Alexei Miller elected
Gazprom Neft Board Chairman
Moscow, July 6, 2006
Gazprom Neft Board of Directors at the meeting on July 4, 2006 elected
Gazprom chief executive Alexey Miller as Gazprom Neft Chairman of the
Board. Oleg Philippenko was appointed Secretary of the Board of
Directors of Gazprom Neft. In addition, new redactions of Regulations
of Moscow branch of Gazprom Neft, Regulations of Noyabrsk branch of
Gazprom Neft and Regulations of Yamal representative office of Gazprom
Neft were approved. The alternations in the Regulations were made due
to Gazprom Neft name change.
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Georgia Republic gas
from Ninotsminda field
By OGJ editors HOUSTON, June 29
CanArgo Energy Corp., Tbilisi, Georgia Republic, said its Ninotsminda
Oil Co. Ltd. unit signed a contract to supply gas from Ninotsminda
field to state-owned Georgian Gas Transportation Co.
Georgian Gas will deliver the gas to the state-owned Gardabani
gas-fired thermal power plant and will repair the 25-mile pipeline from
the field to the plant. Deliveries will be seasonal, generally October
to May.
Deliveries of 7 MMscfd initially are to grow as Georgian Oil and
CanArgo rework wells in the field. The horizontal N22H and N100H2 wells
produce gas, the latter having tested at 13 MMcfd and 301 b/d of
condensate on a 63/64-in. choke.
The ability to sell gas in Georgia and the memorandum of understanding
concluded with the Ministry of Energy in March 2006 provide comfort to
move ahead to appraise the potentially large Kumisi gas prospect later
this year, CanArgo said.
Meanwhile, CanArgo said its 100% owned Tethys Petroleum Investments
Ltd. subsidiary will seek a separate market listing to raise funds for
its activities in Kazakhstan. CanArgo will retain a minority interest.
Funds raised will be used to develop Kyzyloi gas field and further
explore and develop the Akkulka and Greater Akkulka areas. Gas flow of
22 MMcfd is to start from Kyzyloi into the Bukhara-Urals gas trunkline
in the first quarter of 2007.
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Australia Eni
developing Blacktip gas field
Rick Wilkinson OGJ Correspondent MELBOURNE, July 5 2006
Eni Australia Ltd. has begun development of Blacktip natural gas field
in the southern Bonaparte Gulf of Western Australia. Plans include two
initial development wells, a fixed production platform, and a 108-km
subsea pipeline to an onshore treatment plant to be built at Wadeye on
the Northern Territory shore. Blacktip, 330 km southwest of Darwin, was
discovered in 2001. The onshore treatment plant will have a capacity to
treat 1.3 billion cu m/year of gas.
Eni did not release a cost estimate, although an earlier plan to
develop the field (with Woodside Petroleum Ltd. as operator) was
estimated to cost $750 million (Aus.).
Eni bought Woodside's stake last year for $40 million and now has 100%
interest in the field, which has a reserve estimate of about 1.2 tcf of
gas plus 150 million bbl of condensate.
Eni has signed a 25-year agreement to sell the gas to Northern
Territory's Power & Water Corp.
Meanwhile, Sydney-based Australian Pipeline Trust (APT) has signed a
$400 million (Aus.) gas transportation deal with Power & Water
Corp. to pipe the gas from Wadeye across the Northern Territory to
intersect the existing Amadeus basin (central Australia)-to-Darwin
pipeline at a point about 150 km south of Darwin.
ATP said the 227-km onshore pipeline will initially be capable of
delivering 30 PJ/year of gas. Capital cost of construction is about
$130 million (Aus.).
First gas from the Blacktip project is expected on stream at the
beginning of 2009.
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Malaysia Petronas keen
on Sabah gas route
July 06, 2006
Malaysia’s state-owned Petronas plans to construct a 480km gas pipeline
as part of the Sabah Oil and Gas Terminal (SOGT) integrated project.
The project, which Petronas said it was undertaking with its production
sharing contract partners, involves the construction of a subsea
pipeline from offshore Sabah to a new onshore oil and gas processing
terminal in Kimanis, with a storage capacity of 300,000 b/d of oil and
an onshore gas terminal.
