Blog Archives

Worldwide Field Development News Oct 19 – Oct 25, 2013

This week the SubseaIQ team added 4 new projects and updated 13 projects. You can see all the updates made over any time period via the Project Update History search. The latest offshore field development news and activities are listed below for your convenience.

Africa – West

Lukoil Strikes Oil Offshore Sierra Leone

Oct 24, 2013 – Lukoil completed drilling the Savannah-1X wildcat in the Sl-5-11 license offshore Sierra Leone. The well was drilled on schedule by the Eirik Raude (UDW semisub) to a depth of 14,519 feet. Several oil-bearing reservoirs were confirmed and oil samples were taken from Turonian sands. Drilling data will be evaluated through the end of the year to advance the company’s geological understanding of the area.

Project Details: Savannah

Asia – Far East

CNOOC Announces Additional Bohai Bay Discoveries

Oct 24, 2013 – CNOOC announced an oil discovery at its Luda 5-2 North field in Bohai Bay. The Luda 5-2N-2 and Luda 5-2N-4 wells were each drilled to a depth of 3,740 feet and encountered gross pay zones of 390 and 280 feet respectively. Luda 5-2N-2 tested oil at a rate 1,040 barrels per day. Additionally, the company announced the successful appraisal of the Kenli 9-5/9-6 oil field. The Kenli 9-5-2D and 9-6-2 wells were drilled in the southern part of Bohai Bay. Kenli 9-6-2 flowed at a rate of 200 barrels per day.

S. America – Brazil

Petrobras-led Consortium to Develop Pre-Salt Libra Field

Oct 24, 2013 – A group of companies comprised of Petrobras, Shell, Total, CNPC and CNOOC won a 35-year production sharing contract to develop the Libra pre-salt oil field in the Santos Basin offshore Brazil. Libra is located in block BM-S-11 in 6,500 feet of water and is estimated to hold as much at 12 billion barrels of oil. Additional appraisal will be needed to determine the best development scenario and to confirm production rates that are currently estimated at 1.4 MMbopd. Petrobras will serve as the operator with a 40 percent stake on behalf of its partners Shell (20 percent), Total (20 percent), CNPC (10 percent) and CNOOC (10 percent).

Europe – North Sea

ENI’s Receives Disappointing Results at Bonna

Oct 24, 2013 – Drilling results at Eni’s Bonna prospect in the Barents Sea proved to be disappointing. Well 7016/2-1 was drilled by the Scarabeo 8 (UDW semisub) to a depth of 13,205 feet. The well was drilled to investigate the possibility of gas in the Eocene and Paleocene reservoirs of the Sotbakken Group. No reservoir-quality rocks were encountered and the well has been declared dry.

Project Details: Bonna

Asia – SouthEast

Songa Mercur Spuds Spuds ENI’s Ca Ngu Well

Oct 24, 2013 – Neon Energy announced the spud of the Ca Ngu-1 exploration well in Block 120 offshore Vietnam. The objective of the well is to prove the presence of hydrocarbons in Pliocene clastic and Miocene carbonate reservoirs. Block operator ENI secured the Songa Mercur (mid-water semisub) to drill the well in 885 feet of water to a target depth of around 4,900 feet. If successful, the well could de-risk the nearby Rua Bien and Ca Lang prospects. Block 120 partners consist of ENI (50%), Neon Energy (25%) and KrisEnergy (25%).

Project Details: Ca Ngu

Galoc-6H Flows at Expected Rate

Oct 24, 2013 – Subsea tree installation, well clean-up and flow testing of the Galoc-6H development well have successfully been completed at the Otto Energy-operated Galoc field. Galoc-6H flowed at a stable rate of 3,800 bopd on a 56/64-inch choke with a flowing tubing pressure of ~570 psi. These results were constrained by the testing equipment onboard the Ocean Patriot (mid-water semisub). Once tied into production facilities, Otto expects normal production from the well to reach 4,000 to 6,000 bopd. The 5H and 6H wells were drilled as part of the Phase II development plan which aims to increase field production to 12,000 bopd. Phase II production is scheduled to begin in November 2013.

Project Details: Galoc

S. America – Other & Carib.

Total to Proceed With Vega Pleyade Development

Oct 25, 2013 – French supermajor Total announced its decision to move forward with the development of the Vega Pleyade gas and condensate field offshore Argentina. The field is located in the Cuenca Marina Austral 1 (CMA-1) concession that Total has operated since 1978. Development consists of installing a new production platform in about 160 feet of water. Three production wells will be drilled from the platform and produced gas will flow through 48 miles of subsea pipeline to a treatment plant at Rio Cullen. In a separate initiative, Total will begin a drilling campaign in 2014 aimed at boosting production from the Carina field and providing additional appraisal in CMA-1. Total owns a 37.5 percent stake in the concession. Its partners include Wintershall (37.5 percent) and Pan American Energy (25 percent).

