Energy

BP plans £7bn debt issue to ward off a Middle East sale

BP is drawing up plans to issue up to £7bn of debt as an alternative to selling a stake to a Middle Eastern sovereign wealth fund. The oil giant has been beset by rumors that state-backed funds from Libya, Qatar or Kuwait are seeking a stake, amid suggestions that BP is casting around for an investment partner to help stave off a hostile takeover bid. But a BP source said the most likely means of raising funds would be to issue debt, which would bolster the beleaguered group's finances. The source said BP's bankers would begin working on a bond issue - thought to be in the region of £6.6bn - with a view to seeking debt investors after the group's second quarter results are released on July 27. BP (up 11.3p to 333.3p) is also planning to announce an asset sale of up to £7bn within the next few weeks, the source said. The oil major's 60pc stake in Latin American group Pan American is thought to be on the block. The holding has a value of close to the £7bn that BP is seeking to raise through disposals.

Hyundai E&C wins US$1.13bn order from Kuwait

Hyundai Engineering & Construction said it had won a port construction order worth US$1.13 billion from Kuwait's Ministry of Public Works. Hyundai said in a statement the order was part of a larger project that could draw additional investments worth US$20.4 billion. Shares in Hyundai E&C were up 1.91 percent, versus the broader market's 1.32 percent rise in early July.

Saudi's PetroRabigh in petchem plant deal

Saudi Arabia-based PetroRabigh will supply petrochemical feedstock for a new plant Saudi Advanced Industries Company (SAIC) and Tasnee are building. PetroRabigh is controlled by Japan's Sumitomo Chemical and state oil giant Saudi Aramco. It is to provide 100,000 metric tons annually of feedstock for the production of 120,000 metric tons of polyether polyols, used in making polyurethanes, PetroRabigh said in a statement on the Saudi bourse website. It did not give a value for the deal. The project, scheduled to begin production in the fourth quarter of 2013, is expected to cost between SAR375 million (US$100 million) and 400 million and will be located in Rabigh, on the Red Sea coast of Saudi Arabia, the statement said. Polyurethane is used in the construction, automotive, appliance and furniture industries.

Jordan: Peaceful power

Jordan is moving forward with plans to develop a civil nuclear program seen as important to meeting the country's energy needs and reducing the reliance on imported fuel. For a country that has to import almost all of its energy needs, leaving its economy susceptible to bouts of global market instability and price fluctuations, nuclear energy is a logical solution to Jordan's burgeoning electricity requirements. With electricity consumption projected to almost double by 2020, the need to boost generation capacity is becoming acute. Amman is looking at importing liquefied natural gas from Qatar and ramping up imports of gas and oil from other regional sources, such as Egypt and Iraq. Jordan would also like to develop an independent energy option. The push to develop a nuclear energy capability was given further impetus in 2007 when it was confirmed the country had substantial reserves of uranium – at least 65,000 tons, more than enough to fuel its own ambitions and allow for exports. As a result, Amman has set out plans to have a fully operational nuclear power facility by 2020, with a generation capacity of 1000 MW, which would meet around 20% of the country's estimated electricity demand at that time. Looking forward, Jordan is considering deploying additional nuclear generation capacity to raise atomic energy's contribution to the mix to 30% by 2030. (Source: OBG)

Chinese oil giant, BP start operating largest Iraqi oilfield

China National Petroleum Corp. (CNPC), China's largest oil company, and British oil company BP PLC (BP) have taken over operation and management of Iraq's largest oilfield, Rumaila, in a 20-year agreement, CNPC said in a statement. CNPC and BP aim to increase output at the Rumaila oilfield 10 per cent to 1.17 million barrels per day by the end of the year, the statement posted on the CNPC website said. Located in southeastern Iraq, the Rumaila oil field has proven reserves of 17.7 billion barrels.

Kuwait relying on renewable energy

Kuwait's dependence on the renewable energy in generating power and seawater desalination would preserve its oil resources as the major source of national income, besides being an environmentally friendly energy, Kuwait Institute for Scientific Research (KISR) said. Researcher at the KISR, Walid Khalid Nasaar, said that he conducted a study on the above-mentioned topic and that the KISR currently designs and implements comprehensive engineering solutions to seawater desalination with the use of renewable energy resources like wind as well as constructing an experimental station in Qabad area. He pointed out that the project would start with deriving renewable energy from wind and solar power in order to produce electricity, then operating water pumps that extract subterranean water from 120 meters under the sea along with using the same source for operating a small seawater desalination station depending on the reverse osmosis technique. Al-Nasaar, a member of the research team who conduct this study, said that early July saw the installation of air turbines in Qabad area in order to embark upon the experiment and there is another unit of reverse osmosis that would be added later on following equipping and operating the solar panels.

