Iraq is asking global
oil firms for final proposals
18-05-08 www.gasandoil.com Source:
www.gulf-times.com
Iraq has asked major international oil companies to submit their final
contract proposals to boost production at the country’s largest oil
fields after several rounds of talks in the Jordanian capital, Amman,
since the beginning of this year, people close to the Iraqi Oil
Ministry have said. They said technical talks between Iraqi oil
officials and senior executives from Royal Dutch Shell, BP, ExxonMobil,
Chevron, France’s Total, Anadarko Petroleum and BHP Billiton were
concluded in Amman this month.
“The technical talks were concluded and the Iraqi
negotiators asked companies to submit their final proposals on
contracts to the (oil) ministry,” an Iraqi source familiar with these
talks told. “I can confirm these technical talks were concluded,” an
international oil company source said.
Iraqi oil industry and oil
company sources couldn’t confirm or rule out news reports that BP has
already submitted its plan and could be the first oil major to sign an
Iraqi technical support contract if its proposal is approved by the
ministry. Reports also said ExxonMobil could be the second to submit
its proposal to the Iraqi ministry.
Senior Iraqi officials, including the oil minister, would
examine each company’s proposal and decide whether to sign the contract
or not, another Iraqi oil source said. He didn’t rule out a few slight
changes to be made to these contracts before signing them.
Earlier, Iraqi oil sources said these technical services
contracts, or TSCs, could be signed as early as June. Each would last
two years and could be extended for another year.
Iraq wants to increase production by 600,000 bpd in six
producing oil fields in northern and southern Iraq. They are Kirkuk in
the north, West Qurna 1, Zubair, Missan, Rumaila and Luhais in the
south. Iraq is currently producing between 2.3 mm bpd and 2.4 mm bpd
from its southern and northern oil fields. Iraqi oil officials have
estimated the value of each contract to be around $ 500 mm.
Oil company sources said almost all issues were resolved in
Amman except for how Iraq is going to pay back these companies. Iraq
said it is ready to pay them back through compensating them with
produced crude oil; such a method would need the approval of the UN
committee that manages Iraqi oil revenues.
“The remuneration issue isn’t a complicated one and can be
solved,” a company source said.
In February the oil majors and the Iraqi delegation
discussed a template for TSCs for producing oil fields which need
further development. Shell is eyeing the development of the Kirkuk oil
field, discovered in 1927 by the Iraq Petroleum in which Shell was a
shareholder. Shell and BHP will also explore development options for
the Missan oil fields near Basra, the sources said.
BP is discussing the development of Rumaila with the Iraqis,
which it helped to discover and of which it recently conducted a
technical study, they said. Rumaila has estimated reserves of 15.5 bn
barrels.
ExxonMobil is eyeing the development of Zubair oil field in
the south. Discovered in 1952, Zubair has estimated reserves of 6.1 bn
barrels, the sources said. Chevron has entered a joint venture with
Total to develop the West Qurna 1 oil field in southern Iraq.
Anadarko, leading a consortium consisting of Vitol Holding
and United Arab Emirates’ Dome, is eyeing the development of Luhais oil
field in southern Iraq, they said. The technical support contracts, or
TSCs, would be signed under the framework of the country’s old
hydrocarbon law as its new oil and gas law is still mired in debate.
Iraq announced in April names of 35 international oil
companies qualified to bid for future oil and gas contracts to develop
one of the world’s largest oil fields.
The companies negotiating the TSCs are among the qualified
firms.
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Iraq Kurdistan Niko Resources Group wins first PSC
Source: www.upstreamonline.com www.gasandoil.com 23-05-08
An all Canadian group led by Niko Resources is primed to start an
exploration drive in Iraq after sealing its first Production Sharing
Contract (PSC) with the Kurdistan Regional Government for the Qara Dagh
(Black Mountain) Block in Sulaymaniyah.
The 846 sq km block, which lies on trend with existing discoveries,
covers a large portion of an unexplored 65 km long by 6 km wide surface
structure with existing oil seeps.
Operator Niko and Vast Exploration each have a 27 % stake in the
consortium, with Groundstar Resources holding 6 %.
