Transocean leads CIMC Yiulian eyes

Brazil rigs race 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 Eyes on Kiev

Players keeping close
watch on Ukraine’s
Two consortia are battling to secure a prized design, engineering and construction contract for Ophir Energy’s
gas market plans.
multi-billion dollar Block R floating liquefied natural gas project off Equatorial Guinea. Page 5
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 deep- Zubair threat
water Mad Dog phase two project in the US Gulf using an integrated semisub Iraq bows to pressure
after Eni warns it will
production platform designed by KBR and its subsidiary GVA. Pages 2&3 quit country. Page 17

Colorado cap
Myanmar onshore round Ghana
hana seeks progress US state introduces
stringent emissions
set to break new ground on co-operation path
Pages
ages 28 to 31
rules for oil and gas
projects. Pages 34&35
Page 6

NEWS 2 COMMENT 10 POLITICS 12 WORLD 14 SHALE 34 LNG 40 CLASSIFIED 43 FINANCIAL 50

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2 28 February 2014

NEWS
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
BRIEFS
UGANDA
Albertine
BP opts to develop Mad D
acreage offer UK giant in talks
UGANDA will launch an
acreage offering later this with US engineer
year focused on the
Albertine graben. while South
Fred Kabagambe-Kaliisa,
permanent secretary at the Korean yard
Ministry of Energy &
Mineral Development, likely to take on
said: “Invitations to
prospective companies will
fabrication job
go out later this year...
ERIK MEANS and
especially for relinquished
areas where data exists and ANTHONY GUEGEL
has been upgraded, such as Oslo and Houston
Semliki and Taitai.”
Tullow Oil has
relinquished the Taitai UK SUPERMAJOR BP has decided
discovery area in Block 2 in to develop its challenging Mad
the Lake Albert area. Dog phase two project in the
Green Canyon area of the deep-
SINGAPORE water Gulf of Mexico using an in-
tegrated semi-submersible pro-
Marco Polo duction platform designed by KBR
and its Swedish subsidiary GVA.
books rigs BP is now understood to be ne-
SINGAPORE’S Marco Polo gotiating a major front-end engi-
Marine has ordered up to neering design contract with
three newbuild jack-up rigs Houston-based KBR, with work
at compatriot Sembcorp likely to start in the second quar-
Marine’s PPL Shipyard. ter of this year and last 12 months.
The owner ordered one BP’s timetable had previously
firm unit for $214.3 million pegged FEED work to start in Au-
and left two optional gust, but sources now reckon it
contracts at the yard. will probably get rolling by May or
The Pacific Class June.
400-design rig will be A full engineering, procure-
equipped to operate in ment and construction contract
water depths of up to 400 for Mad Dog 2 is expected to be
feet and to drill to depths tendered towards the end of the
of up to 30,000 feet. FEED contract period, and KBR-
GVA will be in an enviable posi- Decision made: BP chief executive Bob Dudley
IRAQ tion, potentially together with a
fabrication yard, for this lucrative Houston Offshore Engineering — bids for the FEED contract, choos- aged for the original spar platform
Weatherford award.
The three major South Korean
both of which had proposed ten-
sion-leg platform designs for Mad
ing instead to make its preferred
choice based on the pre-FEED
solution on Mad Dog 2.
Some of this weight reduction
cuts back shipbuilders — Hyundai Heavy Dog 2 — that it had decided in- work by the three camps. could be attributable to KBR and
WEATHERFORD plans to Industries, Daewoo Shipbuilding stead to go for the semisub solu- The Mad Dog 2 semisub is GVA being said to be working
sell off four non-core & Marine Engineering and Sam- tion, with KBR designing the top- dubbed “an Atlantis look-alike”, closely together to design the
businesses and wind down sung Heavy Industries — are al- sides and GVA handling the hull. with reference to the large floater semisub as an integrated unit
operations in Iraq as part ready regarded as the natural con- All three of these groupings — chosen by BP to develop its deep- from the outset.
of a larger plan to cut costs. tenders to carry out the Aker, HOE and KBR-GVA — had water Atlantis field in the US Gulf. Observers added, however, that
The global services giant fabrication work on the giant performed pre-FEED work for BP That unit has a nameplate top- the size of the new semisub could
said it will divest its semisub. on their respective solutions late sides capacity of 27,000 tonnes, still change, with some sources
pipeline and specialty If all goes according to plan, the last year after BP, in a bid to whereas one source said the Mad questioning whether dimensions
services, testing and new platform could be completed achieve major cost savings, jetti- Dog 2 topsides is currently might rise again due to the extra
production services, and installed by 2018. soned its original plan to develop planned to be “in the ballpark of facilities needed to carry out BP’s
drilling fluids and Sources told Upstream that BP Mad Dog 2 using a huge spar plat- 25,000 tonnes”. ambitious water-flood programme
wellheads business units. gave notice late last week to rival form. This is considerably lower than on Mad Dog.
The company will contractors Aker Solutions and Sources said BP did not invite the 33,000-tonne topsides envis- “It’s Atlantis with waterflood-
complete contracts in Iraq
“and exit the early
production facility
GULF OF MEXICO
Houston TEXAS New
Na Kika 3 gets under way
Orleans
business for good,” it said.
LOUISIANA SUPERMAJOR BP has started deep-water Gulf of Mexico,”
production from the initial well said Richard Morrison, BP Gulf
RUSSIA on its two-well Na Kika phase of Mexico regional president.
Licence for three project in the deep-water
Gulf of Mexico, writes Blake
Initial production from Na
Kika, which is a series of subsea
Rosneft Wright.
The aim is to have the second
fields tied back to a central
processing facility in
RUSSIAN authorities have
signed a resolution producer coming on stream by Mississippi Canyon Block 474,
granting an exploration the middle of this year. The Na began in November 2003.
Atlantis
and development licence to Kika 3 project included the The facility, which has a
Green Canyon drilling and completion of the throughput capacity of around
Rosneft for the Kaygansko- U S A
Vasyukanskaya-more
Garden Banks Ariel-5 and Kepler-4 wells, and 130,000 barrels per day of oil and
offshore structure north-
Main map Holstein subsea infrastructure to 550 million cubic feet per day of
east of Sakhalin Island. tieback to the existing Na Kika natural gas, is moored in more
Rosneft will have to pay platform. than 6000 feet of water.
Mad Dog
about $23.7 million for the “The Na Kika phase three BP operates Na Kika with a
MEXICO
licence. Keathley Canyon Walker Ridge project demonstrates BP’s 50% working interest and Shell
ongoing commitment to the 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.

Bids for
Dog 2 with KBR semisub ONGC
seismic
INDIA’S state-owned Oil & Nat-
ural Gas Corporation (ONGC)
has issued revised bid docu-
ments for a major 3D broad-
band seismic campaign valued
at more than $100 million.
Sources said ONGC has float-
ed expressions of interest for a
shoot to take place off India’s
west coast and suggested
Petroleum Geo Services, Dol-
phin Geophysical, CGG and
WesternGeco will likely re-
spond to the market inquiry.
The planned survey will cov-
er 3925 square kilometres in
the western part of ONGC’s pro-
lific Mumbai High asset and is
due to take place between Oc-
tober 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, de-
clined 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 ex-
ercise, 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 cov-
er ONGC’s B-46, B-48, B-105 and
B-188 marginal fields in the
Mumbai High North-West area
Photo: REUTERS/SCANPIX as well as the WO-24-1, B-45
and B-192 discoveries in the
ing,” said one source. “What they initial total number of wells proach to control costs, but the UK additional finds such as Mad Dog Cluster 7 region, currently be-
tried to jam on the spar they will planned — 33, including 14 water supermajor is keen now on get- South will also be developed by ing developed.
put on the semisub.” injectors capable of pumping ting the platform built and on lo- the new semisub. Most of these fields are in wa-
BP is believed to be pleased with 280,000 barrels of water per day cation in order to boost oil produc- When BP was studying the spar ter depths of about 80 metres.
the performance of the Atlantis — may end up being scaled back. tion from the existing Mad Dog it had envisaged production ca-
semisub in the US Gulf, which
may explain why it leaned in that
Each well costs around $250
million to drill and complete,
field.
Pressure is declining and the
pacity of 120,000 to 140,000 barrels
of oil equivalent per day. New Zhao
direction and away from the rival
TLP proposals.
Once convinced by KBR — after
sources said, so it becomes an easy
target for savings.
BP could resort to a phased ap-
longer BP waits to initiate water-
flooding the less effective the pro-
gramme could turn out to be. The
The entire Greater Mad Dog area
is believed to hold up to 4 billion
barrels of oil equivalent.
Dong plan
months of review — that it could ROC Oil has submitted a new

Danger of fatigue prompts riser rethink

squeeze the topsides onto another plan to the Chinese authorities
GVA design, the contractors were that seeks to extend produc-
greenlighted to proceed. tion out to 2023 at the Zhao
BP’s trademarked LoSal water- BP IS studying alternative riser configurations which approach five knots or more in velocity Dong oil complex in Bohai Bay,
flood technique — short for low including a steel lazy-wave riser design for — and eddies pinched off the Loop Current writes Russell Searancke.
salinity — and associated equip- mitigating fatigue from ocean currents and the phenomenon found in the deep-water US Gulf. The “incremental develop-
ment could push the total topsides anticipated motions of the Mad Dog phase two The only installation of a steel lazy-wave riser ment plan” was submitted in
payload beyond 30,000 tonnes, floating production semi-submersible in the in the US Gulf was carried out by Anadarko for the late 2013 and Roc said it max-
one industry source suggested. deep-water Gulf of Mexico. Caesar-Tonga subsea tie-back to the Constitution imises production from the
LoSal has membranes to reduce The platform is expected to be moored on the spar. The riser was outfitted with buoyancy fields until 2018.
salt content, which helps to lessen edge of the Sigsbee Escarpment in about 5000 feet modules and strakes and fairings to help shed After that, it proposes a de-
the swelling of the clays, thereby of water. Conventional catenary risers may be vortex-induced vibration. tailed plan to enhance oil recov-
flushing out more oil. ruled out, according to sources. Technip was contracted for the design and ery from the fields until 2023.
The technology is not so much The concern is the potential for fatigue, not installation of that riser in 2012 and could be This latter part of the plan will
the challenge as ensuring there is only from normal platform movements, but also called upon by BP to revisit the technology for require an extension of the pro-
enough real estate for the kit. The from the mid and subsea currents — some of Mad Dog 2. duction sharing contract.

Offshore Crane Technology

facebook.com/LiebherrMaritime
offshore.crane@liebherr.com
www.liebherr.com
4
NEWS 28 February 2014

BP sends BRAZIL

drillship
to the US
UK SUPERMAJOR BP is mobi-
lising 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 char-
tered 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 inde-
pendent 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 assess-
ment of BM-C-34 with a drill-
stem 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 On offer: the Transocean drillship Dhirubhai Deepwater KG1 Photo: TRANSCOCEAN
chartered. There is nothing
magical about it and we are

Transocean to the fore

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

in Petrobras rig tender

drillship to operate in the US
suggests that BP is taking a
break from its exploration pro-
gramme in Brazil to focus on
promising acreage in the Gulf
of Mexico.
“The Ensco DS-4 going to the Drilling giant submits lowest bid as state-run Brazilian
Gulf of Mexico for drilling ac-
tivity is a positive indicator for player makes its return to the international market
demand in the region,” wrote
research company Cowen. FABIO PALMIGIANI
Rio de Janeiro

Ensco 7500 DRILLING contractor Transocean by Seadrill with the cylindrical Samsung Heavy Industries in tors have been going on for almost
on market has submitted the lowest bid and
emerged as the frontrunner in a
semi-submersible rig Sevan
Developer for $490,000.
South Korea, for a dayrate of
$634,000.
a year now and have revolved
mainly around dayrates.
ENSCO is seeking opportuni- tender to supply Brazilian oil Despite a lower dayrate pro- Petrobras asked companies to The rigs for which Petrobras is
ties for the ultra-deepwater giant Petrobras with one or more posed for the Sevan Developer, present only units with modern seeking renewal terms are Pacific
semi-submersible rig Ensco rigs capable of operating in water formerly known as Sevan 4, QGOG DP-2 or DP-3 dynamic positioning, Drilling’s drillship Pacific Mistral,
7500 following a series of depths of 2400 metres. ended up ahead in the competi- either semisubs or drillships, Diamond Offshore’s semisub
problems during its contract in Transocean easily beat the tion with a cheaper mobilisation with planned start-up in the Ocean Valor, Seadrill’s semisubs
Brazil. competition after it proposed the fee and the fact that the Brava Star fourth quarter of 2014. West Eminence and West Taurus,
The drilling rig is chartered drillship Dhirubhai Deepwater is a dual-derrick rig, offering re- All 10 bids submitted in the ten- and Ocean Rig’s drillships Ocean
to Petrobras until August 2014 KG1 for a dayrate of $440,000. ductions in drilling time and costs der were for periods of three years, Rig Corcovado and Ocean Rig
for a zero dayrate — in January According to a source, the for both exploration and develop- with options to renew the con- Mykonos.
both parties reached a mutual Transocean bid was 9.5% lower ment wells. tracts for the same time. All six contracts are due to
understanding after the oil than second place when factoring “When Petrobras put every- Petrobras relaxed some of the expire in 2015. The rigs are char-
company realised the unit was in all the criteria. thing on the balance to equalise bidding rules in the middle of the tered on dayrates ranging from
not the best fit to drill develop- The double-hulled, dynamical- all proposals, the dual-activity process after contractors com- $440,000 to $460,000, with the ex-
ment wells at the Papa Terra ly-positioned rig is presently con- was one of the reasons that cata- plained that plans to remove a key ception of the West Eminence and
field in the Campos basin. tracted to Reliance Industries in pulted the Brava Star to the sec- clause would have exposed them to West Taurus, contracted for
“The Ensco 7500 is currently India until July 2014 for a dayrate ond spot,” said another source. extra risks in the event of well kicks $615,700 and $647,500, respective-
idle as we market the rig, but of $510,000. He said QGOG proposed the low- and blowout spill situations. Petro- ly.
there are opportunities in The tender marked the first est mobilisation fee in the tender, bras then relented and kept the The source also revealed that
Brazil as well as some other time Petrobras has returned to the at about $30 million for the Brava relevant clause in for the tender. Petrobras received bids early in
geographies around the world,” international rig market after an Star, while Transocean proposed “Companies were afraid at first, February in a market enquiry to
said Ensco chief executive absence of more than two years, a mobilisation rate of more than but then Petrobras listened to con- assess the possibility of charter-
Daniel Rabun. as the company tries to secure $50 million for the Dhirubhai tractors and made the bidding ing rigs capable of drilling off Bra-
With the drillship Ensco ultra-deepwater units in the short Deepwater KG1. more attractive to rig players,” zil in water depths of 1000 metres.
DS-4 mobilising to the Gulf of term to cover possible delays on 28 Seven other rigs were offered in said one source. Companies that participated in
Mexico and the Ensco 7500 newbuilds due to be delivered by the tender, including three from He also said the results of the the tender for ultra-deepwater
possibly heading to another Sete Brasil from 2015 to 2020. Ensco, another two from Seadrill tender put additional pressure on rigs were also said to have submit-
country, the UK-headquartered Queiroz Galvao Oil & Gas (QGOG) and one from Maersk Drilling. four contractors seeking the ted offers in the market enquiry,
drilling contractor will be left finished second in the tender with Pacific Drilling finished last extension of charters on six ultra- but the outcome is unknown at
with only five semisubs operat- the newbuild drillship Brava Star with the drillship Pacific Meltem, deepwater rigs. Negotiations this point, as Petrobras has not
ing in Brazil. for a dayrate of $530,000, followed currently under construction at between Petrobras and contrac- disclosed the results yet.
28 February 2014
NEWS 5

EQUATORIAL GUINEA Cardona

Consortia head to head success
for Stone
for Ophir’s FLNG project US INDEPENDENT Stone Ener-
gy has logged new drilling suc-
cess at its Cardona discovery in
the Mississippi Canyon area of
the Gulf of Mexico with the lat-
Bumi-Keppel-IHI in face-off against Excelerate and est well encountering 84 feet of
net oil pay.
Samsung Heavy Industries for multi-billion dollar prize The Block 29 number-4 hit
the pay in the previously-dis-
TAN HWEE HWEE covered zone.
and IAIN ESAU The company currently is
Singapore and London running casing to protect the
sand while drilling the explo-
ration section of the well.
TWO consortia are facing off to The success extends the pro-
secure a prized design, engineer- ductive zone of the Block 29
ing and construction contract TB-9 well to the adjacent fault
from London-listed independent block to the north.
Ophir Energy, covering its multi- Plans are to flow the Cardona
billion dollar Block R floating liq- well to the company’s Pom-
uefied natural gas project off pano platform, with first pro-
Equatorial Guinea. duction in early 2015.
Industry sources said a consor- The current well is expected
tium of Kuala Lumpur-listed Bumi to complete drilling operations
Armada, Singapore-based Keppel in next month.
and Japan’s IHI is doing battle Following the current well,
with a pairing thought to consist Stone plans to drill its Cardona
of Texas-based Excelerate and South prospect, also in Block
South Korean giant Samsung 29.
Heavy Industries.
The operator aims to select its
preferred bidder — under a memo-
randum of understanding — by
Double-up for
the third week of March, with one
source close to Ophir tipping
Zola resource
Bumi-Keppel-IHI as having an CONTINGENT resources at the
edge. Apache-operated Greater Zola
The contract is expected to cov- complex off Western Australia
er pre-front end engineering and have nearly doubled, according
design and FEED studies, plus an to joint venture partner Tap
eventual build, own and operate Oil.
order. Tap said the gross proven
Bumi and Excelerate have and probable contingent re-
signed separate letters of intent source at the Zola, Antiope and
with Ophir and the Malabo-based Bianchi gas discoveries in
government to indicate their com- Block WA-49-R had been newly
mitment to working on the FLNG assessed at 638 petajoules (601
scheme. billion cubic feet of gas).
A final investment decision is The addition was due mainly
expected to be made on the project to the inclusion of resources
by mid-2015, with first LNG ex- from the July 2013 Bianchi dis-
ports starting in 2018, ahead of covery.
gas exports from East Africa and These contain nearly 160 Bcf
the US. of proven and probable contin-
Excelerate and Samsung have gent resources.
proposed a newbuild FLNG vessel.
However, their rivals have pitched
a converted unit, which sources
suggested is attractive to Ophir
Three-well campaign: Vantage Drilling’s drillship Titanium Explorer Photo: VANTAGE DRILLING Output boost
and carries a price tag of about $2
billion.
pacity is based on about 2.6 tril-
lion cubic feet of gas so far discov-
vessel. Ophir plans to lease the
FLNG vessel to reduce its capital
player backed by Singapore’s sov-
ereign wealth fund, Temasek
for Shoreline
In terms of liquefaction tech- ered in Block R, and a feedstock of spending commitments, which Holdings, Pavilion Energy is NIGERIAN independent Shore-
nology, Bumi is understood to be about 400 million cubic feet per are expected to run to about $1 bil- building up a portfolio of gas-rich line Natural Resources and its
offering a self-supporting pris- day. lion to first gas, rising to perhaps assets, including interests picked technical partner Heritage Oil
matic type B (SPB) containment The upper capacity limit $1.5 billion later on. up from Ophir in three blocks off have boosted output from OML
system, with Excelerate focused depends on the success of a three- Petrofac is putting together an Tanzania. 30 in Nigeria’s Delta State by
on a membrane process. well drilling campaign which is overall Block R development plan. Pavilion is expected to play a 17% over the past year, with
As Upstream went to press, due to start in May or June, which Ophir has an 80% stake in Block key role in securing the LNG im- net production running at
sources indicated Excelerate had aims to add a further 2 Tcf of re- R and will begin to seek farminees ports needed for Singapore to be- 15,600 barrels per day.
not asked for either price indica- source. in mid-2014, when it will also start come a major LNG trading hub in Heritage’s chief executive
tion or a delivery slot for its pro- Vantage Drilling’s Titanium Ex- to make inquiries for long-term the Asia Pacific region. Tony Buckingham said OML 30
posal, pointing out that it is not plorer drillship will first spud the offtakers to underpin the project. A site selection study is under- will be “a platform to grow and
necessarily a given that Samsung 420 billion cubic foot Silenius East As well as buying Block R’s out- way for a second import terminal obtain additional interests in
would build the vessel. exploration probe, followed by put, Ophir will look favourably on earmarked for the eastern part of Nigeria and in other core
Ophir is understood to be eye- appraisal wells at the Fortuna and them taking equity in the Singapore while SLNG, the coun- areas.”
ing a 2 million to 2.5 million tonne Tonel North discoveries. upstream asset. try’s first LNG terminal, looks set OML 30 was one of four
per annum FLNG unit which will Block R’s gas is biogenic and Ophir could potentially tap Sin- to be expanded to boost its capac- blocks sold by Shell in 2011 as
be fed with gas from seven subsea needs minimal processing, which gapore-based Pavilion Energy for ity to 9 million tpa from 6 million part of its ongoing Niger Delta
wells. The vessel’s minimum ca- will reduce the cost of an FLNG marketing support. As a new LNG tpa. divestment programme.
6
NEWS 28 February 2014

Offshore MYANMAR

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 On the rise: a hot air balloon flies over a temple in Mandalay, Myanmar Photo: AFP/SCANPIX
and social impact assessments

Myanmar onshore round

as required under existing
production contract sharing
terms.
Wah Wah Thaung admitted
this to delegates at ITE’s

set to break new ground

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 Licensing exercise may feature acreage for unconventional exploration,
“unalienable rights” as this
effectively undermines the now with energy authorities planning to learn from Thai contract models
revised Foreign Investment Law
that affords companies the right AMANDA BATTERSBY
to international arbitration for Yangon
dispute resolution, according to
Jean Loi, managing partner at
law firm VDB Loi in Myanmar. MYANMAR plans to launch an ventional exploration. “Once the shore blocks RSF-7 and MOGE-8. will leave just three shallow-
Another issue is that bidders international onshore licensing managements come to know Kyaw Kyaw Aung took pains to water blocks — A-2, M-1 and M-10,
are only allowed to bid for a round this year that for the first about the PSC model and terms explain it did not mean MOGE the last of which was relinquished
maximum of three blocks from time could include acreage being and conditions of unconventional would be awarding without inter- by China National Offshore Oil
the 30 tracts that compromise offered for unconventional explor- exploration, the blocks occupied national tender two production Corporation (CNOOC) — still avail-
the maiden offshore licensing ation. by MOGE could probably be re- sharing contracts to Daewoo — able.
round. Much debate is going on regard- leased with an unconventional the agreement only covers the Kyaw Kyaw Aung said Block
On a positive note, Loi said ing whether to offer some of the PSC contract in 2014,” said Kyaw feasibility study. M-10 is “the most interesting” of
she knows of operators that onshore blocks that were histori- Kyaw Aung. Australian company Tamboran these three shallow-water tracts
requested amendments to some cally reserved for Myanma Oil & However, there will be no ten- has applied to carry out a feasibil- because it is located near to Block
contract terms during contract Gas Enterprise (MOGE) but where der invitations for enhanced oil ity study into unconventional ex- M-9 where PTTEP will soon begin
negotiations with MOGE and the national company has either recovery or improved petroleum ploration in the Htaukshabin- flowing gas from the Zawtika
the national outfit responded been unsuccessful in its explor- recovery contracts on MOGE’s Kanni areas but to date has not yet project.
favourably. ation forays or has reached a tech- blocks RSF-1, 6, 8, MOGE-2, 5 and received permission from the CNOOC drilled six wells to
MOGE is also said “not to be nological impasse. IOR-1 in the upcoming onshore Ministry of Energy. depths of between 6000 and 7000
unreasonable” with regard to Such blocks could be included in bid round. Eight blocks — PSC-C2 (Shwebo- feet, but the structures hit were
companies relinquishing the third onshore round as Nay “As the Ministry of Energy is Monya), PSC-L (Sittwe), PSC-M not commercial and the Chinese
acreage after disappointing Pyi Taw is keen to maximise up- quite interested in unconvention- (Kyaukphyu), PSC-S (Hsipaw-Lash- operator was also unable to farm-
initial exploration without their stream activity, said MOGE execu- al exploration and production io), PSC-T (Lashio East), PSC-U down the block.
completing the entire tive geologist Kyaw Kyaw Aung. nowadays, foreign companies (Kalaw), PSC-V (Loikaw) and IOR-3 Essar drilled one well on Block
commitment work programme. Blocks PSC-P (Myaungmya), should pay attention in present- (Tetma) — that were without tak- A-2 but did not perform produc-
Another factor is that MOGE’s PSC-Q (Payagon), MOGE-6 (Inda- ing [such] new techniques,” said ers in the 2013 second onshore bid tion testing.
expectation of the signature ing) and MOGE-7 (Myanaung East) Kyaw Kyaw Aung. round will definitely be included Rimbunan drilled one explor-
bonus for deep-water are reserved for MOGE until this The government wants such in the third round, added Kyaw ation well without testing on
exploration blocks might not be year but these could be offered technologies to be transferred to Kyaw Aung. Block M-1, then acquired addition-
“that high” because of the with unconventional production the national oil and gas company, It is not yet known whether all al 2D seismic data before relin-
exploration risk, added Loi. sharing contracts in the 2014 on- he said. or how many of the 30 offshore quishing the acreage without
MOGE received 64 proposals shore round. MOGE earlier signed a landmark blocks offered in the April 2013 sinking a second well.
from 30 companies for its 2013 MOGE and other government memorandum of agreement with round for which bids are still Government officials said they
offshore offering — 42 for energy officials plan to visit Thai- Daewoo to perform a feasibility being evaluated will ultimately be expected the second offshore
shallow-water blocks and 22 for land to learn the contract model, study into unconventional explor- awarded. licensing round would be possible
deep-water blocks. terms and conditions for uncon- ation, said to be shale gas, on on- If all 30 are taken up this in early 2015.
Passion speaks louder than words
Here’s a generation defining question: how can North America’s energy supply be secured in a safe and
efficient manner? We believe the answer lies in having the right people implement the right technologies.
Our history has been built by highly skilled and imaginative individuals with the passion to go the extra
mile. These innovators are now working relentlessly to develop our onshore and offshore assets, and
are tasked with a hugely important mission: to keep raising the bar.

Always exploring
Explore more at neversatisfied.statoil.com Never satisfied
8
NEWS 28 February 2014

Change RIG MARKET

on way for
Petronas
A SUCCESSION plan is being
lined up at Petronas’ twin tow-
ers for Shamsul Azhar Abbas,
the chief executive of the Ma-
laysian 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, sourc-
es said.
Wan Zulkiflee, who also
serves as executive vice presi-
dent of downstream, is among
those seen as a candidate to po-
tentially succeed Shamsul in
the top job.
Anuar Taib, who joined as
president of upstream unit
Petronas Carigali from
Sarawak Shell, is also consid-
ered a strong contender.
The third candidate more re- Options: Huisman’s production facility in Zhangzhou, China Photo: HUISMAN
cently identified within Malay-

CIMC Yiulian tipped for

sian circles is Ahmad Nizam
Salleh, who until recently was
chief executive of South Africa-
based Engen.
Two other previously named

Noble semisub contract

potential contenders are Petro-
nas’ vice president of corporate
strategic planning, Arif Mah-
mood, and Petronas Lubricants
chief executive Amir Hamzah.
Arif orchestrated the acqui-
sition of Canada’s Progress
Energy Resources. Chinese yard emerges as frontrunner to build unit for US player,
Shamsul has already an-
nounced his intention to retire
while drilling equipment package goes to Dutch specialist Huisman
when his contract expires in
2015. XU YIHE
However, recent movements Singapore
made by Petronas’ board have
sparked speculation his retire-
ment could be brought forward CHINESE yard CIMC Yiulian is in the drilling equipment package, Eva Plus, a Zentech-Noble design the five EVA rigs to semisubs capa-
to the first half of 2014. pole position to secure a landmark which will be supplied by Dutch rig, will be classed by ABS and be ble of operating in maximum
A new face at Petronas’ top contract from drilling contractor heavy lift equipment specialist able to work in water depths of depths of between 1200 and 2800
office will likely herald a major Noble Drilling Services to build a Huisman. 1500 feet (457 metres) with drilling metres of water.
reshuffle within the manage- semi-submersible rig for $200 mil- Other bidders including Cosco depths of 30,000 feet (9754 metres). Yiulian has so far specialised in
ment team, including the ex- lion to $250 million. would prefer to act as a sub- The unit will have three lifting jack-up rigs, especially of the CJ46
ecutive vice presidency for ex- Sources said that although a fi- contractor with a workscope of cranes, with two on deck having a design.
ploration and production nal contract is still pending, Noble building only the hull, while leav- capacity of 100 tonnes each. The yard has booked deals to
business presently held by Wee has agreed terms with Shenzhen- ing the integration and completion The living quarters are built to build up to 18 jack-ups, including
Yiaw Hin. based Yiulian after having floated to be carried out by Huisman. accommodate 154 people. 12 CJ46, four CJ50 and two JU2000E
Wee, a former Shell and Tal- a tender last year that also drew Noble is keen to commission Upstream earlier reported that design rigs.
isman executive, was brought participation from China’s Cosco Yiulian as the lead contractor re- Noble had been doing the rounds Noble contracted China’s Dal-
in by Shamsul to lead the chal- Shipyard, Shanghai Waigaoqiao sponsible for project financing, presenting the concept to oil com- ian Shipbuilding Industry Off-
lenge of reversing falls in do- Shipbuilding and Singapore’s which other yards considered panies and was unlikely to place shore (DSIC Offshore) to upgrade
mestic oil and gas production. Jurong Shipyard. harbours excessive financial risks. speculative orders, preferring in- a semi-submersible drilling rig in
The deal could be finalised soon Sources also pointed out that an- stead to first line up charters with 2008.
after Noble signs a charter agree- other possible option is to complete oil companies. DSIC Offshore delivered the unit
Buyers line ment, which many sources said is
one of the key parameters for
integration in Zhangzhou in Fujian
province, where Huisman owns
Including the Paul Wolff, Noble
has five EVA-design rigs in its fleet.
upon mechanical completion for
integration and overall completion

up for deal Noble to start the project.

