PETROL & ENERGY 15.06.2015

The International Energy Agency on Thursday raised its forecast of global oil demand for this year by 400,000 b/d to 94.0 million b/d, but said the demand surge seen in the first half was likely to wane somewhat.

Despite a strong first half, "due to the temporary nature of many of the factors that contributed to the upside, annual growth may subside in 2H15," the IEA said in its latest monthly oil market report.

The report put second quarter demand 500,000 b/d higher than in last month's edition, while putting expected demand in both the third and fourth quarters 200,000 b/d higher than in last month's report.

It attributed the expected slowdown to a deteriorating outlook for demand growth in OECD countries as the stimulus from low fuel prices peters out and economies normalize after "post-recessionary bounces."

The IEA raised its expectation of the "call" on OPEC in the second half by 150,000 b/d compared with its previous report to 30.2 million b/d, noting this was 1 million b/d below what the group has been producing in recent months.

It also said OECD commercial inventories had risen by a "steep" 38.0 million barrels in April, ending the month 147 million barrels above average levels, the widest difference since April 2009.

Preliminary data suggested a 12.6 million barrel increase in May, it added.

The report said OPEC had increased its output by 50,000 b/d in May to 31.33 million b/d, with Saudi Arabia, Iraq and the UAE all pumping at record monthly rates.

"Barring unforeseen outages, OPEC is likely to keep pumping at around 31 million b/d during the coming months as Middle East producers sustain higher rates to preserve market share and meet summer domestic demand," it said.

The IEA raised its forecast of non-OPEC supply in 2015 by 195,000 b/d to 58.0 million b/d.



Angola: The director of Sonangol Production, Belarmino Chitangueleca, foresees difficulties in procuring qualified personnel in the country to conduct production operations in the oil fields in the short term, for lack of talent at domestic market. According to him, who spoke on the sidelines of the conference on oil and gas, which took place on Thursday in Luanda, due to this situation, it is being insufficient to replace technicians who reach the age of retirement. "There are many people who are retiring and the replacement is not being made as expected because there are no talented technicians at the domestic market", he said. As for oil production, by Sonangol, he said it is on the route of growth, despite low oil prices at the international market. To Belarmino Chitangueleca it is essential to work for increased oil production and equate the paralyzed projects. Alexandre Oliveira, the consulting firm Ernst&Young (EY), organizers of the conference, considered the low oil prices at the international market as a shock to the industry of the sector. He said that with this situation, it is crucial that the companies of the sector should create a solid basis that fits the reality of the market. The one-day conference aimed to interact with the agents of the oil sector operating in the country.

Cameroon: The current rise in oil production in Cameroon should be short-lived. Indeed, after crossing the 100,000 barrel per day threshold in 2002 in the first four months of 2015, the production rate will fall to 65,000 barrels per day in 2018. This was revealed by the American ratings agency, Standard & Poor’s (S&P), which cites the Cameroonian government’s forecasts, including the State-run oil company, Société nationale des hydrocarbures (SNH). However, in the immediate, according to the public company’s projections, oil production in Cameroon should double in 2016 to around 57 million barrels, compared to 27 million barrels in 2014 and 24.4 million barrels in 2013.

Egypt: Egypt's President Abdel Fattah al-Sisi asked his government on Saturday to consider postponing a smart card system for subsidised fuel which was due to come into effect in two days, state media said. The report had no further details. Egypt was planning to roll out the new system from June 15, as part of plans to reduce costly energy subsidies over time. Fuel subsidies have long weighed on Egypt's state budget and contributed to the economic stagnation that al-Sisi promised to tackle when he took office last year. The government cut fuel subsidies last summer, raising prices by up to 78 percent, in a move lauded by economists but criticised by some Egyptians accustomed to cheap energy. More subsidy cuts are expected in the coming years. A similar smart card system for subsidised bread has been widely seen as a success for the government because it saved money and also helped families who no longer have to wake up early to fight for loaves. The new cards do not entail rationing for now but will enable the government to monitor the amount of fuel being consumed per vehicle and thereby to crack down on smuggling. Eventually each card will be assigned a ration for subsidised prices. Egypt is home to an estimated 4.5-5.5 million vehicles. 