The group has a 60 % interest in the block, while the government has a
20 % stake and the balance of 20 % will be assigned by the government
to a third party within a period of eight months.
The minimum work programme represents an exploration commitment, which
includes the shooting, processing and interpretation of a minimum of
300 km of 2D seismic data and drilling of one well during the first
exploration period.
"Niko is excited about the potential for the block and is planning to
commence operations immediately," the company's chief executive, Bill
Hornaday, said.
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Bolivia to respect
gas agreement with Argentina
Source: www.latinpetroleum.com 11-05-08
www.gasandoil.com
The Government of Bolivia announced that it would continue to respect
its natural gas export agreement with Argentina, in the immediate
aftermath of its nationalization of four foreign petroleum companies
operating within its borders. “We are going to respect our
agreements with Argentina,” said Bolivian Vice President Alvaro Garcia
Linera.
Garcia reiterated that the decision to nationalize the four companies
was a move by the administration of President Evo Morales to convert
Bolivia’s state oil company, Yacimientos Petroliferos Fiscales
Bolivianos (YPFB), the primary operator of exploration and production
(E&P) activities in Bolivia. The executive said that Bolivia now
has complete control over the production of its resources, which would
allow the country to fulfil its export agreements with Brazil and
Argentina. “The objective of the nationalization process is to
assure that the necessary investments are made in Bolivia so that the
country can comply with its natural gas export agreements,” reaffirmed
Garcia.
YPFB and its Argentine counterpart, Energia Argentina SA (Enarsa),
previously entered into a Purchase and Sales Agreement (PSA) that
obligates YPFB to export to Argentina a minimum 60 % of a contracted
7.7 mm cmpd during 2007-2009. Further, in 2009, the contract states
that YPFB should be exporting the full 7.7 mm cmpd to Argentina.
Per the original PSA, the gas volumes exported to Argentina are
expected to increase to 27.7 mm cmpd in 2010 and remain at this level
for 17 years or through the year 2026.
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Bolivia expects oil
and gas tax revenue to rise 30 % in 2008
Source: www.bloomberg.com 17-05-08
www.gasandoil.com
Bolivia's oil and gas tax revenue is set to rise 30 % this year as the
Andean country takes over refineries and storage installations,
President Evo Morales said.
Oil and gas revenue will rise to about $ 2.5 bn from $ 1.93 bn in 2007,
Morales said, after the government on May 1 seized a majority stake in
four energy companies -- Spain's Repsol-YPF, the UK's BP and Ashmore
Group, and Germany's Oiltanking.
Morales, who took over refineries owned by Petroleo Brasileiro and
Swiss trader Glencore International last year, has pledged to take
greater control of the country's natural resources to keep energy and
mining revenue in the country.
"If it wasn't for nationalization, we would still be receiving $ 300 mm
a year like we did in 2005,'' Morales told in Lima. "We won't negotiate
the looting of our natural resources.''
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IOC plans mini
liquefaction plants to exploit gas from marginal fields
New Delhi, June 12 Richa Mishra thehindubusinessline.com
Company examining various viability options
Even though there is availability of gas in the marginal
fields, the fields are not being exploited as either they are far from
the pipeline network or the market.
Indian Oil Corporation Ltd is looking at various business
options, including setting up mini liquefaction plants to source gas
from the marginal fields of the country.
The company is currently
studying all the three options — transporting through cascade,
pipelines and liquefaction plants — for taking gas from these fields to
the market.
Speaking to Business Line, Mr B.M. Bansal, Director
(Planning & Business Development), Indian Oil, said “We are
studying the three options. Based on the viability of these options we
would approach upstream companies like ONGC and Oil India and the
Government for monetising the gas.”
Monetisation of gas means bringing natural gas to the
markets through alternative means, including pipelines, so as to make
commercial utilisation of it. The business model for sourcing this gas
will depend on the location of the field, production of the gas, and
proximity to the market, he said.
“If the marginal field is near the pipeline or market, then
liquefaction may not be the best option. In such a situation we may opt
for injection into the existing pipeline or lay a new pipeline,” he
said.
Even though there is availability of gas in the marginal
fields, the field are not being exploited as either they are far from
the pipeline network or the market. As regards access to liquefaction
technology, which is currently available with select European and US
companies, he said, “we would go for technological tie-ups”.