The processed gas from the terminal would be transported via the 480km
pipeline to be built from Kimanis to the Petronas LNG Complex in
Bintulu, Sarawak, Malaysian territory to the northeast on the island of
Borneo.
Sabah has become a hot spot for Malaysia with the deepwater success of
Murphy’s Kikeh field and Shell’s Gumusut project.
Kikeh is well into development, while Shell is close to tendering for
Gumusut, with contractors keeping their ears to the ground for the
issue of Invitations To Tender (ITTs), AOGN hears.
First oil is scheduled from Kikeh in the third quarter of 2007,
followed by Shell’s Gumusut and also Malikai projects by 2010 and 2012
respectively, said Petronas.
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CNPC eyes $3 Bn Rosneft stake
July 06, 2006
State-owned China National Petroleum Corporation (CNPC) has shown an
interest in paying up to US $3 Bn in the initial public offering (IPO)
of Rosneft.
“Basically, the heads of both companies have reached a mutual
understanding on the IPO investment,” one source told Reuters. CNPC
will pump a maximum of $3 Bn and a minimum of $500m for a stake in
Rosneft, which hopes its IPO will value it at as much as $80 Bn,
depending on demand. CNPC expressed interest in the IPO on the
condition that Rosneft pursues further co-operation with the Chinese
player in other ventures, one source said. A CNPC spokesman said he was
unaware of the investment plan.
Investment from cornerstone investors is key to the success of the IPO
as some Western investors have voiced concerns about the price Rosneft
wants despite recent falls in stocks in emerging markets.
Rosneft aims to raise up to $11 Bn from the IPO in London and Moscow on
14 July. In debt Rosneft has approached several parties in Asia and
Europe to support the IPO, which would value it at $60-80 Bn.
Malaysia’s state-owned Petronas has been invited and has said it will
consider the offer. BP is unlikely to join, sources have told Reuters.
Brazil’s state operator Petrobras denied a report it was planning to
buy a large stake in Rosneft. CNPC initially expressed interest in
Rosneft’s planned IPO in March during Russian President Vladimir
Putin’s visit to China. In China’s first foray into Russia’s vast oil
and gas industry, China’s second largest energy company Sinopec and
Rosneft last month won the multi-billion dollar auction of a unit of
BP’s Russian vehicle TNK-BP.
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Iran Petrobras eyes
Caspian block
July 06, 2006
Iran’s negotiations with Brazil’s state-owned Petrobras for exploration
acreage in Iran’s sector of the Caspian Sea are well developed,
although a final deal is not expected in the short-term.
More time is needed to reach the final agreement, said Mahmud Mohaddes,
the exploration director at the National Iranian Oil Co (NIOC).
After receiving clearance from Iran’s Economic Council and
co-ordination with the related cabinet members, NIOC will begin its
next round of talks with the Brazilian operator, he noted.
Meanwhile, OMV is still involved in the Mehr Block. Mohaddes stressed
that OMV has not withdrawn from the contract. Referring to the volume
of the oil reserves in Mehr Block, he said that technical studies have
been conducted on the field. “We are upbeat about the volume of the oil
deposits in the field.”
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China Shell submits
development plan to PetroChina
July 06, 2006
Shell has submitted a development plan to state-owned PetroChina in a
bid to help the Anglo Dutch major secure a foothold in the largest gas
field in southwestern China. The Luojiazhai gas field in Sichuan
province is PetroChina’s largest gas field in southwest China with
proven reserves of 2.05 Tcf (58 Bcm), a source told Dow Jones. If
PetroChina accepts Shell’s development plan, Shell could land a
production-sharing contract on the nearby smaller Dukouhe gas field,
which has 988 Bcf (28 Bcm) of proven gas reserves. PetroChina will
invest US $2 Bn over the next five years to increase gas development in
Sichuan, the largest gas-producing region in China.
“Shell submitted the study report to PetroChina at the end of last
week,” the source said. “It is very rare that PetroChina can share
production in the Dukouhe gas-rich field.” An official from
PetroChina’s Southwest Oil and Gas Field branch – the operator of the
field – confirmed Shell’s involvement in the study but did not disclose
the contents of the plan. Shell declined to comment.
Luojiazhai lies in harsh mountainous terrain and PetroChina has limited
technology to ensure safe gas production. Several serious production
accidents have occurred there in the past few years.
