PETROL & ENERGY 09.06.2015



Tumbling oil prices have helped put asset-based senior lenders in the driver’s seat when it comes to restructuring distressed energy companies.

A slew of energy bonds have lost value as crude tumbled 44 percent in the past year. Since senior lenders are most likely the first creditors that would see losses on the debt, that has given them a leading role in driving the bankruptcy process to potentially own the distressed businesses, said panelists at the 31st Annual Bankruptcy & Restructuring Conference of the Association of Insolvency and Restructuring Advisors in Philadelphia on Friday.

“We are seeing many asset-based loans are bigger than the value of the assets,” said Jonathan M. Landers, a restructuring attorney at New York-based Scarola Malone & Zubatov LLP. “That gives a secured lender a much better shot to drive the restructuring process, because the junior creditors don’t really have practical interest anymore.”

Among securities weakened by the crude slide, oil-and-gas producer Samson Investment Co.’s $2.25 billion of 9.75 percent senior unsecured bonds maturing Feb. 2020 have lost 78 percent this year to trade at 9 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.

Sabine Oil & Gas Corp.’s $350 million of 9.75 percent senior unsecured debt due Feb. 2017 dropped to 18.3 cents, down 72 percent on the year

 

Africa

Algeria: Sonatrach said it plans to continue diverting gas supplies, historically bound for European markets, to Asia. The company also said it is looking at potential new long-term supply deals with South American importers. The company is in discussion with companies in Brazil and Argentina and is continuing talks with fellow North African country Egypt to provide additional LNG deliveries. The state-run firm’s Mohamed Rafik Demmak, Sonatrach’s executive VP of marketing, said in a Reuters report that the company still saw limited opportunities in trading its LNG cargo on spot markets and would instead focus on its long-term sales model. 


 
Angola: Floating production vessel operator Bluewater has chosen global marine services provider Strainstall to supply chain tension monitoring systems on the two vessels being used on Total’s Kaombo development offshore Angola. Bluewater is supplying two floating production, storage and offloading (FPSO) vessels for the Angolan offshore development. Strainstall, part of marine services provider James Fisher & Sons, will supply its chain tension monitoring system (CTMS) to identify if anchor loads exceed pre-determined limits. The CTMS can establish an interface directly with onboard monitoring and control systems, providing a simple and easy-to-use solution for the application, said company officials. 

 

Egypt: Dana Gas has commenced drilling the Balsam-2 development well in the Balsam development lease onshore Nile delta in Egypt. The well targets the Qawasim formation at a depth of 3200 m and will be the first horizontal well drilled by Dana Gas Egypt, and one of very few drilled in the onshore Nile Delta to date, the company said Sunday. The well is expected to take approximately four months to drill and complete. The Balsam-2 well is the first in a major drilling campaign of some 30 wells and a large number of work-overs that will be drilled in the next 3 years and forms part of the Gas Production Enhancement Agreement (GPEA) work commitment, Dana Gas said. As per the agreement, Dana Gas has committed to a work programme in return for the ability to sell the government’s share of incremental condensate production at market rates over and above an agreed no further action decline production forecast.



Libya: Libyan state oil company NOC is delivering petrol to a western region opposing a self-declared government in charge of the Tripoli capital, it said in a bid to showcase its impartiality in a power struggle dividing the country. The member of the Organization of Petroleum Exporting Countries has two governments, with the internationally recognised premier working out the east since losing control of Tripoli in August to a rival administration, part of a wider struggle four years after the ousting of Muammar Gaddafi. Tripoli-based NOC has sought to stay out of the conflict to avoid legal questions from customers worried that oil sales will end up on bank accounts controlled by a non-recognised government. In an attempt to highlight its neutrality, NOC said in a statement that it was sending 31 trucks delivering more than 1 million liters of petrol products to all cities in the western mountains. Part of the mountains are held by forces from Zintan, a city allied to the eastern government fighting the Tripoli government on a frontline west of the capital. Zintan has been largely cut off from fuel and other supplies from Tripoli. 



Mozambique: Jindal Steel and Power’s Africa unit plans to build a $400-million power station in Mozambique. The Indian firm will also sign an agreement to sell electricity to the East African country by year-end. “We can start building immediately after commercial agreement, it’s a 30-month project for the 150-MW plant,” Ashish Kumar, Jindal Africa CEO told Reuters on the sidelines of the World Economic Forum African conference. 