They added that Yiulian
emerged as a strong contender by
and operates offshore fabrication
facilities.
Once a deal is signed, Yiulian is
All were built in the early-1980s as
three-column submersibles for op-
erations in shallow water.
at a yard in Brazil in 2009.
The Chinese yard in Dalian also
built and delivered three JU2000E
MALAYSIA’S Petronas is set to offering a very competitive price expected to complete the unit in 33 However, during the 1990s jack-up rigs to Noble — Noble
sell a 25% share of its Canadian and has agreed to be the lead con- months, sources said, adding that Noble, reacting to a surge in de- Roger Lews, Noble Hans Duel and
shale-liquefied natural gas tractor on a turnkey basis. Yiulian is currently carrying out mand for deep-water rigs, opted to Noble Scott Marks, respectively, in
position to Indian and other Yiulian’s offer does not include workshop design. The newbuild spend billions of dollars converting 2007, 2008 and 2009.
Asian buyers, according to
chief executive Shamsul Azhar
Abbas.
“I am pleased to announce
that we have just finalised a
Heerema Marine Contractors takes out Liwan 3-1 award
further 25% equity participa- ITALY’S Saipem is understood to metres of water at the Liwan 3-1 expected to arrive at Liwan in subsea pipelines and moorings for
tion from an Indian party and have awarded Dutch oilfield serv- project using Heerema’s newbuild early June for an offshore installa- the planned floating production,
an established Asian LNG buy- ices provider Heerema Marine J-lay vessel Aegir. tion campaign lasting through storage and offloading vessel and
er,” Shamsul said, according to Contractors a lump-sum deal for Aegir will take over from early August. central processing facility at the
Reuters. pipeline installation at the Husky Saipem’s pipelay crane vessel The scheduled pipeline installa- Ichthys project.
Shamsul said he could not Energy-operated Liwan 3-1 deep- FDS-2, which is said to have de- tion at Liwan will be Aegir’s first The lump-sum deal for Liwan is
name the companies before the water gas development in the Pearl mobilised from Liwan for other campaign in Asia. Aegir’s third contract win in the
signing of the deal, which is River Mouth basin of the South commitments. Aegir will next move on to the Asia Pacific region, after earlier
planned for next week. China Sea, writes Tan Hwee Hwee. Aegir is due to mobilise towards Inpex-operated Ichthys gas devel- awards from Inpex and Shell for
However, Indian Oil Corpo- A letter of intent is was issued the end of May for the opment off Australia’s Northern work on the Ichthys project and
ration has been cited as a to the Dutch player for the instal- Liwan job from Anadarko’s Lucius Territory. the Malikai tension-leg platform
potential buyer of a 10% stake lation of about 37 kilometres of 22- field in the Gulf of Mexico. The deep-water construction development off Australia and
since last year. inch deep-water pipeline in 1500 The deep-water J-lay vessel is vessel will transport and install Malaysia, respectively.
28 February 2014
NEWS 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 Rumaitha and Shenayel fields, 30 shore facilities. A partnership of of Adco’s plan to increase overall being increased to 3.5 million bpd
Operations (Adco) has received kilometres south of Al-Dabbiya, France’s Technip and Abu Dhabi- output to 1.8 million bpd from by Adco’s parent company Abu
technical proposals in a tender for covers a new processing plant and based National Petroleum Con- 1.4 million bpd by 2018. Dhabi National Oil Company.
the offshore Al-Dabbiya field as it a new gathering system involving struction Company (NPCC) built The overall expansion plan
finalises its selection of a contrac- 17 clusters and injection facilities. facilities in 2006 for an existing involves North East Bab, Bab
tor for the onshore Rumaitha and Technip carried out the front- 110,000 barrel per day capacity in a itself, Qusahwira, Ruwais and Search the archive:
Shenayel fields that make the up end engineering and design stud- $600 million contract. Bida al-Qemzan. Adco
rest of the $1 billion North-East ies for both the onshore and off- The NEB 3 development is part The emirate’s total capacity is
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 environ-
mentally 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 manage-
ment 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 win-
ning proposal for the Rumaitha
and Shenayel fields — following
technical and price submission by
eight bidders late last year.
The selection has yet to be con-
firmed and announced by Adco.
The package for the onshore

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 Calgary Houston London Jakarta
Petronas-operated Kepodang gas
development to Tambak Lorok. February 27th and 28th March 3rd through March 6th March 17th and March 18th April 4th Road Show
PGN could not be reached for One on one meetings and One on one meetings and data One on one meetings and data presentation
confirmation over media reports data room availability room availability room availability (Open to the general public)
about the partnership for the March 6th Road Show presentation
210-kilometre pipeline, but Bakrie (Open to the general public)
Group was long known to be
struggling to put together the Calgary Marriott Hilton Américas Grosvenor House, JW Marriot Hotel Jakarta
necessary funding for the project. Downtown Hotel,110 9th 1600 Lamar St, Houston, JW Marriott Hotel Jalan DR Ide Anak Agung
PGN’s involvement will breathe Avenue SE, Calgary, TX 77010, USA 86-90 Park Lane, London Gde Agung Kav E.1.2 No
fresh hope into the stalled pipe- Alberta, Canada 1&2, Kawasan Mega Kiningan
line project widely considered as Jakarta 12950 Indonesia
holding back progress towards the
targeted first gas production at
the Kepodang development before Shedule your meeting today: rondacolombia2014@anh.gov.co - www.rondacolombia2014.com - 018000953000
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 instal-
lation in mid-2015.
However, Upstream under-
stands 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 award-
ed separately to McDermott of the
US.
10 28 February 2014

COMMENT
Russia’s tough rhetoric against
Ukraine’s new leaders... may quickly
break the historic ties between these
two Slavic countries.

Scotland forces focus

on oil and gas sector Russia must heed
T
seems.
HE UK political
establishment in
London has
suddenly discovered
Scotland and North Sea oil, it

This week UK Minister

bureaucracy and the
potential for restructured
and separate tax regimes.
Would an independent
Scotland be more
sympathetic to the needs of
the hydrocarbons sector?
voice of Ukraine
Populist ousting
David Cameron held his first
Cabinet meeting in Scotland
You might have thought
so, but what if its shrunken
of Yanukovich
and used the occasion to tax and business base was irks Moscow, but
promise a £200 billion ($333 strapped for cash?
billion) energy revolution Could it kill the golden its opposition
— a far cry from the £10
billion windfall tax grab this
goose in a rash tax grab now risks loss
itself?
time three years ago. In the meantime, the UK of goodwill for
Both Scotland and oil have government has belatedly
received less than their fair woken up to the need for many years
share of attention in the past
and the new focus is The key to
welcome.
The reason for this Scottish
awakening largely stems economic

T
from the sudden realisation
that later this year Scotland independence HE abrupt ousting of
could vote for independence. is centred on Ukraine’s President
The UK government is now Viktor Yanukovich and
desperate to prove that it oil and gas the imminent
takes oil and gas — largely reserves, with formation of a new government
located in Scottish waters and administration in Kiev is
— very seriously. more than quickly becoming another bone
A political schism between 90% generally of contention between Russia
and the West.
the two nations — joined
politically since the Act of considered to With relations between the
two sides already tense because
Union in 1707 — would have fall inside of Russia’s support for Syria,
a dramatic impact on the UK Scottish the opposition victory in
as a whole, currently also Ukraine has dealt a blow to
made up of Wales and waters. Russian hopes of turning its
Northern Ireland. neighbour into a full political
A secession by Scotland political attention to focus and economic ally, if not a
would certainly reinvigorate on the North Sea’s falling oil subordinate.
a Welsh nationalist party, and gas production. Russian government officials
and what then for the once Last summer, Energy and experts had failed to
predict the wide popular
mighty Great Britain? Would Secretary Ed Davey support for the opposition in New order: anti-government protesters in Kiev
that seat on the United commissioned former Ukraine and the sharp reaction Photo: REUTERS/SCANPIX
Nations Security Council oil-services leader and Wood from ordinary Ukrainians to
still be available? Group founder Ian Wood to tough police actions in the Ukrainian society. However, US Treasury Secretary Jacob
The political and economic review the sector. streets of Kiev, which are often the Kremlin has stopped short Lew said that the best approach
implications are profound, His report was also out seen in Moscow these days. of using another traditional would involve “international
but few believed in recent this week and the £200 The Kremlin responded by weapon against Ukraine — gas support through the
times Scotland would go it billion promise from turning to the usual rhetoric of supplies. International Monetary Fund
alone. Cameron was based on blaming the West and accusing So far, Russian gas exports to and bilateral support”.
The latest opinion polls Wood’s findings. its intelligence agencies of Europe via Ukraine have been Ukraine’s finance ministry
masterminding and financing uninterrupted, while a recent said that $35 billion may be
also suggest it is still Wood is basically calling opposition protests in Ukraine. slump in gas sales in Ukraine needed over the next two
unlikely, as the practical for a new regulator to While the West welcomed the has been explained by warm years, with Turchinov calling
obstacles mount for co-ordinate more change of power in Kiev, weather, with temperatures in for a quick financial support to
Scotland’s First Minister and collaboration and Moscow has repeatedly February above normal. assist authorities in stabilising
Scottish National Party integration between questioned the legitimacy of A sharp contrast to the its domestic currency, the
leader Alex Salmond. government and industry. Ukraine’s new leaders, led by Kremlin’s pronouncements on hryvna.
However, the polls also He had no brief to interim President Aleksandr Ukraine’s power shift was seen Russia’s tough rhetoric
show that support for investigate fiscal issues, but Turchinov, describing events in in the reaction from European against Ukraine’s new leaders,
independence is gaining the new regulator is the country as an “armed Union officials and the US. its apparent public support of
ground and Cameron is specifically tasked with mutiny”. German Chancellor Angela separatist movements, the
Earlier this week, Moscow Merkel was reported to have refusal to provide earlier agreed
becoming aware that he has advising the Treasury. suspended financial assistance called opposition leader Yulia financial assistance and its
a serious fight on his hands. Equally, the Wood Report and recalled its ambassador Tymoshenko, released from a criticism of the West, however,
The key to Scottish is heavy on oil company from Kiev, refusing to prison cell over this past may quickly break the historic
economic independence is obligation, but is light on acknowledge allegations of the weekend, and urged her to ties between these two Slavic
centred on oil and gas incentives. economic harm that work for unity of the country. countries.
reserves, with more than There will also be Yanukovich and his circle of Meanwhile, Poland has risen From here on in, Russian
90% generally considered to questions about where the relatives and friend had done to as a regional political and President Vladimir Putin is
fall inside Scottish waters. new regulator will recruit Ukraine and its economy. diplomatic power, acting as a losing more than he is gaining
There may be little room the relevant skilled staff in Russia’s Duma lower chamber mediator between Kiev and by refusing to acknowledge the
for bickering between the times of shortages. of parliament has also called for other European countries, also choice of the majority of the
authorities in Ukraine’s to the displeasure of Moscow. Ukrainian population.
two newly-separated However, this kind of Crimean Peninsula to hold a On the economic front, the If the Kremlin continues to
nations if independence does attention can only be good. referendum on whether the EU Commissioner for Economic pursue the same approach
happen, but the oil industry It is only a pity it took a region should become a part of Affairs, Olli Rehn, said that towards Ukraine, this country
has already expressed wider political threat to Russia, fuelling separatism substantial financial aid for may become lost to Russia for
concerns about the added bring it about. claims that are dividing Ukraine could be on the agenda. many years.
28 February 2014 11

$35 billion
THE AMOUNT of
financial aid Ukraine says
it may need over the next
two years.

SIDETRACK Chevron’s
pizza PR
problem
I 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 still-
burning 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
Battle of Britain: North Sea oil and gas reserves are at the heart of the debate over Scottish independence from the UK express gratitude to Bobtown
UPSTREAM/RYTIS DAUKANTAS Pizza, which had provided an
operational headquarters for
Chevron during its response

Scaroni’s outburst gets results in Iraq but to the blast.

Unfortunately for
Chevron, a local blogger got

time will tell if the change is permanent

hold of one of the 100 or so
vouchers and posted it
online with a headline about

B
a peace offering that seemed
YZANTINE bureaucracy ourselves, is it worth it to stay expansion has progressed at a paltry and frivolous given
has long stifled the in Iraq?” Scaroni said. snail’s pace since 2009. the gravity of the situation.
growth of Iraq’s oil “Either you remove the BP also had to lay off contract Days later, Chevron was
industry, to the chagrin obstacles, or we remove workers at its Rumaila field being pilloried around the
of international oil companies ourselves,” he says he told Iraqi because the Oil Ministry has world, excoriated for a move
which embraced tough terms to officials, including powerful failed to approve contracts that struck many as
develop its giant fields. Paolo Scaroni, chief executive Deputy Prime Minister for aimed at expanding production. shockingly tone deaf.
Some companies, such as of Italy’s Eni, could hardly hide Energy Hussein Shahristani. Companies complain of Everyone loves free pizza,
Statoil and ExxonMobil, have his emotions earlier this month Scaroni’s outbursts seem to numerous delays in the but Chevron probably should
left or reduced their exposure to in denouncing persistent have finally found a sympathetic approval of visas for have been more aware of the
a country that has failed bureaucratic hurdles in the way ear in the Iraqi Cabinet, which expatriates, as the Iraqi stakes. Anti-frackers keep a
miserably to cut red tape and of approving key contracts. moved to approve two Zubair government pressures them to close eye on industry
create a secure environment for Eni is running far behind packages worth $1 billion. employ poorly-trained locals. missteps — real and
foreign investors. with the development of the “We respect Eni and take their It remains to be seen if the perceived — and this is one
The more patient are having Zubair field because the Iraqi opinions seriously. We want latest step by the Cabinet to that could have been easily
second thoughts about their Cabinet takes a painfully long them to stay,” said an Iraqi approve contracts for Eni is the avoided.
commitments to oilfield time to sanction expenditures. official. beginning of a new era — or The fires are out and the
developments, and are voicing Eni can no longer take it and Eni is not the only company simply a move to stave off the wells are capped, but public
their anger publicly. would be happy to quit Iraq, faced with long delays in departure of yet another major resentment will likely
A normally sober-headed Scaroni warned. “We are asking rehabilitating Zubair, where company from Iraq. smoulder for some time.

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12 28 February 2014

POLITICS
The oil workers will be on the
streets to defend the revolution.
We do not fear fascism.
Venezuelan Energy Minister Rafael Ramirez

Nigeria in UKRAINE

financial
turmoil
NIGERIAN Minister of Finance
Ngozi Okonjo-Iweala has de-
manded a full independent in-
vestigation into claims of un-
accounted oil funds misplaced
by the Nigerian National Petro-
leum Corporation (NNPC),
writes Barry Morgan.
The move highlights anxiety
at the highest levels of govern-
ment over last week’s suspen-
sion of Bank of Nigeria Gover-
nor Lamido Sanusi.
Iweala said she understood
her own ministry’s efforts at
reconciling accounts had dem-
onstrated a shortfall in remit-
tances of $11 billion, but con-
flicting 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 undertak-
en by independent external
auditors.”
The controversy is the latest
in a series of blows to the
credibility of Nigeria’s finan-
cial system at a time when lo- Aftermath: a memorial for the victims of the recent violence in Kiev
cal and foreign lenders are be-

Independent gas players on

ing asked to bankroll
development ventures in the
wake of Shell’s ongoing divest-
ment programme.
The debt-equity markets are
already saturated with applica-
tions from indigenous players
angling to shore up financial With former president Yanukovich apparently on the run and
credibility ahead of bid sub-
missions, and the current tur- protesters still in the streets, the country’s interim energy minister
moil makes their task harder,
according to the chief execu- is facing some major decisions regarding Ukraine’s gas supply
tive of one UK-based explorer.
NNPC group managing di- VLADIMIR AFANASIEV
rector Andrew Yakubu this Moscow
week vigorously defended the
state company before the
House Committee on Upstream DRASTIC political changes in Kiev of independent gas suppliers to feedback on the opposition seizing sign an association agreement
Petroleum against charges that and the resumption of rapproche- the domestic market. power in Kiev, Stavitsky ex- with the European Union. The dis-
officials had connived with ment between Ukraine and Eu- In addition, the opening of pressed the belief that economic counted Russian gas price will
Swiss oil traders to market rope have already invoked cau- Ukraine’s vast underground gas reason between Ukraine and have to be re-confirmed in March
crude below market price and tious hopes that the nation’s storage facilities in the west of the Gazprom will prevail over politics. in negotiations between the two
pocket the difference. state-dominated energy sector country to European gas players Ukraine hopes that Gazprom companies, otherwise it will auto-
The Nigerian Extractive In- will open up to independent play- could create a new gas hub. will extend the discount on gas matically return to last year’s level.
dustries Transparency Initia- ers. This would in turn reduce the supplied to Ukraine into the sec- However, government officials
tive (NEITI) earlier hinted that Ukraine’s interim Energy Min- monopolistic role of state-owned ond quarter, he said. in Moscow have indicated this
about $8 billion was lost annu- ister Eduard Stavitsky expressed gas operator Naftohaz Ukrainy to Naftohaz is currently importing week that they have yet to recog-
ally through crude swaps hope that the new authorities will just co-ordination and supervi- Russian gas at about $269 per thou- nise any legitimate power in Kiev
whereby oil was lifted in ex- foster the liberalisation of the do- sion, according to Stavitsky. sand cubic metres, compared with with whom they can hold talks.
change for refined products. mestic gas market to reduce the He added that the emergence of last year’s average price of $410 per Stavitsky revealed that despite
Yakubu defended local and country’s exposure to fluctuations independent gas suppliers in thousand cubic metres under the a wave of domestic non-payments
international traders, several in Russian gas prices. Ukraine’s domestic market would agreement between the company for supplied gas and uncertainty
of which are currently bidding Speaking to the Kiev-based increase their bargaining power and Gazprom. about the state’s financial re-
for strategic acreage under Kommersant Ukrainy daily, in negotiations with Russia’s state The agreement was signed in serves, Naftohaz has been able to
Shell’s latest divestment exer- Stavitsky said the new govern- controlled monopoly Gazprom. December after the refusal of then- pay $1.68 billion to Gazprom to re-
cise in the eastern Niger Delta. ment should promote the arrival Despite the Kremlin’s negative president Viktor Yanukovich to duce its $3.3 billion debt in the
Against this backdrop, law-
makers bemoaned delays to the
reforming Petroleum Industry
Bill, designed to restructure Foreign oil workers evacuated as South Sudan peace talks fail
the sector and impose trans-
parency. TALKS in the Ethiopian capital power was rebuffed. Fighting con- gic capital. The SPLA this week ers had been evacuated and that
Rivers State Governor Rotimi Addis Ababa designed to hammer tinued in Jonglei State with the admitted to conducting a “tactical trained local workers would re-
Amaechi this week blasted the out a peace accord between South South Sudan Liberation Army retreat” from Malakal while the main to maintain production op-
federal government for refus- Sudan’s warring factions have (SPLA) claiming to have killed 200 government evacuated foreign erations.
ing to allow his office to import broken down, writes Barry Morgan. rebels loyal to Machar at Gadiang, technical engineering workers Output from the Upper Nile’s
two US helicopters for deploy- Regional pressure to accept an and to have retaken the town. from the oilfields. Adar Yale fields as well as Unity
ment in illegal oil bunkering arrangement that excluded both In Upper Nile State, aid workers Upper Nile State Minister for State’s Heglig field complex has
surveillance, hinting at official President Salva Kiir and former fled the town of Malakal as fac- Mining and Petroleum Francis dropped off significantly since
collusion in oil theft. vice president Riek Machar from tions vied for control of the strate- Ayul insisted that not all oil work- 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
INDIA’S Petroleum Ministry has at the current price of $4.2 per
written to Prime Minister Man-
mohan Singh justifying the in-
‘GAS SCAM’ million British thermal units.
The AAP has claimed that the
crease in gas prices from 1 April
and has claimed the government
ALLEGATIONS cost of gas production works out
at $1 per million Btu but Moily
cannot terminate the contract for countered that ONGC’s average
Reliance’s D6 deep-water block. Claims Reliance contract production cost in the previous
Indian Petroleum Minister financial year was $3.6 per million
Veerappa Moily cited arbitration
cannot be cancelled Btu and the latest deep-water
as the primary reason for the min- finds would cost more than $4.2
istry’s inability to cancel Reli- NISHANT UGAL per million Btu to produce.
ance’s contract in his letter to New Delhi Moily added that state-owned
Singh on 14 February. players such as ONGC and Oil
“In view of the contractual pro- India contribute close to 80% of
vision under the PSC (production troleum ministry fined Reliance the country’s gas production and
sharing contract), the govern- $1.005 billion for lower gas output would end up as the biggest
ment will not be able to terminate from the D6 block in the Krishna beneficiaries once prices rise.
the contract on account of a short- Godavari basin, which is pres- Gas prices in India are poised to
fall in production as the matter is ently under arbitration. almost double from 1 April to
pending before the arbitral tribu- In his letter, Moily explained about $8.4 per million Btu, in line
nal,” Moily wrote in his letter to the rationale behind the price with recommendations made by a
Manmohan Singh. rise, claiming it was economically committee headed by Chakravar-
The United Progressive Alliance unviable for companies such as thi Rangarajan, who chairs the
(UPA) government led by Singh is Reliance and Oil & Natural Gas prime minister’s Economic Advi-
facing heat from opposition par- Corporation (ONGC) to produce gas sory Council.
ties 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
Photo: REUTERS/SCANPIX prices should not be increased.
Kejriwal has alleged a “gas scam”,

on Kiev watch
claiming the government is fa-
vouring Reliance.
Responding to Kejriwal’s allega-
tions, Moily said that the existing
contract does provide for termina-
tion if there’s a default by the con- Response: Indian Petroleum Minister Veerappa Moily
tractor. However, in 2012 the pe- Photo: AFP/SCANPIX

Maduro appeals to Venezuelan protesters

VENEZUELA’S President Nicolas to talk with opposition movement oil workers will be on the streets
Maduro has issued a call for a na- leaders and has suggested that the to defend the revolution. We do
tional “peace conference” as his protests are nothing more than a not fear fascism,” he said.
administration tries to break veiled coup attempt. However, opposition leaders and
the stalemate of widespread pro- Despite Venezuela’s vast oil demonstrators show little sign of
fourth quarter of 2014 and in to find alternative gas supplies, tests that threaten to further stag- wealth, tensions are growing as budging from their barricades.
January. fostering the development of un- nate the economy, writes Tom stores run short of everyday con- Many are answering the call of
He said Ukraine may import up conventional gas in tight sand- Darin Liskey. sumer goods.  jailed opposition leader Leopoldo
to 35 billion cubic metres of Rus- stone at home and imports of gas The Opec nation has been roiled Even so, key economic leaders Lopez, who said, “he who tires,
sian gas this year if Gazprom ex- from Europe. by protests for much of the month. in the country are digging in their loses”.
tends the price discount beyond He said Anglo-Dutch super- Demonstrators have made barri- heels. The country’s fragmented op-
the first quarter, thus returning major Shell is expected to drill cades to cut off thoroughfares Energy Minister and head of position groups are beginning to
to its position as one of Gazprom’s three deep exploration wells on across the country and have re- state-run giant PDVSA, Rafael coalesce behind leaders such as
largest customers outside Russia. its blocks in the Kharkiv region leased pictures of alleged police Ramirez, said the country’s oil Lopez and Henrique Capriles, who
However, Stavitsky said that this year to test the potential of brutality on social media outlets. workers remain firm in their sup- lost to Maduro in elections last
Ukraine will continue its efforts tight sandstone. Maduro has previously refused port for the Maduro regime. “The year.
14 28 February 2014

WORLD
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.
UK Secretary of State for Energy & Climate Change Ed Davey

North Sea UK

market at
‘low point’
THE UK’s North Sea market is at a
“low point in exploration activity”
and will need to attract more in-
vestment and possibly chase new
plays to boost productivity, writes
Eoin O’Cinneide.
The latest activity survey by in-
dustry 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 cen-
tury.
“In 2013, only 15 exploration
wells were drilled discovering just
80 million barrels,” the report
read. “Unfortunately, 2012 was
equally poor with 2011 very disap-
pointing. 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 oth-
ers 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 Key issue: Scotland’s First Minister Alex Salmond (left) and UK Prime Minister David Cameron, and (far right) Ian Wood
Mike Tholen held up the period

Independence debate sees

from 2004 to 2008 as a decent bell-
wether 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 UK and Scottish governments hold Cabinet meetings timed to
in exploration, just to get back to
the middle point of the last dec- coincide with release of Wood Review’s final report on North Sea
ade. And frankly a doubling would
be the right sort of order to get EOIN O’CINNEIDE
where we want to get to,” Tholen London
said.
Oil & Gas UK chief executive
Malcolm Webb added: “We need to NORTH Sea oil was finally un- incide not just with each other, ister Alex Salmond in large part 56,000 copies of the Scottish gov-
do two things — we desperately masked as a central issue in the but with the release of a major re- used its recommendations to take ernment’s blueprint for independ-
need to drill more wells ... but we debate over Scottish independ- view detailing recommendations aim at the local electorate who ence were ordered online in the
also need to find more with those ence this week as each side on how to maximise productivity will be voting in the Scottish in- first two months across 40 coun-
wells as well. pressed their case for stewardship in the core oil province. dependence referendum in Sep- tries — including in Nigeria and
“So it is a question of the sort of of what is one of the UK’s major Whereas the Wood Review, tember. Argentina.
plays we are after as well — maybe money earners. written by retired industry vet- The referendum will be keenly Wood has, among other
we need to get into more adven- Cabinet meetings for both the eran Ian Wood, was primarily watched by oil industry players recommendations, called for a
turous plays.” UK and Scottish governments aimed at political and industry the world over. new industry regulator to in-
An overhaul of a “complex, were arranged just a few kilo- circles, UK Prime Minister David Recent research by UK broad- crease collaboration amongst
burdensome and uncompetitive” metres apart in Aberdeen to co- Cameron and Scottish First Min- caster BBC showed that more than industry players and government
fiscal regime is required to stimu-
late investment, particularly in
high-pressure, high-temperature
plays in the southern North Sea,
Wood’s recommendations meet mixed reactions
the report said. INDUSTRY veteran Ian Wood’s struggling to perform a more demanding Scotton said: “Greater collaboration and
Capital expenditure last year recommendations on how best to breathe stewardship role,” Wood said. more efficient use of new and existing
hit £14.4 billion ($24.02 billion), new life into the UK’s North Sea fields have The new regulator would need a infrastructure (are) absolutely vital to the
the highest in three decades. A drawn plenty of praise from players in significant degree of independence as the industry’s future success.”
further £13 billion is expected this politics and the industry — but there have incumbent has to compete for resources However, Richard Power, partner at law
year, but this will drop to around also been dissenting voices. within the Department of Energy & Climate firm Berwin Leighton Paisner, offered a
£7 billion between 2016 and 2017 Having released an interim report in Change. different view.
unless the rate of maturing new November, the final Wood Review delivered It was no surprise that Energy Secretary “It’s debatable whether the formation of a
developments increases, the re- no surprises, with the UK government Ed Davey — who commissioned the review new regulator will make any significant
port argued. accepting the proposals — including a call — and the UK government accepted the positive difference to an industry whose
to set up a new industry regulator. proposal, as did the Scottish government. participants already co-operate and share
Plays: Oil Wood presaged the recommendations in Industry players active in the UK North infrastructure responsibilities pretty well.
& Gas UK his review by contending that the licensing Sea also backed the findings. “Introducing significant additional
chief model in the UK is the right one — leaving Martin Rune Pedersen, managing regulation could prove counterproductive
executive the proposal of a new arm’s-length, director of Maersk Oil UK, said: “(Wood’s) and simply add an extra layer of costs,”
Malcolm industry-funded regulator as the review sets out clear and pragmatic ways Power said.
Webb cornerstone of his scheme to boost the to achieve the fresh approach that is needed “A better solution might be to offer the
sector. to develop the full potential of the North carrot of further tax breaks to exploit fields,
Photo: OIL “The present regulator has halved in size Sea.” just as they do in Norway, rather than the
& GAS UK in the last 20 years and, as a result, is clearly Dana Petroleum chief executive Graham 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
dustry.” Sub-contracts are expect-
APPROVAL ed to go to 10 companies including
France’s Technip, which plans to
FOR SHELL create a CCS centre of excellence
at its office in Milton Keynes.
Last October, Technip and Shell
CCS scheme near subsidiary Cansolv, which will
provide the carbon capture
Aberdeen set for FEED technology for Peterhead, an-
nounced plans to co-operate on
TERRY SLAVIN CCS projects.
London Bill Spence, Shell’s vice presi-
dent in charge of CO2, has said
previously that the oil giant sees
THE UK government’s focus on Peterhead as an important
Scotland and oil and gas was re- addition to its global portfolio of
flected in the emerging carbon test CCS projects, which includes
capture and storage sector this Quest in Alberta and Gorgon in
week as Shell finally received ap- Australia.
proval to pursue the world’s first Stuart Haszeldine, professor of
CCS project on a gas power plant carbon capture and storage at the
at Peterhead, north of Aberdeen. University of Edinburgh, said
Ed Davey, the UK’s Secretary of Goldeneye, which is located 100
State for Energy & Climate kilometres offshore in the outer
Change, confirmed that the Peter- Moray Firth is ideal for geological
head project will be awarded storage of CO2.
funding for a detailed front-end “It is also one of the best under-
engineering and design study. stood CO2 storage sites in the
Shell and power plant owner world,” he said. Shell, which spent
SSE will share £100 million ($166 seven years producing gas at the
million) for the FEED study with site until 2011, did a FEED study
the White Rose project at the Drax for CO2 storage at Goldeneye as
coal power station in Yorkshire, part of a previous CCS project at
the other preferred bidder in the the Longannet power plant,
Photos: AFP/SCANPIX/OIL & GAS UK UK government’s £1 billion CCS which failed to get funding at the
competition. eleventh hour.