Egypt: DEA’s assets in Egypt will see some investment from the company in the coming year. In a bid to increase its oil and gas flow rates at its assets in the Gulf of Suez and Kafr el Sheikh, DEA plans to spend an estimated $274 million in the coming fiscal year. Mohammed Beydoun, chairman of DEA’s JV in Egypt, said that his company’s foreign partner has allocated investments of $191 million to explore and develop wells in the Gulf of Suez. DEA will spend about $83 million on the onshore Disouq field in the ​​Kafr El-Sheikh area to develop wells, with production there to increase to 200 Mcf/d during Q1 of the next fiscal year, compared to the current rate of 130 Mcf/d.

Ghana: Sinopec International Petroleum Service Corporation has begun front end engineering design (FEED) for the next phase of Ghana Western Corridor Gas Infrastructure Development Project at Atuabo. Mushtaq Kaloo, Sinopec’s Engineering Advisor on the Ghana Early Phase Gas Infrastructure Project, said that that the FEED would allow them to determine the specifications of the project, including costs, capacity, pipeline routes and other details. Sinopec also announced that it will also help Ghana develop its oil and gas industry so that the West African country could derive maximum benefits from its hydrocarbon resources Ghana’s first ever US$850mn gas processing plant (GPP) was constructed by the Chinese firm recently. The Atuabo plant is currently processing about 2.83mn cu/m of gas per day from Jubilee field; about two-thirds of its installed capacity of 4.24mn cu/m of gas per day. After building the facility, the Chinese company signed a two- year contract to operate and maintain the plant while training young Ghanaian engineers in its operation and maintenance. 

Libya: Libya’s official government, based in the east since fleeing the capital, has so far failed to sell oil by itself, despite setting up a Dubai bank account and new central bank unit, industry and banking sources say. The internationally-recognised government said in March it wanted oil buyers to pay through a new state oil firm with an account in Dubai and stop dealing with the established entity in Tripoli controlled by a rival government. Last week the government of premier Abdullah Al-Thinni, which has been struggling to make an impact since losing Tripoli last year to a rival faction, launched another attempt to control public finances by setting up a new central bank headquarters in the eastern city of Bayda. Thinni’s government controls more than half of Libya’s oil output of 460,000 barrels per day. But it has failed to attract buyers as foreign firms worry about who exactly owns the oil being marketed by the eastern government, even though it is recognised, industry insiders say. A central bank source confirmed that oil buyers were continuing to pay through the state oil firm NOC and central bank in Tripoli, keeping in place a decade-old payment system. Husni Bey, who heads one of Libya’s biggest private firms, said Thinni had pushed the eastern central bank governor Ali Salem Hibri to set up the Bayda bank to show he wants to run the whole country, but little work was done at the bank. 

Namibia: Pancontinental Namibia Pty Ltd, a subsidiary of Pancontinental Oil & Gas NL and its EL 0037 joint venture partner and Operator Tullow Kudu Limited, a subsidiary of Tullow Oil plc (“Tullow”) have agreed (subject to certain conditions) to amend the farmout agreement between the companies dated 5 September 2013. Tullow recently requested from Pancontinental an extension to a deadline under the farmout agreement concerning a “drill or withdraw” decision by Tullow, which was to have been made by 11 August 2015. Pancontinental has agreed to an extension of the deadline to 31 March 2016. The extension will allow the joint venture time to further assess the results of the extensive exploration programme of 3D seismic and geological work that have been carried out to date. Pancontinental is very encouraged by the exploration results of Tullow’s exploration activities within the EL 0037 area. 