PetroChina expects to start production at Luojiazhai at the end of this
year. When the field comes onstream, daily gas output is estimated to
reach 318 MMcf/d (9 MMcm/d).
Currently, PetroChina is building a gas purification facility in
Luojiazhai, with construction expected to be completed by the end of
the year, according to a report by the China Oil News. The Chinese
giant is also building another purification facility in Dukouhe, with
construction expected to be completed by the end of 2009. A third gas
purification facility at the Tieshanpo field, also in Sichuan, is under
construction and is expected to be onstream by June 2008.
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Nexus gears up for
Aussie appraisal
July 06, 2006
Nexus Energy is preparing to drill the second appraisal well on its
Longtom field offshore southeast Australia in early July.
The Longtom-3 well will evaluate the extent and productivity of
gas-bearing reservoirs encountered in the Emperor formation by two
previous wells.
The first phase will consist of a near vertical well designed to
confirm the presence, extent and quality of the reservoirs. On
confirmation of a minimum gas column, the well will be plugged and
deviated to hit gas reservoirs that were found by the original well.
This horizontal well is expected to be completed and tested to confirm
the productive potential of the reservoirs.
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India east coast Niko
discovers D6 deepwater oil
July 06, 2006
 Niko Resources has
made its first deepwater oil discovery off the east coast of India in
the prolific D6 block, with the successful completion of the D6-MA-1
well. “The MA-1 well is the first Cretaceous test to be carried out by
the D6 joint venture and reached a total depth of 12,412ft (3,783m) and
encountered oil and gas in two tested intervals,” said Niko.
“Preliminary evaluations indicate the well penetrated 85ft (26m) of net
oil pay and 236ft (72m) of net gas pay. The oil zone tested at an
equipment restricted flow rate of more than 6,700 b/d of oil and 10.96
MMcf/d of gas through a 64/64-inch choke with a flowing well-head
pressure of 1,366psig.
“The upper rich gas zone tested at an equipment restricted flow rate of
over 32 MMcf/d and 3,370 b/d of condensate from a 80/64-inch choke with
a flowing wellhead pressure of 1,609psig. Well tests and coring results
indicate excellent reservoir properties.” Niko said that the D6
Cretaceous oil discovery opens a new petroleum province in the block.
Extensive areas of D6 have Cretaceous oil prospectivity and evaluation
of this will start immediately with the spudding of the MB-1 well in
early July. The MB-1 well is structurally higher and located 11km
east of MA-1. MB-1 is ideally located to test geologic models which
indicate the D6 block is optimally positioned for encountering high
quality Cretaceous reservoirs, noted Niko.
The company upgraded the gross gas in-place reserves for D6 to 35.4 Tcf
from an original estimate of 11.4 Tcf. Calgary-based Niko owns 10% of
D-6, while India’s Reliance Industries holds 90%.
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Sakhalin platform
installed July 06, 2006
Sakhalin Energy has completed the installation of the Lunskoye-A gas
production platform topsides for the Sakhalin II Phase II project in
the Sea of Okhotsk offshore northeast Sakhalin Island in Russia’s Far
East. “The successful mating of the installation’s topsides to the four
legs of the concrete gravity base placed on the seabed last summer
follows the 11-day tow of the topsides from its fabrication yard in
South Korea,” said Sakhalin Energy. The installation process took more
than nine hours and involved the co-ordination of the topsides on its
transport barge, the Saipem Castoro-8 installation support vessel and a
fleet of five tugs and anchor handling vessels. Sakhalin Energy Phase
II project director David Greer said: “This operation is a great
example of professional engineering and marine mastery. The marine team
not only safely towed the giant topsides all the way from Korea to
Lunskoye, they then successfully placed them atop their concrete legs.
“This was truly a thoroughly professional operation, involving the
excellent co-operation of all parties involved and was completed
efficiently without incident.
The silent elegance of the docking and mating of these two structures
was a wonderful piece of engineering and a new world record. “The top
of the Lunskoye-A platform, which will become Russia’s first offshore
gas production platform, now stands proudly some 110m (361ft) above the
Sea of Okhotsk. This operation highlights the beginning of a new era in
Russia’s oil and gas production history. It is a great day for Russia,
for Sakhalin and for Sakhalin Energy.” The platform will be the main
source of gas for Russia’s first LNG plant at Prigorodnoye. The
platform will now undergo hook-up and commissioning work before
starting drilling of gas production wells. LNG production is expected
to start in 2008.