oil take centre stage

The Department of Energy & Haszeldine pointed out that the
Climate Change (DECC) will award Captain sandstone, where Golden-
the remaining £900 million to eye sits, could store up to 360 mil-
either or both projects after final lion tonnes of CO2, and that anoth-
investment decisions are taken er four major aquifers lie nearby.
late in 2015. Luke Warren, chief executive of
Shell said the project, which the Carbon Capture and Storage
will store 1 million tonnes per an- Association, welcomed DECC’s
num of carbon dioxide over 10 long-awaited announcement, and
years in its depleted Goldeneye its statement that discussions
gas field, could be up and running would continue with developers
by the end of the decade. outside the competition, includ-
Ed Daniels, chairman of Shell ing the Captain Clean Energy
UK, said: “The successful demon- Project in Scotland and the Don
in an effort to reap an additional introduced by the government “I’m afraid Scotland isn’t Norway, stration of the technology [CCS] at Valley project in Yorkshire.
£200 billion ($333.86 billion) in will lead to greater investment in and if it becomes over-dependent Peterhead would be a step towards “What you have is two competi-
revenues from the North Sea the North Sea… on the tax revenues of oil and gas proving its commercial viability tion projects that are now under
by unlocking between an extra “An independent Scotland it would have to raise taxes an as a tool for mitigating climate way, and the government talking
3 billion and 4 billion barrels of would have to commit about awful lot when the oil and gas de- change. It could also help diver- about a second phase to deliver
oil equivalent over the next two £3800 per head — over 10 times clines further, or it would have to sify the North Sea oil and gas in- commercial CCS in the 2020s.”
decades. more than when costs are slash public expenditure.”
Cameron’s contention is that spread across the UK — to match Those pressing for Scottish Confirmation:
only a unified UK — a “top 10 econ- this.” independence argue the UK UK Secretary
omy” — can provide the “broad However, Salmond cast his government has squandered oil of State for
shoulders” necessary to support eye across the North Sea at revenues and mismanaged the Energy &
the required investment in the Norway to support an argument effective development of the re- Climate
North Sea. for an independent Scotland as source base. Change Ed
The Conservative party leader the most viable steward of oil Scottish Finance Secretary John Davey
also held his Cabinet meeting — revenues. Swinney said: “We’ve had 16
his first in Scotland — at Shell’s Salmond has proposed setting changes to the fiscal regime in the
regional headquarters, and took a up two oil funds — one short-term North Sea in 10 years, we’ve had 14
trip to BP’s Eastern Trough Area and one long-term — to retain oil oil ministers in the last 17 years,
Project (Etap) platform 240 kilo- wealth. three in the last four years. One
metres off Aberdeen. However, UK Secretary of State thing that Scottish control of oil
The UK’s Department of Energy for Energy & Climate Change Ed and gas resources will offer is a
& Climate Change (DECC) toed the Davey rubbished Salmond’s argu- much more stable, long-term Photo:
line, arguing: “The fiscal regime ment, telling UK broadcaster ITV: policy.” BLOOMBERG

www.harding.no
16
WORLD 28 February 2014

Lukoil NORWAY

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 ex-
planation, 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 ma-
ture 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 Decem-
ber, paying about $1.7 billion to
the government.
The Imilorskoye field is esti-
mated 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 Broker-
age in Moscow, Lukoil may be
able to eventually produce be-
tween 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. Appeal: Norway’s government has been urged to allow more projects to qualify for tax concessions, including Shell’s
Earlier, the company said Draugen programme Photo: JOSTEIN LOVAS
that it expected first oil at the

Government considers
Imilorskoye field to be pro-
duced some time in 2015.
Lukoil also said that it is
planning to carry out more
seismic shooting, drill 11 explo-
ration wells and re-test old

oil tax increase changes

holes on the Imilorsky block
with the aim of confirming ad-
ditional oil reserves on the
acreage.
In-place geological resources
of the Imilorskoye field and its
satellites, West Imilorskoye Some projects may be allowed to go ahead
and Istochnoye, are estimated
at 6.2 billion barrels of oil. under old — less onerous —tax regime
The fields, discovered be-
tween 1987 and 1988, have a BEATE SCHJOLBERG
complex geological structure Oslo
which was the main obstacle to
their development.
NORWAY’S government is consid- larled. A number of other criteria covered by existing permissions included in the transition rules,
ering changes to last year’s oil-tax would also apply — the secondary or approvals from lower authori- and also argued for its Asterix gas
Search the archive: increase that could allow a projects must be applied for before ties. Investments in production- discovery to be added to the list of
West Siberia number of development projects the related first project is opera- drilling programmes worth more exempted projects.
to go ahead without being subject tional, and the right to deductions than Nkr80 billion ($13.3 billion) The Norwegian Sea discovery
to the new tax regime. under the old tax regime ends as may be subject to the new, higher may be developed via Polarled, but
The proposed change could ben- soon as a project starts produc- tax rate, even though they were would fall outside the proposed
BP takes up efit the Zidane and Linnorm gas
discoveries in the Norwegian Sea,
tion.
The Norwegian Oil & Gas Asso-
decided by the owners before 5
May 2013, Norwegian Oil & Gas
transition rule because it is un-
likely to be applied for before Po-

Odfjell work which were meant to be linked to

the new Polarled pipeline, due to
open in 2016.
ciation welcomed some of the
changes, but warned that both
the original tax change and some
said.
In separate letters to the minis-
try, individual operators urged the
larled comes on stream.
Canadian operator Talisman
Energy said that a new plan for
BERGEN-based contractor The two projects were put on of the transitional rules could halt government to include more development and operation (PDO)
Odfjell Drilling has seen BP hold last year because of the tax many projects that would other- projects that were decided before for its Yme field should also be in-
take up two two-year options increase, and in Linnorm’s case wise bring valuable production 5 May last year, such as Shell’s cluded in the old tax regime.
on platform drilling services also because of poor project eco- and tax revenues. four-well drilling programme at A plan for the field was ap-
work in the UK in a contract nomics. It also asked for a longer transi- Draugen, ExxonMobil’s phase proved in 2007, but the project has
extension worth an estimated The government does not want tion period, at least until the end three project at the Balder field, been plagued by problems with
$165 million. to reverse the overall tax increase, of 2023. and the Maersk Oil-operated the production facility and is now
The UK oil major’s agreement which cut the tax-deductible “The biggest weakness of the Flyndre tie-back development. being re-planned with a new PDO
with Oslo-listed Odfjell now share of investments to 5.5% from proposal is not the proposed “We are very disappointed that planned for the second quarter of
runs to December 2018, with 7.5%, effective from 5 May last changes, but that the ministry the proposal seems to exclude the 2015.
one more two-year option still year. fails to implement more flexible entire project from the transition- While the proposed change
available. However, the recent proposal qualification criteria for the tran- al system and apply the reduced means a new chance for the Zidane
Odfjell Drilling said it was would allow some projects to go sitional system,” Norwegian Oil & (tax deduction) rate retroactively,” discovery, it may not be enough for
currently operating on the An- ahead under the old tax regime for Gas stated in a letter to the Fi- ExxonMobil wrote. Shell-operated Linnorm.
drew, Bruce, Clair and Magnus a transitional period lasting nance Ministry. “This proposal comes despite The transition rule “will not be
platforms in the UK North Sea through 2020. Because the rules only apply to concern expressed in parliament sufficient to change the decision
under the deal with BP first The Finance Ministry has sug- projects that have to be separately in June 2013 by the parties that made within the licence to put the
signed in October 2009. gested transitional rules that ex- applied for to the Energy Ministry, today comprise the government.” project on hold because of a lack of
Clair Ridge is to be added empt developments that depend they do not include drilling pro- Statoil said its ongoing Heidrun commercially acceptable develop-
once it is handed over to opera- on other projects that were filed grammes at producing fields or Oil Export and Kvitebjorn Pre- ment solutions,” Shell wrote in its
tions in 2016, the driller said. before 5 May 2013, such as Po- other projects that are typically compression projects should be letter to the ministry.
28 February 2014
WORLD 17

MIDDLE EAST Business

Iraq takes Eni threats to as usual
at PTTEP
heart over Zubair row THAILAND’S national upstream
company PTTEP expects next
week will be business as usual
at its Bangkok headquarters
after several weeks of working
Major contract remotely because anti-govern-
ment protesters blocked the
packages for Energy Complex that houses
the Department of Mineral
field approved Fuels and the operator’s offices,
writes Amanda Battersby.
but Sonangol “Hopefully next week, we
quits due to should be able to start going
back to work in our offices,”
rising violence PTTEP chief executive Tevin
Vongvanich said.
“The situation is, I still
NASSIR SHIRKHANI think, dynamic... our working
London life was affected as our office
was taken for about a month so
we had to relocate our working
IRAQ has approved major contract team — our office — to other
packages to develop the Basra places,” he said.
region’s giant Zubair oilfield after “We prepared for the business
Italy’s Eni threatened to quit the continuity, installing a lot of
country. communications systems, data
However, the government did systems [so] that we can access
not take any steps to prevent our data from anywhere.”
Sonangol’s exit because of increas- None of PTTEP’s or other
ing violence in the northern prov- companies’ oil and gas explora-
ince of Ninewa, where the Ango- tion and production operations
lan state company was developing onshore or off Thailand was af-
two fields. fected by the occasionally
Eni made ever more public bloody anti-government dem-
threats earlier in the week, saying onstrations that started last
it was ready to quit unless the gov- November.
ernment acted quickly to approve Tevin said it was not appro-
overdue contacts that have priate for him to comment on
delayed crucial field work at the the political situation, adding
Zubair field. that the national player’s cred-
“If they do not sign the con- it rating remained the same as
tracts in a couple of weeks we will that of the country.
go. We have waited six months,” Ratings agency Moody’s on 21
Eni chief executive Paolo Scaroni February affirmed Thailand’s
said. government credit rating at
The Iraqi government, keen to Baa1 with a stable outlook de-
please Eni, responded the same spite the recent resurgence of
day by approving two contracts Not walking away: a worker at Zubair in Basra Photo: AFP/SCANPIX street protests and blockades.
for de-gassing stations at Zubair
worth a combined $1 billion. to operate the Qayara and Najmah
Contracts worth $500 million or oilfields in 2009, said violence has
more require Cabinet approval, and prevented it from working at the
a third contract is under review. fields.
Scaroni said earlier this month “Our presence in Iraq was as an
that entrenched bureaucracy in operator in an area with much
Iraq had prevented it from in- conflict. Last year we were unable
creasing production at Zubair, to develop any work due to secu-
where output is currently stand- rity matters, so we took the
ing at 320,000 barrels per day com- decision to leave,” said Anabela
pared with about 195,000 bpd Fonseca, Sonangol board member
when it won the service contract in charge of international invest-
in 2009 to rehabilitate the field. ments.
Eni hopes to increase Zubair’s Sonangol made a declaration of
output to 400,000 bpd by the end force majeure last year, which the
of 2014. Iraqi government accepted as the
Obstacles such as contract company’s costs were increasing
delays meant Eni had so far only while it could not develop the
spent $3 billion out of a planned fields.
$7 billion on Zubair. International oil companies
“We are asking ourselves, is it have faced numerous bureaucrat-
worth it? Is it worth it to stay in ic and security problems in Iraq,
Iraq with all these problems,” said forcing the departure of Norway’s
Scaroni. “In Iraq we are suffering Statoil while ExxonMobil of the
a lot from a very complex bureauc- US has reduced its presence in the
racy which makes the investment Basra region.
process very slow. Eni’s threat is part of a cam-
“Iraq has one of the most com- paign by the international compa-
plex bureaucracies on the planet,” nies operating in Iraq to pressure
he added. the government to reduce bu-
Sonangol, which won the right reaucracy.

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.
18
WORLD 28 February 2014

BRAZIL Mylos set

Topazio on track to turn
the bit
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 inter-
rupted in late December due to
problems with a blowout pre-
venter.
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 drill-
ship was moved a few kilo-
metres south-east to spud the
top section of the Pao de Acucar
appraisal well, a move that
Roberta Camuffo, Repsol explo-
ration director for North Amer-
ica 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 My-
IHC Merwede has launched the Sapura Topazio pipelaying support vessel at the Krimpen aan den Ijssel shipyard in the los experienced BOP-related is-
Netherlands. The 550-tonne PLSV was ordered by Sapura Navegacao and is the second in a series of five vessels that will sues and ceased drilling.
be delivered to Petrobras in Brazil to develop pre-salt fields in water depths of up to 2500 metres Photo: IHC MERWEDE “We expect to have this issue
resolved by the end of February

Re-tender bids all in for

and we will probably record ap-
proximately 50 days of off-hire
in the first quarter of 2014,”
said Ocean Rig chief executive
George Economou.
While it completes work on

Petrobras AHTS charter

the BOP, Ocean Rig remains
confident it will extend con-
tracts for two other drillships
— Ocean Rig Corcovado and
Ocean Rig Mykonos — operat-
ing in Brazil.
OSM takes top two spots with Siem Offshore coming The Mykonos and Corcovado
are chartered to Petrobras until
a close third after better response from market March 2015 and May 2015, re-
spectively.
FABIO PALMIGIANI
Rio de Janeiro
Rig in port
BRAZILIAN state-controlled oil present offers for periods of two proposed the Toisa Elan and Toisa the new tender were also submit- THE Diamond Offshore semi-
company Petrobras has received years, with an option to renew the Envoy for $63,000 each. Solstad bid ted in the previous one, the excep- submersible rig Ocean Alliance
bids in a new tender for the char- deal for the same timeframe. the Normand Borg vessel for just tion being the Normand Borg. The has been towed to Guanabara
ter of anchor-handling tug supply OSM offered vessels owned by $56,945, but finished the race in unit has been operating for Petro- Bay in Rio de Janeiro state to
vessels, after it cancelled propos- Swire Pacific Offshore and won eighth place after fuel consump- bras since 2003. carry out maintenance on
als submitted two and a half the top two spots. The company tion and other costs were included Brazilian shipping group Bra- thrusters.
months ago by several contractors proposed both the Pacific Dili- in the final price. vante, which bid aggressively The Skandi Ipanema anchor-
in a similar competition. gence and Pacific Duchess for Astromaritima, which finished with three Posh-owned vessels in handling tug supply vessel,
The Petrobras re-bid saw a bet- dayrates of $59,000 each. first in the previous bidding proc- the December tender, opted to owned by DOF Subsea, assisted
ter response from the market in “Swire Pacific has demonstrat- ess before it was cancelled, offered stay out this time after the Posh mooring with two other tug-
terms of dayrates than the previ- ed an appetite to relocate its ves- the same vessel — Go Phoenix — Concorde, Posh Constant and Posh boats from Camorim Servicos
ous tender, suggesting that own- sels from South-East Asia to Brazil, for the same dayrate of $61,900, Conquest AHTSs were disqualified Maritimos.
ers still prefer to have vessels on lowering both dayrates and mobi- but this time will have to settle by the Petrobras bidding commit- It is understood the semisub
long-term contracts in Brazil than lisation fees,” said one source. for ninth place. tee due to non-compliance with will spend over three months
to gamble in the North Sea spot Siem Offshore finished a close The last two spots went to Fars- winch requirements. in the Rio de Janeiro port.
market. third with the Siem Opal vessel tad with the Far Statesman AHTS Petrobras is now expected to
Bids for an unspecified number
of 18,000-bhp-rated AHTSs were
for a dayrate of $60,000, followed
by Farstad with the Far Sagaris
for $71,950 and Maersk Supply
Service with the Maersk Laser
enter negotiations with the top
bidders with an eye to take deliv-
Remora ready
submitted on 20 February. and Far Senator AHTSs for vessel for $73,500. ery of the vessels late in the first THE Remora HiLoad dynamic
Contractors were asked to dayrates of $70,950 each. Sealion Most of the vessels offered in half of 2014. positioning unit is expected to
start operations for Petrobras

Half the offers for charter of supply vessels disqualified in Brazil in the second quarter
of 2014, following completion of
operational testing.
BRAZIL’S Petrobras has disquali- top six spots. Geonavegacao fin- lower than 90%. Petrobras also dayrate of $19,907 and Astro En- The unique L-shaped unit,
fied more than half the commer- ished last with just one bid. discarded the Astro Vermelho bid chova and Astro Guaricema for supplied by Canadian floater
cial offers submitted in late Janu- However, after reviewing the proposed by Astromaritima and dayrates of $20,997 each. All PSVs specialist Teekay Offshore, is
ary for the charter of an proposals, the Petrobras bidding the newbuild MDPL 1498 offered were offered to Petrobras to carry the first such vessel in the
unspecified number of 1500-bhp- committee disqualified the offers by Geonavegacao due to excessive out three-year contracts. world designed to load oil from
rated platform supply vessels. presented by Astromaritima for prices. Sources expect Petrobras to floating production, storage
Only seven Brazilian-flagged the Astro Badejo and Astro Pargo The final classification showed award the trio of contracts soon. and offloading vessels on to
vessels were offered in the tender PSVs due to non-compliance with Astromaritima with three bids ap- The PSVs are due for delivery in standard tankers with no extra
and Astromaritima secured the age requirements or availability proved — Astro Arraia for a September 2014. equipment.
28 February 2014
WORLD 19

IRAN Azadegan
Iran eyes longer-term ultimatum
for CNPC
joint venture contracts CHINA National Petroleum
Corporation (CNPC) has
received what appears to be a
final warning from Iran to
Nation prepares carry out work at the giant
Azadegan oilfield development
for end of or face losing its contract,
writes Vahe Petrossian.
isolation with In a strong attack on the
presence of “ineffective and
new improved unsuccessful Chinese
deals for all companies... in recent years”,
Deputy Oil Minister Emad
foreign players Hosseini said that the ministry
“has not yet made any decision,
but it has warned the Chinese
VAHE PETROSSIAN contractor of expropriation”.
London In the strongest criticism so
far of CNPC, the deputy
minister said there would be
IRANIAN oil authorities have un- “no hesitation” in ousting
veiled fresh contract terms for CNPC from the project
foreign oil and gas companies in- contracted out nearly seven
volving joint ventures covering years ago.
the full cycle from exploration to CNPC has the contract for
production and entitlement to a Azadegan, also known as South
share in the eventual output. Azadegan, and the smaller
Details of the Iran Petroleum North Azadegan field, with
Contract (IPC) were presented Sinopec developing the nearby
over the weekend at a gathering in Yadavaran field.
Tehran and will be put to foreign Some activity is known to be
companies in London in July. taking place at Yadavaran and
Officials said the formula can be North Azadegan, but there does
modified to take into account fur- not appear to be any fresh
ther suggestions between now activity at the main Azadegan
and the ending of international field, where about 50,000
sanctions. barrels per day has been
Iranian officials, led by Mehdi produced for some years from
Hosseini — the former deputy oil Attractive proposition: Iran’s Azadegan oilfield Photo: AP/SCANPIX worked-over exploration and
minister behind the buy-back for- appraisal wells.
mula started in the 1990s, and of the implication that by booking officials have also stressed the hanced recovery techniques and CNPC and Sinopec are the
now heading the contracts revi- reserves, foreign companies effec- importance of enhanced recovery re-injection facilities. only foreign companies
sion committee set up in October tively exercise ownership of un- projects at existing ageing fields, Officials have talked about the operating in Iran.
— said the IPC approach would derground assets constitutionally mostly situated in Khuzestan new contract terms offering in- The two Azadegans have
help to attract the vast amounts of belonging to all Iranians. province. centives for enhanced recovery combined proven reserves of
investment necessary to develop Iran’s authorities say they know About one half of Iran’s crude projects, but they have not pro- about 10 billion barrels, with
the sector. that they have to offer much bet- output is from very mature fields, vided details on how foreign in- Yadavaran’s estimated at 3
“Although the return of big com- ter terms than other regional which need high-technology en- vestors will be recompensed. billion barrels.
panies depends on the full lifting countries, especially now that
of sanctions... more attractive oil there is intense competition from
contracts will greatly help their such producers as neighbouring
return,” said Oil Minister Bijan Iraq. This has meant giving seri-
Zanganeh. “We welcome the pres- ous consideration to production
ence of all international compa-
nies, including American compa-
nies, to develop oil and gas fields
sharing agreements, but the po-
tential political sensitivities have
until recently scared off most pol- ONSHORE.
OFFSHORE.
and enhance production.” iticians.
US and EU-led sanctions, ex- Under Hosseini, the contract
panded and tightened in recent revisions committee appears to
years, have been relaxed since a have circumvented this obstacle

EVERY SHORE.
preliminary nuclear agreement by differentiating between oil still SM
made between Iran and the major under the ground and oil that has
powers on 24 November in Geneva. been brought to the surface.
The two sides have now started “Ownership of the reservoirs
talks on a final settlement by July. belongs to the people, so owner- Certification | Training | Events | Standards | Statistics | Safety
Negotiations could continue for ship can never be transferred,”
Washington, D.C. | Houston | Beijing | Singapore | Dubai | Rio de Janeiro
another six months, but Iran sug- Hosseini said. However, “the own-
gests it is aiming for the July tar- ership of the produced oil can be 877.562.5187 (Toll-free U.S. & Canada) | +1.202.682.8041 (Local & International) | sales@api.org | www.api.org
get. negotiated”.
In offering foreign companies Hosseini’s comments, and
new terms, Iranian officials reit- statements by other officials over
erated over the weekend that they the weekend, suggest that the Oil
understood the limitations of the Ministry is prepared to be as flex-
buy-back model and accept that ible as possible and further devel-
foreign investors have to be al- op the IPC formula in the coming
lowed a better rate of return and months.
longer-term exploitation periods Hosseini and others said last
of up to 20 years. year that PSAs should and could
“We’ve analysed all the con- be possible for high-risk projects
tracts in the market right now... and reservoirs shared with neigh-
and this is what we’ve come up bouring countries.
with,” Hosseini said. “This is a This could mean PSA contracts
good model with flexibility.” being offered for big fields such as
One key element in the review Azadegan, Yadavaran and Anaran
of the best possible contract terms — shared with Iraq in the south-
under the new government of west — and the giant South Pars
President Hassan Rouhani has gas field shared with Qatar. Also It’s a tough business. Look to API.®
been the issue of production shar- on the PSA list are slow-moving
Copyright 2014 – American Petroleum Institute, all rights reserved. API, the API logo, the “Onshore” slogan and the “Tough” slogan are either service marks, trademarks or registered trademarks of API in the
ing and the ability of foreign in- exploration projects in the deep United States and/or other countries.
vestors to book reserves. The issue waters of the Caspian Sea.
is very sensitive in Iran, because Hosseini, Zanganeh and other
20
WORLD 28 February 2014

TANZANIA First Tlou

Swala in new campaign spud in
Botswana
despite Lake Eyasi row BRISBANE-based Tlou Energy
has spudded the first of three
core holes on its Lesedi coalbed
methane project area in Bot-
swana.
Player to launch The well locations aim to
provide infill data on the coal
second Pangani quality in and around Tlou’s
phase but says pilot pods to help reserves cer-
tification and identification of
government additional drilling sites for an
expanded pilot well campaign.
decision is This core hole data will be
combined with information
‘questionable’ from ongoing production test-
ing operations at the Selemo
IAIN ESAU and Lesedi pilot pods, each
London comprising one vertical and
two horizontal wells.
Managing director Tony Gil-
AUSTRALIA-based Swala Energy’s by said Tlou aims to certify the
65%-owned subsidiary Swala Oil first proven and probable
& Gas is set to enter the second coalbed methane reserves in
exploration phase of its Pangani Botswana, from the Lesedi
and Kilosa-Kilombero production project area, in mid-2014.
sharing agreement in areas on- “This will provide Tlou with
shore Tanzania. a significant first mover advan-
Swala and Otto Energy, its 50% tage to commercialise Lesedi,”
partner in the acreage, advised he said.
state-owned Tanzanian Petrole- The Selemo and Lesedi pilot
um Development Corporation pods must handle more water
(TPDC) of its plan to enter the two- than expected during the de-
year exploration period after grav- watering process so the pump
ity, magnetic and 2D seismic sur- capacity has been increased.
veys helped identify five potential Tlou said good water flows are
hydrocarbon basins and a 200- “usually a positive sign”, with
million-barrel prospect called Gilby adding: “Experience sug-
Kito. gests it is important not to rush
The work commitment in this the dewatering process other-
next period includes additional wise formation damage may
seismic acquisition and drilling occur that is often irreparable.”
one exploration well in each of the Tlou estimates that, based on
two areas by the end of February current production data and ad-
2016. vice from its contractors, first
Chief executive David Mestres gas breakthrough from the
Ridge said: “The results of explor- wells should occur by the end of
ation efforts in our Pangani and next month with peak gas flows
Kilosa-Kilombero PSA licence ar- achieved at a later date.
eas over the last two years has Investments: Tanzania’s President Jakaya Kikwete Photo: REUTERS/SCANPIX
unveiled two exciting Neogene
basins and a prospect of signifi- said “the joint bidding agreement ed TPDC reached such a question- was “seriously concerned” by SacOil joins
cant size in one of them and fur-
ther prospects being investigated
by our geological teams.”
allowed either party to withdraw
at any stage with the remaining
party assuming the withdrawing
able decision.
“The company has invested
significantly in the negotiation
Swala’s statement, describing it as
containing “multiple inaccuracies
and being misleading”.
gas scheme
News of these plans came just a party’s interests in the licence”. for Eyasi and TPDC’s decision It said Pura Vida’s withdrawal SOUTH African minnow SacOil
week after TPDC terminated nego- However, TPDC deemed Pura raises questions not only in re- “materially and substantially af- aims to get closely involved
tiations with Swala Oil & Gas for Vida’s withdrawal to be a breach of spect of the transparency of the fected the joint bid and negotia- with Mozambique’s plans for
the Lake Eyasi-Wembere licence the tender guidelines and ended (licensing) process that will be tions” and made the joint venture gas-fuelled industrial growth
because Pura Vida Energy, Swala’s talks. followed... but also in respect bid “ineligible”. on the back of major deep-wa-
bidding partner, withdrew from Swala disagreed with this move of TPDC’s commitment to local “After the withdrawal of Pura ter gas discoveries.
the process. and told TPDC it will seek advice to content and Tanzanian participa- Vida (on 15 January) the accrued The Johannesburg and Lon-
TPDC said Lake Eyasi-Wembere challenge this decision. tion.” advantages of the combined ef- don-listed player has signed an
is now open to fresh bids. Swala Ridge said: “We are disappoint- TPDC responded by saying it forts fell apart,” said TPDC. expression of interest with two
organisations charged with
managing investment portfo-

Possible New Age find could fire up hopes in Ogaden basin lios on behalf of Mozambique’s
government.
The Administrative Institute
UK-BASED explorer New Age may portedly hit pay in intervals at mal discussions with New Age work obligation of New Age and its for State Participation and
have discovered oil in Ethiopia’s half that depth. about the well’s commercial sig- partners, Africa Oil and Afren. Maputo’s Public Investment
Ogaden basin, although a govern- Ketsela Tadesse, director of pe- nificance. Evaluation is ongoing A successful appraisal well Corporation were set up to in-
ment official said it is too early to troleum licensing and operations amid discussions about whether would fuel industry hopes for re- vestigate opportunities in dis-
confirm this, writes Barry Morgan. at Ethiopia’s Ministry of Mines, to deepen the well to examine its newed prospectivity across the tributing gas throughout the
New Age is drilling on the El told Upstream that El Kuran-3 gas-condensate potential. Kenyan border in Afren’s Block 1, Southern African Development
Kuran-3 probe on Block 8 close to “has not reached target depth... The initial exploration period where the Mandera-Lugh basin Community (SADC).
where the borders of Ethiopia, but I suspect initial hints of en- under the Block 8 production extends into three countries. SacOil said the agreement
Kenya and Somalia meet. couraging results have led to sharing contract was extended to The Somalian section is being aims “purely to govern prelimi-
The well is targeting a prospect these reports in the local media”. April 2014, and completion of this targeted for acquisition by Aus- nary discussions and to formal-
at 2850 metres sub-surface but re- The ministry has yet to hold for- well effectively discharges the tralia-based Amsas Consulting. ise the relationship”.

