Your Quick Guide To The IMF-World Bank Meetings Today

by Simone Foxman

World leaders are meeting in Washington, D.C., to attend a joint IMF-World Bank meeting.

Their focus? The funding available to the IMF, specifically to support the ongoing debt and bank crises in Europe.

Countries in Europe and Asia have expressed interest and even firm commitments in contributing more money to the fund. The U.S. and Canada, however, have said they won’t contribute any more cash to an effort EU leaders should be able to resolve themselves.

While we could hear more pledges over the course of the day, so far Japan, Switzerland, Poland, Sweden, Denmark, Norway, and the euro area have all made dollar commitments totaling $320 billion, according to Bloomberg:

Read more: BI

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Edison Chouest Orders PSV in Poland

REMONTOWA SHIPBUILDING S.A has signed a contract for building of a Platform Supply Vessel for Edison Chouest Offshore from Louisiana, USA.

New building vessel is continuation of the series of four units of the same type which has been started last year. She will be built according to the project elaborated by polish design office MMC Ship Design & Marine Consulting Ltd from Gdynia. The vessel will be equipped with Diesel – Electric propulsion system allowing most cost efficient exploitation, reduction of fuel consumption and lower emission of NOx and SOx to the atmosphere.

Working deck of 1000 m2 will enable to carry high-volume goods, which makes that vessel the biggest one in her class. Technically advanced vessel will operate the complex deep-water operations in the region of South America and Africa.

The vessel will be equipped with Class 2 dynamic positioning system and fitted to operations in world – wide sea areas, in each weather conditions. After completion of the construction and carriage of complex sea trials, the vessel will be delivered to the Owner in the fourth quarter of 2013. The contract includes an option to build another, sister vessel.

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Exxon Shale Failure in Poland May Lengthen Gazprom’s Shadow

By Joe Carroll

Exxon Mobil Corp. (XOM)’s failed shale-gas wells in Poland may hobble the nation’s effort to become one of the world’s major energy sources and dismantle Russian dominance of Eastern European natural-gas markets.

Exxon, the world’s largest energy company by market value, said two exploratory wells drilled in a Polish shale formation last year weren’t commercially viable. The gas discovered in the wells, Exxon’s first in Poland, failed to flow in sufficient quantities to justify bringing them into production, David Rosenthal, vice president for investor relations, said during a conference call yesterday.

International energy prospectors, including Marathon Oil Corp. (MRO), Chevron Corp. (CVX) and Talisman Energy Inc. (TLM), are probing Poland’s shale deposits to see if drilling techniques that revolutionized U.S. gas production can unleash reserves big enough to supply Polish demand for more than three centuries. Exxon’s setbacks suggest Poland’s shale poses unique challenges that may increase costs and delay output, said Gianna Bern, founder of Brookshire Advisory & Research in Chicago.

“Shale exploration is a very high-cost and high-risk business and the Polish shale market is still in its infancy,” Bern, who advises major oil companies on risk management and strategy, said in a telephone interview yesterday. “It’s early in the game for Poland, and they have significant potential reserves over there.”

Reduce Imports

Poland’s shale formations hold 187 trillion cubic feet of recoverable gas, according to an April 2011 assessment by the U.S. Energy Department. Those resources are 32 times larger than the country’s conventional gas reserves and enough to supply domestic consumption for 322 years.

For Poland, successfully unlocking gas from shale would be a boon to domestic manufacturers and power producers by diminishing the need for Russian imports that now supply two- thirds of demand, said Benjamin Schlesinger, president of Benjamin Schlesinger and Associates Inc., a Bethesda, Maryland- based adviser to gas producers, utilities, regulators and financial-services firms.

Poland’s dominant gas company, Polskie Gornictwo Naftowe i Gazownictwo, pays Russia’s state gas company Gazprom OAO (GAZP) $500 for 1,000 cubic meters ($14.16 per million British thermal units) of gas. That’s six times the benchmark U.S. price for the fuel.

Poor Wells

“Poland’s shale resources are enormous,” said Schlesinger, a Stanford University-trained engineer who helped the New York Mercantile Exchange design its gas futures contract. “Poland should be able to capture a good deal of those resources and reduce reliance on the Russian Federation.”

Gazprom’s depositary receipts rose 2.5 percent to $12.40, the highest closing price since Oct. 28. The London-listed receipts each are worth two ordinary shares in the Moscow-based company.