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Brazil Petrobras to
Boost Production 53% by 2015
AFX News Limited 7/5/2006
Petrobras, the Brazilian state oil group, is aiming for an oil and gas
production rate of 4.55 million barrels per day in 2015, up from the
current 2.4 million bpd, chairman Jose Sergio Gabrielli Azevedo said.
The long-term production target, the first Petrobras has set, was
announced as Gabrielli revealed a 2007-2011 business plan, featuring
"aggressive growth objectives" and an US$87.1-billion total investment.
The funds will go toward maintaining Brazil's self-sufficiency in oil,
which it reached in April, while progressing in natural gas,
petrochemicals, and renewables, and consolidating Petrobras' leading
global position in biofuels.
Of the investment, 86 percent will be carried out in Brazil, while 70
percent of non-Brazilian investment will target exploration and
production activities, notably in western Africa and the Gulf of
Mexico.
The business plan is intended to end with a 2011 production rate for
oil and gas of 3.49 million b/d, with an annual growth rate of 7.8
percent between 2006-2011 and 7.5 percent between 2011-2015.
Petrobras expects Brent crude prices to drop below current
international market levels in the coming years, to stand at US$62 per
barrel in 2006, US$55 in 2007, US$40 in 2008, and US$35 between
2009-2011.
Meanwhile it will also honor its contract to import gas from
neighboring Bolivia: "We will maintain our imports of natural gas from
Bolivia at 30 million cubic meters by 2011, as stated in our contract
with that country, which extends to 2019," Gabrielli said.
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China Songliao
Basin Sinopec Finds Gas
Xinhua Economic News 7/5/2006
Sinopec has made an important gas discovery with a daily natural gas
flow of 205,000 cubic meters in a drill stem test in the Changling sag
of the southern part of the Songliao Basin, Shanghai Securities News
reported.
It is the first time for the group to find such a big gas discovery in
the part of the basin, located in northeast China. This discovery is
also a breakthrough for the group in its oil/gas E&D efforts in
northeast China.
Based on the exploration efforts in the Changling sag with an acreage
of more than 7,000 square kilometers, the group hopes to find two to
three large- and medium-scale new gasfields there with 60 billion cubic
meters of newly added gas reserves and make the Changling sag become
one important resource substitution area.
On April 3, Sinopec announced that it discovered a huge package
gasfield in Puguang, the northeast part of southwest China's Sichuan
province. The Puguang gasfield has 251.075 billion cubic meters of
proven gas reserves, of which 188.304 billion is recoverable.
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China North East
Reports Success From New Wells
China North East Petroleum Holdings Limited 7/5/2006
China North East Petroleum Holdings Limited, an oil producing company
in Northern China, announced successful onshore exploration results for
three significant wells drilled in the company's Qian112 oil field. The
wells further expand and delineate the existing areas of operation and
production in the field.
On July 3, the drilling team of Rising Sun Oil Exploration and
Production Ltd. successfully completed the drilling work of three new
wells (Qian5-2, Qian3-5, and Qian12-16). The "Qian5-2," a 5,905-foot
exploratory well, has encountered a 59-foot net pay horizon base on
well log analysis. The well also confirmed additional pay stringer in a
previously discovered upper reservoir.
Additionally, by analyzing the geologic drilling and well logs, the
company’s engineers expect that the Qian5-2 well will be possibly
producing 35-38 barrels of oil, which is on the same production output
level to Qian12-14. The geological logging analysis of the other two
wells (Qian3-5 and Qian12-16) will be available and updated soon.
In an ongoing effort, the company is planning to start the frac job on
these three new wells in next 10 days. The fracturing team from Jilin
Refinery will perform the task. Meanwhile, additional wells are planned
to be drilled in Qian112 Field this year to further exploit the
production potential of the field.
"These successes underscore our corporate exploration and production
strategy of focusing on core, high-impact opportunities that support
our base business," said Hongjun Wang, president of China North East.