DISCOVER THE DORIS DIFFERENCE

www.doris-engineering.com
28 February 2014
WORLD 21

US

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% inter-
est in 550,000 acres and an exclu-
sive 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 po-
sition, according to sales docu-
ments seen by Upstream.
In 2012, Apache acquired about
320 square miles (828 square kilo-
metres) 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 execu-
tive Steven Farris.
“We drilled the well and actu-
ally 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 charac-
terised as having “good oil shows”.
The company plans to begin a
second “multi-year 3D seismic
programme that is expected to il-
luminate new traps in the shallow
oil and gas plays” in named anti-
clines like Trading Bay, McArthur
Field, Middle Ground Shoal and
Swanson River.
Additional targets include a se-
ries of conventional fault, pinch-
out and stratigraphic traps and
structures in the Tertiary and Mes-
ozoic sandstones with “good poten-
tial” 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 bil-
lion 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 in-
crease the limit of liability for oil
spill removal costs and related
damages from $75 million to
around $134 million — the maxi-
mum increase that may be imple-
mented 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 em-
bodied in the law.”
 $437,000
Day rate being earned by Ensco drillship DS-5
under its current three-year commitment with
Repsol and Petrobras

22
WELL OF THE WEEK 28 February 2014

LEON 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 WHERE IS IT?
LOUISIANA
Paleogene prize U S A
Main map

Spain’s Repsol is drilling ahead scheduled to take around 140

on a high-impact wildcat in the days. Leon is a subsalt
deep-water Gulf of Mexico in a prospect with an understood Mississippi Canyon
MEXICO
bid to add new oil and gas planned total well depth of
reserves to its US portfolio. over 30,000 feet. Pre-drill
The operator, and partner estimates peg Leon’s potential
Ecopetrol of Colombia, at between 112 million and 180 Green Canyon
Atwater Valley
Garden Banks
spudded an exploratory well million barrels of oil equivalent.
on the Leon prospect in the Repsol’s current holdings in
G u l f o f M e x i c o
deep-water Keathley Canyon the deep-water US Gulf
area around the turn of the include a 28% working interest
year hoping to tap Paleogene- in the BHP-Billiton-led Shenzi Keathley Walker Ridge Lund
aged reserves on trend with development in the Green Leon Canyon
Chevron’s Jack/St Malo Canyon area, and a 12.5% Jack & St. Malo
complex. interest in Chevron’s lower
Drilling, underway using tertiary Buckskin discovery in Buckskin
Ensco drillship DS-5, is the Keathley Canyon area.
28 February 2014
WORLD 23

INDONESIA Jangkrik
Two left standing in FPU deal
revealed
Gendalo-Gehem battle 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
Consortia led by Saipem and McDermott go head to head off Indonesia.
Japan’s Chiyoda, which is a
for FPU contract after disqualification of Toyo group member of the consortium
along with Tripatra Engineers &
TAN HWEE HWEE Construction and Hyundai
Singapore Heavy Industries, revealed the
award this week.
The companies beat a joint
TWO consortia, led by Italy’s with handling capacities for 420 venture between McDermott
Saipem and the Indonesian sub- MMcfd of gas and 30,000 bpd of and Technip for the $1.1 billion
sidiary of McDermott, are left condensate, will be tied to Gehem contract, which covers the
standing in the re-tender for two and two other discoveries, Maha engineering, procurement,
floating production units destined and Gandang, earmarked under construction and installation of
for Chevron’s Gendalo-Gehem gas the same development. a floating production unit for
and condensate development off Target delivery of the two FPUs the Jangkrik and Jangkrik North
Indonesia, after a third group, led had been pushed to May 2017 fol- East gas field development.
by Japan’s Toyo Engineering, was lowing the re-tender call. The scope of the contract
disqualified. Chevron has secured an exten- covers the engineering,
Despite pulling together a bid sion on the bid validity from the procurement and fabrication of
consortium at short notice for the front-runner for a second subsea the FPU hull and topsides, as
pre-qualification exercise on the contract tendered out in 2013. well as the installation of a
Gendalo-Gehem floaters, Toyo and The validity of the joint bid of mooring system and the
its partners, China’s Cosco Ship- $1.9 billion from Indonesia’s hook-up, commissioning and
yard and Indonesia’s Meindo Timas Suplindo and Subsea 7 is assistance for start-up.
Elang Indah, did not make Chev- understood to have been extended The overall project
ron’s shortlist. through the projected re-tender management, engineering and
However, under Indonesia’s up- process for the twin FPUs. procurement of the FPU project
stream regulation, only two qual- Timas had defended the legal- will be carried out in Jakarta,
ified bids would be necessary in ity of its joint bid with Subsea 7 while the topsides will
order for a re-tender to proceed. when the Gendalo- Gehem subsea fabricated at Saipem’s Karimun
Chevron is understood to have tender was challenged in recent yard in Indonesia.
already called a pre-bid meeting court hearings tied to an anti- The hull will be fabricated at
with the two groups led by Saipem corruption probe. Hyundai’s yard in Ulsan, South
and McDermott as Upstream went The Gendalo-Gehem subsea Korea.
to press. contract involves the procure- The FPU will have the capacity
Saipem is reunited with South ment and installation of 630 kilo- to treat 450 million cubic feet
Korea’s Hyundai Heavy Industries metres of pipelines, 80 kilometres per day of gas plus condensate.
and Indonesia’s Tripatra Engi- of umbilicals and up to 120 subsea A second contract tied to the
neering and Construction against flowline connections in water subsea umbilicals, risers and
McDermott and its new team- depths of up to 6000 feet. flowlines package of the
mate, Encona Inti Industri. Chevron appears set on over- Jangkrik FPU is understood to
Technical proposals for the coming the multiple challenges Gendalo prize: Chevron chief executive John Watson have been awarded to France’s
twin FPUs are due around mid- to conclude the Gendalo-Gehem Photo: AP/SCANPIX Technip.
March, with the commercial bids contracts before the middle of
to follow one month later. the year.
The larger of the two FPUs However, industry observers
comes with a designed processing have flagged potential delays in
capacity of 700 million cubic feet
per day of gas and 25,000 barrels
per day of condensate and is in-
regulatory approvals stemming
from imminent Indonesian
legislative elections, scheduled
A new ship,
tended for the Gendalo field.
The second production floater
to take place as early as this
April. steered by
experienced Ceona Amazon
Overall length 199m

China allows independents hands.

Delivery January 2015

www.ceona-offshore.com

to use oil and gas pipelines

CHINA has deregulated its oil and new rules, the owners and opera-
gas infrastructure market by al- tors of such facilities should allow
lowing independent oil and gas access to third parties on a fair
producers access to the country’s and non-judgmental basis.
oil and gas pipeline grids, writes They should decide whether to
Xu Yihe. allow or reject access within 30
In a decree issued this week, days of applications by independ-
the National Energy Bureau ents.
(NEB), China’s energy industry Any rejection should be justi-
watchdog, said that in order to fied and notified by the NEB, the
promote the opening up of the decree said.
sector, the owners of China’s China boasts several national
pipeline grids should open oil and gas pipeline grids, totalling 60,000
gas trunk branch lines to third kilometres in length and having
parties by providing transporta- annual throughput capacity of 120
tion services as well as storage, billion cubic metres, more than
gasification, liquefaction services 90% of which are owned and oper-
if their facilities have surplus ated by PetroChina.
capacity. Sources said the new decree is
The decision comes as China be- timely because independent shale
gins to open up the upstream sec- gas operators that earned their
tor to non-oil and gas companies, licences to explore more than 20
some privately owned. shale gas blocks in China will
China’s pipelines are dominated start producing their first gas at Trusted to be smarter
by a limited number of state- some blocks, especially in south-
owned oil and gas companies, western Chinese provinces, over
especially PetroChina. Under the the next two years.
24
WORLD 28 February 2014

EUROPE Arctic
Wintershall bucks trend chill for
Mage
and looks to expansion RUSSIA’S state-controlled Mage
marine exploration company
has failed to discover signifi-
cant structures in the coun-
try’s unallocated Arctic regions
German player forging ahead with plans following the interpretation of
data from a massive 2D seismic
for Norway, Denmark and Netherlands programme that was shot dur-
ing the 2013 open water season.
BEATE SCHJOLBERG Speaking last week at the
Oslo Russia Offshore conference in
Moscow, Mage deputy execu-
tive director Gennady Ivanov
GERMAN player Wintershall is revealed that the seismic effort
pushing ahead with development led to the identification of 80
projects in Northern Europe as potential hydrocarbon-bearing
part of a drive to expand its inter- structures.
national production. Preliminary estimates from
The company is working on Mage pegged possible hydro-
plans to bring its Maria and Skar- carbon resources of these
fjell discoveries off Norway on structures at about 2.5 billion
stream, and also has oil develop- tonnes of oil and gas equiva-
ment plans in Denmark and the lent, Ivanov said.
Netherlands. That equates to as much as
At a time when many oil com- 12.8 billion barrels of oil equiv-
panies are paring back invest- alent, but analysts played
ments in the face of rising indus- down the figure, saying that
try costs, Wintershall has no such actual recoverable oil and gas
plans for its ongoing projects, reserves could be lower by be-
Martin Bachmann, head of the tween five and 20 times than
company’s exploration and pro- the initial estimate.
duction activities, told Upstream. Ivanov said that 2D seismic
“We said a few years ago that we was collected across the Rus-
would invest up to €2 billion by sian part of the Arctic in the
2015, and we are on track with Laptev Sea, East Siberian Sea
that. It is also still true that we and the Barents Sea.
want to grow further from there,” He added that the potential
Bachmann said. The figure covers structures are concentrated
investments in Norway and the mainly in the northern part of
northern part of the UK sector. the Barents Sea and the De-
Of Wintershall’s operated proj- Longa Elevation and East-Sibe-
ects, Maria is the most mature after rian Threshold in the Kara Sea.
the licence group decided on a de-
velopment concept in November.
The 130 million-barrel oilfield is
set to be produced via subsea Gazprom
equipment tied back to four exist-
ing installations in the Halten-
banken area of the Norwegian Sea.
deal alive
The aim is to hand in a plan for RUSSIA’S Gazprom says it is
development and production to still on track to sign a first Arc-
the authorities late this year, tic exploration and develop-
leading to first oil in 2018, said ment joint venture with Anglo-
Bachmann. Dutch supermajor Shell.
Meanwhile the company con- Investing: Wintershall head of global exploration and production Martin Bachmann According to a Eurobond pro-
tinues exploring in the area, with Photo: STEVE MARSHALL spectus, Gazprom is now wait-
the ongoing Solberg appraisal well ing for the natural resources
east of Maria and a planned wild- ed Titan, have discussed options many and the Netherlands. The this year. Wintershall is also look- ministry to complete the issu-
cat, Imsa, about 30 kilometres to for some time, and Norwegian au- most recent discovery, F17-10 in ing at a possible development of ing of the licence for the North
the south west. thorities are keen to see area solu- Dutch waters, is an oil discovery the Danish Ravn and Hibonite Vrangelevsky block.
Farther south, Wintershall is tions that can help bring more with potential volumes of at least discoveries, said Bachmann. Gazprom is set to hold a
kicking off development planning discoveries on stream. 30 million barrels with a consider- Looking further ahead, the 66.7% stake in the joint ven-
for the Skarfjell oil and gas discov- Either way, Skarfjell is likely to able upside, said Bachmann. company is eager to get a bigger ture, with Shell having the re-
ery. be a phased development, focus- “If the size is confirmed by the bite of the emerging Barents Sea maining interest.
An appraisal well completed in ing first on the oil and later on the drilling, we are talking about a plays, where new discoveries in Gazprom and Shell signed a
January confirmed a large gas cap, gas, said Bachmann. stand-alone development. the past two years have whetted memorandum on creating the
lifting resources there to between In parallel with the develop- “We have started looking at op- companies’ appetite for Norway’s Arctic joint venture in April
120 million and 230 million bar- ment planning, several operators tions for early development,” he northernmost frontier in the on- last year, but have reported no
rels of oil equivalent. are exploring more in the area said. going 23rd licensing round. progress since then.
“We are setting up a team to near Skarfjell. Statoil is currently Wintershall plans to drill two “We are very keen. We have a In December, the govern-
start development planning for drilling a wildcat near Astero appraisals and three wildcats near significant team looking at it and ment cut back the size of the
Skarfjell. A tie-back to Gjoa would named Juv with Wintershall as a the Dutch discovery this year, in we have a pretty clear idea of North Vrangelevsky block to
be an obvious solution, or a stand- partner, while RWE Dea is about addition to another five operated where we see prospectivity,” said give a bigger share to Rosneft.
alone together with some of the to spud an appraisal at the Titan and non-operated wells off the Bachmann. The resized North Vrange-
other discoveries in the area,” said oil discovery. Netherlands. “Opening up new areas does levsky block, which was
Bachmann. The German company is also The same play that proved suc- take time, and you need to go in at awarded to Gazprom, is located
Licensees at a number of other looking at options in the southern cessful in the Netherlands will an early stage to understand what in the Chukotka Sea and meas-
discoveries, such as Statoil-oper- part of the North Sea, where it is a also be tested in Denmark at the you have got and see what the op- ures about 118,000 square kilo-
ated Astero and RWE Dea-operat- long-standing operator off Ger- operated Chabazite prospect later tions are.” metres.

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28 February 2014
WORLD 25

MYANMAR Mermaid
expands
its fleet
AUSTRALIAN company Mer-
maid 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.

Conditions
Timing: PTTEP chief executive Tevin Vongvanich Photo: BLOOMBERG for Cadlao

PTTEP moves closer to

THE Philippines’ Department
of Energy has attached certain
conditions to a provisional field
development approval to the
owners of the marginal Cadlao
oil discovery.

sanction for M-3 project

The conditions included
awarding the offshore con-
struction contracts by 28
February, and final contract
documentation by 5 March.

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 Thai waters just across from However, the Myanmar authori-
company PTTEP hopes to sanction blocks M-7 and M-8 and the idea ties subsequently asked for great-
its M-3 gas development off would be to carry out exploration er volumes to help meet burgeon-
Myanmar in the next two years as a joint campaign. ing demand and 100 MMcfd will
and sell gas to the country in four It is not known whether the op- be delivered to the local market
to five years’ time. erator believes there are struc- while PTTEP will still be able to
The operator is in talks with the tures that straddle the Myanmar- transport 240 MMcfd of gas across
Myanmar authorities over the Thailand maritime border and the border to Thailand.
timing of further appraisal work which could, in future, necessi- Tevin told Upstream that the
on Block M-3, which it plans to tate unitisation. increased amount of phase one
start after this year’s monsoon, There is the potential to exploit gas will be supplied as “swing pro-
according to PTTEP chief execu- the “very deep” blocks M-7 and duction”.
tive Tevin Vongvanich. M-8 to supply gas to the Myanmar Production start-up from Zaw-
“We are still working with the market, said Tevin, who added tika phase one is expected in the
authorities on timing... we need to that PTTEP’s strategy in Myanmar “next few weeks”, according to
firm up reserves and the develop- was changing to one of now look- Tevin. Another PTTEP official said
ment concept,” Tevin said. ing to accelerate production for 26 of the 36 phase one develop-
The aim is to start an appraisal the domestic market. ment wells have been drilled —
drilling campaign after the 2014 The company has already these wells are taking seven to
monsoon season and complete it dipped its toes into Myanmar’s eight days apiece.
early next year. deep waters with the exploration Tevin conceded that the price
Officials at state-owned well drilled on Block M-11 after for gas sold into Myanmar’s do-
Myanma Oil & Gas Enterprise had farming out interests to Total of mestic market is lower than that
touted Block M-3, home to the France and Japan’s JX Noex. sold in Thailand but explained the
Aung Sinkha gas field, as coming “We have not been successful price differential by pointing out
on stream in 2016 but this is not yet but we hope to be able to iden- that the local market price did not
realistic given that the develop- tify other drilling targets,” said include an amount for onshore
ment concept can only be final- Tevin. piping to the Thai border.
ised after the upcoming appraisal Meanwhile, PTTEP has already Moving onshore Myanmar, the
work. agreed to supply 100 million cubic Thai operator is finalising the
PTTEP has almost finished seis- feet per day of gas from the initial production sharing contract
mic acquisition on deep-water development phase of its Zawtika for Block MOGE-3 and hopes to
blocks M-7 and M-8 off Myanmar. field off Myanmar to the domestic have it signed before the end of
Tevin said it will take another market. March.
couple of years to firm up drilling The 2010 gas sales agreement
locations and the 100% operator is called for PTTEP to supply 20% of
looking to farm down equity on gas output from Zawtika to the
these blocks before sinking the domestic market and Myanmar Search the archive:
drillbit. had been in the frame for 60 Myanmar
PTTEP also has two blocks in MMcfd of the targeted 300 MMcfd.
26
WORLD 28 February 2014

NOC hails AFRICA

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 Corpora-
tion (NOC).
The discovery well, in con-
tract 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 liv-
ing 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 Mur-
zuq 113, with equipment se-
cured and under the protection Welcome: cars drive past the city gate in Abuja, Nigeria Photo: BLOOMBERG
of Libyan state forces as well as

Yinka Folawiyo sets out

the supervision of Libyan sub-
contractors.
Established in 2008, POGC
Libya is a wholly-owned sub-
sidiary of PGNiG, engaged in

course for Aje progress

exploration in Libya’s western
Murzuq basin.
The Murzuq 113 licence area
is made up of two blocks span-
ning 5494 square kilometres.
PGNiG had originally commit-
ted to drilling at least eight
wells, along with a 2D and 3D Independent submits offshore development plan
seismic acquisition programme.
including two subsea wells tied back to floater
Cameroon IAIN ESAU
London
block offer
EDINBURGH-based explorer NIGERIAN independent Yinka 40 million barrels of Cenomanian deemed less attractive than so far in Dussafu, “sufficient to
Bowleven is offering equity Folawiyo Petroleum has submit- oil. buying the FPSO outright. justify a development”, said Kiel-
participation in its onshore ted a development plan to the Aje’s 150 million to 170 million A similar price tag was also land, who added that talks are
Bomono block surrounding Abuja-based government for its barrels of oil equivalent of gas- attributed to Aje gas-condensate under way with Gabon’s govern-
Cameroon’s commercial capital offshore Aje project. condensate resource would be scheme. ment over the proposed project.
of Douala, a proven gas and Jan Kielland, chief executive of tapped at a later date, possibly via Panoro is also a partner in Harvest has a 66.67% stake in the
gas-condensate play. Oslo-listed Panoro Energy, which subsea wells that would send well Houston-based Harvest Natural licence, with Panoro on 33.33%.
Following a confidentiality has a minor stake in the project in fluids down a 30-kilometre multi- Resources’ Dussafu Marin licence Tullow Oil has a 10% back-in right.
agreement, suitors will be in- OML 113, told investors last week phase pipeline to a shore-based off Gabon, where another FPSO •• PANORO has appointed US-
vited to Scotland to view the that the development plan calls processing plant. project is being planned. Kielland based boutique advisory player
physical data room. for two subsea wells tied back to a According to a document pub- said a reserve report due to be Evercore to handle the sale of the
This slice of the Douala basin floating production, storage and lished by London-listed Lekoil, received next month from Gaffney company. Martin Copeland, an
hosts a proven 1 trillion cubic offloading vessel. before last year’s aborted acquisi- Cline Associates will underpin Evercore managing director, said
feet gas discovery in the Palae- He said the partners hoped the tion of Panoro’s Aje stake, the plans to tap multiple, shallow- there has been “a reasonable de-
ocene that needs appraisal drill- project would receive approval in early oil development was priced water pre-salt discoveries via an gree of interest from a diverse
ing with “a large unexplored the next quarter, with first oil due at almost $600 million, most of FPSO. range of companies”.
upside defined on new seismic to flow in late 2015. which would be needed for devel- The floater will initially exploit However, he cautioned that a
acquired in the onshore exten- Production could begin in opment drilling and to acquire an the Tortue, Ruche and Walt sale will not progress until Panoro
sion of deeper Cretaceous strata”, November 2015 at a plateau rate of FPSO. Whitman discoveries through six has sold its Manati asset off Brazil.
where subsequent exploration is about 12,000 barrels per day, However, capital expenditure subsea wells, while the Moubenga “We have not formally set a
likely to focus. although the floater would be would fall if Yinka Folawiyo find will be exploited as a subsea buyer timetable until the sale of
designed to handle twice this decided to lease the floater at an satellite at a later date. Manati is concluded but have
Kosmos spud amount.
The FPSO will initially tap about
assumed dayrate of $95,000,
although this arrangement was
Harvest estimates about 49 mil-
lion barrels of oil has been found
started contacting buyers globally
to establish interest.”
KOSMOS Energy will spud its
deep-water FA-1 well on the
Foum Assaka block targeting
the Eagle prospect off southern
Sinopacific scoops Hyundai Moho Nord modules contract
Morocco next month. CHINESE yard Sinopacific Offshore Moho Nord project — which incor- subsea tieback to the existing Ali- will tap unconsolidated Miocene
The well is expected to last & Engineering has won a sub- porates the smaller Moho Phase 1 ma FPU at Total’s nearby Moho turbidite sands via 11 subsea
three months and will be contract from Hyundai Heavy In- Bis project — will boast a new ten- Bilondo field. production wells and six water
drilled by the semi-submersi- dustries to build two of the modules sion-leg wellhead platform along- Production from Moho Nord is injectors tied back to the new
ble Maersk Discoverer. needed for a floating production side the FPU, with both being built set to start in the third quarter of FPU.
Once adjustments to the unit the South Korean fabrication by Hyundai. 2016, peaking at 140,000 barrels of The other will see Albian carbon-
equity breakdown have been giant is building for Total’s Moho The TLP is due to arrive on loca- oil equivalent per day by 2017. ates tapped through 12 producers
completed on the Foum Assaka Nord project off Congo-Brazzaville, tion in the second quarter of next Moho Phase 1 Bis will tap about and five water injectors lined to the
licence, Kosmos will hold writes Xu Yihe. year, while the FPU will be on loca- 120 million barrels of oil, and Moho TLP.
29.925%, BP 26.325%, SK Innova- The modules will be built at Sin- tion in the second quarter of 2016. Nord will exploit three times this The development is expected to
tion 9.375%, Fastnet 9.375% opacific’s Qidong facility in Jiangsu First oil is expected in the third amount of resource. cost about $10 billion. It is located
with state-owned ONHYM re- province and are scheduled for de- quarter of 2015 from Moho Phase 1 Moho Nord involves two sepa- in 750 metres to 1100 metres of
taining 25%. livery in March 2015. The 34-well Bis, which is being developed as a rate exploitation schemes. One water in the Moho Bilondo licence.
28 February 2014
WORLD 27

KAZAKHSTAN Khazzan
Tender eyes replacement role for
Petrofac
pipeline for Kashagan UK-LISTED Petrofac has con-
firmed receiving a $1.2 billion
contract to build the central
processing facilities for the BP-
led Khazzan tight gas project
NCOC launches in Oman.
The facility will process gas
preliminary from the Khazzan field in Block
61.
inquiries ‘to avoid Oman and BP finalised a $16
billion production sharing
losing time’ as it agreement in December to tap
investigates leaks unconventional gas reserves at
the Khazzan field.
at Kazakh project BP and partner Oman Oil
Company have since been
moving fast to award key ele-
KAMA MUSTAFAYEVA ments of the project.
Baku The facility to be built by
Petrofac covers engineering,
procurement and construction
THE North Caspian Operating of two processing trains each
Company (NCOC) consortium with a capacity of 525 million
developing the giant Kashagan cubic feet per day, as well as an
field in Kazakhstan has hit the associated condensate process-
market with preliminary inquir- ing system, power generation
ies covering replacement pipe- plant, water treatment system
lines that may be needed to and infrastructure.
resolve an issue that has kept Earlier this month, oilfield
production shut-in for almost five services company KCA Deutag
months. won a contract worth an initial
Output from the project had $220 million for construction
to be stopped temporarily on of three newbuild fast-moving
24 September and permanently on land rigs for the tight gas
9 October — only weeks after com- project.
ing on stream — because of multi- First gas is scheduled for late
ple gas leaks found in pipelines 2017, reaching its plateau in the
carrying the field’s hydrogen- Project: artificial islands and outer ice barrier at Kashagan Photo: AGIP KCO following year.
sulphide rich well fluids.
Kazakhstan Oil Minister Uzak- around when production will
bai Karabalin said previously that resume from Kashagan’s initial
the defects appeared to be in pipe- $50 billion development phase.
line welds. Some sources suggested it will be
NCOC’s detailed investigation in mid-2014, while others believe
will establish the exact cause of production may not resume until
the pipeline leaks and the find- 2015.
ings will influence the type and Meanwhile, Kazakhstan’s Envi-
quantity of replacement line pipe, ronment & Water Resources Min-
if any, that will be needed. istry has made a move to fine
The results of the investigations NCOC for allegedly exceeding
are expected to be available later pollution levels by flaring natural
this quarter, said NCOC, with gas.
Karabalin due to receive a report The authorities are considering
next month. a $1.2 billion fine, according to a
According to Karabalin, NCOC report from Bloomberg.
was forced to run a second intel- NCOC will have a right of appeal
ligent pipeline inspection gauge for the ministry’s decision to be
along one pipeline after the first reviewed.
suffered unspecified problems. NCOC’s consortium members
NCOC launched its preliminary include ExxonMobil, Shell, Total
tender process “as a precautionary and Eni — all with 16.807% stakes
measure to avoid losing time” if a — plus state-owned KazMunaiGaz
replacement pipeline is required on 16.877%, China National Petrol-
for the project. eum Corporation on 8.333% and
There are several scenarios Inpex on 7.563%.

New deal for Azeri crude

exports through Russia
AZERBAIJAN will continue to sia were due to halt on 15 February
export oil through Russia via after a May 2013 decision by the
the Baku-Novorossiysk pipeline, Russian government to terminate
following an agreement between a contract that had run for 16
Azeri state energy company Socar years.
and Russian pipeline monopoly The rest of Socar’s oil exports —
Transneft, writes Kama Mustafayeva. about 11.3 million barrels — will
“After lengthy talks on the be sent to Turkey via the Baku-
matter, Socar and Transneft Tbilisi-Ceyhan pipeline, said
signed a new deal which will be sources within Socar.
mutually beneficial,” Socar said. Azeri exports through Russia
“(The) resumption of oil trans- stood at about 12.8 million barrels
portation through Russia will ex- in 2013, down from 15 million bar-
pand export options for Azeri oil rels the previous year.
into world markets.” The Baku-Novorossiysk pipeline
Socar has agreed to export runs for 1330 kilometres between
slightly above 7.5 million barrels the Azerbaijan capital Baku and
of crude through Russia this year. Novorossiysk on Russia’s Black Sea
Azeri oil exports through Rus- coast.
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 conti-
nent.
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 estab-
lished 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 Twene-
boa-Enyenra-Ntomme complex
and stretching into the ultra-deep,
as this is claimed by neighbouring
Ivory Coast. However, hopes are
Adama Toungara this month
pledged to speed up the inaugura-
ted that while Ghana’s local content
law had been passed, the Petroleum
last month during an industry
convention by suggesting that
We want this
that an accommodation can be tion of a multi-national gas com- Commission set up to enforce indig- deals were about to close, with a 10% under
reached by mid-year. pany to co-ordinate strategic enous participation was “still to raft of new entrants to Ghana’s
All eyes are on Eni’s plans to de- natural gas supplies and regasifi- determine the modalities for effec- offshore — including independ- indigenous
velop the oil and non-associated
gas fields of Sankofa and Gye
cation units across the region,
also roping in Nigeria and Equato-
tive implementation”.
About $20 billion worth of
ents Amni International Petrole-
um Development, Britannia-U, management
Nyame on its deep-water Offshore rial Guinea. upstream investment is at stake Camac Energy and Sahara Energy because of
Cape Three Points block — and it Toungara praised Ghana for and predicted to flow over the Fields.
is the gas that may come to the aid taking the lead role, adding that next five years. There is growing Some in the industry have been the neglect
of diplomats in restoring cordial the Ivory Coast state oil and gas national pressure to keep as much reassured by the entry of AGM
links within the region. company Petroci would step up of that in-country as possible. into the South Deepwater Tano suffered under
Ghana’s Minister of Petroleum
& Energy Emmanuel Kofi-Armah
feasibility studies before a possi-
ble launch at the next ministerial
Ghana National Petroleum Cor-
poration (GNPC) chief executive
block, hoping partners Minexco
and Norway’s deep-water driller
successive
Buah and his Ivorian counterpart summit. Last month, Buah admit- Alex Mould caused some concern AGR Energy can speed up the governments.

