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Oil and Gas Energy News Update

Tuesday, March 22, 2011

Iraq to Auction 12 Exploration Blocks in Nov.

Tuesday, March 22, 2011
Dow Jones Newswires
By  Hassan Hafidh

Iraq plans to auction 12 exploration blocks, believed to contain mostly gas reserves, in November as part of the country's efforts to capture natural gas for electricity generation, said the country's oil minister.

Abdul Kareem al-Luaibi said 70% of these blocks are believed to contain gas reserves only, with the rest containing oil and gas reserves.

"We think that these 12 blocks contain at least 29 trillion cubic feet of [non-associated] gas," the minister told reporters in Baghdad.


Lankhorst Ropes Invests in Fiber Rope Test Machine

Tuesday, March 22, 2011
by  Karen Boman

Deepwater rope manufacturer Lankhorst Ropes Offshore Division has invested Euro 2M (US $2.8 million) in a synthetic fiber rope test machine that, for the first time, will enable naval architects to run 'what if' scenarios to simulate the effects of storms and hurricanes on deepwater mooring lines.

Located at Lankhorst Ropes' fiber rope production facility in Portugal, the rope test machine will be used to test the mechanical performance and fatigue behavior for a range of new materials and rope constructions for deepwater mooring and single point mooring (SPM) systems.

The machine can test 65 foot (20 m) ropes with loads up to 1,200 tonnes and a stroke length up to 14.7 feet (4.5 m). In addition, the machine features a precise mechanical control system designed to maintain peak load such that target loads can be maintained within 10kN during testing.

Lankhorst Ropes Invests in Fiber Rope Test Machine
Optimized Mooring Line Installation

Given industry concerns about the rising cost of performing deepwater installations, the test machine is expected to have wider benefits in optimizing installation scenarios. Deepwater ropes are routinely loaded to approx. 40% of MBL [minimum breaking load] to pre-stretch the rope during installation. More accurate information on the degree of pre-loading required will avoid the high cost and safety issues surrounding excessive pre-loading during offshore installation.

"Until now the lack of specialized rope test equipment, and the very high cost of testing, has led to a shortage of authoritative data on rope properties for a variety of fiber types and rope constructions. The Lankhorst fiber rope test machine will fill this knowledge gap, enabling 'what if scenarios that show the effects of storms, hurricanes and loop current events with associated vortex induced vibrations on deepwater mooring lines," says Chris Johnson, sales director, Lankhorst Ropes Offshore Division.

The rope test machine is currently being used to provide test data for a Joint Industry Project (JIP) on Polyester Rope Stiffness Modeling, Testing and Analysis. Chevron, the Bureau of Ocean Energy Management, Regulation and Enforcement, Shell, Petrobras, SBM, Whitehill Manufacturing and Lankhorst Ropes are participants in the JIP.

The actual test results will be confidential for three years after the termination of the JIP, which will occur next month. However, the principles established will be written into the next version of the ABS Rules for Polyester Mooring scheduled for April/May of this year.


ExxonMobil Gets BOEMRE Nod for GOM Deepwater Drilling Permit

Tuesday, March 22, 2011

The Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) approved a fourth deepwater drilling permit that complies with rigorous new safety standards implemented in the wake of the Deepwater Horizon explosion and resulting oil spill. This includes satisfying the requirement to demonstrate the capacity to contain a subsea blowout. The approved permit is a revised permit to drill a new well for ExxonMobil's Well #3 in Keathley Canyon Block 919 in 6,941 ft. water depth, approximately 240 miles off the Louisiana coastline, south of Lafayette, La. This is the first permit approved that designates the Marine Well Containment Company (MWCC) containment system as its containment solution.

"Today's permit approval is the fourth to be approved in the month since the industry confirmed its capability to contain a deepwater loss of well control and blowout. We will continue to review and approve applications that demonstrate the ability to operate safely in deep water," said BOEMRE Director Michael R. Bromwich. "As we have seen, the rate of deepwater permit applications is increasing, which reflects growing confidence in the industry that it understands and can comply with the applicable requirements, including the containment requirement. We expect additional permit approvals in the near future."