Nigeria: Blackstone and Black Rhino, the giant private-equity firm, has revealed on Thursday, the appointment of  Lamido Sanusi, Emir of Kano and Former Governor of the Nigerian Central Bank, as Chairman of the Board of Directors. Black Rhino was formed in January 2012 to develop and to invest in transformational infrastructure projects in Sub-Saharan Africa’s power generation and fuel transportation sectors. “We are pleased that Emir Sanusi has agreed to lend Black Rhino his considerable expertise and wisdom as Chairman,” said Sean Klimczak, a Senior Managing Director at Blackstone who oversees the firm’s global private equity investments in power generation and natural resources. “We look forward to work closely together as we develop energy solutions for Sub-Saharan Africa.” Mr. Sanusi was named Emir of Kano in June 2014, the second-highest Muslim authority in Nigeria. Prior to his appointment, Mr. Sanusi had a distinguished 25-year career in banking. Sanusi began his career in 1985 at ICON Merchant Bankers, a subsidiary of Morgan Guaranty Trust and Baring Brothers, and later ran the credit and risk management division at the United Bank for Africa.

South Africa: South African power utility Eskom said on Sunday it would be imposing 'Stage 1' rolling blackouts from 1500-2000 GMT to ease pressure on the grid. 

Middle East

Iran: Iran expects to boost natural gas exports to Iraq after completion of Iran Gas Trunkline VI (IGAT VI). Ali-Reza Gharibi, managing director of Iran Gas Engineering and Development Company, said construction of the second section of the pipeline would be also of help in sustained gas delivery to western and northwestern Iran, Shana News reported Saturday. The project is estimated to cost $2.2 billion and is among the top priorities of the company in the current calendar year to March 2016, Gharibi added. IGAT VI starts from South Pars gas field reaching Dehgolan after crossing Khozestan, Lorestan, Ilam and Kermanshah provinces. An IGAT-VI offshoot will raise the volume of gas export to Iraq. The two countries have signed a deal under which Iran will export gas to Baghdad with a daily volume of 4 mcm which could increase to 35 mcm/d. Actual supply has been continuously delayed due fragile security situation prevailing in Iraq. A second gas deal is expected to be signed next year between the two nations. Post the six year deal Iran will start supplying 5mcm/d of gas to Basra. The deal requires Iran to raise gas exports to Basra to 30 mcm/d, Shana added. Gas delivery to Basra would come from IGAT VI. 

Iran: Iran needs $100 billion to rebuild its gas industry and has met with European energy giants as an end to decades of international sanctions looms, according to the state-run company in charge of discussions. “We welcome and appreciate investment by companies; we welcome new technology,” Azizollah Ramazani, international affairs director at National Iranian Gas Co., said in an interview in Paris. “During the last 18 months we have had many discussions with foreign companies.” While commodity markets fixate on a return of Iranian oil, the importance of gas in the longer term was underlined Wednesday as BP Plc data showed the Islamic Republic held its position as the nation with the largest proven reserves of the fuel after snatching the crown from Russia in 2011. Deputy Oil Minister Hamid Reza Araghi met with international companies at the World Gas Conference in June, Ramazani said, adding that half of the $100 billion that Iran requires will need to come from foreign producers. The prospect of renewed fossil-fuel supplies from Iran is one of the great unknowns for global energy markets already shaken by surging U.S. shale output and Saudi Arabia’s decision to keep pumping oil even as prices collapsed. 

Iraq: Islamic State militants attacked government forces and their Shi'ite militia allies on Saturday, killing 11 near the city of Baiji as part of the battle for control of Iraq's biggest refinery, army and police sources said. Four suicide bombers in vehicles packed with explosives hit security forces and the local headquarters of the Shi'ite militias in the area of al-Hijjaj, 10 km (6 miles) to the south of Baiji town, near the refinery, sources at the nearby Tikrit security operations command said. Iraqi government forces and powerful Iranian-backed Shi'ite militias face Islamic State on several fronts in Iraq, a major oil producer and OPEC member. They include areas around Baiji refinery, north of Baghdad, and the city of Ramadi west of the capital, seized last month by Islamic State, the ultra-hardline Sunni group that poses the biggest threat to Iraq since the fall of Saddam Hussein in 2003. Ramadi is the provincial capital of Anbar Province, Iraq's Sunni heartland. On Wednesday, President Barack Obama ordered the deployment of 450 more U.S. troops to Anbar to advise and assist fragile Iraqi forces being built up to try to retake territory lost to Islamic State. Iraq has been struggling to find a formula for stability since the last U.S. troops withdrew in 2011, with the battle against Islamic State and widespread sectarian bloodletting severly hampering efforts to rebuild the economy.