Commission fires warning to contractors over single sourc

THE Ghana Petroleum Commis- counsel at Ghana’s Petroleum & tion in the upstream sector,” she six forthcoming licence awards, enterprise and co-opting interna-
sion, established in 2011 but only Energy Ministry, Juliette Twuma- says. Under recently promulgated including deep-water allocations, tional oil companies to take on a
now staffing up for full-scale si-Anokye. regulations, a percentage of lo- contain demands that a 5% block more active role in the nurturing
monitoring of local content par- “It will not be enough to say we cally produced materials must be equity stake is accorded to an in- process.
ticipation compliance, will clamp have dealt with one company for demonstrated in monetary terms. digenous Ghanaian enterprise, Business leaders will be trained
down heavily on contractors that two decades and must continue to Local content in terms of asset transferable only to a similarly to understand how the upstream
insist on single sourcing of goods do so — our local enterprises must ownership requires that 51% of a qualified company. sector works through the Enter-
and services at the expense of be encouraged.” joint venture must be locally The 5% rule will be enforced and prise Development Centre and the
indigenous companies, writes Twumasi-Anokye says all owned and that any non-indige- is deemed separate from whatever Ministry of Petroleum & Energy’s
Barry Morgan. oil companies and sub-contractors nous Ghana-registered company percentage is allocated to state- own Oil & Gas Capacity Building
“Companies must demonstrate must, under legislative instru- that intends to provide goods or owned Ghana National Petroleum Project.
clear justification for sole source ment LI-2204, report any tender services to a contractor, sub-con- Corporation. Ahwireng knows the limited
supply policies,” according to UK- valued at more than $100,000. tractor or licensee should ensure The Commission, under recent- capacity of local industry is com-
trained competition lawyer, bar- “We set the bar this low in order indigenous Ghanaian equity par- ly appointed chief executive Theo pounded by inadequate certifica-
rister-consultant to the Commis- to see small to medium-sized ticipation of at least 10%. Ahwireng, aims to speed up com- tion, information asymmetry and
sion and former senior legal enterprise nurtured for participa- Regulations likely to apply to all pliance through educating local 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.

Border dispute casts

co-operation path shadow over sector
DETERRENT TO
with any adjoining country and
all affected neighbours must be
subject to multilateral
negotiations “and that is why
INVESTMENT we are not only talking with
DISPUTED WATERS Ivory Coast, but also with Togo,
Call for arbitration route Benin and possibly Nigeria”,
GHANA says Fuseini.
with Ivory Coast Few believe official hints
IVORY COAST Ebony Discovery that a resolution can be achieved
area by July, especially if a treaty is
Main map
A DIPLOMATIC dispute over the required to manage a proposed
maritime boundary between Joint Development Zone.
Bonyere
Ghana and Ivory Coast will Moreover, Ghana and its
Atuabo scare off investors, according to neighbours have all applied to
former Ghana presidential the United Nations Law of the
Shallow Water
Tano (Tullow)
Jubilee field candidate Charles Wereko- Sea Tribunal for an extension of
CI-101 CI-401
Brobby, former leader of the their respective exclusive
(Lukoil)
TEN Development United Ghana Movement (UGM), economic zones on the
area (Tullow)
Kosmos Eni writes Barry Morgan. continental shelf, from 200
Deepwater Currently chief policy analyst nautical miles to 350 nautical
Tano (Tullow) Kola Lukoil at the Ghana Institute for Public miles (370 kilometres to 648
Policy Options, Wereko-Brobby kilometres).
South Cape Three
Points (Hess)
urges arbitration as the At stake are several potential
South preferred route to resolution,
CI-100 billion-barrel oil and gas
Deepwater
Gulf of Guinea
(Total)
Tano (AGM) even if it proves protracted. discoveries, including the
“If not swiftly resolved, this Tullow Oil-operated Tweneboa-
Ghanaian claim to Ivorian claim to will definitely affect the Enyenra-Ntomme field complex,
25 km Ivorian waters Ghanaian waters
development of our own the Ebony, Teak and Wawa
upstream sector because finds, plus several potential
potential investors fear risk and prospects and plays in the
so long as the border remains deeper waters where Ghana’s
contested nobody is going to Ministry of Petroleum & Energy
invest more money into oil needs to speed up activity.
exploration.” Acreage potentially affected
Ghanaian officials are also includes Hess finds Pecan,
scheduled to resume Almond and Paradise, and
negotiations with their Ivorian extends to the South Deepwater
counterparts in a bilateral Tano block recently awarded to
Boundary Commission on 17 the AGM consortium led by
February, says Alhaji Inussah Norway’s AGR Energy and
Fuseini, Minister of Lands & Ghana National Petroleum
Natural Resources. Corporation subsidiary
Commitment: The outer maritime limits ExplorCo.
Ghana President

Search still on for hub

John Mahama
Photo: BLOOMBERG

transfer of offshore skillsets into official manoeuvring will squeeze delegation to parliament in the first EFFORTS to de-risk the broader play. Setbacks include Ophir
GNPC’s E&P division ExplorCo. out the less adroit players from week of February, reiterating earlier and under-explored West Energy’s recent Starfish-1
Similar hopes are pinned on the taking a meaningful role. demands by the traditional author- African Transform Margin have disappointment in the Offshore
tipped entry of Shell in partner- Most agree newly appointed ities for a 10% share of the proceeds proved elusive despite the Accra Contract Area, amid
ship with Tullow and GNPC into Acting Petroleum Commissioner of all petroleum produced off the volume of licensed acreage in halting progress in
the Ultra Deepwater Keta block Theo Ahwireng is a fair, though Western Region. the sub-region more than neighbouring Ivory Coast,
abutting the Togo border. tough, operator, grounded by “We want this 10% paid into the doubling over the past five Liberia and Sierra Leone.
years of exposure to GNPC’s nego- Consolidated Fund and placed ex- years, with no hub-making However, from Mauritania to
Fears However, mainstream con- tiating techniques — but people clusively under indigenous man- discovery made beyond Ghana’s Namibia, Brimont believes the
tractors got spooked last month by acknowledge that political pres- agement, because of the neglect we deep-water Jubilee field, writes Transform Margin will attract
Buah’s announcement that GNPC is sure on him is likely to build in have suffered under successive gov- Barry Morgan. overall capital expenditure of
planning to set up its own service the coming months. ernments,” Attibrukusu-III said. About 15 billion barrels of oil $335 billion over the next 15
subsidiary to partner foreign com- Paramount Chief Awulae Atti- equivalent have been discovered years, including field
panies. brukusu-III, President of the West- Ghana steers course: across Nigeria’s legacy region development projects, although
Contractors are worried that ern Region House of Chiefs, led a Pages 30&31 and the wider margin but 80% of this spend will fall in
another 50 billion barrels Nigeria and Angola, mostly by
remain undiscovered, says the majors.

cing at expense of local companies Wood Mackenzie vice president

for upstream consulting,
Renaud Brimont.
“Everywhere, the challenges
will range from establishing
commerciality, proving up play
we need foreign companies to help erence, while local staffing at sen- express permission to progress Tullow’s Jubilee find may have concepts, handling financial
undertake baseline studies to as- ior management level must reach legislation that appears to breach triggered a serious regional constraints and meeting
certain local competence”, he 80%, with middle and junior-level treaty principles. campaign since 2007, with a 57% manpower needs in the wake of
says. management expected to be re- However, foreign companies success rate across the Cote ever more stringent local
Twumasi-Anokye stresses the cruited entirely locally. must be incentivised to use Ghana d’Ivoire-Tano basin alone, “but content regulations.”
need for “contract unbundling” as Pressed on whether Ghana’s lo- as an oil hub to serve their opera- despite high technical volumes, Bright spots on the horizon
one means of expanding opportu- cal content and participation pol- tions in the sub-region, she says, these have not been commercial this year include Afren’s Ogo
nities for local business, plus a icies are not illegal under the free admitting this policy might and fiscal incentives must be discovery in the Benin
commitment to online tendering movement of goods and services founder if fellow Ecowas member stabilised in order to keep Embayment and the prospect of
alongside the regular publication protocols embedded in the Eco- states act to deny regional content investor dollars flowing”. industry sinking the drillbit
of procurement plans. nomic Community of West Afri- in their respective jurisdictions. Proving up these reserves will across Nigeria’s western
A margin of 10% is allowed if can States (Ecowas) treaty, Twu- “The obstacles are principally be more difficult than expected, maritime border, where
tendering locally means an indig- masi-Anokye tells Upstream the political and, as has been the ex- while the wider margin supermajor Shell is poised to
enous outfit can win the bid. Attorney General’s Office had is- perience of the European Union, desperately needs another enter the fray off Benin, and in
Ghanaian operators and con- sued a broad statement to Parlia- ours is also a step-by-step proc- hub-making discovery to Ghana’s virgin ultra-deep Keta
tractors will always be given pref- ment in 2012 giving lawmakers ess,” Twumasi-Anokye says. restore confidence in the wider basin.
30
WORLD FEATURE 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 tie-
in agreement with Tullow Oil to
get the Jubilee field’s Kwame Nk-
rumah floating production, storage
extended by the China Develop-
ment Bank. Ghana’s Petroleum &
Energy Minister Emmanuel Kofi-
Armah Buah has promised to have
gas ready for the Takoradi power
plant by the end of the year.
GNGC chief executive George
try of Trade & Industry to shore up
support of local small to medium-
sized 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
indigenous capability in small in-
dustrial opportunities and helping
business service providers respond
to procurement regulations.
Interest among international
contractors remains strong, with
energy services contractor Wood
upon expertise developed in
WorleyParson’s DeltaAfrik sub-
sidiary 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 Petrol-
and offloading vessel linked up to Sipa-Adjah Yankey describes the supply chains of international oil Group the latest to launch a joint eum Commission’s own supply
Technip’s deep-water pipeline. deal as the first step towards de- and contracting companies active in venture — this one in partnership chain programme will provide crit-
The intention is to have the raw veloping the Western Corridor Gas Ghana’s upstream sector. with local business magnate ical support to the local economy
associated gas flowing to the on- Infrastructure Project, which Kwaku Boafo Nyantekyi-Owusu, — but other voices remain unsure.
shore Atuabo gas processing plant aims to industrialise Ghana’s Opportunities US development who will shoulder the required Operators cautioned local con-
and then onwards to the Takoradi impoverished western region. agency USAID has agreed to fund 51% equity ownership. tractors against trying to walk
power unit. Meanwhile, US non-governmen- the Pyxera programme, which is to In 2010, project manager before they can run.
The $700 million Sinopec- tal organisation Pyxera Global this be based in Takoradi, working close- WorleyParsons chose to partner Exxon-Mobil vice president
managed gas processing project is month signed a memorandum of ly with the operator-funded Enter- Ghana-registered West Atlantic Dave Wilkin has warned industry
funded from a $3 billion loan understanding with Ghana’s Minis- prise Development Centre, building Energy, an entity that draws players that local content tends to

Industry is caught off guard by local content law

THE Ghanaian Local Content & true ownership of local vehicles sporting understand the reputational risk they run vigilant and sincerely encourage
Participation Act passed last October 51% equity in approved joint ventures. in getting caught circumventing our laws.” Ghanaian partners to retool and retrain
comes into full effect on 28 February, “It’s a question of due diligence and the Part of the perceived problem lies with for opportunities in what remains a
according to a surprise directive issued by Commission must peel away the layers the role of Ghana National Petroleum fragile and nascent upstream market.
the Petroleum Commission, to the to find the real shareholders and properly Corporation and the Petroleum “It may be expensive and time-
amazement of industry players who assess corporate qualifications.” Commission in pre-qualifying joint consuming but greater scrutiny should
believed a longer grace period would apply, Acquah is worried by increasing venture partners and attempting to apply to licence renewal because there’s a
writes Barry Morgan. numbers of Angolan and Nigerian control the spread of opportunities across lot of collusion going on and it must stop.”
Implementation of the policy to date entities entering the market but fronted local industry. “It’s getting a lot more Acquah recommends the Commission
has been flawed and the danger now is by Ghanaians to satisfy local ownership competitive because they’re bringing in set up an independent committee of a
that rules may be subverted to scupper regulations, weakening prospects for all these Ghanaian frontmen and the dozen Ghanaian industry players to help
the underlying intent of legislation, building a truly indigenous capability. market is getting murkier — international monitor compliance and guard against
claims Accra-based Research He fears that international contractors oil companies and their contractors should political interference. He says Nigeria does
Development & Financial Consultants will task existing Nigerian partners to desist.” not allow similar incursion by Ghanaian
(RDFC) chief executive Kwame Acquah. sound out the Ghanaian market and Acquah decries a business model that ventures despite Ecowas (Economic
Acquah, who partners several mid-tier move swiftly to groom a local entity to allows Nigerian money and experience to Community of West African States) rules
upstream players, including listed and meet the 51% ownership obligation. dominate the scene. “We need to name on the free movement of labour, goods and
nonlisted pipeline engineering, “A message needs to go out to and shame, because if we don’t, then services.
processing and procurement services international players that this practice local initiatives will get swallowed and “But if we continue down this road,
companies, argues the Petroleum will not be tolerated — especially the we shall end up with Nigerian content.” then regional content rules must be
Commission must dig deeper into the bigger companies, which ought to He says the Commission should be rigorously enforced at Ecowas level.”
28 February 2014
WORLD FEATURE 31

Pair can
Foundation: the Kwame
Nkrumah FPSO, and
Ghana’s Energy Minister
gain from
Emmanuel Kofi-Armah
Buah (right)
Photos: ANADARKO/
linking up
BLOOMBERG NIGERIAN and Ghanaian contrac-
tors should work towards in-
creased collaboration to tap re-
gional 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 education-
al sector to meet industry standards
as Nigeria has done,” he says.
Onyekonwu, who was a partici-
pant in the Lagos Oil & Gas Cham-
ber 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 contrac-
tors and insist that all fabrication
be done in-country.
In the years since implementa-
tion of the 2010 Nigeria Content
Development Act, Nigerian con-
tent is up by 35% and the country
now levies 1% on every contract to
feed the Nigerian Content Fund,
which is designed to assist capi-
talisation of indigenous compa-
nies. “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 at-
tracted $5 billion to develop new
yards and saved many billions in
averted capital flight, according to
Richardson Oil & Gas chief execu-
tive Akin Osuntoki.
Apart from co-operating in re-
gional security initiatives to
patrol the pirate-ridden coasts,
West African nations should de-
velop protocols to allow sovereign
members of the Economic Com-
expand at a different pace in dif- and drivers.” With official encour- munity of West African States and
ferent countries, depending on agement, Haizel-Ferguson pre- I protested the Economic Community of Cen-
factors as diverse as the political
climate and proven reserves base.
pared about 2000 welders and fit-
ters in anticipation of work,
that we could tral African States to jointly fill
indigenous roles in the upstream
Smaller Takoradi contractors getting 800 to National Vocation at least stand oil and gas sector, he says.
such as Sigma, led by chief execu- Training Institute standard. Local content in the Gulf of
tive Ebow Haizel-Ferguson, still “These youths have been left behind and Guinea requires a regional market
feel marginalised by government
policy.
high and dry and feel I’ve betrayed
them — some students owe
learn but approach and, taken holistically,
within 10 years Nigeria should be
$125,000 in unpaid fees while I they didn’t talking about regional content,
Training Ferguson says he can- still owe $60,000 in unpaid hous- not local content, Osuntoki says.
vassed Sinopec several times ing and transportation bills.” listen and “We need to aggregate the vol-
before the 110-kilometre onshore
pipeline was laid from Atuabo
However, Ferguson agrees there
are signs of recovery as vessels are employed ume of gas we can put on the table
and avoid waste by sharing assets
to Takoradi but was told his now returning to Sekondi harbour Ghanaians to achieve economies of scale and
pipe-fitters and welders did not amid progress in revamping berth avoid duplication of effort.
qualify for employment. facilities at the Takoradi port, but only as “Each African country offers dis-
“I protested that we could at he criticises slow progress in get- tinct areas of relative efficiency and
least stand behind and learn but ting promised fertiliser, petro- menial staff recognising this might trigger a
they didn’t listen and employed
Ghanaians only as menial staff
chemical and refinery schemes off
the ground.
and drivers. Ebow Haizel-Ferguson
multiplier effect that would speed
regional industrial development.”
32
WORLD 28 February 2014

JOB on THAILAND

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 de-
velopment 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, part-
ner Singapore-listed independ-
ent RH Petrogas estimated
4 million barrels of net recover-
able reserves at Koi. That puts
estimated total recoverable re-
serves at about 12 million bar-
rels.
The appraisal well was lo-
cated in a water depth of 32 me-
tres 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 engi-
neering and design study to
evaluate the development de-
sign and concept for the shal-
low-water oilfield. Harvest: workers dry rubber pieces at a rubber market in Thailand’s southern province of Surat Thani Photo: AFP/SCANPIX
The operator will also soon
start preparing the plan of de-

Carnarvon relinquishing
velopment to submit to up-
stream regulator SKK Migas.
“We are extremely excited
about the successful appraisal
of the Koi-2 well. This opens up

Thai exploration blocks

several analogous opportuni-
ties 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 produc-
tion,” said RH Petrogas chief Australian player to withdraw from L252/50 and L53/50
executive Francis Chang.
concessions after search for farm-in partner proves fruitless
Extension AMANDA BATTERSBY
Yangon

for drillship AUSTRALIAN independent Car- year after surface geological were awarded to then 50:50 part- and a focus on balancing the risks
JAPANESE independent Inpex narvon Petroleum is relinquish- mapping and a gravity magnetic ners, operator Mubadala Petrole- within the business. In 2014 our
has extended its contract with ing two exploration blocks in survey was finished. um and Carnarvon. focus is on the Phoenix South-1
Transocean’s drillship Discov- Thailand after failing to farm Several leads and three pros- The current operator will ex- well [offshore Australia] and max-
erer Seven Seas for use in Indo- down its stakes to help reduce the pects were identified with indi- pense the accumulated costs for imising the value of our Thailand
nesia. risks and cost. vidual estimated prospective vol- contiguous blocks L52/50 and production operations... I am
Inpex has had the drillship Carnarvon has informed the umes of up to 42 million barrels of L53/50 located in the Khian Sa pleased the company’s operating
on hire since last June at Thai authorities that it plans to oil, which Carnarvon is said to basin — the largest Tertiary basin activities delivered a profit from
$500,000 per day for three de- withdraw from the L252/50 and have believed offered rapid com- in south Thailand — during the oil production in Thailand during
lineation wells and one explor- L53/50 concessions in the south of mercialisation potential. first half of this year. the second half of last year,” said
ation well in the Masela the country, where it had plans to Only two prior conventional However, Carnarvon is not Carnarvon chief executive Adrian
production sharing contract, drill two exploration wells. wells are known to have been turning its back on Thailand Cook.
which hosts the Abadi gas The operator had always main- drilled on L52/50 and L53/50 and where it holds a 40% interest in Carnarvon’s net oil production
field. tained that it would not commit these were sunk by Gopher Oil in the Phetchabun basin joint in Thailand in the six months
Transocean said Inpex had to these two wells without a suit- 1998. venture that includes producing ended 31 December 2013 was
exercised a one-well option to able farm-in partner to come on Upstream technical and trans- oilfields such as Wichian Buri, Si 94,760 barrels that realised an
keep the rig working until June board the 100%-held blocks. action advisers Moyes & Co added Thep, Na Sanun East and Bo Rang average of $101.78 per barrel.
2014 at the same dayrate. A new 314 line kilometre 2D that four coalbed methane wells together with nearby exploration However, the company posted a
seismic survey was completed were drilled on the acreage be- and appraisal opportunities. $4.1 million net loss for the second
over the acreage in 2012 — one tween 2003 and 2006 before they “We have a disciplined strategy half of 2013.
DynaMac in
triple win PV Shipyard starts construction of jack-up for Vietsovpetro
SINGAPORE fabricator Dyna- PETROVIETNAM Marine Shipyard man JU-2000E design, and is a media reported that Vietsovpetro is an enhancement on its work-
Mac has won three new orders (PV Shipyard) has begun in ear- much larger unit than the first rig had completed insurance arrange- scope for its previous rig project
related to oil and gas explor- nest the construction of its second that PV Shipyard built, which was ments to cover the new rig, which called Tam Dao 03.
ation and production facilities. jack-up drilling rig at its yard in a LeTourneau Super 116E model. is called Tam Dao 05 and carries a The Tam Dao 03 has been work-
The orders total S$42 million Vung Tau for its client Viet- The LeTourneau design is suited construction cost of up to $230 ing steadily for Vietsovpetro since
(US$33 million) and cover the sovpetro, writes Russell Searancke. to operations in water depths of million. June 2012.
construction of six topsides Vietsovpetro, the Vietnamese- about 90 metres, but the Friede & Sources said construction of the Another big difference between
modules, two structural blocks Russian joint venture, which is Goldman rig is a harsh-environ- ABS-class rig started just before the Tam Dao 03 and Tam Dao 05
and six pipe racks, said Dyna- Vietnam’s largest oil producer, is ment unit for water depths of up Christmas, and delivery is sched- projects for PV Shipyard is that
Mac. understood to have made a com- to 120 metres. uled for mid-2016. Vietsovpetro is involved from the
The orders were received mitment to build a new jack-up in It is understood that Friede & PV Shipyard’s workscope covers outset in Tam Dao 05 whereas it
from Keppel Fels, Bumi Arma- the middle of last year. Goldman will also provide a leg the engineering procurement and became involved very late in the
da and Modec. The new rig is a Friede & Gold- fixation system. Last week, local construction of the jack-up, which Tam Dao 03 process.
28 February 2014
WORLD 33

NORTH AMERICA

TransCanada unfazed by ruling

Nebraska court ‘Solvable
problem’:
decision leaves TransCanada
chief
Keystone XL executive
Russ Girling
pipeline operator
confident that
no further
delays will arise
TONYA ZELINSKY
Calgary

CANADIAN pipeline operator Tran- Photo:

sCanada is confident a court ruling BLOOMBERG
in the US state of Nebraska chal-
lenging its proposed Keystone XL let me say this is a solvable problem, have to sort itself out at the end of Hazardous Materials Safety Admin- would require two full summer
pipeline will not further delay ap- and we are undeterred.” the day, but that’s not related to istration would further improve construction seasons before becom-
proval of the project on a federal The 1900-kilometre project is in what is going on at the Department safety beyond other oil pipelines. ing operation.
level. the midst of a 90-day comment pe- of State at the current time,” said “Clearly, by any of these criteria, Meanwhile, TransCanada is mov-
The US$5.4-billion cross-border riod following the completion of the Girling. Keystone will be determined to be ing on plans for the proposed Energy
pipeline hit its latest hurdle on 19 final supplemental environmental He is confident the findings of the in the national interest of the US,” East pipeline, carrying light and
February, when a Nebraska court impact statement (FEIS). FEIS suggest the pipeline is in the said Girling. heavy crude from western Canada to
threw out a 2012 state law that gave During this time the US Depart- public’s interest. Obama, who has repeatedly put eastern refiners and for export.
Governor Dave Heineman the au- ment of State will get feedback from The report claimed it would have off a decision on the project, told a It is preparing to file a regulatory
thority to approve the project, other government agencies. a minimal impact on the environ- meeting of governors earlier this application with the National En-
which could have forced landown- According to TransCanada’s ad- ment and would not lead to in- week that a decision on Keystone is ergy Board of Canada by mid-2014.
ers to allow the pipeline through visers, there is no reason to creased oil sands activity. a “couple of months”away. It has secured firm shipper com-
their property. believe the Nebraska ruling will ul- Girling pointed out transport al- The longer approval takes, the mitments for 900,000 of the pipe-
“While we’re clearly disappointed timately affect President Barack ternatives such as rail, truck, or higher the pipeline’s costs climb. By line’s 1.1-million-barrel-per-day ca-
and disagree with the decision, Obama’s decision on a permit. tanker would produce higher green- the end of 2013, TransCanada had pacity.
we’ll now analyse the judgment “We’re past the final environ- house gas emissions. invested about $2.2 billion. TransCanada reported net earn-
and determine what our next steps mental impact review and we’re It also stipulated the 59 special Optimistic a presidential permit ings of C$420 million (US$378 mil-
may be,” said TransCanada chief now in national interest determina- conditions determined by the State will be granted by mid-2014, the Ca- lion) during the fourth quarter and
executive Russ Girling. “But first, tion. The process in Nebraska will Department and the Pipeline & nadian operator said the system C$1.7 billion for the year.
34 28 February 2014

SHALE
The new rules... will ensure Colorado
has the cleanest and safest oil and gas
industry in the country and help
preserve jobs.
AND UNCONVENTIONAL OIL & GAS Colorado Governor John Hickenlooper

Plan to US

curb rail
accidents
THE US transportation regula-
tor has issued its latest emer-
gency order aimed at curbing
a spate of explosive derail-
ments of trains carrying crude
from North Dakota’s prolific
Bakken shale, adding to new
industry-driven safety meas-
ures agreed this week, writes
Kathrine Schmidt.
The US Department of Trans-
portation 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 ro-
bust” 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 appropri-
ately,” Transportation Secre-
tary Anthony Foxx said.
US rail carriers have put to-
gether a list of voluntary safety
standards, including more fre-
quent track inspections, im-
proved braking systems, lower
speed limits for trains with
older tank cars and improved
rail routing technology.
“We share the (Obama) ad-
ministration’s vision for mak-
ing a safe rail network even
safer, and have worked togeth-
er to swiftly pinpoint new op-
erating practices that enhance
the safety of moving crude oil
by rail,” said Edward Hamberg-
er, chief executive of the Asso- New rules: Colorado Governor John Hickenlooper received support from Noble Energy, Encana and Anadarko Petroleum
ciation of American Railroads

Colorado sets bar with em

(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 Both industry and environmental groups get behind latest
emit combustible gases than
crude from other areas. efforts to curb pollution but spectre of individual fracking bans
by local governments still looms
Protesters NOAH BRENNER
charged Houston

A UK district court has convict-

ed three protesters over demon- COLORADO has enacted some of of volatile organic compounds from equipment such as liquids- mission, after taking input from
strations at Cuadrilla Resourc- the most stringent rules in the na- (VOCs). gathering tanks as well as from a varied and often conflicting inter-
es’ Balombe drill site in tion to curb emissions from oil and By some estimates, the new more aggressive regime of inspec- ests, will ensure Colorado has the
southern England last summer. gas development but the changes rules could cut 90,000 tonnes of tions and leak repair. cleanest and safest oil and gas in-
Brighton magistrates court may not be enough to head off a VOCs and 100,000 tonnes of meth- Colorado Governor John Hick- dustry in the country and help
found Natalie Hynde and campaign by groups that want to ane from the air annually. enlooper had been pushing for the preserve jobs.”
Simon Medhurst guilty of be- allow local governments to ban hy- Those two substances can com- rules since November and had Industry unsuccessfully
setting a commercial premises draulic fracturing. bine to form low-level ozone — a general support from Noble Ener- sought some additional flexibility
when they locked themselves The Colorado Air Pollution Con- pollutant that was once thought gy, Encana and Anadarko Petrol- in the regulations but the Colo-
to the gate of the West Sussex trol Division passed the sweeping to exclusively crop up in big cities eum — all of which have major rado Oil & Gas Association (COGA)
drill site on 31 July 2013. new regulations with general sup- located in warm climates but has operations in the state. endorsed the final product none-
Judge William Ashworth port from industry and a push since been seen in areas where “Colorado is proving once again theless.
said their protest “went beyond from the non-profit Environmen- nearby mountain ranges trap the that collaboration and compro- “Unfortunately, we were not
reasonable freedom of speech” tal Defense Fund. emissions close to the surface. mise help solve important issues successful in ensuring that the
as it disrupted access to the site The rules are the first in the na- The reductions, in part, will facing our state,” Hickenlooper rule accommodates the differenc-
at an estimated cost of $8350. A tion to specifically target methane come from retro-fitting valves on said after the rules were approved. es in basins and operators,” COGA
third defendant was convicted emissions from oil and gas instal- production equipment and tight- “The new rules approved by Colo- policy director Doug Flanders
of obstructing the highway lations, not just the reduction ening restrictions on venting rado’s Air Quality Control Com- 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
the deal came in the form of $500
AEW BUYS million in equity investment
from private equity player Energy
120,000 ACRES Minerals Group and $180 million
in debt from Texas Capital Bank,
AEW said.
Utica shale operation AEW is the fourth company
McClendon has revealed under
valued at $5 billion the umbrella of American Ener-
gy Partners.
WILDCATTER Aubrey McClen- Others have focused on non-
don has expanded his growing operated properties and the Mar-
oil empire into Oklahoma with a cellus shale play in Pennsylvania.
series of asset deals at the same The largest so far is American En-
time as a debt offering valued his ergy Utica (AEU), focused on the
operations in the Utica shale in Utica shale in Ohio.
Ohio at roughly $5 billion. Days before AEW revealed its
American Energy Woodford position in Oklahoma, AEU an-
(AEW) — the latest in the fleet of nounced that it had sold $750
companies affiliated with million of debt that could be con-
McClendon’s private equity- verted into a 15% interest in the
backed American Energy Part- company when it made an initial
ners — secured $680 million to public offering.
pay a handful of private compa- Though still privately held,
nies for a foothold in central the deal gives AEU an estimated
Oklahoma, where it plans to drill value of $5 billion — all of which
the Mississippian Lime and has been built up since the com-
Woodford Shale tight oil plays. pany came into existence less
The private companies — than a year ago.
Calyx Energy, Calyx Energy II, At the same time as the debt
Liberty Energy and Truevine sale, AEP increased its revolving
Operating — sold AEW a package credit facility by $500 million to
that totalled 120,000 net acres $950 million.
and 6000 barrels of oil equiva- The cash will be used to fund
lent per day of production. a series of deals with Hess, pri-
Based on the known positions vately held Paloma Partners and
of those private companies, it ExxonMobil’s unconventional
appears the acreage likely spans unit XTO totalling more than
Payne, Noble and Pawnee coun- $1 billion for land in the emerg-
ties in Oklahoma. ing southern wet gas window of
AEW dubbed the stacked the Utica.
Mississippi Lime-Woodford Shale
play the Central Northern Okla-
homa Woodford play and said it Search the archive:
would like to amass as much as Aubrey McClendon
200,000 acres in the area. Cash for

