Spanish natural gas
fleet initiative signed
March 24, 2009 by Martin Barillas
Spanish energy company Repsol has signed an agreement with driving
schools to subsidize the retrofitting of vehicles from gasoline power
to liquid natural gas power. Other fleets are now contemplated.
The Spanish energy company, Repsol, signed an agreement on March 23
with the Spanish National Confederation of Auto Schools (CNAE) to
retrofit its fleet of vehicles used in its driver training programs.
Liquefied natural gas units would replace those that are currently
gasoline-powered, according to Repsol spokesman Iñigo Palacio. LNG
engines reduce toxic emissions of nitrogen by 68 percent and
particulate contaminants by 99 percent with respect to diesel-fuelled
alternatives. Noise pollution is also reduced in the case of
LNG-powered engines.
LNG is also 50 percent cheaper in Spain than gasoline, representing a
savings of 4 Euros for every 100 kilometers over a gasoline-powered
engine. It also means a savings of 2 Euros per 100 kilometers over
diesel-powered engines. Repsol and CNAE hope that the initiative will
teach new drivers that there is a green alternative to gasoline.
Repsol considers that LNG-powered vehicles as a “more immediate”
technology than electric propulsion, according to Palacio, since it is
“easily implemented.” The conversion of a car from gasoline to LNG
power costs about 2,000 euros. However, the engine on the cars to be
used by CNAE would be started by gasoline to then switch over to LNG.
While the vehicle is under way, a driver would simply press a button to
switch from gasoline to LNG power and provide it with a range of 1,000
kilometers.
Repsol is slated to pay for the LNG conversion for 400 vehicles at the
CNAE driving schools, as well as subsidize the rest of the vehicles
with 500 euros per unit in 2009. there are currently 13.5 million
vehicles in the word that use LNG technology, 7 million of which are in
Europe. Repsol now has 31 LNG public filling stations in Spain and has
plans to increase the number to 80. In addition, there are 150 private
filling stations. In the latter case, Repsol plans to increase this
number by 100 per year by reaching agreement with driving schools, taxi
and ambulance services, and trucking companies.
With most of its assets in Spain and Argentina, Repsol is the 15th
largest petroleum company in the world, according to Fortune magazine.
In 1999, it absorbed the formerly state-owned YPF petroleum company of
Argentina during a spate of privatizations under then president Carlos
Menem.
|
New Albany Shale Kentucky USA Energy Sees Commerciality
Kentucky USA Energy, Inc. 3/24/2009
Kentucky USA Energy has reached total depth ("TD") of 2,732 feet on its
Hunter Wells #4 well located on its leasehold in the New Albany Shale.
The well has been evaluated and determined to be commercially viable
and the well's drilling log confirms that there is approximately 166
feet of shale formation encountered in this well.
An additional gas zone which was not in the original reserves study,
the Dutch Creek formation, was also discovered in the Hunter Wells #4
well between 2,598 and 2,610 feet. The Company expects to complete this
additional zone first. The completion process has begun on this well
and the 4 1/2" production casing is expected to be run into the well
this week.
Additional updates on the Company's drilling operation are as follows:
Drilling is presently at 2,145 feet at the Slinker #2 well and is
expected to TD this week. The Company's drilling contractor has
mobilized its rig to the Company's next drilling location, B Johnston
#2, and is expected to spud-in and begin drilling that well later this
week.
"In a few of these last wells we have been drilling, we are
encountering additional gas zones that were not in our original
reserves study," said Steven Eversole, CEO of Kentucky USA Energy.
"These gas zones have shown strong gas to the surface and this is very
encouraging for our revenue prospects as we continue to work towards
building value in our Company and creating shareholder value."
|
Chesapeake Energy CEO
Plans More Cuts in Conventional Drilling
by Jason Womack Dow Jones Newswires 3/24/2009 NEW ORLEANS
Chesapeake Energy Corp. Chief Executive Aubrey McClendon said Tuesday
that the company will cut its conventional drilling activity over the
next two months.
Chesapeake, the largest independent producer of U.S. natural gas by
volume, has already cut its conventional drilling 75% over the last six
months and would reduce it to 85% in the next 60 days. "You
simply cannot make money in a sub-$7-and-$8 environment," McClendon
told attendees at the Howard Weil Energy Conference.
Chesapeake is one of several energy companies that have pulled back on
drilling activity to cope with declining commodity prices.
Overall, the U.S. rig count has declined by more than 45% since peaking
in September as energy prices have plunged. Natural gas prices have
lost about 70% of their value since peaking on July 2 at $13.694 a
million British thermal units.