In the pipeline
Enthused by its success with the ‘LNG at Doorstep’ facility,
Indian Oil is now looking at other prospects of transporting gas. The
project included transportation of gas from the tap-off-point at Dahej,
a dedicated on road ‘LNG train’ of specially designed cryogenic tanker
trucks between Dahej and Pen, and storage tanks and re-gassifying
vaporisers at H&R Johnson, Pen. The project is supported by
partners such as the Petroleum & Explosives Safety Organization,
Chart Industries Inc, USA and Petronet LNG Ltd.
Indian Oil already has an understanding with Deep Industries
for exploration and marketing of gas.
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TransCanada pitched
as key to building in-state gas line
By Stefan Milkowski, June 13, 2008 JUNEAU http://newsminer.com
The Alaska Gasline Port Authority’s project manager, Bill Walker,
spelled out a new goal for his group to lawmakers Thursday in Fairbanks
— get TransCanada to build the “all-Alaska” gas line. Walker
touted the advantages of the port authority’s project, which include a
pipeline running from the North Slope to Valdez and liquefied natural
gas tankers, over the project proposed by Canadian pipeline builder
TransCanada, which involves a line into Canada. But Walker said
the group was not trying to disrupt the Alaska Gasline Inducement Act
process or block TransCanada’s project.
“I think we have a great application,” he said, referring to the
TransCanada proposal. “All we’re saying is don’t let the process
prevent (an all-Alaska) project from going forward.”
Walker said the port authority is asking Gov. Sarah Palin and
TransCanada for assurance that TransCanada would start with an
all-Alaska line if that project was ready to go before a line through
Canada.
“Go with the project that is right sized, right now,” he said. “Don’t
wait for somebody else to go with a bigger project.” Walker
testified during the first of three days of legislative hearings in
Fairbanks on TransCanada’s gas line plan. Lawmakers have 60 days in all
to review the proposal and vote it up or down.
The focus of Thursday’s presentations was in-state gas use, an issue
some lawmakers have cited as a reason to proceed with caution under
AGIA. But representatives from the port authority, the Alaska Natural
Gas Development Authority and Enstar, which is pursuing a small gas
pipeline outside AGIA, all recommended issuing a state license to
TransCanada or said doing so would not affect them.
ANGDA CEO Harold Heinze said the best thing lawmakers could do to help
bring gas to Alaskans is “promptly approve the AGIA license granted to
TC Alaska.” Having multiple companies vying to build the pipeline
would allow in-state users to negotiate for the best terms possible, he
said. (North Slope producers BP and ConocoPhillips are pursuing their
own pipeline project outside the AGIA process.)
Gene Dubay, a representative for Enstar, said he saw Enstar’s pipeline
as “complementary” to TransCanada’s and not in competition with
it. “We believe this project fits within the terms of AGIA,” he
said, referring to a provision in the law blocking the state from
supporting certain competing pipelines after issuing a state license.
Walker said if he could get an assurance that TransCanada would build a
liquefied natural gas project if it proved economic and feasible, then
he would urge the port authority’s board to give TransCanada its
unconditional support.
Kevin Banks, director of the state’s Division of Oil and Gas, said
later that the state would not stand in the way of a commercial
agreement between TransCanada and the port authority, and he noted that
TransCanada has already committed to building a liquefied natural gas
project under certain circumstances.
Walker became emotional as he described how the project has for decades
seemed just out of reach. A lot of the talk about pipelines has to do
with risks to pipeline builders, he said, but there’s also a huge risk
to Alaskans if nothing happens. “It’s troubling.” Walker
presented a stack of papers he’d gathered with 162 news clippings and
announcements dating back to 1987.
“That’s why we’re here,” he said. “We don’t want this process to become
No. 163. We want to make sure this process is successful.”
Local lawmakers said after the hearing they thought Walker’s request
was reasonable.
Rep. Scott Kawasaki, a Democrat from Fairbanks, said he was surprised
at the port authority’s new approach and at Heinze’s outright support
for issuing a license to TransCanada. He said he wasn’t concerned
that backing TransCanada would limit the options for addressing
in-state needs.