Photo: AP/SCANPIX Carrizo off to promising

start with first Utica well
issions regulations CARRIZO Oil & Gas is producing
at above anticipated rates from
its maiden well in the Utica
shale more than seven weeks
still maintain very high bottom-
hole pressure”.
The company will spud its
Brown-1H well next month in
after it started, writes Luke northern Guernsey County and
Johnson. has a total of nine gross Utica
Carrizo’s Rector-1H well in wells planned in 2014, most of
Guernsey County, Ohio, aver- which will be drilled in the vi-
aged output of 553 barrels per cinity of the Rector well because
day of condensate over the first the company already has well
48 days and continues to flow at pads built and plans for other in-
a stabilised rate of more than 500 frastructure.
bpd and 2 million cubic feet per Johnson said Carrizo is trying
day of rich natural gas on a 15/64- to build on its position in the
mitted to working with our opera- state’s constitution. When a simi- Responsible Energy Development inch choke. Utica but has found the task dif-
tors, our communities, and the lar restriction was passed in Long- (CRED) to fight the measures. That puts it above the compa- ficult so far.
state to successfully and effective- mont in 2012 the state and indus- “It is not possible or practical for ny’s 1350 barrels of oil equivalent “We haven’t had as much suc-
ly implement these rules.” try sued the city and that case has hundreds of local governments to type curve and was ahead of cess buying acreage (in the Uti-
It remains to be seen if the not been decided yet. enact differing standards for the analyst estimates. ca), but we have some larger
stricter regulations will be Late last week, citizens filed a protection of natural resources, The well hit a peak rate of 2816 deals we’re working on right
enough to quell an increasingly ballot initiative that will force a such as clean air and water, which barrels of oil equivalent per day, now,” he told analysts on a con-
vocal movement to limit hydrau- statewide vote on whether Colo- are of statewide significance,” including 1680 bpd of conden- ference call on Tuesday.
lic fracturing in Colorado. rado should amend its constitu- CRED communications head Jon sate. It was drilled to a vertical Carrizo has set aside about $75
In November, four towns situ- tion to give local governments the Haubert said. “CRED supports the depth of 7456 feet with a 7890- million for land and seismic ex-
ated along the Front Range north power to regulate fracking. process currently in place which foot lateral, and was completed penditures this year, with almost
of Denver voted to ban fracturing Industry said such a change reinforces the state’s role.” with 31 frac stages. all of it devoted to the Utica and
for at least five years and the re- would cause havoc and limit drill- Many also fear that the change Chief executive Chip Johnson to the Eagle Ford shale in Texas.
sults of a fifth proposal are still ing as towns and even entire is simply one step in an eventual said down-hole pressures have Carrizo posted quarterly earn-
under legal review. counties each enacted their own plan to try to ban fracking in the dropped to within expectations ings in line with estimates, with
However, it is not clear that any drilling regulations. state altogether, something that but remain “at a very high rate a net loss of $22.2 million. It made
of the governments have the pow- Noble and Anadarko have joined environmental groups have said where we think we can keep pro- a profit of $16.8 million in the
er to limit fracking under the to form the group Coloradans for remains one possible option. ducing the well at this rate and three months to December 2012.
36
SHALE 28 February 2014

ARGENTINA Gas prices

Repsol accepts $5 billion stay on
the swing
in deal to end YPF battle US NATURAL gas prices contin-
ued to swing wildly as traders
balanced low storage figures
with expectations of the start
of warmer weather, writes Noah
Bruising two-year fight between Spanish Brenner.
Prices for the front-month
player and government looks to be settled futures contract on the New
York Mercantile Exchange hit a
five-year record of about $6.50
GARETH CHETWYND on 24 February, only to lose 25%
Rio de Janeiro of their value in the next three
trading days and drop to about
$4.71.
REPSOL’S board has approved a Natural gas prices in the US
compensation deal worth $5 bil- had been soaring in February,
lion relating to Argentina’s 2012 climbing more than 40% in less
expropriation of the Spanish com- than two weeks on the back of
pany’s former controlling stake in the lowest storage levels in 10
shale-rich YPF. years and more cold weather
The package, which should put hitting the US east coast.
a stop to a bitter legal dispute, in- But traders ignored the Arc-
cludes two groups of dollar- tic blast and forecasts for un-
denominated Argentina public seasonable cold continuing into
bonds. the first week of March, and
Repsol chief executive Antonio instead continued to take prof-
Brufau publicly welcomed the its gained from the recent price
deal, saying it “frees up resources increases.
from the legal and management Over the longer term, gas
points of view.” prices have stayed moderate at
“To finally reach a friendly between $4.50 and $5 — a level
agreement on this contentious that many see as attractive for
issue that has taken two years is producers to lock in hedges that
extremely positive,” he said. mitigate the downside risk of
Argentina’s President Cristina the volatile market.
Fernandez de Kirchner took the oil “The strip has dropped a bit,
world by surprise in April 2012 but the 12-month is still near
when her administration moved the $4.60 level, which is a good
to expropriate Repsol’s 51% stake level to continue to put on
in YPF. hedges,” analysts at investment
Argentina claimed the Spanish bank Capital One Southcoast
company had failed to invest suf- said in a note.
ficiently in the country, but Rep- But even at that level, pro-
sol denied this, pointing to its ducers could see the market
own ambitious plans to unlock erode as power producers
the potential of Vaca Muerta, con- choose to switch their genera-
sidered by experts to be one of the tion back to cheaper coal.
top three shale formations in the Analysts at Tudor Pickering
world. Holt estimated that prices
Repsol had at first held out for a above $4.50 could cut into natu-
compensation package worth ral gas demand by as much as 3
$10.5 billion, and started legal pro- billion cubic feet per day due to
ceedings against oil peers seeking fuel switching — a figure that
to partner the re-nationalised YPF would allow natural gas in stor-
on the expropriated areas of Vaca age to refill to as much as 3.8
Muerta, with Chevron the main trillion cubic feet.
target. While the current price
The Spanish company came un- spikes have been temporary,
der pressure to settle from some of many in industry are starting
its own minority shareholders, led to see the fundamental market
by Pemex, with 9.4%. shifts needed for higher gas
The state-run Mexican compa- prices in the future.
ny offered tacit support for Argen- “We continue to believe that
tina’s arguments about sovereign- the demand side of the shale
ty, and pushed for a settlement as revolution will eventually
the best way to reduce the im- catch up with the supply side as
pacts of the expropriation. US gas used in transportation,
At one point, Pemex tried to new industrial plants and LNG
nudge Repsol into accepting a exports takes off in the second
compensation deal that included Settlement smiles: Argentine President Cristina Fernandez de Kirchner and, below, Repsol half of this decade, requiring
assets in the Vaca Muerta shale. chief executive Antonio Brufau Photos: AP/AFP/SCANPIX increasing volumes of higher
“This suggestion went down cost gas,” analysts at consul-
badly with the majority on the net income for 2013 was reported natural gas plants to Shell in Peru tancy PIRA Energy said.
board, led by Brufau” said one at €195 million this week, down and Trinidad and Tobago.
Repsol source. from €2.06 billion in 2012. Argentine officials hope the
The compensation offer mooted Revenue reached €6.23 billion compensation settlement will Gas prices
in 2013 reportedly valued shale as-
sets at $500,000 per acre, de-
for 2013 compared to €6.95 billion.
Exploration was a bright spot.
open up the doors to more financ-
ing and joint venture opportuni-
in the US
scribed as “several times lower” Repsol reported nine “positive” ties for YPF, now restored to the had been
than the valuation used in YPF’s wells in Alaska, Algeria, Brazil, status of an entirely state-run
new $1.24 billion joint venture Colombia, Libya and Russia over flag-carrier for Argentina. soaring in
with Chevron.
Repsol eventuallly accepted
the year, achieving a reserves
replacement rate of 275%.
“YPF is a fundamental tool for
the country’s energy future and I
February,
payment in bonds, but only after Repsol’s net output was also up believe the expropriation has giv- climbing
much wrangling over guarantees. 4% on the year, reaching 346,000 en that tool back to Argentines,”
Repsol will now take an impair- barrels of oil equivalent per day, said YPF president Miguel Galuc- more than
ment charge of nearly €1.28 bil- driven by Brazil, Bolivia and cio.
lion ($1.75 billion) on its YPF inter- Russia. The settlement still needs to be 40% in less
ests, adding to €1.10 billion worth
of charges on North American on-
Losses elsewhere were partially
offset by a gain of €1.26 billion on
approved by Repsol’s shareholders
as well as the Argentine parlia-
than two
shore assets. As a result, Repsol’s the company’s sale of liquefied ment. weeks.
28 February 2014
SHALE 37

NORTH AMERICA Cabot in

Rebuttal: Encana chairman
David O’Brien Marcellus
gas deal
Photo: BLOOMBERG

WASHINGTON
UTILITY SALE
Operator clinches
long-term supply
CABOT Oil & Gas has struck a
long-term natural gas sales
agreement with a utility serv-
ing 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

Encana joins Chesapeake

$410 million to help build a 177-
mile (285 kilometre) pipeline
from Cabot’s fields in Susque-
hanna County to the Atlantic
Sunrise pipeline running to
the coast.

in Collingwood getaway
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
Canadian also puts Michigan acreage up for sale gas terminal in Maryland.
Takeaway capacity in the
as state officials scrutinise companies’ actions Marcellus has lagged behind
the strong well results, leading
NOAH BRENNER to price differentials that make
Houston gas worth less than it is at the
benchmark Henry Hub in Lou-
isiana.
ENCANA Oil & Gas is joining uids content was 20%. The wells concerned that it was at these chairman David O’Brien said in Managing these differentials
Chesapeake Energy in trying to were drilled on 30,000 acre units, lease sales that the two compa- September 2012. through long-term sales agree-
exit the Collingwood shale in allowing Encana to hold 146,000 nies agreed to parcel out certain “We want to reiterate that En- ments and hedging has become
Michigan, where state officials acres by production. portions of the state in order to cana remains committed to act- a major issue for Cabot and
continue to investigate allega- Chesapeake Energy had been avoid a competition over leases ing ethically and in compliance other Marcellus producers.
tions the two companies colluded marketing its own position in that was driving up prices in with laws in all that we do.” “The differential is the 800
to keep lease prices low in 2010. Michigan since mid-2012 as part of 2010. However, a representative of pound gorilla in the room right
The Canadian giant is offering an effort to clean up its sprawling Encana acknowledged receiving the Michigan Attorney General now and everybody’s models
about 234,000 net acres for sale US shale portfolio. a subpoena from the Antitrust confirmed to Upstream that the are different,” Cabot chief ex-
across northern and central Mich- That package totals 450,000 net Division of the US Department of investigation remains open. ecutive Dan Dinges told inves-
igan, according to sales docu- acres spanning 20 counties, in- Justice and “a civil investigatory “Our investigation remains ongo- tors during a quarterly confer-
ments seen by Upstream. cluding many of those where demand” from the Michigan ing,” Joy Yearout said in an email. ence call.
The package includes nine Encana holds drilling rights. Attorney General’s office. “We have no additional comment
wells, six of which are currently Sales documents seen by The company launched its own for the record at this time.”
producing and another that was Upstream indicate that package is internal investigation and in Sep- An Encana representative did Search the archive:
completed and is awaiting initial still on the market. tember declared that it found it not immediately respond to re- Cabot
well tests. Chesapeake indicated that had done nothing wrong. quests for comment on the
The best of the wells, the Beaver much of acreage is owned by the “We have taken this matter matter.
Creek 1-23 in Crawford County, state of Michigan and was ac- very seriously and over the past 11 However, reports this week sug-
had initial production as high as
4300 barrels per of oil but the liq-
quired through state lease sales.
State and federal officials are
weeks have conducted a very rig-
orous investigation,” Encana
gested that a settlement could be
close.
Origin target
AUSTRALIA’S fourth-ranked
local producer Origin Energy

Shale giant looks to cash in on services division move has pledged to spend a mini-
mum A$97 million (US$87 mil-
lion) on two new unconven-
CHESAPEAKE Energy is looking at Services had 2013 revenues of $2.2 talented management team that be worth $2.2 to $2.5 billion but tional gas blocks in the Cooper
its options to cash in on its serv- billion, according to Chesapeake, we believe will offer Chesapeake other analysts, including Stifel basin.
ices division as the shale giant derived from a fleet of 115 drilling and its shareholders enhanced re- Nicolas’ Amir Arif, cautioned that Origin said Area A and Area
continues to clean up its portfolio rigs, a pressure pumping fleet of turn opportunities as a stand- the unit could bring in as little as B provide exposure to multiple
and bridge its ongoing funding 360,000 horsepower units, 260 alone company,” Chesapeake chief $1 billion to $1.5 billion. unconventional play types, in-
gap, writes Noah Brenner. trucks to move rigs, 67 cranes and executive Doug Lawler said. Even at the low end, the figure cluding tight sands, shale and
Chesapeake Oilfield Services about 250 fluid-hauling trucks. He also explained that the move would cover the company’s pro- deep coal seams.
could be a candidate for an outright Nomac started out as a way for fits the company’s plan of “finan- jected $1 billion 2014 funding gap The Area A work programme
sale or could be spun off to share- Chesapeake to save money on its cial discipline and profitable and — almost all of which comes in involves the drilling of up to
holders, Chesapeake said, formalis- own wells but as the company has efficient growth from captured the form of capitalised interest. eight exploration and appraisal
ing a move that has been contem- cut its rig count over the past couple resources”. “While this news formally alerts wells, fracture stimulation and
plated unofficially for years. of years Nomac has contracted out Most analysts agreed Chesa- the marketplace that the company flow testing, with the first well
The unit consists of five different about one-third of its rigs to other peake would likely prefer to sell will solicit bids, we expect that expected within 12 months.
companies — the most prominent operators — a trend that Chesa- the unit outright, rather than spin these assets have been available over The Area B commitment
of which is Nomac Drilling — but peake would like to continue, the it off as a separate company to the last year, as the company em- involves seismic followed by
the company’s offerings span pres- company said. shareholders. barked on its divestiture process to up to seven exploration and
sure pumping, trucking and oilfield “Chesapeake Oilfield Services is Investment bank Tudor Picker- right-size the balance sheet,” Sterne appraisal wells, plus flow test-
construction. Chesapeake Oilfield an outstanding business with a ing Holt estimated the unit could Agee analyst Tim Rezvan said. ing.
38 28 February 2014

LNG
Replication is very tempting... on the other
hand, there are equally good arguments
for innovation and change.
Gorgon stage two engineering manager Roger Walpot

Ennore AUSTRALIA

tender
re-run
AT LEAST eight to 10 players are
likely to show interest in Indi-
an Oil Corporation’s (IOC) pre-
qualification exercise to select
a contractor for regasification
facilities for its $700 million
Ennore liquefied natural gas
terminal in Tamil Nadu.
Sources said IOC is pre-
qualifying contractors again
after it cancelled an earlier at-
tempt following controversy
over the qualification process.
“IOC has invited expressions
of interest this week from in-
terested players. The previous
tender stands cancelled and
contractors are being pre-qual-
ified once again,” a source said.
Interested contractors are
required to express interest by
14 March, the source added.
Leading Japanese contrac-
tors Mitsubishi, IHI and Toyo
Engineering are likely to ex-
press interest, sources said.
Taiwan’s CTCI, South Korea’s
Samsung, Turkey’s Fernas, Ita-
ly’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 aggres-
sive bids,” a source said.
The engineering, procure-
ment and construction con-
tractor for the Ennore terminal
will be responsible for building
LNG unloading, regasification
and send-out facilities for the 5
million tonnes per annum pro- Giant: the 2.1 kilometre-long jetty at the Gorgon LNG terminal on Barrow Island
posed facility.

China set
for LNG trio
Chevron pushes on at Gorg
CHINA is set to commission US operator’s engineers work on concept select process on massive
three liquefied natural gas ter-
minals this year, boosting the second phase development of two field groups
nation’s LNG import capacity to
40 million tonnes per annum. JOSH LEWIS
Sources said that the coun- Perth
try’s 13 terminals will operate
at an average rate of 58% this
year, given that the new facili- US SUPERMAJOR Chevron is plan- three main elements. “The first is more manifolds added to the being developed through 10 wells
ties will go on line only at the ning the second-phase develop- the further development of the field, and between seven to nine via two drill centres, with gas
end of this year and will need ment of the two huge fields that Gorgon field,” he said. additional infill wells being also being exported to Barrow
at least two or three months will provide feedstock gas for the “Secondly, the further devel- drilled. Island.
before running at full capacity. US$54 billion Gorgon liquefied opment of Jansz-Io and also Walpot explained the current The drillship Deepwater
They added that LNG imports natural gas project being built in looking ahead to the future for concept for the second phase Frontier is currently employed at
are expected to reach 22 mil- Western Australia. possible tie-backs, other fields would see about three new wells Jansz-Io on the production wells.
lion tonnes during 2014, up The two groups of fields, Gorgon that can tie-back into this infra- added to one of the existing man- Walpot said the next stage of
from 18 million tonnes last and Jansz-Io, are being developed structure.” ifolds in the north-east of the Jansz-Io would focus on the south-
year. as enormous subsea schemes. The Gorgon field lies in water field. west corner of the field and would
Two terminals will be built Chevron’s engineering manager depths of between 200 and 250 A fourth manifold would be see an additional drill centre be-
In Qingdao and Fangcheng- for the Gorgon stage two project, metres and is initially being de- added to the south-west of the ing placed in about 1325 metres of
gang, and will be owned and Roger Walpot, said at the Austral- veloped through eight wells, field, with between two and four water with another five subsea
operated by Sinopec. ia Oil & Gas conference in Perth spread over three manifolds. new wells, and a fifth manifold in wells tied in to it.
The third will be at Hainan, that Chevron currently has a team The gas from the field will be the north-eastern corner with an Chevron will also look at ways
owned and operated by China of about 35 engineers working on exported through a 65-kilometre additional two wells. to tie in other fields in the area to
National Offshore Oil Corpora- the concept select stage on the subsea pipeline to the LNG plant The Jansz-Io field lies about 130 the Gorgon infrastructure, with
tion. Each will have capacity of next phase of developing Gorgon on Barrow Island. Further devel- kilometres from Barrow in 1300 Walpot noting the Greater Gorgon
3 million tonnes per annum. and Jansz-Io, which will focus on opment at Gorgon could see two metres of water and is initially 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’
CHEVRON is examining the tech- re-engineering and re-certifica-
nological challenges it could face
during the next development
SEARCH FOR tion of components.
Lessons learned and new tech-
phase of the upstream fields for its
Gorgon LNG project.
SOLUTIONS niques implemented on other
projects around the globe can also
Roger Walpot, Chevron’s engi- have an impact on the decision-
neering manager for the Gorgon Focus on balance between making process when planning
stage two project, said some of the for another phase of development
potential fields that could be tied
replication and change — as can new technology that was
back to the Gorgon infrastructure not available during the initial
would be “really pushing the en- “On the other hand, there are phase of development.
velope” on industry capability for equally good arguments for inno- During the next development
step-outs. vation and change,” Walpot said. phase, Chevron will also need to
“Some of the fields will require He noted that the lifetime of big look at the upside potential of re-
more than 200-kilometre control gas fields often exceeds the life- cent and future discoveries in the
step-outs to Barrow Island, so the time of controls as well as other Greater Gorgon area and the best
long distance will require tech- parts and equipment, which need way to capitalise on them.
nology qualification,” he said, to be dealt with during the next Walpot said this could include
while adding that Chevron was phase of development. re-rating the LNG plant on Bar-
“quite confident” that solutions do New standards and regulations row Island, de-bottlenecking, or
exist. can also force changes to future expansion with a fourth LNG
“It’s just packaging those solu- developments, which can lead to train.
tions and getting all the boxes
ticked so they can be marinised
and implemented. That is some-
thing 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 some-
times beyond 1000 tonnes,” Wal-
pot said.
“That of course will create sig-
nificant challenges, not only in
design, but in fabrication and test-
ing and installation, and it also
reduces your window of installa-
tion vessels that can actually han-
dle this.”
He pointed out that Chevron
would need to find a balance be-
tween replication and innovation
during the concept stage of the
development.
“Replication is very tempting,
there are very good arguments to
Photo: CHEVRON AUSTRALIA make for replication... minimum
design effort — ‘just give me one

gon stage two

like we did before’ — which will
cut out some of the uncertainty
during the manufacturing, test-
ing 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 op-
erations and maintenance phase,
with the same types of tools and
parts being able to be used across
the project, which in turn would On location: the Transocean drillship Deepwater Frontier at
help speed up turnaround times. the Jansz-Io field Photo: EXXONMOBIL
trillion cubic feet of resources, three LNG trains, and to maintain
making it the single largest plateau production.
resource accumulation in Aus-
tralia.
He said a decision must be made
on when the next gas supply
Allseas finishes $900 million pipelay operation
“With a lot of these other fields, project needs to be on stream and ALLSEAS is putting the finishing touches to its The total lengths of the two main pipelines are 58
we are looking for ways to develop what it needs to deliver in terms huge subsea pipelay operation at the Gorgon LNG kilometres from the Gorgon field and 134
them when it is time for back- of production rates, and other fac- project in Western Australia. kilometres from the Jansz-Io field.
filling the Gorgon development,” tors. Chevron’s Gorgon upstream manager, David All the offshore pipelines were to be installed in
he said. Gorgon is expected to come on Equid, said at the Australian Oil & Gas separate lay corridors.
“One option is where we could stream in the middle of next year conference in Perth that Allseas’ pipelay vessel It is understood that Allseas committed three
have further step-outs, further and will consist of three LNG Solitaire would wrap up its operations on the vessels to the Gorgon project — the Solitaire, the
subsea developments and tie trains with a combined capacity project soon. Lorelay and Calamity Jane.
them in to the existing infra- of 15 million tonnes per annum. “Solitaire is doing the last line and come Sunday Equid added that Chevron’s upstream work on
structure of the Jansz or Gorgon Chevron operates the project, (23 February) it’s finished and all our pipelay the project would likely be finished “probably
systems.” holding a 47.33% stake, with part- operations are over,” he explained. around the end of this year”.
Walpot said one of the main ners ExxonMobil on 25%, Shell on Allseas’ enormous workscope was valued at He noted that, with the project’s subsea
drivers behind focusing on phase 25%, Osaka Gas on 1.25%, Tokyo around A$1 billion (US$900 million) and included structures beginning to be placed on the seabed,
two now was to ensure the secu- Gas on 1% and Chubu Electric the installation of 660 kilometres of pipelines the last main job was the big jumper spools that
rity of supply into the foundation Power on 0.42%. ranging from six inches to 34 inches in diameter. go in between the structures on the seabed.
40
LNG 28 February 2014

Singapore AUSTRALIA

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 ex-
pansion is expected in the sec-
ond quarter of this year.
Singapore’s second minister
for trade and industry S Open to collaboration: Santos chief executive David Knox Photo: BLOOMBERG
Iswaran said two further LNG

Queensland link likely

import licences will be issued
beyond the 3 million tpa con-
tracted to BG Group to meet the
requirements of the added im-
port capacity.
BG as the sole aggregator for

for Shell and PetroChina

the first 3 million tpa tranche
has delivered 1.08 million
tonnes of LNG cargoes from its
assets including Equatorial
Guinea and Trinidad and To-
bago.
Prime Minister Lee said a Subsidiary Arrow Energy said to be running ‘open season’
“competitive request for pro-
posal will be issued for the with owners of three existing LNG projects in the state
next tranche of LNG imports by
June”. RUSSELL SEARANCKE
Oslo

Search the archive:

Singapore LNG SIGNS are emerging that Shell and idea of having their own LNG fa- finance the train construction “far more sense than to go it
PetroChina have begun the formal cility on Curtis Island, and indeed and the existing owner would alone” but that it was a decision
process of linking their gas re- Arrow Energy recently laid off the charge for pipelines and infra- that Arrow had to make.
sources in Queensland, Australia, staff that had been working on structure. The two other incumbents are
Oil Search to one of the three existing lique-
fied natural gas projects in the
that end of the project.
The Queensland state govern-
Each scenario would save, at the
very least, the cost of building ex-
BG Group’s Queensland Curtis
LNG and the ConocoPhillips-Ori-

in the hunt area.

Well-placed sources said Arrow
Energy, the 100%-owned Austral-
ment approved late last year
Arrow’s application to build the
LNG plant, but Shell and Petro-
port pipelines spanning hundreds
of kilometres.
The closing date for the open
gin Energy Australia Pacific LNG
(APLNG).
Market analysts have long said
OIL Search of Papua New Guin- ian subsidiary of Shell and China had already been examin- season is said to be within the that all three existing projects
ea has said it will announce PetroChina, is running an “open ing tie-in arrangements with the next two months, with each need Arrow’s reserves to underpin
imminently a material acquisi- season” with the three LNG three incumbents. project in data rooms and much expansion beyond their first two
tion, most likely of an interest projects’ owners with the inten- Sources said there are several effort being exerted, said sources. trains.
in the Elk-Antelope gas field tion of sending its gas through scenarios that would each lead to One of the three incumbent APLNG is understood to be the
which Total farmed in to re- one, or more, of the trio. big capital savings for Shell and projects is the Gladstone LNG only one of the trio that has
cently. It is understood that an open PetroChina, all based on them re- scheme, which is building two regulatory approvals in place for the
Oil Search called a trading season is the initial stage in a taining their upstream reserves. trains and plans to produce first third and fourth expansion trains.
halt in its shares on 25 Febru- process that should culminate in The first would be that an exist- exports next year. The approved model for the
ary, but had not clarified the Arrow’s gas being converted into ing project would build another David Knox, the chief executive Arrow LNG project is the develop-
acquisition as Upstream went LNG by another party, and with train and purchase Arrow’s gas of Santos — which is a joint op- ment of coalbed methane gas
to press. Arrow having an ownership inter- then sell the LNG. The second erator of Gladstone LNG — said fields in the Surat basin, feeding
The company has been in est in the LNG train that is built to would be similar except that last week that Gladstone LNG into a two-train LNG facility on
discussions for months over a accommodate Arrow’s gas. Arrow would be charged a lique- “welcomes collaboration even if Curtis Island with capacity of up
potential involvement in the It has long been held that Shell faction toll and sell its own LNG. that was to the extent of addition- to 9.2 million tonnes per annum
Elk-Antelope resource, which and PetroChina had dropped the The third would be for Arrow to al trains”. He added that it made of LNG.
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%.
Monadelphous and Kentz-United land awards at Ichthys
French player Total last AUSTRALIAN company Monadel- chanical work covers the erection piping construction package. thys LNG trains, each of which
December took up a 61% inter- phous plus a joint venture be- of piping, mechanical and struc- Yet to be awarded is the electrical will produce 4.2 million tonnes
est in the field but said it would tween Kentz and United Group tural steel for the utility and off- and instrumentation package, per annum of LNG from 2016.
likely divest up to 19%. have landed some of the work re- site area. which is being pursued by players It is understood there are 220
Oil Search reiterated recently lated to the final major onshore Work has started and is expect- including Kentz and Consolidated LNG modules weighing about
it is “in ongoing discussions workscope for the Ichthys lique- ed to be finished by mid-2016. Contractors, said sources. 180,000 tonnes that are being
with the key stakeholders re- fied natural gas project. The UGL-Kentz joint venture The overall workscope is essen- built in South-East Asia and will
garding a potential involve- Monadelphous’ A$680 million said its US$640m contract was for tially the installation and assem- eventually be shipped to the Blay-
ment in the licence”. (US$613 million) contract for me- the structural, mechanical and bly of the modules for the two Ich- din Point LNG site near Darwin.
 t o s.
g h San
r o u
e s th 8 - 11 | April 2014 | 2 p.m. - 9 p.m.
r e pass Mendes Convention Center | Santos | SP
u t u
G a sf
Oi l& The organizer of the major event Brasil Offshore
is also responsible for Santos Offshore. It is the
Petrochemicals 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
Air together the highly qualified audience of various
Environment Logistics segments of the production chain, from
Oil and operators, through production, to the most
Gas diverse suppliers. As in every edition, this event
Ports Metals gathers products and a high level of services
for which opportunities are created and
successful business are implemented. Great
Navals
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 2013 | The 2013 | Government 2013 | R$ 50 million 2013 | The Field 2013-2017 | Until
government approved calculation of the signing sets R$ 15 billion will be allocated to Urucú has 52.8 bcm of 2017, will invest U.S.
for 2013 holding three bonus and the minimum in bonuses Round Pre-Salt Oil SA (PPSA), proven gas reserves, being $236.7 billion, and the
bidding rounds: compromise reached 1 Pre-Salt-focused a state company that will the 2nd largest gas field in Pre-salt production will
Norte & NE | Pre-Salt R$ 4.8 billion prospect of Libra, represent the Union the country, after Mussel, reach 1 million bpd
Natural Gas in the Santos Basin in the Santos Basin

Registration open for visitors.

www.facebook.com/santosoffshore | www.santosoffshore.com.br

Institutional Support
Bronze Sponsor

Highlighted Media Media Partner Business Roundtable Organization and Promotion

 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.

