Energy

Al Jaber wins Zadco deal for oilfield work

Abu Dhabi's Zakum Development Company (Zadco) has awarded a contract to Al Jaber Energy Services, a member of Al Jaber Group, for early civil work at the offshore Upper Zakum oilfield, a statement said. The company could not reveal the value of the deal. Zadco is a venture of state-owned Abu Dhabi National Oil Company (ADNOC), US oil major ExxonMobil and the Japan Oil Development Company. Al Jaber Energy Services is an engineering, procurement and construction contractor with expertise in civil, mechanical, electrical, instrumentation and pipeline work and dedicated to oil and gas, petrochemical, pipelines, water, power and the industrial and infrastructure sector. "Al Jaber has already received a letter of award and scope covers enabling works, civil works and other miscellaneous works at four artificial islands under construction. The duration of the project is 36 months," a spokesperson said. Source: Gulf News

Baker Hughes to bring state-of-the-art fracturing, stimulation vessel to North Sea in 2013

Baker Hughes Incorporated (BHI--NYSE) announced that its subsidiary has chartered a new state-of-the-art pressure pumping vessel that will provide offshore stimulation services to Maersk Oil in the North Sea. Upon completion, scheduled for late 2013, the Blue Orca(TM) will become the eighth vessel in the Baker Hughes fleet. "We are pleased to be working with Maersk Oil as we expand our current fleet into the North Sea," said Art Soucy, Baker Hughes' President of Global Products & Services. "Our full cadre of world-class stimulation vessels offers customers the capacity, performance and redundancy for round-the-clock operations that are needed in today's offshore plays. We are committed to operating safely and efficiently while continuing to build on our pressure pumping market leadership and the challenging offshore environments where operators need us to be." The Blue Orca will be rated to 15,000 psi and will offer among the largest fluid and proppant carrying capacities in the world. It will provide 15,000 hydraulic horsepower pumping capacity and the ability to pump at rates well in excess of 60 bpm. Engineering work on the marine and stimulation systems has already begun. "Stimulation of long horizontal wells is one of Maersk Oil's key technologies and vital for economic development of our tight chalk reservoirs," said Mary Van Domelen, Maersk Oil's Stimulation Team Leader. "We appreciate the opportunity to work with Baker Hughes to deliver a new state-of-the-art stimulation vessel and look forward to welcoming the Blue Orca to the North Sea." The Blue Orca will join Baker Hughes' other stimulation vessels - including the company's newest additions to the Gulf of Mexico: Blue Tarpon and the Blue Dolphin. The vessels support offshore completion operations and will be equipped to support high-rate and high-volume multi-zone fracturing operations. "Our pressure pumping vessels offer enhanced safety systems with redundant back-up blending and pumping capabilities," said Lindsay Link, Baker Hughes' President of Pressure Pumping. "When it comes to performing multi-zone, high-rate, high-pressure completions, our vessels are reliable, efficient and minimize delays in high-cost offshore environments, where time is of the essence for the operators on behalf of whom we are working." Source: Baker Hughes

