires,
loses”.
The country’s fragmented opposition groups are beginning to
coalesce behind leaders such as
Lopez and Henrique Capriles, who
lost to Maduro in elections last
year.
14
28 February 2014
WORLD
North Sea
market at
‘low point’
THE UK’s North Sea market is at a
“low point in exploration activity”
and will need to attract more investment and possibly chase new
plays to boost productivity, writes
Eoin O’Cinneide.
The latest activity survey by industry group Oil & Gas UK showed
that the number of exploration
wells drilled off the UK fell again
last year, leaving the sector facing
its biggest challenge in half a century.
“In 2013, only 15 exploration
wells were drilled discovering just
80 million barrels,” the report
read. “Unfortunately, 2012 was
equally poor with 2011 very disappointing. Taken together, the last
three years have seen the lowest
rate of exploration activity in the
history of the (UK continental
shelf).”
Twenty exploration wells were
postponed last year with four others cancelled, leaving the total
number of probes well shy of the
44 seen in 2008.
There are 25 exploration wells
planned for this year as well as 11
appraisal wells.
Oil & Gas UK economics director
Mike Tholen held up the period
from 2004 to 2008 as a decent bellwether for where drilling needs to
be for the industry to return to
ruder health.
“We need to see a step increase
(in the number of exploration
wells) to the low thirties at least
in exploration, just to get back to
the middle point of the last decade. And frankly a doubling would
be the right sort of order to get
where we want to get to,” Tholen
said.
Oil & Gas UK chief executive
Malcolm Webb added: “We need to
do two things — we desperately
need to drill more wells ... but we
also need to find more with those
wells as well.
“So it is a question of the sort of
plays we are after as well — maybe
we need to get into more adventurous plays.”
An overhaul of a “complex,
burdensome and uncompetitive”
fiscal regime is required to stimulate investment, particularly in
high-pressure, high-temperature
plays in the southern North Sea,
the report said.
Capital expenditure last year
hit £14.4 billion ($24.02 billion),
the highest in three decades. A
further £13 billion is expected this
year, but this will drop to around
£7 billion between 2016 and 2017
unless the rate of maturing new
developments increases, the report argued.
Plays: Oil
& Gas UK
chief
executive
Malcolm
Webb
Photo: OIL
& GAS UK
Scotland isn’t Norway, and if it becomes overdependent on the tax revenues of oil and gas it
would have to raise taxes an awful lot when the
oil and gas declines further.
UK Secretary of State for Energy & Climate Change Ed Davey
UK
Key issue: Scotland’s First Minister Alex Salmond (left) and UK Prime Minister David Cameron, and (far right) Ian Wood
Independence debate sees
UK and Scottish governments hold Cabinet meetings timed to
coincide with release of Wood Review’s final report on North Sea
EOIN O’CINNEIDE
London
NORTH Sea oil was finally unmasked as a central issue in the
debate over Scottish independence this week as each side
pressed their case for stewardship
of what is one of the UK’s major
money earners.
Cabinet meetings for both the
UK and Scottish governments
were arranged just a few kilometres apart in Aberdeen to co-
incide not just with each other,
but with the release of a major review detailing recommendations
on how to maximise productivity
in the core oil province.
Whereas the Wood Review,
written by retired industry veteran Ian Wood, was primarily
aimed at political and industry
circles, UK Prime Minister David
Cameron and Scottish First Min-
ister Alex Salmond in large part
used its recommendations to take
aim at the local electorate who
will be voting in the Scottish independence referendum in September.
The referendum will be keenly
watched by oil industry players
the world over.
Recent research by UK broadcaster BBC showed that more than
56,000 copies of the Scottish government’s blueprint for independence were ordered online in the
first two months across 40 countries — including in Nigeria and
Argentina.
Wood has, among other
recommendations, called for a
new industry regulator to increase collaboration amongst
industry players and government
Wood’s recommendations meet mixed reactions
INDUSTRY veteran Ian Wood’s
recommendations on how best to breathe
new life into the UK’s North Sea fields have
drawn plenty of praise from players in
politics and the industry — but there have
also been dissenting voices.
Having released an interim report in
November, the final Wood Review delivered
no surprises, with the UK government
accepting the proposals — including a call
to set up a new industry regulator.
Wood presaged the recommendations in
his review by contending that the licensing
model in the UK is the right one — leaving
the proposal of a new arm’s-length,
industry-funded regulator as the
cornerstone of his scheme to boost the
sector.
“The present regulator has halved in size
in the last 20 years and, as a result, is clearly
struggling to perform a more demanding
stewardship role,” Wood said.
The new regulator would need a
significant degree of independence as the
incumbent has to compete for resources
within the Department of Energy & Climate
Change.
It was no surprise that Energy Secretary
Ed Davey — who commissioned the review
— and the UK government accepted the
proposal, as did the Scottish government.
Industry players active in the UK North
Sea also backed the findings.
Martin Rune Pedersen, managing
director of Maersk Oil UK, said: “(Wood’s)
review sets out clear and pragmatic ways
to achieve the fresh approach that is needed
to develop the full potential of the North
Sea.”
Dana Petroleum chief executive Graham
Scotton said: “Greater collaboration and
more efficient use of new and existing
infrastructure (are) absolutely vital to the
industry’s future success.”
However, Richard Power, partner at law
firm Berwin Leighton Paisner, offered a
different view.
“It’s debatable whether the formation of a
new regulator will make any significant
positive difference to an industry whose
participants already co-operate and share
infrastructure responsibilities pretty well.
“Introducing significant additional
regulation could prove counterproductive
and simply add an extra layer of costs,”
Power said.
“A better solution might be to offer the
carrot of further tax breaks to exploit fields,
just as they do in Norway, rather than the
stick of increased regulation.”
28 February 2014
15
2015
THE YEAR in which final
investment decisions are due to be
taken for the Peterhead and White
Rose CCS projects in the UK.
Peterhead gets funds
for world-first project
APPROVAL
FOR SHELL
CCS scheme near
Aberdeen set for FEED
TERRY SLAVIN
London
Photos: AFP/SCANPIX/OIL & GAS UK
oil take centre stage
in an effort to reap an additional
£200 billion ($333.86 billion) in
revenues from the North Sea
by unlocking between an extra
3 billion and 4 billion barrels of
oil equivalent over the next two
decades.
Cameron’s contention is that
only a unified UK — a “top 10 economy” — can provide the “broad
shoulders” necessary to support
the required investment in the
North Sea.
The Conservative party leader
also held his Cabinet meeting —
his first in Scotland — at Shell’s
regional headquarters, and took a
trip to BP’s Eastern Trough Area
Project (Etap) platform 240 kilometres off Aberdeen.
The UK’s Department of Energy
& Climate Change (DECC) toed the
line, arguing: “The fiscal regime
introduced by the government
will lead to greater investment in
the North Sea…
“An independent Scotland
would have to commit about
£3800 per head — over 10 times
more than when costs are
spread across the UK — to match
this.”
However, Salmond cast his
eye across the North Sea at
Norway to support an argument
for an independent Scotland as
the most viable steward of oil
revenues.
Salmond has proposed setting
up two oil funds — one short-term
and one long-term — to retain oil
wealth.
However, UK Secretary of State
for Energy & Climate Change Ed
Davey rubbished Salmond’s argument, telling UK broadcaster ITV:
www.harding.no
“I’m afraid Scotland isn’t Norway,
and if it becomes over-dependent
on the tax revenues of oil and gas
it would have to raise taxes an
awful lot when the oil and gas declines further, or it would have to
slash public expenditure.”
Those pressing for Scottish
independence argue the UK
government has squandered oil
revenues and mismanaged the
effective development of the resource base.
Scottish Finance Secretary John
Swinney said: “We’ve had 16
changes to the fiscal regime in the
North Sea in 10 years, we’ve had 14
oil ministers in the last 17 years,
three in the last four years. One
thing that Scottish control of oil
and gas resources will offer is a
much more stable, long-term
policy.”
THE UK government’s focus on
Scotland and oil and gas was reflected in the emerging carbon
capture and storage sector this
week as Shell finally received approval to pursue the world’s first
CCS project on a gas power plant
at Peterhead, north of Aberdeen.
Ed Davey, the UK’s Secretary of
State for Energy & Climate
Change, confirmed that the Peterhead project will be awarded
funding for a detailed front-end
engineering and design study.
Shell and power plant owner
SSE will share £100 million ($166
million) for the FEED study with
the White Rose project at the Drax
coal power station in Yorkshire,
the other preferred bidder in the
UK government’s £1 billion CCS
competition.
The Department of Energy &
Climate Change (DECC) will award
the remaining £900 million to
either or both projects after final
investment decisions are taken
late in 2015.
Shell said the project, which
will store 1 million tonnes per annum of carbon dioxide over 10
years in its depleted Goldeneye
gas field, could be up and running
by the end of the decade.
Ed Daniels, chairman of Shell
UK, said: “The successful demonstration of the technology [CCS] at
Peterhead would be a step towards
proving its commercial viability
as a tool for mitigating climate
change. It could also help diversify the North Sea oil and gas in-
dustry.” Sub-contracts are expected to go to 10 companies including
France’s Technip, which plans to
create a CCS centre of excellence
at its office in Milton Keynes.
Last October, Technip and Shell
subsidiary Cansolv, which will
provide the carbon capture
technology for Peterhead, announced plans to co-operate on
CCS projects.
Bill Spence, Shell’s vice president in charge of CO2, has said
previously that the oil giant sees
Peterhead as an important
addition to its global portfolio of
test CCS projects, which includes
Quest in Alberta and Gorgon in
Australia.
Stuart Haszeldine, professor of
carbon capture and storage at the
University of Edinburgh, said
Goldeneye, which is located 100
kilometres offshore in the outer
Moray Firth is ideal for geological
storage of CO2.
“It is also one of the best understood CO2 storage sites in the
world,” he said. Shell, which spent
seven years producing gas at the
site until 2011, did a FEED study
for CO2 storage at Goldeneye as
part of a previous CCS project at
the Longannet power plant,
which failed to get funding at the
eleventh hour.
Haszeldine pointed out that the
Captain sandstone, where Goldeneye sits, could store up to 360 million tonnes of CO2, and that another four major aquifers lie nearby.
Luke Warren, chief executive of
the Carbon Capture and Storage
Association, welcomed DECC’s
long-awaited announcement, and
its statement that discussions
would continue with developers
outside the competition, including the Captain Clean Energy
Project in Scotland and the Don
Valley project in Yorkshire.
“What you have is two competition projects that are now under
way, and the government talking
about a second phase to deliver
commercial CCS in the 2020s.”
Confirmation:
UK Secretary
of State for
Energy &
Climate
Change Ed
Davey
Photo:
BLOOMBERG
WORLD
16
Lukoil
ahead of
schedule
RUSSIA’S Lukoil has rushed
ahead with the development of
a recently-acquired asset in
West Siberia, the Imilorskoye
field, starting the drilling of
development wells almost six
months ahead of schedule.
Though the privately-held
company has provided no explanation, industry analysts in
Moscow believe that Lukoil is
gearing up to produce first oil
at the field before the end of
this year to be able to offset
falling output at its other mature assets in West Siberia.
Lukoil purchased the licence
for the Imilorsky block, which
includes the field of the same
name, at the end of last December, paying about $1.7 billion to
the government.
The Imilorskoye field is estimated to hold more than 1.4
billion barrels of recoverable oil
reserves and is one of the few
remaining large undeveloped
assets in the oil province of
West Siberia.
According to Finam Brokerage in Moscow, Lukoil may be
able to eventually produce between 120,000 barrels per day
and 160,000 bpd at the field, or
between 7% and 9% of the total
oil output of the company.
Earlier, the company said
that it expected first oil at the
Imilorskoye field to be produced some time in 2015.
Lukoil also said that it is
planning to carry out more
seismic shooting, drill 11 exploration wells and re-test old
holes on the Imilorsky block
with the aim of confirming additional oil reserves on the
acreage.
In-place geological resources
of the Imilorskoye field and its
satellites, West Imilorskoye
and Istochnoye, are estimated
at 6.2 billion barrels of oil.
The fields, discovered between 1987 and 1988, have a
complex geological structure
which was the main obstacle to
their development.
Search the archive:
West Siberia
BP takes up
Odfjell work
BERGEN-based
contractor
Odfjell Drilling has seen BP
take up two two-year options
on platform drilling services
work in the UK in a contract
extension worth an estimated
$165 million.
The UK oil major’s agreement
with Oslo-listed Odfjell now
runs to December 2018, with
one more two-year option still
available.
Odfjell Drilling said it was
currently operating on the Andrew, Bruce, Clair and Magnus
platforms in the UK North Sea
under the deal with BP first
signed in October 2009.
Clair Ridge is to be added
once it is handed over to operations in 2016, the driller said.
28 February 2014
NORWAY
Appeal: Norway’s government has been urged to allow more projects to qualify for tax concessions, including Shell’s
Draugen programme
Photo: JOSTEIN LOVAS
Government considers
oil tax increase changes
Some projects may be allowed to go ahead
under old — less onerous —tax regime
BEATE SCHJOLBERG
Oslo
NORWAY’S government is considering changes to last year’s oil-tax
increase that could allow a
number of development projects
to go ahead without being subject
to the new tax regime.
The proposed change could benefit the Zidane and Linnorm gas
discoveries in the Norwegian Sea,
which were meant to be linked to
the new Polarled pipeline, due to
open in 2016.
The two projects were put on
hold last year because of the tax
increase, and in Linnorm’s case
also because of poor project economics.
The government does not want
to reverse the overall tax increase,
which cut the tax-deductible
share of investments to 5.5% from
7.5%, effective from 5 May last
year.
However, the recent proposal
would allow some projects to go
ahead under the old tax regime for
a transitional period lasting
through 2020.
The Finance Ministry has suggested transitional rules that exempt developments that depend
on other projects that were filed
before 5 May 2013, such as Po-
larled. A number of other criteria
would also apply — the secondary
projects must be applied for before
the related first project is operational, and the right to deductions
under the old tax regime ends as
soon as a project starts production.
The Norwegian Oil & Gas Association welcomed some of the
changes, but warned that both
the original tax change and some
of the transitional rules could halt
many projects that would otherwise bring valuable production
and tax revenues.
It also asked for a longer transition period, at least until the end
of 2023.
“The biggest weakness of the
proposal is not the proposed
changes, but that the ministry
fails to implement more flexible
qualification criteria for the transitional system,” Norwegian Oil &
Gas stated in a letter to the Finance Ministry.
Because the rules only apply to
projects that have to be separately
applied for to the Energy Ministry,
they do not include drilling programmes at producing fields or
other projects that are typically
covered by existing permissions
or approvals from lower authorities. Investments in productiondrilling programmes worth more
than Nkr80 billion ($13.3 billion)
may be subject to the new, higher
tax rate, even though they were
decided by the owners before 5
May 2013, Norwegian Oil & Gas
said.
In separate letters to the ministry, individual operators urged the
government to include more
projects that were decided before
5 May last year, such as Shell’s
four-well drilling programme at
Draugen, ExxonMobil’s phase
three project at the Balder field,
and the Maersk Oil-operated
Flyndre tie-back development.
“We are very disappointed that
the proposal seems to exclude the
entire project from the transitional system and apply the reduced
(tax deduction) rate retroactively,”
ExxonMobil wrote.
“This proposal comes despite
concern expressed in parliament
in June 2013 by the parties that
today comprise the government.”
Statoil said its ongoing Heidrun
Oil Export and Kvitebjorn Precompression projects should be
included in the transition rules,
and also argued for its Asterix gas
discovery to be added to the list of
exempted projects.
The Norwegian Sea discovery
may be developed via Polarled, but
would fall outside the proposed
transition rule because it is unlikely to be applied for before Polarled comes on stream.
Canadian operator Talisman
Energy said that a new plan for
development and operation (PDO)
for its Yme field should also be included in the old tax regime.
A plan for the field was approved in 2007, but the project has
been plagued by problems with
the production facility and is now
being re-planned with a new PDO
planned for the second quarter of
2015.
While the proposed change
means a new chance for the Zidane
discovery, it may not be enough for
Shell-operated Linnorm.
The transition rule “will not be
sufficient to change the decision
made within the licence to put the
project on hold because of a lack of
commercially acceptable development solutions,” Shell wrote in its
letter to the ministry.
WORLD
28 February 2014
17
MIDDLE EAST
Iraq takes Eni threats to
heart over Zubair row
Major contract
packages for
field approved
but Sonangol
quits due to
rising violence
NASSIR SHIRKHANI
London
IRAQ has approved major contract
packages to develop the Basra
region’s giant Zubair oilfield after
Italy’s Eni threatened to quit the
country.
However, the government did
not take any steps to prevent
Sonangol’s exit because of increasing violence in the northern province of Ninewa, where the Angolan state company was developing
two fields.
Eni made ever more public
threats earlier in the week, saying
it was ready to quit unless the government acted quickly to approve
overdue contacts that have
delayed crucial field work at the
Zubair field.
“If they do not sign the contracts in a couple of weeks we will
go. We have waited six months,”
Eni chief executive Paolo Scaroni
said.
The Iraqi government, keen to
please Eni, responded the same
day by approving two contracts
for de-gassing stations at Zubair
worth a combined $1 billion.
Contracts worth $500 million or
more require Cabinet approval, and
a third contract is under review.
Scaroni said earlier this month
that entrenched bureaucracy in
Iraq had prevented it from increasing production at Zubair,
where output is currently standing at 320,000 barrels per day compared with about 195,000 bpd
when it won the service contract
in 2009 to rehabilitate the field.
Eni hopes to increase Zubair’s
output to 400,000 bpd by the end
of 2014.
Obstacles such as contract
delays meant Eni had so far only
spent $3 billion out of a planned
$7 billion on Zubair.
“We are asking ourselves, is it
worth it? Is it worth it to stay in
Iraq with all these problems,” said
Scaroni. “In Iraq we are suffering
a lot from a very complex bureaucracy which makes the investment
process very slow.
“Iraq has one of the most complex bureaucracies on the planet,”
he added.
Sonangol, which won the right
Not walking away: a worker at Zubair in Basra
to operate the Qayara and Najmah
oilfields in 2009, said violence has
prevented it from working at the
fields.
“Our presence in Iraq was as an
operator in an area with much
conflict. Last year we were unable
to develop any work due to security matters, so we took the
decision to leave,” said Anabela
Fonseca, Sonangol board member
in charge of international investments.
Sonangol made a declaration of
force majeure last year, which the
Iraqi government accepted as the
company’s costs were increasing
while it could not develop the
fields.
International oil companies
have faced numerous bureaucratic and security problems in Iraq,
forcing the departure of Norway’s
Statoil while ExxonMobil of the
US has reduced its presence in the
Basra region.
Eni’s threat is part of a campaign by the international companies operating in Iraq to pressure
the government to reduce bureaucracy.
KRG bites into Miran stake
LONDON-listed Genel Energy said the Kurdistan Regional
Government (KRG) has opted to take a 25% stake in the Miran gas
field in the Iraqi autonomous region.
Genel’s working and paying interests in the Miran production
sharing contract will therefore fall from 100% to 75%.
The Miran PSC contains the Miran gas, oil and condensate
discovery with estimated reserves of 3.5 trillion cubic feet of gas
and 95 million barrels of oil and condensate.
Photo: AFP/SCANPIX
Business
as usual
at PTTEP
THAILAND’S national upstream
company PTTEP expects next
week will be business as usual
at its Bangkok headquarters
after several weeks of working
remotely because anti-government protesters blocked the
Energy Complex that houses
the Department of Mineral
Fuels and the operator’s offices,
writes Amanda Battersby.
“Hopefully next week, we
should be able to start going
back to work in our offices,”
PTTEP chief executive Tevin
Vongvanich said.
“The situation is, I still
think, dynamic... our working
life was affected as our office
was taken for about a month so
we had to relocate our working
team — our office — to other
places,” he said.
“We prepared for the business
continuity, installing a lot of
communications systems, data
systems [so] that we can access
our data from anywhere.”
None of PTTEP’s or other
companies’ oil and gas exploration and production operations
onshore or off Thailand was affected by the occasionally
bloody anti-government demonstrations that started last
November.
Tevin said it was not appropriate for him to comment on
the political situation, adding
that the national player’s credit rating remained the same as
that of the country.
Ratings agency Moody’s on 21
February affirmed Thailand’s
government credit rating at
Baa1 with a stable outlook despite the recent resurgence of
street protests and blockades.
WORLD
18
28 February 2014
Mylos set
to turn
the bit
BRAZIL
Topazio on track
IHC Merwede has launched the Sapura Topazio pipelaying support vessel at the Krimpen aan den Ijssel shipyard in the
Netherlands. The 550-tonne PLSV was ordered by Sapura Navegacao and is the second in a series of five vessels that will
be delivered to Petrobras in Brazil to develop pre-salt fields in water depths of up to 2500 metres
Photo: IHC MERWEDE
Re-tender bids all in for
Petrobras AHTS charter
OSM takes top two spots with Siem Offshore coming
a close third after better response from market
FABIO PALMIGIANI
Rio de Janeiro
BRAZILIAN state-controlled oil
company Petrobras has received
bids in a new tender for the charter of anchor-handling tug supply
vessels, after it cancelled proposals submitted two and a half
months ago by several contractors
in a similar competition.
The Petrobras re-bid saw a better response from the market in
terms of dayrates than the previous tender, suggesting that owners still prefer to have vessels on
long-term contracts in Brazil than
to gamble in the North Sea spot
market.
Bids for an unspecified number
of 18,000-bhp-rated AHTSs were
submitted on 20 February.
Contractors were asked to
Rig in port
present offers for periods of two
years, with an option to renew the
deal for the same timeframe.
OSM offered vessels owned by
Swire Pacific Offshore and won
the top two spots. The company
proposed both the Pacific Diligence and Pacific Duchess for
dayrates of $59,000 each.
“Swire Pacific has demonstrated an appetite to relocate its vessels from South-East Asia to Brazil,
lowering both dayrates and mobilisation fees,” said one source.
Siem Offshore finished a close
third with the Siem Opal vessel
for a dayrate of $60,000, followed
by Farstad with the Far Sagaris
and Far Senator AHTSs for
dayrates of $70,950 each. Sealion
proposed the Toisa Elan and Toisa
Envoy for $63,000 each. Solstad bid
the Normand Borg vessel for just
$56,945, but finished the race in
eighth place after fuel consumption and other costs were included
in the final price.
Astromaritima, which finished
first in the previous bidding process before it was cancelled, offered
the same vessel — Go Phoenix —
for the same dayrate of $61,900,
but this time will have to settle
for ninth place.
The last two spots went to Farstad with the Far Statesman AHTS
for $71,950 and Maersk Supply
Service with the Maersk Laser
vessel for $73,500.
Most of the vessels offered in
the new tender were also submitted in the previous one, the exception being the Normand Borg. The
unit has been operating for Petrobras since 2003.
Brazilian shipping group Bravante, which bid aggressively
with three Posh-owned vessels in
the December tender, opted to
stay out this time after the Posh
Concorde, Posh Constant and Posh
Conquest AHTSs were disqualified
by the Petrobras bidding committee due to non-compliance with
winch requirements.
Petrobras is now expected to
enter negotiations with the top
bidders with an eye to take delivery of the vessels late in the first
half of 2014.
Half the offers for charter of supply vessels disqualified
BRAZIL’S Petrobras has disqualified more than half the commercial offers submitted in late January for the charter of an
unspecified number of 1500-bhprated platform supply vessels.
Only seven Brazilian-flagged
vessels were offered in the tender
and Astromaritima secured the
REPSOL Sinopec is expected to
resume drilling operations off
Brazil in the next few days,
after its ambitious pre-salt
programme in the Campos
basin was unexpectedly interrupted in late December due to
problems with a blowout preventer.
The Brazilian joint venture
comprising Spain’s Repsol and
Chinese player Sinopec started
drilling the top section of the
Seat appraisal well on 9
November in Block BM-C-33,
using the drillship Ocean Rig
Mylos in 2665 metres of water.
Two weeks later, the drillship was moved a few kilometres south-east to spud the
top section of the Pao de Acucar
appraisal well, a move that
Roberta Camuffo, Repsol exploration director for North America and Brazil, described as
typical to test the capacities of
the newbuild rig.
However, Repsol Sinopec
faced problems with the BOP
around Christmas Day, when
the Ocean Rig Mylos was again
placed at Seat-2 to continue the
campaign to a final depth of
more than 6700 metres.
“Our drillship Ocean Rig Mylos experienced BOP-related issues and ceased drilling.
“We expect to have this issue
resolved by the end of February
and we will probably record approximately 50 days of off-hire
in the first quarter of 2014,”
said Ocean Rig chief executive
George Economou.
While it completes work on
the BOP, Ocean Rig remains
confident it will extend contracts for two other drillships
— Ocean Rig Corcovado and
Ocean Rig Mykonos — operating in Brazil.
The Mykonos and Corcovado
are chartered to Petrobras until
March 2015 and May 2015, respectively.
top six spots. Geonavegacao finished last with just one bid.
However, after reviewing the
proposals, the Petrobras bidding
committee disqualified the offers
presented by Astromaritima for
the Astro Badejo and Astro Pargo
PSVs due to non-compliance with
age requirements or availability
lower than 90%. Petrobras also
discarded the Astro Vermelho bid
proposed by Astromaritima and
the newbuild MDPL 1498 offered
by Geonavegacao due to excessive
prices.
The final classification showed
Astromaritima with three bids approved — Astro Arraia for a
dayrate of $19,907 and Astro Enchova and Astro Guaricema for
dayrates of $20,997 each. All PSVs
were offered to Petrobras to carry
out three-year contracts.
Sources expect Petrobras to
award the trio of contracts soon.
The PSVs are due for delivery in
September 2014.
THE Diamond Offshore semisubmersible rig Ocean Alliance
has been towed to Guanabara
Bay in Rio de Janeiro state to
carry out maintenance on
thrusters.
The Skandi Ipanema anchorhandling tug supply vessel,
owned by DOF Subsea, assisted
mooring with two other tugboats from Camorim Servicos
Maritimos.
It is understood the semisub
will spend over three months
in the Rio de Janeiro port.
Remora ready
THE Remora HiLoad dynamic
positioning unit is expected to
start operations for Petrobras
in Brazil in the second quarter
of 2014, following completion of
operational testing.
The unique L-shaped unit,
supplied by Canadian floater
specialist Teekay Offshore, is
the first such vessel in the
world designed to load oil from
floating production, storage
and offloading vessels on to
standard tankers with no extra
equipment.
WORLD
28 February 2014
19
IRAN
Iran eyes longer-term
joint venture contracts
Nation prepares
for end of
isolation with
new improved
deals for all
foreign players
VAHE PETROSSIAN
London
IRANIAN oil authorities have unveiled fresh contract terms for
foreign oil and gas companies involving joint ventures covering
the full cycle from exploration to
production and entitlement to a
share in the eventual output.
Details of the Iran Petroleum
Contract (IPC) were presented
over the weekend at a gathering in
Tehran and will be put to foreign
companies in London in July.
Officials said the formula can be
modified to take into account further suggestions between now
and the ending of international
sanctions.
Iranian officials, led by Mehdi
Hosseini — the former deputy oil
minister behind the buy-back formula started in the 1990s, and
now heading the contracts revision committee set up in October
— said the IPC approach would
help to attract the vast amounts of
investment necessary to develop
the sector.
“Although the return of big companies depends on the full lifting
of sanctions... more attractive oil
contracts will greatly help their
return,” said Oil Minister Bijan
Zanganeh. “We welcome the presence of all international companies, including American companies, to develop oil and gas fields
and enhance production.”
US and EU-led sanctions, expanded and tightened in recent
years, have been relaxed since a
preliminary nuclear agreement
made between Iran and the major
powers on 24 November in Geneva.
The two sides have now started
talks on a final settlement by July.
Negotiations could continue for
another six months, but Iran suggests it is aiming for the July target.
In offering foreign companies
new terms, Iranian officials reiterated over the weekend that they
understood the limitations of the
buy-back model and accept that
foreign investors have to be allowed a better rate of return and
longer-term exploitation periods
of up to 20 years.
“We’ve analysed all the contracts in the market right now...
and this is what we’ve come up
with,” Hosseini said. “This is a
good model with flexibility.”
One key element in the review
of the best possible contract terms
under the new government of
President Hassan Rouhani has
been the issue of production sharing and the ability of foreign investors to book reserves. The issue
is very sensitive in Iran, because
Attractive proposition: Iran’s Azadegan oilfield
of the implication that by booking
reserves, foreign companies effectively exercise ownership of underground assets constitutionally
belonging to all Iranians.