42
CUTTINGS 28 February 2014

REX: NO TANKS Going with

the flow…
• 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

•
Tillerson takes
Motive Offshore has named
ExxonMobil is a towering presence in Colin Murray head of finance
the US shale gas scene, but chief
executive Rex Tillerson is now trying to
• Cosco Corporation (Singapore)
has named Tom Yee Lat Shing

on the tower
throw cold water on some fracturing- lead independent director
related plans.
The Texan is one of the most high-

Montage by Upstream
profile plaintiffs in a lawsuit aimed at
BEAN COUNTING
stopping a huge water tower being built
right on the doorstep of his plush ranch ExxonMobil boss says ‘H -NO’ 2 AT STATOIL
in the town of Bartonville, the Wall
Street Journal reported. to fracking-water tower plans No business
area is safe,
Tillerson has reportedly attended at
least two town meetings to protest the beside family ranch it seems,
from the
160-foot tower that is in part planned swinging
to supply water for nearby drilling axe of
operations. Statoil’s
The suit, being led by former US BLADES OUT corporate
House Majority leader Dick Armey, FOR MADURO cutbacks, and
Photo: AP/SCANPIX

alleges the tower is “causing unreason- Embattled Venezuelan President anger is brewing

Photo: REUTERS/SCANPIX
able discomfort and annoyance to Nicolas Maduro may have to think among workers as they risk
persons of ordinary sensibilities”. twice next time he swings his hips to losing a refreshing perk in their
Although the boss of one of the the “poet of salsa”, Ruben Blades daily grind.
largest oil and gas-producing compa- (pictured). The state-owned oil giant is
nies in the world is said not to oppose Maduro, a self-proclaimed fan of now reportedly considering
the tower on any fracking-related Panamanian-born Blades, was stung cutting out free coffee at
grounds, he is reportedly worried it last week by comments the singer made in an opinion piece about helicopter terminals in an
might devalue his property. protests over crime, corruption and the dire economy rocking the Opec effort to save around Nkr3.3
“I cannot stay in a place where I do nation. million ($548,000) spent on
not know who to count on and who not Writing in an open letter, Blades said both sides have their own agenda the benefit last year as it
to count on,” the newspaper reported in the fight, yet the piece prompted Maduro to speculate that the singer targets annual savings of $5
Tillerson as saying to the council. has been enlisted by foreign interests to further destabilise his billion through 2016.
Non-ranch-owning Americans with government and prepare for intervention. Having recently announced
“ordinary sensibilities” must now be Blades said he is baffled by the retort. “If I criticise someone from the job cuts, giving the chop to a
wondering if they can count on Exxon- left, then I’m from the (Central Intelligence Agency). If I criticise someone welcome hot cuppa is a
Mobil to block such intrusive structures from the right, I’m a communist. When I criticise the military, ‘I’m crushing blow for workers
in their own backyards. ‘subversive’,” he wrote . waiting to fly out to platforms,
Maduro is finding out that Blades doesn’t just dance to anyone’s tune. and has only further stirred
the pot of labour discontent.
Statoil’s reported rationale
ECONOMY OF SHALES for the move is that its
Oil workers in a North Dakota shale a 700-square-foot, one-bedroom well-paid workers can afford
patch are getting a raw deal: if their pad, apparently. Something similar in to buy their own coffee,
hard-earned cash is not going on the Big Apple will set you back prompting an IndustriEnergi
exorbitant rent, they are splashing it around $1500 a month, the newspa- union official to call the saving
in sushi restaurants, it seems. per reported. “petty”.
The town of Williston in South But it’s not all bad news: at least Adding to the bitter taste of
Dakota has been unmasked as the there are more sushi restaurants the proposed cutback,
town with the highest average rent in popping up in the town close to the company staff at offices and
the US - beating the likes of New York Yellowstone and Missouri rivers. land-based locations – in-
when it comes to getting a pokey “We want guys to bring their families cluding chief executive Helge
one-bedroom apartment, according here,” Katie Long, communications Lund – will still be able to grab
to The Houston Chronicle. director for economic development in a gratis latte.
Photo: REUTERS/SCANPIX
The oil boom from exploiting the the town, told the Chronicle. So, for now at least, Statoil’s
Bakken shale is behind the rise in average income in the There’s nothing better than high rent, raw fish and uncon- free coffee is grounded.
town to $79,000 – and it will take $2400 a month to occupy ventional resources to pull in a long-term crowd, it seems.
28 February 2014
JOB OPPORTUNITIES 43

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44
JOB OPPORTUNITIES 28 February 2014
28 February 2014
JOB OPPORTUNITIES 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
BUILDING
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.
YOUR
15 or more years of experience with 5 or more years directing a
comparable sales organization, or equivalent combination of education
CAREER
and experience. Masters of Business Administration preferred.
Willingness to travel 50% or more of the time.
Qualified Candidates send resume to gcaime@dynesi.com
with
Sheffield
For your recruitment advertising or other
classified advertising in Upstream, E&P Operator
please contact:
1. Production Coordinator (Yangon, Myanmar)
Stinelli Pallesen in Stavanger 2. CMMS Planning Supervisor (Yangon, Myanmar)
Phone: +47 51 85 91 58 • Fax: +47 51 85 91 60
E-mail: stinelli.pallesen@upstreamonline.com 3. Drilling Supervisor
Carol Davies in Houston 4. Drilling Engineer
Phone: +1 713 693 5506 • Fax: +1 713 626 8125
E-mail: carol.davies@upstreamonline.com EPCI Contractor – SEA
Alternatively call Singapore: +65 6557 0600 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
Rotating Equipment Engineer Ref 6821
Facilities Delivery Manager Ref 6762
Principle Well Engineer Ref 6795
Senior Piping Engineer Ref 6800
Senior Mechanical Engineer Ref 6776
Mechanical Rotating Equipment Engineer Ref 6792
Senior Instrument Engineer Ref 6799

Global Oil and Gas Electrical Equipment Engineer

Cost Engineer
Ref 6793
Ref 6803
Project Resource Specialists Lead Contracts Engineer Ref 6825

USA
Construction Manager Ref 6824
Interface Manager Ref 6774
Mentor IMC Group – an oil and gas sector exclusive professional Principal Completions Engineer Ref 6790
consultancy which provides experienced project management and
technical specialists to the world’s leading oil and gas companies. Commissioning & Hook-Up Manager Ref 6783
Vendor Inspection Coordinator Ref 6785
For over 25 years we have delivered high calibre professionals and FPSO Site Quality Coordinator Ref 6784
services of quality to help our clients implement and execute global Process Engineer Ref 6819
onshore and offshore projects. We also provide a comprehensive
range of value-added services.
Australia & Asia
We support our clients through each project stage from concept HSE Systems Coorindator Ref 6808
through engineering, construction, commissioning and
HSE Manager Ref 6766
operations.
Senior Geophysicist Ref 6770
Mentor operates from our own offices in: Mechanical Process Commissioning Lead Ref 6807
UK +44 20 7536 1140 Senior Instrument & Controls Engineer Ref 6767
Norway +47 51 22 38 35
USA +1 713 425 6307 Offshore ICSS FAT Leader Ref 6823
Singapore +65 6339 1295
Thailand +66 2 104 9194
Malaysia +60 3 2147 4661
Korea +82 52 251 9007
Japan +81 45 670 7035 For full job listings visit:
Brisbane +61 7 3112 2958
Perth +61 8 9214 3844 www.mentorimcgroup.com
46
JOB OPPORTUNITIES 28 February 2014

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clients and candidates engaged in the global
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28 February 2014
JOB OPPORTUNITIES & CONFERENCES 47

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.
48
CONFERENCES 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

D C
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A L
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D NT 2014 SPE/IADC

D IE NG
Managed Pressure
Drilling &
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ILL P
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Underbalanced
G WO RK
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P TEL
0 14
IL 2 NH Operations
7 O
H DIN G CONFERENCE & EXHIBITION
BUIL R I D
RO D 8-9 APRIL 2014
EU M A
HOTEL NH EUROBUILDING
MADRID

Registration and sponsorship opportunities

Registration, sponsorship & exhibition
are available. Please contact IADC at
opportunities are available. Please contact
europe@iadc.org or +31 / 24 - 675 2252 for
IADC at europe@iadc.org or
more information or visit
+31 / 24 - 675 2252 for more information or visit
www.iadc.org/event/2014-iadc-dual-
www.iadc.org/conferences/MPD_UBO_2014
gradient-drilling-workshop
28 February 2014
CONFERENCES 49

Organised by: Conference & Exhibition

INDONESIA ENERGY OIL & GAS 2014

Exhibition, Conference and Networking Party

March 11th & 12th, The Laguna Hotel, Nusa Dua, Bali.

Developments, Strategies and Opportunities in

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IOGS2014 Delegates will: Featuring Over 35 Top Level
speakers, some of which include:
DISCOVER - the latest developments in
Indonesia’s Oil and Gas Sector
LEARN - from the key decision makers
SUNDEEP BHANDARI,
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driving Indonesia’s Hydrocarbon
Revolution ROVICKY DWI PUTROHARI,
ENGAGE - with your key audience at President, INDONESIAN
ASSOCIATION OF
the exhibition and exclusive networking GEOLOGIST
evening.
MR FATRIAL BAHESTI,
Regional Exploration
Featuring a two-day Conference, Geoscientist,
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exclusive networking evening MR RIDWAN RUSLI,

Vice Chairman and CEO,
Benefit from extensive SAMUDRA ENERGY
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Take advantage of our Business COMPANY LIMITED
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participate in one-on-one meetings BAMBANG ISTADI, Chief
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To view the full speaker line up please visit our website or request an agenda:
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For further enquiries please contact:
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Eastern Africa’s Prospective Oil & Gas Frontiers

5th Eastern Africa: Strategy Briefing - 28th April 28th - 30th April 2014
62nd PetroAfricanus Dinner - 29th April Intercontinental Hotel
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50 28 February 2014

FINANCIAL
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

Seadrill BRAZIL

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 de-
mand 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 sup-
plied... it is clear that the mar-
ket is adequately supplied cur-
rently 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 Looking ahead: Petrobras chief executive Maria das Gracas Foster Photo: OTC/BARCHFIELD PHOTOGRAPHY
450 floating units in 2020. Tak-

Petrobras five-year plan

ing into account current new-
build and expected retire-
ments, 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 update targets pre-salt
UK SERVICES giant Petrofac Up to 28 new production systems on menu for sector by 2018 as
expects at best a “modest”
growth in profit this year depreciation of Brazilian real, rising debt costs and late start-ups
before an anticipated stronger
earnings performance the year on some production units undermine company’s fourth quarter results
after.
The London-listed company FABIO PALMIGIANI and
posted a 2.8% rise in net profit GARETH CHETWYND
of $650 million last year, up Rio de Janeiro
from $632 million in 2012, as
the integrated energy services
and offshore projects divisions BRAZIL’S Petrobras has unveiled of 4.2 million bpd by 2020 is the Marlim field, one at the ing short of the losses that Petro-
performed well. an updated five-year business backed by the deployment of an Carcara pre-salt find, one at the bras is taking on its compulsory
Total revenues increased plan that calls for the installation additional seven production units Maromba heavy oil field and one role as an importer of fuels.
from $6.24 billion to $6.33 bil- of up to 28 new production sys- later this decade, including the in the southern portion of the The net profit of 23.6 billion
lion, but onshore engineering tems between 2014 and 2018, the first one at the giant Libra pre-salt Parque das Baleias complex. reais for the whole of 2013 was 11%
and construction revenues majority of which will exploit pre- area. In 2019, Petrobras plans to in- higher than 2012.
were down. salt reservoirs in the Santos basin. Of the 28 units that are due to stall the first production unit at Petrobras recorded a reserves
The $220.6 billion investment produce first oil by 2018, Petrobras the Jupiter pre-salt find and the replacement rate of 131% over the
Earnings dip plan represents a 7% decrease
from the record $236.7 billion set
has already contracted 21 and is
expected to contract another sev-
fifth FPSO at the Buzios field, for-
merly known as Franco. First oil
year, with a 75% success rate on
wildcats and a 100% strike rate in
for the 2013-2017 period, but in- en shortly. from Libra is planned for 2020. the pre-salt.
for Worley vestments of $153.9 billion ear-
marked for exploration and pro-
The tender for the first such
unit — a floating production, stor-
Petrobras also reported a net
profit of 6.28 billion reais ($2.7 bil-
Petrobras chief executive Maria
das Gracas Foster mentioned in a
WORLEYPARSONS’ net earn- duction were up 4% on the age and offloading vessel with ca- lion) in the fourth quarter of 2013, positive light the late-running
ings fell 27% to A$112.1 million previous plan. pacity for 150,000 bpd to be in- down 19% from the net gain of 7.75 subsea riser projects supporting
(US$100 million) in the six After two years of stagnant oil stalled at the Tartaruga Verde and billion reais in the same period a the Cidade de Sao Paulo and
months to 31 December 2013 production in Brazil, Petrobras Tartaruga Mestica fields in the year ago. Cidade de Paraty FPSOs.
due to a contraction in activity predicts domestic output will in- Campos basin — was launched re- The depreciation of the Brazil- “These (riser buoys) are an ap-
in its hydrocarbons and miner- crease about 7.5% in 2014, as five cently. The goal is to begin output ian real, rising debt costs and late plication of new technology and
als and metals segments. production units are expected to in 2017. start-ups on production units the source of some apprehension,
The Melbourne-based com- enter operations this year. The other six still-to-be- such as the P-55, P-63 and P-58 but the technology is demonstrat-
pany said the Australian mar- Petrobras produced 1.93 million contracted units are due to start were cited as factors that under- ing its worth in the operational
ket continues to contract “due barrels per day in 2013. production in 2018 and include mined profits. phase, and this is getting better
to completion of projects”, Output is expected to increase one in the deep waters of the Net revenue increased 10% to 81 every week. We had a flow of
while there was also a “soften- by more than 1 million bpd by Espirito Santo basin, one in the billion reais in the quarter, helped 36,000 bpd from one well to the
ing activity” in Canadian oil 2018 to 3.2 million bpd. deep waters of the Sergipe-Alagoas by some government-sanctioned Cidade de Sao Paulo, and that is a
sands. A longer term production target basin, one to revitalise output at increases in fuel prices, still fall- 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 Push: hardline
members of
offset by lower the US
Congress
than expected pressed for
crude inventory fresh
sanctions
levels as situation against Iran
but the move
worsens in Libya 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 Photo: GETTY
week. IMAGES/AFP/
US light prices rose by $0.90 to SCANPIX
$102.73 per barrel in mid-day
trading on Wednesday, after fresh American Petroleum Institute es- figures were also raising ques- knocked out during an exchange
data showed lower than expected timated the increase at about tions over the outlook for the of heavy fire between rival militia

OIL PRICE
US crude inventory levels. 800,000 barrels. Chinese economy. groups.
In London, benchmark Brent Distillate inventories also Helping sustain prices was In the Persian Gulf, conflicting
crude prices increased by $0.34 to showed a small increase of bad political news from Libya, reports of an arms supply deal be-
$109.85 per barrel in late after- COMMENTARY 340,000 barrels to 113.1 million where oil production was said to tween Iran and Iraq and a US ex-
noon trading. barrels. now be as low as 230,000 barrels pression of concern to Baghdad
The premium between Brent However, gasoline inventories per day because of protests and caused some tension.
and US prices has been at its fell by 2.8 million barrels to militia action at oilfields and Hardline Congress members in
lowest since October — at about 230.6 million barrels, the agency ports. Washington took opportunity of
$7 per barrel. tories during the previous week. said. Output was 1.4 million bpd in the occasion to revive efforts to
The effects of a strong US dollar US crude stocks were up by only Putting some pressure on prices the early summer of 2013. impose fresh sanctions against
were offset by the Energy Infor- 68,000 barrels at 362.4 million were factors such as lower con- The Libyan government has in- Iran — although such new
mation Administration’s esti- barrels, the agency said. sumer confidence and an apparent stituted special measures to be legislation at a time of continued
mate, released mid-morning A Reuters poll of analysts had loss of momentum in the housing able to pay state employees but on positive talks between Iran and
Wednesday, of an unexpectedly predicted a rise of 1.2 million recovery in the US. Wednesday reported a power the big powers seemed unlikely
small increase in US crude inven- barrels, while the industry’s High Chinese corporate debt plant in southern Libya was seriously to be considered.

BRENT SPOT PRICES BRENT FORWARD PRICES OPEC BASKET

105 US$/bbl 107
111 109.80
US$/bbl
106 US$
110 100
106.55

105
95
109

90 104
108
85 103

107
6 Feb 13 Feb 20 Feb 26 Feb 102
80
One Week Ago: 110.54 One Month Ago: 107.84 One Year Ago: 113.22 1M 2M 3M 6M 9M 12M 15M 18M 21M 24M 27M 30M 33M 5 Feb 12 Feb 19 Feb 25 Feb

WTI SPOT PRICES WTI FORWARD PRICES US DEPARTMENT OF ENERGY OIL STOCK DATA
104 105 US$/bbl 21 Feb 14 Feb Net change % change
102.28
US$/bbl US Stocks ('000 bbls)
Crude Oil 362,393 362,325 68 0.02
102 100 Total Motor Gasoline 230,600 233,407 -2807 -1.20
Reformulated Gasoline 35 41 -6 -14.63
95 Inputs ('000 bbls/day)
100 Input to dist. 15,678 15,460 218 1.41
Refinery runs 15,299 15,178 121 0.80
90 US Production ('000 bbls)
98 Total Motor Gasoline 8693 8776 -83 -0.95
Reformulated Gasoline 2965 2915 50 1.72
85 Conventional Gasoline 6129 5895 234 3.97
96 Imports ('000 bbls)
5 Feb 12 Feb 20 Feb 26 Feb
80 Crude Oil (excl. SPR) 7037 7421 -384 -5.17
One Week Ago: 102.79 One Month Ago: 96.70 One Year Ago: 92.43 1M 2M 3M 6M 9M 12M 15M 18M 21M 24M 27M 30M 33M Products 1601 1656 -55 -3.32

UK DAY AHEAD NATURAL GAS PRICES HENRY HUB NATURAL GAS SPOT PRICES HENRY HUB NATURAL GAS FORWARD PRICES
62 5.0 US$/MMBtu
8

61

60
7 4.5
59

58
6 4.0
57

56 5.22
56.00
GBp/therm US$/MMBtu
55 5 3.5
6 Feb 13 Feb 20 Feb 26 Feb 4 Feb 11 Feb 19 Feb 25 Feb 1M 3M 9M 15M 21M 27M 33M 39M 45M 51M 60M

Source: Bloomberg
52
FINANCIAL 28 February 2014

MEXICO 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 260

Oceanografia in 240

220

push for grace 200

26 March 2013
*The Philadelphia Oil Service Index is a price-weighted index composed of the common
26 February 2014

stocks of: Baker Hughes, Cameron International, Global Industries, Halliburton, Lufkin,
National Oilwell Varco, Noble, Oceaneering, Rowan, Schlumberger, Smith, Tidewater,

period on bond
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

Contractor suspended from winning government 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
awards looks for debt-payment extension Oslo OBX 504.62 3.4 0.68 62,922,033 16.00
Amex Oil Index 1482.30 24.0 1.65 22,676,800 13.63
TOM DARIN LISKEY
Philadelphia Oil Service 276.88 0.8 0.30 12,233,780 15.38
Houston Source: Bloomberg

WINNERS & LOSERS THIS WEEK

MEXICAN marine contractor denies that it has acted inappro- ries on the debt extension talks. Company Exch Curr Last price Vol 5 d Mkt Cap* Ch 5 d%
Oceanografia has been working priately in its dealings with The ability to compete for Pemex PDC Energy GR EUR 61.41 1,638,116 2191.0 15.6
around the clock to clinch a short- Pemex and is fighting the sus- contracts is crucial for Oceanogra- Penn Virginia UN USD 14.90 738,251 974.0 15.4
term extension on a grace period pension. fia. Even after deregulation, the Sevan Marine NO NOK 25.90 350,462 224.6 15.1
for debt payments to investors — “The resolution published in the state oil giant will remain the larg- Camac Energy UA USD 0.65 836,540 254.3 13.5
even as it faces the threat of a Official Gazette is temporary, has est corporation in Mexico. Heritage Oil CT GBp 4.30 2060 1112.0 13.2
21-month ban from doing any not yet become final, since the law Pemex is also planning a major
business with state-run Pemex. itself provides resources that will push offshore into deeper waters Forest Oil UN USD 2.01 866,855 239.3 -37.6
The company, which tapped be brought against it,” the com- and Oceanografia is already one of Goodrich Petroleum UN USD 12.99 957,149 575.5 -15.0
capital markets late last year to pany said. the companies named as a possible Endeavour Interntional UN USD 5.17 908,127 244.0 -12.8
buy new vessels before Mexico’s “Oceanografia... delivered docu- bidder in Pemex’s upcoming $1.5 Cabot Oil UN USD 35.35 2,056,991 14,907.8 -11.8
post-reform offshore boom, has mentation to the internal control billion heavy-lift package contract. QEP Resources UN USD 28.45 436,406 5087.7 -11.4
been seeking to negotiate the of (Pemex) to ensure transparency Oceanografia took advantage of *Market Cap in million US$ Source: Bloomberg
grace period on a bond that ma- of contracts, and has always acted investor appetite for Mexican debt
tures in 2015. in each tender legally and in com- last year when it sold about $160 DOLLAR RATES
Oceanografia is one of Mexico’s pliance with the guidelines and million to raise funds to buy ves- Code Currency Last Ch 5 days % 1Yr ago Ch 1 Yr %
biggest contractors, but federal regulations of Pemex.” sels before the regulation changes ARS Argentine Peso 7.885 -1.320 5.038 -36.1
officials have suspended the com- Meanwhile, Oceanografia needs affecting the Mexican oil sector. AUD Australian Dollar 1.116 -0.467 0.978 -12.4
pany from winning new govern- to structure the grace period on Oceanografia used the Caballo BRL Brazil Real 2.347 1.981 1.982 -15.5
CAD Canadian Dollar 1.111 -0.270 1.026 -7.6
ment contracts as part of a new an estimated $335 million in Marango offshore support vessel
CHF Swiss Franc 0.893 -0.459 0.932 4.4
anti-influence peddling investi- bonds, according to sources. The and the heavy-lift OSA Goliath as CNY China Renminbi 6.124 -0.784 6.230 1.7
gation. The Mexican company company did not respond to que- security. COP Colombian Peso 2056.51 -0.350 1817.81 -11.6
DKK Danish Krone 5.462 -0.507 5.709 4.5
EUR Euro 0.732 -0.510 0.766 4.6

Gaspromneft in blocks deal AziNor sets GBP

HKD
British Pound*
Hong Kong Dollar
1.664
7.761
-0.234
-0.072
1.513
7.759
10.0
0.0
RUSSIA’S Gazpromneft has
agreed to pay for the exploration
Once reserves on the assets are
better understood and con- up UK wing ILS
INR
JPY
Israeli Shekel
Indian Rupee
Japanese Yen
3.520
61.985
102.4
-0.324
0.379
-0.049
3.731
54.095
92.0
6.0
-12.7
-10.1
of two blocks in the Tomsk region firmed, the Russian company
KZT Kazakhstan Tenge 184.900 -0.124 150.470 -18.6
— Lower Paninsky and Murom- will have the right to buy out PRIVATELY-owned AziNor Petro- KRW South Korean Won 1065.20 0.042 1088.00 2.1
sky 2 — in exchange for the right Petrogrand’s subsidiaries that leum has established a subsidiary MYR Malaysian Ringgit 3.271 0.734 3.103 -5.1
to buy them at a later stage, ac- hold exploration and develop- called AziNor Catalyst to manage NOK Norwegian Krone 6.067 0.175 5.703 -6.0
cording to licence holder Petro- ment licences. and develop its UK business. PHP Philippines Peso 44.610 0.022 40.755 -8.6
grand of Sweden, writes Vladimir The price paid by Gazpromneft Nick Terrell and Henry Morris PKR Pakistani Rupee 104.950 -0.013 98.170 -6.5
Afanasiev. to Petrogrand will be determined will run the new company, which RUB Russian Rouble 36.023 -1.022 30.678 -14.8
Work will include the shoot- by the size of confirmed hydro- has assets in the central and north- SEK Swedish Krona 6.523 -0.175 6.459 -1.0
ing of new seismic and the drill- carbon assets, the company said. ern North Sea, west of Shetland SGD Singapore Dollar 1.266 -0.205 1.239 -2.1
SKK Slovakia Koruna 22.0497 -0.513 23.0593 4.6
ing of an exploration well on Potential recoverable reserves and west of the Outer Hebrides.
THB Thai Baht 32.574 0.043 30.0 -8.5
each of the blocks in the winter of the two blocks are estimated Bermuda-registered AziNor TRY Turkish Lira 2.238 -1.037 1.807 -19.3
season of 2014-2015. at about 370 million barrels of oil Petroleum is backed by Seacrest ZAR South African Rand 10.8471 1.777 8.8183 -18.7
Petrogrand said that Gazprom- under the Russian reserve clas- Capital Group, also registered on *All currencies in USD except GBP Source: Bloomberg
neft will fully finance this work. sification system. the island.
28 February 2014
FINANCIAL 53

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.

Exchange
Exchange

Currency
Currency
Price High Low Price High Low
Company 26 Feb % change % change Avg vol Market Cap Company 26 Feb % change % change Avg vol Market Cap
2014 5 days 1 year Last 12 months 5 days Mill. USD 2014 5 days 1 year Last 12 months 5 days Mill. USD

Comstock Resources UN USD 20.39 2.5 47.1 20.61 13.57 274,404 972.29
INTEGRATED OIL & GAS COMPANIES
Continental Energy UV USD 0.04 -15.6 -29.8 0.14 0.01 64,203 3.98
BG Group LN GBp 1,104.50 1.5 -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 0.35 819,345 165.16
BP LN GBp 508.20 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
Cenovus Energy CT CAD 28.62 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
Chevron UN USD 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
ConocoPhillips UN USD 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
CPCC CG HKD 5.07 7.9 -7.6 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
Ecopetrol CX COP 3,460.00 -8.2 -33.2 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
EnCana CT CAD 20.98 -0.5 13.4 21.75 17.40 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
Eni IM EUR 17.45 0.7 2.6 19.12 15.16 10,533,600 86,652.36 Double Eagle UW USD 2.16 -0.2 -54.6 6.20 1.90 25,466 24.47
ExxonMobil UN USD 96.38 2.6 8.9 101.74 84.79 3,246,858 421,037.36 Dragon Oil LN EUR 614.50 -2.8 1.3 669.00 544.00 542,980 5,029.26
Galp Energia PL EUR 12.17 3.4 3.8 13.40 10.20 693,189 13,789.68 Drillsearch Energy AT AUD 1.59 -3.4 16.1 1.64 0.91 2,847,497 614.74
Gazprom RX RUB 143.50 -2.7 5.1 265.00 102.06 54,605,190 94,296.37 Dundee Energy CT CAD 0.29 7.4 -38.4 0.55 0.27 19,464 49.13
Hess UN USD 79.74 -1.2 23.4 85.15 61.32 3,422,555 26,919.93 Egdon Resources LN GBp 25.63 -7.7 197.1 43.38 7.75 238,602 61.74
Husky Energy CT CAD 33.45 -1.2 9.9 33.98 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
Imperial Oil CT CAD 48.99 1.1 15.7 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
KazMunaiGas E&P KZ KZT 17,100.00 -1.7 0.6 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
Lukoil RX RUB 2,009.00 -0.9 1.9 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
MOL HB HUF 13,300.00 -3.6 -22.7 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
Murphy Oil UN USD 59.48 3.3 13.7 66.19 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
Occidental UN USD 95.86 1.0 17.2 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
OMV AV EUR 34.10 3.2 3.7 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
Pakistan Petroleum PK PKR 216.90 -0.3 44.3 223.90 143.09 482,960 4,072.61 ERHC Energy UV USD 0.07 -4.3 -4.3 0.09 0.03 123,644 51.24
Pecom Energia AF ARS 5.00 -3.8 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
Petrobras BS BRL 13.16 -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
PetroChina HK HKD 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
Polish Oil & Gas PW PLN 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
Repsol SQ EUR 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
Royal Dutch Shell LN GBp 2,195.50 0.7 2.6 2,281.50 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
Sasol SJ ZAr 54,999.00 -1.8 41.9 56,067.00 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
Sinopec HK HKD 6.64 9.8 -0.7 7.20 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
SNP Petrom RE RON 0.45 -2.3 0.7 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
Statoil NO NOK 160.00 -0.6 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
Suncor UN CAD 33.07 -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
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 20.55
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 Harvest Natural Resources UN USD 4.39 -1.3 -17.0 6.07 2.46 49,522 177.40
Abraxas UR USD 3.40 3.7 70.9 3.96 1.93 809,056 315.74 Heritage Oil CT GBp 4.30 13.2 36.5 4.30 2.15 2,060 1,111.96
Afren LN GBp 157.00 4.6 11.7 170.80 118.20 2,349,615 2,871.55 Hibiscus Petroleum Berhad MK MYR 2.13 0.5 44.9 2.74 1.33 684,160 337.37
Alexander Energy CV CAD 0.65 -3.0 297.5 0.92 0.13 5,893,882 148.41 HKN UV USD 71.00 -1.4 -19.3 91.00 65.00 56 28.54
Aminex LN GBp 1.03 3.5 -74.1 5.65 0.94 13,779,820 17.29 HRT BS BRL 1.09 0.0 -69.2 4.85 0.65 3,646,860 137.09
Anadarko Petroleum UN USD 83.61 -0.1 6.4 98.47 73.66 755,989 42,083.18 Hyperdynamics UN USD 5.40 -11.6 9.2 7.00 3.01 160,342 113.65
Antares Energy AT AUD 0.47 -2.1 -6.0 0.58 0.27 340,107 107.36 Icon Oil AT AUD 0.15 -3.3 -29.3 0.23 0.13 264,432 79.98
Antrim Energy CT CAD 0.08 6.7 -83.7 0.50 0.06 344,607 13.30 Infinity Energy Resources UV USD 1.19 -0.8 -41.7 3.75 0.95 8,632 25.52
Apache Corporation UN USD 80.38 -4.4 9.2 94.84 67.91 856,209 31,822.56 Inpex JT JPY 1,296.00 -1.4 4.2 1,355.00 995.00 5,344,940 18,512.96
Apco Argentina UR USD 13.98 -3.1 9.7 17.64 8.89 10,266 422.92 International Frontier CV CAD 0.09 5.9 38.5 0.16 0.05 34,860 5.15
ARC Resources CT CAD 30.23 2.5 19.7 30.66 24.71 1,698,411 8,544.26 InterOil Corporation UN USD 57.69 8.1 -22.0 106.44 43.85 976,993 2,816.66
Arsenal Energy CT CAD 5.22 0.4 -5.1 6.60 3.74 17,648 75.55 InterOil Exploration & Prod. NO NOK 2.08 9.5 3.5 2.49 0.93 3,826,249 86.37
Atlantic Petroleum DC DKK 122.50 -4.7 -31.4 184.50 113.00 9,533 82.94 Isramco UR USD 144.50 10.3 46.0 153.00 83.15 2,418 392.71
ATP Oil & Gas UV USD 0.03 -2.3 -64.1 0.32 0.01 242,693 1.31 Ivanhoe Energy CT CAD 0.66 10.0 -67.6 2.28 0.37 74,942 68.21
Australian Worldwide Expl. AT AUD 1.43 -1.0 7.1 1.51 1.11 2,604,104 667.23 Jerusalem Oil IT ILs 15,340.00 3.6 97.9 15,550.00 7,703.00 8,840 756.06
Barnwell Industries UA USD 2.98 1.0 -11.3 3.89 2.80 600 24.67 JKX Oil & Gas LN GBp 63.00 -8.0 -3.1 81.00 48.00 101,644 180.02
Bass Strait Oil AT AUD 0.01 -28.6 -72.2 0.02 0.00 1,697,486 2.32 Karoon Gas AT AUD 3.16 1.6 -54.9 7.29 2.86 1,295,873 724.22
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 5.59
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
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 32.22
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

