Daily Archives: November 11, 2011
By Laura MacInnis and Caren Bohan WASHINGTON | Fri Nov 11, 2011 11:00am EST
(Reuters) – With Europe mired in crisis, President Barack Obama is launching a charm offensive this week to hitch the U.S. economy to growth opportunities in Asia that he hopes can help power the recovery he needs for re-election.
Obama, who was born in Hawaii and spent part of his childhood in Indonesia, will host Asian leaders including Chinese President Hu Jintao and Japanese Prime Minister Yoshihiko Noda in Honolulu this weekend to seek to improve trade ties across the Pacific.
He will then travel to Australia to announce plans to boost the U.S. military presence in the region and will be the first American president to attend the East Asia Summit in Bali. There, he will heap attention on the Philippines, Thailand, Malaysia and Indonesia as well as India.
The campaign to cozy up to Asian powers large and small comes at a critical moment for the U.S. economy, whose recovery is at risk because of a spiraling debt crisis in Europe that dominated a G-20 leaders’ summit in France last week.
“To have this trip happen when you have nothing but crisis in Europe and nothing but opportunity in Asia, you couldn’t have more of a juxtaposition,” said Victor Cha, who advised President George W. Bush on Asian affairs.
Georgetown University professor Charles Kupchan said he expected the Asia swing to be “much more upbeat” than the trip to Cannes had been for Obama, whose re-election chances in November 2012 will hinge on his economic record.
Executives from companies such as Boeing Caterpillar, General Electric and Time Warner Cable will also attend the APEC summit to help Obama make the case that closer ties with Asia will help create U.S. jobs.
“When you look for rays of light, where is growth going to come from, one of the main answers is exports to Asia,” Kupchan said. “It is something that this president needs to focus on, particularly in an election season.”
Obama will not be able to leave the European financial crisis behind entirely. Asia-Pacific finance ministers meeting in Honolulu before the leaders’ summit fretted about Europe’s lack of strong action to deal with crises in Greece and Italy, and talked of ways to bolster their own economies to minimize potential spillover.
Obama will also seek to reassert the U.S. role as a Pacific power, shifting more of its budget-stretched military resources to Asia as it pulls out of Afghanistan and Iraq and worries less about security in Europe.
In Australia, he is set to announce an agreement for more than 2,000 Marines to train and do joint exercises from Darwin, a city with a large military presence on the country’s northern coast, according to an Obama administration official familiar with the plans. The official spoke on condition of anonymity.
The cooperation deal is seen as a stepping stone to a more permanent presence for the United States in Australia, which could eventually see U.S. vessels stationed in Perth or nearby that could respond faster to regional threats or humanitarian emergencies than they could from Hawaii or California.
“This is part of a big push to put the United States back into the Asian game after a decade or so in which it has been preoccupied with the Middle East,” Kupchan said.
Obama is likely to avoid direct references to China when making the announcement, although the agreement is widely seen to be a way for the United States to act as a check on Chinese power and defuse possible conflicts over waterways and disputed islands.
“It is sending a very clear message that the United States is not ceding Asia diplomatically to China,” said Cha, now a scholar at the Center for Strategic and International Studies.
Kupchan agreed, saying smaller and emerging powers in Asia “don’t want China stepping all over them because of its economic clout.” The United States provides a good military counterbalance that should not contradict its cooperative ties with Beijing so long as it is handled delicately, he said.
Asia has been a stated foreign policy priority for Obama since his first days in office, but wars in Iraq, Afghanistan, Libya and the Middle East soon diverted much of his attention.
- US President Barack Obama looks to capitalise on Asian growth (telegraph.co.uk)
- Asia-Pacific Leaders Deal with Global Economic Trouble at APEC Conference (usnews.com)
- APEC CEOs to world leaders: boost trade and growth – Reuters (reuters.com)
- For Obama, an Asian agenda with an eye on home (seattletimes.nwsource.com)
- Two Models for Integrating Asia: A Must Win for President Obama (Center for Strategic and International Studies) (thuytinhvo.wordpress.com)
The deal marks China’s latest move to win influence over Western-owned energy assets to feed its fast-growing economy. It is also Sinopec’s major purchase in Brazil in just a year after it made a $7 billion purchase from Repsol for a 40 percent stake in its Brazil division.
“For Sinopec, there are not many opportunities to grow in the traditional domestic upstream oil and gas sector — overseas acquisition is an area to find growth,” said UOB Kay Hian analyst Yan Shi.
“It will benefit Sinopec on upstream reserves, and reduce risks in its money-losing downstream operation.”
Sinopec, Asia’s biggest oil refiner, expected the deal will expand its overseas oil and gas business operations and boost its oil and output growth.
Galp’s primary assets in Brazil include four deep-water blocks of BM-S-11, BM-S-24, BM-S-8 and BM-S-21 in the Santos Basin, it said.
Sinopec expected it would receive 21,300 barrels of oil equivalent per day (boedp) in 2015 and production would reach a peak of 112,500 boedp in 2024.
Under the agreement, Sinopec’s wholly owned unit, Sinopec International Exploration and Production Corp (SIPC), will take new shares to be issued by Galp and assume shareholder loans, Sinopec Group said in a statement.
“Taking into consideration this investment and projected future capital expenditure, the total cash payout amounts to approximately $5.18 billion at closing,” Sinopec said.
The transaction must be approved by the Chinese government.
China’s outbound M&A deals this year totaled $37.6 billion, down from $54.1 billion last year, according to Thomson Reuters data.
The deal would help Galp, a newcomer to large-scale oil projects, to finance its stake in the development of massive oil fields in the deepwater region known as the subsalt region in Brazil–site of the largest oil discovery in the Americas in more than 30 years.
“This capital increase significantly strengthens Galp Energia’s capital structure, fully securing its funding needs for the future expansion and development of its upstream activities,” Galp said in a statement.
Sinopec’s overseas acquisition strategy is partly guided by the desire to build up scale in certain countries, including Brazil, said a company official who declined to be named.
Galp is a minority partner with Brazil’s state-run oil company Petrobras in key offshore discoveries, including the vast Lula field, formerly known as Tupi, as well as the Cernambi and Iara finds.
Sinopec Group is the parent of Hong Kong-listed and Shanghai-listed China Petroleum & Chemical Corp. The group does overseas upstream oil and gas investment and operations via its wholly owned unit SIPC.
By Judy Hua, Wan Xu and Ken Wills (Reuters)
- China’s Sinopec buys $5.2-billion stake in Brazil’s Galp (business.financialpost.com)
On the 11th hour of the 11th day of the 11th month of 1918 an armistice between Germany and the Allied nations came into effect. On November 11, 1919, Armistice Day was commemorated for the first time. In 1919, President Wilson proclaimed the day should be “filled with solemn pride in the heroism of those who died in the country’s service and with gratitude for the victory”. There were plans for parades, public meetings and a brief suspension of business activities at 11am.
In 1926, the United States Congress officially recognized the end of World War I and declared that the anniversary of the armistice should be commemorated with prayer and thanksgiving. The Congress also requested that the president should “issue a proclamation calling upon the officials to display the flag of the United States on all Government buildings on November 11 and inviting the people of the United States to observe the day in schools and churches, or other suitable places, with appropriate ceremonies of friendly relations with all other peoples.”
An Act (52 Stat. 351; 5 U. S. Code, Sec. 87a) was approved on May 13, 1938, which made November 11 in each year a legal holiday, known as Armistice Day. This day was originally intended to honor veterans of World War I. A few years later, World War II required the largest mobilization of service men in the history of the United States and the American forces fought in Korea. In 1954, the veterans service organizations urged Congress to change the word “Armistice” to “Veterans”. Congress approved this change and on June 1, 1954, November 11 became a day to honor all American veterans, where ever and whenever they had served.
In 1968 the Uniforms Holiday Bill (Public Law 90-363 (82 Stat. 250)) made an attempt to move Veterans Day to the fourth Monday of October. The bill took effect in 1971. However, this caused a lot of confusion as many states disagreed with this decision and continued to hold Veterans Day activities on November 11. In 1975, President Gerald R. Ford signed Public Law 94-97 (89 Stat. 479), which stated that Veterans Day would again be observed on November 11 from 1978 onwards. Veterans Day is still observed on November 11.
- Veterans Day 2011 (mb50.wordpress.com)
The United State of America will be the main export market for the natural gas produced by the Angola LNG project, the head of the production department of the Oil Ministry, Alcides Santos said Thursday in Moscow, Russia.
Cited by Angolan news agency Angop, Santos said, at the Angola-Russia economic forum, that according to projections, annual exports are estimated at US$5.2 billion.
Explaining the choice of the United States as the main market for Angola’s natural gas, Santos said that the US had been the first country to show interest in purchasing the gas and also had terminals ready to receive it, as well as the fact that US group Chevron is the main shareholder of Angola LNG.
“The LNG Angola project, which ahs been underway for over two years in an area of 2,000 hectares in Soyo municipality, Zaire province, will produce, through a single line, 5.2 billion tons of natural gas,” he said.
In order to complete the project in 2012, Chevron, BP, Total, ENI and Sonangol have invested US$9.1 billion.
As well as the United States countries in Europe and Asia, notably South Korea and Japan, are interested in importing the natural gas from Angola.
The Angola-Russia economic forum, which has the theme of “Angola in the 21st Century: A Growing Economy,” began Thursday in the Russian capital and features speeches by members of the Angolan government and Russian officials.
- Lithuania: Cheniere Eyes LNG Exports by 2015 (mb50.wordpress.com)
- Japan hopes to buy LNG from U.S. by 2015 (mb50.wordpress.com)
- Canada: Kitimat LNG Wins Export Licence (mb50.wordpress.com)
- Lithuania: Klaipedos Nafta Receives Three Bids for LNG FSRU (mb50.wordpress.com)
- USA: Total Close to Sign Sabine Pass LNG Deal (mb50.wordpress.com)
- USA: Jordan Cove Files for LNG Export Permit (mb50.wordpress.com)
Aker Solutions has signed a contract with Lundin for the engineering, procurement and construction of a subsea production system for the Brynhild project on the Norwegian continental shelf. The contract value is approximately NOK 700 million (USD 123 Million).
The scope of work includes one template-manifold structure, one riser base, three subsea trees, three wellhead systems, control system, a tie-in system, 38 kilometres of umbilicals, HP riser and rental tooling. The contract contains several options for additional equipment, including other field developments.
The Brynhild field is located north-west of the Ula field and 38 kilometres east of the Pierce field. The water depth is approximately 80 meters. Brynhild will be developed as a fast track subsea tie-back to the Pierce FPSO.
“We are very pleased to be awarded this first subsea production system contract with Lundin. This contract allows us to utilise the total strength of our subsea offering and work closely with this important customer”, says Alan Brunnen, EVP Subsea within Aker Solutions.
Management, engineering and procurement of the subsea production system will be primarily performed at Aker Solutions’ headquarters in Oslo, Norway. Fabrication of the subsea trees will be completed at Aker Solutions’ manufacturing centre in Tranby, Norway and production of the template-manifolds will be carried out at the company’s fabrication yard in Egersund, Norway. The umbilical will be manufactured in Moss, Norway and the control and wellhead systems will be delivered out of Aberdeen, UK. Installation and commissioning will be handled by Aker Solution’s service base in Aagotnes, Norway. Final deliveries will be made in Q2 2013.
The contract has been signed and booked as order intake in Q3 2011. The contract party is Aker Subsea AS.
- Norway-based Aker Solutions Increases its Middle East Presence with X3M Acquisition (mb50.wordpress.com)
- Norway: Aker Proposes Aker Floating Production Acquisition (mb50.wordpress.com)
- Re-inventing subsea intervention to keep economics above water (mb50.wordpress.com)
- Norway: Det Norske Pens Important Jette Field Deals (mb50.wordpress.com)
- USA: EMAS Wins Gulf of Mexico Subsea Contract from BP (mb50.wordpress.com)
- Norway: Goliat Field Goes Online (mb50.wordpress.com)
- Subsea:The Riserless Light Well Intervention – (Video) (mb50.wordpress.com)
Kosmos Energy announced yesterday financial results for the third quarter 2011. The Company generated net income attributable to common shareholders of $52 million in the third quarter of 2011, or $0.13 per basic and diluted share. This compares to a net loss attributable to common unit holders of $99 million for the same period in 2010.
Highlights for the third quarter 2011 include:
- Two Jubilee liftings totaling approximately 2 million barrels of oil, net to Kosmos
- EBITDAX of $191 million
- Grew total liquidity by over $115 million to nearly $1.1 billion
- Exploration discovery at Akasa on West Cape Three Points Block
- Successful Enyenra-3 appraisal well on Deepwater Tano Block
- Jubilee Unit participation interest increased as a result of expert redetermination
- Expanded exploration portfolio, with increase in offshore Morocco position to approximately 12 million gross acres
Third-quarter 2011 oil revenues were $230 million, or $115.50 per barrel sold. Production expense was $24 million, or $12.13 per barrel, and depletion and depreciation was $43 million, an average of $21.36 per barrel. Exploration expense for the third quarter 2011 was $11 million. General and administrative costs were $39 million, with over 50 percent related to non-cash items, primarily the Company’s long-term equity incentive compensation program. Interest expense was $17 million. The effective tax rate for the third quarter 2011 was 49 percent.
Cash and cash equivalents at the end of the third quarter 2011 was $656 million, with long-term debt of $1 billion. Total liquidity, including cash and cash equivalents and available borrowing under the debt facility, was nearly $1.1 billion.
Brian F. Maxted, President and Chief Executive Officer, commented, “Our results for the third quarter were very strong, supported by our oil liftings and continued robust Brent pricing. While production at Jubilee has not ramped up as quickly as planned, the ultimate resources recoverable from this giant field are unchanged, and we continue to be encouraged by its reservoir performance. We had a number of positives in our exploration and appraisal drilling programs for the quarter, with successes on both of our Ghana blocks, which continue to highlight the value upside of our Ghana assets. At the same time, we are further enhancing the Company’s portfolio of exploration opportunities, capturing substantial acreage offshore Morocco during the quarter.”
Jubilee Unit Redetermination
A redetermination of the Jubilee Unit tract participation interest was recently completed, resulting in an increase in Kosmos’ Unit interest. As determined by an independent expert analysis, a greater portion of the Jubilee field resources reside in the West Cape Three Points Block than was established under the original tract participations. The original tract participations in the Jubilee Unit were 50 percent for both the West Cape Three Points and Deepwater Tano Blocks. After expert analysis, the Unit interests have been changed to 54.37 percent for the West Cape Three Points Block and 45.63 percent for the Deepwater Tano Block. Accordingly, the Company’s Jubilee Unit interest increased to 24.08 percent from 23.51 percent.
All of the Jubilee Phase 1 wells have been drilled, and current oil production is approximately 80,000 barrels per day. Identified completion issues require one of the producing wells to be sidetracked, as well as downhole remediation on certain other wells. Once these completion issues have been resolved, production is expected to continue ramping up toward the FPSO facility capacity. The J-7 production well is currently being sidetracked, with completion expected at the beginning of 2012. Additionally, the Phase 1A development, including five production and three injection wells, is being planned to commence drilling in 2012.
Kosmos is currently drilling the Teak-3 appraisal well on the West Cape Three Points Block, testing a potential updip stratigraphic extension of the discovery wells. Results at Teak-3 are expected by the end of November 2011. The Teak-4 appraisal well is scheduled to begin drilling late in the first quarter of 2012.
On the Deepwater Tano Block, Kosmos and its partners are currently redrilling the Enyenra-1 (previously known as Owo-1) discovery well, with plans to perform a drill stem test at that location. Immediately following operations at Enyenra-1, the Enyenra-4 appraisal well will be drilled over 4 miles downdip from Enyenra-2, on the south flank of the discovery. Results at Enyenra-4 are expected in the first quarter of 2012.
New Ventures Portfolio
Kosmos’ new ventures team is pursuing a number of opportunities to further enhance the Company’s exposure to new petroleum systems. Kosmos recently entered into a new petroleum agreement for the Essaouira Block offshore the Kingdom of Morocco. The Essaouira Block covers 2.9 million gross acres and is located north of the Company’s Foum Assaka Block. Both blocks are in the Agadir basin. Kosmos will be the operator of the Essaouira Block with a 37.5 percent working interest. As a result of the new agreement, Kosmos’ total acreage position offshore Morocco has grown to approximately 12 million gross acres. The Company is planning an approximately 5,000 square kilometer seismic shoot offshore Morocco on the Foum Assaka and Essaouira Blocks, targeted to begin before year-end 2011.
Kosmos Energy Ltd. is an international oil and gas exploration and production company focused on underexplored regions in Africa. The Company’s asset portfolio includes major discoveries and exploration prospects with significant hydrocarbon potential in several West African countries. Kosmos is listed on the New York Stock Exchange and is traded under the ticker symbol KOS.
Source: Kosmos Energy, November 11, 2011
- Tullow Strikes Oil at Enyenra Well, Offshore Ghana (mb50.wordpress.com)
- Anadarko Reports Successful Itaipu Appraisal, Offshore Brazil (mb50.wordpress.com)
- Ghana: Seadrill Inks One-Year Contract for Ultra-Deepwater Newbuild West Leo (mb50.wordpress.com)
- The Run Continues In Hornbeck Offshore (mb50.wordpress.com)
- Bowleven Announces Drilling Success, Offshore Cameroon (mb50.wordpress.com)
Lundin Petroleum AB (“Lundin Petroleum”) through its wholly owned subsidiary Lundin Norway AS announces the approval from the Norwegian Ministry of Petroleum and Energy of the Plan for Development and Operation (PDO) for the Brynhild field in PL148, located in the Norwegian North Sea. First production from the Brynhild field is expected in late 2013.
The Brynhild field is located adjacent to the Norway-United Kingdom border, some 210 km from the Norwegian mainland. The development of Brynhild will be a three well subsea tie-back to the Pierce FPSO located in the United Kingdom, 38 km south of the field.
The estimated gross reserves are approximately 20 million barrels of oil equivalents (MMboe) with net peak production of approximately 12,000 barrels of oil equivalents per day (boepd). The hydrocarbons will be processed at the Pierce FPSO before being offloaded for further transportation.
Lundin Petroleum has a 50 percent working interest in the Brynhild field and is operator. Partners are Talisman with 30 percent and Noreco with 20 percent.
Lundin Petroleum is a Swedish independent oil and gas exploration and production company with a well balanced portfolio of world-class assets primarily located in Europe and South East Asia. The Company is listed at the NASDAQ OMX, Stockholm (ticker “LUPE”) and at the Toronto Stock Exchange (TSX) (Ticker “LUP”). Lundin Petroleum has proven and probable reserves of 187 million barrels of oil equivalent (MMboe).
- Lundin Petroleum Spuds Exploration Well Offshore Congo (mb50.wordpress.com)
- Lundin Petroleum hits the jackpot at Avaldsnes (tradingfloor.com)
- North Sea oil field size doubled (bbc.co.uk)