PETROL & ENERGY 21.05.2015


Oil’s rebound and more certainty around company valuations are keys to driving mergers and acquisitions activity next year given the pent-up demand for deals, bankers said Tuesday at an energy forum in Houston.

“The dam will break at some point,” Stephen Trauber, vice chairman and global head of energy at Citigroup Inc., said at the Mergermarket conference.

The Permian Basin in West Texas and southeastern New Mexico is a hot area for M&A interest, while consolidation is expected in the Eagle Ford shale play in South Texas as producers try to drive efficiencies and lower costs, Trauber said. Offshore, drilling in the deepwater Gulf of Mexico is becoming a “big boys’ game” that is seeing smaller firms leave the subsea fields, he said.

“You have to be big-pocketed and large,” Trauber said. “There’s a lot of sellers and not a lot of buyers. I’m not sure there’s a long list of buyers established to take on the assets that are going to come into the marketplace.”

Oil’s rebound from a six-year low in March has faltered near $60 a barrel amid speculation that rising prices will encourage production in U.S. shale formations. The Organization of Petroleum Exporting Countries, led by Saudi Arabia, has increased output, exacerbating the oversupply. Goldman Sachs Group Inc. said a continuing surplus would send prices back down to $45 a barrel by October. 

 

Africa

Algeria: Algeria is expecting a 32,000bpd increase in crude oil production starting in July. The increase will come from the start of production from two fields, according to the state-run oil and gas firm Sonatrach. The new production increase will come when the BirSebaa field starts producing 20,000-25,000 bpd of crude in addition to 12,000-15,000 bpd from the Bir El-M’sena field, Sonatrach interim chief Said Sahnoun said, according to the official news agency APS. According to Sahnoun,Algeria saw production rates for the first four months of 2015 remain unchanged when compared to the same period in 2014. 


Egypt: German company DEA has sold its stake in the $12bn West Nile Delta (WND) project in Egypt to its joint venture partner and operator BP. The deal will enable the company to balance its portfolio, and includes the transfer of a portion of its stake in the ongoing phase 1 development of five trillion cubic feet of gas resources. With the remaining interest of 17.25% in North Alexandria and West Mediterranean Deepwater concessions, WND is said to remain the largest project in DEA's portfolio. Scheduled to begin production in 2017, the WND project is expected to produce 1.2 billion cubic feet per day, which is equal to 25% of the Egypt's existing gas production. 


Kenya: The Ministry of Energy and Petroleum has selected the Consortium of Liketh Investment Kenya and HCIG Energy Investment Company for the concession of both Mui Basin Coal Block A (Zombe-Kabati) and Block B (Mutitu-Ituku) in Kitui County. The consortium will now be invited for negotiations with the ministry as per the tender requirement on the basis of their responsiveness in the technical and financial proposals they submitted. The consortium is one of the three technically successful firms for the concession of the two coal blocks whose financial proposals were opened on March 23, 2015. The other two consortiums were a consortium of Transcentury Investments Continental Oil and Power Machines and the Consortium of the China Northeast Electric Power Engineering Corporation and China Coal Technology. 


Libya: Libya’s National Oil Corporation (NOC) reported that Eni has discovered gas and condensate in A1-01/01 well drilled in contract area D (NC41) in Sabratah Basin Offshore Libya. The well is located approximately 140 km from the Libyan coast and 20 km North of Bouri Field, at an average water depth of about 125m. 


Libya: Libya's El Feel oilfield is still closed due to a strike by security guards, a spokesman for state oil firm NOC said on Wednesday. The guards have shut down the western field, operated by NOC and Italy's ENI, to demand more jobs, oil officials have said. 