Exxon’s failures followed disappointing results at Polish wells drilled last year by 3Legs Resources Plc and BNK Petroleum Inc. (BKX) London-based 3Legs’s Lebien well and BNK’s Lebork well flowed at lower rates than similar prospects in the Barnett and Fayetteville shale regions in the U.S., Sanford C. Bernstein & Co. said in a Nov. 10 note to clients.

“Poland is cited among Europe’s best shale prospects, but Exxon’s result supports our caution on achieving material near- term volumes,” Oswald Clint, a London-based analyst at Bernstein, said in a note today.

Even so, it may be too early to draw any firm conclusions from Exxon’s drilling failure, said Pawel Poprawa, who specializes in shale at the Polish Geological Institute in Warsaw.

‘Technological Problem’

“If we look at the experience from the U.S. or Canada, no single well can provide the answer if the basin has potential or not,” he said. “Low flows seem to be a technological problem.”

Marathon Oil said today that it’s evaluating data after finishing its first well in a Polish shale formation. The Houston-based company said in a statement that it intends to drill three more wells during the next few months and withdraw rock samples for testing. Marathon plans a total of six to seven Polish shale wells this year, according to the release.

The Polish shale results come after Exxon encountered a dry hole in Hungary in late 2009 drilled in a tight-sand deposit similar to shale. Exxon walked away from the $75 million project after striking more water than gas.

Exxon and other major North American energy producers have been lured to explore shale prospects from Germany to Argentina after largely missing out on the boom in shale extraction in the U.S. that began in the middle of the last decade.

Smaller Explorers

Smaller explorers such as EOG Resources Inc. (EOG), Chesapeake Energy Corp. (CHK) and Range Resources Corp. (RRC) came to dominate the U.S. shale industry by default as the biggest international companies focused on locating billion-barrel offshore crude fields in places like the Gulf of Mexico and West Africa.

Shale formations were ignored by much of the energy industry for most of the past century because the rocks were considered too hard to crack using traditional drilling techniques. That began to change in the late 1990s with the development of new horizontal drilling practices and more- intensive hydraulic fracturing that succeeded in unlocking gas and crude from shale and similarly dense geologic deposits.

‘Attractive Fiscal Terms’

Exxon sought to jump-start its shale program in June 2010 with the $34.9 billion acquisition of XTO Energy, a Fort Worth, Texas-based pioneer of shale development. In addition to shale wells and undrilled prospects that stretch from the Mexican border to Canada, Exxon wanted to transfer XTO’s in-house expertise to foreign shale fields.

Exxon hasn’t disclosed its plans for further drilling in Poland. The shares rose 0.3 percent to $83.97 at the close in New York.

Poland has led European shale exploration by virtue of its tempting geology and by offering “attractive fiscal terms” to prospectors, the Energy Department in Washington said in a September report.

Still, a “likely aggressive tax burden” to be imposed on shale-gas producers may damp investor enthusiasm, analysts at Bank Zachodni WBK SA, based in Wroclaw, Poland, said yesterday in a note to clients.

Polish drilling also has been hindered by a scarcity of rigs, water and specialized equipment needed for shale wells, Bern said.

“Getting the things you need to drill these wells is much more difficult in Poland than in the United States, where the shale industry is very well-developed,” Bern said.

Source

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USA: Mitsui Closes Texas Shale Oil/Gas Deal

Mitsui & Co., Ltd.  announced that Mitsui E&P Texas LP, a wholly owned subsidiary of Mitsui, and SM Energy Company have closed the previously announced agreement for MEPTX to acquire a 12.5% working interest in SME’s Eagle Ford property in Texas, USA.

Mitsui has participated in shale oil/gas projects in the United States and Poland, and aims to expand its shale business into other countries leveraging its global network and the knowledge acquired through these projects.

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Greece Investigates Shale Gas

The Ministry for the Environment, Energy and Climate Change announced a special preparatory research project to be awarded to the Greek state-owned Institute for Geology and Mineral Exploration (IGME), in order to explore potential shale gas reserves in the territory. More specifically, the Deputy Minister Ioannis Maniatis revealed in a press conference that after a series of preliminary examinations by a scientific committee on the issue, the decision was taken based on similar initiatives by other European countries.

Moreover, the Greek Ministry released a report examining best practices in other countries and concluding that the present day technology can be of use regarding the potential Greek reserves. Special note was highlighted in the examples of Poland, France and Bulgaria. Moreover it was made known that in the near future Greece may join the Shale Gas Resource initiative.