"We are very pleased with the work performance and well drilling result
of our drilling team; Rising Sun truly continues their success in
Songyuan Region and delivering their commitment to our company's well
drilling program. Subsequent updates will be available regarding this
ongoing drilling project."
China North East Petroleum Holdings Ltd. is engaged in the production
of crude oil in Northern China. CNEH has a guaranteed arrangement with
Jilin Refinery of PetroChina to sell its produced crude oil for use in
the China marketplace. The company currently operates 21 producing
wells in Northern China and estimates generating approximately an
average 420 barrels of high-quality crude oil per day. By the end of
2007, CNEH plans to finish drilling another 81 wells, resulting in a
total of 102 producing wells.
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Deutsche Bank, KfW
Gazprom gas pipeline loan
02-06-06 AFX
Deutsche Bank and the state-owned Kreditanstalt fuer Wiederaufbau (KfW)
banking group are negotiating with Gazprom over a multi-billion euro
loan for constructing a portion of a planned Baltic-Sea natural-gas
pipeline, announced the German government.
A public discussion about the deal “could endanger the success of the
credit talks,” it said.
The financing would go toward construction of a portion of a 900
km-long pipeline to be built by the state-owned Russian energy giant,
Gazprom, BASF and E.ON.
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Gazprom Wins Duma's
Blessing for Export Monopoly
by RBK TV, Moscow, in Russian BBC Monitoring Former Soviet Union
7/5/2006
Following a long and difficult debate, deputies of Russia's State Duma
on Wednesday authorized Gazprom's total monopoly on export sales of
natural gas. The MPs passed the second and third, final, readings of
legislation to make Gazprom the country's sole natural gas exporter.
The new law applies to natural gas produced from all types of deposits
and transported in gaseous and liquid states.
Independent gas producing companies are unhappy with the bill. After
the first reading they submitted a number of proposals to the State
Duma. However, in preparing the document for the second reading, the
Duma's committee on energy, transport, and communications rejected all
the amendments proposed. The deputies were in a hurry to comply with
President Vladimire Putin's instruction: pass the bill as soon as
possible.
Deputies believe the law will help avoid competition among Russian
natural gas exporters, threatening a considerable reduction in gas
export prices. Apart from protecting the exporters' commercial
interests, the law will serve the fiscal interests of the state.
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Uzbekistan Lukoil
Begins Development of Khauzak Block
LUKOIL 7/5/2006
LUKOIL Overseas has drilling development wells in accordance with the
field development plan of the Khauzak contract area of Dengizkul gas
field (southwestern part of Republic of Uzbekistan).
Development of this field makes part of the
Kandym-Khauzak-Shady-Kungrad PSA project. The PSA on the project was
signed on June 16, 2004 in Tashkent in the presence of the presidents
of Russia and Uzbekistan and came into force on November 24, 2004. The
project is being implemented by a consortium of investors, which
includes LUKOIL Overseas (90%) and Uzbekneftegaz (10%). The
consortium's share in profit production is 50%.
The duration of the PSA is 35 years. The volume of approved original
gas in place in the contract area totals 329 billion cubic meters.
Commercial production is expected to start in the fourth quarter of
2007. Peak annual production of natural gas will exceed 10 billion
cubic meters, while cumulative production under the project could reach
207 billion cubic meters of gas.
An operating company, LUKOIL Uzbekistan Operating, has been established
for project management purposes. In the future LUKOIL will also create
a marketing company for joint sales of production (including the share
of the Uzbek party).
To date, a 3D field seismic survey has been completed on the Khauzak
block, group designs for construction of development wells has been
drafted, and construction of power lines, access road and preparation
for the workover of three wells is in progress.
China drilling company TUHA, the winning bidder at the corresponding
tender, is the drilling contractor. Horizontal well's depth - 3000 m,
drilling time – 4 months. 37 new development wells will be drilled on
Khauzak.
In total, Kandym-Khauzak-Shady-Kungrad project involves drilling of
more than 180 development wells and construction of over 1,500
kilometers of pipelines. Two compressor stations, gathering points,
shift camps, high-voltage power lines, a 40-kilometer railway line,
motor roads and access roads will also be constructed. The project also
involves construction of a modern gas processing plant in the Kandym
area with a capacity of 8 billion cubic meters of gas per year. In
total, investment under the PSA to date is around $100 million.
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