Namibia: Thorn in the flesh of Nampower, advocacy group Consumer 4 Electricity has projected that electricity prices are subject to increase by 100% sooner rather than later. Apart from the increase, the advocacy group believes the hikes are used as measures to fund the Kudu gas-to-power project as well as the Xaris coal power station. Speaking to the Economist, advocacy member Peter Nutt said, "These are interesting times. They [Nampower] are still aiming for a two dollar per kiloWatt/hour increase. They are aiming for 100%. This tariff increase is meant to create an equity base for the Kudu and Xaris power projects respectively." Drawing reference to the Electricity Act Nutt said, "The Electricity Control Board can not increase the price of electricity for projects that are coming, or when Nampower buys electricity from other countries."Another point of concern for Nutt is Nampower's deviation from its intended hike trajectory. According to him, Nampower is deviating from a cost reflective curve. Nutt further stated that the Electricity Control Board was informed of non-disclosure by the advocacy group. 


Nigeria: SacOil has terminated its JV with Nigdel United Oil Company of Nigeria, and has withdrawn its participation from Oil Prospecting Licence (OPL) 233. Accordingly, SacOil has the right to be refunded by Nigdel for all costs expensed to date on OPL233. The company has no future commitments and obligations associated with the appraisal of OPL233. Dr. Thabo Kgogo, CEO of SacOil, said: "The termination of the joint venture in respect of OPL233 is in line with the strategy communicated to shareholders previously; improves the company's financial position and will reduce future financial exposure emanating from such higher risk assets… With the expected return of capital from OPL233 and OPL281, combined with SacOil's existing cash resources, the company will be in a far stronger position to pursue its strategy of increasing production and focusing on cash generative assets." 


South Africa: South Africa's Eskom will reduce up to 1,000 megawatts of electricity from the national grid at 1400 GMT and then cut as much as 2,000 megawatts from 1500 GMT until 2000 GMT, the power utility said on Wednesday. 


Sudan: South Sudan’s government denied claims by rebel forces that they’ve seized oil fields in the north of the country after clashes in the region. Lony T. Ngungdeng, a spokesman for insurgents loyal to former Vice President Riek Machar, said on Tuesday that the fighters took control of facilities in Upper Nile state, which are still producing crude. Fighting is taking place around Malakal, the state capital, and Akoka, Information Minister Michael Makuei Lueth said by phone Wednesday from South Sudan. South Sudan has sub-Saharan Africa’s biggest oil reserves after Nigeria and Angola, according to BP Plc data. Its low-sulfur crude is prized by Japanese buyers as a cleaner-burning fuel for power generation. Before the fighting broke out, China National Petroleum Corp., Malaysia’s Petroliam Nasional Bhd. and India’s Oil & Natural Gas Corp. pumped most of the country’s oil. The oil fields at Paloch in Melut county in Upper Nile were captured in partnership with fighters led by Johnson Olony, whose split from the government last month has reinvigorated the rebels, said Mabior Garang, a spokesman for Machar’s insurgents. 


Tanzania: The Tanzania Petroleum Development Corporation hasindicated that there is a ‘very high’ possibility of discovering sizeable shale gas reserves in the Tanga region of the country. The announcement came as a result of research as part of an initial exploratory project in Gombero, which began in 2010 and formed part of a development programme for Tanzania’s young scientists to practise in-field research. TPDC acting Managing Director, Dr Emma Msaky, explained that the project is currently in its second phase, following the drilling of boreholes, both shallow and deep for exploratory purposes. This phase will involve new boreholes being drilled for sampling to identify the exact depth and quality of shales; this fresh research began over the weekend and is expected to last around 40 days. Co-ordinator of the Gombero project, Frank Mayagilo suggested that shale gas could be extracted in a shorter time than other natural gases and could require lower investment; he indicated that a deep shale borehole could cost a fraction of a natural gas site. 


Tanzania: Aminex (LON:AEX) chief executive Jay Bhattacherjee said it is a very promising time for his company, which is on schedule to be a new gas producer in East Africa. The company, which today issued an interim management statement, anticipates first gas from the Kiliwani North field shortly (by mid-2015). A new independent assessment of the Kiliwani North as well as the larger nearby Ntorya project and other exploration assets recently highlighted the potential prize for Aminex. The CPR, announced last week, identified 44bn cubic feet of contingent gas resources at Kiliwani North and saw 70bn cubic feet at Ntorya, meanwhile some 4.7 trillion cubic feet of gas potential was outlined across the broader Ruvuma project, onshore Tanzania. 