ExxonMobil's Well #3 is a new well. The operator had a rig on-location and an approved Permit to Drill a New Well when activities were suspended due to the temporary drilling suspensions imposed following the Deepwater Horizon oil spill.

ExxonMobil has contracted with the MWCC to use its capping stack to stop the flow of oil should a well control event occur. As part of its approval process, the bureau reviewed ExxonMobil's containment capability available for the specific well proposed in the permit application and confirmed that the capabilities of the capping stack met the requirements specific to the proposed well's characteristics.

BOEMRE has worked diligently to help industry adapt to and comply with new, rigorous safety practices. These standards ensure that oil and gas development continues, while also incorporating key lessons learned from the Deepwater Horizon oil spill. This new permit meets the new safety regulations and information requirements in Notices to Lessees (NTL) N06 and N10, and the Interim Final Safety Rule.


Top Iraqi Panel Asks Oil Ministry to Review Shell Gas Deal -Minister

(Dow Jones Newswires), March 22, 2011

The Iraqi Council of Ministers' energy committee has returned to the Oil Ministry a draft deal with Shell to produce gas from southern Iraq oil fields, in order to review the economics of the pact before submitting it to the cabinet for approval, the country's oil minister said Tuesday.

"God willing, next week we will submit clear views on economics of the contract to the cabinet's Energy Committee," Abdul Kareem al-Luaibi said of the long-awaited $12 billion deal. "Then the Energy Committee will discuss it before submitting specific recommendations to the Council of Ministers."
The minister didn't elaborate on the economics of the deal.

The Energy Committee is headed by Deputy Prime Minister for Energy Affairs, Hussein al-Shahristani, with oil, electricity and water resources ministers also members of the committee.
Shell would hold 44% of the venture, Mitsubishi 5%, and Iraq state-owned South Gas Co. the remaining 51%.

The goal is to capture and produced gas at fields near the oil hub of Basra, including the supergiant Rumaila. Shell in early 2010 finalized contracts with Iraq to produce oil from two super oil fields in southern Iraq.


API: New Energy Policy to Add Jobs for Brazil

Tuesday, March 22, 2011

API President and CEO Jack Gerard said the administration's offer to exchange batteries for oil from Brazil reflects its inadequate and illogical energy policy:

"It is beyond comprehension the administration would encourage trade for Brazilian oil while obstructing U.S. oil and natural gas development, eliminating related jobs here at home, and decreasing oil and natural gas revenues to the U.S. Treasury when the government is trillions of dollars in debt. The message from the White House to America's oil and natural gas workers: we're going to outsource your job.

"The administration is missing the obvious: what makes sense for Brazil also makes sense for the United States. Like every other nation, we should be developing our own oil and natural gas resources. It's good for energy security, good for the economy, good for jobs, and it will help bring down our deficit.

"The administration says it supports more oil and natural gas development here in the United States, then at every turn discourages it. And today, the White House is making a deal with Brazil for the oil it is not allowing companies to produce here. There's nothing wrong with buying Brazilian oil, but there's a big problem when we're forced to because we're held back from producing our own."


UK Govt: Deepwater Oil Drilling Safety Rules Fit for Purpose

Tuesday, March 22, 2011
Dow Jones Newswires
by  James Herron
The U.K. government gave its regulatory regime for deep water offshore oil and gas drilling a largely clean bill of health, saying that existing rules address most of the concerns raised by a parliamentary committee studying the impact of the Deepwater Horizon disaster in the Gulf of Mexico.

U.K. lawmakers on the Energy and Climate Change Committee had raised serious doubts in January about whether the oil industry is prepared to tackle a deep water blowout and oil spill should it occur in the North Sea, but the government's response to these concerns published Tuesday said existing rules are adequate.
"The U.K. government has already taken a number of actions (such as increasing the number of environmental inspectors and inspections to mobile rigs) to further bolster the already robust U.K. regulatory regime," the government report said.