Iran’s authorities say they know
that they have to offer much better terms than other regional
countries, especially now that
there is intense competition from
such producers as neighbouring
Iraq. This has meant giving serious consideration to production
sharing agreements, but the potential political sensitivities have
until recently scared off most politicians.
Under Hosseini, the contract
revisions committee appears to
have circumvented this obstacle
by differentiating between oil still
under the ground and oil that has
been brought to the surface.
“Ownership of the reservoirs
belongs to the people, so ownership can never be transferred,”
Hosseini said. However, “the ownership of the produced oil can be
negotiated”.
Hosseini’s comments, and
statements by other officials over
the weekend, suggest that the Oil
Ministry is prepared to be as flexible as possible and further develop the IPC formula in the coming
months.
Hosseini and others said last
year that PSAs should and could
be possible for high-risk projects
and reservoirs shared with neighbouring countries.
This could mean PSA contracts
being offered for big fields such as
Azadegan, Yadavaran and Anaran
— shared with Iraq in the southwest — and the giant South Pars
gas field shared with Qatar. Also
on the PSA list are slow-moving
exploration projects in the deep
waters of the Caspian Sea.
Hosseini, Zanganeh and other
Photo: AP/SCANPIX
officials have also stressed the
importance of enhanced recovery
projects at existing ageing fields,
mostly situated in Khuzestan
province.
About one half of Iran’s crude
output is from very mature fields,
which need high-technology en-
hanced recovery techniques and
re-injection facilities.
Officials have talked about the
new contract terms offering incentives for enhanced recovery
projects, but they have not provided details on how foreign investors will be recompensed.
Azadegan
ultimatum
for CNPC
CHINA National Petroleum
Corporation (CNPC) has
received what appears to be a
final warning from Iran to
carry out work at the giant
Azadegan oilfield development
or face losing its contract,
writes Vahe Petrossian.
In a strong attack on the
presence of “ineffective and
unsuccessful Chinese
companies... in recent years”,
Deputy Oil Minister Emad
Hosseini said that the ministry
“has not yet made any decision,
but it has warned the Chinese
contractor of expropriation”.
In the strongest criticism so
far of CNPC, the deputy
minister said there would be
“no hesitation” in ousting
CNPC from the project
contracted out nearly seven
years ago.
CNPC has the contract for
Azadegan, also known as South
Azadegan, and the smaller
North Azadegan field, with
Sinopec developing the nearby
Yadavaran field.
Some activity is known to be
taking place at Yadavaran and
North Azadegan, but there does
not appear to be any fresh
activity at the main Azadegan
field, where about 50,000
barrels per day has been
produced for some years from
worked-over exploration and
appraisal wells.
CNPC and Sinopec are the
only foreign companies
operating in Iran.
The two Azadegans have
combined proven reserves of
about 10 billion barrels, with
Yadavaran’s estimated at 3
billion barrels.
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WORLD
20
28 February 2014
TANZANIA
Swala in new campaign
despite Lake Eyasi row
Player to launch
second Pangani
phase but says
government
decision is
‘questionable’
IAIN ESAU
London
AUSTRALIA-based Swala Energy’s
65%-owned subsidiary Swala Oil
& Gas is set to enter the second
exploration phase of its Pangani
and Kilosa-Kilombero production
sharing agreement in areas onshore Tanzania.
Swala and Otto Energy, its 50%
partner in the acreage, advised
state-owned Tanzanian Petroleum Development Corporation
(TPDC) of its plan to enter the twoyear exploration period after gravity, magnetic and 2D seismic surveys helped identify five potential
hydrocarbon basins and a 200million-barrel prospect called
Kito.
The work commitment in this
next period includes additional
seismic acquisition and drilling
one exploration well in each of the
two areas by the end of February
2016.
Chief executive David Mestres
Ridge said: “The results of exploration efforts in our Pangani and
Kilosa-Kilombero PSA licence areas over the last two years has
unveiled two exciting Neogene
basins and a prospect of significant size in one of them and further prospects being investigated
by our geological teams.”
News of these plans came just a
week after TPDC terminated negotiations with Swala Oil & Gas for
the Lake Eyasi-Wembere licence
because Pura Vida Energy, Swala’s
bidding partner, withdrew from
the process.
TPDC said Lake Eyasi-Wembere
is now open to fresh bids. Swala
Investments: Tanzania’s President Jakaya Kikwete
said “the joint bidding agreement
allowed either party to withdraw
at any stage with the remaining
party assuming the withdrawing
party’s interests in the licence”.
However, TPDC deemed Pura
Vida’s withdrawal to be a breach of
the tender guidelines and ended
talks.
Swala disagreed with this move
and told TPDC it will seek advice to
challenge this decision.
Ridge said: “We are disappoint-
ed TPDC reached such a questionable decision.
“The company has invested
significantly in the negotiation
for Eyasi and TPDC’s decision
raises questions not only in respect of the transparency of the
(licensing) process that will be
followed... but also in respect
of TPDC’s commitment to local
content and Tanzanian participation.”
TPDC responded by saying it
Photo: REUTERS/SCANPIX
was “seriously concerned” by
Swala’s statement, describing it as
containing “multiple inaccuracies
and being misleading”.
It said Pura Vida’s withdrawal
“materially and substantially affected the joint bid and negotiations” and made the joint venture
bid “ineligible”.
“After the withdrawal of Pura
Vida (on 15 January) the accrued
advantages of the combined efforts fell apart,” said TPDC.
Possible New Age find could fire up hopes in Ogaden basin
UK-BASED explorer New Age may
have discovered oil in Ethiopia’s
Ogaden basin, although a government official said it is too early to
confirm this, writes Barry Morgan.
New Age is drilling on the El
Kuran-3 probe on Block 8 close to
where the borders of Ethiopia,
Kenya and Somalia meet.
The well is targeting a prospect
at 2850 metres sub-surface but re-
portedly hit pay in intervals at
half that depth.
Ketsela Tadesse, director of petroleum licensing and operations
at Ethiopia’s Ministry of Mines,
told Upstream that El Kuran-3
“has not reached target depth...
but I suspect initial hints of encouraging results have led to
these reports in the local media”.
The ministry has yet to hold for-
mal discussions with New Age
about the well’s commercial significance. Evaluation is ongoing
amid discussions about whether
to deepen the well to examine its
gas-condensate potential.
The initial exploration period
under the Block 8 production
sharing contract was extended to
April 2014, and completion of this
well effectively discharges the
work obligation of New Age and its
partners, Africa Oil and Afren.
A successful appraisal well
would fuel industry hopes for renewed prospectivity across the
Kenyan border in Afren’s Block 1,
where the Mandera-Lugh basin
extends into three countries.
The Somalian section is being
targeted for acquisition by Australia-based Amsas Consulting.
DISCOVER THE DORIS DIFFERENCE
www.doris-engineering.com
First Tlou
spud in
Botswana
BRISBANE-based Tlou Energy
has spudded the first of three
core holes on its Lesedi coalbed
methane project area in Botswana.
The well locations aim to
provide infill data on the coal
quality in and around Tlou’s
pilot pods to help reserves certification and identification of
additional drilling sites for an
expanded pilot well campaign.
This core hole data will be
combined with information
from ongoing production testing operations at the Selemo
and Lesedi pilot pods, each
comprising one vertical and
two horizontal wells.
Managing director Tony Gilby said Tlou aims to certify the
first proven and probable
coalbed methane reserves in
Botswana, from the Lesedi
project area, in mid-2014.
“This will provide Tlou with
a significant first mover advantage to commercialise Lesedi,”
he said.
The Selemo and Lesedi pilot
pods must handle more water
than expected during the dewatering process so the pump
capacity has been increased.
Tlou said good water flows are
“usually a positive sign”, with
Gilby adding: “Experience suggests it is important not to rush
the dewatering process otherwise formation damage may
occur that is often irreparable.”
Tlou estimates that, based on
current production data and advice from its contractors, first
gas breakthrough from the
wells should occur by the end of
next month with peak gas flows
achieved at a later date.
SacOil joins
gas scheme
SOUTH African minnow SacOil
aims to get closely involved
with Mozambique’s plans for
gas-fuelled industrial growth
on the back of major deep-water gas discoveries.
The Johannesburg and London-listed player has signed an
expression of interest with two
organisations charged with
managing investment portfolios on behalf of Mozambique’s
government.
The Administrative Institute
for State Participation and
Maputo’s Public Investment
Corporation were set up to investigate opportunities in distributing gas throughout the
Southern African Development
Community (SADC).
SacOil said the agreement
aims “purely to govern preliminary discussions and to formalise the relationship”.
28 February 2014
WORLD
US
21
Apache offers Cook Inlet stake
Explorer looking for joint venture partner on 900,000 Alaskan acres split
between onshore and offshore before drilling campaign
NOAH BRENNER
Houston
US GIANT Apache is looking to
bring in a joint venture partner to
help shoulder costs on its massive
exploration position around Cook
Inlet in Alaska.
The company has a 100% interest in 550,000 acres and an exclusive option on another 350,000
acres split about 60:40 between
onshore and offshore areas.
Apache is offering a 30% to 50%
stake across the entire acreage position, according to sales documents seen by Upstream.
In 2012, Apache acquired about
320 square miles (828 square kilometres) of 3D seismic — the first in
the Cook Inlet basin — before an
exploration drilling campaign.
The results of an initial onshore
well were deemed “disappointing”
in August by Apache chief executive Steven Farris.
“We drilled the well and actually got too close to a fault so we
really didn’t evaluate that well. I
am personally still very positive
about the Cook Inlet,” he said. “So,
we’ve slowed down that activity
but in terms of its prospectivity, I
still think it has good value.”
However, Apache got 70 feet of
core from the well that it characterised as having “good oil shows”.
The company plans to begin a
second “multi-year 3D seismic
programme that is expected to illuminate new traps in the shallow
oil and gas plays” in named anticlines like Trading Bay, McArthur
Field, Middle Ground Shoal and
Swanson River.
Additional targets include a series of conventional fault, pinchout and stratigraphic traps and
structures in the Tertiary and Mesozoic sandstones with “good potential” to find fields in the range of 50
million to 100 million barrels of oil,
according to the sales documents.
In total, Apache believes the
Cook Inlet basin could hold 1 billion barrels of oil and 19 trillion
cubic feet of gas.
The gas could bring prices as
high as $14 per million cubic feet
in Alaska, which is currently
short of gas in that area.
US to up spill
liability costs
THE US Bureau of Ocean Energy
Management (BOEM) plans to increase the limit of liability for oil
spill removal costs and related
damages from $75 million to
around $134 million — the maximum increase that may be implemented without legislation.
“This proposed change is the
first administrative increase to the
liability cap since the Oil Pollution
Act came into effect 24 years ago
and is necessary to keep pace with
the 78% increase in inflation since
1990,” said BOEM director Tommy
Beaudreau. “This adjustment helps
to preserve the deterrent effect and
the ‘polluter pays’ principle embodied in the law.”
$437,000
Day rate being earned by Ensco drillship DS-5
under its current three-year commitment with
Repsol and Petrobras
WELL OF THE WEEK
22
LEON
28 February 2014
LEON FACTS
Location: Keathley Canyon Blocks 643 and 687
Water Depth: 6049 feet
Rig: Ensco drillship DS-5
Spud date: December 2013
Planned well depth: Over 30,000 feet
Target: Paleogene sands
Reserve potential: Up to 180 million barrels of oil equivalent
Spanish explorer
in deep dive
Repsol looks to US Gulf for
Paleogene prize
WHERE IS IT?
U
S
LOUISIANA
A
Main map
Spain’s Repsol is drilling ahead
on a high-impact wildcat in the
deep-water Gulf of Mexico in a
bid to add new oil and gas
reserves to its US portfolio.
The operator, and partner
Ecopetrol of Colombia,
spudded an exploratory well
on the Leon prospect in the
deep-water Keathley Canyon
area around the turn of the
year hoping to tap Paleogeneaged reserves on trend with
Chevron’s Jack/St Malo
complex.
Drilling, underway using
Ensco drillship DS-5, is
scheduled to take around 140
days. Leon is a subsalt
prospect with an understood
planned total well depth of
over 30,000 feet. Pre-drill
estimates peg Leon’s potential
at between 112 million and 180
million barrels of oil equivalent.
Repsol’s current holdings in
the deep-water US Gulf
include a 28% working interest
in the BHP-Billiton-led Shenzi
development in the Green
Canyon area, and a 12.5%
interest in Chevron’s lower
tertiary Buckskin discovery in
the Keathley Canyon area.
Mississippi Canyon
MEXICO
G
Leon
u
Keathley
Canyon
l
f
o
f
M
e
x
i
Walker Ridge
Jack & St. Malo
Buckskin
Atwater Valley
Green Canyon
Garden Banks
c
o
Lund
WORLD
28 February 2014
23
INDONESIA
Two left standing in
Gendalo-Gehem battle
Consortia led by Saipem and McDermott go head to head
for FPU contract after disqualification of Toyo group
TAN HWEE HWEE
Singapore
TWO consortia, led by Italy’s
Saipem and the Indonesian subsidiary of McDermott, are left
standing in the re-tender for two
floating production units destined
for Chevron’s Gendalo-Gehem gas
and condensate development off
Indonesia, after a third group, led
by Japan’s Toyo Engineering, was
disqualified.
Despite pulling together a bid
consortium at short notice for the
pre-qualification exercise on the
Gendalo-Gehem floaters, Toyo and
its partners, China’s Cosco Shipyard and Indonesia’s Meindo
Elang Indah, did not make Chevron’s shortlist.
However, under Indonesia’s upstream regulation, only two qualified bids would be necessary in
order for a re-tender to proceed.
Chevron is understood to have
already called a pre-bid meeting
with the two groups led by Saipem
and McDermott as Upstream went
to press.
Saipem is reunited with South
Korea’s Hyundai Heavy Industries
and Indonesia’s Tripatra Engineering and Construction against
McDermott and its new teammate, Encona Inti Industri.
Technical proposals for the
twin FPUs are due around midMarch, with the commercial bids
to follow one month later.
The larger of the two FPUs
comes with a designed processing
capacity of 700 million cubic feet
per day of gas and 25,000 barrels
per day of condensate and is intended for the Gendalo field.
The second production floater
with handling capacities for 420
MMcfd of gas and 30,000 bpd of
condensate, will be tied to Gehem
and two other discoveries, Maha
and Gandang, earmarked under
the same development.
Target delivery of the two FPUs
had been pushed to May 2017 following the re-tender call.
Chevron has secured an extension on the bid validity from the
front-runner for a second subsea
contract tendered out in 2013.
The validity of the joint bid of
$1.9 billion from Indonesia’s
Timas Suplindo and Subsea 7 is
understood to have been extended
through the projected re-tender
process for the twin FPUs.
Timas had defended the legality of its joint bid with Subsea 7
when the Gendalo- Gehem subsea
tender was challenged in recent
court hearings tied to an anticorruption probe.
The Gendalo-Gehem subsea
contract involves the procurement and installation of 630 kilometres of pipelines, 80 kilometres
of umbilicals and up to 120 subsea
flowline connections in water
depths of up to 6000 feet.
Chevron appears set on overcoming the multiple challenges
to conclude the Gendalo-Gehem
contracts before the middle of
the year.
However, industry observers
have flagged potential delays in
regulatory approvals stemming
from imminent Indonesian
legislative elections, scheduled
to take place as early as this
April.
China allows independents
to use oil and gas pipelines
CHINA has deregulated its oil and
gas infrastructure market by allowing independent oil and gas
producers access to the country’s
oil and gas pipeline grids, writes
Xu Yihe.
In a decree issued this week,
the National Energy Bureau
(NEB), China’s energy industry
watchdog, said that in order to
promote the opening up of the
sector, the owners of China’s
pipeline grids should open oil and
gas trunk branch lines to third
parties by providing transportation services as well as storage,
gasification, liquefaction services
if their facilities have surplus
capacity.
The decision comes as China begins to open up the upstream sector to non-oil and gas companies,
some privately owned.
China’s pipelines are dominated
by a limited number of stateowned oil and gas companies,
especially PetroChina. Under the
new rules, the owners and operators of such facilities should allow
access to third parties on a fair
and non-judgmental basis.
They should decide whether to
allow or reject access within 30
days of applications by independents.
Any rejection should be justified and notified by the NEB, the
decree said.
China boasts several national
gas pipeline grids, totalling 60,000
kilometres in length and having
annual throughput capacity of 120
billion cubic metres, more than
90% of which are owned and operated by PetroChina.
Sources said the new decree is
timely because independent shale
gas operators that earned their
licences to explore more than 20
shale gas blocks in China will
start producing their first gas at
some blocks, especially in southwestern Chinese provinces, over
the next two years.
Gendalo prize: Chevron chief executive John Watson
Photo: AP/SCANPIX
A new ship,
steered by
experienced
hands.
Trusted to be smarter
Jangkrik
FPU deal
revealed
A GROUP led by Italy’s Saipem
has been confirmed as the
winner of the key contract to
provide a floating production
unit for Eni’s Jangkrik project
off Indonesia.
Japan’s Chiyoda, which is a
member of the consortium
along with Tripatra Engineers &
Construction and Hyundai
Heavy Industries, revealed the
award this week.
The companies beat a joint
venture between McDermott
and Technip for the $1.1 billion
contract, which covers the
engineering, procurement,
construction and installation of
a floating production unit for
the Jangkrik and Jangkrik North
East gas field development.
The scope of the contract
covers the engineering,
procurement and fabrication of
the FPU hull and topsides, as
well as the installation of a
mooring system and the
hook-up, commissioning and
assistance for start-up.
The overall project
management, engineering and
procurement of the FPU project
will be carried out in Jakarta,
while the topsides will
fabricated at Saipem’s Karimun
yard in Indonesia.
The hull will be fabricated at
Hyundai’s yard in Ulsan, South
Korea.
The FPU will have the capacity
to treat 450 million cubic feet
per day of gas plus condensate.
A second contract tied to the
subsea umbilicals, risers and
flowlines package of the
Jangkrik FPU is understood to
have been awarded to France’s
Technip.
Ceona Amazon
Overall length 199m
Delivery January 2015
www.ceona-offshore.com
WORLD
24
28 February 2014
EUROPE
Wintershall bucks trend
and looks to expansion
German player forging ahead with plans
for Norway, Denmark and Netherlands
BEATE SCHJOLBERG
Oslo
GERMAN player Wintershall is
pushing ahead with development
projects in Northern Europe as
part of a drive to expand its international production.
The company is working on
plans to bring its Maria and Skarfjell discoveries off Norway on
stream, and also has oil development plans in Denmark and the
Netherlands.
At a time when many oil companies are paring back investments in the face of rising industry costs, Wintershall has no such
plans for its ongoing projects,
Martin Bachmann, head of the
company’s exploration and production activities, told Upstream.
“We said a few years ago that we
would invest up to €2 billion by
2015, and we are on track with
that. It is also still true that we
want to grow further from there,”
Bachmann said. The figure covers
investments in Norway and the
northern part of the UK sector.
Of Wintershall’s operated projects, Maria is the most mature after
the licence group decided on a development concept in November.
The 130 million-barrel oilfield is
set to be produced via subsea
equipment tied back to four existing installations in the Haltenbanken area of the Norwegian Sea.
The aim is to hand in a plan for
development and production to
the authorities late this year,
leading to first oil in 2018, said
Bachmann.
Meanwhile the company continues exploring in the area, with
the ongoing Solberg appraisal well
east of Maria and a planned wildcat, Imsa, about 30 kilometres to
the south west.
Farther south, Wintershall is
kicking off development planning
for the Skarfjell oil and gas discovery.
An appraisal well completed in
January confirmed a large gas cap,
lifting resources there to between
120 million and 230 million barrels of oil equivalent.
“We are setting up a team to
start development planning for
Skarfjell. A tie-back to Gjoa would
be an obvious solution, or a standalone together with some of the
other discoveries in the area,” said
Bachmann.
Licensees at a number of other
discoveries, such as Statoil-operated Astero and RWE Dea-operat-
Arctic
chill for
Mage
RUSSIA’S state-controlled Mage
marine exploration company
has failed to discover significant structures in the country’s unallocated Arctic regions
following the interpretation of
data from a massive 2D seismic
programme that was shot during the 2013 open water season.
Speaking last week at the
Russia Offshore conference in
Moscow, Mage deputy executive director Gennady Ivanov
revealed that the seismic effort
led to the identification of 80
potential hydrocarbon-bearing
structures.
Preliminary estimates from
Mage pegged possible hydrocarbon resources of these
structures at about 2.5 billion
tonnes of oil and gas equivalent, Ivanov said.
That equates to as much as
12.8 billion barrels of oil equivalent, but analysts played
down the figure, saying that
actual recoverable oil and gas
reserves could be lower by between five and 20 times than
the initial estimate.
Ivanov said that 2D seismic
was collected across the Russian part of the Arctic in the
Laptev Sea, East Siberian Sea
and the Barents Sea.
He added that the potential
structures are concentrated
mainly in the northern part of
the Barents Sea and the DeLonga Elevation and East-Siberian Threshold in the Kara Sea.
Gazprom
deal alive
Investing: Wintershall head of global exploration and production Martin Bachmann
Photo: STEVE MARSHALL
ed Titan, have discussed options
for some time, and Norwegian authorities are keen to see area solutions that can help bring more
discoveries on stream.
Either way, Skarfjell is likely to
be a phased development, focusing first on the oil and later on the
gas, said Bachmann.
In parallel with the development planning, several operators
are exploring more in the area
near Skarfjell. Statoil is currently
drilling a wildcat near Astero
named Juv with Wintershall as a
partner, while RWE Dea is about
to spud an appraisal at the Titan
oil discovery.
The German company is also
looking at options in the southern
part of the North Sea, where it is a
long-standing operator off Ger-
this year. Wintershall is also looking at a possible development of
the Danish Ravn and Hibonite
discoveries, said Bachmann.
Looking further ahead, the
company is eager to get a bigger
bite of the emerging Barents Sea
plays, where new discoveries in
the past two years have whetted
companies’ appetite for Norway’s
northernmost frontier in the ongoing 23rd licensing round.
“We are very keen. We have a
significant team looking at it and
we have a pretty clear idea of
where we see prospectivity,” said
Bachmann.
“Opening up new areas does
take time, and you need to go in at
an early stage to understand what
you have got and see what the options are.”
LEADERS IN CORROSION RESISTANT FLOWLINES
CO2
HP/HT
H2S
many and the Netherlands. The
most recent discovery, F17-10 in
Dutch waters, is an oil discovery
with potential volumes of at least
30 million barrels with a considerable upside, said Bachmann.
“If the size is confirmed by the
drilling, we are talking about a
stand-alone development.
“We have started looking at options for early development,” he
said.
Wintershall plans to drill two
appraisals and three wildcats near
the Dutch discovery this year, in
addition to another five operated
and non-operated wells off the
Netherlands.
The same play that proved successful in the Netherlands will
also be tested in Denmark at the
operated Chabazite prospect later
RUSSIA’S Gazprom says it is
still on track to sign a first Arctic exploration and development joint venture with AngloDutch supermajor Shell.
According to a Eurobond prospectus, Gazprom is now waiting for the natural resources
ministry to complete the issuing of the licence for the North
Vrangelevsky block.
Gazprom is set to hold a
66.7% stake in the joint venture, with Shell having the remaining interest.
Gazprom and Shell signed a
memorandum on creating the
Arctic joint venture in April
last year, but have reported no
progress since then.
In December, the government cut back the size of the
North Vrangelevsky block to
give a bigger share to Rosneft.
The resized North Vrangelevsky block, which was
awarded to Gazprom, is located
in the Chukotka Sea and measures about 118,000 square kilometres.
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WORLD
28 February 2014
25
Mermaid
expands
its fleet
MYANMAR
AUSTRALIAN company Mermaid Marine has doubled the
size of its vessel fleet and added
two shipyards by agreeing
to buy two subsidiaries of
Singapore’s Jaya Holdings for
A$550 million (US$496 million)
in cash.
Jaya has a fleet of 27 vessels,
two shipyards in Singapore and
Batam, Indonesia, and six
high-specification
vessels
being built.
Mermaid said the acquisition
would give it “immediate scale
in international markets”
while ownership of the two
shipyards would gave it access
to vessel construction facilities
in strategic locations.
Timing: PTTEP chief executive Tevin Vongvanich
Photo: BLOOMBERG
PTTEP moves closer to
sanction for M-3 project
Thailand’s state-run company in
talks with Myanmar authorities
with more appraisal drilling set to
take place after monsoon season
AMANDA BATTERSBY
Yangon
THAILAND’S national upstream
company PTTEP hopes to sanction
its M-3 gas development off
Myanmar in the next two years
and sell gas to the country in four
to five years’ time.
The operator is in talks with the
Myanmar authorities over the
timing of further appraisal work
on Block M-3, which it plans to
start after this year’s monsoon,
according to PTTEP chief executive Tevin Vongvanich.
“We are still working with the
authorities on timing... we need to
firm up reserves and the development concept,” Tevin said.
The aim is to start an appraisal
drilling campaign after the 2014
monsoon season and complete it
early next year.
Officials
at
state-owned
Myanma Oil & Gas Enterprise had
touted Block M-3, home to the
Aung Sinkha gas field, as coming
on stream in 2016 but this is not
realistic given that the development concept can only be finalised after the upcoming appraisal
work.
PTTEP has almost finished seismic acquisition on deep-water
blocks M-7 and M-8 off Myanmar.
Tevin said it will take another
couple of years to firm up drilling
locations and the 100% operator is
looking to farm down equity on
these blocks before sinking the
drillbit.
PTTEP also has two blocks in
Thai waters just across from
blocks M-7 and M-8 and the idea
would be to carry out exploration
as a joint campaign.
It is not known whether the operator believes there are structures that straddle the MyanmarThailand maritime border and
which could, in future, necessitate unitisation.
There is the potential to exploit
the “very deep” blocks M-7 and
M-8 to supply gas to the Myanmar
market, said Tevin, who added
that PTTEP’s strategy in Myanmar
was changing to one of now looking to accelerate production for
the domestic market.
The company has already
dipped its toes into Myanmar’s
deep waters with the exploration
well drilled on Block M-11 after
farming out interests to Total of
France and Japan’s JX Noex.
“We have not been successful
yet but we hope to be able to identify other drilling targets,” said
Tevin.
Meanwhile, PTTEP has already
agreed to supply 100 million cubic
feet per day of gas from the initial
development phase of its Zawtika
field off Myanmar to the domestic
market.
The 2010 gas sales agreement
called for PTTEP to supply 20% of
gas output from Zawtika to the
domestic market and Myanmar
had been in the frame for 60
MMcfd of the targeted 300 MMcfd.
However, the Myanmar authorities subsequently asked for greater volumes to help meet burgeoning demand and 100 MMcfd will
be delivered to the local market
while PTTEP will still be able to
transport 240 MMcfd of gas across
the border to Thailand.
Tevin told Upstream that the
increased amount of phase one
gas will be supplied as “swing production”.
Production start-up from Zawtika phase one is expected in the
“next few weeks”, according to
Tevin. Another PTTEP official said
26 of the 36 phase one development wells have been drilled —
these wells are taking seven to
eight days apiece.
Tevin conceded that the price
for gas sold into Myanmar’s domestic market is lower than that
sold in Thailand but explained the
price differential by pointing out
that the local market price did not
include an amount for onshore
piping to the Thai border.
Moving onshore Myanmar, the
Thai operator is finalising the
production sharing contract
for Block MOGE-3 and hopes to
have it signed before the end of
March.
Search the archive:
Myanmar
Conditions
for Cadlao
THE Philippines’ Department
of Energy has attached certain
conditions to a provisional field
development approval to the
owners of the marginal Cadlao
oil discovery.
The conditions included
awarding the offshore construction contracts by 28
February, and final contract
documentation by 5 March.
WORLD
28 February 2014
Welcome: cars drive past the city gate in Abuja, Nigeria
Photo: BLOOMBERG
26
NOC hails
Murzuq
gas find
POLISH Oil & Gas Company
(POGC), which earlier this year
wrote down its investments in
Libya and pulled out all staff,
has made a gas discovery at the
Murzuq concession, according
to Libya’s National Oil Corporation (NOC).
The discovery well, in contract area 113/1, had a flow of 4
million cubic feet per day, NOC
said. The Polish company,
which has not commented on
the discovery, withdrew its
staff in January.
The company said at the
time that there was no direct
threat against its workers living in Libya.
However, armed militia and
striking workers had created
an atmosphere of insecurity,
preventing most oil companies
from returning to the sites of
their operations.
