PETROL & ENERGY 13.05.2015

Oil prices eased on Tuesday as the market remained oversupplied and as the dollar gained on fears Greece could exit the euro zone.

Greece paid about 750 million euros ($836.70 million) to the International Monetary Fund late on Monday, a day before it was due, two Greek finance ministry officials told Reuters, but it was not enough to stop worries over future payments.

"Just hours before the loan was due, Greece brought relief to the markets by ordering payment. But don't be too happy just yet," Singapore-based brokerage Phillip Capital warned.

"The four month extension of Greece's bailout plan, agreed in February, expires next month. This means for the rest of May, Greece will be locked into debating another extension of its bailout plan."

Reflecting cautious market sentiment, June Brent crude was down 17 cents to $64.74 a barrel by 0240 GMT. June West Texas Intermediate (WTI) dropped 9 cents to $59.16 a barrel.

The most recent price falls came after months of rallies which saw Brent climb 40 percent since its January lows, but many analysts say that these rises looked to have come to an end as production around the world continued to outpace demand..



Angola: A new oil platform in Angola is ready to produce 70,000 barrels of oil per day. The oil rig named Kizomba Satellites phase 2, is a large underwater drilling rig which is attached to a huge floating platform based 150km off the coast of Angola. The rig operates in deep water to depths of 1350m. It has subsea wells and the complex gadgets to control oil production under the water. The project is a BP collaboration with different oil companies. BP Regional President Darryl Willis said: “This is another successful project from this prolific block. We expect to follow this up later in the year with the Greater Plutonio phase 3 project in neighbouring Block 18 which is operated by BP.” Angola is the second largest oil producer in sub-Saharan Africa and is a member of OPEC. 

Egypt: BG Group has issued an update on its first-quarter offshore activities. In March, the company signed a tie-in agreement with BP Egypt and RWE DEA to use the West Delta Deep Marineoffshore infrastructure in the Egyptian sector of the Mediterranean Sea. The facilities will be used to process gas from the West Nile Delta project fields, expected to start producing in mid-2017. BG also signed a separate agreement with the same companies under which the right of use of the Rosetta onshore facilities will effectively be transferred to them from mid-2016 to process their gas from 2018. However, BG Group will continue to hold rights to the Rosetta concession and may process future gas through the WDDM facilities.

Liberia: Canadian Overseas Petroleum (LON:COPL, CVE:XOP) continues to work with ExxonMobil for the planning of future drilling in Liberia. The potential expansion of the group’s portfolio in sub-Saharan Africa is another focus of the company in the near-term, as it works to complete a deal for projects in Tanzania, Namibia, Nigeria, Ghana, Equatorial Guinea and Mozambique. COPL in February announced a tie-up with African oil firm Shoreline Energy, and the joint venture has been progressing a pipeline of opportunities. The Africa focussed pre-revenue explorer this morning reported a $2.1mln loss for the first quarter of 2015, and said it had $2.5mln of cash and equivalents as at March 31.

Libya: Libyan oil firm Arabian Gulf Oil Company (Agoco) has announced that it is currently producing around 230,000-260,000 barrels per day. The figure is down by around 35,000bpd as protests have closed the Nafoura oilfield. Agoco operates Libya’s key port of Hariga, which it claims remains fully operations. "The Nafoura field is still closed," said Agoco's spokesman. "But Hariga port is working normally." Agoco exports oil from the southeastern fields of Sarir and Messala from Hariga. It also has fields connected to the port of Zueitina, but protesters blocked the pipeline to that port a week ago, forcing the Nafoura oilfield, which had pumped up to 35,000 bpd, to shut down. Elsewhere in Libya, the El Feel oilfield, in the west of the country, remains closed, due to a strike by security personnel. A swathe of protests and oilfield shutdowns has seen Libya’s production figures fall to around 400,000bpd in recent weeks. The problems are being exacerbated by Libya’s political problems, as two rival government factions vie for control of the country’s hydrocarbon resources. 