Project Details: Vega Pleyade

Australia

Eni Establishes Additional Resources at Evans Shoal

Oct 25, 2013 – Drilling operations are complete at the Eni-operated Evans Shoal North-1 appraisal well. The well, located in the Timor Sea, was drilled by the Ensco 104 (400′ ILC) to a depth of almost 13,000 feet. Results indicate that the Evans Shoal North-1 reservoir is in communication with the reservoir encountered while drilling Evans Shoal-2. Eni conducted a production test and achieved a constrained rate of 30 MMscfd. The operator estimates the Evans Shoal field to contain at least 8 Tcf of in place gas resources and remains committed to establishing a fast-track development in the area. Eni’s partners in the field include Shell (32.5 percent), Petronas (25 percent) and Osaka Gas (10 percent).

Project Details: Evans Shoal

ExxonMobil Flips the Switch at Tuna and Turrum

Oct 25, 2013 – ExxonMobil announced the start of production from its Kipper Tuna Turrum (KTT) project in the Bass Strait. Gas is now being produced at the Tuna field and oil is flowing from Turrum to the Marlin B production platform. At $4.3 billion, KTT is the largest domestic oil and gas development on Australia’s eastern seaboard. Production startup from the Kipper field is expected to commence in 2016.

Project Details: Kipper Tuna Turrum (KTT)

CNOOC Expands Overseas Businesses with Acquisition of Nexen (Canada)

CNOOC Limited and Nexen Inc. announced that they have entered into a definitive agreement under which CNOOC Limited will acquire all of the outstanding common shares of Nexen for US$27.50 per share in cash.

The purchase price represents a premium of 61% to the closing price of Nexen’s common shares on the NYSE on July 20, 2012, and a premium of 66% to Nexen’s 20 trading-day volume-weighted average share price. Total cash consideration of approximately US$15.1 billion will be paid for Nexen’s common and preferred shares, and Nexen’s current debt of approximately US$4.3 billion will remain outstanding. The transaction, which will be completed by way of a plan of arrangement, is expected to close in the fourth quarter of 2012.

The acquisition of Nexen expands CNOOC Limited’s overseas businesses and resource base in order to deliver long-term, sustainable growth. Nexen will complement CNOOC Limited’s large offshore production footprint in China and extends CNOOC Limited’s global presence with a high-quality asset base in many of the world’s most significant producing regions – including Western Canada, the U.K. North Sea, the Gulf of Mexico and offshore Nigeria – focused on conventional oil and gas, oil sands and shale gas. In addition, Nexen management’s current mandate will be expanded to include all of CNOOC Limited’s North American and Caribbean assets.

Nexen had average production of 207 mboe/d (after royalties) in Q2 2012. In accordance with SEC rules, Nexen had 900 mmboe of proved reserves and 1,122 mmboe of probable reserves as of December 31, 2011. In addition, as of December 31, 2011, Nexen had best estimate contingent resources of 5.6 billion boe in accordance with Canadian National Instrument 51-101, predominantly in the Canadian oil sands.

The transaction will be funded by CNOOC Limited’s existing cash resources and external financing.

Mr. Wang Yilin, Chairman of CNOOC Limited said, “The acquisition reflects our strong belief in Nexen’s rich and diverse portfolio of assets and world-class management and employees. This is an exciting opportunity for us to build on our existing joint venture relationship with Nexen in Canada, and to acquire a leading international platform in the process. We strongly believe that this acquisition will create long-term value for CNOOC Limited’s shareholders.”

Commenting on the acquisition, Mr. Barry Jackson, Chairman of the Board of Nexen, said, “This transaction delivers significant and immediate value to Nexen shareholders. The Nexen Board is unanimous in its view that the transaction is in the best interest of Nexen and recommends shareholders vote in favor of the transaction.”

Source

Recap: Worldwide Field Development News (Jun 1 – Jun 7, 2012)

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This week the SubseaIQ team added 3 new projects and updated 28 projects. You can see all the updates made over any time period via the Project Update History search. The latest offshore field develoment news and activities are listed below for your convenience.