Furthermore Maniatis noted to the press “The research regarding shale gas is an integral part of the national strategy for energy that focuses on the use of gas either of a conventional or unconventional nature”. Moreover he added that ” The prospects for shale gas worldwide are impressive, since in the year 2000 just 1% of the global production of natural gas came from that source, whilst nowadays that figure has multiplied, and for that reason and for the purpose of Greek energy security the Ministry will proceed if adequate reserves exist in Greece, keeping in mind the present optimistic data”.

IGME, responsible for state-directed geological research in the country and the outlook for the shale gas, will survey for a three-month period beginning in early 2012, before any initial findings are announced.  Further, it is possible that the research will be funded by EU structural capital and will also involve the cooperation its Bulgarian counterparts who are already researching in their own country.

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Norway: Skarv Start-Up Put Off for 1Q 2012

Oil major BP said it had delayed the start-up of production from its Skarv oil and gas field off Norway until late in the first quarter of 2012, scrapping a previous timetable for late in the fourth quarter of this year.

Originally the field had been due to enter production in August.

“The slippage is due to delays in receiving the vessel, problems with the riser pull-in (process) and the weather conditions,” BP spokesman Jan Erik Geirmo told Reuters on Wednesday.

BP is the operator of the field and has a stake of 24 percent, while the other licensees include Statoil (36 percent), PGNiG of Poland (12 percent) and Germany’s E.ON Rurhgas (28 percent).

On Tuesday PGNiG cut its forecast for next year’s production from Skarv by 40 percent to 0.24 billion cubic metres and said the field’s launch would be delayed until 2012.

Poland’s gas monopoly also slashed expected oil production from the field to 250,000 tonnes in 2012.

Geirmo declined to say how the delayed start-up would affect production estimates.

Shares in Statoil were down 1.79 percent at 137.2 crowns at 1126 GMT, while the Oslo benchmark index was up 0.54 percent.

Carnegie analyst John Olaisen said the fall was due to the delay at the Skarv field, adding that he thought it would shave 2 percent off Statoil’s planned 2012 output.

Statoil declined to comment on how the delay at Skarv would impact production targets for this year and the next.

“We will present our numbers … with our third-quarter results next Thursday (Oct. 27),” said Statoil spokesman Ola Anders Skauby.

In June Statoil said that a delay in Skarv’s start-up, then pushed back to the fourth quarter of 2011, would reduce 2011 output by some 10,000 barrels of oil equivalent per day (boepd).

The Norwegian firm so far expects its 2011 production to be slightly under 2010′s 1.9 million boepd.

The company has a history of missing its production forecasts.

According to the Norwegian Petroleum Directorate the Skarv field contains 104 million barrels of oil and 42.1 billion cubic metres of gas.

By Walter Gibbs and Joachim Dagenborg (Reuters)

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Natural gas shale play development now going global

Thirty years ago oilman George Mitchell started an American energy revolution when his company took old techniques and applied them in innovative ways to shale gas fields in north Texas.

Hydraulic fracturing and horizontal drilling were not exactly new, but the combination unlocked tremendous reserves of natural gas in the Barnett Shale and, eventually, similar formations across the U.S. Shale names like the Marcellus, Bakken, Haynesville, Utica and Woodford are now synonymous with game-changing gas reserves.

Some so-called experts feared that we might have to import liquefied natural gas from international producers only a decade ago, but now the American supply is estimated at 100 years or more.

Europe is finally taking notice. The continent has begun exploring its own shale formations in the hopes that some measure of energy independence might be gained.

The goal is not freedom from Middle East and Latin American state-run oil entities, but rather Russian suppliers. European economic and clean-air interests might be linking up about shale even as U.S. regulators are giving the practice a harder look here.

The evidence is cropping up almost everywhere. Halliburton fractured Poland‘s first shale play well last year, while ExxonMobil is exploring concessions in Germany, joining nations such as Spain and the Netherlands in a search for vast stores of natural gas.

U.S. diplomatic channels are willing to help. The State Department formed the Global Shale Gas Initiative last year, “to help countries seeking to utilize their unconventional natural gas resources to identify and develop them safely and economically,” according to the department’s website.

The Global Shale Gas Initiative so far selected countries with some known presence of gas-bearing shale within their borders, market potential and “geopolitical synergies.” The GSGI partnerships include China, India, Jordan and Poland, where reserves are announced at approximately 1.4 trillion cubic meters.