Mozambique: Anadarko says it has completed its exploration drilling campaign in Mozambique’s Offshore Area 1. The company drilled two maturation wells during 1Q 2015 on the Golfinho discovery to advance the project toward development. Anadarko and its partners continue to progress remaining agreements and approvals for a development of various deepwater gas fields linked to new LNG facilities onshore Mozambique. They have held talks with the new administration, including the president and prime minister, and have evaluated onshore LNG contractor bids in preparation for contractor selection later this year. In block CI-103 off Côte d’Ivoire, Anadarko is planning for a drillstem test and interference program as part of its appraisal of the deepwater Paon discovery. The program will likely include further appraisal drilling during the second half of this year. Data from these operations should shed light on reservoir connectivity, deliverability, fluid properties and reservoir size, with positive results moving the partners closer to a final investment decision. Additionally, the company is preparing to drill a first well on a prospect in the CI-528 block in 2016. 

Namibia: AziNam Ltd., the offshore Namibia focused exploration company, is pleased to announce that it has received government approval for it to assume operatorship of Petroleum Exploration Licence 34, offshore Namibia, and that it has also opened its office in Windhoek, the capital of Namibia. In recent months AziNam has increased its working interest position in the majority of its offshore Namibia licences. During the course of 2014 AziNam increased its working interest in PEL 34 from 20% to 40%. The Government of Namibia, along with our partners, have now approved AziNam to become operator of PEL 34. The Company's current working interest positions in PELs 30, 33 and 34, offshore Namibia, stand as follows: PEL 30: Eco (Atlantic) Oil & Gas - 32.5% (operator); AziNam - 32.5%; Tullow Oil - 25%; Namcor - 10%. PEL33: Eco (Atlantic) Oil & Gas - 60% (operator); AziNam - 30%; Namcor - 10%. PEL34: Eco (Atlantic) Oil & Gas - 50%; AziNam - 40% (operator); Namcor - 10%. 

Nigeria: Shell, Seplat and four other oil companies have shut down their operations in some oilfields in the western part of Niger Delta, following vandalization of the Trans Forcados pipeline, ThisDay reports. The companies are: Shell Petroleum Development Company (SPDC), Seplat Petroleum Development Company and four other Nigerian companies comprising Shoreline Resources Limited, Neconde, First Hydrocarbon Nigeria (FHN) and Nigerian Petroleum Development Company (NPDC), a subsidiary of the Nigerian National Petroleum Corporation (NNPC). The Trans Forcados Pipeline (TFP), conveys crude oil produced by these companies from the producing fields to the Forcados Export Terminal. Vandals had earlier damaged the pipeline, resulting to the shutdown of crude oil production by these companies from late December 2014 to the first week of January 2015, before they struck again in the first week of March and more recently, the last week of April to the first week of May. Shell had earlier declared force majeure on Forcados crude oil stream, effectively disrupting the export of 189,000 barrels per day, following what it described as “series of leaks” in the Trans Forcados Pipeline. 

Nigeria: Nigeria’s government owes the nation’s oil marketers, importers and storage companies more than 200 billion naira ($1 billion) in subsidy payments, according to an industry body. The members of the Major Oil Marketers Association of Nigeria, which include Total SA, Oando Plc, Forte Oil Plc and Exxon Mobil Corp.’s local unit, are owed about 40 percent of that amount as of the end of March, with more costs incurred since then, Thomas Olawore, the body’s executive secretary, said on Tuesday. A “recent meeting” with Finance Minister Ngozi Okonjo-Iweala “was not conclusive,” Olawore said in an interview in the commercial capital, Lagos. “Something must be done” about the outstanding amount following the government’s payment of 154 billion naira last month, he said. Nigerians have faced long queues for fuel in recent weeks across Africa’s biggest crude producer and economy, which relies on imports to meet more than 70 percent of domestic needs. The government guarantees cheaper fuel by subsidizing gasoline, paying marketers the difference between the landing price of oil and the fixed domestic price. “A large part of that amount -- about 159 billion naira -- is made up of forex differentials claimed by the marketers,” Paul Nwabuikwu, a spokesman for the Finance Ministry, said by e-mail on Tuesday. “As the minister has said, there is need to verify this huge claim.” 