Asia – Far East
CNOOC Receives Formal EIA Approval for Lishui Development
Jun 6, 2012 – CNOOC and Primeline Energy have received formal approval on the environmental impact assessment report for the development of the Lishui gas field from the State Oceanic Administration. The SOA had previously approved the routing of pipeline for the development. Primeline Energy, a partner on the field, reported that the EIA approval paves the way for the final regulatory approval required for the development, namely approval of the overall development program. Primeline expects that CNOOC will submit the ODP for confirmation by the National Reform and Development Committee shortly. Thus far, major construction contracts have been signed for the development to progress with fabrication of the platform and work on the pipeline are proceeding on schedule. The development is currently on time for first production, which is expected to be around 3Q 2013. The Lishui gas field is located on Block 25/34 offshore China and reportedly holds 4.9 billion cubic meters of proven gas reserves.
Project Details: Lishui
Peng Lai Field Leaks Small Amount of Oil
Jun 5, 2012 – CNOOC Limited reported that a small amount of oil is leaking from the Penglai 19-3 oil field in the Bohai Bay. A small amount of oil leaked into the sea from the Penglai 19-3 field when a safety device on a hose coupling parted due to an abnormality during an oil transfer operation on June 3. The leak was secured immediately when automatic isolation valves closed. Roughly 0.6 tonnes of oil was released into the sea, said CNOOC.
Project Details: Peng Lai
Europe – East
Gazprom Seeking New Partners for Shtokman Project
Jun 6, 2012 – Gazprom has been seeking to develop Shtokman, one of the world’s largest natural gas fields, since the early 1990s, and after several attempts has put together a consortium comprising Statoil, Total and itself. But technological challenges and precipitously low gas prices, as well as the emergence of the U.S. as a gas exporter, have called its financial viability into question. The final investment decision for project hasn’t been announced.
Project Details: Shtokman
N. America – Mexico
Fluor to Build Ku-Maloob-Zaap Production Platform
Jun 7, 2012 – ICA Fluor and Fluor Corporation have signed a contract with Pemex for the construction of an offshore production platform at the Ku-Maloob-Zaap field in the Gulf of Mexico. The contract has a value of $95 million. ICA Fluor and its subsidiary Industria del Hierro will be responsible for the procurement, construction, testing, and load-out of the Ayatsil-C platform. Weighing 11,832 tons and reaching 433 feet (132 meters) deep, Ayatsil-C is the first structure of this size to be installed by Pemex. The project is expected to be completed by the end of 2013.
Project Details: Ku-Maloob-Zaap
Europe – North Sea
Athena Field Performs as Expected
Jun 7, 2012 – Ithaca Energy reported that the Athena field has reached initial peak gross oil production rates of 22,000 bopd, and oil export operations have commenced. The flow from each of the four oil production wells is being supported by electrical submersible pumps with water injection being used to support the reservoir pressure of the field and thereby maintaining and sustaining production rates. An initial cargo has already been offloaded from the BW Athena to the shuttle tanker Betty Knutsen.
Project Details: Athena
Premier Hits Oil in Carnaby
Jun 6, 2012 – Premier has reached a total depth of 4,695 feet (1,431 meters) at the Carnaby exploration well and has encountered oil. Initial analysis indicates that the well encountered 51 feet (15 meters) of net oil in the main Tay sandstone within an estimated 86 feet (26 meters) oil column. A core was taken and confirmed oil in excellent quality sandstones. Pressure data and sampling indicates that the API of the oil is 24 degrees and is of similar quality to that established at the nearby Catcher discoveries. The oil water contact was at the shallower end of expectation; driven by the more complex geology associated with this type of footwall prospect. The well also encountered 51 feet (15 meters) of Cromarty sands but these were shown to be water wet on the logs. The high quality data acquisition from the well will now be used to determine what contribution the Carnaby discovery will make to the overall Catcher development. The well will be plugged and abandoned ahead of the rig moving to drill the high risk Coaster prospect on Block 28/10a, immediately east of the Catcher acreage.
Project Details: Carnaby
MPX Terminates Rig Contract
Jun 6, 2012 – MPX Energy and partners have terminated the drilling contract with Awilco Drilling as a consequence of technical downtime. The semisub was conducting exploratory drilling at the Timon exploration well in the UK sector of the North Sea. As previously reported, the well has been suspended for reentry and the license partners are currently investigating alternative rig options to complete drilling of the Timon prospect.
Project Details: Timon
ConocoPhillips Delays Jasmine Production until 2013
Jun 5, 2012 – ConocoPhillips has delayed production start-up of its Jasmine field in the central North Sea until 2013. It had been hoped that the high-pressure, high-temperature field, described as one of the UK’s largest finds in the last 10 years, could come online in the fourth quarter of 2012. Thus far, the operator has drilled two of eight development wells and plans to spend about $400 million on the project. Jasmine was discovered in 2006 and has been estimated to hold recoverable reserves of more than 100 million barrels oil equivalent. The development, 5.5 miles (8 kilometers) west of the Judy platform, will comprise a Jasmine wellhead platform (WHP) and a bridge-linked accommodation and utility platform, a Judy riser and separation platform (JRP) with additional Judy well slots bridge-linked to the existing Judy platform and a multiphase pipeline from the WHP to the JRP.