Nigeria: Seplat Petroleum Development Company has announced a 51 percent rise in gas revenues for 2014 as it holds its annual general meting today. Seplat, which is dual listed on the Nigeria and London Stock Exchanges, has always highlighted its gas commercialisation strategy as a key revenue driver for the company. During its historic and oversubscribed IPO, Seplat with an average gross gas production of 99 million standard cubic feet per day in 2013 had projected that it would triple its gas production by end 2016 through massive investments in processing and delivery infrastructure. In February, Seplat concluded a 10 day tie-in on its Oben plant to enable the company have a “single homogenous plant consisting of 2 by 45 MMSCF and 2 by 75 MMSCF trains able to deliver 240MMSCF/D WAGP specification gas post-commissioning, from the Oben node. This facility expansion and upgrade will bring the company’s overall daily gas production capacity to slightly over 300mmscf/d.” Nigeria, the holder of Africa’s largest gas reserves with about 182 Tcf of proven gas, raised the price of gas to power plants to $2.50 per million standard cubic feet plus 80 cents for transport last August. 



Nigeria: The gains of the recent establishment of the Nigerian Electricity Management Services Agency (NEMSA) cannot be over- emphasized.  This establishment followed the signing into law of the much desired NEMSA bill by the then president of Nigeria, Dr. Goodluck Jonathan. With NEMSA, the power sector can now boast of an independent agency that has the capacity both in words and actions to bite while tackling issues of timely response to the needs of the privatized industry. One of such timely responses is the closing up of technical gaps in the electricity industry and providing adequate support for investors in the post privatized power sector. In closing up these technical gaps, NEMSA will regularly carry out periodic inspection, monitoring and assessment of existing power plants/stations installations, extra high voltage and high voltage transmission lines with associated transmitting or switching stations and distribution networks to ensure that they are in regular fitness to generate, transmit, distribute and deliver reliable and safe power supply to electricity consumers. It will also carry out or cause to be carried out investigation of electrical accidents and electrocutions in connection with generation, transmission, distribution, supply or use of electricity with a view to finding out the causes, and to enforce remedial measures and proffer or suggest ways of preventing future occurrence. 



Nigeria: Nigeria's fuel marketers, who are still not importing due to money owed them, have agreed to distribute fuel brought in by the state oil company, the main trade body said on Saturday, after talking with the new administration on Friday. Major cities are still suffering from gasoline shortages despite the end of a fuel distribution strike. After the negotiation on Friday, fuel will become available not just at state-owned retail stations but those owned by major and independent marketers to reduce the queues of double-parked cars. The dispute over subsidy payments brought much of Nigeria to a standstill in May, as it relies almost wholly on imports. Nigeria now depends wholly on swapping its crude for fuel imports, Obafemi Olawore, spokesman for Major Marketers Association of Nigeria (MOMAN) said, as those waiting for subsidy payments are unable to secure commercial loans to bring in fresh supplies. Olawore said MOMAN had contact with President Muhammadu Buhari's new government and was optimistic that payments of around 291 billion naira (nearly $1.5 billion) promised in writing by the outgoing administration will be honoured. 



Sudan: Fighting between rebels and government forces in South Sudan’s oil-producing states intensified, the army said before the two sides meet on Monday for peace talks. Rebels attacked non-producing oil fields north of the Unity state capital, Bentiu, on Friday and were repulsed, army spokesman Colonel Philip Aguer said by phone from the capital, Juba. The Sudan People’s Liberation Army is “in full control of Unity oilfields and has captured a number of equipment including tanks and ammunitions,” Aguer said. “The oilfields of Unity state are not functioning now because of the insecurity of the rebel attacks, but they are not controlling it.” Fighting that erupted in the world’s newest nation in December 2013 has left tens of thousands of people dead and more than 2 million displaced. Crude production in the country, home to sub-Saharan Africa’s third-largest reserves, has been cut by at least a third during clashes that have targeted facilities. Before the conflict, China National Petroleum Corp., Malaysia’s Petroliam Nasional Bhd. and India’s Oil & Natural Gas Corp. pumped most of the oil. 