The company said Polish
staff had left a drill site at Murzuq 113, with equipment secured and under the protection
of Libyan state forces as well as
the supervision of Libyan subcontractors.
Established in 2008, POGC
Libya is a wholly-owned subsidiary of PGNiG, engaged in
exploration in Libya’s western
Murzuq basin.
The Murzuq 113 licence area
is made up of two blocks spanning 5494 square kilometres.
PGNiG had originally committed to drilling at least eight
wells, along with a 2D and 3D
seismic acquisition programme.
Cameroon
block offer
EDINBURGH-based explorer
Bowleven is offering equity
participation in its onshore
Bomono block surrounding
Cameroon’s commercial capital
of Douala, a proven gas and
gas-condensate play.
Following a confidentiality
agreement, suitors will be invited to Scotland to view the
physical data room.
This slice of the Douala basin
hosts a proven 1 trillion cubic
feet gas discovery in the Palaeocene that needs appraisal drilling with “a large unexplored
upside defined on new seismic
acquired in the onshore extension of deeper Cretaceous strata”,
where subsequent exploration is
likely to focus.
Kosmos spud
KOSMOS Energy will spud its
deep-water FA-1 well on the
Foum Assaka block targeting
the Eagle prospect off southern
Morocco next month.
The well is expected to last
three months and will be
drilled by the semi-submersible Maersk Discoverer.
Once adjustments to the
equity breakdown have been
completed on the Foum Assaka
licence, Kosmos will hold
29.925%, BP 26.325%, SK Innovation 9.375%, Fastnet 9.375%
with state-owned ONHYM retaining 25%.
AFRICA
Yinka Folawiyo sets out
course for Aje progress
Independent submits offshore development plan
including two subsea wells tied back to floater
IAIN ESAU
London
NIGERIAN independent Yinka
Folawiyo Petroleum has submitted a development plan to the
Abuja-based government for its
offshore Aje project.
Jan Kielland, chief executive of
Oslo-listed Panoro Energy, which
has a minor stake in the project in
OML 113, told investors last week
that the development plan calls
for two subsea wells tied back to a
floating production, storage and
offloading vessel.
He said the partners hoped the
project would receive approval in
the next quarter, with first oil due
to flow in late 2015.
Production could begin in
November 2015 at a plateau rate of
about 12,000 barrels per day,
although the floater would be
designed to handle twice this
amount.
The FPSO will initially tap about
40 million barrels of Cenomanian
oil.
Aje’s 150 million to 170 million
barrels of oil equivalent of gascondensate resource would be
tapped at a later date, possibly via
subsea wells that would send well
fluids down a 30-kilometre multiphase pipeline to a shore-based
processing plant.
According to a document published by London-listed Lekoil,
before last year’s aborted acquisition of Panoro’s Aje stake, the
early oil development was priced
at almost $600 million, most of
which would be needed for development drilling and to acquire an
FPSO.
However, capital expenditure
would fall if Yinka Folawiyo
decided to lease the floater at an
assumed dayrate of $95,000,
although this arrangement was
deemed less attractive than
buying the FPSO outright.
A similar price tag was also
attributed to Aje gas-condensate
scheme.
Panoro is also a partner in
Houston-based Harvest Natural
Resources’ Dussafu Marin licence
off Gabon, where another FPSO
project is being planned. Kielland
said a reserve report due to be
received next month from Gaffney
Cline Associates will underpin
plans to tap multiple, shallowwater pre-salt discoveries via an
FPSO.
The floater will initially exploit
the Tortue, Ruche and Walt
Whitman discoveries through six
subsea wells, while the Moubenga
find will be exploited as a subsea
satellite at a later date.
Harvest estimates about 49 million barrels of oil has been found
so far in Dussafu, “sufficient to
justify a development”, said Kielland, who added that talks are
under way with Gabon’s government over the proposed project.
Harvest has a 66.67% stake in the
licence, with Panoro on 33.33%.
Tullow Oil has a 10% back-in right.
•• PANORO has appointed USbased boutique advisory player
Evercore to handle the sale of the
company. Martin Copeland, an
Evercore managing director, said
there has been “a reasonable degree of interest from a diverse
range of companies”.
However, he cautioned that a
sale will not progress until Panoro
has sold its Manati asset off Brazil.
“We have not formally set a
buyer timetable until the sale of
Manati is concluded but have
started contacting buyers globally
to establish interest.”
Sinopacific scoops Hyundai Moho Nord modules contract
CHINESE yard Sinopacific Offshore
& Engineering has won a subcontract from Hyundai Heavy Industries to build two of the modules
needed for a floating production
unit the South Korean fabrication
giant is building for Total’s Moho
Nord project off Congo-Brazzaville,
writes Xu Yihe.
The modules will be built at Sinopacific’s Qidong facility in Jiangsu
province and are scheduled for delivery in March 2015. The 34-well
Moho Nord project — which incorporates the smaller Moho Phase 1
Bis project — will boast a new tension-leg wellhead platform alongside the FPU, with both being built
by Hyundai.
The TLP is due to arrive on location in the second quarter of next
year, while the FPU will be on location in the second quarter of 2016.
First oil is expected in the third
quarter of 2015 from Moho Phase 1
Bis, which is being developed as a
subsea tieback to the existing Alima FPU at Total’s nearby Moho
Bilondo field.
Production from Moho Nord is
set to start in the third quarter of
2016, peaking at 140,000 barrels of
oil equivalent per day by 2017.
Moho Phase 1 Bis will tap about
120 million barrels of oil, and Moho
Nord will exploit three times this
amount of resource.
Moho Nord involves two separate exploitation schemes. One
will tap unconsolidated Miocene
turbidite sands via 11 subsea
production wells and six water
injectors tied back to the new
FPU.
The other will see Albian carbonates tapped through 12 producers
and five water injectors lined to the
TLP.
The development is expected to
cost about $10 billion. It is located
in 750 metres to 1100 metres of
water in the Moho Bilondo licence.
WORLD
28 February 2014
27
KAZAKHSTAN
Tender eyes replacement
pipeline for Kashagan
NCOC launches
preliminary
inquiries ‘to avoid
losing time’ as it
investigates leaks
at Kazakh project
KAMA MUSTAFAYEVA
Baku
THE North Caspian Operating
Company (NCOC) consortium
developing the giant Kashagan
field in Kazakhstan has hit the
market with preliminary inquiries covering replacement pipelines that may be needed to
resolve an issue that has kept
production shut-in for almost five
months.
Output from the project had
to be stopped temporarily on
24 September and permanently on
9 October — only weeks after coming on stream — because of multiple gas leaks found in pipelines
carrying the field’s hydrogensulphide rich well fluids.
Kazakhstan Oil Minister Uzakbai Karabalin said previously that
the defects appeared to be in pipeline welds.
NCOC’s detailed investigation
will establish the exact cause of
the pipeline leaks and the findings will influence the type and
quantity of replacement line pipe,
if any, that will be needed.
The results of the investigations
are expected to be available later
this quarter, said NCOC, with
Karabalin due to receive a report
next month.
According to Karabalin, NCOC
was forced to run a second intelligent pipeline inspection gauge
along one pipeline after the first
suffered unspecified problems.
NCOC launched its preliminary
tender process “as a precautionary
measure to avoid losing time” if a
replacement pipeline is required
for the project.
There are several scenarios
Project: artificial islands and outer ice barrier at Kashagan
around when production will
resume from Kashagan’s initial
$50 billion development phase.
Some sources suggested it will be
in mid-2014, while others believe
production may not resume until
2015.
Meanwhile, Kazakhstan’s Environment & Water Resources Ministry has made a move to fine
NCOC for allegedly exceeding
pollution levels by flaring natural
gas.
The authorities are considering
a $1.2 billion fine, according to a
report from Bloomberg.
NCOC will have a right of appeal
for the ministry’s decision to be
reviewed.
NCOC’s consortium members
include ExxonMobil, Shell, Total
and Eni — all with 16.807% stakes
— plus state-owned KazMunaiGaz
on 16.877%, China National Petroleum Corporation on 8.333% and
Inpex on 7.563%.
New deal for Azeri crude
exports through Russia
AZERBAIJAN will continue to
export oil through Russia via
the Baku-Novorossiysk pipeline,
following an agreement between
Azeri state energy company Socar
and Russian pipeline monopoly
Transneft, writes Kama Mustafayeva.
“After lengthy talks on the
matter, Socar and Transneft
signed a new deal which will be
mutually beneficial,” Socar said.
“(The) resumption of oil transportation through Russia will expand export options for Azeri oil
into world markets.”
Socar has agreed to export
slightly above 7.5 million barrels
of crude through Russia this year.
Azeri oil exports through Rus-
sia were due to halt on 15 February
after a May 2013 decision by the
Russian government to terminate
a contract that had run for 16
years.
The rest of Socar’s oil exports —
about 11.3 million barrels — will
be sent to Turkey via the BakuTbilisi-Ceyhan pipeline, said
sources within Socar.
Azeri exports through Russia
stood at about 12.8 million barrels
in 2013, down from 15 million barrels the previous year.
The Baku-Novorossiysk pipeline
runs for 1330 kilometres between
the Azerbaijan capital Baku and
Novorossiysk on Russia’s Black Sea
coast.
Photo: AGIP KCO
Khazzan
role for
Petrofac
UK-LISTED Petrofac has confirmed receiving a $1.2 billion
contract to build the central
processing facilities for the BPled Khazzan tight gas project
in Oman.
The facility will process gas
from the Khazzan field in Block
61.
Oman and BP finalised a $16
billion production sharing
agreement in December to tap
unconventional gas reserves at
the Khazzan field.
BP and partner Oman Oil
Company have since been
moving fast to award key elements of the project.
The facility to be built by
Petrofac covers engineering,
procurement and construction
of two processing trains each
with a capacity of 525 million
cubic feet per day, as well as an
associated condensate processing system, power generation
plant, water treatment system
and infrastructure.
Earlier this month, oilfield
services company KCA Deutag
won a contract worth an initial
$220 million for construction
of three newbuild fast-moving
land rigs for the tight gas
project.
First gas is scheduled for late
2017, reaching its plateau in the
following year.
28
28 February 2014
WORLD FEATURE
So long as the border remains
contested nobody is going to invest
more money into oil exploration.
Wereko-Brobby, Ghana Institute
for Public Policy Options
WEST AFRICA
Ghana seeking to progress on
Oil and gas
players cheered
by state’s view on
removing trade
barriers in region
BARRY MORGAN
Accra
G
HANA President John
Mahama this month
loudly proclaimed his
commitment before a
regional diplomatic gathering to
the promotion of intra-African
commerce and the removal of all
trade barriers within the continent.
This will be music to the ears of
foreign companies aiming to ease
the stringency of local content
regulations by drawing upon oil
and gas expertise already established in the sub-region — but
Ghana, like its neighbours, seeks
not only to develop but to export
its skills.
With the Tullow Oil-operated
Tweneboa-Enyenra-Ntomme oil
and gas field complex now approved
for development, industry watchers
hope the pace can quickly pick up in
the Takoradi oil hub — but several
clouds loom on the horizon.
Dual claims Controversy still
dogs exploration and production
plans in a triangular swathe of
acreage encompassing the Tweneboa-Enyenra-Ntomme complex
and stretching into the ultra-deep,
as this is claimed by neighbouring
Ivory Coast. However, hopes are
that an accommodation can be
reached by mid-year.
All eyes are on Eni’s plans to develop the oil and non-associated
gas fields of Sankofa and Gye
Nyame on its deep-water Offshore
Cape Three Points block — and it
is the gas that may come to the aid
of diplomats in restoring cordial
links within the region.
Ghana’s Minister of Petroleum
& Energy Emmanuel Kofi-Armah
Buah and his Ivorian counterpart
Adama Toungara this month
pledged to speed up the inauguration of a multi-national gas company to co-ordinate strategic
natural gas supplies and regasification units across the region,
also roping in Nigeria and Equatorial Guinea.
Toungara praised Ghana for
taking the lead role, adding that
the Ivory Coast state oil and gas
company Petroci would step up
feasibility studies before a possible launch at the next ministerial
summit. Last month, Buah admit-
ted that while Ghana’s local content
law had been passed, the Petroleum
Commission set up to enforce indigenous participation was “still to
determine the modalities for effective implementation”.
About $20 billion worth of
upstream investment is at stake
and predicted to flow over the
next five years. There is growing
national pressure to keep as much
of that in-country as possible.
Ghana National Petroleum Corporation (GNPC) chief executive
Alex Mould caused some concern
last month during an industry
convention by suggesting that
deals were about to close, with a
raft of new entrants to Ghana’s
offshore — including independents Amni International Petroleum Development, Britannia-U,
Camac Energy and Sahara Energy
Fields.
Some in the industry have been
reassured by the entry of AGM
into the South Deepwater Tano
block, hoping partners Minexco
and Norway’s deep-water driller
AGR Energy can speed up the
We want this
10% under
indigenous
management
because of
the neglect
suffered under
successive
governments.
Commission fires warning to contractors over single sourc
THE Ghana Petroleum Commission, established in 2011 but only
now staffing up for full-scale
monitoring of local content participation compliance, will clamp
down heavily on contractors that
insist on single sourcing of goods
and services at the expense of
indigenous companies, writes
Barry Morgan.
“Companies must demonstrate
clear justification for sole source
supply policies,” according to UKtrained competition lawyer, barrister-consultant to the Commission and former senior legal
counsel at Ghana’s Petroleum &
Energy Ministry, Juliette Twumasi-Anokye.
“It will not be enough to say we
have dealt with one company for
two decades and must continue to
do so — our local enterprises must
be encouraged.”
Twumasi-Anokye says all
oil companies and sub-contractors
must, under legislative instrument LI-2204, report any tender
valued at more than $100,000.
“We set the bar this low in order
to see small to medium-sized
enterprise nurtured for participa-
tion in the upstream sector,” she
says. Under recently promulgated
regulations, a percentage of locally produced materials must be
demonstrated in monetary terms.
Local content in terms of asset
ownership requires that 51% of a
joint venture must be locally
owned and that any non-indigenous Ghana-registered company
that intends to provide goods or
services to a contractor, sub-contractor or licensee should ensure
indigenous Ghanaian equity participation of at least 10%.
Regulations likely to apply to all
six forthcoming licence awards,
including deep-water allocations,
contain demands that a 5% block
equity stake is accorded to an indigenous Ghanaian enterprise,
transferable only to a similarly
qualified company.
The 5% rule will be enforced and
is deemed separate from whatever
percentage is allocated to stateowned Ghana National Petroleum
Corporation.
The Commission, under recently appointed chief executive Theo
Ahwireng, aims to speed up compliance through educating local
enterprise and co-opting international oil companies to take on a
more active role in the nurturing
process.
Business leaders will be trained
to understand how the upstream
sector works through the Enterprise Development Centre and the
Ministry of Petroleum & Energy’s
own Oil & Gas Capacity Building
Project.
Ahwireng knows the limited
capacity of local industry is compounded by inadequate certification, information asymmetry and
the high cost of fabrication — “so
28 February 2014
29
$20 billion
THE AMOUNT of potential upstream
investment in the next five years said to be
at stake, depending on the outcome of
Ghana’s local content law changes.
co-operation path
DISPUTED WATERS
GHANA
Ebony Discovery
area
IVORY COAST
Main map
Bonyere
Atuabo
Shallow Water
Tano (Tullow)
CI-101
TEN Development
area (Tullow)
Deepwater
Tano (Tullow)
South Cape Three
Points (Hess)
Gulf of Guinea
25 km
Jubilee field
CI-401
(Lukoil)
Kosmos
Kola
CI-100
(Total)
Eni
Lukoil
South
Deepwater
Tano (AGM)
Ghanaian claim to
Ivorian waters
Ivorian claim to
Ghanaian waters
Commitment:
Ghana President
John Mahama
Photo: BLOOMBERG
transfer of offshore skillsets into
GNPC’s E&P division ExplorCo.
Similar hopes are pinned on the
tipped entry of Shell in partnership with Tullow and GNPC into
the Ultra Deepwater Keta block
abutting the Togo border.
Fears However, mainstream con-
tractors got spooked last month by
Buah’s announcement that GNPC is
planning to set up its own service
subsidiary to partner foreign companies.
Contractors are worried that
official manoeuvring will squeeze
out the less adroit players from
taking a meaningful role.
Most agree newly appointed
Acting Petroleum Commissioner
Theo Ahwireng is a fair, though
tough, operator, grounded by
years of exposure to GNPC’s negotiating techniques — but people
acknowledge that political pressure on him is likely to build in
the coming months.
Paramount Chief Awulae Attibrukusu-III, President of the Western Region House of Chiefs, led a
delegation to parliament in the first
week of February, reiterating earlier
demands by the traditional authorities for a 10% share of the proceeds
of all petroleum produced off the
Western Region.
“We want this 10% paid into the
Consolidated Fund and placed exclusively under indigenous management, because of the neglect we
have suffered under successive governments,” Attibrukusu-III said.
Ghana steers course:
Pages 30&31
cing at expense of local companies
we need foreign companies to help
undertake baseline studies to ascertain local competence”, he
says.
Twumasi-Anokye stresses the
need for “contract unbundling” as
one means of expanding opportunities for local business, plus a
commitment to online tendering
alongside the regular publication
of procurement plans.
A margin of 10% is allowed if
tendering locally means an indigenous outfit can win the bid.
Ghanaian operators and contractors will always be given pref-
erence, while local staffing at senior management level must reach
80%, with middle and junior-level
management expected to be recruited entirely locally.
Pressed on whether Ghana’s local content and participation policies are not illegal under the free
movement of goods and services
protocols embedded in the Economic Community of West African States (Ecowas) treaty, Twumasi-Anokye tells Upstream the
Attorney General’s Office had issued a broad statement to Parliament in 2012 giving lawmakers
express permission to progress
legislation that appears to breach
treaty principles.
However, foreign companies
must be incentivised to use Ghana
as an oil hub to serve their operations in the sub-region, she says,
admitting this policy might
founder if fellow Ecowas member
states act to deny regional content
in their respective jurisdictions.
“The obstacles are principally
political and, as has been the experience of the European Union,
ours is also a step-by-step process,” Twumasi-Anokye says.
Border dispute casts
shadow over sector
DETERRENT TO
INVESTMENT
Call for arbitration route
with Ivory Coast
A DIPLOMATIC dispute over the
maritime boundary between
Ghana and Ivory Coast will
scare off investors, according to
former Ghana presidential
candidate Charles WerekoBrobby, former leader of the
United Ghana Movement (UGM),
writes Barry Morgan.
Currently chief policy analyst
at the Ghana Institute for Public
Policy Options, Wereko-Brobby
urges arbitration as the
preferred route to resolution,
even if it proves protracted.
“If not swiftly resolved, this
will definitely affect the
development of our own
upstream sector because
potential investors fear risk and
so long as the border remains
contested nobody is going to
invest more money into oil
exploration.”
Ghanaian officials are
scheduled to resume
negotiations with their Ivorian
counterparts in a bilateral
Boundary Commission on 17
February, says Alhaji Inussah
Fuseini, Minister of Lands &
Natural Resources.
The outer maritime limits
with any adjoining country and
all affected neighbours must be
subject to multilateral
negotiations “and that is why
we are not only talking with
Ivory Coast, but also with Togo,
Benin and possibly Nigeria”,
says Fuseini.
Few believe official hints
that a resolution can be achieved
by July, especially if a treaty is
required to manage a proposed
Joint Development Zone.
Moreover, Ghana and its
neighbours have all applied to
the United Nations Law of the
Sea Tribunal for an extension of
their respective exclusive
economic zones on the
continental shelf, from 200
nautical miles to 350 nautical
miles (370 kilometres to 648
kilometres).
At stake are several potential
billion-barrel oil and gas
discoveries, including the
Tullow Oil-operated TweneboaEnyenra-Ntomme field complex,
the Ebony, Teak and Wawa
finds, plus several potential
prospects and plays in the
deeper waters where Ghana’s
Ministry of Petroleum & Energy
needs to speed up activity.
Acreage potentially affected
also includes Hess finds Pecan,
Almond and Paradise, and
extends to the South Deepwater
Tano block recently awarded to
the AGM consortium led by
Norway’s AGR Energy and
Ghana National Petroleum
Corporation subsidiary
ExplorCo.
Search still on for hub
EFFORTS to de-risk the broader
and under-explored West
African Transform Margin have
proved elusive despite the
volume of licensed acreage in
the sub-region more than
doubling over the past five
years, with no hub-making
discovery made beyond Ghana’s
deep-water Jubilee field, writes
Barry Morgan.
About 15 billion barrels of oil
equivalent have been discovered
across Nigeria’s legacy region
and the wider margin but
another 50 billion barrels
remain undiscovered, says
Wood Mackenzie vice president
for upstream consulting,
Renaud Brimont.
Tullow’s Jubilee find may have
triggered a serious regional
campaign since 2007, with a 57%
success rate across the Cote
d’Ivoire-Tano basin alone, “but
despite high technical volumes,
these have not been commercial
and fiscal incentives must be
stabilised in order to keep
investor dollars flowing”.
Proving up these reserves will
be more difficult than expected,
while the wider margin
desperately needs another
hub-making discovery to
restore confidence in the wider
play. Setbacks include Ophir
Energy’s recent Starfish-1
disappointment in the Offshore
Accra Contract Area, amid
halting progress in
neighbouring Ivory Coast,
Liberia and Sierra Leone.
However, from Mauritania to
Namibia, Brimont believes the
Transform Margin will attract
overall capital expenditure of
$335 billion over the next 15
years, including field
development projects, although
80% of this spend will fall in
Nigeria and Angola, mostly by
the majors.
“Everywhere, the challenges
will range from establishing
commerciality, proving up play
concepts, handling financial
constraints and meeting
manpower needs in the wake of
ever more stringent local
content regulations.”
Bright spots on the horizon
this year include Afren’s Ogo
discovery in the Benin
Embayment and the prospect of
industry sinking the drillbit
across Nigeria’s western
maritime border, where
supermajor Shell is poised to
enter the fray off Benin, and in
Ghana’s virgin ultra-deep Keta
basin.
WORLD FEATURE
30
28 February 2014
WEST AFRICA
Ghana steers
course towards
Takoradi
Tullow deal marks
first step towards
developing Western
Corridor infrastructure
and improving local
economy
BARRY MORGAN
Accra
T
HE Ghana National Gas
Company (GNGC) has
signed off a construction,
pre-commission and tiein agreement with Tullow Oil to
get the Jubilee field’s Kwame Nkrumah floating production, storage
and offloading vessel linked up to
Technip’s deep-water pipeline.
The intention is to have the raw
associated gas flowing to the onshore Atuabo gas processing plant
and then onwards to the Takoradi
power unit.
The $700 million Sinopecmanaged gas processing project is
funded from a $3 billion loan
extended by the China Development Bank. Ghana’s Petroleum &
Energy Minister Emmanuel KofiArmah Buah has promised to have
gas ready for the Takoradi power
plant by the end of the year.
GNGC chief executive George
Sipa-Adjah Yankey describes the
deal as the first step towards developing the Western Corridor Gas
Infrastructure Project, which
aims to industrialise Ghana’s
impoverished western region.
Meanwhile, US non-governmental organisation Pyxera Global this
month signed a memorandum of
understanding with Ghana’s Minis-
try of Trade & Industry to shore up
support of local small to mediumsized enterprises to provide services
to the oil and gas industry.
The $5 million Pyxera initiative is
focused on the western region and
will ensure local participation in the
supply chains of international oil
and contracting companies active in
Ghana’s upstream sector.
Opportunities US development
agency USAID has agreed to fund
the Pyxera programme, which is to
be based in Takoradi, working closely with the operator-funded Enterprise Development Centre, building
indigenous capability in small industrial opportunities and helping
business service providers respond
to procurement regulations.
Interest among international
contractors remains strong, with
energy services contractor Wood
Group the latest to launch a joint
venture — this one in partnership
with local business magnate
Kwaku Boafo Nyantekyi-Owusu,
who will shoulder the required
51% equity ownership.
In 2010, project manager
WorleyParsons chose to partner
Ghana-registered West Atlantic
Energy, an entity that draws
upon expertise developed in
WorleyParson’s DeltaAfrik subsidiary in Nigeria but has since
trained a score of local engineers.
National Vice President of
Ghana’s House of Chiefs Awulae
Attibrukusu is confident the Petroleum Commission’s own supply
chain programme will provide critical support to the local economy
— but other voices remain unsure.
Operators cautioned local contractors against trying to walk
before they can run.
Exxon-Mobil vice president
Dave Wilkin has warned industry
players that local content tends to
Industry is caught off guard by local content law
THE Ghanaian Local Content &
Participation Act passed last October
comes into full effect on 28 February,
according to a surprise directive issued by
the Petroleum Commission, to the
amazement of industry players who
believed a longer grace period would apply,
writes Barry Morgan.
Implementation of the policy to date
has been flawed and the danger now is
that rules may be subverted to scupper
the underlying intent of legislation,
claims Accra-based Research
Development & Financial Consultants
(RDFC) chief executive Kwame Acquah.
Acquah, who partners several mid-tier
upstream players, including listed and
nonlisted pipeline engineering,
processing and procurement services
companies, argues the Petroleum
Commission must dig deeper into the
true ownership of local vehicles sporting
51% equity in approved joint ventures.
“It’s a question of due diligence and the
Commission must peel away the layers
to find the real shareholders and properly
assess corporate qualifications.”
Acquah is worried by increasing
numbers of Angolan and Nigerian
entities entering the market but fronted
by Ghanaians to satisfy local ownership
regulations, weakening prospects for
building a truly indigenous capability.
He fears that international contractors
will task existing Nigerian partners to
sound out the Ghanaian market and
move swiftly to groom a local entity to
meet the 51% ownership obligation.
“A message needs to go out to
international players that this practice
will not be tolerated — especially the
bigger companies, which ought to
understand the reputational risk they run
in getting caught circumventing our laws.”
Part of the perceived problem lies with
the role of Ghana National Petroleum
Corporation and the Petroleum
Commission in pre-qualifying joint
venture partners and attempting to
control the spread of opportunities across
local industry. “It’s getting a lot more
competitive because they’re bringing in
all these Ghanaian frontmen and the
market is getting murkier — international
oil companies and their contractors should
desist.”
Acquah decries a business model that
allows Nigerian money and experience to
dominate the scene. “We need to name
and shame, because if we don’t, then
local initiatives will get swallowed and
we shall end up with Nigerian content.”
He says the Commission should be
vigilant and sincerely encourage
Ghanaian partners to retool and retrain
for opportunities in what remains a
fragile and nascent upstream market.
“It may be expensive and timeconsuming but greater scrutiny should
apply to licence renewal because there’s a
lot of collusion going on and it must stop.”
Acquah recommends the Commission
set up an independent committee of a
dozen Ghanaian industry players to help
monitor compliance and guard against
political interference. He says Nigeria does
not allow similar incursion by Ghanaian
ventures despite Ecowas (Economic
Community of West African States) rules
on the free movement of labour, goods and
services.
“But if we continue down this road,
then regional content rules must be
rigorously enforced at Ecowas level.”
28 February 2014
WORLD FEATURE
Pair can
gain from
linking up
Foundation: the Kwame
Nkrumah FPSO, and
Ghana’s Energy Minister
Emmanuel Kofi-Armah
Buah (right)
Photos: ANADARKO/
BLOOMBERG
expand at a different pace in different countries, depending on
factors as diverse as the political
climate and proven reserves base.
Smaller Takoradi contractors
such as Sigma, led by chief executive Ebow Haizel-Ferguson, still
feel marginalised by government
policy.
Training Ferguson says he can-
vassed Sinopec several times
before the 110-kilometre onshore
pipeline was laid from Atuabo
to Takoradi but was told his
pipe-fitters and welders did not
qualify for employment.
“I protested that we could at
least stand behind and learn but
they didn’t listen and employed
Ghanaians only as menial staff
31
and drivers.” With official encouragement, Haizel-Ferguson prepared about 2000 welders and fitters in anticipation of work,
getting 800 to National Vocation
Training Institute standard.
“These youths have been left
high and dry and feel I’ve betrayed
them — some students owe
$125,000 in unpaid fees while I
still owe $60,000 in unpaid housing and transportation bills.”
However, Ferguson agrees there
are signs of recovery as vessels are
now returning to Sekondi harbour
amid progress in revamping berth
facilities at the Takoradi port, but
he criticises slow progress in getting promised fertiliser, petrochemical and refinery schemes off
the ground.