Project Details: Jasmine
Marathon Submits Boyla PDO to Norwegian Authorities
Jun 4, 2012 – Marathon and partners have submitted a plan for development and operation (PDO) of the Boyla field (formerly Marihone) to the Norwegian Ministry of Petroleum and Energy. The Boyla development is expected to begin production during the fourth quarter of 2014. The field will be developed as a subsea tie-back to the Alvheim floating production, storage and offloading vessel (FPSO) with two production wells and a water injection well being drilled. The total investment is estimated to be $867 million with reserves estimated at 23 million barrels of oil equivalents. Boyla crude oil will be commingled with the Alvheim blend and exported via shuttle tankers. Associated gas will be exported via Alvheim to the SAGE pipeline.
Project Details: Alvheim
Aker Grabs Early Phase Studies for Several Discoveries
Jun 4, 2012 – Statoil has awarded Aker Solutions early phase studies for several major discoveries on the Norwegian Continental Shelf including Skrugard, Havis and Johan Sverdrup. Aker Solutions will perform a concept study for the Skrugard and Havis fields, as one of several vendors. The two fields, which are located only 4 miles (7 kilometers) apart, will be developed as a joint solution. The work on the Johan Sverdrup field development is a feasibility and screening study. The concept study for the Skrugard and Havis development will be executed by Aker Solutions in Oslo, with participation from its new engineering office in Tromso. As a part of the concept study for the Skrugard and Havis fields, Aker Solutions will on behalf of Statoil perform a screening of potential scope to be performed by local suppliers in the northern regions for the developments ahead. The screening will be led by the Tromso office.
Project Details: Skrugard
Africa – West
Rialto Energy Sidetracks Gazelle-P3 well
Jun 5, 2012 – Rialto Energy has commenced drilling of the Gazelle-P3 ST2 well to optimize the recently drilled Gazelle-P3 ST well in order to underpin the oil and gas development of the Gazelle field. Following planned testing in the Upper Cenomanian-1 reservoir (UC-1), the Gazelle-P3 ST2 well is intended to be suspended as a future producer. The sidetrack operation is expected to take about 12 to 15 days.
Project Details: Gazelle
First Subsea Completes Block 31 FPSO Mooring
Jun 4, 2012 – First Subsea has completed the mooring of the PSVM (Plutao, Saturno, Venus and Marte) FPSO in Block 31 offshore Angola. The double-hulled PSVM FPSO, moored in 6,562 feet (2,000 meters) of water, is a hub field development that will produce oil from the Plutao, Saturno, Venus and Marte fields. Comprising the northeast sector of the license about 400 kilometers (249 miles) from Luanda, PSVM is the first of four planned development projects on Block 31.
Project Details: PSVM
N. America – US GOM
ATP Resumes Completion Ops at Mirage Field
Jun 4, 2012 – ATP has resumed recompletion operations at the Mississippi Canyon Block 941 A-2 well at the Telemark Hub. The recompletion was suspended while the company recovered a piece of tubing that was stuck in the casing. The MC 941 A-2 recompletion operations to perforate and frac-pack the B upper and lower sands are expected to conclude during second quarter 2012. MC 941 is located in the Mirage field at the Telemark Hub location utilizing the ATP Titan floating drilling and production platform.
Project Details: Telemark
N. America – US Alaska
Shell Still Optimistic about Alaska Drilling
Jun 5, 2012 – Dow Jones Newswires reported that Shell hopes to drill for oil offshore Alaska in July 2012. “We are very encouraged with the progress in the Beaufort and Chukchi seas. All the permits are coming into place and we are looking forward to drilling, most probably in July and then later on in August and the early part of September,” Chief Executive Peter Voser told Dow Jones Newswires.
Project Details: Burger, SW Shoebill, Cracker Jack
Australia
ConocoPhillips Progresses Caldita/Barossa Discoveries
Jun 7, 2012 – Santos Limited has entered into an agreement with ConocoPhillips and SK E&S to progress with the development of the Caldita and Barossa gas discoveries located in the Timor Sea. Prior to the agreement, Santos held a 40% interest in both discoveries, with operator ConocoPhillips holding the remaining 60%. Under the terms of the agreement, SK will earn a 37.5% interest in Caldita and Barossa through a proportionate reduction by Santos and ConocoPhillips. ConocoPhillips will remain operator of both permits. SK will fund the first $260 million of a three-well appraisal program, expected to begin in 2013. Following completion of the appraisal program, SK will have the option to increase its interest to 49.5% in exchange for a further payment of $60 million to Santos and ConocoPhillips, shared according to their original interests in the permits. SK will fund up to $90 million of pre-front end engineering and design (pre-FEED) and FEED activities, expected to begin in 2014. SK will make FID and first LNG cargo payments of up to $110 million to Santos and ConocoPhillips upon meeting certain milestones.
Asia – SouthEast
AWE Spuds Atlas
Jun 4, 2012 – AWE Limited has commenced exploratory drilling at the Atlas-1 well. The well is an exploration well designed to test the gas potential of a carbonate reservoir sequence that, together with the nearby Lengo gas discovery, could contain up to 1 trillion cubic feet of recoverable sales gas. The well is planned to be drilled to a total measured depth of about 2,526 feet (770 meters). The water depth of the site is 230 feet (70 meters).
Project Details: Atlas

