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Update: Floatel Superior Stable Again. Will be Towed to Land, Statoil Says

After the PSA Norway today informed of Floatel Superior stability incident which occurred this morning in the Norwegian Sea, Statoil has provided a more detailed insight into the matter.

The oil company announced on its website that, after a hole was discovered in the rig’s ballast tank, causing the rig to tilt 3-4 degrees, the crew of 374 have mustered at the lifeboat stations and evacuation by helicopter is taking place.

“The rig’s stability is now re-established” Statoil said and added that Floatel Superior would be towed to land in due course.

Statoil has set up a personnel reception centre in Kristiansund. Six helicopters and an emergency response vessel have been deployed in order to assist the rig. In addition, an anchor handling vessel will be dispatched to inspect the damage.

Owned by the Swedish company Floatel, the Floatel Superior is a dynamically-positioned (DP-3) semi-submersible facility with a living quarters module aft and an open work deck forward.  The flotel can accommodate 440 people in single cabins when operating on the Norwegian shelf.

The PSA Norway in July 2012 granted consent to Statoil to use the  flotel at Njord Field in the Norwegian Sea.

Update: Floatel Superior Stable Again. Will be Towed to Land, Statoil Says| Offshore Energy Today.

USA: Higher Oil, Gas Taxes Would Hurt Jobs and Revenue, API Says

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API’s Chief Economist John Felmy told reporters yesterday that when America’s oil and natural gas industry reports solid earnings it means jobs are being created and more revenue is being delivered to government.

He said raising taxes on the industry would hurt both jobs and revenue: “If first quarter earnings are solid, it will be a positive sign for American workers, for American retirees, and, in particular, for Uncle Sam, which is desperately in need of the massive revenue our industry has been providing.

“In 2011, the three companies paying the largest share of incomes taxes in the United States were oil and natural gas companies. They paid almost $55 billion – and paid at higher effective rates than all other companies. They also paid at substantially higher rates than the U.S. federal statutory rate.

“Unfortunately, calls for higher taxes on the industry often accompany the release of earnings reports. Higher taxes are a bad idea, not only because they would be discriminatory and punitive – but also because they would hurt investment, hurt jobs, hurt future financial performance and, after a few years, decrease the revenue our industry delivers to the government.

“Instead of raising taxes, if we committed to a strong program of domestic development, we could in 2030 create as many as 1.4 million jobs, generate $800 billion in additional revenue, and substantially boost U.S. oil and natural gas production, according to a study last year by Wood Mackenzie. In just seven years, as many as one million jobs could be created.

“Our industry is successful, and our nation shares in and benefits from that success. We need to remember that when earnings are released.”

API represents more than 500 oil and natural gas companies, leaders of a technology-driven industry that supplies most of America’s energy, supports 9.2 million U.S. jobs and 7.7 percent of the U.S. economy, delivers more than $86 million a day in revenue to our government, and, since 2000, has invested more than $2 trillion in U.S. capital projects to advance all forms of energy, including alternatives.

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USA: TCEQ Says Grants Available for Gas Fueling Station

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The Texas Commission on Environmental Quality announced that up to $4.5 million in grants is being made available to eligible individuals, businesses, and governmental entities to support the development of a network of natural gas vehicle fueling stations to serve as a foundation for a self-sustaining market for natural gas vehicles in Texas.

The TCEQ Clean Transportation Triangle grants are part of the Texas Emissions Reduction Plan, and are offered to eligible entities that intend to build natural gas fueling stations along the interstate highways connecting Houston, San Antonio, Dallas, and Fort Worth.  These fueling stations must be located no more than three miles from the interstate highways and must be made available to the public.

CTT program goals include ensuring that natural gas vehicles purchased, leased or otherwise commercially financed, or re-powered under the Texas Natural Gas Vehicle Grant Program have access to fuel; and building the foundation for a self-sustaining market for natural gas vehicles in Texas.

Grants are offered to eligible applicants, with preference to be given to stations providing both liquefied natural gas and compressed natural gas at a single location; and stations located not more than one mile for an interstate highway system.

Application deadline is April 16, 2012.

Articles

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European Client Cancels Order, Says DSME

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Daewoo Shipbuilding & Marine Engineering said on Friday that a European customer called off a 589.3 billion Korean won ($520.8 million) ship order, making it the first cancellation of an order to the major shipbuilder this year.

The South Korean shipbuilder said in a regulatory filing that two VLCCs and two bulk carriers, which were ordered in 2008, were annulled because its client failed to honour payables. It did not identify the shipping company.

Industry officials say global shipping firms will cancel or delay orders due to the lack of credit amid Europe’s debt woes.

South Korea’s major shipbuilders have received requests to delay deliveries of 24 ships worth some $3 billion as the debt crisis in Europe bites, raising fears about a repeat of the 2008 downturn that hit the industry globally.

South Korea is home to the world’s biggest shipbuilders including Daewoo and Hyundai Heavy Industries.

Reporting by Hyunjoo Jin (Reuters)

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Australia: UBS Says Woodside Faces LNG Delays

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Woodside Petroleum Ltd., Australia’s second-biggest oil producer, faces delays at its liquefied natural gas projects because of challenges in obtaining funding, customers and regulatory approvals, UBS AG said.