Uganda: The government of Uganda has pushed back the deadline for the closing of its first licensing round from the end of May to the end of July. The round consists of six exploration blocks in western and northern Uganda. Fred Kabagambe Kaliisa, Permanent Secretary for the Ministry of energy was cited by New Vision as saying 10 applications had been received for acreage to date, however the government is looking for more firms to participate in the licensing round. According to Kaliisa, an additional six companies had shown interest in getting exploration licenses but have not yet bought the request for qualification documents. Kaliisa added that the bid closing deadline had coincided with two international oil conferences in the US and the UK. The government plans to promote the round at the upcoming Global Pacific and Partners’ 12thAfrica Independents Forum 2015 taking place May 26 and 27 in London. Kaliisa hopes to attract more bidders from promoting the round at the conference. 

 

Middle East

Iran: Iran is planning a $2.8bn project which is projected to add 480,000 barrels a day of processing capacity at the Siraf refinery, Bloomberg reports. Ali-Reza Sadegh-Abadi, managing director of Siraf Refineries Infrastructure Co., said that the project will see the construction of new processing units which will turn condensate into exportable products. Using their own funds, private Iranian companies will build eight processing plants, each with a capacity of 60,000 barrels a day, said Sadegh-Abadi, who is coordinating the project. The project is scheduled to be completed in three years, he said. The Siraf refinery is located in the Iranian city of Assaluyeh on the Persian coast, near the giant South Pars offshore gas field. Production from the biggest phase of South Pars, Phase 12, started in March, adding to the country’s crude oil exports. Iranian exports doubled last year to about 200,000 barrels a day and contributed to total of 1.3mn barrels a day of shipments in April, according to the International Energy Agency. The country plans eventually to reduce exports of condensate to zero and use all of it in local refineries, Sadegh-Abadi said. 


Iraq: Iraq's cabinet has approved a $526.6 million drilling deal with China's Zhongman for the West Qurna Two oilfield, the government said in a statement on Tuesday.Under the 28-month contract, Zhongman Petroleum and Natural Gas will drill 66 production oil wells at West Qurna Two, operated by Russia's Lukoil, the statement said. The current production capacity of the West Qurna / 2 is more than 400 thousand barrels per day, but actual production is less than 350 thousand barrels per day.Ranked as one of the largest oil fields in the world, West Qurna Two, where Lukoil holds a 75-percent stake, is one of several big fields under development which are set to boost Iraq's economy. 


Qatar: Wintershall is ceasing its activities in Qatar and is returning Block 4 North near the North Field off the Qatari coast on 25 May 2015. Wintershall’s office in Doha will be closed. In 2013, Wintershall made the “Al Radeef” gas discovery off the cost of Qatar.  “During the development planning, it was always clear to us and our partners that an economic development of the discovery, including the processing of the gas, would only be possible if we have access to local infrastructure. This access was not granted. That is why we have decided to take this step”, explains Wintershall Board Member Martin Bachmann, who is responsible for exploration and production in Europe and the Middle East. Further activities in the Middle East region are not affected by the withdrawal from Qatar. The current focus of Wintershall is on the United Arab Emirates. “We are also closely following the developments in other countries in the region”, explains Bachmann. “The challenges in the region are increasing with local energy consumption growing rapidly. In order to maintain production in the long term, fields must be exploited more efficiently and technically more complex fields need to be developed.” 


Saudi Arabia: Saudi Arabia and its main Middle East OPEC partners are turning down Chinese requests for extra oil as they hold back fuel for their own refineries just as demand from the world's biggest crude importer hits new records.While the Saudi and other refusals for additional crude supplies may not be part of a new pricing strategy, the rejections to their biggest client help explain a 40 percent rise in oil prices this year as Chinese importers have had to seek more oil from other suppliers in what analysts say is still an oversupplied market. Senior Chinese oil traders told Reuters the Saudis have turned down requests from Chinaoil and Unipec - the respective trading arms of PetroChina and Sinopec - for extra cargoes of crude for May and June loadings, forcing them to seek supplies from producers in West Africa, Oman and Russia. Saudi Arabia "used to provide as and if we asked for extra cargoes on top of contract during the first four months of the year, but not for May and June," said a trader with one of China's biggest oil importers on condition of anonymity as he had no permission to talk to media. Another source with a Chinese refinery that takes Saudi oil said Saudi heavy crude was "a bit tight" in May and June. 