BP Gets Approval for South China Sea Exploration

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The Ministry of Commerce, People’s Republic of China, has granted consent to British Petroleum (BP), for an exploration drilling in the South China Sea in partnership with CNOOC, China Daily reveals today.

BP and the block operator CNOOC signed a deal for the exploration at the 43/11 deepwater block in South China Sea in January last year, but the agreement was subject to the Government’s approval.

This is BP’s second project in the deep waters of South China Sea after it had bought a stake in the Block 42/05 from Devon Energy China Ltd., in September 2010.

China daily reports that the partners in the project plan to use China’s first and only home made deepwater semi-submersible drilling rig Offshore Oil 981.

Asked when the exploration drilling would begin, BP China President Chen Liming told Reuters: “When we start depends on many factors, such as whether the drilling rig is ready. We hope to start drilling there by the end of the year.”

BP has been operating in China since the early 1970s and has business activities which include offshore gas production, chemical joint ventures, LPG import and marketing, oil product and lubricant retailing, chemicals joint ventures manufacturing ,technology licensing etc. According to China Daily, the British oil giant has so far invested more than USD 5 billion into China.

Articles

Source

Oil deals: MPs boycott Museveni meeting

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By YASIIN MUGERWA & SHEILA NATURINDA

A group of NRM MPs yesterday boycotted a meeting called by President Museveni at State House, Entebbe to try and convince members to back him on a $2.9 billion (Shs7.3 trillion) oil deal to bring Total-CNOOC into Uganda’s oil industry through a farm-out by Tullow Oil.

Addressing a news conference at parliament independent-minded MPs described their colleagues who went for President Museveni’s meeting as “hypocrites”. Lwemiyaga MP Theodore Ssekikubo, Kampala Central MP Muhammad Nsereko, Vincent Kyamadidi (Rwampara) and Wilfred Niwagaba (Ndorwa East) said they couldn’t be party to a State House meeting that seeks to help the President overthrow Parliament.

“We passed a resolution in Parliament stopping the signing of oil contracts without relevant laws in place,” Mr Niwagaba said. “We were not drunk when we passed this resolution. We had given the government 30 days to table these laws but it’s now two months and they have not acted yet the President wants to sign new contracts.” He added: “We want to warn Oil companies that if they dare sign, Ugandans will not be party to illegal contracts signed with the President because as far as we are concerned Tullow doesn’t have any license.”

In an unprecedented response to what they called “a sinister plot to hijack the independence of Parliament and entrench corruption in the oil sector”, a group of the same legislators in October this year walked out on President Museveni at the party’s stormy Kyankwanzi retreat.

Those who witnessed this drama, this newspaper that the trouble began after the President proposed that the NRM Caucus resolve to overturn the Parliament resolutions on oil that placed a moratorium on executing oil contracts and oil transactions on the Executive until the necessary laws have been passed by Parliament.

The President reportedly argued that the resolutions of Parliament on the matter would affect the $2.9 billion deal to bring Total and CNOOC into Uganda’s oil industry. But sources who attended the Friday NRM Caucus Meeting at State House told Daily Monitor that President told members that Speaker Rebecca Kadaga assured him that the resolution didn’t affect on-going contracts.

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But the lawmakers led by Mr Ssekikubo and Abdul Katuntu who was part of the press conference, the chief petitioners in an on-going House inquiry in to the allegations of corruption said the $2.9 billion deal with Total-CNOOC in a farm-out deal will be challenged in courts of law. Kyamadidi and Nsereko accused Tullow of peddling air. The MPs want government to withhold its consent to signing of a deal expected to be concluded as soon as the two parties agree on the tax component.

“Self-indulgence is what is taking place at State House,” Mr Ssekikubo said. “I don’t know what my colleagues have gone to do at State House. If it’s to help the President sign Total-CNOOC deal with Tullow, then they are making a very big mistake. Our position is that Parliament must be respected and the President should wait for the oil laws to be put in place before entering into any contract.”

But Mr Katuntu, an established lawyer said: “Tullow doesn’t not have any legal contract. The Memorandum of Understanding they signed with the government is illegal and should not be a basis for entering into new contracts. It’s up to those companies which want to be hoodwinked to proceed and sign otherwise what the president is trying to do is illegal and unacceptable.”

While the independent-minded NRM MPs boycotted the meeting, majority of the friendly NRM MPs attended the meeting with the President which started at 4pm. Details of the meeting were not readily available by press time. But sources said the President wanted MPs support him on the deal. This was a follow-up meeting to the one at Kyankwanzi meeting which allowed the president to proceed with the deal.

At Kyankawanzi meet, after some MPs walked out on the President, Soroti Municipality MP Mike Mukula moved a motion which was seconded by Mr Alex Ruhunda (Fort Portal Municipality) binding the NRM Caucus to allow the President to proceed with the signing of the $2.9 billion Total-CNOOC farm-out deal with Tullow.