Nigeria: The Nigerian National Petroleum Corporation (NNPC) has said it was leading a drive to attract massive global investments into the nation’s gas sub-sector. This is contained in a statement by Mr Ohi Alegbe, the Group General Manager, Group Public Affairs, NNPC in Abuja. The statement stated that the measure was aimed at ameliorating the effect of drop in crude oil prices on the Nigerian economy. It stated that the Group Managing Director, NNPC, Dr Joseph Dawha, stated this at a panel session at the ongoing Offshore Technology Conference (OTC) in Houston, Texas, USA. 

Tunisia: Serinus Energy Inc. updated its Winstar-13 well onshore Tunisia on the Sabria Field. According to the company production testing of WIN-13 commenced on April 28, initially through on-site equipment, and was switched into the flowline on May 5. It is producing 41.5°API light oil and solution gas, consistent with the rest of the field. The test data has the well flowing at an average rate of 147 bpd of oil and 298 Mcf/d of natural gas. Initial flow was mostly water as drilling and completion fluids that had been lost to the formation during those operations were recovered. The water cut has dropped continuously since then to its current level of 19%. The current oil rate is fluctuating between 125 – 175 bpd with a gas-oil ratio of 2,200 ft3 per bbl and a flowing wellhead pressure of 403 psi. In contrast, the Winstar-12bis well averaged 553 bpd at a flowing pressure wellhead pressure of 2,550 psi during its first week of production in December 2014. Management believes that this disparity is due to a combination of wellbore damage and some type of obstruction in the tubing string. 

Middle East

Iraq: The oil and energy parliamentary energy Committee revealed on Monday that more than $ 22 billion have accumulated as debts for international oil companies operating in Iraqi oil provinces."More than $ 22 billion is the value of outstanding debt currently on central and southern governorates for international oil companies operating in the development and production of oil in the provinces of Basra, Maysan and Wasit," The committee's member , Tariq Sadeq told Shafaq News. Sadeq explained that "the debt accumulated on the Ministry of Oil because of the financial crisis and the ministry has to find an agreement formula with the oil companies to end the debt problem."Maysan oil police announced earlier that foreign oil investment companies in Maysan fields agreed to delay part of the financial dues payment this year and complete paying them next year. 

Iraq: Maysan Oil Company south of Iraq said on Monday, that the Chinese PetroChina company has completed the drilling of 122 wells in Halfaya oil field within the development field plan.The company's spokesman, Khaled Wahem told Shafaq News, that "the number of wells drilled in Halfaya oil field rose to 122 wells in addition to 18 wells in Bazerkan field as drilling operations are still ongoing." Halfaya oil field in Maysan province is considered one of the biggest productive fields in the province and has oil reserves rate extracted from the oil fields of the province to (16) billion barrels per day, as well as large amounts of gas as the Chinese Petro China Company works to develop the field.Halfaya oil field produces currently 200 thousand barrels of oil after the completion of the first two phases of development for the period from 2012 to 2014 at a cost of about $ 3 billion, according to a statement by the Chinese company in an official statement last year. 

Kuwait / Saudi Arabia: A unit of Chevron Corp. operating along the Saudi-Kuwaiti border confirmed it’s shutting down the Wafra oil fields for maintenance amid a shortage of staff and equipment, trimming a potential 250,000 barrels a day from global supply. Saudi Arabian Chevron holds a concession to Saudi Arabia’s 50 percent stake in oil and natural gas deposits in an area called the neutral or partitioned zone, Sally Jones, a London-based Chevron spokeswoman, said late Monday in an e-mailed statement. The Wafra fields lie in Kuwait’s section of the shared zone. The stoppage at Wafra may help reduce a worldwide glut that has pushed crude prices down by about 40 percent in the last 12 months. OPEC, which counts Kuwait and Saudi Arabia as members, chose in November to keep pumping crude oil to protect its share of the market rather than cutting output to boost prices. Brent crude, a global benchmark, was trading at $65.08 a barrel Tuesday at 8:42 a.m. in London. 

Oman: Oman Oil Co (OOC) will announce a new structure later this year and privatise some its companies, according to a senior official,Reuters reports. Issam al-Zadjali, chief executive of the state-owned company, which owns interests in exploration and production, petrochemicals, power generation and shipping, said that OOC would sell some of its assets by privatising several of its daughter companies, but did not specify which units would be put up for privatisation. The chief executive added that the company would be focusing more on Duqm, where it is currently building a refinery, and managing its international assets. He also revealed that OOC would sign a number of agreements with the State General Reserve Fund (SGRF), Oman's largest sovereign wealth fund, with the first planned to be on joint management of international investments. "In the future, we will be looking into investing in Africa, but not immediately," Zadjali said without elaborating. The SGRF opened an office in Dar es Salaam, Tansania in January. 