Tanzania: Aminex saw a six-month extension to the repayment date of its corporate loan facility. The extension gives the company time to finalize its gas sales agreement (GSA) and see first gas flows from its Kiliwani North development in Tanzania. The company expects to produce first gas from Kiliwani North into the new Tanzanian regional pipeline in mid-2015 based on advice received from the Tanzanian authorities. Although there is uncertainty over the exact timing of a signed GSA, with first production expected mid-2015, Aminex has successfully negotiated a six-month extension until the end of January 2016 of its $7.6 million corporate loan facility to enable the completion of ongoing repayment and re-financing discussions. First production is dependent on final commissioning of the new pipeline and completion of the processing plant on Songo-Songo Island, which is currently on schedule, and the signing of the Kiliwani North GSA. The GSA is complete except for the finalization of the payment protection clauses and guarantees. 



Tanzania: STATOIL Tanzania AS, operator of Block 2 offshore Tanzania, has confirmed that the drillship Discoverer Americas contracted for its second drilling campaign in Block 2 departed last week after completion of a successful exploration programme. Speaking about the completion of the drilling programme and the departure of Discoverer Americas, Statoil Country Manager, Mr Ystein Michelsen said, "Since the start of the programme in February 2012, we have drilled 14 wells and made eight discoveries of approximately 22 tcf of gas in place. Four of these are classified as 'high impact' discoveries, including the Piri -1 discovery, which was the second largest gas discovery in the world in 2014". There will be further activity in Block 2 as Statoil still sees potential in the area. However, as a result of the successful drilling programme, the company will now focus on evaluating data from the wells to enable it to mature new prospects and progress the development project. 


 

Middle East

Iran: Iran will increase crude exports with the end of international sanctions even if oil prices decline, the country’s representative to OPEC said, adding supply after a surplus sent Brent falling almost 50 percent last year. The Persian Gulf nation can double oil exports within six months of sanctions ending, Mehdi Asali said, according to state-run Islamic Republic News Agency. Under sanctions, Iran is allowed to export about 1 million barrels of oil a day. Iran produced 2.8 million barrels of oil a day in May, more than Venezuela and Nigeria, according to data compiled by Bloomberg. World powers including Russia and the U.S. plan to complete talks with Iran by June 30 to end the decade-long impasse over its atomic program. Iran isn’t satisfied with current oil prices, and most OPEC members think $75 a barrel is fair, Iran’s oil minister Bijan Namdar Zanganeh said June 5. Russia may start importing crude from Iran this week as part of an oil-for-goods agreement, Zanganeh said over the weekend after attending the Organization of Petroleum Exporting Countries meeting in Vienna. 


Iran / Russia: Russia may start importing crude from Iran next week as part of an oil-for-goods agreement, Iranian Energy Minister Bijan Namdar Zanganeh said. “We hope that next week” Russia will take its first imports, Zanganeh told reporters on board a plane from Vienna late on Friday, after attending a meeting of the Organization of Petroleum Exporting Countries. “Much of this will be for cash and we will be using this money to buy commodities from the Russians.” Iranian oil exports have dropped 50 percent since international sanctions against the country were tightened in 2011 amid a dispute over its nuclear program. Companies that trade with Iran are barred from doing business with U.S. and European operators. World powers including Russia and the U.S. plan to complete talks with Iran by the end of June to end the decade-long impasse over its atomic program. Zanganeh said he discussed the deal with Russian Energy Minister Alexander Novak in the Austrian capital on June 3. The country plans to buy “much lower than 500,000 barrels day” in exchange for cash, which Iran will then spend on Russian goods including steel, wheat and oil byproducts, he said. 



Iran: Iran said it’s received “positive” feedback from international oil companies on the new contracts being prepared for the return of foreign investors if and when nuclear sanctions are lifted. “So far the feedback has been positive, we want a win-win contract so the foreigners can come,” Iran Oil Minister Bijan Namdar Zanganeh said in Vienna on Friday while attending a meeting of the Organization of Petroleum Exporting Countries. Zanganeh has been the center of attention this week, meeting chief executive officers of companies including Royal Dutch Shell Plc, Eni SpA, Total SA and Lukoil OAO. For the first time in years, European oil companies are openly declaring their interest in Iran in anticipation of a possible end to sanctions against the country over its nuclear program. Total CEO Patrick Pouyanne summarized the view of the European industry on Wednesday when he said: “We love Iran.” U.S. oil companies, constrained by the history of American sanctions against Iran dating from the 1979 Islamic revolution, are more cautious, but ConocoPhillips said it would consider Iran if the conditions were right. 