UAE: The Abu Dhabi Company for Onshore Petroleum Operations (Adco) has awarded the Engineering, Procurement and Construction (EPC) contract valued $334 million for the development of the Mender field to China Petroleum Engineering and Construction Corporation (CPECC). With a production capacity of about 20,000 barrels per day, the Mender field project is of strategic importance since it will help boost Adco’s daily crude production from 1.6 mbpd barrels to 1.8 mbpd by 2017. The contract was signed at Adco’s headquarters on May 17 by Abdul Munim Saif Al Kindi, Chief Executive Officer, and Ahmad Al Hammadi, Senior Vice President (South East), for Adco and by Hou Haojie, the president of CPECC, and Ji Chenglin, General Manager of CPECC Abu Dhabi. The contract covers the construction of gathering stations, pipelines and power transmission lines, as well as sewage systems.


UAE: The Arab Petroleum Investments Corporation (APICORP), has announced its 2014 full year consolidated financial results for the period ending 31st December 2014. The investment company established in 1975 by the 10 member states of the Organisation of Arab Petroleum Exporting Countries (OAPEC), posted a net profit of $105.03mn for 2014. The total was adjusted as the organisation took the step of building up an investment provision of $13.48mn. As of 31st December 2014, total assets had grown to $5.88bn, with shareholders’ equity increasing to $1.86bn. During the year, APICORP successfully finalised three Shariah-compliant medium-term funding facilities totalling $1.2bn, which is aligned with the company’s strategy of improving its terms of funding facilities and better managing its cost of funds. This was reinforced by Moody’s reaffirming the company’s foreign currency issuer rating of Aa3 for long-term debt, and Prime-1 for short-term debt, with a stable outlook, for the third consecutive year. APICORP’s balance sheet remains robust, with significant liquidity of $983mn and a very healthy capital adequacy ratio of 28.8%. 

 

Rest of the World

Brazil: Parnaiba Gas Natural SA, Brazil’s biggest independent natural gas producer, is investing 1.5 billion reais ($500 million) in projects including five fields in the country’s northeast. The producer backed by Cambuhy Investimentos, which counts Brazilian billionaire Pedro Moreira Salles as an investor, expects the plan to increase gas output 71 percent to 8.4 million cubic meters (297 million cubic feet) a day by July 2016, Henrique Rzezinski, institutional relations vice-president, said. PGN, as the Rio de Janeiro-based producer is known, emerged from the collapse of Eike Batista’s mining and energy conglomerate when Cambuhy agreed to buy the venture from the Brazilian entrepreneur hours before his oil company filed for bankruptcy protection in October 2013. The company, which is Brazil’s fourth largest operator of oil and gas fields, has a long-term agreement to supply the fossil fuel to four Eneva SA thermoelectric plants in the Maranhao state. PGN earlier this month received an environmental license to build a 40-kilometer (25 miles) pipeline connecting the Gaviao Branco fields to a gas treatment plant in Maranhao. 


Brazil: Brazilian state-run oil company Petroleo Brasileiro SA said on Wednesday it will only be required to pay for excess oil rights found in areas it bought from the government in 2010 when it declares the fields commercially viable. That means there is no set date for the conclusion of talks with the government on how to price any oil rights beyond the 5 billion barrels already purchased, Petrobras, as the company is known, said in a securities filing. Investors are concerned that Petrobras, which many believe overpaid for the initial exploration rights in a September 2010 oil-for-stock swap, will be forced to pay more even as rising debt, delayed output and falling oil prices crimp its cash and force investment cutbacks. Petrobras' preferred shares, the company's most traded class of stock, fell 6.3 percent on Tuesday, its biggest one-day decline in 3-1/2 months, on concern Brazilian Finance Minister Joaquim Levy was pressuring it to make the payment this year. Local news agency Agencia Estado on Tuesday said that payment could be as high as 20 billion reais ($6.6 billion). 