Saudi Arabia: Saudi Aramco will dedicate most of its spending to oil production over the next decade to maintain its position as the world's top crude oil exporter, the state-owned energy giant reiterated in its annual report for 2014. "The bulk of this spending will be in our upstream activities to ensure we maintain adequate spare crude oil production capacity to help stabilise the world oil market whenever disruptions occur," it said, referring to both exploration and production. Aramco added that in the shorter term it would also invest in boosting natural gas production to meet rising domestic demand. It did not give a monetary value for projected spending.Global oil demand is expected to rise to 111 million barrels per day in 2040 from around 93 million bpd currently, it said.The oil giant has completed a massive investment programme which took its output capacity up to 12 million bpd. Aramco said in its latest report that it planned to bring online the expansion of the Shaybah oilfield to 1 million bpd in April 2016, earlier than initially thought; previously, officials had indicated this would happen by end-2016 or early 2017. 

Turkey: Gazprom says it exported 5.4 bcm (190 bcf) of gas to Turkey via the Blue Stream pipeline in the Black Sea during the first four months of 2015. This represented a 4% increase over the same period in 2014. Blue Stream provides around 16 bcm (600 bcf) annually of Russian natural gas to Turkish consumers. During a recent meeting in Ankara, Gazprom Chairman Alexey Miller and Taner Yildiz, Turkey’s Minister of Energy and Natural Resources, addressed the upgrade of the gas pipeline and the new planned gas line from Russia to Turkey across the Black Sea. Last December, Gazprom and Botas Petroleum Pipeline Corp. signed a memorandum of understanding on constructing the new 1,100-km (683-mi) pipeline which will transport 47 bcm (1.7 tcf) to the Turkish-Greek border. 

UAE: GS Energy Corp. is poised to win a stake in Abu Dhabi’s largest onshore oil-field concession, joining France’s Total SA and Japan’s Inpex Corp. in a $22 billion venture, according to three people with knowledge of the matter. The energy unit of South Korea’s GS Holdings Corp. is set to sign a contract for the concession this week with state-owned Abu Dhabi National Oil Co., said the people, who asked not to be identified because the information is confidential. State-owned Adnoc is seeking overseas companies to join it in a new 40-year partnership to pump oil from the largest onshore producing deposits in the United Arab Emirates. The awards give companies from Asia, to which Abu Dhabi sells most of its crude, direct stakes in the emirate’s biggest producing fields. Inpex won a 5 percent stake last month. GS Energy bid for as much as 5 percent of the venture and said it would pay Adnoc as much as $1.1 billion in a signing bonus, according to a regulatory filing the company made on March 11.

UAE: Cosmo Oil and its Spanish upstream business partner Cepsa are in talks with the Abu Dhabi National Oil Co (ADNOC), aiming to obtain a new oilfield stake in the Middle Eastern nation, the Japanese firm's top executive said on Tuesday. Cosmo Oil's President Keizo Morikawa also said that Hail oilfield, in which Cosmo's joint venture with Cepsa has a stake, will likely start production from second-half 2016. He did not say which oilfield stake in the country it was aiming to obtain. Cosmo Oil and Cepsa have been working together on crude and natural gas development due to their close relations with Abu Dhabi. Abu Dhabi's state-owned investment vehicle International Petroleum Investment Co (IPIC) owns all of Cepsa and is the biggest shareholder in Cosmo, with nearly a 21 percent stake.Cosmo in 2011 was granted a 30-year extension on its stakes in oilfields in the United Arab Emirates, as well as a contract for a new concession for the Hail oilfield for the same amount of time. 

