Friday, 20 October 2017

KrisEnergy commits to Cambodia Apsara oil development

KrisEnergy commits to Cambodia Apsara oil development

KrisEnergy Ltd, an independent upstream oil and gas company, has announced it has made a final investment decision to proceed with the first phase of development for the Apsara oil field, the first hydrocarbon development project in the Kingdom of Cambodia.

Located in Cambodia Block A in the Gulf of Thailand, Phase 1A of the Apsara development envisages a single unmanned minimum facility 24-slot wellhead platform producing to a moored production barge capable of processing up to 30,000 barrels of fluid per day with gas, oil and water separation facilities on the vessel. Oil will be sent via a 1.5km pipeline for storage to a permanently moored floating, storage and offloading vessel.

Kelvin Tang, KrisEnergy’s Chief Executive Officer and President of Cambodian operations, commented: “FID is another step in progressing the Apsara development within the target timeframe following the formal signing of the petroleum agreement in late August. Our technical and operations teams are preparing the necessary tenders for materials, equipment and services. In parallel, consultations continue with parties interested in joining this groundbreaking project to reduce our operational risk and capital expenditure exposure.”

KrisEnergy is the operator of Cambodia Block A and holds 95% working interest. The General Department of State Property and Non-Tax Revenue of the Ministry of Economy and Finance holds the remaining 5% on behalf of the Royal Government of Cambodia.
The Cambodia Block A contract area covers 3,083sqkm over the Khmer Basin in the Gulf of Thailand where water depths range between 50m and 80m.

The individual oil accumulations in Cambodia Block A are small in size and spread over a large geographic area, requiring significant funds and time to develop fully. Additionally, reservoir production performance in the Khmer Basin has yet to be proven.

For these reasons, among others, there is some uncertainty regarding long-term production rates, reserves and commercial viability and therefore a phased development approach has been prudently adopted. Once the initial Phase 1A platform is on stream, there will be a period to monitor reservoir performance before commencing Phase 1B, which envisages up to three additional platforms producing to the Phase 1A facilities. A Phase 1C will potentially add up to six additional platforms for the full 10-platform Apsara development.

Odfjell SE sells its share in Singapore tank terminal

Odfjell SE sells its share in Singapore tank terminal 

Odfjell SE has announced that Odfjell Terminals B.V has entered into an agreement with a fund managed by Macquarie Infrastructure and Real Assets to sell its 50% ownership in Oiltanking Odfjell Terminal Singapore Pte Ltd.

The price of around $300 million implies an enterprise value of around USD 330 million for Odfjell Terminals B.V’s share in the Singapore terminal.

The transaction will result in a net gain for Odfjell SE of approximately $135 million (Odfjell SE's share). The closing of the transaction is subject to customary regulatory approval and is expected during the fourth quarter of 2017.

Kristian Mørch, CEO of Odfjell and Chairman of Odfjell Terminals B.V, said: “We are pleased to have concluded on the sale of our Singapore terminal at what we believe is a very attractive valuation and a testimony to the strength and quality of the investments made in Singapore since 2001.”  

Frank Erkelens, CEO of Odfjell Terminals B.V. said: “We appreciate the cooperation we have had with our good partner Oiltanking in Singapore, and wish them and their new partner Macquarie Infrastructure and Real Assets a successful future in further developing the full potential of the terminal. This divestment is in line with our strategy to focus on the terminals where we have managerial control of the assets and to further invest in growth opportunities in our core markets, such as Houston and Rotterdam.”

Thursday, 19 October 2017

Andalas Energy and Power signs MOU for Development of an Independent Power Producer at the Puspa Field

Andalas Energy and Power signs MOU for Development of an Independent Power Producer at the Puspa Field 

Andalas Energy and Power plc has announced that it has signed a memorandum of understanding with PT Pertamina Power Indonesia, a wholly-owned subsidiary of PT Pertamina, and Siemens AG regarding the development of an independent power producer at the Puspa field in Sumatra.

Andalas, PPI and Siemens agree to jointly pursue the development of an independent power producer at the Puspa field in Sumatra. The Puspa field is operated by PT Pertamina EP.

A basis has also been established to engage project partners; negotiate and agree further project agreements with all stakeholders, secure gas from the Puspa field, generate conceptual development plans including an electricity demand analysis, a load flow study, a site identification study, identify and select gas-fired power generation technology, and identify and select an engineering, procurement and construction contractor.