Iran / Indonesia: Indonesia is seeking a long-term oil supply deal with Iran in anticipation of a possible end to sanctions against the Persian Gulf nation over its nuclear program. Resources Minister Sudirman Said will discuss potential crude supply and investments with Iran on the sidelines of an Organization of Petroleum Exporting Countries meeting in Vienna on Friday, according to a statement on the ministry’s website. The Asian nation, which left OPEC in 2008 amid declining production, will also discuss its request to rejoin the group. Indonesia, where current crude production isn’t sufficient to meet domestic demand, joins European oil majors including Royal Dutch Shell Plc and BP Plc in declaringinterest in Iran’s energy resources. The Middle East nation and six global powers seek to finalize by June 30 details of a deal that would curb its nuclear program in exchange for an easing of sanctions. Talks will examine the possibility of PT Pertamina, Indonesia’s state oil and gas company, entering Iran’s exploration and production industry either as an operator or shareholder, Said said in the statement Thursday. 



Iraq: DNO ASA, the biggest oil producer in Iraqi Kurdistan, is owed almost $700 million in export payments amid political rows over crude revenues and battles with Islamic State, according to the median of six analyst estimates. Their figures, from a survey this week and covering exports since 2009, range from $400 million to $1.1 billion, with the average and median estimates within $685 million to $690 million. DNO’s own estimate is $500 million to $1 billion. The Oslo-based company and producers including Genel Energy Plc have been caught for years in a dispute between the semi-autonomous Kurdistan Regional Government and central Iraqi authorities over the spoils from the nation’s crude. Operators rely on local sales at low prices and intermittent exports. While the two sides reached a deal on exports in December, the KRG complains that it’s not receiving its full budget dues. Payments to producers are also held back to fund the battle with Islamic State militants after a collapse in crude prices last year put additional pressure on government spending capacity. 



Qatar / India: Indian oil minister Dharmendra Pradhan has pushed for a reduction in Qatari LNG prices, reported news agency Press Trust of India Sunday. Qatar is the biggest supplier of the chilled fuel to India, exporting 7.5 million tonnes a year of LNG on a long-term 25-year contract, indexed to the moving average of crude price. Pradhan raised the issue of price cut during his meeting with Qatar's energy minister Mohammed Saleh Abdullah Al Sada on the sidelines of the 6th OPEC International Summit in Vienna on June 4, Press Trust added. The Qatari minister, sources told the news agency, was sympathetic to the Indian cause, but wanted the issue to be negotiated between the companies concerned. The price of LNG from that India imports from Qatar comes close to $13 per million British thermal unit compared with the $6-7 in the spot or current market. Petronet LNG buys 7.5 million tonnes a year of LNG from RasGas of Qatar but has asked for a 10 per cent cut in import volumes this year.



UAE: The United Arab Emirates' National Drilling Company has signed contracts worth $543 million to buy 14 new rigs, state news agency WAM reported on Sunday. One offshore and one onshore rig, worth $203 million, will be built in the UAE, WAM said, quoting the company's chief executive Abdullah Saeed al-Suwaidi. The onshore rig deal was signed with National Oilwell Varco , while the offshore one went to Lamprell. A third deal was signed with China Petroleum Technology & Development Corporation for 12 rigs, Suwaidi said. The new contracts are part of the UAE company's expansion plans and also the result of growing demand from its customers, it said. 

 

Rest of the World

Australia: Central Petroleum has agreed to acquire to acquire a 50 percent interest in the Mereenie oil & gas field from Santos and assume operatorship of the field in the Northern Territory’s Amadeus basin. The move will significantly increase Central’s operations and enable Central and Santos to maximise the amount of gas available for the proposed Northern Territory-East Coast (NEGI) gas pipeline. By taking on operatorship of Mereenie, Central will become the common operator across all three conventional gas fields producing in the Amadeus Basin. This acquisition will increase Central’s oil production to over 500 bopd and contracted gas sales to over 4 PJ/p.a. Under the agreement Central will pay A$45 million in cash to Santos, structured as A$35 million on financial closure of the deal and the balance of A$10 million to be paid in June 2016.



Australia: AWE Limited (ASX: AWE), the Operator of Permits L1/L2 in the Perth Basin, Western Australia, advises that at 06:00 hours (6.00am) AWST today the Waitsia-1 appraisal well was at a Measured Depth below Rotary Table (MDRT) of 3,367m and was completing coring operations before drilling ahead in a 8 ½ inch hole to the planned total depth of 4,050m. Two sections of core were cut in the primary target, the Kingia and High Cliff Sandstones. Core #1 was cut from 3,318m to 3,345.5m MDRT and Core #2 was cut from 3,345.5m to 3,367m MDRT. Both cores will be sent for analysis. Wireline logs will be run over a number of intervals, including the Dongara and Kingia, after the well has reached total depth. The Waitsia-1 well was spudded on 14 May 2015 and is forecast to take approximately six weeks in total to complete. 