Bulgaria: Vagit Alekperov, OAO LUKOIL President, had a meeting with Rosen Plevneliev, President of the Republic of Bulgaria, and Boyko Borissov, Bulgaria’s Prime- minister, in Sofia today. The parties discussed the company’s operations in Bulgaria and prospects for future cooperation. LUKOIL has been operating in Bulgaria for nearly 16 years; the company owns the LUKOIL Neftochim Burgas Refinery, with production in 2014 at approximately 6 million tons of oil, and a sales network of 221 filling stations (194 stations of its own and 27 under franchise agreement). In May, a multi-purpose filling complex was commissioned on the highway 60 kilometers away from Burgas. The complex is equipped in view of the new corporate requirements and design. 


Canada: Alfa SAB and Harbour Energy Ltd. agreed to acquire Pacific Rubiales Energy Corp. in a deal that values Latin America’s largest non-state oil producer at about C$2.1 billion ($1.7 billion). The companies agreed to pay C$6.50 a share in cash, Pacific Rubiales said Wednesday. That’s 39 percent more than the Bogota, Colombia-based company’s closing price on May 4, the day before it said it had entered exclusive talks. Alfa, the Mexican conglomerate, is seeking to expand in oil as its home nation opens production to foreign investment. The company already owns almost 19 percent of Pacific Rubiales, according to data compiled by Bloomberg. Harbour was formed by Asian commodity trader Noble Group Ltd. and private-equity firm EIG Global Energy Partners LLC, to invest in energy assets worldwide. The price is 73 percent below Pacific Rubiales’s 2014 high, which was set before crude prices began to tumble. The Colombian company’s shares have fallen 66 percent over the past 12 months as the oil slump led to record losses. 


Italy: Sound Oil has encountered gas shows in the second Nervesa appraisal well  (AP-2015-1), north-east Italy. The well has reached a total depth of 2,054m. Mud log gas shows were recorded while drilling in the target reservoir zones within the Miocene San Dona Formation. The wireline logging has confirmed the presence of various gas bearing levels. Ownership of Nervesa: Sound Oil (100%, operator). 


Japan / Thailand: Japanese utility Tokyo Electric Power Co. (Tepco) and Thai state owned utility are joining hands to work together in LNG sector to gain cost competitiveness, reported Nikkei Asia ReviewThursday. Tepco and the Electricity Generating Authority of Thailand (EGAT) would cooperate in the procurement, shipment, and use of LNG to generate power. Thailand’s LNG demand and imports have been rising and the two companies hope joining hands will bring down procurement costs. The two companies plan to build several plants to meet Thailand's growing electricity demand, Nikkei reported. Tepco has already joined hands with Chubu Electric Power to procure LNG. 


Kazakhstan: Further to the announcement of 10 February 2015, Roxi, the Central Asian oil and gas company with a focus on Kazakhstan, is pleased to announce that  the sale of the Company's equity and debt interests in the Galaz Contract Area  to a consortium led by Xinjiang Zhundong Petroleum Technology Co, a Chinese publicly traded conglomerate, (the "Galaz Disposal"), is proceeding as planned and is now expected to complete by 31 May 2015. Following the recent rise in the price of Brent crude the total proceeds of Galaz Disposal will now be $100 million and the net proceeds attributable to Roxi will now be approximately $23 million. $2 million of the aggregate purchase consideration will be retained by the purchaser for a period of 12 months to cover warranty claims individually greater than $50,000. Roxi's share of this retention will be $0.68 million. 


Malaysia: Malaysia's dependence on oil-related revenue will decline to 15.5 percent by 2020, from just under 30 percent of revenue currently, state news agency Bernama said on Thursday, quoting Malaysia's economic planning unit. The federal government's total debt is projected to drop to 45 percent by 2020, from 54.5 percent of gross domestic product as of December 2014, the report added. Prime Minister Najib Razak, who is also the finance minister, is tabling a five-year plan in parliament aimed at leading the Southeast Asian nation toward its goal of becoming a fully developed economy by 2020. 