The company may defer a decision on its proposed Browse LNG venture “materially beyond” the third quarter of 2012, Gordon Ramsay and Cameron Hardie, UBS analysts in Melbourne, wrote in a report dated Nov. 25. They cut their rating on the shares to “neutral” from “buy” after Woodside’s 2012 output forecast, which was less than estimated by UBS.

Chief Executive Officer Peter Coleman, who took control of Woodside in May, aims to develop an estimated A$75 billion ($74 billion) in LNG projects with partners including Chevron Corp. The company may sell stakes in its Browse and Pluto ventures in Australia to help fund the developments, he said Aug. 18.

Talks on how to develop the Sunrise LNG venture are at an impasse, and the delays may prompt partner Royal Dutch Shell Plc to focus on other opportunities, the analysts wrote.

Woodside fell the most in more than a year in Sydney Nov. 25 after saying production may range from 73 million barrels of oil equivalent to 81 million barrels next year, compared with a UBS forecast of 91 million barrels.

Shares of the Perth-based oil and gas producer extended their losses today, falling 2.3 percent to A$32.60 at the 4:10 p.m. close in Sydney. The benchmark index rose 1.9 percent.

(bloomberg)

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Usan Production Will Mitigate Yemen Loss, Nexen Says

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Government of Yement today informed Nexen that the company’s application to extend the Block 14 (Masila) Production Sharing Contract has not been accepted, and that a newly Yemen national company will take over the operatorship of the block upon the PSC expiry on December 17.

Marvin Romanow, Nexen’s President and CEO said: “While we’re disappointed we did not receive an extension, we’re proud of the accomplishments we’ve achieved there. Our operations at Masila have generated significant value for our company, enabling us to deploy the cash flow to build our current portfolio of legacy assets.”

Nexen explained on its website that decrease in the company’s all round production volumes as a result of the contract expiry will be reduced by the start-up of the Usan project, offshore Nigeria, which is expected to begin production in the first half of next year.

The Usan field was discovered in 2002 and is located some 100 kilometers offshore in water depths ranging from 750 to 850 meters. The field development plan includes a floating production, storage and offloading (FPSO) vessel with a storage capacity of two million barrels of oil.

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Soc Gen Says China May Look for US LNG Deals in Future

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China may look to buy US LNG volumes in the future as an alternative to buying more gas from Russia, one European gas analyst said.

Soc Gen analyst Thierry Bros said in a report Tuesday that, with US Gulf Coast LNG expected to materialize in 2016, China will likely first look into a potential US LNG deal before signing a gas supply agreement with Gazprom.

The bank estimates the minimum breakeven cost for US Gulf Coast LNG delivered into China, taking shipping into account, would work out at around $11.6/MMBtu. This allows plenty of room for negotiations between companies selling US LNG and the Chinese from $13.50/MMBtu — which would allow a minimum of 15% return on investment — and $22/MMBtu — which takes into account full oil indexation — Societe Generale added.

The $13.5 to $22/MMBtu negotiation range translates into a price of oil between $77/b and $133/b, or an oil-indexation formula with a slope between 0.10 and 0.17. This is large enough to match a Russian pipe-gas oil-index price,” Bros said.

As a result, Societe Generale believes China will prefer to look further into US LNG rather than rely on securing an agreement with Gazprom, which could further delay negotiations between Russia and China.

Judging by the seeming lack of any progress in the gas pricing issue during [Russian Prime Minister Vladimir] Putin’s recent visit to China, it seems Beijing is in no particular hurry to sign the contract,” Bros said.

In 2006, Moscow and Beijing signed an initial agreement on gas supplies, when they agreed to construct two pipelines to transport a total of 68 billion cubic meters/year of gas from Russia to China over 30 years. Gazprom and China’s state-owned CNPC in 2010 subsequently signed a legally binding agreement on the supply of up to 30 Bcm/year.

Negotiations since then have not gone as smoothly and have been bogged down by pricing disagreements. Putin’s recent visit to Beijing in October didn’t resolve any of those issues although he said the parties were “on their way to the final stage of negotiations.”

The report published by Societe Generale comes in response to the latest agreement between Cheniere Energy Partners’ Sabine Pass Liquefaction unit in the US and Gas Natural Fenosa announced on Monday.

Under the LNG-sale-and purchase agreement, Gas Natural Fenosa would buy as much as 3.5 million mt/year of LNG. The deal is expected to help facilitate the construction of the first two liquefaction trains at the site, which would produce 9 million mt/year of LNG in the first phase. Construction of the two trains at Sabine Pass is estimated to begin in 2012.

(platts)

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USA: Societe Generale Says Cheniere Can Make Sabine Pass Export Decision After Fenosa Deal

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Societe Generale today said that Cheniere Energy can take a final investment decision on phase 1 of its Sabine Pass LNG export project after it has yesterday signed a supply deal with Gas Natural Fenosa, Bloomberg reported.

This latest deal should allow construction of the liquefaction facilities, two trains capable of producing up to 9 million tons a year, at Sabine Pass to commence in 2012”, Societe Generale said in a report.

Gas Natural Fenosa has yesterday agreed to buy 3.5 million tonnes per annum (mtpa) of LNG from Cheniere Energy. The first LNG deliveries are expected to commence in 2016.

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