Israel: Prime Minister Benjamin Netanyahu said a deal is in the works that would allow the development of a large natural gas field that will balance the needs of energy companies and Israel's regulators while preventing overcharging. Netanyahu said the cabinet would discuss a national gas plan this week that will lead to lower electricity prices. He is under pressure to strike a balance between moving ahead with plans to develop the large Leviathan gas field while creating competition, since Leviathan is owned by the same firms as the nearby Tamar site that started production in 2013. The fields are off Israel's Mediterranean coast. The issue has come to the forefront of Israel's economic policy after anti-trust commissioner David Gilo last month said he would step down to protest at a lack of competition in the gas sector. Noble Energy and Delek Group own 85 percent of Leviathan, which has an estimated 22 trillion cubic feet (622 billion cubic metres) of reserves. Production had been expected to begin in 2018 following an initial investment of around $6.5 billion but development has been frozen.

Oman: Exploration activities targeting hydrocarbon prospects in Block 42 are set to shift into higher gear as Oman Oil Company Exploration & Production (OOCEP), the wholly owned upstream subsidiary of Oman Oil Company, prepares to drill its first exploration well in this frontier hydrocarbon domain in the east of the country. OOCEP has a 100 per cent interest in the 25,600 sq kilometre concession encompassing the northeast coastal range of the Oman mountains and the basin immediately to the south under the Rimal al Sharqiya (Wahiba Sands). It is also the operator of the block, part of a portfolio of licenses that has placed this exclusively Omani oil and gas exploration and production in the top tier of oil companies operating in the Sultanate. According to the company, two key prospects have been identified as “drilling candidates” in the priority (Area-1) prospective zone. The first exploration well has been scheduled for drilling in the current second quarter of this year in line with OOCEP’s commitment under an Exploration & Production Sharing Agreement (EPSA) signed with the Omani government. The well will test the presence of hydrocarbons in the Rimal al Sharqiya structure. A second exploration well is planned to follow on the heels of the first well targeting independent reservoirs in the Sedrah NW structure. 

Qatar / Pakistan: Negotiations between Pakistan and Qatar over import of LNG have hit a snag, according toExpress Tribune, a Pakistani newspaper. The talks regarding imports, to be done on a government-to-government basis, have been stuck on the issues of mode of payment and issuance of standby letter of credit (SBLC) by independent power producers (IPPs). Currently, Pakistan State Oil (PSO) is importing LNG through spot purchases after failing to finalise the government-to-government LNG trade deal with Qatar, Express Tribune reported. Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi said, “The power sector has not yet provided guarantees for LNG payments, but we are close.” All arrangements with Qatar had been finalised except the payment mechanism and this is proving to be a thorn in taking the agreement forward, Express Tribune said adding that Qatar wants the Pakistani government to ensure the payment mechanism, especially given the country’s circular debt issue that has plagued the power sector. 

Saudi Arabia: Representatives of Aramco Overseas Company were in London last week, as part of a drive to attract revenue. Opened by Fahad Al-Abdul Kareem, managing director of Aramco Overseas Company (AOC), the Aramco Investment Forum delivered a busy opening day — the first of four geared toward highlighting the Kingdom’s investment potential, according to the Arabian Sun. Alongside the event holders, AOC, were a host of Saudi entities, including Saudi Aramco itself, whose chief representation came via Nabeel A. Al Mansour, vice president of Material Supply. “As one of the world’s leading energy enterprises we are keen to underline the scope of opportunity between us and potential partners. Indeed, investors can work with us across many areas, from our core upstream business, to our expanding downstream portfolio,” said Al Mansour. “Through offices around the world, we have an excellent track record of working with overseas partners, and in order to support both the growth of Aramco and the Kingdom, we are looking for partners to now join us in Saudi Arabia,” he added. In Europe, Saudi Aramco (through AOC) purchases high volumes of materials and services to support current operations in the Kingdom, making London a strategic location for hosting an investment-led event, added the report. 