Rest of the World

Australia: MEO Australia Limited (ASX: MEO) advises that the National Offshore Petroleum Titles Administrator (NOPTA) has approved a six month suspension and extension to the current Permit Year 5 of NT/P68. As previously reported (see ASX Release 9th February 2015), MEO is in the process of withdrawing from the Blackwood gas discovery and retaining a 100% interest in the remainder of NT/P68, including the Heron gas discovery, with Eni bearing the costs of managing the division of the Permit. Permit Year 5 will now end on 26th October 2015, before which MEO will have the opportunity to renew NT/P68 for a further 5 years, subject to a 50% relinquishment and negotiation with the regulator of a suitable work program. 

Azerbaijan: BP will suspend operations for three weeks at West Azeri platform in the Caspian Sea for planned maintenance. Crude oil and condensate production in Azerbaijan fell to 42 MMT in 2014, down 3% YoY. In Q1-2015, the production in Azerbaijan rose 2% YoY to 10.6 MMT. Azerbaijan plans to produce 40 MMT of oil and 29 Bcm of gas in 2015.

China: The Chinese government is looking at stripping its biggest energy companies of their oil and gas pipelines, as part of sweeping industry reforms that would see the assets spun off into independent businesses, according to people with knowledge of the plans. China’s economic planning agency, the National Development and Reform Commission, is leading talks on the initiative, according to four people, who asked not to be named as they aren’t authorized to speak publicly on the issue. The separation of the pipeline units would be part of President Xi Jinping’s reforms to allow markets a more decisive role in the economy. The NDRC has held talks since last year on the sale of the assets with the biggest pipeline owners and the utilities that buy most of the fuels, the people said. A final decision on the plan or the number of companies to be created hasn’t been made. The assets could be worth as much as $300 billion, according to an estimate by Neil Beveridge, a Hong Kong-based analyst at Sanford C. Bernstein. 

China: China's shale gas output is expected to top 5 billion cubic meters (bcm) in 2015, said Guo Jiaofeng, a researcher with the Development Research Center of the State Council, reportedXinhua Finance on Tuesday. By 2020, the shale gas output of the country is likely to exceed 30 bcm, accounting for 15 percent of China's total gas output, Jiaofeng said adding that country’s shale gas industry is ready for massive commercial development after ten years of exploration experience, technology breakthrough and theoretical approach. Meanwhile, Sinopec on Monday announced start up of shale gas transmission pipeline connecting Fuling field in southwest China's Chongqing municipality. The 136-km pipeline will be able to transit 6 bcm of shale gas each year out of the Fuling field. Sinopec plans to build 63 platforms with 253 wells and form 5 billion cubic meters of shale gas production capacity in Fuling by the end of 2015, Xinhua Finance said. Last year, Sinopec’s Fuling field was verified by Chinese government as country’s largest shale gas play. The Ministry of Land and Resources verified proven reserves of nearly 107 billion cubic metres (bcm) in the Fuling shale gas field. 

China: China may relinquish its new status as the world’s biggest oil importer back to the U.S. in coming months as demand from refineries slows. The country bought about 7.4 million barrels a day of crude from overseas in April, overtaking U.S. imports of about 7.3 million, government data compiled by Bloomberg show. The Asian nation’s purchases may drop in the next few months as processing declines, according to ICIS China, a Shanghai-based commodities researcher. China’s new ranking shows how the U.S. shale boom is reshaping flows of oil around the world as suppliers hunt for buyers amid a global glut. A surge in American production is reducing the need for the world’s biggest economy to import crude while the Asian nation seeks to take advantage of a slump in prices to fill its emergency stockpiles. China, which is forecast to account for 11 percent of global oil use this year, increased shipments from overseas 13 percent to 30.29 million metric tons in April from a month earlier, according to preliminary data released by the Beijing-based General Administration of Customs on Friday. On a barrels-a-day basis, imports were at a record. 

Denmark: Maersk Oil has discovered hydrocarbons in the exploration well Xana-1X, which was drilled in license 9/95 in Danish North Sea. The well was drilled at a water depth of 68m and a total drilling depth of 5,701m in the Jurassic formation. At present the partners are in the process of assessing the technical and commercial implications of the discovery and looking at potential follow-up. The well is currently being plugged and abandoned. Ownership structure of license 9/95: Maersk Oil (34%, operator), Dong E&P (20%), Nordsofonden (20%), Noreco oil (16%) and Danoil Exploration (10%). 