I protested
that we could
at least stand
behind and
learn but
they didn’t
listen and
employed
Ghanaians
only as
menial staff
and drivers.
Ebow Haizel-Ferguson
NIGERIAN and Ghanaian contractors should work towards increased collaboration to tap regional procurement opportunities
in the upstream supply chain
across West Africa, according to
Petroleum Association of Nigeria
board member Mike Onyekonwu.
“Ghana is lucky to learn from its
big brother in the sub-region and
should escalate collaborative efforts
throughout the tertiary educational sector to meet industry standards
as Nigeria has done,” he says.
Onyekonwu, who was a participant in the Lagos Oil & Gas Chamber and is a serving member of the
Nigerian Content Development
Monitoring Board, says Ghana
should consider imposing rules
requiring ownership of oil and gas
equipment by indigenous contractors and insist that all fabrication
be done in-country.
In the years since implementation of the 2010 Nigeria Content
Development Act, Nigerian content is up by 35% and the country
now levies 1% on every contract to
feed the Nigerian Content Fund,
which is designed to assist capitalisation of indigenous companies. “This is the right way to go
and we are not ashamed to say it.”
In the three years since the 2010
Nigerian Content Development
Act was passed, Nigeria has attracted $5 billion to develop new
yards and saved many billions in
averted capital flight, according to
Richardson Oil & Gas chief executive Akin Osuntoki.
Apart from co-operating in regional security initiatives to
patrol the pirate-ridden coasts,
West African nations should develop protocols to allow sovereign
members of the Economic Community of West African States and
the Economic Community of Central African States to jointly fill
indigenous roles in the upstream
oil and gas sector, he says.
Local content in the Gulf of
Guinea requires a regional market
approach and, taken holistically,
within 10 years Nigeria should be
talking about regional content,
not local content, Osuntoki says.
“We need to aggregate the volume of gas we can put on the table
and avoid waste by sharing assets
to achieve economies of scale and
avoid duplication of effort.
“Each African country offers distinct areas of relative efficiency and
recognising this might trigger a
multiplier effect that would speed
regional industrial development.”
WORLD
32
JOB on
move at
Koi field
THE Pertamina-PetroChina
joint operating body (JOB) is
wasting no time in pursuing
the field development design
and preparing the plan of development for its Koi oilfield off
West Papua, Indonesia, writes
Amanda Battersby.
The JOB has already mulled
the standalone development of
Koi and it is pressing ahead
after the success of the Koi-2
appraisal well.
After testing the well, partner Singapore-listed independent RH Petrogas estimated
4 million barrels of net recoverable reserves at Koi. That puts
estimated total recoverable reserves at about 12 million barrels.
The appraisal well was located in a water depth of 32 metres and was drilled to a total
vertical depth of 1428 metres by
the jack-up Bohai 1.
The partners have agreed to
carry out a pre-front-end engineering and design study to
evaluate the development design and concept for the shallow-water oilfield.
The operator will also soon
start preparing the plan of development to submit to upstream regulator SKK Migas.
“We are extremely excited
about the successful appraisal
of the Koi-2 well. This opens up
several analogous opportunities in the offshore area of the
Island PSC. We are delighted to
begin the pre-FEED study and
look forward to bringing the
project into successful production,” said RH Petrogas chief
executive Francis Chang.
Extension
for drillship
JAPANESE independent Inpex
has extended its contract with
Transocean’s drillship Discoverer Seven Seas for use in Indonesia.
Inpex has had the drillship
on hire since last June at
$500,000 per day for three delineation wells and one exploration well in the Masela
production sharing contract,
which hosts the Abadi gas
field.
Transocean said Inpex had
exercised a one-well option to
keep the rig working until June
2014 at the same dayrate.
DynaMac in
triple win
SINGAPORE fabricator DynaMac has won three new orders
related to oil and gas exploration and production facilities.
The orders total S$42 million
(US$33 million) and cover the
construction of six topsides
modules, two structural blocks
and six pipe racks, said DynaMac.
The orders were received
from Keppel Fels, Bumi Armada and Modec.
28 February 2014
THAILAND
Harvest: workers dry rubber pieces at a rubber market in Thailand’s southern province of Surat Thani
Photo: AFP/SCANPIX
Carnarvon relinquishing
Thai exploration blocks
Australian player to withdraw from L252/50 and L53/50
concessions after search for farm-in partner proves fruitless
AMANDA BATTERSBY
Yangon
AUSTRALIAN independent Carnarvon Petroleum is relinquishing two exploration blocks in
Thailand after failing to farm
down its stakes to help reduce the
risks and cost.
Carnarvon has informed the
Thai authorities that it plans to
withdraw from the L252/50 and
L53/50 concessions in the south of
the country, where it had plans to
drill two exploration wells.
The operator had always maintained that it would not commit
to these two wells without a suitable farm-in partner to come on
board the 100%-held blocks.
A new 314 line kilometre 2D
seismic survey was completed
over the acreage in 2012 — one
year after surface geological
mapping and a gravity magnetic
survey was finished.
Several leads and three prospects were identified with individual estimated prospective volumes of up to 42 million barrels of
oil, which Carnarvon is said to
have believed offered rapid commercialisation potential.
Only two prior conventional
wells are known to have been
drilled on L52/50 and L53/50 and
these were sunk by Gopher Oil in
1998.
Upstream technical and transaction advisers Moyes & Co added
that four coalbed methane wells
were drilled on the acreage between 2003 and 2006 before they
were awarded to then 50:50 partners, operator Mubadala Petroleum and Carnarvon.
The current operator will expense the accumulated costs for
contiguous blocks L52/50 and
L53/50 located in the Khian Sa
basin — the largest Tertiary basin
in south Thailand — during the
first half of this year.
However, Carnarvon is not
turning its back on Thailand
where it holds a 40% interest in
the Phetchabun basin joint
venture that includes producing
oilfields such as Wichian Buri, Si
Thep, Na Sanun East and Bo Rang
together with nearby exploration
and appraisal opportunities.
“We have a disciplined strategy
and a focus on balancing the risks
within the business. In 2014 our
focus is on the Phoenix South-1
well [offshore Australia] and maximising the value of our Thailand
production operations... I am
pleased the company’s operating
activities delivered a profit from
oil production in Thailand during
the second half of last year,” said
Carnarvon chief executive Adrian
Cook.
Carnarvon’s net oil production
in Thailand in the six months
ended 31 December 2013 was
94,760 barrels that realised an
average of $101.78 per barrel.
However, the company posted a
$4.1 million net loss for the second
half of 2013.
PV Shipyard starts construction of jack-up for Vietsovpetro
PETROVIETNAM Marine Shipyard
(PV Shipyard) has begun in earnest the construction of its second
jack-up drilling rig at its yard in
Vung Tau for its client Vietsovpetro, writes Russell Searancke.
Vietsovpetro, the VietnameseRussian joint venture, which is
Vietnam’s largest oil producer, is
understood to have made a commitment to build a new jack-up in
the middle of last year.
The new rig is a Friede & Gold-
man JU-2000E design, and is a
much larger unit than the first rig
that PV Shipyard built, which was
a LeTourneau Super 116E model.
The LeTourneau design is suited
to operations in water depths of
about 90 metres, but the Friede &
Goldman rig is a harsh-environment unit for water depths of up
to 120 metres.
It is understood that Friede &
Goldman will also provide a leg
fixation system. Last week, local
media reported that Vietsovpetro
had completed insurance arrangements to cover the new rig, which
is called Tam Dao 05 and carries a
construction cost of up to $230
million.
Sources said construction of the
ABS-class rig started just before
Christmas, and delivery is scheduled for mid-2016.
PV Shipyard’s workscope covers
the engineering procurement and
construction of the jack-up, which
is an enhancement on its workscope for its previous rig project
called Tam Dao 03.
The Tam Dao 03 has been working steadily for Vietsovpetro since
June 2012.
Another big difference between
the Tam Dao 03 and Tam Dao 05
projects for PV Shipyard is that
Vietsovpetro is involved from the
outset in Tam Dao 05 whereas it
became involved very late in the
Tam Dao 03 process.
WORLD
28 February 2014
33
NORTH AMERICA
TransCanada unfazed by ruling
Nebraska court
decision leaves
Keystone XL
pipeline operator
confident that
no further
delays will arise
‘Solvable
problem’:
TransCanada
chief
executive
Russ Girling
TONYA ZELINSKY
Calgary
CANADIAN pipeline operator TransCanada is confident a court ruling
in the US state of Nebraska challenging its proposed Keystone XL
pipeline will not further delay approval of the project on a federal
level.
The US$5.4-billion cross-border
pipeline hit its latest hurdle on 19
February, when a Nebraska court
threw out a 2012 state law that gave
Governor Dave Heineman the authority to approve the project,
which could have forced landowners to allow the pipeline through
their property.
“While we’re clearly disappointed
and disagree with the decision,
we’ll now analyse the judgment
and determine what our next steps
may be,” said TransCanada chief
executive Russ Girling. “But first,
Photo:
BLOOMBERG
let me say this is a solvable problem,
and we are undeterred.”
The 1900-kilometre project is in
the midst of a 90-day comment period following the completion of the
final supplemental environmental
impact statement (FEIS).
During this time the US Department of State will get feedback from
other government agencies.
According to TransCanada’s advisers, there is no reason to
believe the Nebraska ruling will ultimately affect President Barack
Obama’s decision on a permit.
“We’re past the final environmental impact review and we’re
now in national interest determination. The process in Nebraska will
have to sort itself out at the end of
the day, but that’s not related to
what is going on at the Department
of State at the current time,” said
Girling.
He is confident the findings of the
FEIS suggest the pipeline is in the
public’s interest.
The report claimed it would have
a minimal impact on the environment and would not lead to increased oil sands activity.
Girling pointed out transport alternatives such as rail, truck, or
tanker would produce higher greenhouse gas emissions.
It also stipulated the 59 special
conditions determined by the State
Department and the Pipeline &
Hazardous Materials Safety Administration would further improve
safety beyond other oil pipelines.
“Clearly, by any of these criteria,
Keystone will be determined to be
in the national interest of the US,”
said Girling.
Obama, who has repeatedly put
off a decision on the project, told a
meeting of governors earlier this
week that a decision on Keystone is
a “couple of months”away.
The longer approval takes, the
higher the pipeline’s costs climb. By
the end of 2013, TransCanada had
invested about $2.2 billion.
Optimistic a presidential permit
will be granted by mid-2014, the Canadian operator said the system
would require two full summer
construction seasons before becoming operation.
Meanwhile, TransCanada is moving on plans for the proposed Energy
East pipeline, carrying light and
heavy crude from western Canada to
eastern refiners and for export.
It is preparing to file a regulatory
application with the National Energy Board of Canada by mid-2014.
It has secured firm shipper commitments for 900,000 of the pipeline’s 1.1-million-barrel-per-day capacity.
TransCanada reported net earnings of C$420 million (US$378 million) during the fourth quarter and
C$1.7 billion for the year.
34
28 February 2014
SHALE
AND UNCONVENTIONAL OIL & GAS
Plan to
curb rail
accidents
THE US transportation regulator has issued its latest emergency order aimed at curbing
a spate of explosive derailments of trains carrying crude
from North Dakota’s prolific
Bakken shale, adding to new
industry-driven safety measures agreed this week, writes
Kathrine Schmidt.
The US Department of Transportation will require all crude
transported by rail to be tested
and correctly classified. The
agency will also forbid any oil
to be transported by rail under
its least-restrictive Group 3
packing category and instead
require the use of a “more robust” tank car mandated for
higher-risk shipments.
“Today we are raising the bar
for shipping crude on behalf of
the families and communities
along rail lines nationwide — if
you intend to move crude oil by
rail, then you must test and
classify the material appropriately,” Transportation Secretary Anthony Foxx said.
US rail carriers have put together a list of voluntary safety
standards, including more frequent track inspections, improved braking systems, lower
speed limits for trains with
older tank cars and improved
rail routing technology.
“We share the (Obama) administration’s vision for making a safe rail network even
safer, and have worked together to swiftly pinpoint new operating practices that enhance
the safety of moving crude oil
by rail,” said Edward Hamberger, chief executive of the Association of American Railroads
(AAR) trade group.
The news comes as a Wall
Street Journal study found that
oil from the Bakken and Eagle
Ford shales has a much higher
“vapour pressure”, meaning it
tends to be much more likely to
emit combustible gases than
crude from other areas.
Protesters
charged
A UK district court has convicted three protesters over demonstrations at Cuadrilla Resources’ Balombe drill site in
southern England last summer.
Brighton magistrates court
found Natalie Hynde and
Simon Medhurst guilty of besetting a commercial premises
when they locked themselves
to the gate of the West Sussex
drill site on 31 July 2013.
Judge William Ashworth
said their protest “went beyond
reasonable freedom of speech”
as it disrupted access to the site
at an estimated cost of $8350. A
third defendant was convicted
of obstructing the highway
The new rules... will ensure Colorado
has the cleanest and safest oil and gas
industry in the country and help
preserve jobs.
Colorado Governor John Hickenlooper
US
New rules: Colorado Governor John Hickenlooper received support from Noble Energy, Encana and Anadarko Petroleum
Colorado sets bar with em
Both industry and environmental groups get behind latest
efforts to curb pollution but spectre of individual fracking bans
by local governments still looms
NOAH BRENNER
Houston
COLORADO has enacted some of
the most stringent rules in the nation to curb emissions from oil and
gas development but the changes
may not be enough to head off a
campaign by groups that want to
allow local governments to ban hydraulic fracturing.
The Colorado Air Pollution Control Division passed the sweeping
new regulations with general support from industry and a push
from the non-profit Environmental Defense Fund.
The rules are the first in the nation to specifically target methane
emissions from oil and gas installations, not just the reduction
of volatile organic compounds
(VOCs).
By some estimates, the new
rules could cut 90,000 tonnes of
VOCs and 100,000 tonnes of methane from the air annually.
Those two substances can combine to form low-level ozone — a
pollutant that was once thought
to exclusively crop up in big cities
located in warm climates but has
since been seen in areas where
nearby mountain ranges trap the
emissions close to the surface.
The reductions, in part, will
come from retro-fitting valves on
production equipment and tightening restrictions on venting
from equipment such as liquidsgathering tanks as well as from a
more aggressive regime of inspections and leak repair.
Colorado Governor John Hickenlooper had been pushing for the
rules since November and had
general support from Noble Energy, Encana and Anadarko Petroleum — all of which have major
operations in the state.
“Colorado is proving once again
that collaboration and compromise help solve important issues
facing our state,” Hickenlooper
said after the rules were approved.
“The new rules approved by Colorado’s Air Quality Control Com-
mission, after taking input from
varied and often conflicting interests, will ensure Colorado has the
cleanest and safest oil and gas industry in the country and help
preserve jobs.”
Industry
unsuccessfully
sought some additional flexibility
in the regulations but the Colorado Oil & Gas Association (COGA)
endorsed the final product nonetheless.
“Unfortunately, we were not
successful in ensuring that the
rule accommodates the differences in basins and operators,” COGA
policy director Doug Flanders
said. “Nevertheless, we are com-
28 February 2014
35
90,000
THE AMOUNT in tonnes of volatile
organic compounds that could be
removed from the air by Colorado’s new
emissions regulations.
McClendon secures
Oklahoma foothold
AEW BUYS
120,000 ACRES
Utica shale operation
valued at $5 billion
WILDCATTER Aubrey McClendon has expanded his growing
oil empire into Oklahoma with a
series of asset deals at the same
time as a debt offering valued his
operations in the Utica shale in
Ohio at roughly $5 billion.
American Energy Woodford
(AEW) — the latest in the fleet of
companies affiliated with
McClendon’s private equitybacked American Energy Partners — secured $680 million to
pay a handful of private companies for a foothold in central
Oklahoma, where it plans to drill
the Mississippian Lime and
Woodford Shale tight oil plays.
The private companies —
Calyx Energy, Calyx Energy II,
Liberty Energy and Truevine
Operating — sold AEW a package
that totalled 120,000 net acres
and 6000 barrels of oil equivalent per day of production.
Based on the known positions
of those private companies, it
appears the acreage likely spans
Payne, Noble and Pawnee counties in Oklahoma.
AEW dubbed the stacked
Mississippi Lime-Woodford Shale
play the Central Northern Oklahoma Woodford play and said it
would like to amass as much as
200,000 acres in the area. Cash for
Photo: AP/SCANPIX
issions regulations
mitted to working with our operators, our communities, and the
state to successfully and effectively implement these rules.”
It remains to be seen if the
stricter regulations will be
enough to quell an increasingly
vocal movement to limit hydraulic fracturing in Colorado.
In November, four towns situated along the Front Range north
of Denver voted to ban fracturing
for at least five years and the results of a fifth proposal are still
under legal review.
However, it is not clear that any
of the governments have the power to limit fracking under the
state’s constitution. When a similar restriction was passed in Longmont in 2012 the state and industry sued the city and that case has
not been decided yet.
Late last week, citizens filed a
ballot initiative that will force a
statewide vote on whether Colorado should amend its constitution to give local governments the
power to regulate fracking.
Industry said such a change
would cause havoc and limit drilling as towns and even entire
counties each enacted their own
drilling regulations.
Noble and Anadarko have joined
to form the group Coloradans for
Responsible Energy Development
(CRED) to fight the measures.
“It is not possible or practical for
hundreds of local governments to
enact differing standards for the
protection of natural resources,
such as clean air and water, which
are of statewide significance,”
CRED communications head Jon
Haubert said. “CRED supports the
process currently in place which
reinforces the state’s role.”
Many also fear that the change
is simply one step in an eventual
plan to try to ban fracking in the
state altogether, something that
environmental groups have said
remains one possible option.
the deal came in the form of $500
million in equity investment
from private equity player Energy
Minerals Group and $180 million
in debt from Texas Capital Bank,
AEW said.
AEW is the fourth company
McClendon has revealed under
the umbrella of American Energy Partners.
Others have focused on nonoperated properties and the Marcellus shale play in Pennsylvania.
The largest so far is American Energy Utica (AEU), focused on the
Utica shale in Ohio.
Days before AEW revealed its
position in Oklahoma, AEU announced that it had sold $750
million of debt that could be converted into a 15% interest in the
company when it made an initial
public offering.
Though still privately held,
the deal gives AEU an estimated
value of $5 billion — all of which
has been built up since the company came into existence less
than a year ago.
At the same time as the debt
sale, AEP increased its revolving
credit facility by $500 million to
$950 million.
The cash will be used to fund
a series of deals with Hess, privately held Paloma Partners and
ExxonMobil’s unconventional
unit XTO totalling more than
$1 billion for land in the emerging southern wet gas window of
the Utica.
Search the archive:
Aubrey McClendon
Carrizo off to promising
start with first Utica well
CARRIZO Oil & Gas is producing
at above anticipated rates from
its maiden well in the Utica
shale more than seven weeks
after it started, writes Luke
Johnson.
Carrizo’s Rector-1H well in
Guernsey County, Ohio, averaged output of 553 barrels per
day of condensate over the first
48 days and continues to flow at
a stabilised rate of more than 500
bpd and 2 million cubic feet per
day of rich natural gas on a 15/64inch choke.
That puts it above the company’s 1350 barrels of oil equivalent
type curve and was ahead of
analyst estimates.
The well hit a peak rate of 2816
barrels of oil equivalent per day,
including 1680 bpd of condensate. It was drilled to a vertical
depth of 7456 feet with a 7890foot lateral, and was completed
with 31 frac stages.
Chief executive Chip Johnson
said down-hole pressures have
dropped to within expectations
but remain “at a very high rate
where we think we can keep producing the well at this rate and
still maintain very high bottomhole pressure”.
The company will spud its
Brown-1H well next month in
northern Guernsey County and
has a total of nine gross Utica
wells planned in 2014, most of
which will be drilled in the vicinity of the Rector well because
the company already has well
pads built and plans for other infrastructure.
Johnson said Carrizo is trying
to build on its position in the
Utica but has found the task difficult so far.
“We haven’t had as much success buying acreage (in the Utica), but we have some larger
deals we’re working on right
now,” he told analysts on a conference call on Tuesday.
Carrizo has set aside about $75
million for land and seismic expenditures this year, with almost
all of it devoted to the Utica and
to the Eagle Ford shale in Texas.
Carrizo posted quarterly earnings in line with estimates, with
a net loss of $22.2 million. It made
a profit of $16.8 million in the
three months to December 2012.
SHALE
36
ARGENTINA
Repsol accepts $5 billion
in deal to end YPF battle
Bruising two-year fight between Spanish
player and government looks to be settled
GARETH CHETWYND
Rio de Janeiro
REPSOL’S board has approved a
compensation deal worth $5 billion relating to Argentina’s 2012
expropriation of the Spanish company’s former controlling stake in
shale-rich YPF.
The package, which should put
a stop to a bitter legal dispute, includes two groups of dollardenominated Argentina public
bonds.
Repsol chief executive Antonio
Brufau publicly welcomed the
deal, saying it “frees up resources
from the legal and management
points of view.”
“To finally reach a friendly
agreement on this contentious
issue that has taken two years is
extremely positive,” he said.
Argentina’s President Cristina
Fernandez de Kirchner took the oil
world by surprise in April 2012
when her administration moved
to expropriate Repsol’s 51% stake
in YPF.
Argentina claimed the Spanish
company had failed to invest sufficiently in the country, but Repsol denied this, pointing to its
own ambitious plans to unlock
the potential of Vaca Muerta, considered by experts to be one of the
top three shale formations in the
world.
Repsol had at first held out for a
compensation package worth
$10.5 billion, and started legal proceedings against oil peers seeking
to partner the re-nationalised YPF
on the expropriated areas of Vaca
Muerta, with Chevron the main
target.
The Spanish company came under pressure to settle from some of
its own minority shareholders, led
by Pemex, with 9.4%.
The state-run Mexican company offered tacit support for Argentina’s arguments about sovereignty, and pushed for a settlement as
the best way to reduce the impacts of the expropriation.
At one point, Pemex tried to
nudge Repsol into accepting a
compensation deal that included
assets in the Vaca Muerta shale.
“This suggestion went down
badly with the majority on the
board, led by Brufau” said one
Repsol source.
The compensation offer mooted
in 2013 reportedly valued shale assets at $500,000 per acre, described as “several times lower”
than the valuation used in YPF’s
new $1.24 billion joint venture
with Chevron.
Repsol eventuallly accepted
payment in bonds, but only after
much wrangling over guarantees.
Repsol will now take an impairment charge of nearly €1.28 billion ($1.75 billion) on its YPF interests, adding to €1.10 billion worth
of charges on North American onshore assets. As a result, Repsol’s
Settlement smiles: Argentine President Cristina Fernandez de Kirchner and, below, Repsol
chief executive Antonio Brufau
Photos: AP/AFP/SCANPIX
net income for 2013 was reported
at €195 million this week, down
from €2.06 billion in 2012.
Revenue reached €6.23 billion
for 2013 compared to €6.95 billion.
Exploration was a bright spot.
Repsol reported nine “positive”
wells in Alaska, Algeria, Brazil,
Colombia, Libya and Russia over
the year, achieving a reserves
replacement rate of 275%.
Repsol’s net output was also up
4% on the year, reaching 346,000
barrels of oil equivalent per day,
driven by Brazil, Bolivia and
Russia.
Losses elsewhere were partially
offset by a gain of €1.26 billion on
the company’s sale of liquefied
natural gas plants to Shell in Peru
and Trinidad and Tobago.
Argentine officials hope the
compensation settlement will
open up the doors to more financing and joint venture opportunities for YPF, now restored to the
status of an entirely state-run
flag-carrier for Argentina.
“YPF is a fundamental tool for
the country’s energy future and I
believe the expropriation has given that tool back to Argentines,”
said YPF president Miguel Galuccio.
The settlement still needs to be
approved by Repsol’s shareholders
as well as the Argentine parliament.
28 February 2014
Gas prices
stay on
the swing
US NATURAL gas prices continued to swing wildly as traders
balanced low storage figures
with expectations of the start
of warmer weather, writes Noah
Brenner.
Prices for the front-month
futures contract on the New
York Mercantile Exchange hit a
five-year record of about $6.50
on 24 February, only to lose 25%
of their value in the next three
trading days and drop to about
$4.71.
Natural gas prices in the US
had been soaring in February,
climbing more than 40% in less
than two weeks on the back of
the lowest storage levels in 10
years and more cold weather
hitting the US east coast.
But traders ignored the Arctic blast and forecasts for unseasonable cold continuing into
the first week of March, and
instead continued to take profits gained from the recent price
increases.
Over the longer term, gas
prices have stayed moderate at
between $4.50 and $5 — a level
that many see as attractive for
producers to lock in hedges that
mitigate the downside risk of
the volatile market.
“The strip has dropped a bit,
but the 12-month is still near
the $4.60 level, which is a good
level to continue to put on
hedges,” analysts at investment
bank Capital One Southcoast
said in a note.
But even at that level, producers could see the market
erode as power producers
choose to switch their generation back to cheaper coal.
Analysts at Tudor Pickering
Holt estimated that prices
above $4.50 could cut into natural gas demand by as much as 3
billion cubic feet per day due to
fuel switching — a figure that
would allow natural gas in storage to refill to as much as 3.8
trillion cubic feet.
While the current price
spikes have been temporary,
many in industry are starting
to see the fundamental market
shifts needed for higher gas
prices in the future.
“We continue to believe that
the demand side of the shale
revolution will eventually
catch up with the supply side as
US gas used in transportation,
new industrial plants and LNG
exports takes off in the second
half of this decade, requiring
increasing volumes of higher
cost gas,” analysts at consultancy PIRA Energy said.
Gas prices
in the US
had been
soaring in
February,
climbing
more than
40% in less
than two
weeks.
SHALE
28 February 2014
37
NORTH AMERICA
Rebuttal: Encana chairman
David O’Brien
Photo: BLOOMBERG
Cabot in
Marcellus
gas deal
WASHINGTON
UTILITY SALE
Operator clinches
long-term supply
Encana joins Chesapeake
in Collingwood getaway
Canadian also puts Michigan acreage up for sale
as state officials scrutinise companies’ actions
NOAH BRENNER
Houston
ENCANA Oil & Gas is joining
Chesapeake Energy in trying to
exit the Collingwood shale in
Michigan, where state officials
continue to investigate allegations the two companies colluded
to keep lease prices low in 2010.
The Canadian giant is offering
about 234,000 net acres for sale
across northern and central Michigan, according to sales documents seen by Upstream.
The package includes nine
wells, six of which are currently
producing and another that was
completed and is awaiting initial
well tests.
The best of the wells, the Beaver
Creek 1-23 in Crawford County,
had initial production as high as
4300 barrels per of oil but the liq-
uids content was 20%. The wells
were drilled on 30,000 acre units,
allowing Encana to hold 146,000
acres by production.
Chesapeake Energy had been
marketing its own position in
Michigan since mid-2012 as part of
an effort to clean up its sprawling
US shale portfolio.
That package totals 450,000 net
acres spanning 20 counties, including many of those where
Encana holds drilling rights.
Sales documents seen by
Upstream indicate that package is
still on the market.
Chesapeake indicated that
much of acreage is owned by the
state of Michigan and was acquired through state lease sales.
State and federal officials are
concerned that it was at these
lease sales that the two companies agreed to parcel out certain
portions of the state in order to
avoid a competition over leases
that was driving up prices in
2010.
Encana acknowledged receiving
a subpoena from the Antitrust
Division of the US Department of
Justice and “a civil investigatory
demand” from the Michigan
Attorney General’s office.
The company launched its own
internal investigation and in September declared that it found it
had done nothing wrong.
“We have taken this matter
very seriously and over the past 11
weeks have conducted a very rigorous investigation,” Encana
chairman David O’Brien said in
September 2012.
“We want to reiterate that Encana remains committed to acting ethically and in compliance
with laws in all that we do.”
However, a representative of
the Michigan Attorney General
confirmed to Upstream that the
investigation remains open.
“Our investigation remains ongoing,” Joy Yearout said in an email.
“We have no additional comment
for the record at this time.”
An Encana representative did
not immediately respond to requests for comment on the
matter.
However, reports this week suggested that a settlement could be
close.
Shale giant looks to cash in on services division move
CHESAPEAKE Energy is looking at
its options to cash in on its services division as the shale giant
continues to clean up its portfolio
and bridge its ongoing funding
gap, writes Noah Brenner.
Chesapeake Oilfield Services
could be a candidate for an outright
sale or could be spun off to shareholders, Chesapeake said, formalising a move that has been contemplated unofficially for years.