One of the Committee's principal concerns--that the oil industry couldn't handle an oil spill in the rough seas west of the Shetland Islands--has already been dealt with, the government said. Chevron has developed a cap that can be used to seal a blowout in this area that will be available for anybody to use, the government said. Additional capping devices are also in development, it said.

The government did promise to assess in partnership with the oil industry whether oil rigs' blowout preventers--the crucial piece of equipment that failed aboard the Deepwater Horizon--should be upgraded to include extra failsafes, called blind shear rams. This assessment won't be concluded before summer, it said.

"We will also be considering the requirement of [compulsory] insurance as part of our review," it said.
Existing rules cover the other main concerns of the U.K. lawmakers--that companies spill response plans aren't adequate for the least likely but highest risk accidents; that existing financial provisions wouldn't cover the cost of a large spill; and that workers aboard offshore rigs fear reprisals if they raise safety concerns--the government said.


Bill to Boost State Engineer's CBM Water Permitting Authority

Haynesville Surpasses Barnett as Largest Shale Gas-Producer in US

Tuesday, March 22, 2011
Fort Worth Star-Telegram, Texas
The Haynesville Shale play in Northwest Louisiana and East Texas has surpassed North Texas' Barnett Shale as the No. 1 natural gas producer among U.S. shale plays, according to the U.S. Energy Information Administration website and an energy consulting firm.

But there's still some debate as to whether Haynesville is the clear-cut No. 1.

Among those wanting further clarification and more detailed confirming data Monday were Steven Grape, the Dallas-based domestic reserves project manager for the EIA, and Gene Powell, publisher of the Fort Worth-based Powell Shale Digest, widely considered an authority on U.S. shale-gas plays and especially the Barnett Shale, which underlies more than 20 North Texas counties.
The EIA had posted on its website Monday an item headlined "Haynesville surpasses Barnett as the Nation's leading shale play," based on "reported pipeline flows" of natural gas from the two regions.

It cited as its source Bentek Energy of Evergreen, Colo., a well-known energy consulting firm.

The EIA website included a Bentek chart showing that the Haynesville Shale area had production of an estimated 5.5 billion cubic feet of natural gas per day, compared to 5.25 billion for Barnett. It said Haynesville surpassed Barnett in output even after the North Texas field had recovered fully from "freeze-offs" at wellsites that had briefly reduced production during bitterly cold weather in early February.

Matt Marshall, a senior energy analyst for Bentek, told the Star-Telegram in a telephone interview Monday afternoon that company estimates, updated through Sunday, showed output in the Haynesville production area in Louisiana had jumped to 5.6 billion cubic feet per day.

However, that number includes an estimated 950 million cubic feet of output that, while in the general Haynesville production area, actually comes from geological formations other than the Haynesville Shale itself, Marshall said. But the 5.6 billion does not include roughly "several hundred million" cubic feet of daily gas production from the East Texas portion of the Haynesville Shale, he said.

Marshall said Bentek's latest estimates show that production in the Fort Worth Basin, home to the Barnett Shale, is 5.44 billion cubic feet per day. But that figure includes about 790 million cubic feet that actually is from formations other than the Barnett, he said.

Actual production from the entire Barnett Shale per se and the Haynesville Shale per se in Louisiana is virtually tied at about 4.65 billion cubic feet per day, Marshall said. But if you add in the Haynesville Shale production from East Texas, Haynesville is the clear-cut leader, based on estimates of flows through gas pipelines, Marshall said.

Both Powell and Grape said Monday that they want more information about the Bentek analysis before they can be assured that Haynesville is the new No. 1 shale play in gas production.

Powell said the most-accurate measurement of production from each shale play is actual well production data, rather than estimates based on reported pipeline flows. But there can be a time lag of several months before firm well-production data can be assembled. Grape, the EIA official, stressed that the Bentek information represents "estimates" based on pipeline flows. He said he needed more information before being able to say firmly whether Haynesville or Barnett is now the top producer.