India: Indian cabinet on Wednesday approved plans to sell a 10 percent stake in state-run oil refiner Indian Oil Corp and a 5 percent stake in power producer NTPC, a government source told reporters. Indian government has set an ambitious target of raising 695 billion rupees ($10.83 billion) through stake sale in state-run companies in 2015/16 fiscal year that ends in March 2016.

India: Indian Oil Corp (IOC) will hold 45 per cent stake in the planned LNG import terminal at Ennore in the southern Indian state of Tamil Nadu and 50 per cent interest will be offered to financial institutions, reported Press Trust of India. A joint venture company is being incorporated for setting up of the project. IOC would hold 45 per cent stake in the company while Tamil Nadu government enterprise, TIDCO will have 5 per cent holding. Balance 50 per cent will be for a strategic partner like LNG supplier, the official told Press Trust, adding that the project will be completed by 2019. Till a strategic partner is roped in, ICICI and IDFC have agreed to hold 50 per cent interest. Ennore will be the third LNG terminal on the east coast with state-owned GAIL India Ltd building a facility at Kakinada in Andhra Pradesh and Petronet LNG Ltd proposing a 5 million tons facility at Gangavaram in Andhra Pradesh. India currently has four LNG import terminals, all on the west coast -- Dahej and Hazira in Gujarat, Dabhol in Maharashtra and Kochi in Kerala. 

Indonesia: Indonesian state-owned energy firm Pertamina will halt operations at its oil trading arm, Petral, its chief executive said on Wednesday, after the unit was targeted by the president's anti-corruption campaign. "We see that the role of Petral is not significant in Pertamina's business. We report that Pertamina will stop Petral (operations)," CEO Dwi Soetjipto told reporters, adding that Petral's subsidiaries would be liquidated. Pertamina will take over the buying of crude and oil products from Petral Singapore, which had been the sole supplier to the state firm. 

Indonesia: ExxonMobil has begun ramping up production at Banyu Urip field in Cepu Block, located in East Java, Indonesia. The company targets to reach a peak output of more than 200 Mbbl/d in 2015. Banyu Urip is a light to medium waxy crude with very low sulphur content that will yield good output of diesel, kerosene and vacuum gas oil. Recoverable resources at the field are estimated at more than 450 MMbbl. The oilfield was producing 75 Mbbl/d at the end of Apr-2015. Ownership of Cepu Block: ExxonMobil (45%, operator), Pertamina (45%) and Jawa Timur Government (10%).

Poland: Poland's biggest power producer PGE and gas grid operator Gaz-System said on Tuesday they will work on developing the country's first power-to-gas conversion facility, which will turn the electricity produced at wind farms into gas. PGE and Gaz-System signed a letter of intent on Tuesday to prepare a feasibility study into the construction of the power-to-gas installation in 2015. Power-to-gas (P2G) is a technology which converts electrical power into gas fuel, using electricity to split water into hydrogen and oxygen through electrolysis. P2G can reduce surpluses of renewable power by converting them into gas, which can then be used in transport, domestic heating and power generation. The cost of the project will be up to 20 million euros ($22.49 million). The timeline to develop the project will be clearer later this year after the feasibility study is completed, a Gaz-System spokeswoman said.

United Kingdom: Falkland Oil and Gas Limited (“FOGL”), the exploration company focused on its extensive licence areas to the North, South and East of the Falkland Islands, is providing an operational update on the 14/20-1 “Isobel Deep” well that was spudded, by Premier Oil as operator, on 8th April 2015. The technical issues relating to the blow-out preventer (“BOP”) control system have now been fully resolved and drilling operations on Isobel Deep have recommenced.  Whilst these repairs were being undertaken the rig was utilised to drill top-hole sections and set conductors on the Chatham and Jayne East Locations.  On Jayne East, (FOGL 40% interest) the 36” conductor was set at a depth of 541metres and the well temporarily suspended. Drilling on Jayne East will recommence when the rig returns after the Humpback well in the South Falklands Basin. The Isobel Deep well is expected to take approximately 15 days to complete. A further release will be issued once logging is completed. 