All parties have agreed to bear their own costs and to share all agreed third-party costs, equally during this phase of the project. The agreement includes binding provisions relating to the joint pursuit of the project, conditions precedent, exclusivity, costs, term and confidentiality and non-binding provisions relating to the objectives and execution of further agreements and joint committees. It is for a term of 24 months and subject to all necessary approvals and finance.

Andalas will make a final investment decision after the project has been included in the RUPTL and the company has completed the work program outlined above, obtained various licences relating to the facility and transmission lines and negotiated the final agreements with other stakeholders including the consortium members, PEP, PLN and lending institutions.

The third-party costs to Andalas during the development phase are expected to be modest. The material costs of the project relate to the capital costs of the power plant, which will only be incurred when the project achieves FID.

David Whitby, CEO of Andalas Energy & Power, commented, “The execution of the Puspa MOU establishes our first joint project with PPI and Siemens. 

“Pertamina has recently completed an appraisal program on the Puspa field. The proposed IPP would enable Pertamina to commercialise the field. Andalas’ preliminary assessment is that it will support a 20 to 50MW wellhead IPP. We will continue to refine this model in discussions with all stakeholders including PPI, Siemens, PEP and PLN.

“We are pleased to welcome Siemens to our consortium. Siemens is a leading provider of generating systems and networks in Indonesia, and we believe their addition to the project will prove invaluable.”

Rosneft and the Government of the Kurdish Autonomous Region of Iraq agree on cooperation at five production blocks

Rosneft and the Government of the Kurdish Autonomous Region of Iraq agree on cooperation at five production blocks

Rosneft and the Government of the Kurdish Autonomous Region of Iraq signed the documents required to put into force Production Sharing Agreements (PSA) concerning five production blocks located in the Kurdish Autonomous Region. 

The signed documents outlined the main terms of the project which provides for the establishment of a joint venture for the implementation of the long-term contract regarding the infrastructure project in Iraqi Kurdistan. The documents are also related to widening their cooperation in exploration and production of hydrocarbons, commerce and logistics.

Rosneft obtained access to the management of major regional transportation system with a throughput capacity of 700 thousand bbl per day, which is going to be expanded to the level of 950 thousand bbl per day.

The share of Rosneft Group Subsidiaries in PSA will be 80%. The amount of payments for the projects farm-in and geological information for each of five blocks ranges will be from $40 million to $110 million and may total to $400 million (including $200 million that can be compensated by oil produced from block). The heads of terms of the agreements and the basic principles of product distribution are similar to the PSA in Iraqi Kurdistan that was signed by other international oil and gas companies.

The parties agreed to implement the geological exploration program and to start pilot production as early as in 2018. In case of success, in 2021 it is planned to start full-field development of the blocks. According to conservative estimates, the total recoverable oil reserves at five blocks may be about 670 million barrels.  

The documents were signed in pursuance of the Investment Agreement which was concluded at the St. Petersburg International Economic Forum in 2017. Also, the parties committed to putting into effect the Production Sharing Agreements signed during the Forum concerning the five blocks with substantial geological potential and outlined other prospective areas of cooperation in exploration and production, including the gas industry.

The signed documents have strengthened the cooperation between Rosneft and Iraqi Kurdistan, which started in February 2017 from signing a contract on crude purchase and sale in 2017-2019. The new agreements will allow Rosneft to talk about the full-fledged entry of the company in one of the most promising regions of the developing global power market. This is with the expected recoverable reserves in the order of 45 billion bbl of oil and 5.66 trillion m3 of gas (according to the estimate of the Ministry of Natural Resources of Kurdistan Region). The agreements provided for further phased investments by Rosneft in the Kurdistan region.

Hedging Facility Update

Hedging Facility Update

Nostra Terra, the oil and gas exploration and production company with a portfolio of assets in the USA and Egypt, announces the following:

As previously announced on 26th September 2017, Nostra Terra has secured a hedging facility with BP Energy Company ("the hedging facility"). In response to queries from investors, the board of the Company (the "Board") can confirm that it intends to utilise the hedging facility primarily in conjunction with lending facilities to enable increased funds to be made available to the Company.  

Also, as Nostra Terra has been able to demonstrate a track record of stable and secure oil production, BP Energy Company has waived its margin requirement.  As a result, the Company's working capital position can be improved because the Company will not be required to hold cash on margin.

The hedging facility includes an inter-creditor agreement to work seamlessly with Nostra Terra's existing $25,000,000 senior lending facility with Texas Capital Bank ("the TCB Facility"). This could also be applied to any other potential new senior lending facility. Nostra Terra has gone to great lengths over recent years to maintain the TCB Facility in good standing, with this goal in mind.