Rep. Mike Kelly, a Fairbanks Republican, echoed the idea. “They
see it the same way I certainly do,” he said, “and to have them lay it
on the line like that in Fairbanks today was a very positive
thing. “That’s exactly what I believe,” he went on, “that the
TransCanada proposal is the best shot for this happening and for all
the iterations regarding in-state that you can think of.”
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Tanzania Aminex tests Kiliwani North-1 40 MMcfd
Uchenna Izundu International Editor LONDON, 6/7/08
Aminex PLC, London, has tested its Kiliwani North-1 (KN-1) well on the
Nyuni license in Tanzania. The vertical well, which reached a TD of
2,030 m, tested Lower Cretaceous sandstones, flowing 40 MMcfd of gas
through a 72/64-in. choke (OGJ, Mar. 24, 2008, Newsletter). Aminex said
the condensate level was 1 bbl/MMcf.
The KN-1 discovery is on the Nyuni production-sharing license adjacent
the producing Songo-Songo field and 5 km from a major gas pipeline. Key
Petroleum is a 20% partner with Aminex on the Nyuni license area.
Aminex and Key units have signed a new production-sharing agreement for
the nearby 504 sq km Songo-Songo West area as well. Key will be
operator of the Songo-Songo West license. The PSA is held 50% by
Aminex's wholly owned subsidiary Ndovu Resources Ltd., and 50% by
Funguo Petroleum Pty. Ltd., a wholly owned unit of Key.
The partners will drill a well within the first 3 years. They also have
secured comprehensive, existing seismic coverage.
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Turkey Otto 2nd Gas Flow from Kuze Arpaci-1 in
Edirne,
Otto Energy 6/11/2008
Further to the ASX release dated June 4, 2008, joint venture partners
Otto Energy and Incremental Petroleum announced further excellent flow
rates from the recently drilled exploration well, the Kuzey Arpaci-1.
Highlights:
# The first zone tested flowed dry gas at a rate of 1.15 MMscf/d over
the interval 462.8m to 467.5m at a stabilized rate of 1.15MMscfg/d
through a 1/2" choke.
# Additional perforations have since been added and the combined zones
flowed dry gas at rates of up to 2.8 MMscf/d from several intervals
between 404m and 468m through a 40/64" choke.
# Two further pay zones with multiple potential gas intervals at a
shallower level have been identified in the well and will be added at a
later stage.
Kuzey Arpaci-1 was the second well drilled in 2008 as part of a 4-well
drilling campaign designed to prove up commercial volumes of gas, which
are earmarked for production by mid 2009.
Following completion of the production test, the rig will move to the
gas exploration well Arpaci-1, which was drilled in 2006. After testing
the well, the rig will return to the Arpaci-2 location to drill and
test the new well Arpaci-2A. Arpaci-2A is a re drill of Arpaci-2, which
had to be plugged back due to high gas pressures.
The partners in the Edirne Gas project are Otto Energy with 35% and
Joint Operators Incremental Petroleum (55%) and Petraco Energy (10%).
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 Alaska
Oooguruk Starts Up North Slope Production
Pioneer Natural Resources 6/10/2008
Pioneer Natural Resources Company announced that production and sales
from the Oooguruk Unit on the North Slope have commenced as scheduled.
Pioneer and its partner, Eni sanctioned the Oooguruk development in
early 2006 after drilling three exploration wells during the winter of
2003.
The Oooguruk offshore oil field is located in the North Slope of
Alaska, some 250 kilometers southeast of Barrow. The field is located 5
miles offshore from Harrison Bay in the Beaufort Sea, at an average
water depth of approximately 5 feet.
Eni owns a 30% working interest in the field, acquired through the
purchase of Armstrong Oil&Gas' Alaskan assets in August 2005.
Pioneer Natural Resources Company holds the remaining 70% and is the
Operator.
Pioneer is the first independent to initiate new field operations on
the North Slope and has set a new precedent for North Slope offshore
development because from the exploration phase to first production, the
Oooguruk field was brought online in less than five years, a record
time for a new offshore field on the North Slope.