Australia: Apache Corporation (NYSE, Nasdaq: APA) today announced it has completed the previously disclosed sale of its Australian subsidiary Apache Energy Limited to a consortium of private equity funds managed by Macquarie Corporate Holdings Limited and Brookfield Asset Management Inc. (NYSE: BAM) (TSX: BAM.A) (Euronext: BAMA). Total proceeds of $1.9 billion are net of $225 million in customary, post-closing adjustments for the period between the effective date, October 1, 2014, and closing.



Azerbaijan: Azerbaijan's SOCAR shipped 593,449 tonnes of oil via Russia in the first five months of 2015, up from 423,644 tonnes in the same period last year, the state energy company said on Friday. SOCAR said in January it had signed a one-year contract with Russian oil pipeline operator Transneft to transport 1.7 million tonnes of oil through the Baku-Novorossiisk pipeline, up from 1.02 million tonnes in 2014. SOCAR had planned to halt oil exports via Russia in February 2014, opting instead to send the bulk of its crude through the Baku-Tbilisi-Ceyhan pipeline and retaining some to cover rising domestic demand for oil products. The company reversed its plans later that month. Oil exports via Russia for the whole of 2013 totalled 1.75 million tonnes, down from 2.06 million in 2012.
Canada: PetroMaroc Corporation plc announced today that it intends, subject to receipt of TSX Venture Exchange ("TSXV") approval, to enter into an unsecured loan transaction, pursuant to which the Company will borrow from A.G. Oates, an arm's length party (the "Lender"), the principal amount of CDN$400,000, bearing interest at the rate of 10.0% per annum (the "Loan"). The principal amount and all accrued interest under the Loan shall be due and payable on the earlier of (the "Maturity Date"): i) April 30, 2016; and ii) provided that the $9.7 million principal amount of debentures issued by the Company on April 10, 2014 (the "Debentures") are not then in default, ten (10) days after the Company receives the amount of $2,500,000 (the "Escrowed Funds") being held in escrow pursuant to a percentage interest transfer agreement entered into between the Company and Maghreb Petroleum Exploration S.A. If the Company receives the Escrowed Funds when the Debentures are in default, the Maturity Date shall be April 30, 2016. The Loan shall be unsecured and shall be subject to and ranking subordinate in priority to the Debentures. In consideration for providing the Loan to the Company, the Lender will receive, subject to TSXV approval, eight million (8,000,000) bonus warrants (the "Bonus Warrants"), with each Bonus Warrant exercisable into one (1) common share (a "Common Share") of the Company at a price of $0.05 per Common Share for a period of 12 months from the date of issuance. 



Canada: Cenovus Energy has agreed to purchase Canexus Corp’s North American Terminal Operations (NATO), a crude-by-rail trans-loading facility, for C$75 million (US$60 million). The terminal is located approximately 50 km north-east of Edmonton in Bruderheim, Alberta. It has pipeline connections to the Cold Lake and Access crude oil pipeline systems as well as links to the Canadian Pacific and Canadian National rail lines. Cenovus currently transports production volumes from its Foster Creek steam-assisted gravity drainage (SAGD) operation to Bruderheim on the Cold Lake pipeline. The transaction is expected to close on 31-Aug-2015. 



Canada: Delphi Energy has signed an agreement to sell its working interests in producing properties, facilities and infrastructure and undeveloped land in the greater Wapiti area for C$50 million (US$40 million). The Wapiti property is located 50 km south of the city of Grand Prairie, Alberta. The assets to be divested have a monthly production of approximately 1.2 MBOE/d in Apr-2015. The production consists of approximately 4.9 MMcf/d of natural gas and 420 BOE/d of natural gas liquids (49% ethane). Total land in the greater Wapiti area of 31,277 net acres inclusive of 19,377 net acres of undeveloped land. The transaction is expected to close by the end of Jun-2015. 