McClendon said that the natural gas industry, particularly privately
held natural gas producers, will have difficulty accessing credit
markets and that the rig count is unlikely to snap back. "We
would be very surprised to see much of a rig count increase in 2010 and
2011, even with a healthy rebound in natural gas prices," McClendon
said.
|
Iraq Revises Model
Contract for Int. Oil/Gas Co's.
by Hassan Hafidh AMMAN Dow Jones Newswires Mar. 24, 2009
The two non-producing gas
fields are Akkas in western Iraq
and Mansouriya in the center.
firms would have 75% stake in the joint ventures with
state-owned Iraqi operators at the fields holding the rest, he said.
That was up from 49-51% equity stake initially proposed.
The Iraqi Oil Ministry has sent out a revised copy of a model contract
for the eight oil and gas fields included in its landmark first bidding
round in an effort to accelerate the process of awarding contracts to
international oil firms by the end of June, a senior Iraqi oil official
said Monday.
"We had sent out to bidding companies on March 19 a semifinal version
of the model contract," Abdul Mahdy al-Ameedi, deputy director general
at Iraq's Petroleum Contracts and Licensing Directorate, or PCDL, told
Dow Jones Newswires by telephone from Baghdad.
International oil companies have to send their comments on the new
model contract by April 1, and the PCLD will issue its final model
servicing contract and resend it to them between April 15 and April 17,
he said.
"Companies would have two and half months to study the final model
contract and submit their offers by the end of June this year," he
said, adding that contracts would be awarded by the end of June.
The PCLD has made several changes to the original model contract which
was first issued in November last year, Ameedi said.
The most important change the directorate had made to the original
model contract was that oil firms would have a 75% stake in the joint
ventures with state-owned Iraqi operators at the fields holding the
rest, he said. That was up from 49-51% equity stake initially proposed.
The Iraqi oil ministry is planning to award service contracts which
mean that winning companies would receive remuneration in kind for each
produced barrel as well as cost fees. Big oil companies prefer deals
that give them a share of profits and allow them to book reserves.
The initial model contract stated firms should bid on the cost per
barrel of maintaining the same output over 20 years, and the cost per
barrel of raising output. Oil companies would recover their costs from
oil they pump above the baseline.
The producing oil fields in question are Kirkuk and Bai Hassan in
northern Iraq, West Qurna-1, North and South Rumaila, Zubair and Missan
in southern Iraq. The two non-producing gas fields are Akkas in western
Iraq and Mansouriya in the center.
Baghdad hopes contracts for the fields will help boost the country's
crude production capacity to 4.5 million barrels a day by 2012 from 2.4
million barrels a day now.
|
 Two Canadian Oil
Giants Join Forces in $ 15B Merger
Suncor Energy Inc. 3/23/2009
Suncor and Petro-Canada have agreed to merge the two companies. Upon
completion of the transaction, the parties have agreed the combined
entity will operate corporately and trade under the Suncor name, while
maintaining the strong brand presence and customer loyalty of
Petro-Canada in refined products.
According to Reuters, Suncor will acquire Petro-Canada for C$18.43
billion ($14.9 billion) in an all-share deal.
"This merger creates a made-in-Canada energy leader with the assets,
cost structure and financial strength to compete globally," said Rick
George, who is president and chief executive officer of Suncor and who
will assume the same role with the merged entity. "The combined
portfolio boasts the largest oil sands resource position, a strong
Canadian downstream brand, solid conventional exploration and
production assets, and low-cost production from Canada's east coast and
internationally."
Under the terms of the Arrangement Agreement entered into between
Suncor and Petro-Canada, the proposed merger will be effected by way of
a Plan of Arrangement completed under the Canada Business Corporations
Act. It will feature a common share exchange through which Petro-Canada
common shareholders will effectively receive 1.28 common shares of the
merged company for each common share of Petro-Canada they own and each
Suncor common shareholder will receive one common share of the merged
company for each common share of Suncor they own. The exchange ratio
represents an approximate 25% premium for the Petro-Canada shares to
the 30-day weighted-average trading price of such shares. On completion
of the proposed transaction, Suncor's existing shareholders will own
approximately 60 per cent and Petro-Canada shareholders will own
approximately 40 per cent of the merged company.
The merged company will have the following key characteristics:
* a resource base with approximately 7.5 billion
barrels of oil equivalent (boe) of proved (developed and undeveloped)
and
probable reserves, on top of an estimated
contingent resource base
of approximately 19 billion boe (see 2008 Reserves and
Remaining
Recoverable Resources in this news release).
* strong cash flow from current crude oil and
natural gas production of approximately 680,000 boe per day (boe/d).
