Oil and Gas News

Oil News from around the web, Crude oil for August 2009 delivery fell as much as $0.63, or 0.9%, to $66.10 a barrel on the New York Mercantile Exchange. Brent crude oil for August 2009 settlement dropped as much as $0.79, or 1.2%, to $65.86 a barrel on London’s ICE Futures Europe exchange

Posted on July 3, 2009 – 8:29 pm | by oilandgaspress.com

Kosmos Energy, a privately-held oil company with a stake in Ghana’s newly-discovered oil reserves, has been the subject of interest from China and India’s ONGC. Now Shell is rumoured to be looking into Kosmos - although with Shell’s substantial operations in nearby Nigeria it would be somewhat surprising if they hadn’t considered it. Kosmos, which is backed by private equity groups Warburg Pincus and Blackstone, is up for sale with a decision expected in July.

 

It has just over 30 per cent stake in the Jupiter field in the Gulf of Guinea, which holds more than 1bn barrels of recoverable oil, making it one of the significant finds in recent years. However oil majors have not yet become involved in Ghana. Two fellow small oil contenders are involved in Jubilee; Anadarko of the US, with an equal share of the field, and UK-listed Tullow with just under 23 per cent.
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African Petroleum’s 2008 net profit fell 11 percent to 5.1 billion naira ($35 million), the firm’s full-year results released to the Nigerian Stock Exchange (NSE) showed on Monday. Gross earnings at AP, one of Nigeria’s biggest marketers of gasoline and other refined petroleum products, rose 59 percent to 162.59 billion naira from 102.49 billion the previous year.

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China National Petroleum Corporation (CNPC), the parent of PetroChina Company, has begun work on an oil pipeline in south-western Chad, according to state media reports.

Crude oil will be shipped from the Koudalwa field, about 300km south of N’Djamena, to the Djarmaya refinery north of the capital.

Chad started producing oil in 2003 and now generates about 170,000 barrels per day.

The southwestern Chari-Baguirmi region is estimated to produce 60,000 barrels per day.

The pipeline is scheduled to begin operations in 2011. -Offshore Technology
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Nigeria, Niger and Algeria have yet to agree on which foreign companies will build the Trans-Sahara pipeline, Algerian Energy and Mines Minister Chakib Khelil said on Tuesday. Nigeria’s state oil company NNPC, Algeria’s state oil company Sonatrach and Niger will sign a deal next week in Abuja to facilitate the pipeline, he said.  The European Union views the project to bring gas from Nigeria across the desert to Europe via Algeria as one that could help it diversify energy supplies. “We haven’t accepted anybody yet,” Khelil told reporters after attending a gas meeting in Doha. “Only partners that can bring something to the project, not just money, should be there.” Russia’s Gazprom, France’s Total and Italy’s Eni were among many companies that had expressed interest in participating in the $10 billion project, Khelil said.

 

Each country could sell stakes in its share of the pipeline, as long as the new partners were accepted by the other two countries, he added. Algeria could pump the Nigerian gas onto Europe through existing pipelines that it may expand, or it could build another line for the gas, he said. “Initially there will be space in the pipeline system,” he said. The pipeline would start operating in 2015-2016, he added. Some of Algeria’s long-term supply contracts with Italy were due to expire in 2019-2020, so the Nigerian gas could replace Algerian gas in those contracts, he said. The partners would raise the money for the project against long-term sales deals, Khelil said. The project had been stuck on the drawing board for years. Issues that took time to resolve were how to develop gas fields in Nigeria for both domestic and international supply and what would happen if the pipeline were cut off, he said. Algeria would supply gas if supplies from Nigeria halted for any reason, he added. Around a third of Nigeria’s oil output is out of action due to militant attacks on oil installations. Initially NNPC and Sonatrach would hold a total around 90 percent stakes in the project, while Niger would hold 10 percent, Khelil said.

 

 

 
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Russia’s attempt to create a joint gas venture with Nigeria is set to become one of the classic branding disasters of all time - after the new company was named Nigaz. The venture was agreed last week during a four-day trip by Russia’s president Dmitry Medvedev to Africa. The deal between Russia’s Gazprom and Nigeria’s state oil company was supposed to show off the Kremlin’s growing interest in Africa’s energy reserves.Instead, the venture is now likely to be remembered for all the wrong reasons - as a memorable PR blunder, worse than Chevrolet’s Nova, which failed to sell in South America because it translates as “doesn’t go” in Spanish. Alert users of Twitter first highlighted the unfortunate English connotations of Nigaz, which appears to have eluded Medevedev’s Russian-speaking delegation.