Chevron sees 20% jump in production by 2017

Chevron Corp aims to grow output by a fifth by 2017, driven by big Australian projects moving gas to energy-hungry Asian markets, while it also tries to squeeze another $150 million in cost savings out of its refining arm. Closer to home, in the Marcellus shale, the second-largest U.S. oil company said reservoir outcomes were exceeding expectations, although it was investing there at a "measured pace" in light of depressed North American natural gas prices. After getting $850 million of savings from a multi-year restructuring of its refining and chemicals division, compared with $700 million originally planned, Chevron said it was now looking for a total of $1 billion in savings. "We've been able to meet and exceed those targets within two years," Mike Wirth, head of Chevron's refining and chemicals operations, told Reuters. "We're looking for ways to squeeze a little more yield out of every barrel through the flexibility of our operations." Chevron has been reducing the number of countries served by its marketing operations. It sold its UK refinery last year as well as a New Jersey terminal last month. George Kirkland, executive vice president for upstream and gas, saw ample demand for its coming flood of Australian liquefied natural gas (LNG) since it will be sold in Asia, which does not have the same glut as North America. "LNG is a replacement energy for coal or oil or nuclear and it really doesn't have any direct gas-on-gas competition, apart from other LNG," Kirkland said at a meeting with analysts in New York. "All these markets are different." A new Angolan LNG project with peak capacity for 175,000 barrels of oil equivalent per day (bpd) should start shipping next quarter and, while contracts with Angola's government are not finalized, Chevron expects the gas to go to Europe and Asia. New onshore gas sources, opened up through new drilling techniques and hydraulic fracturing, have been found in other countries. Chevron started an initial well this quarter in China, where it is exploring 940,000 acres with Sinopec 600028.HK, and in Poland, where it just started up a second shale gas well. Larger rival Exxon Mobil Corp had cast some doubt on Polish shale gas prospects after its first two wells there did not find commercial quantities. In Rio de Janeiro, the Brazilian energy regulator said on Tuesday that Chevron's drilling rights there will remain suspended but those rights could be restored within months if the company gave it additional information about a November leak from its offshore drilling project. That leak, which has been put at 2,400 to 3,000 barrels, prompted prosecutors to lodge a 20 billion real ($11.2 billion) lawsuit against Chevron and threaten staff there with criminal penalties. Brazil has attracted intense interest from energy companies who are eager to explore for what some believe could be some of the world's biggest untapped oil fields. Hours before that statement, Chevron Chief Executive John Watson told reporters the company had been very forthcoming with information about the accident to Brazilian authorities. "We regret the incident, but there wasn't damage, and we expect to be treated as Petrobras or other companies would be treated in a similar circumstance," Watson told reporters after the presentation to analysts. The Brazilian energy regulator said its investigation showed a different conclusion about the cause of the accident than Chevron provided, and it was seeking to clear up the different views before reinstating Chevron. Overall, Chevron stuck with its production target of 3.3 million barrels per day by 2017, assuming oil prices of $79 per barrel, up from its anticipated output of 2.68 million bpd this year. The start of its investment-heavy projects would allow the company to reduce cash on its balance sheet, Chevron said, as analysts sought clues on potential dividend increases. Chevron also said it planned to hold onto its West Coast refineries at a time when others are pulling out, including rival BP Plc, which has put its Southern California refinery up for sale. Chevron shares closed 1.1 percent higher at $111.19, their highest so far this year. Source: Reuters

Adbic finalizes $800 million oil pipe plan, seeks partners

Jamal al Dhaheri, the chief executive of Abu Dhabi Basic Industries Corp (Adbic) has said the state-owned firm is finalizing plans for an $800m joint project to make oil and gas pipes, Reuters has reported. "We are in negotiations with partners. It will be a majority Adbic project in Abu Dhabi," said al Dhaheri at a conference, declining to give further details. Adbic is hoping to form a joint venture to make the key equipment for global energy companies in a bid to reduce the emirates' heavy reliance on oil exports. Source: Reuters