Malaysia: British Columbia and a group of companies led by Malaysia’s Petroliam Nasional Bhd. reached a preliminary deal on taxes and royalties for a proposed C$36 billion ($30 billion) liquefied natural gas project. The government and Petronas-led Pacific NorthWest LNG said the memorandum of understanding sets a path toward forging a final investment decision on the project. The agreement unveiled Wednesday at a press conference in Vancouver is a step forward for Pacific NorthWest, one of 19 LNG projects proposed in British Columbia to chill and ship western Canadian natural gas to growing energy markets in Asia. Last week, a British Columbia aboriginal community rejected almost $1 billion in compensation from Pacific NorthWest, a setback for the project. The Lax Kw’alaams band, whose ancestral lands overlap the site of the gas shipping terminal planned by Pacific NorthWest voted to reject the project. 


Norway: Faroe Petroleum reported that Statoil has failed to discover hydrocarbons in Bister (6407/8-7) exploration well in PL348/C, Norwegian Sea. The well was drilled by Transocean Spitsbergen drilling rig to a total vertical depth of 2,990m below sea level in the Are Jurassic formation. This was followed by side-track 6407/8-7A which was drilled to a total vertical depth of 2,770m below sea level. The well and side-track targeted hydrocarbons in the Jurassic, Ile, Tilje and Are formations where good quality reservoirs were confirmed, but no hydrocarbons were encountered at this location. The well will be plugged and abandoned. Ownership of PL348/C:  Statoil (35%, operator), GDF SUEZ (15%), E.ON (17.5%), Core Energy AS (22.5%) Faroe (7.5%) and VNG (2.5%). 


Norway: The Norwegian Petroleum Directorate (NPD) reported that Talisman Energy has failed to discover hydrocarbons in 15/12-24 S (Snomus) wildcat in PL672, North Sea. The well is located about six km north of the Varg field and 220 km south-west of Stavanger. The purpose of the well was to prove petroleum in Upper Jurassic reservoir rocks and Middle Jurassic reservoir rocks. The well encountered about 195m of sandstone mixed with siltstone in the Ula formation, of which 155m are sandstone of good to very good reservoir quality. The well also encountered 85m of sandstone mixed with siltstone in the Skagerrak formation in Upper Triassic, of which 45m are sandstone of generally poor reservoir quality. The well has weak traces of petroleum in sandstone rocks in both the Ula and Skagerrak formations. The well is classified as dry. The well was drilled by the Maersk Giant drilling facility to vertical and measured depths of 3136m and 3141m below sea level, respectively, and was terminated in the Skagerrak formation in the Upper Triassic. Water depth at the site is 86m. The well has been permanently plugged and abandoned. Ownership of PL672: Talisman Energy (25%, operator), Det norske oljeselskap (25%), Ithaca Energy (25%) and Fortis Petroleum (25%). 



Norway: A natural gas condensate leak at Statoil's Gudrun platform in the North Sea in February came close to causing a deadly accident, the company's investigation concluded on Wednesday. About 2.8 tonnes or 4 cubic metres of hydrocarbons leaked at a rate of 8 kilogrammes per second when a pipeline cracked due to increased vibration on Feb. 18. The platform's production was shut as soon as the leak was detected. Statoil said its investigation classified the incident as having the highest degree of seriousness, Red 1, which could have led to fatalities. "The investigation concludes that the outcome could have been fatal if anybody had been exposed to the leak. A gas leak of this size represents a major incident potential if ignited," Statoil's investigators said. Coincidently no one was close to the ruptured pipeline. "The investigation team believes that pure chance prevented a full pipeline break," they said. In case of a full rupture, condensate would have leaked at a rate of 140 kg per second. The platform was shut for 23 days as a result of the leak.


