Daily Archives: November 9, 2011

IEA Sees $150/Bbl If MENA O&G Spending Delayed

image

Delaying expected oil and gas investment in the Middle-East and North Africa by just a third would push prices to $150 a barrel, the International Energy Agency warned Wednesday.

The warning lays bare the world’s heightened vulnerability to any hitch in what is still the world’s largest oil patch. The continued reliance on this region comes despite a push for increased independence from oil imports in North America with the extraction of domestic, more expensive hydrocarbons.

In its annual energy outlook, the IEA warns that “if between 2011 and 2015, investment in the MENA region runs one-third lower than the $100 billion a year required, consumers could face a near-term rise in the oil price to $150″ a barrel.

That’s because increased production in the Middle East and North Africa will cover more than 90% of the extra barrels needed worldwide through 2035.

Back in 2008, a spike to an all-time high of $147 a barrel blamed by some economists for exacerbating the global financial crisis.

Yet “it is far from certain that all of this investment [needed from the MENA region] will be forthcoming” to keep oil below that level, said the agency, which represents the world’s largest consumers. It cited increased political instability, conflicts damaging oil infrastructure, international sanctions and resource nationalism as key risks to spending.

This year, the overthrow of three Arab regimes and turmoil elsewhere in the region showed such risks are far from being academic.

In Libya, a civil war interrupted most production and investments for eight months and damaged key oil terminals. The increased emphasis on risk in the region underscores the lasting impact of the Arab uprisings on the oil-rich area.

Iraq will be the largest source of new production additions. Providing investments aren’t delayed, the IEA expects its output to reach 5.4 million barrels a day in 2020 and 7.7 million barrels a day in 2035, compared with about 2.7 million barrels a day today. The numbers are lower, however, than Iraq’s own plans to reach a capacity of 6 million-8 million barrels a day before 2020.

Production from the second contributor, Saudi Arabia, is expected to grow by almost 40% to nearly 14 million barrels a day by 2035, it said.

By contrast, the agency takes a bearish view on Libya’s output. It says could take two years to recover from war damage and won’t grow at all until 2030–in contrast with the view in Tripoli that no more than 15 months are needed to return to normal.

The IEA also predicts production in Iran will be hindered by sanctions and tough investment terms with the Islamic Republic only adding 600,000 barrels a day in production by 2035.

Western consumers are paying more for oil out of fear for their future supply. But at the same time, the Organization of Petroleum Exporting Countries acknowledged Tuesday that its members–the majority in MENA–needed higher oil prices to cover their social spending.

The agency’s main scenario sees oil-import prices still rising to $118 a barrel in real terms in 2020 and $140 a barrel in 2035.

Overall, the IEA, which represents the view of oil consumers, normally has higher oil-demand expectations than producers group OPEC. But under its main scenario, which takes into account new measures to cut energy consumption, the IEA sees global demand for oil at 92.4 million barrels a day in 2020 and 99.4 million barrels a day in 2035.

That’s less than OPEC’s working assumptions released Tuesday, with respectively 97.8 million barrels a day and 109.7 million barrels a day for these dates.

Copyright (c) 2011 Dow Jones & Company, Inc.

Source – RIGZONE

Norway: Technip Wins Two-Year Contract Extension for Pipeline Repair Services

image

Technip was awarded the options for a two-year extension of the Statoil PRS Pool services frame contract to the latest possible completion date of 1st December 2014. The yearly revenue under the contract is expected to be in the range of €13-26 million.

This contract covers maintenance and operation of Statoil’s PRS Pool located at Killingøy in Haugesund, Norway.

Technip’s responsibility is to ensure that the PRS is ready for contingency operations and that qualified personnel are available to operate the equipment should an emergency operation be required. The PRS is also used for planned marine operations including hot-taps and hyperbaric welding operations (tie-ins). The use of the PRS for planned work improves the contingency preparedness for an eventual pipeline repair operation.

The frame contract is carried out by Technip’s operating center at Killingøy, in collaboration with DeepOcean.

*PRS – Pipeline Repair System. This system comprises a wide range of equipment for pipeline repair, both manned and remotely operated, including welding machines, installation structures or pipeline retrieval tools. Technip is responsible for maintenance and modification services for the PRS, which is operated by Statoil on behalf of the PRS Pool members.

*Planned Marine Operations – The PRS has successfully performed four hyperbaric tie-ins in 2011 on the NordStream pipelines (2 off) in the Baltic Sea and at the P12 landfall (2 off) at Kollsnes outside Bergen. These operations were performed from the Technip Diving Support vessel Skandi Arctic.

*Hot Taps – Equipment used to tap into pipelines containing hydrocarbons under pressure.

*Hyperbaric Welding – Automated or manual welding performed under pressure using a habitat placed above the weld location. Divers are either welding manually or overseeing the automatic welding process.

Source

Shell to Become Operator of Guyane Maritime Permit in French Guiana

image

Northern announces that earlier today, Tullow Oil Plc (“Tullow”) in their Interim Management Statement provided the following update on well GM-ES-1, in the Guyane Maritime Permit, in which Northern has a 1.25% interest:

“In French Guiana, the Zaedyus exploration well discovered 72 metres of net oil pay in two turbidite fans. This is the first well in Tullow’s extensive Guyana Basin acreage and successfully proved that the Jubilee play is mirrored across the Atlantic  from West Africa. Currently, a sidetrack is being drilled to  recover reservoir cores with operations expected to complete in mid-November. The partners are working on the 2012 programme and anticipate it to include 3D seismic and the drilling of two wells which is expected to commence in mid-2012 once all the necessary approvals have been obtained.