The unit consists of five different
companies — the most prominent
of which is Nomac Drilling — but
the company’s offerings span pressure pumping, trucking and oilfield
construction. Chesapeake Oilfield
Services had 2013 revenues of $2.2
billion, according to Chesapeake,
derived from a fleet of 115 drilling
rigs, a pressure pumping fleet of
360,000 horsepower units, 260
trucks to move rigs, 67 cranes and
about 250 fluid-hauling trucks.
Nomac started out as a way for
Chesapeake to save money on its
own wells but as the company has
cut its rig count over the past couple
of years Nomac has contracted out
about one-third of its rigs to other
operators — a trend that Chesapeake would like to continue, the
company said.
“Chesapeake Oilfield Services is
an outstanding business with a
talented management team that
we believe will offer Chesapeake
and its shareholders enhanced return opportunities as a standalone company,” Chesapeake chief
executive Doug Lawler said.
He also explained that the move
fits the company’s plan of “financial discipline and profitable and
efficient growth from captured
resources”.
Most analysts agreed Chesapeake would likely prefer to sell
the unit outright, rather than spin
it off as a separate company to
shareholders.
Investment bank Tudor Pickering Holt estimated the unit could
be worth $2.2 to $2.5 billion but
other analysts, including Stifel
Nicolas’ Amir Arif, cautioned that
the unit could bring in as little as
$1 billion to $1.5 billion.
Even at the low end, the figure
would cover the company’s projected $1 billion 2014 funding gap
— almost all of which comes in
the form of capitalised interest.
“While this news formally alerts
the marketplace that the company
will solicit bids, we expect that
these assets have been available over
the last year, as the company embarked on its divestiture process to
right-size the balance sheet,” Sterne
Agee analyst Tim Rezvan said.
CABOT Oil & Gas has struck a
long-term natural gas sales
agreement with a utility serving Washington DC as the
Marcellus shale player looks to
lock in better prices for the gas
gushing from its wells in
north-east
Pennsylvania,
writes Noah Brenner.
The deal calls for Cabot to
sell about 500 million cubic
feet of natural gas per day to
WGL Holdings over 15 years.
The terms of those sales were
not disclosed.
The utility is also investing
$410 million to help build a 177mile (285 kilometre) pipeline
from Cabot’s fields in Susquehanna County to the Atlantic
Sunrise pipeline running to
the coast.
It is the second long-term
supply deal struck by Cabot,
which earlier agreed to sell 350
MMcfd to Japanese player
Sumitomo, which will export
the gas through the proposed
Cove Point liquefied natural
gas terminal in Maryland.
Takeaway capacity in the
Marcellus has lagged behind
the strong well results, leading
to price differentials that make
gas worth less than it is at the
benchmark Henry Hub in Louisiana.
Managing these differentials
through long-term sales agreements and hedging has become
a major issue for Cabot and
other Marcellus producers.
“The differential is the 800
pound gorilla in the room right
now and everybody’s models
are different,” Cabot chief executive Dan Dinges told investors during a quarterly conference call.
Search the archive:
Cabot
Origin target
AUSTRALIA’S fourth-ranked
local producer Origin Energy
has pledged to spend a minimum A$97 million (US$87 million) on two new unconventional gas blocks in the Cooper
basin.
Origin said Area A and Area
B provide exposure to multiple
unconventional play types, including tight sands, shale and
deep coal seams.
The Area A work programme
involves the drilling of up to
eight exploration and appraisal
wells, fracture stimulation and
flow testing, with the first well
expected within 12 months.
The Area B commitment
involves seismic followed by
up to seven exploration and
appraisal wells, plus flow testing.
38
28 February 2014
LNG
Ennore
tender
re-run
AT LEAST eight to 10 players are
likely to show interest in Indian Oil Corporation’s (IOC) prequalification exercise to select
a contractor for regasification
facilities for its $700 million
Ennore liquefied natural gas
terminal in Tamil Nadu.
Sources said IOC is prequalifying contractors again
after it cancelled an earlier attempt following controversy
over the qualification process.
“IOC has invited expressions
of interest this week from interested players. The previous
tender stands cancelled and
contractors are being pre-qualified once again,” a source said.
Interested contractors are
required to express interest by
14 March, the source added.
Leading Japanese contractors Mitsubishi, IHI and Toyo
Engineering are likely to express interest, sources said.
Taiwan’s CTCI, South Korea’s
Samsung, Turkey’s Fernas, Italy’s Saipem, China’s Huanqiu
Contracting, Spain’s Tecnicas
Reunidas and Technip from
France are also likely to chase
the job, sources said.
However, the sources picked
the two Japanese contractors
as potential front runners.
“IHI and Toyo have worked
in India with Petronet’s LNG
terminals and can offer aggressive bids,” a source said.
The engineering, procurement and construction contractor for the Ennore terminal
will be responsible for building
LNG unloading, regasification
and send-out facilities for the 5
million tonnes per annum proposed facility.
China set
for LNG trio
CHINA is set to commission
three liquefied natural gas terminals this year, boosting the
nation’s LNG import capacity to
40 million tonnes per annum.
Sources said that the country’s 13 terminals will operate
at an average rate of 58% this
year, given that the new facilities will go on line only at the
end of this year and will need
at least two or three months
before running at full capacity.
They added that LNG imports
are expected to reach 22 million tonnes during 2014, up
from 18 million tonnes last
year.
Two terminals will be built
In Qingdao and Fangchenggang, and will be owned and
operated by Sinopec.
The third will be at Hainan,
owned and operated by China
National Offshore Oil Corporation. Each will have capacity of
3 million tonnes per annum.
Replication is very tempting... on the other
hand, there are equally good arguments
for innovation and change.
Gorgon stage two engineering manager Roger Walpot
AUSTRALIA
Giant: the 2.1 kilometre-long jetty at the Gorgon LNG terminal on Barrow Island
Chevron pushes on at Gorg
US operator’s engineers work on concept select process on massive
second phase development of two field groups
JOSH LEWIS
Perth
US SUPERMAJOR Chevron is planning the second-phase development of the two huge fields that
will provide feedstock gas for the
US$54 billion Gorgon liquefied
natural gas project being built in
Western Australia.
The two groups of fields, Gorgon
and Jansz-Io, are being developed
as enormous subsea schemes.
Chevron’s engineering manager
for the Gorgon stage two project,
Roger Walpot, said at the Australia Oil & Gas conference in Perth
that Chevron currently has a team
of about 35 engineers working on
the concept select stage on the
next phase of developing Gorgon
and Jansz-Io, which will focus on
three main elements. “The first is
the further development of the
Gorgon field,” he said.
“Secondly, the further development of Jansz-Io and also
looking ahead to the future for
possible tie-backs, other fields
that can tie-back into this infrastructure.”
The Gorgon field lies in water
depths of between 200 and 250
metres and is initially being developed through eight wells,
spread over three manifolds.
The gas from the field will be
exported through a 65-kilometre
subsea pipeline to the LNG plant
on Barrow Island. Further development at Gorgon could see two
more manifolds added to the
field, and between seven to nine
additional infill wells being
drilled.
Walpot explained the current
concept for the second phase
would see about three new wells
added to one of the existing manifolds in the north-east of the
field.
A fourth manifold would be
added to the south-west of the
field, with between two and four
new wells, and a fifth manifold in
the north-eastern corner with an
additional two wells.
The Jansz-Io field lies about 130
kilometres from Barrow in 1300
metres of water and is initially
being developed through 10 wells
via two drill centres, with gas
also being exported to Barrow
Island.
The drillship Deepwater
Frontier is currently employed at
Jansz-Io on the production wells.
Walpot said the next stage of
Jansz-Io would focus on the southwest corner of the field and would
see an additional drill centre being placed in about 1325 metres of
water with another five subsea
wells tied in to it.
Chevron will also look at ways
to tie in other fields in the area to
the Gorgon infrastructure, with
Walpot noting the Greater Gorgon
area contains an estimated 37
28 February 2014
39
1000 tonnes
THE WEIGHT of some of
the subsea structures likely to
be used in the Gorgon stage
two development.
Technological challenges of next
phase to ‘really push the envelope’
Photo: CHEVRON AUSTRALIA
gon stage two
trillion cubic feet of resources,
making it the single largest
resource accumulation in Australia.
“With a lot of these other fields,
we are looking for ways to develop
them when it is time for backfilling the Gorgon development,”
he said.
“One option is where we could
have further step-outs, further
subsea developments and tie
them in to the existing infrastructure of the Jansz or Gorgon
systems.”
Walpot said one of the main
drivers behind focusing on phase
two now was to ensure the security of supply into the foundation
three LNG trains, and to maintain
plateau production.
He said a decision must be made
on when the next gas supply
project needs to be on stream and
what it needs to deliver in terms
of production rates, and other factors.
Gorgon is expected to come on
stream in the middle of next year
and will consist of three LNG
trains with a combined capacity
of 15 million tonnes per annum.
Chevron operates the project,
holding a 47.33% stake, with partners ExxonMobil on 25%, Shell on
25%, Osaka Gas on 1.25%, Tokyo
Gas on 1% and Chubu Electric
Power on 0.42%.
CHEVRON is examining the technological challenges it could face
during the next development
phase of the upstream fields for its
Gorgon LNG project.
Roger Walpot, Chevron’s engineering manager for the Gorgon
stage two project, said some of the
potential fields that could be tied
back to the Gorgon infrastructure
would be “really pushing the envelope” on industry capability for
step-outs.
“Some of the fields will require
more than 200-kilometre control
step-outs to Barrow Island, so the
long distance will require technology qualification,” he said,
while adding that Chevron was
“quite confident” that solutions do
exist.
“It’s just packaging those solutions and getting all the boxes
ticked so they can be marinised
and implemented. That is something that we will have to focus
on,” he added.
Other challenges facing the
next upstream phase includes the
size and weight of the subsea
structures.
“Some of these structures are
huge, reaching up to and sometimes beyond 1000 tonnes,” Walpot said.
“That of course will create significant challenges, not only in
design, but in fabrication and testing and installation, and it also
reduces your window of installation vessels that can actually handle this.”
He pointed out that Chevron
would need to find a balance between replication and innovation
during the concept stage of the
development.
“Replication is very tempting,
there are very good arguments to
make for replication... minimum
design effort — ‘just give me one
like we did before’ — which will
cut out some of the uncertainty
during the manufacturing, testing the installation,” he said.
Replication could also lead to
faster deliveries, with the lessons
learned during the first phase of
development being applied to the
second phase of the project.
It would also help with the operations and maintenance phase,
with the same types of tools and
parts being able to be used across
the project, which in turn would
help speed up turnaround times.
SEARCH FOR
SOLUTIONS
Focus on balance between
replication and change
“On the other hand, there are
equally good arguments for innovation and change,” Walpot said.
He noted that the lifetime of big
gas fields often exceeds the lifetime of controls as well as other
parts and equipment, which need
to be dealt with during the next
phase of development.
New standards and regulations
can also force changes to future
developments, which can lead to
re-engineering and re-certification of components.
Lessons learned and new techniques implemented on other
projects around the globe can also
have an impact on the decisionmaking process when planning
for another phase of development
— as can new technology that was
not available during the initial
phase of development.
During the next development
phase, Chevron will also need to
look at the upside potential of recent and future discoveries in the
Greater Gorgon area and the best
way to capitalise on them.
Walpot said this could include
re-rating the LNG plant on Barrow Island, de-bottlenecking, or
expansion with a fourth LNG
train.
On location: the Transocean drillship Deepwater Frontier at
the Jansz-Io field
Photo: EXXONMOBIL
Allseas finishes $900 million pipelay operation
ALLSEAS is putting the finishing touches to its
huge subsea pipelay operation at the Gorgon LNG
project in Western Australia.
Chevron’s Gorgon upstream manager, David
Equid, said at the Australian Oil & Gas
conference in Perth that Allseas’ pipelay vessel
Solitaire would wrap up its operations on the
project soon.
“Solitaire is doing the last line and come Sunday
(23 February) it’s finished and all our pipelay
operations are over,” he explained.
Allseas’ enormous workscope was valued at
around A$1 billion (US$900 million) and included
the installation of 660 kilometres of pipelines
ranging from six inches to 34 inches in diameter.
The total lengths of the two main pipelines are 58
kilometres from the Gorgon field and 134
kilometres from the Jansz-Io field.
All the offshore pipelines were to be installed in
separate lay corridors.
It is understood that Allseas committed three
vessels to the Gorgon project — the Solitaire, the
Lorelay and Calamity Jane.
Equid added that Chevron’s upstream work on
the project would likely be finished “probably
around the end of this year”.
He noted that, with the project’s subsea
structures beginning to be placed on the seabed,
the last main job was the big jumper spools that
go in between the structures on the seabed.
LNG
40
Singapore
plans new
terminal
SINGAPORE plans to build a
second liquefied natural gas
receiving terminal to the east
of the island nation, taking
into consideration the land
constraints on the expansion
of the its first import facility on
Jurong Island, writes Tan Hwee
Hwee.
Singapore’s Prime Minister
Lee Hsien Loong said further
details on the second terminal
now undergoing site selection
will be released in due course.
The government is “studying
a few potential sites in eastern
Singapore”, he said at the
official opening of Singapore
LNG (SLNG) on Jurong Island.
SLNG has started a tender
process to select a contractor
for its planned expansion to
boost imports to 9 million
tonnes per annum by 2017, up
from the current 6 million tpa
capacity.
A final investment on the expansion is expected in the second quarter of this year.
Singapore’s second minister
for trade and industry S
Iswaran said two further LNG
import licences will be issued
beyond the 3 million tpa contracted to BG Group to meet the
requirements of the added import capacity.
BG as the sole aggregator for
the first 3 million tpa tranche
has delivered 1.08 million
tonnes of LNG cargoes from its
assets including Equatorial
Guinea and Trinidad and Tobago.
Prime Minister Lee said a
“competitive request for proposal will be issued for the
next tranche of LNG imports by
June”.
Search the archive:
Singapore LNG
Oil Search
in the hunt
OIL Search of Papua New Guinea has said it will announce
imminently a material acquisition, most likely of an interest
in the Elk-Antelope gas field
which Total farmed in to recently.
Oil Search called a trading
halt in its shares on 25 February, but had not clarified the
acquisition as Upstream went
to press.
The company has been in
discussions for months over a
potential involvement in the
Elk-Antelope resource, which
could underpin a new liquefied
natural gas development or act
as feedstock for an expansion
of the PNG LNG project, in
which Oil Search owns 29%.
French player Total last
December took up a 61% interest in the field but said it would
likely divest up to 19%.
Oil Search reiterated recently
it is “in ongoing discussions
with the key stakeholders regarding a potential involvement in the licence”.
28 February 2014
AUSTRALIA
Open to collaboration: Santos chief executive David Knox
Photo: BLOOMBERG
Queensland link likely
for Shell and PetroChina
Subsidiary Arrow Energy said to be running ‘open season’
with owners of three existing LNG projects in the state
RUSSELL SEARANCKE
Oslo
SIGNS are emerging that Shell and
PetroChina have begun the formal
process of linking their gas resources in Queensland, Australia,
to one of the three existing liquefied natural gas projects in the
area.
Well-placed sources said Arrow
Energy, the 100%-owned Australian subsidiary of Shell and
PetroChina, is running an “open
season” with the three LNG
projects’ owners with the intention of sending its gas through
one, or more, of the trio.
It is understood that an open
season is the initial stage in a
process that should culminate in
Arrow’s gas being converted into
LNG by another party, and with
Arrow having an ownership interest in the LNG train that is built to
accommodate Arrow’s gas.
It has long been held that Shell
and PetroChina had dropped the
idea of having their own LNG facility on Curtis Island, and indeed
Arrow Energy recently laid off the
staff that had been working on
that end of the project.
The Queensland state government approved late last year
Arrow’s application to build the
LNG plant, but Shell and PetroChina had already been examining tie-in arrangements with the
three incumbents.
Sources said there are several
scenarios that would each lead to
big capital savings for Shell and
PetroChina, all based on them retaining their upstream reserves.
The first would be that an existing project would build another
train and purchase Arrow’s gas
then sell the LNG. The second
would be similar except that
Arrow would be charged a liquefaction toll and sell its own LNG.
The third would be for Arrow to
finance the train construction
and the existing owner would
charge for pipelines and infrastructure.
Each scenario would save, at the
very least, the cost of building export pipelines spanning hundreds
of kilometres.
The closing date for the open
season is said to be within the
next two months, with each
project in data rooms and much
effort being exerted, said sources.
One of the three incumbent
projects is the Gladstone LNG
scheme, which is building two
trains and plans to produce first
exports next year.
David Knox, the chief executive
of Santos — which is a joint operator of Gladstone LNG — said
last week that Gladstone LNG
“welcomes collaboration even if
that was to the extent of additional trains”. He added that it made
“far more sense than to go it
alone” but that it was a decision
that Arrow had to make.
The two other incumbents are
BG Group’s Queensland Curtis
LNG and the ConocoPhillips-Origin Energy Australia Pacific LNG
(APLNG).
Market analysts have long said
that all three existing projects
need Arrow’s reserves to underpin
expansion beyond their first two
trains.
APLNG is understood to be the
only one of the trio that has
regulatory approvals in place for the
third and fourth expansion trains.
The approved model for the
Arrow LNG project is the development of coalbed methane gas
fields in the Surat basin, feeding
into a two-train LNG facility on
Curtis Island with capacity of up
to 9.2 million tonnes per annum
of LNG.
Monadelphous and Kentz-United land awards at Ichthys
AUSTRALIAN company Monadelphous plus a joint venture between Kentz and United Group
have landed some of the work related to the final major onshore
workscope for the Ichthys liquefied natural gas project.
Monadelphous’ A$680 million
(US$613 million) contract for me-
chanical work covers the erection
of piping, mechanical and structural steel for the utility and offsite area.
Work has started and is expected to be finished by mid-2016.
The UGL-Kentz joint venture
said its US$640m contract was for
the structural, mechanical and
piping construction package.
Yet to be awarded is the electrical
and instrumentation package,
which is being pursued by players
including Kentz and Consolidated
Contractors, said sources.
The overall workscope is essentially the installation and assembly of the modules for the two Ich-
thys LNG trains, each of which
will produce 4.2 million tonnes
per annum of LNG from 2016.
It is understood there are 220
LNG modules weighing about
180,000 tonnes that are being
built in South-East Asia and will
eventually be shipped to the Blaydin Point LNG site near Darwin.
h
g
u
o
r
s th
.
s
o
t
San
8 - 11 | April 2014 | 2 p.m. - 9 p.m.
e
pass
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t
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sf
Mendes Convention Center | Santos | SP
a
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Oi
Petrochemicals
Environment
Oil and
Gas
Air
Logistics
Metals
Ports
Navals
The organizer of the major event Brasil Offshore
is also responsible for Santos Offshore. It is the
premier meeting in the State of São Paulo for the
Oil and Gas sector. It provides the developing
of their business through an event that brings
together the highly qualified audience of various
segments of the production chain, from
operators, through production, to the most
diverse suppliers. As in every edition, this event
gathers products and a high level of services
for which opportunities are created and
successful business are implemented. Great
opportunities await you at Santos Offshore.
See special conditions to participate.
Pre-Salt in Santos. Acelerated Growth.
Holding most of the pre-salt reserves, the Santos Basin is the target of investments in the sector for
the development and extension of the supply chain of the Oil and Gas segment.
2013 | The federal
government approved
for 2013 holding three
bidding rounds:
Norte & NE | Pre-Salt
Natural Gas
2013 | The
calculation of the signing
bonus and the minimum
compromise reached
R$ 4.8 billion
2013 | Government
sets R$ 15 billion
in bonuses Round
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prospect of Libra,
in the Santos Basin
2013 | R$ 50 million
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a state company that will
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proven gas reserves, being
the 2nd largest gas field in
the country, after Mussel,
in the Santos Basin
2013-2017 | Until
2017, will invest U.S.
$236.7 billion, and the
Pre-salt production will
reach 1 million bpd
Registration open for visitors.
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Photo: AP/SCANPIX
QUOTE OF THE WEEK
In the 1980s, while I was compiling the oil and gas index, David
Cameron was still fooling around on the playing fields of Eton.
Scottish First Minister Alex Salmond sticks the class boot into the UK prime minister as the pair put North Sea resources
centre stage in the debate on Scottish independence.
CUTTINGS
42
28 February 2014
Going with
the flow…
REX: NO TANKS
•
Gregory McNab has quit as
chief executive of Otto Energy to
be replaced by Matthew Allen,
with Paul Senycia named vice
president of exploration and new
ventures and Craig Hasson
appointed chief financial officer
•
Mitch Ingram is taking over
from the retiring Derek Fischer
as managing director of
Queensland Gas Company
•
AziNor Petroleum has hired
Nick Terrell and Henry Morris to
run AziNor Catalyst
•
Kevin O’Connor has been
appointed chief executive of
Air2Work
•
Magma Global has appointed
David Charlesworth head of
engineering
•
Oceaneering International has
appointed Eric Silva chief
information officer
BLADES OUT
FOR MADURO
Embattled Venezuelan President
Nicolas Maduro may have to think
twice next time he swings his hips to
the “poet of salsa”, Ruben Blades
(pictured).
Maduro, a self-proclaimed fan of
Panamanian-born Blades, was stung
last week by comments the singer made in an opinion piece about
protests over crime, corruption and the dire economy rocking the Opec
nation.
Writing in an open letter, Blades said both sides have their own agenda
in the fight, yet the piece prompted Maduro to speculate that the singer
has been enlisted by foreign interests to further destabilise his
government and prepare for intervention.
Blades said he is baffled by the retort. “If I criticise someone from the
left, then I’m from the (Central Intelligence Agency). If I criticise someone
from the right, I’m a communist. When I criticise the military, ‘I’m
‘subversive’,” he wrote .
Maduro is finding out that Blades doesn’t just dance to anyone’s tune.
ECONOMY OF SHALES
a 700-square-foot, one-bedroom
Oil workers in a North Dakota shale
pad, apparently. Something similar in
patch are getting a raw deal: if their
the Big Apple will set you back
hard-earned cash is not going on
around $1500 a month, the newspaexorbitant rent, they are splashing it
per reported.
in sushi restaurants, it seems.
But it’s not all bad news: at least
The town of Williston in South
there are more sushi restaurants
Dakota has been unmasked as the
popping up in the town close to the
town with the highest average rent in
Yellowstone and Missouri rivers.
the US - beating the likes of New York
“We want guys to bring their families
when it comes to getting a pokey
here,” Katie Long, communications
one-bedroom apartment, according
director for economic development in
to The Houston Chronicle.
Photo: REUTERS/SCANPIX
the town, told the Chronicle.
The oil boom from exploiting the
There’s nothing better than high rent, raw fish and unconBakken shale is behind the rise in average income in the
town to $79,000 – and it will take $2400 a month to occupy ventional resources to pull in a long-term crowd, it seems.
BEAN COUNTING
AT STATOIL
No business
area is safe,
it seems,
from the
swinging
axe of
Statoil’s
corporate
cutbacks, and
anger is brewing
among workers as they risk
losing a refreshing perk in their
daily grind.
The state-owned oil giant is
now reportedly considering
cutting out free coffee at
helicopter terminals in an
effort to save around Nkr3.3
million ($548,000) spent on
the benefit last year as it
targets annual savings of $5
billion through 2016.
Having recently announced
job cuts, giving the chop to a
welcome hot cuppa is a
crushing blow for workers
waiting to fly out to platforms,
and has only further stirred
the pot of labour discontent.
Statoil’s reported rationale
for the move is that its
well-paid workers can afford
to buy their own coffee,
prompting an IndustriEnergi
union official to call the saving
“petty”.
Adding to the bitter taste of
the proposed cutback,
company staff at offices and
land-based locations – including chief executive Helge
Lund – will still be able to grab
a gratis latte.
So, for now at least, Statoil’s
free coffee is grounded.
Photo: REUTERS/SCANPIX
ExxonMobil boss says ‘H -NO’
to fracking-water tower plans
beside family ranch
2
Cosco Corporation (Singapore)
has named Tom Yee Lat Shing
lead independent director
Montage by Upstream
Tillerson takes
on the tower
Motive Offshore has named
Colin Murray head of finance
Photo: AP/SCANPIX
ExxonMobil is a towering presence in
the US shale gas scene, but chief
executive Rex Tillerson is now trying to
throw cold water on some fracturingrelated plans.
The Texan is one of the most highprofile plaintiffs in a lawsuit aimed at
stopping a huge water tower being built
right on the doorstep of his plush ranch
in the town of Bartonville, the Wall
Street Journal reported.
Tillerson has reportedly attended at
least two town meetings to protest the
160-foot tower that is in part planned
to supply water for nearby drilling
operations.
The suit, being led by former US
House Majority leader Dick Armey,
alleges the tower is “causing unreasonable discomfort and annoyance to
persons of ordinary sensibilities”.
Although the boss of one of the
largest oil and gas-producing companies in the world is said not to oppose
the tower on any fracking-related
grounds, he is reportedly worried it
might devalue his property.
“I cannot stay in a place where I do
not know who to count on and who not
to count on,” the newspaper reported
Tillerson as saying to the council.
Non-ranch-owning Americans with
“ordinary sensibilities” must now be
wondering if they can count on ExxonMobil to block such intrusive structures
in their own backyards.
•
•
JOB OPPORTUNITIES
28 February 2014
43
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2014 SALARY GUIDE
NOW AVAILABLE
Get industry leading insights.
Learn how salaries have changed in the last year by regions,
seniority levels and specialisms in the industry.
Gain insights from industry experts on the survey results and how
to make a positive impact on your business.
Find out what employees want and how you can create a
Visit hays-oilgas.com to request your copy.
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Original Equipment Manufacture
Drilling & Well Delivery
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44
JOB OPPORTUNITIES
28 February 2014
JOB OPPORTUNITIES
28 February 2014
45
Chief Marketing Officer
Dynamic Energy Services is one of the largest privately held energy
services company in the US. Gulf Coast. Responsible for overseeing
Business Development. Marketing and Sales Initiatives including
directing a large existing sales force located along the US Gulf Coast
and major US onshore shale areas with an emphasis on continued
recruiting and coaching. This position reports to the President and
CEO and is based out of the Lafayette/Houston Corridor. Ideal candidate
will have Bachelor’s degree (B.A) from four-year College or University.
15 or more years of experience with 5 or more years directing a
comparable sales organization, or equivalent combination of education
and experience. Masters of Business Administration preferred.
Willingness to travel 50% or more of the time.
Qualified Candidates send resume to gcaime@dynesi.com
For your recruitment advertising or other
classified advertising in Upstream,
please contact:
Stinelli Pallesen in Stavanger
Phone: +47 51 85 91 58 • Fax: +47 51 85 91 60
E-mail: stinelli.pallesen@upstreamonline.com
Carol Davies in Houston
Phone: +1 713 693 5506 • Fax: +1 713 626 8125
E-mail: carol.davies@upstreamonline.com
Alternatively call Singapore: +65 6557 0600
BUILDING
YOUR
CAREER
with
Sheffield
E&P Operator
1.
2.
3.
4.
Production Coordinator (Yangon, Myanmar)
CMMS Planning Supervisor (Yangon, Myanmar)
Drilling Supervisor
Drilling Engineer
EPCI Contractor – SEA
1. Project Control Manager (Thailand)
Please kindly submit CVs in MS WORD format only to:
Yong Guang (yong.guang@sheffieldoffshore.net)
Website: www.sheffieldoffshore.net
UK and Europe
Global Oil and Gas
Project Resource Specialists
Rotating Equipment Engineer
Facilities Delivery Manager
Principle Well Engineer
Senior Piping Engineer
Senior Mechanical Engineer
Mechanical Rotating Equipment Engineer
Senior Instrument Engineer
Electrical Equipment Engineer
Cost Engineer
Lead Contracts Engineer
Ref 6821
Ref 6762
Ref 6795
Ref 6800
Ref 6776
Ref 6792
Ref 6799
Ref 6793
Ref 6803
Ref 6825
USA
Mentor IMC Group – an oil and gas sector exclusive professional
consultancy which provides experienced project management and
technical specialists to the world’s leading oil and gas companies.
For over 25 years we have delivered high calibre professionals and
services of quality to help our clients implement and execute global
onshore and offshore projects. We also provide a comprehensive
range of value-added services.
We support our clients through each project stage from concept
through engineering, construction, commissioning and
operations.