Exxon “freezes” oil exploration deal, Baghdad squares off against Kurdistan

Claims were made to Baghdad by the KRG last week for a month's worth of oil income, worth $1bn and counting, who in addition, labeled government officials as 'failures'. The insult was leveled at the government for vetoing a critical oil exploration deal in the north. The heightened tension is rooted in a long history of disputes transcending energy contracts and revenues but this is ultimately about power and politics, says Saket Vemprala, Oil and Gas Analyst at Business Monitor International (BMI), speaking to AMEinfo.com. "Baghdad is worried that any policy move which gives greater power or autonomy to Kurdistan will bring the province one step closer towards independence - a goal that Kurdish politicians publicly renounce (or downplay), but one that resonates deeply with most Kurds. Baghdad wants to centralize all policymaking, including that of oil." Another aspect is competition. Kurdistan's oil deals are production sharing contracts (PSC), more profitable to foreign companies while oil prices are high than the technical service contracts (TSC) that Baghdad has offered to companies in its own licensing rounds. Baghdad does not recognize the validity of Kurdistan's oil contracts, including the recent Exxon deal, but as Vemprala says, "In the absence of a federal oil and gas law, Baghdad's claims that the contracts are 'illegal' are meaningless." The government of Iraq vowed earlier this month to halt Kurdistan's significant contract with Exxon Mobil for the US oil giant to look for oil fields in the north. As tensions continue to rise between Baghdad and the Kurdistan Regional Government (KRG), what is the outlook like for Kurdistan's future oil industry? The two sides need to reach a deal on a package of federal laws governing the oil and gas sector, which has been stuck in Parliament since 2007. Hopes that a deal would be struck by the end of 2011 were dashed, and now it appears no deal is likely until well into 2013. "Baghdad still has a trump card to play," says Vemprala, "given that the revenues for all oil exported from Kurdistan is paid through Baghdad, the federal government can simply choose to pay a portion (or none) of these revenues on to Erbil and foreign companies. Current oil producers in Kurdistan report having received only 50% of entitlements, and it's anyone's guess when the rest of the cash will be reimbursed." The stakes are currently very high for Kurdistan, with such potential for oil to transform their economy and subsequent revenues to enhance the KRG's political leverage in Baghdad. BMI's Vemprala explains how the Exxon deal will likely swing the fortunes of the semi-autonomous region: "Everyone is closely watching the fall-out from the Exxon deal, because if it appears that the US giant has been able to sign deals on 'both sides,' that would encourage other companies to enter Kurdistan - France's Total, for example, has openly admitted its interest - without fearing sanctions from Baghdad." Essentially, other supermajors are likely to feel that if the US giant Exxon, which is traditionally risk-averse and has some backing from the US state department, are pushed out, then why would it be worth attempting to invest. Everyone else could stay away until the political situation is sorted out. However, the political situation could remain in a stalemate for quite some time while Kurdistan is hindered from gaining momentum with its key industry. Source: AME Info

Omanoil records 2011 as paramount financial year for performance and profitability

Oman Oil Marketing Company (Omanoil) announced a breakthrough financial performance year for 2011 during its Annual General Meeting (AGM), held at the Crowne Plaza Hotel Muscat. The company recorded its best-ever year for financial performance with sales at approximately RO 278.2 million, an increase of 29% compared to RO 216.2 million in 2010. The pre-tax profit increased by 18% to RO 9.2 million. After providing for corporate tax, the company’s net profit amounted to RO 8.1 million, and earnings per share stood at 126 baisas. During the Annual General Meeting, the proposed final cash dividend of 62 baisas per share amounting to RO 4.0 million for the financial year ended 31st December 2011 was approved, representing a 48% increase as compared to last year. “Our accomplishments are a result of dedicated collective efforts as we climb great heights with the support of our spirited staff. The Omanoil family is passionate, persevering and committed to continued operational efficiency, excellence in convenience and world class service, and passionately meeting customer needs to ensure total customer satisfaction,” said Sheikh Salim bin Abdullah Al Rawas, Chairman of Oman Oil Marketing Company. Oman Oil Marketing Company closed 2011 with over 1 billion liters in fuel sales. An