EIA data for 2009, based considerably on natural gas reserves, showed the Barnett Shale as the leading gas-producing area in the nation, with nearly 1.8 trillion cubic feet of output. Grape said earlier this month that he thought Barnett also was the leading producer last year, although the EIA hasn't published final 2010 figures.

Foster Wheeler Clinches Detail Design Contract in GOM

Tuesday, March 22, 2011

Foster Wheeler's Global Engineering and Construction Group has been awarded a detail design contract by Enbridge Offshore for the deepwater Walker Ridge Gathering System (WRGS) export gas pipelines and the deepwater Big Foot (BGF) export oil pipeline located in the Walker Ridge (WR) area of the Gulf of Mexico.

The contract value, which was not disclosed, will be included in the company's first-quarter 2011 bookings. Foster Wheeler's work on the design contract is expected to be completed during the second quarter of 2011.

"We are delighted that Enbridge Offshore Facilities, LLC has selected Foster Wheeler Upstream's Houston-based team for this project and we look forward to delivering a high quality service which fully satisfies our client," said Clive Vaughan, chief executive officer, Foster Wheeler Upstream. "We have performed the detail design of essentially all of the deepwater pipelines in the Gulf of Mexico. Upstream remains a top growth priority for Foster Wheeler, and the award of the three deepwater gas and oil pipelines contained in this WRGS and BGF project confirms our strategy and commitment to the upstream oil and gas market sector."


W&T Offshore Responds to Report of Oil Sheen in Gulf of Mexico

Tuesday, 22 March 2011 06:15 PR Newswire

W&T Offshore, Inc. (NYSE: WTI) announced that it responded to reports of an oil sheen in the Gulf of Mexico that was said to be near a W&T...

HOUSTON, March 22, 2011 /PRNewswire/ -- W&T Offshore, Inc. (NYSE: WTI) announced that it responded to reports of an oil sheen in the Gulf of Mexico that was said to be near a W&T operated platform in Mississippi Canyon block 243 ("Matterhorn").  Following an onsite and aerial  investigation  by the Company,  it was determined that the source of a reported oil sheen was not the Matterhorn platform or any other nearby W&T operated facilities, as speculated in several media reports.  

About W&T Offshore

W&T Offshore is an independent oil and natural gas company focused primarily in the Gulf of Mexico, including exploration in the deepwater and deep shelf regions, where it has developed significant technical expertise. W&T has grown through acquisition, exploitation and exploration and holds working interests in approximately 67 fields in federal and state waters and a majority of its daily production is derived from wells it operates.  For more information on W&T Offshore, please visit its Web site at

Janet Yang, Finance Manager

Danny Gibbons, SVP & CFO
SOURCE W&T Offshore, Inc.

Marex Group Reaches Agreement to Acquire Spectron Group

Tuesday, 22 March 2011 02:35 PR Newswire

Marex Group Limited ("Marex"), the international broker of commodity derivatives, financial futures and foreign exchange, which is majority-owned..

NEW YORK, March 22, 2011 /PRNewswire/ -- Marex Group Limited ("Marex"), the international broker of commodity derivatives, financial futures and foreign exchange, which is majority-owned by JRJ Group ("JRJ") and its partners, Trilantic Capital Partners and BXR Group, today announces that it has reached agreement with Imarex ASA to acquire its 100% holding of Spectron Group Limited ("Spectron") for approximately $154.1 million.

Operating from offices in London, Continental Europe, Asia and the US, Spectron is a leading global broker of wholesale energy and other commodity products. Spectron provides electronic and voice brokerage services for a diverse range of mainly Over-the-Counter ("OTC") markets, including gas, power, environmental products, freight, crude oil and related products, coal, weather and metals. Spectron's broad client base includes traders and risk managers within large oil and gas corporations, energy utilities, commodities firms, financial institutions and charterers. The transaction is subject to FSA approval in the UK and expected to close in the second quarter of 2011.