China: China imported the least crude in 15 months, surrendering its lead as the world’s biggest oil buyer to the U.S. Overseas purchases dropped to 23.24 million metric tons in May, according to preliminary data released by the General Administration of Customs in Beijing on Monday. That’s the lowest level since February 2014 and equivalent to 5.5 million barrels a day, down from a record 7.4 million a day in April. China’s record appetite for crude had bolstered OPEC’s strategy of pumping into an oversupplied global market, and a slowdown in buying could worsen the glut. Purchases declined amid increased refinery maintenance and as port storage facilities filled up, according to ICIS China, a Shanghai-based commodities researcher. The U.S. imported about 6.9 million barrels a day in May, based on weekly data from the government. China’s top refiners shut a total of 882,000 barrels a day of processing capacity in May, the most this year, according to ICIS. Dalian West Pacific Petrochemical Refinery in the northeast, the largest plant using seaborne oil, closed for maintenance from April 20 to May 25. Dalian’s ports ranked third by crude imports behind Ningbo and Qingdao, receiving 31.4 million tons in 2014, according to the customs administration.



Cyprus: The Aphrodite natural gas field off Cyprus is commercially viable and plans call for producing 8 billion cubic metres (bcm) a year and construction of a pipeline to Egypt, the partners behind the project said on Sunday. Cyprus, which required an international bailout in 2013, is hoping for an economic turnaround based partly on offshore reserves. Texas-based Noble Energy and Israel's Delek Group discovered the deposit, estimated to hold 128 bcm of gas, in Cyprus's offshore Block 12 in 2011. It also contains 9 million barrels of condensate. Plans call for a floating production storage and offloading vessel (FPSO) to process 8 bcm of gas a year and the construction of underwater pipelines connecting the well to Cyprus and Egypt, Delek said in a statement. The planned Egyptian exports were made possible by a cooperation agreement the countries signed in February, Delek said, adding that the partners would submit their plans to the Cypriot government in the near future. Noble is the project operator with a 70 percent stake. Delek, through two subsidiaries, holds the remaining 30 percent, but is in early-stage talks to buy an additional 19.9 percent for about $155 million. 



India: India’s Reliance Power will invest $3 billion in developing floating LNG terminal and power plant in Bangladesh. The Indian private sector company and Bangladesh Power Development Board (BPDB) signed a Memorandum of Understanding (MoU) on Saturday to develop 3,000 MW of LNG based combined cycle power project in Bangladesh in phases, along with a Floating Storage and Re-gasification Unit (FSRU) based LNG terminal to supply re-gasified LNG to the power project. The MoU was signed during the visit of Prime Minister of India Narendra Modi to Dhaka. The land for the power project shall be provided by BPDB at appropriate locations, Reliance Power said in a statement adding that the FSRU terminal shall be set up at Maheshkhali Island in Cox’s Bazar district of Bangladesh. According to Reliance Power, the project is in line with the Master Plan of 2010 for Bangladesh, under which BPDB envisages to develop a 3,000 MW LNG based power project so as to meet the growing power demand and supplement the domestic gas reserves in the country. 



Indonesia: Petronas expects its floating LNG facilities to open more opportunities in global projects,Bernama reported Saturday citing company statement. The company has already received enquiries from multinationals regarding its first floating LNG facility, the PFLNG1, which is expected to start operation in first next year, said company’s Global LNG Project, Upstream Vice President Adnan Zainal Abidin Petronas has two FLNGs in the pipeline: the PFLNG1, costing more than $1 billion and scheduled to be ready by early 2016, and the PFLNG2, expected to be ready by 2018. "Our focus now is on both floaters, which will be located offshore Malaysia. We are already receiving enquiries in fields operated by others. For us, our priority is to commission them successfully and to have the necessary track record," he told Bernama on the sidelines of the 26th World Gas Conference (WGC). "With those under our belt, the discussions can go further. It's still early but we have already had preliminary discussions. It is all about possibilities.” With its floating LNG facilities in place, the company expects to monetise gas fields which previously were considered too small or stranded. 



Kazakhstan: LUKOIL President Vagit Alekperov visited Astana to attend the 28th Plenary Session of the Foreign Investors’ Council under the President of Kazakhstan. As part of his visit, Mr. Alekperov met with Kazakhstan Prime Minister Karim Masimov, executives from Kazakshtan's Ministry of Energy and KazMunayGas, the national oil company of Kazakhstan. The parties discussed LUKOIL's operations in Kazakhstan. Following the meeting, LUKOIL and KazMunayGas signed a Memorandum of Understanding to expand the cooperation between the companies in exploration at unlicensed areas in Kazakhstan. LUKOIL has been operating in Kazakhstan since 1995. The Company has 7 onshore production projects under way and is a partner to the Caspian Pipeline Consortium (CPC). LUKOIL is the largest Russian investor in Kazakhstan; since 1995 the company has invested more than $7 billion into the Republic's economy.