Russia: Terneftegas, a JV between Novatek and Total, started commercial production from the Termokarstovoye gas and gas condensate field, Northern Russia. There are 22 gas condensate wells drilled in the field. The field’s infrastructure also includes a gas gathering network, a gas treatment unit, and a gas condensate de-ethanization facility. The field is expected to reach its planned daily production level equivalent to approximately 2.4 Bcm of natural gas and 800 MTPA of de-ethanized gas condensate as early as Jun-2015. Michael Borrell, Total’s Senior Vice President E&P, Europe and Central Asia, said: “We are delighted with the start-up of Termokarstovoye, the first project executed together with our strategic partner in Russia Novatek, with whom we are also jointly developing the Yamal LNG project. Achieved ahead of schedule and below budget, this fourth start-up since the beginning of the year will contribute to Total’s production growth in 2015”. Ownership of Terneftegas: Novatek (51%) and Total (49%). 


United Kingdom: Royal Dutch Shell joined fellow oil company BP on Wednesday in calling on European regulators to refrain from imposing stricter capital requirements and greater disclosure measures on oil trading. Last month, the head of BP's trading division Paul Reed said some markets could be exposed to severe stress because of some looming EU regulations. Mike Muller, vice president for trading at Shell, sided with Reed's views on Wednesday, saying regulators would achieve undesired effects if companies and trading houses were forced to follow stricter capital requirement rules or be limited in their ability to trade derivatives. European authorities will implement a set of regulations known as the Markets in Financial Instruments Directive (Mifid II) in 2017, which contains capital requirement directive (CRD IV) aimed at cutting systemic risks across equity, fixed income and commodity markets. Both BP and Shell trading divisions employ hundreds of people and trade millions of barrels of oil and refined products per day. Shell will become even bigger when it finalises its acquisition of smaller rival BG. 


USA: Transocean Ltd., owner of the rig that sank in the 2010 Macondo disaster in the Gulf of Mexico, joined Halliburton Co. in settling all remaining issues with BP Plc. Transocean and BP, the well’s owner, will mutually release all claims against each other, while the London-based exploration and production company will pay the rig contractor $125 million in compensation for legal fees, Transocean said Wednesday in a statement. Transocean, based in Vernier, Switzerland, also agreed to pay $212 million to two classes of plaintiffs represented by a committee in the Macondo litigation. The settlements were the latest in a series of resolutions since the 2010 sinking of the Deepwater Horizon in the Gulf of Mexico, which set off thousands of lawsuits against BP, Transocean and Halliburton. 


USA: Rex Energy and Stonehenge Energy Resources II LP have signed an agreement for the construction of a natural gas gathering and compression system in Moraine East Area, Pennsylvania. Stonehenge will build the system in 2015 to gather Rex’s production in the Moraine East Area in Butler County. The initial part of the system will consist of a 20-mile trunkline, various gathering lines and a compressor station, which will fully support the early production from the area. The system's initial capacity of 400 MMcf/d could also be expanded to facilitate future development and growth in the Moraine East Area. The Stonehenge system will deliver gas to the Bluestone processing plant, owned and operated by MarkWest Energy Partners LP. 


Venezuela: Petroleos de Venezuela SA is looking to import sweet crude from as far away as West Africa or the North Sea to mix with its heavy oil and produce refined oil products, according to two people familiar with the discussions. A delegation from PDVSA, as the state producer is known, traveled to Houston late April to seek long-term structured supply deals for 40 to 42 degree API oil from West Africa or the North Sea rather than grades from the U.S., the people said, asking not to be identified because talks are private. PDVSA is not interested in condensates from the U.S. since it doesn’t believe they yield good gasoline, the people said. Caracas-based PDVSA plans capital investments of $277.9 billion during 2015 and 2019 to increase production to 6 million barrels a day from 2.79 million in 2014. 

Vietnam: Vietnam has raised retail petrol prices by more than 6 percent to as high as 20,830 dong ($0.96) per litre on Wednesday, the third increase this year, top fuel importer and distributor Petrolimex said. The new prices, in effect from Wednesday night, were in line with the latest global prices of oil products, Petrolimex said in a statement on its website. 
 
Energy Prices

Crude Oil ($/BBL)
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%
 
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Steel ($/MT)
Steel Billet: $ 305.00
(LME Official – 3 months Buyer)

Euro/USD
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