Mentor operates from our own offices in:
UK
+44 20 7536 1140
Norway
+47 51 22 38 35
USA
+1 713 425 6307
Singapore
+65 6339 1295
Thailand
+66 2 104 9194
Malaysia
+60 3 2147 4661
Korea
+82 52 251 9007
Japan
+81 45 670 7035
Brisbane
+61 7 3112 2958
Perth
+61 8 9214 3844
Construction Manager
Interface Manager
Principal Completions Engineer
Commissioning & Hook-Up Manager
Vendor Inspection Coordinator
FPSO Site Quality Coordinator
Process Engineer
Ref 6824
Ref 6774
Ref 6790
Ref 6783
Ref 6785
Ref 6784
Ref 6819
Australia & Asia
HSE Systems Coorindator
HSE Manager
Senior Geophysicist
Mechanical Process Commissioning Lead
Senior Instrument & Controls Engineer
Offshore ICSS FAT Leader
For full job listings visit:
Ref 6808
Ref 6766
Ref 6770
Ref 6807
Ref 6767
Ref 6823
www.mentorimcgroup.com
46
JOB OPPORTUNITIES
28 February 2014
Air Energi provide trusted expertise to our
clients and candidates engaged in the global
oil and gas industry. Through our company
values: safe, knowledgeable, innovative,
passionate, inclusive and pragmatic, WE
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Angola Australia Brazil Cameroon Canada China Equatorial Guinea France Indonesia Italy Japan Kazakhstan Kuwait Malaysia Nigeria
Norway Papua New Guinea Qatar Russia Singapore South Korea Syria Thailand UAE United Kingdom USA Venezuela Vietnam
28 February 2014
JOB OPPORTUNITIES & CONFERENCES
CHARTERING DIRECTOR
Brightoil Shipping (BOSS) is a division of the Brightoil Group. We own and operate a modern fleet of
VLCC and Aframax tankers in addition to a growing fleet of bunker barges. In addition to carrying our own
system cargoes, we fix our vessels on a spot and contract basis with many of the world’s largest oil companies.
The Brightoil Group was established in 1992 in China and is listed on the Hong Kong Stock Exchange.
The Group reported annual revenues of approximately HKD39, 553 million and employed around 1,500 staff
worldwide. The Brightoil Group aims to transform itself into a global multi-national energy conglomerate,
with an Asian heritage.
RESPONSIBILITIES
• Develop and implement the spot and medium term Chartering strategy
• Optimise earnings in accordance with our commercial strategy
• Optimise vessel utilisation relative to market peers
• Manage group system cargoes
• Identify and recommend project opportunities including charter-in and out, pooling, JVs and commercial
management.
• Responsible for cost efficiency while never compromising quality or safety
• Review and improve internal Chartering processes
• Manage key customer and stakeholder relationships
• Manage the integration of internal processes with our current systems
• Produce regular performance management reports (market/peer comparison)
REQUIREMENTS
• Degree in Shipping, Business Administration or Economics
• At least 10 years commercial tanker shipping experience ideally with a large ship-owner and/or global
energy company. Candidates with less experience may be considered for Manager or Senior Manager position.
• Thorough understanding of oil tanker markets and participants
• Thorough knowledge of Chartering and Operations software
• Excellent verbal and written communication skills
• Bilingual in English & Mandarin is preferred.
• Strategic CRM experience and business process improvement and/or project management experience
are preferred.
How to apply:
If the above job requirements ideally match your profile, we would like to invite you to email your full
resume with your current & expected remuneration and earliest commencement date to hrsg@bwoil.com
Brightoil Shipping (S'PORE) Pte Ltd
10 Pasir Panjang Road,
#15 &16, Mapletree Business City
Singapore 117438
We regret that we will not be able to respond to all applications as only shortlisted candidates will be notified.
47
CONFERENCES
48
28 February 2014
13th Turkish International
OIL & GAS
Conference
9–10
April 2014
Ankara • Turkey
Turkey’s leading
Oil & Gas event
www.turoge.com
Tel: +44 (0)20 7596 5008 Email: og@ite-events.com
London • Moscow • Almaty • Baku • Tashkent • Atyrau • Aktau • Istanbul • Hamburg • Beijing • Poznan • Dubai
C
D
IA
L
A
U
D NT
G
E
N
I
I
ILL P
D
R
D SHO
A
K
R
R
G WO
14
0
IL 2 NH
R
P TEL
A
O
G
7
H DIN
UIL R I D
B
RO D
EU M A
Registration and sponsorship opportunities
are available. Please contact IADC at
europe@iadc.org or +31 / 24 - 675 2252 for
more information or visit
www.iadc.org/event/2014-iadc-dualgradient-drilling-workshop
2014 SPE/IADC
Managed Pressure
Drilling &
Underbalanced
Operations
CONFERENCE & EXHIBITION
8-9 APRIL 2014
HOTEL NH EUROBUILDING
MADRID
Registration, sponsorship & exhibition
opportunities are available. Please contact
IADC at europe@iadc.org or
+31 / 24 - 675 2252 for more information or visit
www.iadc.org/conferences/MPD_UBO_2014
CONFERENCES
28 February 2014
49
Conference & Exhibition
Organised by:
INDONESIA ENERGY OIL & GAS 2014
Exhibition, Conference and Networking Party
March 11th & 12th, The Laguna Hotel, Nusa Dua, Bali.
Developments, Strategies and Opportunities in
Oil and Gas in the Indonesian Region
Featuring Over 35 Top Level
speakers, some of which include:
IOGS2014 Delegates will:
DISCOVER - the latest developments in
Indonesia’s Oil and Gas Sector
SUNDEEP BHANDARI,
LEARN - from the key decision makers
driving Indonesia’s Hydrocarbon
Revolution
CEO, PETRODRIL
ROVICKY DWI PUTROHARI,
ENGAGE - with your key audience at
the exhibition and exclusive networking
evening.
President, INDONESIAN
ASSOCIATION OF
GEOLOGIST
MR FATRIAL BAHESTI,
Regional Exploration
Geoscientist,
PERTAMINA EP
Featuring a two-day Conference,
Workshop Day, Exhibition and
exclusive networking evening
MR RIDWAN RUSLI,
Vice Chairman and CEO,
SAMUDRA ENERGY
Benefit from extensive
networking opportunities in the
comfort of a 5 star venue
SOEKOESEN SOEMARINDA,
General Manager,
SINGAPORE PETROLEUM
COMPANY LIMITED
Take advantage of our Business
Matchmaking Service and
participate in one-on-one meetings
with your fellow delegates
BAMBANG ISTADI, Chief
Business Development,
ENERGI MEGA PERSADA
To view the full speaker line up please visit our website or request an agenda:
www.indonesia-energy.com
For further enquiries please contact:
charlotte@oliverkinross.com +44 (0) 207 374 0250
www.globalpacificpartners.com
5th
Eastern Africa’s Prospective Oil & Gas Frontiers
28th - 30th April 2014
5th Eastern Africa: Strategy Briefing - 28th April
62nd PetroAfricanus Dinner - 29th April
Intercontinental Hotel
Nairobi, Kenya
5 Eastern Africa Oil, Gas/LNG & Energy Conference - 29th - 30th April
th
Sponsors:
Supported By:
MINISTERE DES
H YDRO CARBURES
DE LA
R EPUBLIQUE DU C ONGO
Media Partners:
AFRIC A E N E R G Y
INTELLIGENCE
Senior Partners
Dr Duncan Clarke: duncan@glopac.com
Babette van Gessel: babette@glopac.com
Sponsor / Exhibition / ShowCase Enquiries
Amanda Wellbeloved: amanda@glopac-partners.com
Sonika Greyvenstein: sonika@glopac-partners.com
Registration
Judith Moore: Judith@glopac-partners.com
Brigitt Relli: brigitt@glopac-partners.com
Marketing Contact
Jerry van Gessel: jerry@glopac-partners.com
Jodee Lourensz: jodee@glopac-partners.com
50
28 February 2014
FINANCIAL
Seadrill
warns of
weakness
RIG markets could experience
weakness this year as drilling
units become available due to
project delays, Seadrill has
warned.
However, the Norwegian
owner sees these “challenges”
mainly threatening the lower
end of the rig market, with demand to remain strong for
high-specification units.
Although Seadrill pointed out
that the fundamentals in the
offshore market remain strong,
it said some oil companies are
experiencing constrained cash
flows, meaning budgets have to
be re-examined.
“Contrasting with 2012 when
the market was under supplied... it is clear that the market is adequately supplied currently and may encounter
some challenges in 2014.”
However, in the longer-term
the outlook is better for the
floater segment, with demand
to at least keep pace with the
rate of deliveries.
“We estimate the market
will demand approximately
450 floating units in 2020. Taking into account current newbuild and expected retirements, it is likely that the
market will be able to absorb 25
to 30 newbuild floating units
per year,” said the company.
Long view
for Petrofac
UK SERVICES giant Petrofac
expects at best a “modest”
growth in profit this year
before an anticipated stronger
earnings performance the year
after.
The London-listed company
posted a 2.8% rise in net profit
of $650 million last year, up
from $632 million in 2012, as
the integrated energy services
and offshore projects divisions
performed well.
Total revenues increased
from $6.24 billion to $6.33 billion, but onshore engineering
and construction revenues
were down.
Earnings dip
for Worley
WORLEYPARSONS’ net earnings fell 27% to A$112.1 million
(US$100 million) in the six
months to 31 December 2013
due to a contraction in activity
in its hydrocarbons and minerals and metals segments.
The Melbourne-based company said the Australian market continues to contract “due
to completion of projects”,
while there was also a “softening activity” in Canadian oil
sands.
We had a flow of 36,000 bpd from one well
to the Cidade de Sao Paulo, and that is a
record for the pre-salt
Petrobras chief executive Maria das Gracas Foster
BRAZIL
Looking ahead: Petrobras chief executive Maria das Gracas Foster
Photo: OTC/BARCHFIELD PHOTOGRAPHY
Petrobras five-year plan
update targets pre-salt
Up to 28 new production systems on menu for sector by 2018 as
depreciation of Brazilian real, rising debt costs and late start-ups
on some production units undermine company’s fourth quarter results
FABIO PALMIGIANI and
GARETH CHETWYND
Rio de Janeiro
BRAZIL’S Petrobras has unveiled
an updated five-year business
plan that calls for the installation
of up to 28 new production systems between 2014 and 2018, the
majority of which will exploit presalt reservoirs in the Santos basin.
The $220.6 billion investment
plan represents a 7% decrease
from the record $236.7 billion set
for the 2013-2017 period, but investments of $153.9 billion earmarked for exploration and production were up 4% on the
previous plan.
After two years of stagnant oil
production in Brazil, Petrobras
predicts domestic output will increase about 7.5% in 2014, as five
production units are expected to
enter operations this year.
Petrobras produced 1.93 million
barrels per day in 2013.
Output is expected to increase
by more than 1 million bpd by
2018 to 3.2 million bpd.
A longer term production target
of 4.2 million bpd by 2020 is
backed by the deployment of an
additional seven production units
later this decade, including the
first one at the giant Libra pre-salt
area.
Of the 28 units that are due to
produce first oil by 2018, Petrobras
has already contracted 21 and is
expected to contract another seven shortly.
The tender for the first such
unit — a floating production, storage and offloading vessel with capacity for 150,000 bpd to be installed at the Tartaruga Verde and
Tartaruga Mestica fields in the
Campos basin — was launched recently. The goal is to begin output
in 2017.
The other six still-to-becontracted units are due to start
production in 2018 and include
one in the deep waters of the
Espirito Santo basin, one in the
deep waters of the Sergipe-Alagoas
basin, one to revitalise output at
the Marlim field, one at the
Carcara pre-salt find, one at the
Maromba heavy oil field and one
in the southern portion of the
Parque das Baleias complex.
In 2019, Petrobras plans to install the first production unit at
the Jupiter pre-salt find and the
fifth FPSO at the Buzios field, formerly known as Franco. First oil
from Libra is planned for 2020.
Petrobras also reported a net
profit of 6.28 billion reais ($2.7 billion) in the fourth quarter of 2013,
down 19% from the net gain of 7.75
billion reais in the same period a
year ago.
The depreciation of the Brazilian real, rising debt costs and late
start-ups on production units
such as the P-55, P-63 and P-58
were cited as factors that undermined profits.
Net revenue increased 10% to 81
billion reais in the quarter, helped
by some government-sanctioned
increases in fuel prices, still fall-
ing short of the losses that Petrobras is taking on its compulsory
role as an importer of fuels.
The net profit of 23.6 billion
reais for the whole of 2013 was 11%
higher than 2012.
Petrobras recorded a reserves
replacement rate of 131% over the
year, with a 75% success rate on
wildcats and a 100% strike rate in
the pre-salt.
Petrobras chief executive Maria
das Gracas Foster mentioned in a
positive light the late-running
subsea riser projects supporting
the Cidade de Sao Paulo and
Cidade de Paraty FPSOs.
“These (riser buoys) are an application of new technology and
the source of some apprehension,
but the technology is demonstrating its worth in the operational
phase, and this is getting better
every week. We had a flow of
36,000 bpd from one well to the
Cidade de Sao Paulo, and that is a
record for the pre-salt,” she said.
28 February 2014
51
$153.9 bn
THE AMOUNT
earmarked for exploration
and production in Petrobras’
new five-year plan.
See-sawing week for oil prices
Strong US dollar
offset by lower
than expected
crude inventory
levels as situation
worsens in Libya
Push: hardline
members of
the US
Congress
pressed for
fresh
sanctions
against Iran
but the move
is unlikely to
succeed
VAHE PETROSSIAN
London
OIL prices see-sawed because of
various political and economic
factors over the past week, but
ended up trading at about the
same level on Wednesday as they
had on the same day the previous
week.
US light prices rose by $0.90 to
$102.73 per barrel in mid-day
trading on Wednesday, after fresh
data showed lower than expected
US crude inventory levels.
In London, benchmark Brent
crude prices increased by $0.34 to
$109.85 per barrel in late afternoon trading.
The premium between Brent
and US prices has been at its
lowest since October — at about
$7 per barrel.
The effects of a strong US dollar
were offset by the Energy Information Administration’s estimate, released mid-morning
Wednesday, of an unexpectedly
small increase in US crude inven-
Photo: GETTY
IMAGES/AFP/
SCANPIX
OIL PRICE
COMMENTARY
tories during the previous week.
US crude stocks were up by only
68,000 barrels at 362.4 million
barrels, the agency said.
A Reuters poll of analysts had
predicted a rise of 1.2 million
barrels, while the industry’s
BRENT SPOT PRICES
111
109.80
US$/bbl
American Petroleum Institute estimated the increase at about
800,000 barrels.
Distillate inventories also
showed a small increase of
340,000 barrels to 113.1 million
barrels.
However, gasoline inventories
fell by 2.8 million barrels to
230.6 million barrels, the agency
said.
Putting some pressure on prices
were factors such as lower consumer confidence and an apparent
loss of momentum in the housing
recovery in the US.
High Chinese corporate debt
BRENT FORWARD PRICES
OPEC BASKET
105 US$/bbl
107
105
95
109
US$
106.55
106
100
110
knocked out during an exchange
of heavy fire between rival militia
groups.
In the Persian Gulf, conflicting
reports of an arms supply deal between Iran and Iraq and a US expression of concern to Baghdad
caused some tension.
Hardline Congress members in
Washington took opportunity of
the occasion to revive efforts to
impose fresh sanctions against
Iran — although such new
legislation at a time of continued
positive talks between Iran and
the big powers seemed unlikely
seriously to be considered.
figures were also raising questions over the outlook for the
Chinese economy.
Helping sustain prices was
bad political news from Libya,
where oil production was said to
now be as low as 230,000 barrels
per day because of protests and
militia action at oilfields and
ports.
Output was 1.4 million bpd in
the early summer of 2013.
The Libyan government has instituted special measures to be
able to pay state employees but on
Wednesday reported a power
plant in southern Libya was
90
104
85
103
108
107
6 Feb
One Week Ago: 110.54
13 Feb
20 Feb
One Month Ago: 107.84
26 Feb
One Year Ago: 113.22
WTI SPOT PRICES
102
80
WTI FORWARD PRICES
104
102.28
US$/bbl
100
5 Feb
12 Feb
20 Feb
One Month Ago: 96.70
26 Feb
One Year Ago: 92.43
21 Feb
14 Feb
Net change
% change
362,393
230,600
35
362,325
233,407
41
68
-2807
-6
0.02
-1.20
-14.63
95
Inputs ('000 bbls/day)
Input to dist.
Refinery runs
15,678
15,299
15,460
15,178
218
121
1.41
0.80
90
US Production ('000 bbls)
Total Motor Gasoline
Reformulated Gasoline
Conventional Gasoline
8693
2965
6129
8776
2915
5895
-83
50
234
-0.95
1.72
3.97
Imports ('000 bbls)
Crude Oil (excl. SPR)
Products
7037
1601
7421
1656
-384
-55
-5.17
-3.32
80
1M 2M 3M 6M 9M 12M 15M 18M 21M 24M 27M 30M 33M
HENRY HUB NATURAL GAS SPOT PRICES
UK DAY AHEAD NATURAL GAS PRICES
62
25 Feb
US Stocks ('000 bbls)
Crude Oil
Total Motor Gasoline
Reformulated Gasoline
85
One Week Ago: 102.79
19 Feb
US DEPARTMENT OF ENERGY OIL STOCK DATA
98
96
12 Feb
US$/bbl
105
100
102
5 Feb
1M 2M 3M 6M 9M 12M 15M 18M 21M 24M 27M 30M 33M
HENRY HUB NATURAL GAS FORWARD PRICES
8
5.0
7
4.5
6
4.0
US$/MMBtu
61
60
59
58
57
56
55
56.00
GBp/therm
6 Feb
13 Feb
20 Feb
26 Feb
5
5.22
US$/MMBtu
4 Feb
11 Feb
19 Feb
25 Feb
3.5
1M
3M
9M
15M
21M
27M
33M
39M
45M
51M
60M
Source: Bloomberg
FINANCIAL
52
MEXICO
28 February 2014
AMEX OIL INDEX
1500
Net change from last week: +24.00
1482.30
1400
1300
1200
26 March 2013
26 February 2014
*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.
Source: Bloomberg
PHILADELPHIA OIL SERVICE INDEX*
300
Net change from last week: +0.80
276.88
280
Transparency: oilfield services player Oceanografia has been suspended from winning
Pemex awards pending an investigation
Photo: BLOOMBERG
Oceanografia in
push for grace
period on bond
Contractor suspended from winning government
awards looks for debt-payment extension
260
240
220
200
26 March 2013
26 February 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.
16,231.26
190.7
1.19
125,791,075
16.77
S&P 500
1851.73
23.0
1.26
579,900,320
23.70
Nasdaq Comp.
4314.52
76.6
1.81
523,364,403
37.86
FTSE 100
6813.49
16.8
0.25
951,238,234
8.66
Oslo OBX
504.62
3.4
0.68
62,922,033
16.00
1482.30
24.0
1.65
22,676,800
13.63
276.88
0.8
0.30
12,233,780
15.38
Amex Oil Index
TOM DARIN LISKEY
Houston
Philadelphia Oil Service
Source: Bloomberg
WINNERS & LOSERS THIS WEEK
MEXICAN marine contractor
Oceanografia has been working
around the clock to clinch a shortterm extension on a grace period
for debt payments to investors —
even as it faces the threat of a
21-month ban from doing any
business with state-run Pemex.
The company, which tapped
capital markets late last year to
buy new vessels before Mexico’s
post-reform offshore boom, has
been seeking to negotiate the
grace period on a bond that matures in 2015.
Oceanografia is one of Mexico’s
biggest contractors, but federal
officials have suspended the company from winning new government contracts as part of a new
anti-influence peddling investigation. The Mexican company
denies that it has acted inappropriately in its dealings with
Pemex and is fighting the suspension.
“The resolution published in the
Official Gazette is temporary, has
not yet become final, since the law
itself provides resources that will
be brought against it,” the company said.
“Oceanografia... delivered documentation to the internal control
of (Pemex) to ensure transparency
of contracts, and has always acted
in each tender legally and in compliance with the guidelines and
regulations of Pemex.”
Meanwhile, Oceanografia needs
to structure the grace period on
an estimated $335 million in
bonds, according to sources. The
company did not respond to que-
Gaspromneft in blocks deal
RUSSIA’S Gazpromneft has
agreed to pay for the exploration
of two blocks in the Tomsk region
— Lower Paninsky and Muromsky 2 — in exchange for the right
to buy them at a later stage, according to licence holder Petrogrand of Sweden, writes Vladimir
Afanasiev.
Work will include the shooting of new seismic and the drilling of an exploration well on
each of the blocks in the winter
season of 2014-2015.
Petrogrand said that Gazpromneft will fully finance this work.
Once reserves on the assets are
better understood and confirmed, the Russian company
will have the right to buy out
Petrogrand’s subsidiaries that
hold exploration and development licences.
The price paid by Gazpromneft
to Petrogrand will be determined
by the size of confirmed hydrocarbon assets, the company said.
Potential recoverable reserves
of the two blocks are estimated
at about 370 million barrels of oil
under the Russian reserve classification system.
ries on the debt extension talks.
The ability to compete for Pemex
contracts is crucial for Oceanografia. Even after deregulation, the
state oil giant will remain the largest corporation in Mexico.
Pemex is also planning a major
push offshore into deeper waters
and Oceanografia is already one of
the companies named as a possible
bidder in Pemex’s upcoming $1.5
billion heavy-lift package contract.
Oceanografia took advantage of
investor appetite for Mexican debt
last year when it sold about $160
million to raise funds to buy vessels before the regulation changes
affecting the Mexican oil sector.
Oceanografia used the Caballo
Marango offshore support vessel
and the heavy-lift OSA Goliath as
security.
AziNor sets
up UK wing
PRIVATELY-owned AziNor Petroleum has established a subsidiary
called AziNor Catalyst to manage
and develop its UK business.
Nick Terrell and Henry Morris
will run the new company, which
has assets in the central and northern North Sea, west of Shetland
and west of the Outer Hebrides.
Bermuda-registered AziNor
Petroleum is backed by Seacrest
Capital Group, also registered on
the island.
Company
Exch
Curr
Last price
PDC Energy
GR
EUR
61.41
1,638,116
Vol 5 d
Mkt Cap* Ch 5 d%
2191.0
15.6
Penn Virginia
UN
USD
14.90
738,251
974.0
15.4
Sevan Marine
NO
NOK
25.90
350,462
224.6
15.1
Camac Energy
UA
USD
0.65
836,540
254.3
13.5
Heritage Oil
CT
GBp
4.30
2060
1112.0
13.2
Forest Oil
UN
USD
2.01
866,855
239.3
-37.6
Goodrich Petroleum
UN
USD
12.99
957,149
575.5
-15.0
Endeavour Interntional
UN
USD
5.17
908,127
244.0
-12.8
Cabot Oil
UN
USD
35.35
2,056,991
14,907.8
-11.8
QEP Resources
UN
USD
28.45
436,406
5087.7
-11.4
*Market Cap in million US$
Source: Bloomberg
DOLLAR RATES
Code
Currency
ARS
AUD
Argentine Peso
Australian Dollar
7.885
1.116
BRL
Brazil Real
CAD
CHF
CNY
Canadian Dollar
Swiss Franc
China Renminbi
COP
Colombian Peso
DKK
EUR
GBP
Danish Krone
Euro
British Pound*
HKD
ILS
Hong Kong Dollar
Israeli Shekel
INR
JPY
Indian Rupee
Japanese Yen
KZT
KRW
Kazakhstan Tenge
South Korean Won
MYR
NOK
Malaysian Ringgit
Norwegian Krone
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
*All currencies in USD except GBP
Last
Ch 5 days %
1Yr ago
Ch 1 Yr %
-1.320
-0.467
5.038
0.978
-36.1
-12.4
2.347
1.981
1.982
-15.5
1.111
0.893
6.124
-0.270
-0.459
-0.784
1.026
0.932
6.230
-7.6
4.4
1.7
2056.51
-0.350
1817.81
-11.6
5.462
0.732
1.664
-0.507
-0.510
-0.234
5.709
0.766
1.513
4.5
4.6
10.0
7.761
3.520
-0.072
-0.324
7.759
3.731
0.0
6.0
61.985
102.4
0.379
-0.049
54.095
92.0
-12.7
-10.1
184.900
1065.20
-0.124
0.042
150.470
1088.00
-18.6
2.1
3.271
6.067
0.734
0.175
3.103
5.703
-5.1
-6.0
44.610
104.950
36.023
6.523
1.266
22.0497
32.574
2.238
10.8471
0.022
-0.013
-1.022
-0.175
-0.205
-0.513
0.043
-1.037
1.777
40.755
98.170
30.678
6.459
1.239
23.0593
30.0
1.807
8.8183
-8.6
-6.5
-14.8
-1.0
-2.1
4.6
-8.5
-19.3
-18.7
Source: Bloomberg
FINANCIAL
28 February 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
BG Group
LN
GBp
1,104.50
1.5
BP
LN
GBp
508.20
Cenovus Energy
CT
CAD
28.62
Chevron
UN
USD
ConocoPhillips
UN
USD
CPCC
CG
HKD
5.07
7.9
-7.6
Ecopetrol
CX
COP
3,460.00
-8.2
-33.2
EnCana
CT
CAD
20.98
-0.5
13.4
21.75
17.40
Eni
IM
EUR
17.45
0.7
2.6
19.12
15.16
ExxonMobil
UN
USD
96.38
2.6
8.9
101.74
84.79
3,246,858
421,037.36
Galp Energia
PL
EUR
12.17
3.4
3.8
13.40
10.20
693,189
Gazprom
RX
RUB
143.50
-2.7
5.1
265.00
102.06
54,605,190
Hess
UN
USD
79.74
-1.2
23.4
85.15
61.32
Husky Energy
CT
CAD
33.45
-1.2
9.9
33.98
Imperial Oil
CT
CAD
48.99
1.1
15.7
KazMunaiGas E&P
KZ
KZT
17,100.00
-1.7
0.6
Lukoil
RX
RUB
2,009.00
-0.9
1.9
MOL
HB
HUF
13,300.00
-3.6
-22.7
Murphy Oil
UN
USD
59.48
3.3
13.7
66.19
Occidental
UN
USD
95.86
1.0
17.2
OMV
AV
EUR
34.10
3.2
3.7
Pakistan Petroleum
PK
PKR
216.90
-0.3
44.3
Pecom Energia
AF
ARS
5.00
-3.8
Petrobras
BS
BRL
13.16
PetroChina
HK
HKD
Polish Oil & Gas
PW
PLN
Repsol
SQ
EUR
Royal Dutch Shell
LN
GBp
2,195.50
0.7
2.6
2,281.50
Sasol
SJ
ZAr
54,999.00
-1.8
41.9
56,067.00
Sinopec
HK
HKD
6.64
9.8
-0.7
7.20
SNP Petrom
RE
RON
0.45
-2.3
0.7
Statoil
NO
NOK
160.00
-0.6
Suncor
UN
CAD
33.07
Currency
Price
26 Feb
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.