 

Writing on Monday, shunty 75 observed: “Nigaz is the name for the new Gazprom Nigeria venture. They need a new PR outfit. NO WAY!! Haha!!” Other twitterers also derided the name. An article in Brand Republic pointed out the obvious: that the name has “rather different connotations” for English-speakers. It recalled other international branding mishaps including the Ford Pinto - which in Brazil means small penis - and the Pepsi slogan “come alive with the Pepsi generation”. In Taiwan this rousing motto translated as “Pepsi will bring your ancestors back from the dead”. It is unclear why nobody alerted Medevedev to the blunder. But one possible explanation is that the offending word is still widely used in Russia, and was even famously employed by the poet Vladimir Mayokovsky in the 1920s. The new company Nigaz plans to invest at least $2.5bn (£1.5bn) in oil and gas exploration and aims to build refineries, pipelines and gas power stations across Nigeria. “We have a chance to become major energy partners,” Medvedev declared last week following a meeting with Nigeria’s presient Umaru Yar’Adua in the capital Abuja.

 

 

 

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 European gasoline prices jumped yesterday, boosted by spot exports to Nigeria and supported by gains in crude and U.S. gasoline futures of between three and four percent. Refinery issues in Nigeria have been exacerbated by recent militant action in the Niger Delta, requiring further spot supplies of the motor fuel from Europe.

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Nigeria’s House of Representatives yesterday insisted that French oil giant, Total Nigeria PLC must pay the N2.1m fine imposed on the company for failing to appear before its committee on Public Procurement over the Akpo oil Field Development Project [FDP]. A Nigerian oil firm, TILONE Nigeria Ltd was the bid winner of the contract but TOTAL allegedly gave the contract to a foreign firm Occeaneering AG in defiance to the NNPC’s board of directors order. But the Committee had queried TOTAL over the $43 million contract for the supply of Remotely Operated Vehicles [ROVs] it awarded through its subsidiary, TOTAL Upstream Nigeria [TUPNI] to Oceaneering AG, through an invitation it extended to TOTAL.  However, the French Oil giant failed to appear before the committee on Wednesday June 3, to respond to a petition by Tilone, a development that infuriated the lawmakers to impose N1.2m fine on TOTAL.

 

 

 

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Petrobras (Petroleo Brasileiro) has won two blocks in Uruguay’s oil and gas exploration and production bidding round, Reuters reported.

The blocks are located in the Punta del Este basin off the Uruguayan coast. Block 3 is at a depth of 100 to 200m and Block 4 is 300km from the mainland at depths varying from 200 to 1,500m.

The tender, which was announced on 1 June 2009, included the Pelotas and Punta del Este offshore basins.

Petrobras will study the blocks for four years before it decides whether to start drilling, the company said.

Petrobras is operator of Block 4 and holds a 40% interest. YPF and Galp Energia are partners in the block, holding 40% and 20% interests respectively.

 

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Attacks by Nigerian militants in recent days have slashed oil output from Royal Dutch Shell’s  onshore facilities to around 140,000 barrels per day, around half of what they were producing earlier this year. The Movement for the Emancipation of the Niger Delta (MEND) militant group has carried out a wave of attacks since last month, mostly in the western Niger Delta, hitting facilities belonging to Shell, Chevron and Agip. “In the past 10 days we have had five attacks that have reduced our oil production to around 140,000 barrels per day,” Shell’s Africa communications director Olav Ljosne told Reuters, referring to output from the company’s SPDC joint venture. SPDC is the largest private oil and gas company in Nigeria and operates a joint venture in which the state-run Nigerian National Petroleum Corporation (NNPC) holds 55 percent, Shell 30 percent, Total 10 percent and Agip (ENI.MI) 5 percent. The joint venture operations, all in the delta’s swamplands, have the capacity to produce an average of 1 million barrels of oil equivalent per day (boepd).
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Nigeria’s state oil company rejected criticism from a leading human rights group Wednesday, calling an Amnesty International report “inaccurate.”   “We have issues with the report,” said Levi Ajuonoma, a spokesman for Nigerian National Petroleum Corporation. Amnesty said Tuesday that pollution and environmental impacts from the oil industry in the Niger Delta are creating a “human rights tragedy” in which local people suffer poor health and loss of livelihood. Governments and oil companies are failing to be accountable for the problems, Amnesty said in its report, called “Petroleum, Pollution and Poverty in the Niger Delta.” But the state oil company said it was local communities who cause much of the environmental damage by vandalizing pipelines for monetary gain.

 

“We take environmental damage very seriously,” Ajuonoma said. “Pipeline damage is a major cause of pollution,” he argued, blaming “communities who… vandalize pipelines and make claims on the oil company operating in the area.” Amnesty leveled a wide range of charges in its report. “People living in the Niger Delta have to drink, cook with and wash in polluted water,” said Audrey Gaughran, who co-authored the report. “They eat fish contaminated with oil and other toxins — if they are lucky enough to be able to still find fish. The land they farm on is being destroyed. “After oil spills, the air they breathe smells of oil, gas and other pollutants. People complain of breathing problems and skin lesions, and yet neither the government nor the oil companies monitor the human impacts of oil pollution.” The report looks at oil spills, gas flaring, waste dumping and other environmental impacts from the oil industry. The majority of the evidence in the report relates to Shell, the main oil company operating in the region. “Despite its public claims to be a socially and environmentally responsible corporation, Shell continues to directly harm human rights through its failure to adequately prevent and mitigate pollution and environmental damage in the Niger Delta,” Gaughran said.