New coal power is difficult to build on due to stringent environmental politics. Some nations, such as Germany, are either running away from or increasingly wary about nuclear power in the wake of the Japanese tsunami disaster.

Eastern European nations, with still fresh memories of Russian domination, want an option to the oil and gas giant perched near their borders. Some, like France, are opposed to hydraulic fracturing although its energy situation is more settled than other neighbors.

But many nations are willing and eager to consider unconventional drilling options, although opinion is divided on whether the European shales have sufficient permeability to recover massive oil and gas. They look across the pond and see potential oceans of energy independence where little existed before the U.S. shale plays shot up.

Original Article

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Soros-Backed San Leon Says Polish Shale Gas Profits to Beat U.S.

By Marek Strzelecki

Sept. 20 (Bloomberg) — San Leon Energy Plc, the natural- gas explorer backed by billionaire George Soros and Blackrock Inc., expects its Polish shale licenses to be more profitable than U.S. deposits, the company’s exploration director said.

San Leon, which became one of the leading shale gas explorers in Poland after buying Realm Energy International Corp. for $142 million last month, seeks to profit either through so-called farm-outs with a cash component or asset sales once it develops its fields and proves they can produce gas, John Buggenhagen said in an interview in Warsaw.

Shale gas, unlocked from rocks by blasting them with sand, chemicals and water, has boosted U.S. production and delivered the lowest prices in almost a decade. Companies including Exxon Mobil Corp. and Chevron Corp. seek to emulate the U.S. boom in Poland, Europe’s biggest holder of shale.

“If you’re getting $4 for your gas in the U.S., here you’re getting $8, meaning I can produce half as much gas for the same profit,” Buggenhagen said.

Dublin-based San Leon has 14 licenses and 1.7 million acres of land in the eastern European country to explore for shale gas and conventional hydrocarbons, according to a presentation on its website. Poland has granted 101 licenses, with eight wells completed out of a mandatory 124. Test production has started on two wells.

U.S. Example

“If you look at what’s going on in North America, I mean that people are paying $10, $20, $30 an acre, and selling it for $10,000, $20,000, $30,000 an acre, that’s the kind of return that we’re looking for.” Buggenhagen said. “We would like to use our existing capital to start exploring those Realm concessions on our own, as opposed to giving away acreage through farm-outs.”

Last year, the company signed a farm-out agreement with Talisman Energy Inc., under which the Canadian gas explorer will drill one well on each of San Leon’s concessions in the Baltic basin in northern Poland in exchange for 30 percent stakes in the licenses. Talisman has an option to increase its holdings to 60 percent if it drills an additional well on each license.

San Leon was approached by three “significant oil and gas companies” and may consider more farm-outs after upcoming drillings, Buggenhagen said.

“If I come and drill the well that costs me $4 million to $5 million and if I’ve increased the value of that block 10- fold, then the value of my farm-out is that much more” he said.

Production Start

Poland may sit atop about 5.2 trillion cubic meters of shale gas, according to the U.S. Energy Information Administration. Commercial production can start in three to five years, helped by the relatively high price of Russian gas, Buggenhagen said.

The country buys some 60 percent of its gas under a long- term contract from Russia. In the second quarter the country was paying more than $400 a 1,000 cubic meters of Russian gas, according to Polish Deputy Prime Minister Waldemar Pawlak. That’s about three times today’s gas price for October delivery on the New York Mercantile Exchange.

While Poland’s almost complete reliance on coal as fuel for power generation may help boost shale production given the European Union’s push to lower carbon-dioxide emissions, the country should be cautious in increasing royalties for oil and gas producers, Buggenhagen said.

“What we’re struggling to know is how is the Polish government going to respond to success, in terms of changing royalties and income taxes,” he said. “You see that everywhere in the world — the greed factor — how much greed we will see over the next three to five years.”

Production Fees

Last month, Poland’s largest opposition Law and Justice party presented a draft law calling for output fees to be at least 40 percent of the value of the deposit. While the government argues mining fees should not be set before gas deposits are proven, in June Pawlak said the country saw Norway and its sovereign wealth fund as a model to benefit from shale gas production.

“Royalties are less than 1 percent now, so very low,” Buggenhagen said. “They will go up, for sure, But if you raise it to 40 percent you’re going to discourage the investment.”

Original Article

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