Source

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CNOOC Boasts High Shale Production in US Partnerships

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China’s largest offshore oil producer, China National Offshore Oil Corp (CNOOC), said unconventional oil and gas production in its United States partnerships totaled 3 million to 4 million barrels this year.

“We expect annual production to hit 8 million barrels as we put more capital into the wells,” said Zhu Weilin, executive vice-president of CNOOC Ltd.

China is estimated to hold more natural gas trapped in shale than the US, according to the US Energy Information Administration in April. Shale gas is among the largest onshore energy prospects in China.

CNOOC paid $570 million for a 33.3-percent stake in Chesapeake Energy Corp’s Niobrara shale project in Colorado and Wyoming in February this year. Last November, the company made a $1.8-billion purchase for a one-third stake in Chesapeake’s Eagle Ford project in south Texas.

He said his company is looking for opportunities with US companies in deepwater exploration as well as shale gas and oil.
“CNOOC has 19 offshore blocks in China that we are looking for foreign partners to co-develop,” said Zhu at the recent China-US Relations Conference.

“We see other small Chinese companies coming to the US for partnerships and supply agreements in unconventional oil and gas fields,” said Christine Ehlig-Economides, professor of the Petroleum Engineering Department at Texas A&M University. “This is one area they want to learn from.”

Industry analysts said China is paying a high premium for the partnerships while others have said Chinese is learning new exploration techniques through the projects.

The prices China’s State-owned oil companies have paid for assets are mixed; in some cases, they may have paid above market value but recent economic conditions, good financial performances, and growing experience with international deals have benefited the companies, according to a report by the International Energy Agency.

Two-thirds of the USD 70 billion invested in 144 projects overseas by China’s three oil giants, Sinopec Group, China National Petroleum Corp and CNOOC, have not turned a profit thus far, according to a recent report by the China University of Petroleum and the China Petroleum and Chemical Industry Association.

“Natural resources are one of the few sectors where the US government has stringent scrutiny because they are the strategic industries,” said Huang Yasheng, professor at the Sloan School of Management at the Massachusetts Institute of Technology.

In 2005, CNOOC dropped its USD 18.5-billion bid for Unocal Corp because of opposition from US lawmakers.

It would have been the largest overseas acquisition by a Chinese company.

“Chinese companies should position themselves globally, rather than nationally,” said Xiang Bing, founding dean of the Cheung Kong Graduate School of Business, one of China’s leading business schools.

Source

The US power grab in Africa

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By Pepe Escobar

Beware of strangers bearing gifts. Post-modern Amazon and United States Secretary of State Hillary Clinton finally landed in Tripoli – on a military jet – to lavish praise on the dodgy Transitional National Council (TNC), those pportunists/defectors/Islamists formerly known as “North Atlantic Treaty Organization rebels”.

Clinton was greeted on Tuesday “on the soil of free Libya” (her words) by what the New York Times quaintly described as an “irregular militia” (translation: a heavily armed gang that is already raising hell against other heavily armed gangs), before meeting TNC chairman Mustafa Abdel-NATO (formerly known as Jalil).

The bulk of the US gifts – US$40 million – on top of the $135 million already disbursed since February (most of it military “aid”) is for a missile scramble conducted by “contractors” (ie mercenaries) trying to track the tsunami of mobile anti-aircraft rockets that by now are already conveniently ensconced in secret Islamist warehouses.

Clinton told students at the University of Tripoli, “We are on your side.” She could not possibly connect the dots and note that the shabab (young people) who started demonstrating against Muammar Gaddafi in February have absolutely nothing to do with the TNC’s opportunists/defectors/Islamists who hijacked the protests. But she did have time to unveil another US foreign policy “secret” – that the US wants Gaddafi “dead or alive”, George W Bush-style (or as the beneficiary of targeted assassination, Barack Obama-style).

The new Fallujah
In her exhausting six-and-a-half hours on “free Libya” soil, Clinton couldn’t possibly find the time to hitch a helicopter ride to Sirte and see for herself how NATO is exercising R2P (“responsibility to protect” civilians).

A few hundred soldiers and no less than 80,000 civilians have been bombed for weeks by NATO and the former “rebels”. Only 20,000 civilians have managed to escape. There’s no food left. Water and electricity have been cut off. Hospitals are idle. The city – under siege – is in ruins. Sirte imams have issued a fatwa (decree) allowing survivors to eat cats and dogs.

What Gaddafi never did to Benghazi – and there’s no evidence he might have – the TNC is doing to Sirte, Gaddafi’s home town. Just like the murderous US offensive in Fallujah in the Iraqi Sunni triangle in late 2004, Sirte is being destroyed in order to “save it”. Sirte, the new Fallujah, is brought to you by NATO rebels. R2P, RIP.