 

A Shell spokesman said the company shares Amnesty’s concern for the people in the Niger Delta but disputes the group’s assessment of its corporate accountability. “We feel that the root causes of the Niger Delta’s humanitarian issues are poverty, corruption, crime, militancy, and violence. This report does not acknowledge these issues to any substantive degree, but concentrates on oil and gas issues in isolation, and as such, its value is limited,” said a spokesman at the company’s headquarters in The Hague, Netherlands, who asked not to be identified per company policy. “This report brings no new insights or analysis to help oil companies such as SPDC improve managing the issues of the Niger Delta,” the Shell spokesman said. “Instead, in parts it draws wide-ranging and superficial conclusions from a number of these deeply complex issues, offering little underlying analysis to support those conclusions.”
 

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The Nigerian Senate passed a bill on Thursday stipulating tougher penalties against energy firms that flare gas but pushed back a deadline which has repeatedly been missed to the end of next year. Nigeria flares more gas than any other country in the world except Russia, burning about 2.5 billion cubic feet of gas per day because it lacks the infrastructure to make use of it. Oil companies were supposed to stop all gas flaring in the OPEC-member country by the end of last year or face hefty fines. But like previous deadlines it passed without any companies being punished. The bill says companies that flare gas from Jan. 1, 2011, will have to pay the prevailing international market price of gas for the amount flared. “It shall pay an additional 50 percent of the amount to the community where the gas is being flared. A shutdown order of 50 days shall be issued to the defaulting company,” the bill says.

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Nigeria, Niger and Algeria are set to sign an agreement today to launch works for the Trans-Sahara natural gas route, Africa’s largest pipeline project by cost, a spokeswoman for Algeria’s Energy Ministry said Thursday. She said Algerian Energy Minister Chakib Khelil “is leaving Thursday for Abuja to sign the intergovernmental agreement Friday. That will relaunch the project.”

 

The European Union recently lent its support to the project - which will pipe Nigerian gas to Europe through Niger and Algeria - seeing it as an element to diversify its supplies away from Russia. Estimates for the cost of the pipeline have varied from $13 billion to $20 billion, dwarfing Chevron Corp.’s $4 billion Chad-Cameroon oil pipeline. Total SA and Eni SpA have expressed interest in joining the Trans- Saharan pipeline project.

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Russia’s Gazprom and Nigeria’s state-operated NNPC formed the company - pronounced “nye-gaz” - last week. Nigerians No Nigaz, a group formed on the social networking site Facebook, says the name could be pronounced in a way offensive to black people. Users of Twitter have also expressed disbelief at the decision. The topic has prompted hundreds of tweets. Henry Makiwa, known as makiwahenry, said: “Lol [laugh out loud] of the day: Russian/Nigerian oil conglomerate has had PR branding blunder after naming joint company ‘Nigaz’.” 

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Jordan’s Natural Resources Authority (NRA) said that the closing date for submission of bids for oil exploration blocks by international and regional companies in the northern and central regions of the Kingdom has ended.

The cut-off date was extended from May to July after requests fromsome international companies that showed continued interest in bidding for the blocks.

“In the oil business, these companies needed three to four months to study and evaluate [the blocks] before deciding to submit or not,” NRA director Maher Hijazin told The Jordan Times.

Two blocks included in the bidding round are the Northern Highlands, a 7,454km² region along the country’s northern border with Syria, and the Al Jafr block in the central region, a 19,156km² plot east of the Jordan River.

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The Niger Delta is a region in Nigeria consisting of nine oil-producing states. It has a land area of about 46,500 square miles (75,000 square km)

An area of rich biological diversity, the region contains the world’s third-largest wetland with the most extensive freshwater swamp forest, according to the UNDP. More than half the area contains creeks and small islands, while the rest is rainforest, the UNDP says. At the same time, the Niger Delta produces the oil wealth that accounts for the bulk of Nigeria’s foreign earnings, the UNDP says. Amnesty says the majority of people living in the Niger Delta depend on the natural environment for their food and livelihood, particularly through agriculture and fisheries. Shell said it is not responsible for some 80 percent of the pollution in the oil-rich area, because that pollution is the result of attacks and sabotage of Shell operations in the Niger Delta.

Tags: Abuja, Algeria, Anadarko, Cameroon, Chad, freshwater, Galp Energia, Gulf of Guinea, Jordan River, Koudalwa field, Nigaz, Niger, NIGERIA, Nigerian Senate, oil pipeline, rainforest, swamp forest, total