* a strong balance sheet, with a pro forma debt to
capitalization of 29.6 per cent and a debt-to-cash flow ratio of 1.2.
* an experienced management team, complementary
cultures and leading environmental and social responsibility practices.
* a high quality asset portfolio including:
* a suite of oil sands growth options for both mined
and in-situ resource recovery, as well as value-added upgrading.
* a position in every major oil development project
on Canada's East Coast.
* low-cost international crude oil and natural gas
production from the North Sea, North Africa and Latin America.
* refining capacity of 433,000 barrels per day (b/d)
and a strong Canadian retail brand.
* a solid platform for further development of
renewable energy projects.
"The merger will be good for shareholders of both companies with
reduced capital requirements, operating efficiencies and complementary
integration opportunities between upstream and downstream assets," said
Ron Brenneman, who is currently president and chief executive officer
of Petro-Canada and who will assume the role of Executive Vice Chairman
in the merged company. "The increased scale provides more stability in
volatile markets, plus the financial and organizational capability to
successfully take on large-scale projects in the future."
"More than just the strategic fit, I also believe there's a lot of
common ground in our corporate vision" said George. "Both Petro-Canada
and Suncor have a history of innovation and pushing the frontiers of
oil and gas development in Canada. And just as importantly, both
companies have taken a leadership position in striving to develop not
just resources, but also communities, the Canadian economy and our
quality of life. We've both put a strong focus on people and our shared
environment and together, I expect that focus to be even stronger as we
move forward."
The merging companies estimate achieving annual operating expenditure
reductions of $300 million. These savings are expected to come from
efficiencies in overlapping operations, streamlining business
practices, and improved logistics. The companies also expect to achieve
annual capital efficiencies of approximately $1 billion through
elimination of redundant spending and targeting capital budgets to
high-return, near term projects.
The merged company's Board of Directors is expected to comprise 12
Directors, including eight members from Suncor's current board and four
members from Petro-Canada's current board. John Ferguson, Suncor Energy
Chairman, will serve as Chairman of the Board of Directors of the
merged company.
Completion of the proposed merger is conditional on approval of Suncor
and Petro-Canada shareholders, compliance with the Competition Act, and
satisfaction of other customary approvals including regulatory, stock
exchange, and Court of Queen's Bench of Alberta approvals. The required
shareholder approval will be two thirds of the votes cast by holders of
Suncor common shares and two thirds of the votes cast by holders of
Petro-Canada common shares at meetings of Suncor and Petro-Canada,
respectively, held to consider the proposed merger. Suncor and
Petro-Canada will defer their annual and general meetings so that
combined annual and special shareholder meetings for each of Suncor and
Petro-Canada can be held in late May or early June to consider annual
shareholder business and the proposed merger. Suncor and Petro-Canada
anticipate that the proposed merger will be completed in the third
quarter of 2009.
It is expected that a joint information circular will be sent to the
shareholders of each company in April. The Arrangement has been
structured to allow shareholders of Petro-Canada and Suncor to receive
shares of the merged company on a tax-deferred basis for Canadian and
United States income tax purposes. The Arrangement Agreement provides
that each party is subject to non-solicitation provisions and for the
payment of a fee of $300 million to either party in the event that the
transaction is not completed for certain reasons other than, among
other things, shareholder and regulatory approval.
The merged company will continue to be governed by the provisions of
the Petro-Canada Public Participation Act. Key provisions provide that
the head office will be in Calgary, Alberta; no single shareholder or
group acting in concert can hold more than 20% of the outstanding
shares of the merged company; and the public can communicate with and
obtain services from head office in either of Canada's official
languages.
Both Boards of Directors have determined that the proposed merger is in
the best interest of their respective companies based in part upon
fairness opinions received from their financial advisors. CIBC World
Markets and Morgan Stanley are acting as financial advisors to Suncor
for the purposes of this transaction. Petro-Canada retained RBC Capital
Markets and Deutsche Bank as its financial advisors. Blake, Cassels and
Graydon LLP served as legal counsel to Suncor. Petro-Canada retained
Macleod Dixon LLP as its legal counsel, and Torys LLP in connection
with the Petro-Canada Public Participation Act and United States legal
issues.
Subject to the approval of the stock exchanges, the merged company's
shares will trade on both the Toronto and New York stock exchanges
under the symbol (SU).
|
Egyptian Gas
Area Shell May Use Floating LNG Technology
By Dinakar Sethuraman March 24 Bloomberg
Royal Dutch Shell Plc, Europe’s largest
oil company, may
produce liquefied natural gas from an area in Egypt using a floating
vessel, a
government official said. Shell may use
the untested floating LNG technology in the northeastern part of the
Mediterranean sea near Cyprus to produce the cleaner-burning fuel, said
Omar El
Sisi, an official at state-owned Egyptian Natural Gas Holding Co.