Price
26 Feb
2014
Comstock Resources
UN
USD
20.39
2.5
47.1
20.61
13.57
274,404
Continental Energy
UV
USD
0.04
-15.6
-29.8
0.14
0.01
64,203
3.98
0.35
819,345
165.16
Company
% change
5 days
% change
1 year
High
Low
Last 12 months
Avg vol
5 days
Market Cap
Mill. USD
972.29
-3.7
1,355.50
1,006.00
6,878,709
62,688.53
Cooper Energy
AT
AUD
0.56
7.7
0.0
0.59
2.7
14.5
510.00
426.55
38,462,190
156,070.78
Cosco Capital
PM
PHP
9.17
4.1
-42.0
18.90
7.47
14,721,740
1,523.89
0.5
-11.2
33.39
28.25
3,667,793
19,476.99
Crew Energy
CT
CAD
7.89
2.3
20.3
8.03
4.99
1,823,138
863.82
115.42
1.6
0.4
127.82
109.27
2,217,373
220,390.01
Curlew Lake
CV
CAD
0.02
0.0
-63.6
0.07
0.02
206
0.33
66.38
2.1
15.0
74.57
56.38
1,605,756
81,401.08
Denbury Resources
UN
USD
16.25
0.4
-9.4
19.65
15.56
8,889,222
5,958.70
5.95
4.05
168,588,800
97,190.67
Det Norske Oljeselskap
NO
NOK
65.10
-2.8
-27.0
94.00
62.15
440,724
1,509.89
5,251.41
3,330.00
8,356,785
69,160.81
Devon Energy
UN
USD
63.95
-0.5
19.0
66.92
50.81
5,045,946
25,963.70
3,732,095
13,983.39
DNO International
NO
NOK
24.16
9.6
131.6
25.34
9.01
8,196,801
4,075.10
10,533,600
86,652.36
Double Eagle
UW
USD
2.16
-0.2
-54.6
6.20
1.90
25,466
24.47
Dragon Oil
LN
EUR
614.50
-2.8
1.3
669.00
544.00
542,980
5,029.26
13,789.68
Drillsearch Energy
AT
AUD
1.59
-3.4
16.1
1.64
0.91
2,847,497
614.74
94,296.37
Dundee Energy
CT
CAD
0.29
7.4
-38.4
0.55
0.27
19,464
49.13
3,422,555
26,919.93
Egdon Resources
LN
GBp
25.63
-7.7
197.1
43.38
7.75
238,602
61.74
26.97
1,477,851
29,607.59
Elan Oil & Gas
LN
GBp
101.00
1.9
-21.1
132.50
87.00
785,808
227.34
49.59
38.58
632,255
37,375.23
Endeavour Interntional
UN
USD
5.17
-12.8
111.9
7.50
2.36
908,127
244.02
17,890.00
12,980.77
218
6,494.20
Energen
UN
USD
80.66
4.0
75.7
89.90
44.46
167,070
5,862.81
2,140.00
1,781.30
1,367,017
47,431.51
Energy XXI (Bermuda)
UW
USD
23.70
-1.3
-19.7
33.93
20.40
1,011,745
1,667.34
17,790.00
12,870.00
88,658
6,117.61
Enerlabs
UV
USD
0.35
-22.2
105.9
0.90
0.13
3,210
3.38
50.90
486,300
11,121.73
EnQuest
LN
GBp
144.70
2.6
11.1
145.50
116.70
1,131,144
1,932.65
99.42
77.21
1,076,827
77,268.90
EOG Resources
UN
USD
187.91
5.1
52.2
188.26
112.09
506,669
51,321.90
39.69
30.75
272,829
15,249.02
Equal Energy
CT
CAD
5.95
-0.8
77.1
6.06
3.18
14,421
190.80
223.90
143.09
482,960
4,072.61
ERHC Energy
UV
USD
0.07
-4.3
-4.3
0.09
0.03
123,644
51.24
25.9
6.49
2.77
273,711
1,280.51
Europa Oil & Gas
LN
GBp
7.50
-9.1
-24.5
13.53
5.75
594,049
25.57
-1.8
-10.5
20.35
12.74
6,736,100
75,012.23
Falkland Oil & Gas
LN
GBp
26.75
0.0
-9.3
32.00
23.25
861,191
237.50
8.00
0.6
-24.4
11.00
7.31
124,220,800
221,323.96
First Australian Rsc.
AT
AUD
0.06
7.5
42.5
0.06
0.02
12,630,470
127.64
5.06
1.2
-8.8
6.76
4.47
3,160,006
9,762.27
Fitzroy River
AT
AUD
0.40
-5.9
11.1
0.46
0.30
17,912
32.53
18.56
5.2
20.0
19.94
15.15
5,939,815
33,563.09
Forest Oil
UN
USD
2.01
-37.6
-65.7
6.67
1.94
866,855
239.34
1,975.00
7,303,005
238,287.54
Freeport-McMoran
UN
USD
33.49
1.0
8.5
38.09
26.34
11,464,918
34,778.30
36,696.00
1,053,652
32,952.42
FX Energy
UW
USD
3.74
10.3
0.0
6.18
2.48
218,039
199.75
5.02
232,729,300
97,190.67
Gas Plus
IM
EUR
4.84
-0.4
3.2
5.25
4.32
8,659
297.25
0.49
0.40
3,761,300
7,654.33
Gasco Energy
UV
USD
0.02
3.9
-66.0
0.08
0.00
273,642
10.54
12.0
162.80
122.90
2,713,315
84,095.73
Glen Rose Petroleum
UV
USD
0.07
16.7
-65.0
0.20
0.04
1,718
2.27
-0.8
9.8
37.00
26.83
2,868,347
48,899.28
Global Energy Development
LN
GBp
76.50
-3.2
-25.0
110.00
65.50
18,271
45.97
20.55
Surgutneftegaz (ADR 1:50)
GF
RUB
5.67
2.3
-20.8
7.51
5.30
645
27,678.67
Global Petroleum
AT
AUD
0.12
15.0
-4.2
0.13
0.08
72,200
Tatneft-cls
RX
RUB
210.29
-1.3
1.6
225.99
97.80
2,149,298
12,717.29
Golden Gate Petroleum
AT
AUD
0.00
0.0
-66.7
0.01
0.00
0
4.30
Total
FP
EUR
46.68
5.0
25.5
46.69
35.18
4,612,634
151,624.28
Goodrich Petroleum
UN
USD
12.98
-15.0
3.2
28.53
11.17
957,149
575.54
YPF Sociedad
AF
ARS
291.50
-0.2
155.7
342.00
103.00
94,423
14,541.27
Gulfsands Petroleum
LN
GBp
29.50
0.4
-72.7
111.00
27.75
172,449
57.87
Halcon Resources
UN
USD
3.92
5.9
-44.3
8.12
3.16
5,326,379
1,625.22
INDEPENDENT OIL & GAS COMPANIES
Abraxas
UR
USD
3.40
3.7
Afren
LN
GBp
157.00
Alexander Energy
CV
CAD
0.65
Aminex
LN
GBp
1.03
3.5
Anadarko Petroleum
UN
USD
83.61
Antares Energy
AT
AUD
0.47
Antrim Energy
CT
CAD
0.08
Apache Corporation
UN
USD
Apco Argentina
UR
ARC Resources
CT
Arsenal Energy
CT
CAD
5.22
0.4
-5.1
Atlantic Petroleum
DC
DKK
122.50
-4.7
-31.4
ATP Oil & Gas
UV
USD
0.03
-2.3
-64.1
0.32
0.01
242,693
1.31
Australian Worldwide Expl.
AT
AUD
1.43
-1.0
7.1
1.51
1.11
2,604,104
667.23
Harvest Natural Resources
UN
USD
4.39
-1.3
-17.0
6.07
2.46
49,522
177.40
Heritage Oil
CT
GBp
4.30
13.2
36.5
4.30
2.15
2,060
1,111.96
Hibiscus Petroleum Berhad
MK
MYR
2.13
0.5
44.9
2.74
1.33
684,160
337.37
HKN
UV
USD
71.00
-1.4
-19.3
91.00
65.00
56
28.54
HRT
BS
BRL
1.09
0.0
-69.2
4.85
0.65
3,646,860
137.09
Hyperdynamics
UN
USD
5.40
-11.6
9.2
7.00
3.01
160,342
113.65
Icon Oil
AT
AUD
0.15
-3.3
-29.3
0.23
0.13
264,432
79.98
Infinity Energy Resources
UV
USD
1.19
-0.8
-41.7
3.75
0.95
8,632
25.52
Inpex
JT
JPY
1,296.00
-1.4
4.2
1,355.00
995.00
5,344,940
18,512.96
70.9
3.96
1.93
809,056
315.74
4.6
11.7
170.80
118.20
2,349,615
2,871.55
-3.0
297.5
0.92
0.13
5,893,882
148.41
-74.1
5.65
0.94
13,779,820
17.29
-0.1
6.4
98.47
73.66
755,989
42,083.18
-2.1
-6.0
0.58
0.27
340,107
107.36
6.7
-83.7
0.50
0.06
344,607
13.30
80.38
-4.4
9.2
94.84
67.91
856,209
31,822.56
USD
13.98
-3.1
9.7
17.64
8.89
10,266
422.92
CAD
30.23
2.5
19.7
30.66
24.71
1,698,411
8,544.26
6.60
3.74
17,648
75.55
InterOil Exploration & Prod.
NO
NOK
2.08
9.5
3.5
184.50
113.00
9,533
82.94
Isramco
UR
USD
144.50
10.3
46.0
Ivanhoe Energy
CT
CAD
Jerusalem Oil
IT
ILs
JKX Oil & Gas
LN
Karoon Gas
AT
International Frontier
CV
CAD
0.09
5.9
38.5
0.16
0.05
34,860
5.15
InterOil Corporation
UN
USD
57.69
8.1
-22.0
106.44
43.85
976,993
2,816.66
2.49
0.93
3,826,249
86.37
153.00
83.15
2,418
392.71
0.66
10.0
-67.6
2.28
0.37
74,942
68.21
15,340.00
3.6
97.9
15,550.00
7,703.00
8,840
756.06
GBp
63.00
-8.0
-3.1
81.00
48.00
101,644
180.02
AUD
3.16
1.6
-54.9
7.29
2.86
1,295,873
724.22
5.59
Barnwell Industries
UA
USD
2.98
1.0
-11.3
3.89
2.80
600
24.67
Bass Strait Oil
AT
AUD
0.01
-28.6
-72.2
0.02
0.00
1,697,486
2.32
Beach Petroleum
AT
AUD
1.60
2.9
16.4
1.71
1.09
13,892,190
1,839.24
Key Petroleum
AT
AUD
0.01
-15.4
-21.4
0.02
0.01
488,389
BHP Billiton
AT
AUD
38.58
-0.4
6.1
39.79
30.43
9,274,282
178,551.37
KFG Resources
CV
CAD
0.03
-14.3
-33.3
0.08
0.02
38,000
1.37
Blue Dolphin Energy
UV
USD
5.20
-5.5
-42.5
9.20
4.15
348
55.02
Lakes Oil
AT
AUD
0.00
-20.0
-42.9
0.01
0.00
5,089,568
36.19
Bounty Oil & Gas
AT
AUD
0.01
0.0
-35.0
0.02
0.01
196,400
10.93
Lions Gate Energy
CV
CAD
0.03
0.0
-25.0
0.06
0.02
0
0.79
BPI Industries
UV
USD
0.00
-14.3
220.0
0.00
0.00
107,834
0.04
Long Run Exploration
CT
CAD
5.12
-0.2
28.6
6.08
3.63
514,860
507.59
BPZ Resources
UN
USD
2.16
0.5
-20.3
2.75
1.59
120,781
253.86
Loon Energy
CV
CAD
0.04
-12.5
-46.2
0.08
0.02
6,000
0.63
C Williams Energy
UN
USD
98.34
5.6
149.4
99.21
35.30
84,868
1,196.20
Lundin Petroleum
SS
SEK
128.00
1.6
-12.4
155.60
109.30
1,364,780
6,239.28
Cabot Oil
UN
USD
35.33
-11.8
16.3
41.78
29.18
2,056,991
14,907.83
Magellan Petroleum
UR
USD
1.28
-7.2
17.4
1.47
0.97
24,117
58.05
Cairn Energy
LN
GBp
192.00
0.5
-30.0
309.60
188.50
2,100,227
1,864.93
Magnum Hunter Resources
UN
USD
7.99
-9.2
102.5
9.27
2.37
5,587,447
1,371.86
Cairn India
IS
INR
323.65
-0.8
5.4
339.30
267.70
1,560,510
9,954.74
Marathon Oil
UN
USD
33.96
1.9
3.3
38.17
29.47
1,345,904
23,657.69
Callon Petroleum
UN
USD
6.69
-1.3
25.5
7.60
3.21
88,707
269.91
Mart Resources
CV
CAD
1.34
0.0
-32.0
2.14
0.98
327,446
430.07
Calvalley Petroleum
CT
CAD
1.62
1.9
-21.0
2.19
1.38
86,246
113.77
Max Petroleum
LN
GBp
1.50
-7.4
-63.2
4.85
1.35
2,536,780
54.30
Camac Energy
UA
USD
0.66
13.5
171.3
0.73
0.18
836,540
254.35
Medco Energi
IJ
IDR
2,500.00
-1.0
48.8
3,000.00
1,550.00
1,125,060
716.35
32.22
Canadian Natural Rsc.
CT
CAD
40.99
0.9
34.7
41.70
28.44
3,803,124
40,121.93
Mediterranean Oil & Gas
LN
GBp
4.50
-2.7
-57.6
11.00
4.25
1,368,303
Candax Energy
CT
CAD
0.02
50.0
-40.0
0.04
0.01
62,434
14.42
Metalore
CT
CAD
3.15
21.6
-16.0
4.15
2.33
646
5.03
Carboclor
AF
ARS
2.05
-4.7
66.7
2.70
0.99
37,787
23.82
Naphta Explorations
IT
ILs
2,413.00
-1.8
37.0
2,500.00
1,730.00
96,039
667.06
Carrizo Oil & Gas
UW
USD
49.78
11.3
120.3
50.37
21.46
539,018
2,259.26
New Zealand Oil & Gas
NZ
NZD
0.78
0.0
-16.6
0.95
0.75
118,802
266.45
Central Petroleum
AT
AUD
0.46
0.0
-36.6
0.88
0.33
2,795,146
127.42
Newfield Exploration
UN
USD
27.87
8.5
18.5
32.55
19.57
703,558
3,797.83
Cheniere Energy
UA
USD
49.80
4.5
135.5
50.69
20.72
2,775,175
11,857.69
Nighthawk Energy
LN
GBp
8.71
-7.3
123.6
12.25
2.80
1,167,300
137.88
Chesapeake Energy
UN
USD
25.18
-4.6
27.5
29.05
18.21
1,364,579
16,747.17
Niko Resources
CT
CAD
2.80
-11.1
-60.9
9.79
1.12
322,551
224.74
Chinook Energy
CT
CAD
1.33
-2.9
20.9
1.53
0.80
154,874
256.41
Noble Energy
UN
USD
69.52
4.4
27.8
78.00
52.63
736,563
25,020.65
Cimarex Energy
UN
USD
113.27
1.3
69.1
117.10
62.99
215,512
9,855.85
Noreco
NO
NOK
0.19
11.8
-87.1
1.63
0.13
81,568,460
177.22
Circle Oil
LN
GBp
21.88
6.1
22.4
25.75
15.25
1,390,460
205.06
Northern Petroleum
LN
GBp
28.50
-4.6
-45.7
58.00
27.00
108,893
45.23
CMS Energy
UN
USD
28.56
0.6
9.1
29.94
25.75
451,982
7,631.46
Norwest Energy
AT
AUD
0.02
-11.1
-61.9
0.04
0.01
604,676
15.81
CNOOC Ltd
HK
HKD
12.54
-0.6
-16.7
16.48
11.48
55,654,420
72,143.79
Nuvista Energy
CT
CAD
9.10
1.4
65.8
9.39
5.30
694,698
1,105.69
CNPC Hong Kong
HK
HKD
13.44
0.6
-14.7
17.04
10.54
8,741,222
13,962.82
Oando
SJ
ZAR
155.00
-3.1
138.5
225.00
15.00
9,116
1,267.37
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
Currency
Exchange
Currency
28 February 2014
Exchange
54
Price
26 Feb
2014
OGX
BS
BRL
0.25
4.2
-92.6
3.73
0.11
39,057,160
344.62
ABB
VX
CHF
22.63
0.1
12.0
24.80
19.04
5,759,814
Oil & Natural Gas Corp.
IS
INR
283.95
1.9
-7.3
353.00
234.40
98,730
39,102.35
AGR Group
NO
NOK
4.90
-7.5
-47.0
9.25
3.00
24,688
100.28
Oil Search
AT
AUD
8.57
1.2
16.6
8.98
6.86
4,185,561
10,312.99
Aker
NO
NOK
196.00
2.6
-10.3
224.00
167.00
29,696
2,338.25
Aker Solutions
NO
NOK
101.20
2.6
-9.6
115.00
78.60
463,036
4,570.66
Amec
LN
GBp
1,112.00
0.5
7.2
1,210.00
961.00
1,483,945
5,515.56
51,992.74
Company
Price
26 Feb
2014
% change
5 days
% change
1 year
High
Low
Last 12 months
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
58,678.88
Oriental Petroleum
PM
PHP
0.02
-5.6
-19.0
0.03
0.02
31,760,000
79.89
Origin Energy
AT
AUD
14.58
-1.8
23.9
14.99
11.43
3,428,873
14,382.89
OSX
BS
BRL
0.60
0.0
-91.5
7.58
0.39
1,278,220
79.89
AP Moller-Maersk
DC
DKK
66,100.00
2.5
45.6
67,350.00
39,960.00
5,467
Otto Energy
AT
AUD
0.09
-3.3
-1.1
0.12
0.07
1,368,147
91.63
Badger Explorer
NO
NOK
7.50
1.4
-6.3
11.20
4.75
1,260
22.92
PA Resources
SS
SEK
10.45
0.5
-73.9
45.00
7.60
100,509
181.33
Baker Hughes
UN
USD
61.98
2.1
39.4
63.53
42.61
894,807
27,092.76
213.54
Pacific Rubiales Energy
CX
CAD
28,340.00
-3.3
-34.5
45,680.00
28,220.00
265,322
4,470.98
Baker Technology
SP
SGD
0.31
-1.6
-12.1
0.36
0.25
6,778,200
Pakistan Oilfields
PK
PKR
494.20
0.4
2.7
541.70
425.00
105,900
1,113.24
Blom
NO
NOK
17.00
13.7
-89.7
239.00
8.15
6,977
28.22
Pan Pacific Petroleum
AT
AUD
0.12
0.0
9.5
0.13
0.09
39,778
60.64
Bolt Technology
UW
USD
20.00
-6.7
32.4
22.76
14.36
37,404
173.31
Pancontinental O&G
AT
AUD
0.04
-13.3
-59.4
0.12
0.04
2,675,049
40.21
Boskalis Westminister
NA
EUR
35.67
2.8
7.0
38.64
26.92
392,027
5,860.84
Panhandle Royalty
UN
USD
37.50
2.1
39.3
40.40
26.83
15,641
308.88
Brunel International
NA
EUR
44.09
-2.0
19.8
48.20
28.57
20,876
1,467.43
Panoro Energy
NO
NOK
3.14
-2.2
27.6
3.64
2.38
1,017,635
121.40
Bumi Armada
MK
MYR
3.90
-1.3
2.6
4.18
3.68
1,547,380
3,485.66
Paramount Resources
CT
CAD
44.61
-0.4
23.5
46.71
31.68
117,143
3,897.44
BW Offshore
NO
NOK
7.10
5.5
11.8
8.70
5.12
711,959
805.19
PDC Energy
UW
USD
61.34
15.6
46.9
73.93
38.02
1,638,116
2,191.04
Cameron International
UN
USD
63.45
3.1
0.8
67.41
52.50
663,807
14,049.63
Penn Virginia
UN
USD
14.90
15.4
255.6
15.15
3.56
738,251
973.96
Cape
LN
GBp
278.00
3.1
20.9
330.00
222.75
242,575
560.22
Penn West
UN
CAD
8.17
1.5
-15.9
13.16
7.03
2,083,390
3,995.71
Cecon
NO
NOK
1.16
-10.8
-49.6
2.60
0.90
13,239
34.67
Petrel Resources
LN
GBp
15.13
3.4
-17.7
22.00
10.50
105,852
25.09
Chicago Bridge & Iron
UN
USD
83.43
4.3
59.8
84.48
50.41
1,006,111
8,967.30
Petrichore Energy
CV
CAD
0.43
-12.2
95.5
0.58
0.16
25,667
11.88
China Oilfield Services
HK
HKD
21.50
0.0
39.8
26.00
13.04
7,641,197
14,538.45
Petrobank Energy
CT
CAD
0.39
2.7
-46.5
0.79
0.31
129,365
33.77
COOEC
CG
CNY
8.16
-4.4
33.3
9.69
6.02
51,363,160
5,889.75
PetroCeltic International
LN
GBp
165.25
-2.5
-6.4
187.75
129.00
152,939
483.35
Core Laboratories
UN
USD
188.35
-0.5
41.3
199.99
124.35
37,282
8,448.58
PetroFrontier
CV
CAD
0.22
7.5
-15.7
0.39
0.14
85,173
15.40
Petromin Resources
CV
CAD
0.03
0.0
-57.1
0.07
0.03
2,000
1.92
Petroquest Energy
UN
USD
4.54
1.8
21.7
5.10
3.55
1,212,659
292.76
Petsec Energy
AT
AUD
0.08
4.2
-61.5
0.20
0.07
261,200
15.53
Philodrill
PM
PHP
0.04
0.0
-16.3
0.05
0.03
49,960,000
155.01
Pioneer Natural Resources
UN
USD
193.26
2.8
55.5
227.02
109.25
284,393
26,798.92
Premier Oil
LN
GBp
300.90
3.2
-20.4
405.00
267.50
1,135,101
2,647.31
PrimeEnergy
UR
USD
54.65
5.7
103.7
55.89
26.35
345
131.48
ProAm Exploration
CV
CAD
0.01
0.0
-50.0
0.03
0.01
0
0.13
PT Energi Mega Persada
IJ
IDR
92.00
-1.1
-9.8
146.00
62.00
288,822,900
353.15
PTT Expl. & Prod.
TB
THB
151.50
-1.3
-2.9
174.00
141.00
5,547,020
18,461.93
QEP Resources
UN
USD
28.40
-11.4
-5.6
34.23
25.95
436,406
5,087.66
Queiroz Galvao Exploracao
BS
BRL
8.43
3.6
-32.0
13.06
7.81
870,160
Questerre Energy
CT
CAD
1.25
0.0
58.2
1.58
0.70
Quicksilver Resources
UN
USD
3.30
-5.2
80.3
3.67
Quoram
LN
GBp
0.13
0.0
-76.2
Range Resources
UN
USD
85.35
-2.4
19.7
Reliance Industries
IS
INR
810.55
-0.2
-1.6
Resource America
UW
USD
9.55
5.6
6.7
Rio Bravo Oil
UU
USD
0.99
0.0
Roc Oil
AT
AUD
0.48
Rockhopper Exploration
LN
GBp
Rocksource
NO
NOK
Rosneft Oil
RX
RUB
Royale Energy
UR
USD
RWE
GF
EUR
Santos
AT
AUD
13.90
Senex Energy
AT
AUD
0.77
0.0
20.3
Serica Energy
LN
GBp
12.00
-6.8
-57.8
Sinophil
PM
PHP
0.30
0.0
-6.2
Soco International
LN
GBp
447.80
1.4
35.0
Softrock Minerals
CV
CAD
0.02
-20.0
-20.0
Sonde Resources
CV
CAD
0.60
0.0
South Sea Petroleum
HK
HKD
0.06
0.0
Daewoo Heavy Industries
KP
KRW
13,150.00
8.2
-15.7
17,000.00
10,100.00
2,002,855
2,551.38
Daewoo Shipblg & Mar. Eng.
KP
KRW
36,100.00
3.7
17.0
38,850.00
23,000.00
1,039,620
6,461.79
Deep Sea Supply
NO
NOK
10.35
0.5
-3.3
12.50
8.80
130,733
217.00
DOF
NO
NOK
30.20
3.4
6.3
34.50
23.00
41,287
552.81
Dril-Quip
UN
USD
97.64
-3.1
21.7
121.00
76.49
103,216
3,973.28
Eidesvik Offshore
NO
NOK
33.80
4.0
-5.6
37.60
32.50
1,828
167.98
Envir Group
AT
AUD
0.05
-22.0
9.5
0.06
0.02
15,162
6.68
EOC Limited
NO
NOK
5.15
-2.5
43.5
7.49
2.62
243,526
94.19
Ezra Holdings
SP
SGD
1.05
-1.4
-6.7
1.51
0.82
2,424,200
811.76
Farstad Shipping
NO
NOK
131.00
-1.5
-3.7
141.00
116.00
772
842.14
Fluor
UN
USD
78.78
-1.8
28.4
83.93
53.50
2,107,004
12,632.18
FMC Technologies
UN
USD
50.37
-0.3
-1.1
59.79
47.58
451,998
11,887.92
954.53
Foster Wheeler
UW
USD
32.01
0.4
35.6
33.08
19.29
1,688,229
3,152.52
51,665
297.77
Goodtech
NO
NOK
16.30
-4.7
8.7
19.50
14.60
8,381
87.40
1.44
708,833
584.48
Great Offshore
IS
INR
63.65
-3.9
-12.9
81.50
34.00
64,875
38.15
0.53
0.11
681,048
2.01
Gulf Island Fabrication
UW
USD
20.75
3.5
-11.2
26.82
18.06
25,725
300.28
89.18
70.30
383,884
13,985.42
Gulfmark Offshore
UN
USD
45.39
8.8
27.5
53.89
34.50
265,059
1,217.30
927.90
765.00
164,335
42,162.12
Halliburton
UN
USD
55.51
1.8
37.1
57.01
36.77
2,161,159
47,231.62
10.30
7.31
37,848
193.57
Helix Energy Solutions
UN
USD
23.95
7.5
5.9
27.58
19.44
1,372,480
2,532.32
16.4
1.05
0.60
0
32.16
Hitachi Zosen
JT
JPY
586.00
-2.0
-15.1
985.00
536.00
1,222,260
911.40
-3.1
-18.8
0.59
0.33
1,401,331
292.09
Honghua
HK
HKD
2.14
-4.5
-37.8
4.25
2.06
8,501,880
893.22
116.25
-1.7
-18.3
163.25
111.00
662,323
549.88
Hyundai Heavy Industries
KP
KRW
225,500
2.7
4.6
291,500
172,000
176,222
16,028.21
0.99
-9.2
-14.7
2.20
0.84
465,903
14.21
Hunting Plc
LN
GBp
841.50
5.5
-1.0
947.00
719.00
316,877
2,068.82
246.84
-0.2
-0.7
270.20
178.92
4,005,266
72,615.13
Ingersoll-Rand
UN
USD
60.52
3.0
47.8
63.42
40.64
401,087
16,823.94
2.82
1.8
15.6
3.68
1.95
24,603
41.27
Jacobs Engineering
UN
USD
60.20
-0.1
26.2
66.88
46.93
207,779
7,940.64
29.02
-1.7
5.4
30.95
20.48
30,237
24,116.14
Jereh Oilfield Services
CS
CNY
69.60
-10.2
37.4
85.29
47.32
3,886,970
7,270.90
-2.4
9.7
15.80
11.35
4,593,016
12,104.61
Kawasaki Heavy
JT
JPY
418.00
-3.0
43.6
496.00
272.00
17,192,000
6,826.72
0.90
0.48
5,392,557
789.79
KBR
UN
USD
31.72
0.1
6.1
36.70
27.60
1,496,129
4,698.68
28.96
12.00
388,594
49.96
Keppel Corp.
SP
SGD
10.43
-0.8
-5.8
11.51
10.01
2,509,400
14,904.71
0.42
0.26
1,110,000
53.37
Key Energy
UN
USD
8.73
3.9
6.0
8.93
5.61
2,588,896
1,333.53
448.00
309.91
184,316
2,472.61
Lamprell
LN
GBp
140.00
-0.9
6.3
183.00
119.50
278,184
606.54
0.04
0.01
6,600
0.43
Logan International
CT
CAD
5.90
-1.7
57.3
8.18
3.38
16,445
178.00
-33.7
0.93
0.38
74,577
30.28
Lupatech
BS
BRL
0.62
-1.6
-64.2
2.03
0.37
308,520
41.63
-32.1
0.09
0.05
42,132,660
59.78
Markwest Energy Partners
UN
USD
67.39
-4.2
21.4
75.79
54.60
776,912
11,535.85
Matrix Composites & Eng.
AT
AUD
1.22
4.3
-30.7
1.77
0.60
306,544
103.34
Matrix Service
UW
USD
32.15
0.7
108.2
33.20
12.53
66,725
846.87
McDermott International
UN
USD
8.54
-0.2
-31.8
13.06
6.68
607,877
2,020.43
880.80
Southwestern Energy
UN
USD
42.35
-1.2
26.7
44.40
32.86
826,048
14,896.72
St Mary Land
UN
USD
72.00
-3.1
24.3
94.00
54.95
3,666,774
4,828.24
Serinus Energy
CT
CAD
3.62
1.1
-
4.97
2.65
17,504
256.14
Stealth Ventures
CV
CAD
0.02
0.0
-50.0
0.10
0.02
2,456
0.20
Mermaid Marine
AT
AUD
2.81
-4.7
-31.3
4.10
2.61
763,791
Sterling Energy
LN
GBp
51.50
-5.1
42.1
56.00
33.00
58,908
188.58
Mitcham Industries
UW
USD
14.15
-1.4
-7.8
18.39
13.59
17,242
181.09
Sterling Resources
CV
CAD
0.69
-2.8
-12.7
0.86
0.53
384,740
191.98
Mitsui Eng & Shipbuild
JT
JPY
209.00
3.5
24.4
237.00
135.00
8,562,000
1,696.55
Stone Energy
UN
USD
35.60
0.1
75.0
37.94
17.38
236,268
1,779.78
Modec Inc.