Saudi Arabia: Saudi Aramco Total Refining and Petrochemical Company (Satorp) has secured a $533.33mn loan from the state-affiliated Saudi Industrial Development Fund in Riyadh, Reuters reports. The company is expected to draw the 7.5% loan in a single disbursement on or around 28th of August, the report said. A joint venture between Saudi Arabia's national oil company, Saudi Aramco, and France’s Total, Satorp is located in Jubail Industrial City, about 100km north of Dammam in the Eastern Province. Satorp started operation in late 2013 and with current production of 400,000 barrels per day is one of Saudi Arabia's major refineries. Saudi Arabia in recent years has stepped up its plans to diversify away from its reliance on crude oil export and develop its refining sector with a number of significant projects currently in the pipeline. Inside the Kingdom, Aramco is set to build a $7bn refinery in Jazan and has reportedly started talks to build a petrochemical plant in Indonesia. Through its subsidiaries, the oil giant owns stakes in several joint ventures in South Korea including Korea’s largest refiner S-Oil.

Saudi Arabia: Saudi Arabia, the world's biggest oil exporter, told OPEC that it kept pumping the most crude in three decades last month amid growing signs that the 12-nation group's quest to maintain market share is working. The kingdom produced 10.33 mbpd in May, an increase of 25,000 bopd from April, according to data the country communicated to the Organization of Petroleum Exporting Countries. The group supplied almost 31mpd collectively, the most in almost three years. OPEC decided on June 5 to persist with a strategy of maintaining production, insisting suppliers outside the group should be the ones to curb a surplus. Oil stockpiles in developed economies are more than 100 31mpd above the five-year average for the time of year. US production will peak this year and shale supply is starting to slow, Energy Department reports show. The group "expects non-OPEC supply to decline in the second half of 2015, compared to an increase in the first half." Brent crude futures for July settlement gained as much as $1.48, or 2.3%, to $66.36/bbl on the London-based ICE Futures Europe exchange, the highest since May 22. 


Rest of the World

Australia: Australia might be receiving plenty of praise as it builds towards becoming a leading global exporter of liquefied natural gas (LNG) but there are still fears the country won’t be able to make the most of this opportunity. According to Chevron Australia Pty Ltd.’s Managing Director Roy Krzywosinski, service providers will play a key role in helping to overcome these fears by demonstrating Australia has the capability and capacity to support a globally competitive LNG industry. He believes it is critical Chevron, and other major operators around the country, maintain strong relationships with services companies beyond the construction phase to deliver a healthy sector and prosperous domestic LNG industry. Speaking at the Australian Petroleum Production & Exploration Association (APPEA) Conference in Melbourne recently, Krzywosinski said the LNG industry in Australia was in transition and would rely on a services sector that was prepared for the changing environment. “The industry’s capacity has never before been stretched or tested (like this) with the addition of 13 new gas trains. I believe the most successful services companies over the long-term will be the ones who are flexible, adaptable and cost competitive,” Krzywosinski said.

Canada: Pacific NorthWest LNG (PNW LNG) announced today that the required technical and commercial components of the project have been satisfied. Consequently, PNW LNG has resolved to move forward with a positive Final Investment Decision, subject to two conditions. The Final Investment Decision will be confirmed by the partners of PNW LNG once two outstanding foundational conditions have been resolved. The first condition is approval of the Project Development Agreement by the Legislative Assembly of British Columbia, and the second is a positive regulatory decision on Pacific NorthWest LNG’s environmental assessment by the Government of Canada. Progress Energy Canada and the North Montney Joint Venture partners will continue to invest in its North Montney natural gas resources. The investment to date has proved and probable natural gas reserves of over 20 trillion cubic feet (tcf) with $2 billion-plus invested annually, representing approximately 4,000 sustainable jobs in northeast British Columbia. 

China: Northwest China's Xinjiang Uygur Autonomous Region is likely to submit final version of crude oil and natural gas development and utilization plan in 2016-2020 for approval, Xinhua Financereported Thursday citing statement from local government. Local government recently held a meeting to examine the draft of the development and utilization plan. PetroChina Planning and Engineering Institute (CPPEI) undertakes the task of drafting of the plan, according to Xinhua Finance. In the past few decades region’s natural gas output has soared manifold. In 2005, Xinjiang yielded 10.6 bcm of gas which rose to 29.6 billion last year, accounting for 23.5 percent of the country’s total output. This year, the region is expected to produce 30.5 bcm of natural gas. Xinjiang has three major gas-rich basins – Tarim, Junggar and Tuha, which supply gas to booming eastern regions of China. 