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54
FINANCIAL 28 February 2014

Exchange

Exchange
Currency

Currency
Price High Low Price High Low
Company 26 Feb % change % change Avg vol Market Cap Company 26 Feb % change % change Avg vol Market Cap
2014 5 days 1 year Last 12 months 5 days Mill. USD 2014 5 days 1 year Last 12 months 5 days Mill. USD
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 58,678.88
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
Oriental Petroleum PM PHP 0.02 -5.6 -19.0 0.03 0.02 31,760,000 79.89 Aker Solutions NO NOK 101.20 2.6 -9.6 115.00 78.60 463,036 4,570.66
Origin Energy AT AUD 14.58 -1.8 23.9 14.99 11.43 3,428,873 14,382.89 Amec LN GBp 1,112.00 0.5 7.2 1,210.00 961.00 1,483,945 5,515.56
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 51,992.74
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
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 6,778,200 213.54
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 Daewoo Heavy Industries KP KRW 13,150.00 8.2 -15.7 17,000.00 10,100.00 2,002,855 2,551.38
Petromin Resources CV CAD 0.03 0.0 -57.1 0.07 0.03 2,000 1.92 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
Petroquest Energy UN USD 4.54 1.8 21.7 5.10 3.55 1,212,659 292.76 Deep Sea Supply NO NOK 10.35 0.5 -3.3 12.50 8.80 130,733 217.00
Petsec Energy AT AUD 0.08 4.2 -61.5 0.20 0.07 261,200 15.53 DOF NO NOK 30.20 3.4 6.3 34.50 23.00 41,287 552.81
Philodrill PM PHP 0.04 0.0 -16.3 0.05 0.03 49,960,000 155.01 Dril-Quip UN USD 97.64 -3.1 21.7 121.00 76.49 103,216 3,973.28
Pioneer Natural Resources UN USD 193.26 2.8 55.5 227.02 109.25 284,393 26,798.92 Eidesvik Offshore NO NOK 33.80 4.0 -5.6 37.60 32.50 1,828 167.98
Premier Oil LN GBp 300.90 3.2 -20.4 405.00 267.50 1,135,101 2,647.31 Envir Group AT AUD 0.05 -22.0 9.5 0.06 0.02 15,162 6.68
PrimeEnergy UR USD 54.65 5.7 103.7 55.89 26.35 345 131.48 EOC Limited NO NOK 5.15 -2.5 43.5 7.49 2.62 243,526 94.19
ProAm Exploration CV CAD 0.01 0.0 -50.0 0.03 0.01 0 0.13 Ezra Holdings SP SGD 1.05 -1.4 -6.7 1.51 0.82 2,424,200 811.76
PT Energi Mega Persada IJ IDR 92.00 -1.1 -9.8 146.00 62.00 288,822,900 353.15 Farstad Shipping NO NOK 131.00 -1.5 -3.7 141.00 116.00 772 842.14
PTT Expl. & Prod. TB THB 151.50 -1.3 -2.9 174.00 141.00 5,547,020 18,461.93 Fluor UN USD 78.78 -1.8 28.4 83.93 53.50 2,107,004 12,632.18
QEP Resources UN USD 28.40 -11.4 -5.6 34.23 25.95 436,406 5,087.66 FMC Technologies UN USD 50.37 -0.3 -1.1 59.79 47.58 451,998 11,887.92
Queiroz Galvao Exploracao BS BRL 8.43 3.6 -32.0 13.06 7.81 870,160 954.53 Foster Wheeler UW USD 32.01 0.4 35.6 33.08 19.29 1,688,229 3,152.52
Questerre Energy CT CAD 1.25 0.0 58.2 1.58 0.70 51,665 297.77 Goodtech NO NOK 16.30 -4.7 8.7 19.50 14.60 8,381 87.40
Quicksilver Resources UN USD 3.30 -5.2 80.3 3.67 1.44 708,833 584.48 Great Offshore IS INR 63.65 -3.9 -12.9 81.50 34.00 64,875 38.15
Quoram LN GBp 0.13 0.0 -76.2 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
Range Resources UN USD 85.35 -2.4 19.7 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
Reliance Industries IS INR 810.55 -0.2 -1.6 927.90 765.00 164,335 42,162.12 Halliburton UN USD 55.51 1.8 37.1 57.01 36.77 2,161,159 47,231.62
Resource America UW USD 9.55 5.6 6.7 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
Rio Bravo Oil UU USD 0.99 0.0 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
Roc Oil AT AUD 0.48 -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
Rockhopper Exploration LN GBp 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
Rocksource NO NOK 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
Rosneft Oil RX RUB 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
Royale Energy UR USD 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
RWE GF EUR 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
Santos AT AUD 13.90 -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
Senex Energy AT AUD 0.77 0.0 20.3 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
Serica Energy LN GBp 12.00 -6.8 -57.8 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
Sinophil PM PHP 0.30 0.0 -6.2 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
Soco International LN GBp 447.80 1.4 35.0 448.00 309.91 184,316 2,472.61 Lamprell LN GBp 140.00 -0.9 6.3 183.00 119.50 278,184 606.54
Softrock Minerals CV CAD 0.02 -20.0 -20.0 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
Sonde Resources CV CAD 0.60 0.0 -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
South Sea Petroleum HK HKD 0.06 0.0 -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
Southwestern Energy UN USD 42.35 -1.2 26.7 44.40 32.86 826,048 14,896.72 Matrix Composites & Eng. AT AUD 1.22 4.3 -30.7 1.77 0.60 306,544 103.34
St Mary Land UN USD 72.00 -3.1 24.3 94.00 54.95 3,666,774 4,828.24 Matrix Service UW USD 32.15 0.7 108.2 33.20 12.53 66,725 846.87
Serinus Energy CT CAD 3.62 1.1 - 4.97 2.65 17,504 256.14 McDermott International UN USD 8.54 -0.2 -31.8 13.06 6.68 607,877 2,020.43
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 2.61 763,791 880.80
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 Oceaneering International UN USD 70.76 -1.4 15.2 87.64 58.08 330,851 7,656.05
Tri-Valley UV USD 0.01 116.7 225.0 0.03 0.00 31,186 0.44 Oil States International UN USD 92.59 -7.8 22.3 113.64 71.36 1,134,651 4,937.21
Tudor Corporation CV CAD 0.01 0.0 -50.0 0.03 0.01 0 0.14 OMZ Uralmash-Izhora RX RUB 39.57 0.0 18.8 54.24 25.00 0 318.63
TUI GY EUR 12.95 -3.0 67.4 14.02 7.45 38,341 4,467.61 Petrofac LN GBp 1,352.00 1.8 -15.2 1,607.00 1,080.00 1,460,429 7,794.08
Tullow Oil LN GBp 768.50 -1.0 -35.5 1,270.00 736.00 3,281,144 11,636.60 PHI UW USD 39.50 5.0 25.8 40.57 23.43 473 613.22
Tuscany Energy CV CAD 0.39 -1.3 -11.4 0.60 0.20 1,468 6.79 ProSafe NO NOK 43.15 2.1 -24.3 61.70 41.05 454,606 1,678.38
Ultra Petroleum UN USD 23.84 -4.6 38.3 26.05 15.95 7,134,100 3,648.81 RPC UN USD 18.60 0.1 18.2 19.76 12.42 165,643 4,074.14
Unit Corporation UN USD 60.82 12.1 37.4 61.00 40.51 77,145 2,994.34 Saipem IM EUR 16.67 1.7 -18.2 24.87 12.13 4,758,426 10,054.09
Urals Energy LN GBp 7.00 0.0 21.7 11.25 3.93 202,717 29.41 Samsung Heavy Ind. KP KRW 34,300.00 0.3 -10.3 45,800.00 29,800.00 802,282 7,406.22
W&T Offshore UN USD 15.20 1.3 -1.1 19.88 10.39 892,819 1,144.21 SBM Offshore NA EUR 11.29 1.2 8.6 16.18 10.06 1,934,940 3,220.27
Wentworth Resources NO NOK 4.80 -2.0 13.2 6.13 3.69 112,492 121.74 Schlumberger UN USD 93.09 2.9 22.0 94.91 69.08 1,621,500 121,725.53
Wessex Exploration LN GBp 0.43 -2.3 -89.4 4.40 0.30 975,735 5.18 Scomi Group MK MYR 0.44 -7.4 41.9 0.50 0.31 29,194,440 208.47
Westmount Energy LN GBp 19.50 0.0 -22.0 25.00 13.00 1,321 3.16 Seacor UN USD 87.28 2.3 25.4 99.00 67.76 139,980 1,774.57
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 4.63 3.90 3,659,200 6,638.61
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 28.60 16.50 350,462 224.59
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 36.95 193,141 2,349.89
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 16.58 11.38 206,859 441.85
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 8.2 866.00 665.00 84,080 363.72
Siem Offshore NO NOK 9.38 -4.3 19.6 10.50 7.01 99,989 602.06
OILFIELD SERVICES, ENGINEERING & CONSTRUCTION
SNC-Lavalin CT CAD 48.78 3.2 3.4 49.87 39.47 981,192 6,665.28
Aban Offshore IS INR 503.45 -2.4 73.1 549.85 188.25 1,535,070 352.64 Solstad Offshore NO NOK 113.00 -0.9 8.7 124.00 90.00 2,743 720.60
28 February 2014
FINANCIAL 55

Exchange

Exchange
Currency

Currency
Price High Low Price
26 Feb % change
High Low
Company % change Avg vol Market Cap Company 26 Feb % change % change Avg vol Market Cap
2014 5 days 1 year Last 12 months 5 days Mill. USD 2014 5 days 1 year Last 12 months 5 days Mill. USD

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 Showa Shell JT JPY 1,025.00 5.6 51.9 1,150.00 633.00 2,283,780 3,773.29
TTS Marine NO NOK 6.35 -2.0 -29.4 9.25 5.71 36,067 90.65 Siam United Services TB THB 3.06 -5.0 -15.9 7.40 2.66 6,323,100 103.32
Wah Seong MK MYR 1.98 0.0 20.4 2.17 1.58 553,380 464.48 South Indupa AF ARS 2.66 -7.0 62.2 6.66 1.40 159,918 139.77
Weatherford International UN USD 16.02 7.2 34.3 17.38 11.11 1,338,568 12,354.35 South Jersey Ind. UN USD 55.78 1.8 2.4 62.27 51.83 29,457 1,796.51
Willbros Group UN USD 8.93 4.7 32.3 10.45 6.13 39,189 444.53 Syntroleum UR USD 3.93 1.0 -8.6 7.74 2.40 25,430 39.17
Wilson Sons BS BRL 25.55 -2.9 -9.7 33.00 21.72 47,020 774.33 Tamilnadu Petro. IS INR 10.18 1.8 -7.5 12.70 7.00 25,570 14.74
Wood Group LN GBp 774.00 6.5 0.2 927.00 610.00 1,230,532 4,824.49 Tesoro Petroleum UN USD 52.60 4.6 -3.1 65.75 40.91 416,761 6,931.37
WorleyParsons AT AUD 17.13 10.4 -34.5 26.72 15.08 1,180,936 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
RIG AND SEISMIC COMPANIES
Transportadora d Gas UN ARS 2.09 -4.1 20.2 2.93 1.52 13,223 333.69
Akita Drilling CT CAD 14.73 -3.2 36.0 16.61 10.55 8,655 242.94 Tupras TI TRY 38.60 0.5 -23.2 56.25 35.50 702,327 4,317.38
Atwood Oceanics UN USD 47.46 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
CGG FP EUR 12.12 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
Dawson Geophysical UW USD 29.50 -0.4 -2.6 40.67 27.18 19,884 237.86 Williams Companies UN USD 41.09 1.5 21.7 42.46 31.25 1,532,599 28,095.74
Delek Drilling IT ILs 1,852.00 1.6 25.2 1,991.00 1,423.00 311,639 2,877.63
Diamond Offshore
EMGS
UN
NO
USD
NOK
47.69
7.31
-0.1
0.1
-28.2
-25.6
70.36
11.15
44.53
6.39
428,424
344,019
6,631.30
240.67
BAKER HUGHES NORTH AMERICAN
Ensco International UN USD 52.93 2.4 -10.6 64.14 48.25 666,960 12,361.26 ROTARY RIG COUNT
Ensign Energy Services CT CAD 17.35 0.1 1.9 18.44 15.19 174,802 2,394.79 Jan 3 Jan 10 Jan 17 Jan 24 Jan 31 Jan Avg Feb 7 14 Feb 21 Feb Feb Avg
Entek Energy AT AUD 0.04 0.0 -45.3 0.06 0.03 788,592 16.01 Alabama-land 4 5 4 5 5 5 5 5 5 5
Alabama-inland water 0 0 0 0 0 0 0 0 0 0
Eurasia Drilling-GDR LN USD 28.35 9.5 -27.2 46.50 25.41 798,998 4,161.42
Alabama-offshore 0 0 0 0 0 0 0 0 0 0
Fred. Olsen Energy NO NOK 198.40 2.1 -17.6 300.40 190.80 174,108 2,181.11
Total Alabama 4 5 4 5 5 5 5 5 5 5
Fugro NA EUR 42.80 5.0 20.3 49.72 35.11 388,969 4,945.96 Alaska-land 11 10 11 11 12 11 11 11 14 12
Geospace Technologies UW USD 73.57 -0.3 -24.0 113.11 65.31 155,612 966.30 Alaska-offshore 0 0 0 0 0 0 0 0 0 0
Grand Gulf Energy AT AUD 0.01 0.0 -26.7 0.02 0.00 126,148 7.37 Total Alaska 11 10 11 11 12 11 11 11 14 12
Greencastle Resources CV CAD 0.07 0.0 -18.8 0.09 0.05 24,000 2.70 Arizona 0 0 0 0 0 0 0 0 0 0
Arkansas 11 11 12 12 12 12 12 12 12 12
Helmerich Payne UN USD 97.49 3.8 51.0 97.90 55.79 271,722 10,483.56
California-land 32 32 32 31 31 32 31 34 34 33
Hercules Offshore UW USD 4.78 1.5 -28.0 7.96 4.38 5,146,901 763.60
California-offshore 2 2 2 0 0 1 0 2 2 1
ION Geophysical UN USD 4.13 -1.2 -35.4 7.25 2.81 502,454 676.24 Total California 34 34 34 31 31 33 31 36 36 34
Major Drilling CT CAD 8.69 -1.1 -4.1 9.37 6.41 270,690 619.18 Colorado 65 59 61 62 62 62 62 60 60 61
Nabors Industries UN USD 22.56 6.7 42.6 22.96 14.34 11,387,644 6,658.95 Florida-land 1 1 1 0 0 1 0 0 0 0
Neon Energy AT AUD 0.03 -16.7 -88.2 0.43 0.03 7,208,372 14.86 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
Noble Drilling UN USD 31.26 0.2 -13.5 42.33 30.04 732,524 7,918.98
Total Florida 3 3 3 2 2 3 0 0 1 0
Northern Offshore NO NOK 9.45 -4.1 -9.6 10.75 8.11 94,935 254.90
Georgia 0 0 0 0 0 0 0 0 0 0
UN USD 10.62 1.1 13.0 12.24 8.90 69,997 2,230.20 Hawaii 0 0 0 0 0 0 0 0 0 0
Parker Drilling UN USD 7.89 4.7 64.4 8.67 3.75 253,903 954.32 Idaho 0 1 1 1 1 1 1 1 1 1
Patterson-UTI Energy UW USD 30.10 2.4 30.8 30.66 18.83 672,861 4,339.97 Illinois 3 3 1 1 1 2 1 0 1 1
Petroleum Geo-Services NO NOK 64.90 3.0 -30.4 95.25 61.75 1,132,050 2,329.97 Indiana 1 1 2 2 3 2 3 2 2 2
Kansas 29 30 29 31 30 30 32 33 32 32
Petrolia Drilling NO NOK 8.09 5.5 47.1 9.95 5.25 14,128 36.32
Kentucky 5 5 5 4 4 5 3 3 4 3
Pioneer Drilling UN USD 10.68 6.9 26.1 10.73 6.46 954,742 667.90
N Louisiana-land 25 25 24 24 25 25 25 23 23 24
Precision Drilling UN CAD 10.77 0.1 31.1 11.21 7.29 2,485,986 2,980.30
S Louisiana-inland water 20 20 20 20 20 20 21 18 18 19
Rompetroll Well Services RE RON 0.51 -2.1 32.5 0.54 0.35 34,300 42.92 S Louisiana-land 12 14 15 15 16 14 13 16 13 14
Rowan Co. UN USD 32.54 1.2 -4.3 38.64 30.22 345,449 4,040.17 S Louisiana-offshore 55 51 51 52 53 52 52 50 51 51
SeaBird Exploration NO NOK 1.63 11.6 -81.7 10.15 1.30 693,433 16.28 Total Louisiana 112 110 110 111 114 111 111 107 105 108

Seadrill NO NOK 212.70 -2.7 2.8 289.40 201.10 2,096,015 16,452.05 Maryland 0 0 0 0 0 0 0 0 0 0
Michigan 0 0 0 0 0 0 0 0 0 0
Songa Offshore NO NOK 2.97 6.8 -30.5 6.02 2.49 5,094,344 427.83
Mississippi 7 7 13 13 13 11 8 9 12 10
Spectrum NO NOK 35.00 -1.1 -31.0 66.00 30.40 7,756 242.96
Montana 10 10 9 9 9 9 8 8 8 8
TGS NO NOK 183.30 6.3 -14.7 231.00 138.90 433,432 3,127.82 Nebraska 2 2 2 2 2 2 2 2 2 2
Thalassa Holdings LN GBp 310.00 9.7 330.6 317.00 72.00 92,202 129.26 Nevada 0 2 2 2 2 2 2 2 2 2
Transocean UN USD 43.53 1.7 -15.1 55.79 41.45 930,787 15,692.90 New Mexico 79 81 77 79 80 79 80 83 81 81
Trinidad Drilling CT CAD 10.94 2.1 62.1 11.10 6.46 288,060 1,360.10 New York 0 0 0 0 0 0 0 0 0 0
N Dakota 174 168 168 169 169 170 168 168 166 167
Vantage Drilling UA USD 1.71 -0.6 3.6 2.06 1.55 2,137,758 519.23
Ohio 35 35 36 36 38 36 39 40 39 39
Oklahoma 169 183 186 187 185 182 185 182 181 183
PIPELINE AND DOWNSTREAM COMPANIES
Oregon 0 0 0 0 0 0 0 0 0 0
Adams Resources UA USD 72.36 8.2 81.1 73.21 38.65 1,744 305.19 Pennsylvania 56 55 56 55 55 55 54 53 54 54
Ashland UN USD 94.77 -0.1 25.4 100.84 72.11 190,068 7,373.63 S Dakota 1 1 1 1 1 1 1 0 0 0
Bharat Petroleum IS INR 377.75 7.4 0.6 428.45 256.00 69,332 4,396.52 Tennessee 0 0 0 0 0 0 0 0 0 0
Texas-offshore 2 2 2 2 2 2 2 2 3 2
Buckeye Partners UN USD 73.29 -0.2 35.6 75.80 53.50 76,766 9,054.33
Texas-inland water 0 0 0 0 0 0 0 0 0 0
Caltex Australia AT AUD 21.15 5.1 16.3 23.77 16.80 633,812 5,115.47
District 1 136 135 136 132 130 134 131 131 136 133
Centrica LN GBp 319.60 1.8 -8.5 403.20 302.50 15,775,760 27,014.18 District 2 81 84 83 81 78 81 79 81 73 78
Chennai Petroleum IS INR 58.00 -2.7 -54.9 130.05 52.00 22,029 139.02 District 3 54 53 57 57 60 56 58 57 58 58
Cosmo Oil JT JPY 194.00 -3.5 -7.6 248.00 165.00 3,610,600 1,606.47 District 4 34 26 27 29 32 30 33 30 33 32
Dialog Group MK MYR 3.31 -1.8 40.9 3.60 2.30 3,806,680 2,452.21 District 5 7 7 8 7 7 7 7 7 8 7
District 6 30 29 31 31 29 30 31 30 31 31
DuPont UN USD 65.45 1.9 39.4 65.68 46.48 1,111,915 60,737.63
District 7b 12 15 10 14 15 13 14 12 12 13
Dynegy UN USD 23.19 5.6 16.1 25.16 18.11 110,193 2,320.30
District 7c 81 83 82 77 80 81 78 82 84 81
Enbridge CT CAD 47.27 -0.4 5.4 49.17 41.74 1,176,807 35,361.32 District 8 271 267 280 285 283 277 290 286 289 288
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
Total Texas 832 825 841 839 842 836 845 840 846 844
Fuchs Petrolub GY EUR 62.79 1.5 16.6 63.10 48.92 1,015 6,528.69
Utah 23 25 26 26 26 25 26 26 26 26
Fuji Kosan JT JPY 687.00 -1.2 24.6 753.00 521.00 23,260 58.68
Virginia 0 0 0 0 0 0 0 0 0 0
General Sekiyu JT JPY 909.00 1.0 0.6 1,099.00 835.00 1,491,200 5,018.56
Washington 0 0 0 0 0 0 0 0 0 0
Genesis Energy UN USD 51.85 -1.8 16.8 56.80 43.62 326,606 4,611.93 W Virginia 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 53 54 53 53 53 53 52 51 51 51
IRPC TB THB 3.34 0.0 -22.0 4.34 2.94 14,386,080 2,095.00 Total United States 1751 1754 1777 1777 1785 1769 1771 1764 1771 1769

Kinder Morgan UN USD 75.38 -3.8 -12.9 92.97 73.26 1,031,060 33,960.71 Canada-land 281 476 564 590 608 504 619 624 632 625
Canada-offshore 1 1 1 0 0 1 2 0 0 1
Manali Petrochem. IS INR 7.61 -0.4 -12.4 9.80 5.74 18,489 21.07
Total Canada 282 477 565 590 608 504 621 624 632 626
Metrogas AF ARS 1.28 -5.2 90.2 1.82 0.64 28,428 92.40
Grand total 2033 2231 2342 2367 2393 2273 2392 2388 2403 2394
National Fuel Gas UN USD 75.71 0.2 32.7 77.04 56.32 70,795 6,342.34 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 busi-
ness for Portugal’s Galp Energia
has high achievement running
and learned much about inter-
national literature.
Recalling those years, he says:
“I was equally good at languages
and science. I liked anthropol-
ogy but I was always interested
in geology and hiking. I loved
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.
in the family. His father was an the outdoors. I also wanted Whyte returned with Shell to
accomplished rugby player and enough money (from my career) the UK as team leader for the Auk
athlete, winning 13 caps for to enjoy life outside work.” field but left at 29 to work for
Scotland in the 1960s and repre- As a result, Whyte opted to Clyde Petroleum — independ-
senting Great Britain in the long study geophysics, with geology ently and then under the wing of
jump. as a secondary subject, and re-
And aside from his achieve-
ments in the industry, Whyte
turned home to take a four-year
course at Edinburgh University.
I have a clear
junior has coxed a rescue boat, It was in the Scottish capital view of the future.
become fluent in Portuguese that his athletic talent came to
and Dutch, studied the equiva- the fore, clearly inherited from I care about people
lent of A-level physics in French
— and beat his dad’s long jump
his father David.
Whyte senior’s prowess at the but I am also fairly
record. long jump won him a Great Brit- demanding.
Born in Perth, Scotland, to ain athletics vest when aged
parents who were both teach- only 18.
ers, Stephen Whyte wasted no His personal best long jump Gulf Canada and Conoco — as senior vice
time in expanding his horizons distance was 7.25 metres, says non-operated asset manager, ex- president of
He left Scotland aged 16 for his son. And as for the rugby... ploration manager and commer- Europe &
Vancouver Island, Canada, after A check of the archives finds cial director. Central Asia
securing a scholarship to attend that David Whyte was capped 13 He spent six years in the before heading
Pearson College, one of a dozen times on the wing between 1965 Netherlands with his team, to Lisbon and
or so United World Colleges and 1967. making about 10 discoveries and Galp in April
(UWC) in places as far-flung as He played with the great Scot- tripling reserves. 2012 to take up
Wales, Swaziland, Venezuela tish flanker Jim Telfer and With Conoco selling its Dutch his current posi-
and India. against rugby legends such as business to Wintershall, Whyte tion.
Wales’ Barry John, Willie John felt he wanted a bigger chal- Whyte lives
Idealistic The aim of UWC, McBride of Ireland and Austral- lenge. with his wife and
formed in the 1960s and which ia’s Ken Catchpole. He returned to Shell and two-year-old child in
follows the International Bac- Stephen Whyte did not play quickly became development Cascais, a beautiful
calaureate, is to “make educa- rugby until he got to university, manager for the central North coastal town about 30
tion a force to unite people, na- where he also took part in ath- Sea before the supermajor under- kilometres west of Lisbon.
tions and cultures for peace and letics, quipping that “I long- went its huge upstream Europe “I had been to Lisbon once
a sustainable future”. jumped farther than my father”. re-organisation in 2002-2003. before, in 2006, for a golfing holi-
To achieve this goal, each col- He became Scottish Universities day with a mate and I did not
lege accepts about 200 to 300 champion in this event. Adding value The Scot eventually know what Galp was,” he reflects.
students from about 85 coun- While he out-jumped his illus- became joint venture infrastruc- Now settled in to the way of
tries. trious dad, Whyte did not reach ture manager for Europe, respon- life, he describes Portugal as
Whyte recalls his two years at his father’s heights at rugby, sible for eight countries and 50 “gorgeous, with friendly people.
Pearson as “very interesting, although he points out that he people and adding $1 billion in I love people and living in differ-
heady and idealistic days”. did play for a Middle East team value during his time there. ent countries — if you speak the
This was where he against the Netherlands and Whyte’s next step was to a language you get a level or two
became cox- Kenya. more exotic clime, being ap- deeper into the culture”.
swain of an While studying in Edinburgh, pointed Shell’s country manager Asked what he is like to work
inshore res- Whyte did summer jobs with in Brazil just when the pre-salt with, Whyte thinks carefully: “I
cue boat, Western Geophysical and Shell, play was opening up. like the professional challenge
studied eventually joining the super- There, he was responsible for of helping other people be suc-
physics major in the Netherlands after 400 staff, two floating produc- cessful.
in French completing his degree. tion, storage and offloading ves- “I engage people within my
(his moth- “I worked offshore as well site sels, and production of about team, excite them about the
er was a petroleum engineer, and in 1989 80,000 barrels per day. journey we are on and get them
French to 1990 I was involved in map- He also became a director of to invest in steps to improve
teacher) ping the Groningen gas field as the Brazilian Petroleum Institute the business.
part of a unitisation agreement and picked up another language. “I have a very clear view
Mission: Galp’s
with Germany,” he says. “It was an exciting time,” he says. of the future. I care about
Stephen Whyte
Highlighting his linguistic Whyte left Shell and returned people but I am also
Photos: GALP
talents, he became fluent in to the UK to join BG Group as fairly demanding.”