A gravel island was built and outfitted with facilities to accommodate
development drilling and field operations. Pioneer anticipates peak
gross production in 2010/2011 of 15,000 to 20,000 barrels of oil per
day from approximately 40 development wells (approximately half of the
wells will be producing wells and half will be injection wells). These
wells are expected to be drilled over the next three years. The gross
oil resource potential from these base development wells is as much as
90 million barrels, before expansion opportunities. Field life is
expected to be 25 to 30 years.
In commissioning the system and evaluating initial production data,
Pioneer expects to initially produce 2,000 to 3,000 gross BOPD from
Oooguruk. Production is expected to be shut in for approximately 45
days this summer for scheduled maintenance on the onshore third-party
processing facility. Thereafter, production will be reinitiated and is
expected to rise as additional wells are brought on line.
Through its participation in the Oooguruk project, Eni achieves its
first production in Alaska and enhances its role as a major player in
the Arctic.
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Alaska Palin reverses
course on LNG pipeline plan
By Pat Forgey | JUNEAU EMPIRE 6/10/08
Gov. Sarah Palin began campaigning for office two years ago as a
supporter of bringing Alaska's vast natural gas reserves to market as
liquefied natural gas exported through Valdez, popularly known as the
"All-Alaska" gas pipeline proposal.
Times have changed.
Now, her administration is asking the Alaska Legislature to instead
endorse an overland route through Canada that brings Alaska's gas to
U.S. Midwest markets, as the best deal for Alaska. Palin
administration officials said their review shows a route through Canada
is far more profitable to both the state and the gas producers than
LNG(liquefied natural gas) or any other option.
"In general, LNG is economic, just not as economic as the overland
route," said Pat Galvin, commissioner of the Department of Revenue, one
of two top state officials that reviewed applications submitted under
the Alaska Gasline Inducement Act.
Galvin and Commissioner Tom Irwin of the Department of Natural
Resources narrowed the field down to just one application, from
TransCanada Corp. of Calgary, Alberta, that met all the state's
requirements. If the Legislature approves, TransCanada will be
eligible for a $500 million state subsidy, in exchange for building a
pipeline set up to meet the state's goal of encouraging development.
The Legislature began its review Monday of the Palin administration's
look at LNG options with testimony from the administration and its team
of consultants. Palin said Monday after watching the hearings in
the converted middle school gym where legislators are meeting that two
years ago she had not expected to see such economic benefits of a
longer line.
"It was surprising to see how obvious it was that the overland (route)
was much more economic," she said.
Galvin said that while exporting LNG may allow the state to, at times,
capture higher prices paid for natural gas in Asia, it also comes with
risks that TransCanada's overland route doesn't carry. Those include
higher costs, lengthier timelines and the risk that the project might
not be done at all.
One of the risks is that the federal government might not approve an
export license for Alaska gas, especially if the U.S. Midwest is
suffering a shortage at the time.
Palin's administration hired Lukens Energy Group to review the value of
the TransCanada project, along with other projects, such as LNG, that
were only conceptual in nature. Currently, no company is proposing an
LNG project.
An application by the Alaska Gasline Port Authority was earlier
rejected as incomplete.
Part of Lukens' job was to determine how profitable the projects would
be over time, based on today's dollars, a measure known as "Net Present
Value."
Analyst Deepa Poduval of Lukens said that even though an LNG project
wasn't chosen by the state, they'd still likely make money.
"NPV is substantially positive for all LNG project configurations
considered," Poduval told the Legislature Monday. Legislators expect to
spend additional time today reviewing LNG options, before heading on
the road for two weeks of public hearings around Alaska.
Palin said the last few years of study have provided the state with
information it didn't have before AGIA. Back then, the state wasn't
able to determine with authority what was best for Alaskans.
Supporting the Palin administration's position on LNG is a proposal by
ConocoPhillips and BP to develop their own pipeline plan, also an
overland route.
Galvin held out hope that an LNG export option might yet be developed,
but that it would be in conjunction with an overland pipeline, not
instead of it.
"The findings are being portrayed as the death knell of LNG," he said,
but that's not the case at all.
What's known as a "Y" line splitting off from the main overland line
and bringing gas to Valdez still holds great promise, he said.
"Overland going first gives us a leg up," Galvin said. Such a
project would be much less risky, he said.
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