United Kingdom: The CLH Group has taken over the ownership, management and operation of the GPSS (Government Pipeline and Storage System) network it acquired in March, after winning the bidding process organised by the UK Government. The GPPS shall now be known as the CLH Pipeline System (CLH-PS) with immediate effect. The CLH-PS is an oil logistics system that comprises 2,000 kilometres of pipeline and 16 storage facilities, representing 50% of the UK’s entire oil pipeline network. It has a capacity of over one million cubic metres. The CLH-PS network was previously owned and operated on behalf of the Ministry of Defence by the Oil and Pipelines Agency (OPA). The near 80 staff of the OPA will be retained within the newly formed CLH Pipeline System (CLH-PS) Limited, with its registered office located in London. 

USA: Shell has received the approval for its revised multi-year Chukchi Sea exploration plan from the Bureau of Ocean Energy Management (BOEM). The exploration plan proposes the drilling of up to six wells within the Burger Prospect, located in approximately 140 ft of water about 70 miles north-west of Wainwright. Shell will conduct its operations using the drillship M/V Noble Discoverer and the semi-submersible drilling unit Transocean Polar Pioneer. 

USA: BP has awarded a project contract to Technip for the Thunder Horse South Expansion project in the Gulf of Mexico. The project scope covers project management and engineering and permanent anchoring of two rigid production flowlines of 3.2 km each with four pipeline end terminations. Technip will also conduct pre-commissioning and testing of the new production pipeline systems on the south side of the Thunder Horse production drilling quarters unit. The current field development is located in Mississippi Canyon Blocks 778 and 822 at a water depth of approximately 1,900m. The offshore installation is expected to be performed in H2-2016 by Technip's flag ship vessel the Deep Blue. 

USA: Breitling Energy Corporation (OTCBB:BECC) (the "Company") announces the start of the drilling phase of the Steller Energy Cole #1 in northwestern Sterling County, Texas.   The proposed 8100-foot vertical well is scheduled to spud today in search of oil zones in the Wolfcamp lime and Cisco-Canyon sands.  The well is offsetting the Marathon #1 Cole that was completed in the Lower Wolfcamp formation in 1969, which intersected over 100-feet of limestone. 

USA: Royal Dutch Shell Plc’s plan to return to the Arctic this year shows exploration in one of the world’s most remote regions is proving resilient against the slide in crude prices. The U.S. Interior Department on Monday endorsed Shell’s plan to have two rigs drill as many as six exploratory wells in the Chukchi Sea off the coast of Alaska. Shell wants to resume work halted in 2012 when its main drilling rig ran aground and was lost. It also was fined for air pollution violations. Shell, which has already committed $6 billion to the Arctic project, is seeking to unlock Arctic resources that may total 10 times the amount of oil and gas produced from the North Sea so far, according to its website. Arctic oil is also being chased by Russia, though drilling has been slowed by sanctions. While exploration drilling in Norway’s Arctic will slow in 2015 to half last year’s level, at least seven wells are planned in the Barents Sea. The activity shows the long-term opportunity of Arctic oil trumping the drop in oil prices in a world where few large fields remain to be discovered. 

Uzbekistan: Lukoil has begun production tests of two gas treatment plants (GTPs) at the Northern Shady site and the Kuvachi-Alat field in Uzbekistan's Bukhara region as part of the Kandym Early gas project, which is being implemented together with Uzbekneftegaz. The GTPs have a combined annual capacity of 2.2 bcm and will process natural gas from 34 wells to supply the Mubarek gas processing plant.  Launching the new facilities will allow the company to significantly increase its gas production in Uzbekistan, Lukoil said Tuesday. More than 170 km of power lines, an electric substation, over 180 km of high- and medium-pressure pipelines, 237 km of fiber-optic lines, 150 km of roads and 7 bridges have been built under the Kandym Early gas project. The Kandym project is the initial stage of the large-scale Kandym group of fields surface facilities construction project under the Kandym-Khauzak-Shady-Kungrad PSA. The Kandym group consists of six gas condensate fields – Kandym, Kuvachi-Alat, Akkum, Parsankul, Khoji and West Khoji. The Northern Shady Site (Dengizkul Field) is located within the Khauzak-Shady Project area, but its surface facilities are being constructed as part of the Kandym project. 
Energy Prices

Crude Oil ($/BBL)
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(LME Official – 3 months Buyer)

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