Colombia: Colombia's reserves of crude oil were down 5.6 percent to 2.3 billion barrels at the end of last year, the mines and energy ministry said on Friday, due to attacks by leftist rebels on infrastructure and the global fall in crude prices. Reserves, equal to 6.4 years of output at the country's current production rate, were down from 2.4 billion in 2013. The Andean nation, where taxes and royalties from oil make up 20 percent of government revenue, has been battered by the global fall in prices. Crude is the country's largest export and source of foreign exchange. "We are looking to increase our crude reserves and maintain production above 1 million barrels (per day) to keep moving the country's economy," Energy Minister Tomas Gonzalez said in a statement. Colombia's private sector oil producers' association has warned that a fall in exploration and investment could threaten efforts to increase output to a million barrels per day this year. Marxist rebels have recently increased attacks on oil infrastructure such as pipelines. Colombia's oil production was 988,100 barrels per day in 2014. Gas reserves were 5.9 tera-cubic feet, equivalent to 13.2 years of reserves, the ministry added. State-run Ecopetrol produces most of the country's crude oil, while Toronto-listed Pacific Rubiales Energy Corp is the industry's biggest private player. 

Ecuador: Amerisur Resources has signed an agreement with Petroamazonas for the construction and operation of the pipeline from the Ecuadorian border to the point of connection with the RODA gathering system for the transport of Amerisur's crude oil. As per the agreement, the minimum transport volume guaranteed by Petroamazonas to Amerisur is 5 Mbbl/d. The transport tariff from the point of reception to the point of delivery at Lago Agrio is $1.09/bbl. The company expects the Ecuador-Colombia Interconnector to be in operation in Q4-2015. (Selected by SPTEC Advisory from 1derrick, June 12)

France: French oil major Total said on Saturday management had ordered the halting of the La Mede refinery in southeast France after a union launched a strike against plans to stop crude processing at the plant. Total intends to halt crude oil processing at its 153,000 barrels-per-day La Mede site near Marseille by the end of 2016 as demand for petroleum products declines in Europe. The hardline CGT union launched an unlimited strike at the plant on Thursday and has threatened to extend it to the entire oil sector in France. Around 18 employees out of 430 had joined the action, a company spokesman said. "The site management gave on Friday night the order to shut down the refinery since the CGT strike does not allow the units to be operated normally and safely," the spokesman said. Talks were ongoing with a group of other unions representing a majority of employees, he added. The refinery shut-down would not disrupt fuel supplies in the region this weekend nor next week and it would take several days to bring the plant to a standstill, he said. Most units, apart from distillation and a reformer, had already been halted since an electricity outage last week, the spokesman said. The company plans to cut 180 out of 430 jobs at the plant, as well as investing 200 million euros ($225 million) there to create France's first biorefinery. 

Indonesia: Indonesia's energy ministry said Friday the country will rejoin the Organization of Petroleum Exporting Countries this year to forge a closer relationship with oil suppliers. I Gusti Nyoman Wiratmadja Pudja, director-general of oil and gas at the ministry, said Indonesia will reactivate its membership in November after all OPEC members approved its application to rejoin the oil cartel at a meeting in Vienna last week. The Southeast Asian country left the group in 2008 after nearly five decades of being the only Asian member amid declining oil reserves and investment. The country joined OPEC two years after it was founded in 1960. Indonesia hopes membership will strengthen its ability to secure oil supplies and attract investment to its domestic energy industry. It is Southeast Asia's largest oil producer, but the nation of 250 million people has imported for years because of aging wells and exploration failures. Consumption is continuing to rise but an unpredictable legal system and bureaucracy has deterred foreign investors. Indonesia with a 2015 oil production target of 825,000 barrels per day would be the fourth-smallest producer in a 13-member OPEC ahead of Libya, Ecuador and Qatar. 