Shell is expected to take over Operatorship of the block in early 2012, subject to Government and Joint Venture approval.”

The partner interests in the Guyane Maritime licence offshore French Guiana are:

Shell France 45%

Tullow 27.5%

Total 25%

Northpet Investments 2.5% (Northern owns a 50% equity interest in Northpet)

Source

Anadarko Reports Successful Itaipu Appraisal, Offshore Brazil

image

Anadarko Petroleum Corporation  today announced the successful Itaipu-2 pre-salt appraisal well, located in block BM-C-32 in the Campos Basin offshore Brazil. The well was drilled to total depth of approximately 16,000 feet (4,877 meters) in 4,660 feet (1,420 meters) of water, and encountered a gross petroleum column of approximately 58 net feet (18 meters) in a pre-salt carbonate reservoir.

“The pre-salt Itaipu-2 well is an aggressive step-out from the Itaipu discovery well, which is located 4 miles (7 kilometers) northwest,” Anadarko Sr. Vice President, Worldwide Exploration, Bob Daniels said. “The Itaipu-2 well established a fluid contact and appears to have successfully extended the accumulation 120 meters downdip from the discovery. Accordingly, the appraisal well significantly increases the areal extent of the vast Itaipu field, and we believe incorporating the data from both the appraisal well and the original discovery well will increase our previous resource estimates for the field. We are very pleased with these results and look forward to continued activity on the block.”

Anadarko, through a wholly owned subsidiary, holds a 33.3-percent working interest in BM-C-32. BP operates the block with a 40-percent working interest and Maersk Oil holds a 26.7-percent working interest.

Separately, Anadarko also is currently drilling an appraisal of its post-salt Itauna discovery on block BM-C-29, and plans to spud the Wahoo-4 pre-salt appraisal well on block BM-C-30 around the end of the year.

Source

CGGVeritas’ Results Rise on High Demand for Seismic Equipment

image

CGGVeritas, the world’s largest seismic surveyor of oil fields, surged to a two-month high after reporting a profit in the third quarter and strong demand for equipment.

Net income was $41 million compared with a loss of $33 million a year earlier, the company said today in a statement. That beat the $23 million average estimate of seven analysts surveyed by Bloomberg. Sales climbed 21 percent to $797 million.

The French seismic company said it is “confident” in achieving its objectives this year.

CGGVeritas rose as much as 11 percent to 18.10 euros, the highest intraday price since Sept. 1, before paring gains to trade up 90 cents at 17.15 euros at 9:48 a.m. in Paris. The shares are down 25 percent since the start of the year.

Rates for surveying vessels are likely to rise in the second half of this year as oil companies plan to spend more on exploration and production, CGGVeritas, which conducts seismic studies and sells equipment to estimate the size of oil and natural-gas deposits, has forecast. President Barack Obama’s administration yesterday announced plans for 15 offshore oil- lease sales from 2012 to 2017 in the Gulf of Mexico and off Alaska’s coast.

‘Strong’ Demand

CGGVeritas’ “good set of results” combined with the U.S. offshore leasing plan is positive for the company, Bertrand Hodee, an analyst at Kepler Capital Markets, said in a note today. Kepler has a “buy” rating on the stock.

The company’s backlog at the end of the quarter fell to $1.24 billion compared with $1.31 billion the previous quarter.

CGGVeritas reported a group operating margin of 12 percent, compared with 4 percent a year earlier. The measure of profitability grew to 32 percent for its Sercel seismic equipment division from 30 percent a year earlier and was 9 percent for the service business from a negative 4 percent.

“We expect demand for seismic equipment to remain strong, activity to build globally in key basins and marine overcapacity to progressively be absorbed,” Chief Executive Officer Jean- Georges Malcor said in the statement. “Strong underlying oil and gas fundamentals” are expected to drive “high levels” of demand for seismic surveys.

The seismic company seeks to achieve a positive free cash flow this year and has forecast that a performance plan will help raise operating income by $75 million.

The French surveyor, created in 2006 when Massy, France- based Compagnie Generale de Geophysique SA bought Houston-based Veritas DGC Inc., has about 65 percent of the global market for seismic equipment and around a third of the market for services, executives have said.

By Tara Patel (Bloomberg)

Source

Ocean Rig Bidding to Rent 5 Drillships to Petrobras, Brazil

image

DryShips Inc confirmed market speculation that its Ocean Rig UDW drilling unit was bidding to rent out five new drillships to Brazilian state oil company, Petrobras .

Shares of Athens-based DryShips were up 9 percent at $2.95 on Tuesday morning on Nasdaq, a day after it posted estimate-beating third-quarter profit.

Through its majority-owned Ocean Rig unit, DryShips owns and operates 9 ultra-deepwater drilling units, comprising 2 ultra-deepwater semisubmersible rigs and 7 ultra-deepwater drillships.

“We are a part of the tender process for the Petrobras domestic tender. The contracts are still being negotiated, it’s still at a very early stage,” Chief Operating Officer Pankaj Khanna said on a conference call.

He said the 15-year contract at a rate of $620,000 per day would be “very profitable,” adding that the company was confident of receiving financing for 85 to 90 percent of the transaction.

“It would be really positive for earnings in the future, especially given that the current rates are at $500,000 per day for a one-year contract,” analyst Salvatore Vital of Sterne, Agee & Leach told Reuters.

Earlier in the year Ocean Rig, which started trading on Nasdaq on October 6, won a $1.1 billion deepwater drilling contract from Brazil’s Petrobras.

Source: Reuters

Source

%d bloggers like this: