Daily Archives: May 15, 2012
Anadarko Petroleum Corporation today announced the Golfinho exploration well discovered a new, major natural gas accumulation nearly 20 miles (32 kilometers) northwest of its Prosperidade complex within the Offshore Area 1 of the Rovuma Basin.
The Golfinho discovery well encountered more than 193 net feet (59 net meters) of natural gas pay in two high-quality Oligocene fan systems that are age-equivalent to, but geologically distinct from, the previous discoveries in the Prosperidade complex.
“The success of the Golfinho well significantly expands the tremendous resource potential of the Offshore Area 1 in the deep-water Rovuma Basin, with additional opportunities yet to test,” Anadarko Sr. Vice President, Worldwide Exploration, Bob Daniels said. “The Golfinho discovery, which is entirely contained within the Offshore Area 1 block, adds an estimated 7 to 20-plus Tcf (trillion cubic feet) of incremental recoverable resources over a significant areal extent. This new discovery is only 10 miles offshore, providing potential cost advantages for future development options.
“We are very excited about this new discovery and the value these additional resources represent for the people of Mozambique and our partnership. We look forward to continuing an active exploration program in the highly prospective northern and southern portions of the Offshore Area 1, as well as delineating this new discovery.”
The Golfinho exploration well was drilled to a total depth of approximately 14,885 feet (4,537 meters), in water depths of approximately 3,370 feet (1,027 meters). Once operations are complete at Golfinho, the partnership plans to mobilize the Belford Dolphin drillship to drill the Atum-1 exploration well.
Additionally, at the Barquentine-1 well location in the Prosperidade complex, the partnership successfully tested the upper Oligocene zone, which flowed at a facility-constrained rate of approximately 100 million cubic feet of natural gas per day. This is the third successful drill-stem test flowing at this facility-constrained rate.
Anadarko is the operator in the Offshore Area 1 with a 36.5-percent working interest. Co-owners include Mitsui E&P Mozambique Area 1, Limited (20 percent), BPRL Ventures Mozambique B.V. (10 percent), Videocon Mozambique Rovuma 1 Limited (10 percent) and Cove Energy Mozambique Rovuma Offshore, Ltd. (8.5 percent). Empresa Nacional de Hidrocarbonetos, ep’s 15-percent interest is carried through the exploration phase.
- Anadarko Successful at Barquentine-4 Well, Offshore Mozambique (mb50.wordpress.com)
- Anadarko’s First Flow Test Offshore Mozambique Successful (mb50.wordpress.com)
- UK: Shell Tables USD 1.56 bln Bid for Cove (mb50.wordpress.com)
- USA: Stone Buys Anadarko’s Pompano Field Stake (mb50.wordpress.com)
By Brian Winter SAO PAULO | Tue May 15, 2012 9:55am EDT
(Reuters) – President Dilma Rousseff plans to cut and simplify taxes for electricity producers and distributors, two senior officials told Reuters, as part of a strategy to reduce Brazil‘s high business costs and stimulate its struggling economy.
Brazil has been on the brink of recession since mid-2011 as high taxes, an overvalued exchange rate and other structural problems squeeze what had previously been one of the world’s most dynamic emerging economies.
Rousseff has in recent months announced targeted tax cuts for stagnant sectors such as the automotive industry, embracing an incremental approach to reform that has drawn criticism from investors who say more drastic changes are needed.
But the officials, who spoke on condition of anonymity, said the tax reductions for electricity companies would likely be the most far-reaching to date.
They said Rousseff will announce the plans in coming weeks. Brazil has the world’s third-highest power costs so Rousseff is aiming to give relief to consumers as well as companies in energy-intensive areas such as steel and petrochemicals.
Internal government studies suggest that, depending on which taxes are cut, electricity costs could fall by between 3 and 10 percent starting as early as 2013, the officials said.
That would have a measurable impact on inflation, and thus aid Rousseff’s quest to push Brazilian interest rates lower.
“We know that taxes in Brazil are crazy, and we’re trying to do something about it,” one senior official said. “(Electricity) seems like a case where we can make a big difference quickly.”
Rousseff probably will not pass the tax cuts by decree, so she will have to negotiate them with Congress and other groups.
She plans to use her record-high popularity ratings to push through cuts to taxes at both the federal and state level, with a special focus on eliminating levies that overlap or are difficult to calculate, the officials said.
Brazil’s tax code is so complex that an average company spends 2,600 hours a year calculating what it owes, according to the World Bank‘s annual Doing Business study, which compares business practices around the world. That is almost 14 times the time needed to do taxes in the United States, and by far the highest among the 183 countries in the bank’s survey.
“The focus is as much on simplifying taxes as reducing them,” a second official said.
Brazil’s electricity industry includes state-run companies such as Eletrobras (LIPR3.SA) as well as multinationals like AES Corp. (AES.N) and GDF Suez (GSZ.PA). Hydroelectric power supplies about three-quarters of Brazil’s electricity needs, with nuclear, thermal and wind power accounting for the rest.
If the initiative is successful, Rousseff will use a similar blueprint to reduce taxes for other industries in coming months, possibly including telecoms, the officials said.
Specific details such as the size of the tax cuts, which taxes will be targeted, and the timing of the announcement are still being finalized by Rousseff’s team, the officials said. One said the plan would likely be unveiled in late June, before politicians nationwide turn their attention to municipal elections in October.
POWER COSTS A PROBLEM FOR INDUSTRIES
Electricity prices are a big component of the so-called “Brazil cost” – the mix of taxes, high interest rates, labor costs, infrastructure bottlenecks, and other issues that have caused the economy to become less competitive.
After a decade of strong performance, Brazil grew below the Latin American average in 2011 and so far this year.
Brazil’s average electricity cost of $180 per megawatt hour is exceeded only by Italy and Slovakia, the Getulio Vargas Foundation, a private think-tank, said in a 2011 study based on data from the International Energy Agency.
High electricity rates have contributed to stagnant investment and production in energy-intensive industries. Despite Brazil’s bauxite and alumina resources, no new aluminum factories have been built in Brazil since 1985 and two have closed, keeping production levels stagnant, the Getulio Vargas study said. It added that electricity accounts for 35 percent – “an insane proportion” – of the industry’s production costs.
Pittsburgh-based aluminum producer Alcoa (AA.N) said in April it was considering big production cuts at two of its Brazil factories in part because of high electricity costs.
One of the officials who spoke to Reuters said the situation at Alcoa had added urgency to Rousseff’s plan to cut taxes.
All told, taxes account for about half of the cost of electricity in Brazil, studies show. The taxes themselves are roughly evenly split between the federal and state level.
Cutting or simplifying taxes at the federal level will be relatively straightforward for Rousseff. However, she also believes she can push through tax cuts at the state level by using leverage from upcoming debt negotiations.
Several states are asking for lower interest rates on debt they owe the federal government. Rousseff will likely ask the states to simplify or cut their taxes on electricity in return, one of the sources said.
The left-leaning president will also ensure that any tax relief is fully passed along to consumers, the officials said.
Although the electricity sector is partly privately controlled, Rousseff believes she can use the pricing power of state-run companies to effectively push rates lower if needed, they said. An upcoming renegotiation of concessions in the industry could also be an opportunity to push for lower rates.
SHADOWS OF STRATEGY WITH BANKS
Rousseff’s tactics are similar to those she used to cut interest rates in recent months – another pillar of her strategy to reduce the “Brazil cost.”
Her government has frozen billions of dollars in spending, allowing the central bank to slash its benchmark interest rate by 3.5 percentage points since August. When some private-sector banks balked at lowering rates for consumers, Rousseff and senior officials publicly hectored them for having some of the world’s largest spreads.
State-run banks then announced lower interest rates for customers, and the private banks soon yielded and followed suit.
Such tactics have caused friction between Rousseff and some members of the business community, especially banking executives, who privately accuse her of trying to bully the private sector.
Yet the officials said Rousseff is using the best tools available to her to restore Brazil’s competitiveness. Congress blocked attempts at a comprehensive tax reform by her predecessor as president, and Rousseff, herself a former energy minister, believes the only politically viable alternative is to move one sector at a time, they said.
“I’m fully aware that Brazil needs to reduce its tax burden,” Rousseff told reporters while on a visit to India in March. “What I have done is take little measures that, in their totality, create greater tax breaks, which is fundamental for the country to grow.”
(Reporting by Brian Winter; Editing by Kieran Murray and Sofina Mirza-Reid)
- Brazil counts on ruthless tax ‘lion’ to keep it afloat (business.financialpost.com)
- Criminal charges and $22 Billion in Lawsuits Raise Questions About Brazil (mb50.wordpress.com)
- Brazil’s Rousseff to link returns on some savings accounts to central bank lending rate (theglobeandmail.com)
- Brazil expands welfare benefits (bbc.co.uk)
- Brazil president Dilma Rousseff blasts Western QE as ‘monetary tsunami’ (telegraph.co.uk)
Excelerate Energy® L.P. is moving forward with the development of the first floating liquefaction facility in the United States utilizing its Floating Liquefaction Storage Offloading vessel (FLSO™) technology.
The Lavaca Bay LNG project will be located in Port Lavaca, situated between Galveston and Corpus Christi on the Texas Gulf Coast, and will be designed to export liquefied natural gas (LNG) to markets worldwide by 2017.
Excelerate Energy’s FLSO comprises 3 million tonnes per annum (MTPA) of production capacity, 250,000 cubic meters (m3) of LNG storage, and a fully integrated gas processing plant. With this gas processing capability, the FLSO can accommodate a wide range of gas compositions at its inlet making it well suited for virtually any application near shore or offshore. For those situations where gas processing is not required due to presence of existing processing facilities or where pipeline quality gas is used as the feedstock, the processing equipment can be removed and liquefaction capacity increased to 4 MTPA.
The FLSO will measure 338 meters in length, with a breadth of 62 meters. Front End Engineering and Design (FEED) is in an advanced phase and Excelerate is now entering into discussions with potential off takers and natural gas suppliers as well as investors and potential sources of finance to take the project forward. Excelerate Energy expects FEED to last until the end of 2012, and following its completion and successful permitting project delivery will take approximately 44 months from final investment decision (FID).
In its initial phase, the Lavaca Bay LNG project will consist of one permanently moored FLSO with multiple connections to the onshore natural gas grid in South Texas. The project will be designed with the potential for expansion and the addition of a second FLSO over time for a total production capacity of up to 8 MTPA. Excelerate Energy expects to begin the export authorization and Federal Energy Regulatory Commission (FERC) permitting immediately, and is in the process of completing its site-specific final front-end engineering design (FEED) effort.
“Excelerate Energy applies the same philosophy to its liquefaction vessel design as it does to its regasification vessel fleet – essentially using proven technology in an innovative way to provide more efficient and timely solutions to the LNG industry,” stated Rob Bryngelson, Excelerate Energy President and CEO. “Port Lavaca provides us with the unique opportunity to further capitalize on our position as a market leader in floating LNG solutions.”
Excelerate Energy selected Port Lavaca for the site of the facility because of its direct access to the highly liquid south Texas natural gas market, access to the Atlantic Basin through the Gulf of Mexico, and potential access to the Pacific basin with the widening of the Panama Canal. The facility will interconnect to the region’s existing pipeline system in order to obtain natural gas and liquefy it onboard the vessel. The Port Lavaca location being developed by Excelerate Energy has previously received FERC approval as an LNG import facility, which should facilitate the permitting process.
- Excelerate Energy LP Selects PENTA Software for Unified Procurement, Job Cost, Document and Project Management (prweb.com)
- USA: Mitsubishi Inks Development Deal with Cameron LNG (mb50.wordpress.com)
- USA: Cheniere Urges FERC to Approve Sabine Pass Liquefaction Project (mb50.wordpress.com)
- Zachry-CB&I venture lands Freeport FEED (mb50.wordpress.com)
- USA: ETE Units File with FERC for Proposed Lake Charles Liquefaction Project (mb50.wordpress.com)
- USA: Cheniere CEO Sees Domestic Gas Prices at USD 2/MMBtu (mb50.wordpress.com)
Two Pre-Season Storms Eyed in Atlantic, Pacific oceans, Could Cause Damages to Gas, Oil Projects in Gulf of Mexico
Storms that enter the Gulf of Mexico could damage and halt both operations and production of natural gas and oil development projects in the area. Just this March, according to a one-year progress report on the Obama administration’s Blueprint for a Secure Energy Policy, it said that the Gulf of Mexico is safely back to strong production after the much celebrated 2010 Deepwater Horizon oil spill, otherwise known as the BP oil disaster or the Gulf of Mexico oil spill.
Of the two pre-season storms spotted by the National Hurricane Center, the stronger one was found in the Pacific about 550 miles or 885 kilometers south-southwest of Acapulco, Mexico. In a weather bulletin, the center said it has a 50 per cent chance of becoming a tropical depression in the next day or two.
The one in the Atlantic, meanwhile, was 460 miles west-southwest of the Azores, with a 20 per cent probability of becoming a sub-tropical storm in the next two days.
The eastern Pacific and Atlantic hurricane seasons officially start on May 15 and June 1, respectively.
The oil spill in the Gulf of Mexico flowed for three months in 2010. It is recorded as the largest accidental marine oil spill in the history of the petroleum industry. The spill, which stemmed from a sea-floor oil that resulted from the explosion of Deepwater Horizon, killed 11 men and injured 17 others, including massive damage to marine and wildlife habitats and to the Gulf’s fishing and tourism industries.
- Pacific Santa Ana Drillship Arrives in U.S. Gulf of Mexico to Work for Chevron (mb50.wordpress.com)
- 1st tropical depression of Pacific season forms (seattletimes.nwsource.com)
- First tropical depression forms off the coast of Mexico ahead of official start of hurricane season (mega949.com)
- First tropical depression forms off the coast of Mexico ahead of official start of hurricane season (640whlo.com)