Iraq wants oil companies to develop 11 fields

Iraq's oil minister is calling on international oil companies that won contracts to develop 11 oil and gas fields to show they are able to meet their obligations. Hussain al-Shahristani also stressed that the oil companies will have Iraq's full backing in overcoming the numerous obstacles they will face as they develop the fields to which they won rights during two earlier oil licensing rounds. Al-Shahristani told international oil company representatives at a conference that implementing the contracts on time and under budget was the country's "highest national priority." The minister has said he wants to raise output from 2.5 million barrels per day to 12 million barrels per day in six years.

Kuwait approves new oil law

A Kuwait parliamentary committee approved a change to the law governing the country's top oil authority mandating that the Supreme Petroleum Council (SPC) meet more often. The parliamentary committee for financial and economic affairs met with Oil Minister Sheikh Ahmad al-Sabah and unanimously agreed that the SPC should meet at least six times a year, rather than four. The amendment means the authority, chaired by the prime minister, will also be able to appoint experts and consultants. The 17-member SPC is now reviewing plans for the long-delayed Al-Zour refinery. The council first approved the project in 2004, but bids were double the budgeted amount. The SPC approved new plans in 2008, but parliament blocked the subsequent contracts because Kuwait National Oil Co. circumvented the central tendering authority.

Saudi firm eyes oil, gas investments in Iraq, Qatar

Saudi industrialization and energy services company Taqa is considering investing US$1.6 billion in pipelines and US$133 million in offshore platforms in Qatar and Iraq, an Arabic newspaper said. Officials from Taqa told the Saudi-owned daily Asharq al-Awsat they were considering investing in the gas industry in Qatar and the oil industry in Iraq by building platforms and pipelines for companies already working in the two countries. Taqa, 40 percent owned by the Saudi government, said it has already invested 500 million riyals (US$133.3 million) in offshore oil and gas platforms in Saudi Arabia. Officials said interest has increased since one of the company's main partners, the Italian oilfields services company Saipem, won a US$10 billion contract to develop fields in southern Iraq.

BG Egypt to invest US$2bn on offshore pipeline, wells

BG Group's Egyptian subsidiary said it would invest US$2 billion to install a pipeline and drill new wells off Egypt's Mediterranean coast to help meet the country's growing demand for gas. BG Egypt, the country's largest natural gas producer, said it expected the new offshore pipeline, its third in the West Delta concession, to be operational by the end of this year and would enable the firm to maintain its current production levels. The firm will also drill nine wells in West Delta, which will be operational by late 2011, BG Egypt President Arshad Sufi said. "Gas demand in Egypt is going up, and increased demand helps promote exploration," Sufi told reporters. BG Group was one of six firms that won offshore oil and gas blocks in the Mediterranean in February. Egypt's proven natural gas reserves were 77.2 trillion cubic feet in its 2008/09 fiscal year, according to the oil ministry. BG Egypt says its production accounts for 35 to 40 percent of the country's gas output, which the ministry said was 2.33 trillion cubic feet in 2008/09. Just over 37 percent of Egypt's total production is exported.

Bahrain-Iran to sign gas export deal soon

Iran will soon sign a deal on exporting gas to Bahrain and the kingdom will invest in South Pars natural gasfield, Iran's foreign minister said in comments. "According to agreements, Bahrain will invest in South Pars phases and Iran will take part in Bahrain's refining and petrochemical industries, and finally Iran's gas will be exported to Bahrain," Iran's oil ministry website Shana quoted Foreign Minister Manouchehr Mottaki as saying. South Pars is on the Iranian side of the world's largest known gas reserves not associated with oil production. The reserves in the Gulf waterway are shared with Qatar. The Iranian section is divided into 24 phases and Iran is hoping to generate huge income from development. "Mottaki said Bahrain's oil and gas minister will visit Tehran soon and an agreement will be signed," the website said. Bahrain signed a preliminary agreement with Iran in 2008 to import one billion cubic feet of natural gas per day (bcfd). Bahrain suspended gas talks in February last year for several months after an Iranian official reportedly made comments that appeared to question the kingdom's sovereignty. Bahraini media reported in October last year that the talks would be resumed and Iranian and Bahraini officials met to discuss the deal in April. Iran has the world's second largest gas reserves but has struggled to develop its oil and gas sector as Western firms steer clear because of UN and US sanctions over Tehran's nuclear energy program.

Dubai's ENOC enters Kenyan market with Galana

Dubai's government-owned refiner Emirates National Oil Co (ENOC) signed an agreement with Galana Oil Kenya to enter the Kenyan market, a local newspaper said. Galana Oil Kenya will begin to distribute ENOC oil products, including automobile, industrial engine, and hydraulic oil, the Arabic daily Al Bayan said. "Our expansion step in the Kenyan market is part of a long term strategic framework to spread and increase distribution of our products inside and outside of Africa," ENOC Group's Chief Executive Officer Saeed Abdullah Khoory told the newspaper. Galana Oil Kenya has a chain of retail gasoline stations in Kenya.