However, having now secured the hedging facility with BP Energy Company, the Board believes the Company is in a better funding position than it anticipated to be able to deliver its growth strategy. Nostra Terra is currently in discussions with three banks, including Texas Capital Bank, to ensure it has the best facility in place not just for immediate growth plans but also those over the coming years.

Nostra Terra expects to provide an update concerning this in the coming weeks

Wednesday, 18 October 2017

Petronas calls for collaboration between LNG producers and consumers for sustainable LNG market

Petronas calls for collaboration between LNG producers and consumers for sustainable LNG market

PETRONAS, currently the world’s third-largest LNG producer has urged producers and consumers of liquefied natural gas (LNG) to collaborate towards encouraging growth and sustainability of the industry.    

Its President and Group CEO Wan Zulkiflee Wan Ariffin warned that while demand for LNG has grown, there is a possibility of industry stagnation if LNG prices do not encourage necessary investments to sustain the business.

“Today, players are cancelling and delaying projects in tandem with the LNG prices. Without sufficient investments, both buyers and sellers face an uncertain future regarding business sustainability and energy security,” he said.

Speaking to the audience at the LNG Producer-Consumer Conference 2017 in Tokyo, Japan, headed that PETRONAS too was forced to not proceed with its proposed LNG project in Canada due to the prolonged depressed prices and unfavourable market conditions.

Nevertheless, he acknowledged that the current market dynamics has stimulated internal efficiency improvements that have provided PETRONAS with better agility as an integrated end-to-end LNG player to accelerate growth once the industry is on an upturn.

Recently, PETRONAS celebrated its 10,000th cargo from its Bintulu LNG Complex in Malaysia, delivered to Japan on October 4. This further cements its sterling reputation as a reliable LNG solution producer and supplier with an impeccable track record of not missing a single cargo.

“With deeper resource pools, we can invest in people, technology and innovation to provide energy solutions that go beyond just selling and delivering LNG. Through these investments, we aspire to help create a more sustainable LNG market that can fuel the world’s economies,” he said.

Wan Zulkiflee urged all parties to engage in early collaboration to work towards mutually-favourable market conditions to encourage investments for business longevity and long-term supply stability. 

“While current market dynamics are not encouraging conversations about sustainable gas pricing, it is in our interest, both as sellers and as buyers to bring this up.
“Although buyers’ considerations remain in our best interests, the current market volatility necessitates the security of demand. This is imperative for the producers to continue investing to support the upstream and LNG value chain in a timely manner,” he concluded.

With over 30 years of experience in integrated global LNG business, PETRONAS is committed to meet the growing demand for clean energy required for global sustainability and climate change goals.

Continental Resources Reports Sale Of 1 Million Barrels of Bakken Oil for Export To China

Continental Resources Reports Sale Of 1 Million Barrels of Bakken Oil for Export To China

Continental Resources, Inc has announced its first-ever sale of Bakken oil specifically for delivery overseas. The Company has sold 1,005,000 barrels of Bakken crude oil for November delivery to Atlantic Trading and Marketing ("ATMI"), which intends to export the oil to China.

Daily sales transactions of 33,500 barrels per day in November will take place in Cushing, Oklahoma. ATMI then plans to transport the oil for loading on tankers at Texas ports.
"This is a historic day for Continental and begins a new chapter in our long-term strategy to establish multiple international markets for American light sweet oil," said Harold Hamm, Continental's Chairman and Chief Executive Officer. "This new normal was created by the American shale energy revolution and the lifting of the 1977 crude oil export ban. We expect to see many similar industry transactions in coming months and years."

In December 2015 the U.S. lifted its ban on oil exports, allowing foreign sales to be transacted without a license. Oil exports have grown steadily in the past two years, primarily to foreign refineries configured specifically to process light sweet crude oil. "We recognized back in 2015, when we were working to lift the export ban, that American light sweet oil would be a good fit for these refineries, especially in Europe and Asia," Mr. Hamm said.

"The current $6 discount to Brent should not exist, given the consistency and high quality of WTI, as well as relative shipping costs," he said. "Stabilized U.S. production and increasing industry sales of American crude to international markets will drive down U.S. inventories, correcting much of the recent disparity between Brent and WTI prices. Modern modes of transport in the crude oil sector today eliminate price disparities between markets and allow free markets to work."