The Egyptian government last year
announced it wouldn’t sign
new gas-export contracts until 2010, citing price volatility and the
need to
meet domestic demand. Explorers must set aside a third of gas reserves
for
domestic use and a third for storage before being allowed to export the
rest.
“We have no comments to make on
floating LNG at this point
in time,” Catherine Aitken, a spokeswoman for Shell, said in an e-mail
today.
The Egyptian government agreed last
year to pay more for gas
supplied by foreign companies to the domestic market to attract
investments in
deep water areas.
Shell, the world’s biggest
non-government LNG producer, is
studying the use of floating LNG terminals for projects in Australia,
Egypt and
Iraq, John Mills, an executive vice president for gas and power in
North
Africa, Middle East and South Asia, told reporters in November.
Shell will invest $337 million in
Egypt’s West Desert field
in 2009-10, the country’s Oil Ministry said in January. The North
African
nation’s economic growth will ease to 3.5 percent this year from 7
percent the
past two years because of the global recession, Standard Chartered said
on Feb.
12.
Egypt produces 700,000 barrels of oil
per day, Oil Minister
Sameh Fahmy said in a statement on the ministry’s Web site. That
compares with
a record high of 950,000 barrels in 1995.
Floating facilities may take less than
half the time to
build compared with onshore units and may cost a third of an onshore
plant,
Citigroup Inc. said in April.
|
 Israel
Zion Oil Drill
Commence April 2009 Zion Oil & Gas, Inc. 3/20/2009
Zion has advised Aladdin Middle East Ltd (AME) that AME should proceed
with mobilization of the 2,000 horsepower drilling rig that Zion plans
to use to drill its Ma'anit-Rehoboth #2 well.
Zion anticipates that the required Turkish rig crew work visas will be
granted soon and due to the time required to ship the drilling rig
(which has already been packed into eighty loads) from Ankara, Turkey
to Haifa, Israel, Zion has given notice to AME to proceed with
mobilization of the drilling rig. It is anticipated that the drilling
rig will arrive in Israel, clear customs and be fully rigged-up (i.e.
erected) to begin drilling in April 2009.
Zion currently holds two petroleum exploration licenses, the Joseph and
Asher-Menashe Licenses, between Netanya on the south and Haifa on the
north, covering a total of approximately 162,000 acres. Zion has
applied for a further permit area (tentatively named by Zion the
Issachar-Zebulun Permit Area) and the application, if granted, will
increase Zion's total license area to over 400,000 acres.
Zion's Chief Executive Officer, Richard Rinberg, said today, “We
eagerly anticipate the arrival of the 2,000 horsepower drilling rig and
the drilling of Zion's second well, on our Joseph License, to the
Triassic Formation (down to a depth of 15,400 feet) and then, we plan,
to the Permian Formation (down to a depth below 18,000 feet).”
|
Cameroon Deep Water
Port Plan: Fe, Al, O/G
Skillings Mining Review February 2009
The Cameroon government has okayed a
new $160 million export
terminal to serve an emerging iron ore province that extends into
neighboring
Congo and Gabon, according to Australian iron ore company, Sundance
Resources.
September is the targeted date for the
funding for the new
terminal. The $160 million cost, which excludes materials-handling
infrastructure and utilities, is $50 million below the prefeasibility
study
estimate.
The terminal site, which would handle
high-grade direct
shipping ore (DSO), would allow development of a 22-meter deep berth
accommodating 250,000 dry weight ton ships.
Don Lewis of Sundance said that Camlron
SA, Sundance’s
Cameroon subsidiary, has been selected as a core operator within the
overall
multiuser port development, where Rio Tinto Alcan plans to finance,
construct
and operate an aluminum terminal; the Bolloré group would finance,
construct
and operate a container terminal; and Angelkique/SCDP would finance,
construct
and operate a hydrocarbons terminal.
The deep-water port would be situated
near Kribi, where
Camlron would construct a stand-alone iron ore terminal for development
by the
other selected operators.
Sundance is developing Cameroon’s
Mbalam iron ore project,
situated near the Belinga iron ore project in Gabon, which is being
developed
by China National Machinery and Equipment Import and Export Corp.
The Mbalam and Belinga projects are
part of an emerging iron
ore province, straddling the Cameroon border into the Congo Republic
and Gabon.
Lewis said that the company has
delineated a compliant
resource of 2.45 billion tons of DSO and itabirite hematite.
|