It gets much nastier. Libya is just one angle of a multi-vector US strategy in Africa. Wacko presidential candidate Michelle Bachmann, during Tuesday’s Republican debate in Las Vegas, may have inadvertently nailed it. Displaying her geographical acumen as she referred to Obama’s new US intervention in Uganda, Bachmann said, “He put us in Libya. Now he’s putting us in Africa.” True, Libya is not in Africa anymore; as the counter-revolutionary House of Saud would want it, Libya has been relocated to Arabia (ideally as a restored monarchy).

As for Obama “putting us in Africa” (see Obama, King of Africa Asia Times Online, October 18, 2011), those 100 special forces in Uganda billed as “advisers” should be seen as a liquid modernity remix of Vietnam in the early 1960s; that also started with a bunch of “advisers” – and the rest is history.

Murderous mystic crackpot Joseph Kony’s Lord’s Resistance Army (LRA) is now a rag-tag bunch of no more than 400 warriors (they used to be over 2,000). They are on the run – and not even based in Uganda, but in South Sudan (now a Western protectorate), the Central African Republic and the long border with the Democratic Republic of Congo.

So why Uganda? Enter London-based Heritage Oil, and its chairman Tony Buckingham, a former – you guessed it – “contractor” (ie mercenary). Here’s Heritage’s modus operandi, described by Buckingham himself; they deploy “a first mover strategy of entering regions with vast hydrocarbon wealth where we have a strategic advantage”.

Translation: wherever there’s foreign invasion, civil war, total breakdown of social order, there are big bucks to be made. Thus Heritage’s presence in Iraq, Libya and Uganda.
Profiting from post-war fog, Heritage signed juicy deals in Iraqi Kurdistan behind the back of the central government in Baghdad. In Libya, Heritage bought a 51% stake in a local company called Sahara Oil Services; this means it’s now directly involved in operating oil and gas licenses. Pressed about it, TNC honchos have tried to change the conversation, alleging that nothing is approved yet.

What’s certain is that Heritage barged into Libya via a former SAS commando, John Holmes, founder of Erinys, one of the top mercenary outfits in Iraq apart from Xe Services, former Blackwater. Holmes cunningly shipped the right bottles of Johnnie Walker Blue Label to Benghazi for the right TNC crooks, seducing them with Heritage’s mercenary know-how of enforcing “oil field security”.

Got contractor, will travel
Obama’s Uganda surge is also a classic Pipelineistan gambit. The possibly “billions of barrels” of oil reserves discovered recently in sub-Saharan Africa are located in the sensitive cross-border of Uganda, South Sudan, the Central African Republic and the Democratic Republic of Congo.

Believe it or not, Heritage was the top oil company in Uganda up to 2009, drilling on Lake Albert – between Uganda and the Democratic Republic of Congo – and playing one country against another. Then they sold their license to Tullow Oil, essentially a spin-off, also owned by Buckingham, bagging $1.5 billion in the process and crucially not paying 30% of profits to Washington’s bastard, the government of Ugandan President Yoweri Museveni.

Enter Libya’s state oil company, Tamoil, which was part of a joint venture with the Ugandans to build a crucial oil pipeline to Kenya; Uganda is landlocked, and badly needs the pipeline when oil exports start next year. The NATO war on Libya paralyzed the Pipelineistan gambit. Now everything is open for business again. Tamoil may be out of the picture – but so may be other players.

Trying to sort out the mess, the parliament in Uganda – slightly before Obama’s announcement – decided to freeze all oil contracts, hitting France’s Total and the China National Offshore Oil Corporation, but especially Tullow oil.

But now, with Obama’s special forces “advising” not only Uganda but also the neighbors, and linking up with Heritage – which is essentially a huge oil/mercenary outfit – it’s not hard to fathom where Uganda’s oil contracts will eventually land.

The Amazon rules
Unified Protector, Odyssey Dawn and all other metaphors Homeric or otherwise for the Africom/NATO 40,000-plus bombing of Libya have yielded the desired result; the destruction of the Libyan state (and much of the country’s infrastructure, to the delight of disaster capitalism vultures). It also delivered the lethal unintended consequence of those anti-aircraft missiles appropriated by Islamists – a supremely convincing reason for the “war on terror” in northern Africa to become eternal.

Washington couldn’t care less about R2P; as the Libyan Clinton hop shows, the only thing that matters is the excuse to “securitize” Libya’s arsenal – the perfect cover story for US contractors and Anglo-French intel ops to take over Libyan military bases.

The iron rule is that “free” Libya should be under the control of the “liberators”. Tell that to the “irregular militias”, not to mention the Abdelhakim Belhaj gang and his al-Qaeda assets now in military control of Tripoli.

It’s useful to remember that last Friday, the same day the US State Department announced it was sending “contractors” to Libya, was the day Obama announced his Uganda surge. And only two days later, Kenya invaded Somalia – once again under the R2P excuse of protecting civilians from Somali jihadis and pirates.