Pakistan: Pakistan plans to increase LNG imports from 400 MMCFD to 600 MMCFD in 2015-16 as per the annual plan, reported Business Recorder newspaper. A pipeline to transport the LNG will be constructed by the Sui-Southern Gas Company Limited (SSGCL) which is expected to be completed by the end of 2016. The government also plans to build additional LNG terminals. Pakistan has been facing severe gas shortage due to increasing demand for electricity from households as well as industrial consumers. To fill the gap, the South Asian nation is trying to source gas from various sources. Recently, Qatar sold its first LNG cargo to Pakistan State Oil Company Limited (PSO). This is the first LNG agreement between Qatar and Pakistan and the first ever LNG import deal for any entity in Pakistan. Last month, PSO launched its first tender for supply of LNG. In the tender notice published on its website, the state owned firm said that it is looking to buy four cargoes of LNG of 143,000 cubic metres each during the period June to September. 



Poland: ConocoPhillips, the U.S. energy company, said on Friday it has stopped its shale gas exploration in Poland due to unsatisfactory results, leaving the rest of the field to Polish state-run firms. Earlier this year another U.S. energy major Chevron Corp gave up looking for shale gas in Poland, following the withdrawal of Exxon Mobil, Total and Marathon Oil over the past three years. ConocoPhillips said its subsidiary Lane Energy Poland has invested around $220 million in Poland since 2009. It drilled seven wells over its three Western Baltic concessions. ConocoPhillips also said it expected a charge related to the Poland withdrawal of approximately $90 million pre-tax, and around $30 million after-tax. Global oil firms were attracted to Poland a few years ago, sharing a belief that eastern Europe's biggest economy would repeat the shale gas boom seen in the United States. In 2011 Poland's former Prime Minister Donald Tusk said that he expected the first commercial shale gas in 2014, expressing hopes it will help Poland significantly reduce its reliance on gas imports from Russia. A drastic cut in Poland's estimated shale gas reserves marked a first blow in 2012 and a slump in oil prices in the past year proved a second. 



United Kingdom: Celtique Energie Petroleum has signed an agreement with Union Jack Oil and Egdon Resources to sell its 50% stake in PEDL241 in Lincolnshire, UK. The license contains the North Kelsey prospect, located approximately 10 km to the south of the Wressle-1 discovery well in PEDL180.  Under the terms of the agreement, Union Jack will increase its interest in the license from 10% to 20%, and Egdon will increase its interest in the license from 40% to 80%. The prospect is defined on 3D seismic data and has potential for up to four stacked conventional reservoir intervals in the Chatsworth, Beacon Hill, Raventhorpe and Santon sandstones. The estimate of gross mean combined prospective resources for these multiple objectives is estimated to be 6.7 MMbbl. Post-transaction ownership of PEDL241: Egdon Resources (80%, operator) and Union Jack Oil (20%).  




United Kingdom: Falkland Oil and Gas plans to continue drilling into next year, its chief executive said, defying legal threats made by the Argentine government against oil explorers in the Falkland Islands. A group of oil drillers, which also include Premier Oil, Edison, Noble and Rockhopper, resumed their Falkland Islands exploration campaign in March and have made a series of successful finds since. However, their drilling work has angered Argentina, which continues to dispute the sovereignty of the islands and launched a domestic court case in April against executives of the companies involved. "I can't go to Argentina and nearby countries. But operationally, this has no effect," Tim Bushell, Falkland Oil and Gas chief executive, said. The companies are continuing their 2015 exploration campaign as planned and are counting on hiring a drilling rig at lower rates to expand their plans into next year. "We'll negotiate a lower rate with the rig and other services. We conservatively expect to get a 20-25 percent reduction," he told Reuters. The group has currently contracted the Eirik Haude drilling rig for a six-well drilling campaign that is expected to end around October.


 
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ETS SUPPLY & ENGINEERING LLC
700 Boulevard East 2E
Weehawken 07086 New Jersey US
Cell: +90 973 685 4949 || +1 973 704 7373
+1 973 685 5959