Malaysia: A small-sized oil tanker went missing off the southeast coast of Malaysia close to Singapore over the weekend in what could be the second hijacking of such a vessel this month, maritime officials said on Monday. The Malaysian Maritime Enforcement Agency (MMEA) said the 7,300 deadweight tonne (DWT) Orkim Harmony disappeared about 30 nautical miles from the Johor port of Tanjung Sedili, carrying nearly 7.5 million litres or 48,000 barrels of RON95 gasoline. The Orkim Harmony is operated by shipping company Orkim Ship Management. "Orkim Sdn Bhd regretfully confirms the report issued by Malaysia Maritime Enforcement Agency that the Company has lost contact with its vessel Orkim Harmony early morning 12 June," the ship's operator said in a statement. The MMEA said there would be an official briefing at 0700 GMT. 

Mexico: BlackRock Inc., the world’s largest money manager, agreed to buy Infraestructura Institucional, a Mexican infrastructure investment firm, to expand its presence in the country. Terms of the deal weren’t provided. Infraestructura Institucional oversees about $1 billion of invested and committed capital, New York-based BlackRock said Friday in a statement. The purchase will bring assets in BlackRock’s global infrastructure platform to more than $7 billion. The firm’s Mexico office will grow to more than 50 employees and $26 billion of assets under management. BlackRock, led by Chief Executive Officer Laurence D. Fink, is expanding offerings targeting infrastructure projects such as roads and bridges as it seeks alternatives to traditional bond investments, whose returns have been eroded by years of near-zero interest rates. Earlier this year, it agreed to buy a stake in two natural gas pipelines owned by state oil company Petroleos Mexicanos in a joint deal with First Reserve Corp. Mexican President Enrique Pena Nieto enacted widespread energy industry changes in 2013, 75 years after the country’s oil and gas business was nationalized. The government projects that opening up the industry will generate $62.5 billion in investments by 2018. 

Norway: The slump in investment in Norway's oil and gas sector, a cornerstone of the economy, is seen levelling off from 2016, data from Statistics Norway showed on Friday, although the central bank is still expected to cut interest rates next week. Economists had feared that the steep fall in investment following a plunge in crude oil prices, which has forced energy companies to delay or cancel projects and lay off staff, would continue into next year. "Recent investment surveys indicate a significant decrease in the investment level in 2015. The oil companies' preliminary estimates indicate that the fall will flatten out in 2016," the agency said in a statement. The agency's data were more upbeat than recent releases, which have been on the weak side. The crown strengthened from around 8.822 to the euro before the data to 8.717 as of 0850 GMT. A rate cut at the central bank's June 18 meeting is seen as all but a done deal among economists, although some said that was not as obvious as it was before the release. The data may reduce the possibility for further rate cuts after that, however. Total 2016 investments were estimated at 184.9 billion Norwegian crowns ($23.8 billion) which is 1.4 percent higher than the 2015 estimate released at the same time a year ago.

Netherlands: Geofinance N.V. ("Geofinance") has entered into a share sale agreement with International Finance Corporation ("IFC") to acquire from IFC 178,000,000 common shares of Candax Energy Inc. ("Candax") (TSX: CAX) , representing approximately 16.67% of the issued and outstanding common shares of Candax, for Cdn.$55,000 in cash, or approximately Cdn.$0.00030899 per common share.  The acquisition is subject to customary closing conditions. After giving effect to the acquisition, Geofinance will have ownership and control of 862,304,271 common shares of Candax representing approximately 80.75% of the issued and outstanding common shares of Candax.  Geofinance holds the shares for investment purposes.  Depending on various factors, Geofinance may take such actions with respect to its investment in Candax as it deems appropriate, including, without limitation, purchasing additional securities of Candax or selling some or all of the securities, engaging in hedging or similar transactions with respect to securities of Candax and/or otherwise changing its intentions with respect to the purpose of its investment in Candax. 