JT
JPY
2,619.00
0.7
8.1
3,970.00
2,310.00
244,040
1,187.29
Sun Resources
AT
AUD
0.03
-3.6
-52.6
0.06
0.02
875,303
63.97
MTQ Corporation
SP
SGD
1.67
0.9
60.0
1.68
0.98
33,800
167.53
Swift Energy
UN
USD
11.93
-2.7
-9.5
16.87
10.90
286,428
517.71
Mullen Group
CT
CAD
26.69
1.1
23.0
29.74
19.84
229,761
2,178.02
Talisman Energy
CT
CAD
11.65
-1.7
-8.5
13.83
10.68
2,369,367
10,855.61
National Oilwell
UN
USD
74.27
-2.8
11.1
84.71
63.08
4,955,959
31,834.78
Tap Oil
AT
AUD
0.44
-4.4
-37.9
0.71
0.43
323,430
94.39
Nature Group
LN
GBp
29.00
0.0
-10.1
46.50
23.00
75,239
38.26
Taurus Petroleum
KA
SEK
1.86
3.3
-8.4
2.50
0.80
3,542,924
17.03
Neptune Marine
AT
AUD
0.05
9.1
50.0
0.05
0.02
134,100
79.53
Tengasco
UA
USD
0.44
2.3
-33.2
0.71
0.35
14,320
26.77
Newpark Resources
UN
USD
11.06
-0.5
28.6
13.63
8.17
219,171
964.41
Tethys Oil
SS
SEK
74.25
2.8
25.8
77.00
56.50
76,355
404.63
Tri-Valley
UV
USD
0.01
116.7
225.0
0.03
0.00
31,186
0.44
Tudor Corporation
CV
CAD
0.01
0.0
-50.0
0.03
0.01
0
0.14
TUI
GY
EUR
12.95
-3.0
67.4
14.02
7.45
38,341
4,467.61
Tullow Oil
LN
GBp
768.50
-1.0
-35.5
1,270.00
736.00
3,281,144
11,636.60
Tuscany Energy
CV
CAD
0.39
-1.3
-11.4
0.60
0.20
1,468
6.79
Ultra Petroleum
UN
USD
23.84
-4.6
38.3
26.05
15.95
7,134,100
Unit Corporation
UN
USD
60.82
12.1
37.4
61.00
40.51
77,145
Urals Energy
LN
GBp
7.00
0.0
21.7
11.25
3.93
202,717
29.41
Samsung Heavy Ind.
KP
KRW
W&T Offshore
UN
USD
15.20
1.3
-1.1
19.88
10.39
892,819
1,144.21
SBM Offshore
NA
EUR
Wentworth Resources
NO
NOK
4.80
-2.0
13.2
6.13
3.69
112,492
121.74
Schlumberger
UN
USD
Wessex Exploration
LN
GBp
0.43
-2.3
-89.4
4.40
0.30
975,735
5.18
Scomi Group
MK
Westmount Energy
LN
GBp
19.50
0.0
-22.0
25.00
13.00
1,321
3.16
Seacor
UN
Whiting Petroleum
UN
USD
63.38
3.3
31.3
70.57
42.44
1,694,268
7,516.74
SembCorp Marine
SP
SGD
4.03
-1.5
-8.2
Woodside Petroleum
AT
AUD
37.86
-1.3
5.9
39.54
33.30
4,691,490
27,942.92
Sevan Marine
NO
NOK
25.90
15.1
37.0
Yangarra Resources
CV
CAD
0.76
0.0
198.0
0.78
0.24
458,707
100.64
ShawCor
CT
CAD
43.52
0.6
14.1
46.77
Zargon Oil & Gas
CT
CAD
7.94
-3.1
10.9
9.40
6.00
45,664
215.03
Shenzhen Chiwan
CS
HKD
14.87
-3.3
11.3
ZaZa Energy
UR
USD
0.93
-0.5
-42.2
1.98
0.62
140,873
99.25
Shinko Plantech
JT
JPY
804.00
2.0
8.2
Siem Offshore
NO
NOK
9.38
-4.3
19.6
SNC-Lavalin
CT
CAD
48.78
3.2
Solstad Offshore
NO
NOK
113.00
-0.9
IS
INR
503.45
-2.4
73.1
549.85
188.25
1,535,070
UN
USD
70.76
-1.4
15.2
87.64
58.08
330,851
7,656.05
Oil States International
UN
USD
92.59
-7.8
22.3
113.64
71.36
1,134,651
4,937.21
OMZ Uralmash-Izhora
RX
RUB
39.57
0.0
18.8
54.24
25.00
0
318.63
Petrofac
LN
GBp
1,352.00
1.8
-15.2
1,607.00
1,080.00
1,460,429
7,794.08
PHI
UW
USD
39.50
5.0
25.8
40.57
23.43
473
613.22
ProSafe
NO
NOK
43.15
2.1
-24.3
61.70
41.05
454,606
1,678.38
3,648.81
RPC
UN
USD
18.60
0.1
18.2
19.76
12.42
165,643
4,074.14
2,994.34
Saipem
IM
EUR
16.67
1.7
-18.2
24.87
12.13
4,758,426
10,054.09
34,300.00
0.3
-10.3
45,800.00
29,800.00
802,282
7,406.22
11.29
1.2
8.6
16.18
10.06
1,934,940
3,220.27
93.09
2.9
22.0
94.91
69.08
1,621,500
121,725.53
MYR
0.44
-7.4
41.9
0.50
0.31
29,194,440
208.47
USD
87.28
2.3
25.4
99.00
67.76
139,980
1,774.57
4.63
3.90
3,659,200
6,638.61
28.60
16.50
350,462
224.59
36.95
193,141
2,349.89
16.58
11.38
206,859
441.85
866.00
665.00
84,080
363.72
10.50
7.01
99,989
602.06
3.4
49.87
39.47
981,192
6,665.28
8.7
124.00
90.00
2,743
720.60
OILFIELD SERVICES, ENGINEERING & CONSTRUCTION
Aban Offshore
Oceaneering International
352.64
FINANCIAL
Currency
Price
26 Feb
2014
Exchange
Currency
55
Exchange
28 February 2014
Price
26 Feb
2014
Subsea 7
NO
NOK
115.60
6.3
-11.2
139.19
96.76
2,085,962
6,703.32
Nippon Seiro
JT
JPY
256.00
-1.9
9.9
329.00
227.00
33,200
56.02
Superior Energy
UN
USD
29.51
8.9
17.5
29.91
22.86
648,111
4,706.31
Pakistan State Oil
PK
PKR
344.63
0.1
70.8
373.50
183.65
986,600
810.58
Swiber Holdings
SP
SGD
0.65
2.4
-2.3
0.81
0.59
1,307,800
313.86
Penn Octane
UV
USD
0.01
0.0
-88.9
0.10
0.01
0
0.15
Team Incorporated
UN
USD
42.30
-0.3
-2.5
48.09
32.33
58,418
859.74
TI
TRY
4.10
-4.9
-30.0
6.20
3.75
253,786
1,057.36
Technip
FP
EUR
72.60
13.1
-12.8
92.49
60.20
866,642
11,275.60
Petrolub International
JT
JPY
508.00
0.4
34.0
518.00
377.00
10,260
114.01
Teekay
UN
USD
55.71
2.7
70.0
56.23
32.49
621,243
3,939.45
Petron
PM
PHP
13.72
-1.3
0.9
16.30
11.42
3,894,540
2,886.52
Tenaris (ADR 1:10)
UN
USD
41.50
-4.6
2.3
49.87
38.47
2,379,988
24,496.14
Petronas Dagangan
MK
MYR
30.64
1.3
32.3
31.82
21.04
423,540
9,279.47
Tidewater
UN
USD
48.30
1.7
1.5
63.20
45.19
103,001
2,397.60
Petronas Gas
MK
MYR
23.54
0.2
28.9
25.00
13.36
396,700
14,199.72
Total Energy Trust
CT
CAD
19.70
-3.9
37.3
20.83
13.13
15,075
552.81
Questar Oil & Gas
UN
USD
23.58
0.5
1.8
26.01
21.44
208,105
4,129.21
Toyo Kanetsu
JT
JPY
290.00
-0.7
1.8
426.00
227.00
514,800
393.00
San Ai Oil
JT
JPY
543.00
4.4
31.5
549.00
351.00
113,600
392.52
Trican Well Service
CT
CAD
13.67
-2.9
2.5
16.23
11.97
646,291
1,822.94
Shell Pakistan
PK
PKR
180.23
-4.9
22.7
241.88
117.26
71,480
146.93
TSC Offshore
HK
HKD
3.45
5.5
107.8
3.80
1.66
632,624
307.51
TTS Marine
NO
NOK
6.35
-2.0
-29.4
9.25
5.71
36,067
90.65
Wah Seong
MK
MYR
1.98
0.0
20.4
2.17
1.58
553,380
464.48
Weatherford International
UN
USD
16.02
7.2
34.3
17.38
11.11
1,338,568
12,354.35
Willbros Group
UN
USD
8.93
4.7
32.3
10.45
6.13
39,189
Wilson Sons
BS
BRL
25.55
-2.9
-9.7
33.00
21.72
47,020
Wood Group
LN
GBp
774.00
6.5
0.2
927.00
610.00
1,230,532
WorleyParsons
AT
AUD
17.13
10.4
-34.5
26.72
15.08
1,180,936
Company
% change
5 days
% change
1 year
High
Low
Last 12 months
Avg vol
5 days
Market Cap
Mill. USD
Company
CT
CAD
14.73
-3.2
Atwood Oceanics
UN
USD
47.46
CGG
FP
EUR
12.12
Dawson Geophysical
UW
USD
Delek Drilling
IT
ILs
Diamond Offshore
UN
EMGS
NO
Ensco International
Ensign Energy Services
JPY
1,025.00
5.6
51.9
1,150.00
633.00
2,283,780
3,773.29
3.06
-5.0
-15.9
7.40
2.66
6,323,100
103.32
South Indupa
AF
ARS
2.66
-7.0
62.2
6.66
1.40
159,918
139.77
South Jersey Ind.
UN
USD
55.78
1.8
2.4
62.27
51.83
29,457
1,796.51
444.53
Syntroleum
UR
USD
3.93
1.0
-8.6
7.74
2.40
25,430
39.17
774.33
Tamilnadu Petro.
IS
INR
10.18
1.8
-7.5
12.70
7.00
25,570
14.74
4,824.49
Tesoro Petroleum
UN
USD
52.60
4.6
-3.1
65.75
40.91
416,761
6,931.37
3,787.31
Toa Oil
JT
JPY
172.00
8.2
73.7
270.00
96.00
712,400
209.07
TPL
CT
CAD
48.93
-1.9
2.9
51.21
43.94
1,140,491
31,156.71
Transportadora d Gas
UN
ARS
2.09
-4.1
20.2
2.93
1.52
13,223
333.69
Tupras
TI
TRY
38.60
0.5
-23.2
56.25
35.50
702,327
4,317.38
36.0
16.61
10.55
8,655
242.94
2.4
-6.4
59.49
43.92
137,922
3,048.00
Turcas Petroleum
TI
TRY
2.24
-5.5
-33.5
4.07
2.23
666,059
225.07
6.5
-41.3
21.07
10.63
955,995
2,928.24
Valero Energy
UN
USD
52.07
3.2
26.9
53.64
33.00
1,823,547
28,111.19
Williams Companies
UN
USD
41.09
1.5
21.7
42.46
31.25
1,532,599
28,095.74
-2.6
40.67
27.18
19,884
237.86
25.2
1,991.00
1,423.00
311,639
2,877.63
USD
47.69
-0.1
-28.2
70.36
44.53
428,424
6,631.30
NOK
7.31
0.1
-25.6
11.15
6.39
344,019
240.67
UN
USD
52.93
2.4
-10.6
64.14
48.25
666,960
12,361.26
CT
CAD
17.35
0.1
1.9
18.44
15.19
174,802
2,394.79
Entek Energy
AT
AUD
0.04
0.0
-45.3
0.06
0.03
788,592
16.01
Eurasia Drilling-GDR
LN
USD
28.35
9.5
-27.2
46.50
25.41
798,998
4,161.42
Fred. Olsen Energy
NO
NOK
198.40
2.1
-17.6
300.40
190.80
174,108
2,181.11
Fugro
NA
EUR
42.80
5.0
20.3
49.72
35.11
388,969
4,945.96
BAKER HUGHES NORTH AMERICAN
ROTARY RIG COUNT
Alabama-land
0
0
0
0
0
0
0
0
0
0
0
0
Total Alabama
4
5
4
5
5
5
5
5
5
5
11
10
11
11
12
11
11
11
14
12
Alaska-land
-24.0
113.11
65.31
155,612
966.30
-26.7
0.02
0.00
126,148
7.37
Total Alaska
Greencastle Resources
CV
CAD
0.07
0.0
-18.8
0.09
0.05
24,000
2.70
Arizona
Helmerich Payne
UN
USD
97.49
3.8
51.0
97.90
55.79
271,722
10,483.56
Hercules Offshore
UW
USD
4.78
1.5
-28.0
7.96
4.38
5,146,901
763.60
ION Geophysical
UN
USD
4.13
-1.2
-35.4
7.25
2.81
502,454
676.24
Major Drilling
CT
CAD
8.69
-1.1
-4.1
9.37
6.41
270,690
619.18
Nabors Industries
UN
USD
22.56
6.7
42.6
22.96
14.34
11,387,644
6,658.95
Neon Energy
AT
AUD
0.03
-16.7
-88.2
0.43
0.03
7,208,372
14.86
Noble Drilling
UN
USD
31.26
0.2
-13.5
42.33
30.04
732,524
7,918.98
Northern Offshore
NO
NOK
9.45
-4.1
-9.6
10.75
8.11
94,935
254.90
UN
USD
10.62
1.1
13.0
12.24
8.90
69,997
2,230.20
Parker Drilling
UN
USD
7.89
4.7
64.4
8.67
3.75
253,903
954.32
Patterson-UTI Energy
UW
USD
30.10
2.4
30.8
30.66
18.83
672,861
Petroleum Geo-Services
NO
NOK
64.90
3.0
-30.4
95.25
61.75
Petrolia Drilling
NO
NOK
8.09
5.5
47.1
9.95
5.25
Pioneer Drilling
UN
USD
10.68
6.9
26.1
10.73
6.46
954,742
667.90
Precision Drilling
UN
CAD
10.77
0.1
31.1
11.21
7.29
2,485,986
2,980.30
Rompetroll Well Services
RE
RON
0.51
-2.1
32.5
0.54
0.35
34,300
42.92
Rowan Co.
UN
USD
32.54
1.2
-4.3
38.64
30.22
345,449
4,040.17
SeaBird Exploration
NO
NOK
1.63
11.6
-81.7
10.15
1.30
693,433
16.28
Seadrill
NO
NOK
212.70
-2.7
2.8
289.40
201.10
2,096,015
16,452.05
Songa Offshore
NO
NOK
2.97
6.8
-30.5
6.02
2.49
5,094,344
427.83
Spectrum
NO
NOK
35.00
-1.1
-31.0
66.00
30.40
7,756
242.96
TGS
NO
NOK
183.30
6.3
-14.7
231.00
138.90
433,432
3,127.82
Thalassa Holdings
LN
GBp
310.00
9.7
330.6
317.00
72.00
92,202
129.26
Transocean
UN
USD
43.53
1.7
-15.1
55.79
41.45
930,787
15,692.90
Trinidad Drilling
CT
CAD
10.94
2.1
62.1
11.10
6.46
288,060
1,360.10
Vantage Drilling
UA
USD
1.71
-0.6
3.6
2.06
1.55
2,137,758
519.23
25.4
7.4
0.6
UN
USD
73.29
-0.2
Caltex Australia
AT
AUD
21.15
5.1
Centrica
LN
GBp
319.60
Chennai Petroleum
IS
INR
58.00
Cosmo Oil
JT
JPY
194.00
Dialog Group
MK
MYR
DuPont
UN
Dynegy
UN
Enbridge
CT
0
0
0
0
0
0
0
0
0
10
11
11
12
11
11
11
14
12
0
0
0
0
0
0
0
0
0
0
Arkansas
11
11
12
12
12
12
12
12
12
12
California-land
32
32
32
31
31
32
31
34
34
33
2
2
2
0
0
1
0
2
2
1
Total California
34
34
34
31
31
33
31
36
36
34
Colorado
California-offshore
65
59
61
62
62
62
62
60
60
61
1
1
1
0
0
1
0
0
0
0
Florida-inland water
0
0
0
0
0
0
0
0
0
0
Florida-offshore
2
2
2
2
2
2
0
0
1
0
Total Florida
3
3
3
2
2
3
0
0
1
0
Georgia
0
0
0
0
0
0
0
0
0
0
Hawaii
0
0
0
0
0
0
0
0
0
0
Idaho
0
1
1
1
1
1
1
1
1
1
4,339.97
Illinois
3
3
1
1
1
2
1
0
1
1
1,132,050
2,329.97
Indiana
1
1
2
2
3
2
3
2
2
2
14,128
36.32
Kansas
29
30
29
31
30
30
32
33
32
32
Kentucky
5
5
5
4
4
5
3
3
4
3
N Louisiana-land
25
25
24
24
25
25
25
23
23
24
S Louisiana-inland water
20
20
20
20
20
20
21
18
18
19
S Louisiana-land
12
14
15
15
16
14
13
16
13
14
S Louisiana-offshore
55
51
51
52
53
52
52
50
51
51
112
110
110
111
114
111
111
107
105
108
Maryland
0
0
0
0
0
0
0
0
0
0
Michigan
0
0
0
0
0
0
0
0
0
0
Mississippi
7
7
13
13
13
11
8
9
12
10
Montana
10
10
9
9
9
9
8
8
8
8
Nebraska
2
2
2
2
2
2
2
2
2
2
Nevada
0
2
2
2
2
2
2
2
2
2
79
81
77
79
80
79
80
83
81
81
Total Louisiana
New Mexico
New York
0
0
0
0
0
0
0
0
0
0
N Dakota
174
168
168
169
169
170
168
168
166
167
Ohio
Oregon
-0.1
0
11
Florida-land
PIPELINE AND DOWNSTREAM COMPANIES
Buckeye Partners
Alaska-offshore
Oklahoma
94.77
Feb Avg
5
0
0.0
377.75
21 Feb
5
0
-0.3
INR
14 Feb
5
0
0.01
USD
Feb 7
5
0
73.57
IS
Jan Avg
5
0
USD
UN
Jan 31
5
0
AUD
73.21
Jan 24
5
0
UW
81.1
Jan 17
4
0
AT
8.2
Jan 10
5
Alabama-offshore
Grand Gulf Energy
72.36
Jan 3
4
Alabama-inland water
Geospace Technologies
Bharat Petroleum
Market Cap
Mill. USD
THB
1.6
Ashland
Avg vol
5 days
JT
-0.4
USD
Low
Last 12 months
TB
29.50
UA
High
Siam United Services
1,852.00
Adams Resources
% change
1 year
Showa Shell
RIG AND SEISMIC COMPANIES
Akita Drilling
% change
5 days
35
35
36
36
38
36
39
40
39
39
169
183
186
187
185
182
185
182
181
183
0
0
0
0
0
0
0
0
0
0
56
55
56
55
55
55
54
53
54
54
S Dakota
1
1
1
1
1
1
1
0
0
0
Tennessee
0
0
0
0
0
0
0
0
0
0
Texas-offshore
2
2
2
2
2
2
2
2
3
2
Texas-inland water
0
0
0
0
0
0
0
0
0
0
District 1
136
135
136
132
130
134
131
131
136
133
District 2
81
84
83
81
78
81
79
81
73
78
District 3
54
53
57
57
60
56
58
57
58
58
1,606.47
District 4
34
26
27
29
32
30
33
30
33
32
3,806,680
2,452.21
District 5
7
7
8
7
7
7
7
7
8
7
46.48
1,111,915
60,737.63
District 6
30
29
31
31
29
30
31
30
31
31
18.11
110,193
2,320.30
District 7b
12
15
10
14
15
13
14
12
12
13
41.74
1,176,807
35,361.32
District 7c
81
83
82
77
80
81
78
82
84
81
District 8
271
267
280
285
283
277
290
286
289
288
38.65
1,744
305.19
100.84
72.11
190,068
7,373.63
428.45
256.00
69,332
4,396.52
35.6
75.80
53.50
76,766
9,054.33
16.3
23.77
16.80
633,812
5,115.47
1.8
-8.5
403.20
302.50
15,775,760
27,014.18
-2.7
-54.9
130.05
52.00
22,029
139.02
-3.5
-7.6
248.00
165.00
3,610,600
3.31
-1.8
40.9
3.60
2.30
USD
65.45
1.9
39.4
65.68
USD
23.19
5.6
16.1
25.16
CAD
47.27
-0.4
5.4
49.17
Pennsylvania
Energy Transfer Partners
UN
USD
53.89
-0.2
14.2
57.31
45.16
1,148,144
20,503.01
District 8a
39
38
37
39
36
38
34
35
33
34
Enterprise Product Partners
UN
USD
65.87
-0.2
17.8
67.79
55.31
1,169,494
61,589.38
District 9
22
21
22
19
20
21
21
21
21
21
Equitable Resources
UN
USD
99.90
-0.1
67.4
102.30
57.87
426,451
15,075.72
District 10
63
65
66
66
70
66
67
66
65
66
Fuchs Petrolub
GY
EUR
62.79
1.5
16.6
63.10
48.92
1,015
6,528.69
Total Texas
832
825
841
839
842
836
845
840
846
844
Fuji Kosan
JT
JPY
687.00
-1.2
24.6
753.00
521.00
23,260
58.68
General Sekiyu
JT
JPY
909.00
1.0
0.6
1,099.00
835.00
1,491,200
5,018.56
Genesis Energy
UN
USD
51.85
-1.8
16.8
56.80
43.62
326,606
4,611.93
W Virginia
Utah
23
25
26
26
26
25
26
26
26
26
Virginia
0
0
0
0
0
0
0
0
0
0
Washington
0
0
0
0
0
0
0
0
0
0
32
34
34
33
33
33
29
30
30
30
Hindustan Petroleum
IS
INR
262.50
9.5
-12.6
324.80
158.45
73,925
1,430.76
Wyoming
IRPC
TB
THB
3.34
0.0
-22.0
4.34
2.94
14,386,080
2,095.00
Total United States
Kinder Morgan
UN
USD
75.38
-3.8
-12.9
92.97
73.26
1,031,060
33,960.71
Manali Petrochem.
IS
INR
7.61
-0.4
-12.4
9.80
5.74
18,489
21.07
Metrogas
AF
ARS
1.28
-5.2
90.2
1.82
0.64
28,428
92.40
National Fuel Gas
UN
USD
75.71
0.2
32.7
77.04
56.32
70,795
6,342.34
Canada-land
Canada-offshore
Total Canada
Grand total
53
54
53
53
53
53
52
51
51
51
1751
1754
1777
1777
1785
1769
1771
1764
1771
1769
281
476
564
590
608
504
619
624
632
625
1
1
1
0
0
1
2
0
0
1
282
477
565
590
608
504
621
624
632
626
2033
2231
2342
2367
2393
2273
2392
2388
2403
2394
Note: Monthly averages may not total due to rounding
56
HEAD TO HEAD
28 February 2014
Galp’s globetrotter
Stephen is a
Scot made of
the Whyte stuff
Portuguese player’s head of E&P left home at
16 then coxed a rescue boat, learned several
languages — and ‘long-jumped farther’ than
his international athlete dad...
IAIN ESAU
Lisbon
S
TEPHEN Whyte has
always been a man with
a mission to succeed.
The 48-year-old chief
operating officer of the E&P business for Portugal’s Galp Energia
has high achievement running
in the family. His father was an
accomplished rugby player and
athlete, winning 13 caps for
Scotland in the 1960s and representing Great Britain in the long
jump.
And aside from his achievements in the industry, Whyte
junior has coxed a rescue boat,
become fluent in Portuguese
and Dutch, studied the equivalent of A-level physics in French
— and beat his dad’s long jump
record.
Born in Perth, Scotland, to
parents who were both teachers, Stephen Whyte wasted no
time in expanding his horizons
He left Scotland aged 16 for
Vancouver Island, Canada, after
securing a scholarship to attend
Pearson College, one of a dozen
or so United World Colleges
(UWC) in places as far-flung as
Wales, Swaziland, Venezuela
and India.
Idealistic The aim of UWC,
formed in the 1960s and which
follows the International Baccalaureate, is to “make education a force to unite people, nations and cultures for peace and
a sustainable future”.
To achieve this goal, each college accepts about 200 to 300
students from about 85 countries.
Whyte recalls his two years at
Pearson as “very interesting,
heady and idealistic days”.
This was where he
became coxswain of an
inshore rescue boat,
studied
physics
in French
(his mother was a
French
teacher)
and learned much about international literature.
Recalling those years, he says:
“I was equally good at languages
and science. I liked anthropology but I was always interested
in geology and hiking. I loved
the outdoors. I also wanted
enough money (from my career)
to enjoy life outside work.”
As a result, Whyte opted to
study geophysics, with geology
as a secondary subject, and returned home to take a four-year
course at Edinburgh University.
It was in the Scottish capital
that his athletic talent came to
the fore, clearly inherited from
his father David.
Whyte senior’s prowess at the
long jump won him a Great Britain athletics vest when aged
only 18.
His personal best long jump
distance was 7.25 metres, says
his son. And as for the rugby...
A check of the archives finds
that David Whyte was capped 13
times on the wing between 1965
and 1967.
He played with the great Scottish flanker Jim Telfer and
against rugby legends such as
Wales’ Barry John, Willie John
McBride of Ireland and Australia’s Ken Catchpole.
Stephen Whyte did not play
rugby until he got to university,
where he also took part in athletics, quipping that “I longjumped farther than my father”.
He became Scottish Universities
champion in this event.
While he out-jumped his illustrious dad, Whyte did not reach
his father’s heights at rugby,
although he points out that he
did play for a Middle East team
against the Netherlands and
Kenya.
While studying in Edinburgh,
Whyte did summer jobs with
Western Geophysical and Shell,
eventually joining the supermajor in the Netherlands after
completing his degree.
“I worked offshore as well site
petroleum engineer, and in 1989
to 1990 I was involved in mapping the Groningen gas field as
part of a unitisation agreement
with Germany,” he says.
Highlighting his linguistic
talents, he became fluent in
Dutch before Shell posted him
to Oman for three years, where
he was regional development
scientist for the northern area.
“Those were great times — it
was a lovely place to live,” he
says.
Whyte returned with Shell to
the UK as team leader for the Auk
field but left at 29 to work for
Clyde Petroleum — independently and then under the wing of
I have a clear
view of the future.
I care about people
but I am also fairly
demanding.
Gulf Canada and Conoco — as
non-operated asset manager, exploration manager and commercial director.
He spent six years in the
Netherlands with his team,
making about 10 discoveries and
tripling reserves.
With Conoco selling its Dutch
business to Wintershall, Whyte
felt he wanted a bigger challenge.
He returned to Shell and
quickly became development
manager for the central North
Sea before the supermajor underwent its huge upstream Europe
re-organisation in 2002-2003.
Adding value The Scot eventually
became joint venture infrastructure manager for Europe, responsible for eight countries and 50
people and adding $1 billion in
value during his time there.
Whyte’s next step was to a
more exotic clime, being appointed Shell’s country manager
in Brazil just when the pre-salt
play was opening up.
There, he was responsible for
400 staff, two floating production, storage and offloading vessels, and production of about
80,000 barrels per day.
He also became a director of
the Brazilian Petroleum Institute
and picked up another language.
“It was an exciting time,” he says.
Whyte left Shell and returned
to the UK to join BG Group as
senior vice
president of
Europe
&
Central Asia
before heading
to Lisbon and
Galp in April
2012 to take up
his current position.
Whyte
lives
with his wife and
two-year-old child in
Cascais, a beautiful
coastal town about 30
kilometres west of Lisbon.
“I had been to Lisbon once
before, in 2006, for a golfing holiday with a mate and I did not
know what Galp was,” he reflects.
Now settled in to the way of
life, he describes Portugal as
“gorgeous, with friendly people.
I love people and living in different countries — if you speak the
language you get a level or two
deeper into the culture”.
Asked what he is like to work
with, Whyte thinks carefully: “I
like the professional challenge
of helping other people be successful.
“I engage people within my
team, excite them about the
journey we are on and get them
to invest in steps to improve
the business.
“I have a very clear view
of the future. I care about
people but I am also
fairly demanding.”
Mission: Galp’s
Stephen Whyte
Photos: GALP