aggressive growth strategy focused on closing retail network gaps resulted in ten new high-volume sites strategically located in the Sultanate. The number of retail filling stations reached a total of 132 in 2011; additionally three existing sites were renovated to maintain customer satisfaction. "Our retail network expansion invests in strategic locations across Oman to reinforce the nation’s long-term development ambitions," said Al Rawas. “The country’s developing infrastructure is accommodating the growing population and has inspired our expansion plan to reach our customers across the Sultanate, providing consistently excellent re-fuelling and shopping experiences at all our filling stations as loyal friends on the road to motorists and local communities.” The fuel cards business grew over the year with sales to new customers in the Government and private sectors significantly contributing to overall sales of the Retail business. Omanoil aims to expand the fuel card business as a main growth factor within Retail, as it will accommodate high government spending projected in 2012. As a part of the strategic expansion, Omanoil renewed the Convenience Store Agreement with its two partners, Enhance and Khimji Ramdas to sustain the ahlain business. A total of nine ahlain convenience stores were commissioned in 2011 with new outlets planned to complement the existing retail network and provide added convenience to customers. "The framework of our retail network expansion strategy focuses on total convenience, allowing us to redefine the one-stop-shop concept, while introducing best-in-class customer service,” said Al Rawas. A remarkable year for Omanoil, 2011 witnessed vast improvement of economic conditions and increased Government spending on infrastructural developments, projects of which Omanoil successfully secured while retaining existing projects. The Aviation business continued its success in 2011 with over 50% market share at Muscat International Airport. The company’s position as a market leader in aviation fuel supply is maintained by securing exclusive contracts with a number of international carriers such as Thai Airways and Biman Bangladesh. New airline customers include Lufthansa and Swiss Air. With the country’s high investments in tourism development, it is envisaged that the future’s new Muscat International Airport will receive higher passenger and air traffic, resulting in greater aviation fuel demand. Joint Venture Company Omanoil Matrix Marine Services has grown exponentially in volume as the sole active bunker fuel supplier at Port Sohar. The company is expanding its presence in emerging ports in the Sultanate hoping to see the same results as Port Sohar. Oman Oil Marketing Company achieved financial targets in 2011 due to excellent sales in both construction and rig segments. While base oil prices remained stable, improving the company’s market share in the commercial lube segment, Omanoil further increased sales with new accounts. Additional markets obtained include Afghanistan and Kuwait, and in strengthening brand awareness in new markets, the company looks to the future of export lubricants in the African continent and the GCC. Lying at its heart, excellent customer service provides a platform for continued growth as the foundation of Omanoil’s corporate reputation. Repeat and loyal customers are a result of effectively understanding customer needs and concerns, and efficiently responding by dynamically exceeding expectations. Al Rawas said, “Where customer service is the heart of the company, Health, Safety, Security and Environment (HSSE) is the backbone. We celebrate 19 years of safe operations without Loss Time Injury at our Mina Al Fahal terminal, indicative of the world-class operational standards we have in place and the commitment of staff who implement best practices at all times. Our focus on HSSE and improving industry benchmarks will enrich our successes as we grow.” Aiming to be a model corporate citizen advocating best practices, Omanoil continues to pioneer social initiatives and programs through creative collaborations with local associations and organizations. Engaging the local community and the youth through various road safety initiatives, issues concerning the youth, sports, education and health has gained Omanoil the trust and goodwill of stakeholders and investors. Al Rawas concluded, “As a fully-pledged Omani company, our Omanisation rate is one of the highest in the industry at 86% at all levels of employment. Investment in Omani staff is a crucial asset to move the company forward with the benefit of an intimate understanding of local market sensibilities, coupled with best international practice that results in trust, confidence and loyalty among stakeholders. We aim to develop the talent pool to ensure continuity of leadership and skilled resources.” Source: Albawaba