Norway: The semisubmersible Island Innovator has completed drilling an appraisal well and side track on the western flank of Lundin Norway’s Alta oil discovery in the Barents Sea. Alta is a short distance north of the company’s Gohta discovery and roughly 160 km (99.4 mi) from the northern Norwegian coastline. After drilling the Alta discovery well 7220/11-1 in October 2014, Lundin estimated recoverable oil and gas in the range of 125-400 MMboe. This year’s appraisal well 7220/11-2 was drilled 6.5 km (4 mi) to the southwest in 379 m (1,243 ft) of water. Main goals, which were achieved, were to confirm the reservoir model and prove hydrocarbon columns and fluid contacts similar to those established in the discovery well. The well encountered a 50-m (164-ft) thick gas column in rocks of variable reservoir quality. The subsequent 7220/11-2 A side track, drilled 330 m (1,082 ft) to the west of the well, found movable oil. Pressure data and fluid properties indicate communication between all three Alta wells. During a drillstem test on the side track, maximum production rate was 860 b/d of oil and 0.65 MMcf/d of gas through a 24/64-in. choke. Island Innovator will next drill appraisal well 7220/11-3 on Alta’s eastern flank in license PL609.

United Kingdom: Oil producer Afren is on the lookout for a new finance director after CFO Darra Comyn resigned on Friday, in the middle of a restructuring process to help it deal with a mounting debt pile. Comyn, who has been on Afren's board since March 2010, is expected to leave in the summer, in time to seal the restructuring deal, the company said. "Darra has agreed to remain as an employee of the company until the restructuring closes," Afren said. The company still held around $1.3 billion debt last month and said this week it would default on $11.9 million in interest payments on 2020 bonds. It has been hit hard by a series of problems over the past year, including the dismissal of founder and then CEO Osman Shahenshah, a dry oilfield in Iraqi Kurdistan and a failed takeover approach byNigeria's Seplat Petroleum. On June 10 it said it would provide an update on its recapitalisation within a week. Afren also announced on Friday it had appointed Petroceltic executive David Thomas as Chief Operating Officer, effective June 8. 

USA: Leading Gulf of Mexico oil producer Shell Oil Co, the U.S. arm of Royal Dutch Shell Plc , said it was removing non-essential workers from offshore platforms as a precautionary measure ahead of a low-pressure storm system given an 80 percent chance of becoming a tropical cyclone in the next 48 hours. Shell said there would be no impact to offshore production due to the removal of non-essential workers ahead of the storm system's approach to the U.S. Gulf Coast. The U.S. National Hurricane Center has warned that tropical storm conditions could appear along the coasts of Texas and Louisiana as early as Tuesday. Earlier in the day, Shell said it was only monitoring the storm system as did BP Plc. But by Sunday night, Shell said it was withdrawing workers who primarily provide support services to workers who operate off-shore platforms. "Shell has initiated efforts to reduce non-essential personnel on some offshore assets as a precautionary measure in addition to normal preparations for heavy weather," said Shell spokesman Ray Fisher. Removal of non-essentials can also be the first taken prior to temporarily closing production, which happens when production workers are removed to safer areas on-shore. U.S. oil companies have been closely watching the large tropical disturbance.

USA: The average price of regular grade gasoline rose by 3 cents over the last two weeks, the smallest gain in more than two months of steady increases, according to the Lundberg survey released on Sunday. "Prices appears to be peaking," said Trilby Lundberg, publisher of the survey. Drivers paid an average of $2.87 a gallon, 82 cents below the average price paid at this time last year. If strong U.S. gas supply continues and oil prices stay steady, then pump prices will likely stop rising for the first time since April, Lundberg said. The lowest average-price gasoline in the survey of cities in the lower 48 states was found in Tucson, Arizona, at $2.45 a gallon. The most expensive was San Diego, at $3.62 a gallon. 

USA: Repsol has awarded a contract to Erickson to provide crew and cargo transport to the North Slope of Alaska. This agreement will guarantee the use of medium lift aircraft to support Repsol’s oil and gas operations and provide emergency response services.
Energy Prices

Crude Oil ($/BBL)
Brent: $ 63.30 -2.18%

WTI: $ 59.72 -0.99%
OPEC Basket: $ 62.14 -0.43
Natural Gas ($/MMBTU)
Henry Hub: $ 2.81 +0.72%

Steel ($/MT)
Steel Billet: $ 115.00
(LME Official – 3 months Buyer)

€ 1 = $ 1.1196 -0.28%


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