The US adventure in Somalia looks increasingly like a mix of Sophocles and the Marx Brothers. First there was the Ethiopian invasion (it failed miserably). Then the thousands of Ugandan soldiers sent by Museveni to fight al-Shabaab (partially failed; after all the Washington-backed “government” barely controls a neighborhood in Mogadishu).

Now the Kenyan invasion. A measure of the Central Intelligence Agency’s brilliance is that operatives have been on the ground for months alongside bundles of mercenaries. Soon some counter-insurgency hotshot in Washington praying in the altar of new CIA head David Petraeus will conclude that the only solution is an army of MQ-9 Reapers to drone Somalia to death.

The big picture remains the Pentagon’s Africom spreading its militarized tentacles against the lure of Chinese soft power in Africa, which goes something like this: in exchange for oil and minerals, we build anything you want, and we don’t try to sell you “democracy for dummies”.

The Bush administration woke up to this “threat” a bit too late – at Africom’s birth in 2008. Under the Obama administration, the mood is total panic. For Petraeus, the only thing that matters is “the long war” on steroids – from boots on the ground to armies of drones; and who are the Pentagon, the White House and the State Department to disagree?

Italian geographer and political scientist Manlio Dinucci is one of the few to point out how neo-colonialism 2.0 works; one just needs to look at the map. In Central Africa, the objective is US military supremacy – on air and in intel – over Uganda, South Sudan, the Central African Republic and the Democratic Republic of Congo.

In Libya, the objective is to occupy an absolutely strategic crossroads between the Mediterranean, northern Africa and the Middle East, with the added (nostalgic?) benefit of the West – as in Paris, London and Washington – finally getting to hold military bases as when King Idris was in power (1951 to 1969). As a whole, control must be established over northern Africa, central Africa, eastern Africa and – more problematically – the Horn of Africa.

The trillion-dollar question ahead is how China – which plots strategic moves years in advance – is going to react. As for Amazon Clinton, she must be beaming. In Iraq, Washington meticulously destroyed a whole country over two long decades just to end up with nothing – not even a substantial oil contract. Clinton at least got a private army – the “advisers” who will be stationed in the bigger-than-the-Vatican US Embassy in Baghdad.
And considering that Obama’s new African “advisers” will be paid by the State Department, now Clinton’s also got her own African private army. After November 2012, Clinton might well consider a move into the contractor business. In the sacred name of R2P, naturally.

Pepe Escobar is the author of Globalistan: How the Globalized World is Dissolving into Liquid War (Nimble Books, 2007) and Red Zone Blues: a snapshot of Baghdad during the surge. His new book, just out, is Obama does Globalistan (Nimble Books, 2009).

Uganda: Minister aims to present oil bills this year

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By Elias Biryabarema

KAMPALA (Reuters) – Uganda‘s energy minister said she expects to send three petroleum bills to parliament by the end of the year as the government moves quickly to put laws in place to regulate the country’s nascent oil sector before the start of production.

Earlier in the week, President Yoweri Museveni said he would discuss a parliamentary vote to delay UK exploration company Tullow Oil‘s planned sale of stakes in local oil fields, pledging to defend the country’s interests in the case.

Earlier this week, Uganda’s parliament passed a resolution urging the government to withhold consent for Tullow‘s proposed deal with France’s Total and China’s CNOOC until laws were in place to regulate the industry.

“We’re working very hard, and we expect that by the end of this year we’ll have brought the three bills — Resource Management Bill, Revenue Management Bill and Value Addition Management Bill — to parliament,” Energy Minister Irene Muloni told a news conference on Saturday.

“The problem is that I can’t control the process thereafter. So how fast the bills will be debated and passed into law will depend on parliament, but at least on my side we’re moving very quickly.”

Last year, Tullow agreed to sell stakes in its Ugandan assets to Chinese group CNOOC and French oil company Total for $2.9 billion.

In March, Tullow said Uganda had assessed taxes of $472 million on its earnings from the sale, and it was disputing that figure. It has since begun an arbitration process before a tax appeals tribunal in Kampala.

The company, meanwhile, has been awaiting final government approval for the partnership, which would allow it to move ahead with a project to develop oil reserves.

Endorsement of the deal is expected to kick start a $10 billion investment to develop the country’s oil fields and start production.

Muloni said government officials expected to extract more favourable terms from companies in future oil deals because the discovery of oil has diminished the exploration risk for oil firms.

“Before the discovery we didn’t know what we had. We didn’t know whether we had oil or not, and for an oil company to bring in a big investment they needed stabilisation clause,” she said.

“Now we’re operating with certainty, we have the oil. So when we’re negotiating new deals, we’ll put up tough positions on the table.”

Hydrocarbon deposits were discovered along Uganda’s border with the Democratic Republic of Congo in 2006.

Original Article

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