UAE: Global vision for RAK Petroleum Public Company

Local energy firm RAK Petroleum Public Company has put the final touches to a merger deal that gives its shareholders a stake in lucrative operations across the Gulf region and beyond, Global Arab Network reports according to OBG. Last month, RAK Petroleum announced that it had finalized the merger of its Middle East and North Africa (MENA) operating subsidiaries with Norwegian firm DNO International. The announcement was made after the deal cleared all regulatory requirements, having been approved by the Oslo-listed company’s shareholders in November 2011. In addition to this new deal, RAK Petroleum also holds licenses in its home emirate, as well as Oman and Tunisia, a portfolio the company has built up in just a few years, having only been founded in 2005. The company posted net profits of $14.4m in 2010, almost doubling its 2009 total. While final results for 2011 have yet to be released, in the first nine months of the year, the company was well on its way to eclipsing its 2010 figures: RAK Petroleum’s regional assets returned net profits of more than $11.7m, not counting the company’s earnings through its existing stake in DNO. Based on an assessment by international petroleum consultants DeGolyer & MacNaughton, the oil and gas assets of RAK Petroleum and DNO were valued at $250m and $1.64bn, respectively, with the companies having proven and probable reserves totaling more than 400m barrels of oil equivalent. Under the agreement, 153.42m DNO shares were issued to the RAK firm, giving it a 42.8% stake in its Norwegian partner. Even before the merger, RAK Petroleum had been the largest single shareholder in DNO, having increased its investment in 2010 from 10% to 30%. Bijan Mossavar-Rahmani, the chairman and CEO of RAK Petroleum, as well as the executive chairman of DNO, says the merger opens up opportunities for expansion. “We are excited about the next phase of growth for both companies,” he said after DNO’s shareholders signed off on the deal. “RAK Petroleum now plans to focus on further non-operated investments in the oil and gas sector, and DNO International now has an even stronger and diversified platform for growth, with plans for a dual listing on the London Stock Exchange in 2012.” The proposed listing on the London exchange is expected to contribute to extended coverage of the company’s shares, attract interest from a broader range of MENA-focused investors and provide a solid platform for follow-on merger and acquisition activity. The merger has been a carefully planned marriage, with the final union taking well over six months. In July 2011, the two companies agreed to the outline of the merger, with negotiations and due diligence being carried out across the second half of the year, before shareholders of both firms voted in favor of the deal in November. DNO is in the process of ramping up production at its Tawke field in the Kurdistan region of Iraq, which began preliminary pumping in 2007 and was fully connected into export pipelines two years later. Currently, capacity is around 70,000 barrels per day (bpd), a figure the firm expects to increase to 100,000 this year and to 200,000 in the near future. The firm also has two other licenses in Kurdistan and is conducting exploration surveys on the fields, licenses for five blocks in Yemen and one in Tunisia. With the addition of RAK Petroleum’s assets in Oman, Tunisia and RAK itself, the company will have a broader base of operations, as well as established production, Mossavar-Rahmani said in an interview with industry publication Oil and Gas Middle East in late 2011. “The RAK Petroleum assets would help DNO become a stronger company, not just because of the value of bringing our expertise to the Iraq operations,” he said. “By contributing our blocks in the UAE, Oman and Tunisia, we will transform DNO from a two MENA-country company into a five-country MENA presence.” DNO could very well have a presence in several MENA countries if Mossavar-Rahmani has his way, with the executive chairman saying RAK Petroleum’s experience could be parlayed into moves to enter the Libyan and South Sudanese markets. RAK Petroleum’s increased stake in DNO could take both firms a long way, paying dividends to investors, as the independent producer looks to boost production and raise its profile. Source: Oxford Business Group

Qatargas-1 plans LNG units shutdown in April

Qatargas, the world's largest LNG supplier, plans to shut all three liquefied natural gas (LNG) producing units at its Qatargas-1 plant for three weeks of work starting in the third week of April, its chief executive told Reuters. Qatargas-1 has three LNG trains with a total combined production capacity of nearly 10 million tons per annum (mtpa). 'This is a normal planned shutdown,' Khalid bin Khalifa Al-Thani told Reuters. 'All at the same time,' he added regarding whether all three trains, each with a capacity of 3.2 mtpa, would shut together. Qatargas has a total capacity of 42 mtpa. Qatargas-1, which began operations in late 1996, is controlled by state-run Qatar Petroleum (QP) with international energy companies ExxonMobil, Total, Mitsui and Marubeni holding smaller stakes. Sister company RasGas operates the other 35 mtpa of production facilities which together make Qatar by far the world's biggest LNG exporter. Source: Reuters

Kuwait's crude oil exports to China jump 49.8%

Kuwait's crude oil exports to China jumped 49.8 percent in February from a year earlier to 962,000 tons, equivalent to around 243,000 barrels per day (bpd), for the third straight month of expansion, latest official data showed. Kuwait provided 4.1 percent of China's total crude oil imports, compared to a 3.2 percent share in the same month of last year and 4.0 percent in January, according to the Chinese General Administration of Customs. China's overall imports of crude oil in February rose 18.5 percent year-on-year to 5.98 million bpd. Saudi Arabia remained China's top supplier with its shipments surging 38.6 percent from a year earlier to 1.39 million bpd, followed by Angola with 785,000 bpd, up 17.3 percent. Russia became third with imports from the country jumping 52.0 percent to 605,000 bpd. Iran, the fifth largest supplier for China, saw the 40.3 percent plunge to 290,000 bpd on the year. Kuwaiti Minister of Oil Hani Hussein said in a press statement issued in Kuwait on March 6 that final endorsement on building a joint refinery in that country was attained from China. The project, consists of a 300,000 bpd refinery and a 1 million ton-per-year ethylene cracker, is part of Kuwait's aim of more than doubling crude exports to China to 500,000 bpd. Source: Kuwait News Agency