The combination of the two companies is highly complementary, with each firm a leader in its respective markets. As a leading intermediary in European power and gas markets, Spectron is well positioned for a continuation of the secular growth trend in energy-related financial market activity, with transaction levels expected to continue to respond positively to the processes of liberalisation and integration necessary to realize key EU objectives for competitive, secure and sustainable European energy markets. Marex is a leading broker of metals, agricultural, energy and financial products. Together, the companies will comprise the world's largest independent, privately-owned broker in power, gas, fuel oil, metals, agriculture and other high growth asset classes, able to service clients across both OTC and exchange-traded arenas.

Roger Nagioff, CEO of Marex and Co-Founding Partner of JRJ Group, said: "The partnership with Spectron is transformational for shareholders, clients and employees of both firms. It's a highly complementary combination given Marex's longstanding expertise in exchange-traded commodity derivatives, and Spectron's market-leading execution capabilities in a broad range of energy-related OTC derivatives. This transaction is entirely consistent with, and supportive of, Marex's strategy of growing the firm to become the preeminent independent global broker across the commodities and financial asset classes."

Gordon Bennett, Managing Director of Spectron, said: "The partnership with Marex provides new opportunities for the clients and employees of the combined group. Marex has a successful track record in growing its business and providing top quality service for its clients. I am excited about working with the Marex team to develop the enlarged group into a world-leader across the energy and commodities sectors."

About Spectron

Spectron operates one of the largest global marketplaces for energy, commodity, freight and environmental products from its offices in London, Frankfurt, Oslo, Singapore and several cities across the US. Spectron Group is regulated by the Financial Services Authority in the UK and the National Futures Association in the US. Its screen-based trading system, combined with specialist voice brokers, serves users who trade physical and financial products in a number of wholesale markets, including natural gas, electricity, emissions, coal, metals and weather. About $500bn worth of products and contracts are transacted via the Spectron Group annually. For further information, please visit

About Marex

Marex is amongst the world's largest independent, privately-owned, brokers, providing execution, direct market access and clearing services in the metals, energy, agriculture, financial futures and foreign exchange markets. Marex's client base includes commodity producers and consumers, banks, brokers, CTAs, hedge funds and professional traders. Marex is a member of the London Metal Exchange, the CME Group exchanges, ICE US, NYSE Liffe, ICE Futures and Eurex and offers access to all major exchanges in the US and Asia. Marex is headquartered in London with offices in New York, Hong Kong and Geneva. Marex subsidiaries are regulated by the Financial Services Authority in the UK, the National Futures Association in the US and the Securities and Futures Commission in Hong Kong. For further information, please visit

J.P. Morgan plc acted as financial adviser to Marex on the acquisition and Reynolds Porter Chamberlain LLP and The Dontzin Law Firm LLP acted as legal counsel. PricewaterhouseCoopers LLP provided additional advice.

About JRJ Group

JRJ is a private investment firm established in January 2009. JRJ focuses exclusively on the financial services sector, providing capital, operational expertise and strategic guidance to enhance the value of its investments. For further information, please visit

Gavin Prentice, Marex
Tel: +44 (0)20 7650 4004

Ethan Levner, JRJ Group
Tel: +44 (0)20 7290 7050

Carole Cable, Brunswick Group
Tel: +44 (0)20 7404 5959

Jeremy Capstick, J.P. Morgan
Tel: +44 (0)20 7742 4000

Hong Kong
Ekaterina Alferova, Brunswick Group
Tel:  +852 3512 5093

New York
Michelle Lee, Brunswick Group
Tel:  +1 212 333 3810



Shell and Showa Shell Sekiyu supporting relief efforts in Japan

Shell and Showa Shell Sekiyu supporting relief efforts in Japan

Tuesday, 22 March 2011 16:30

Tokyo. Showa Shell Sekiyu K.K. and Shell said today they would make a combined donation of US $2 million to the Japanese Red Cross Society to provide disaster relief assistance in response to the catastrophic earthquake and tsunami in Japan. The Shell Group, in addition to this, has implemented a worldwide employee donation program to further support Japan's disaster relief efforts.

Shell's Country Chairman for Japan, Chris Gunner, said "Our hearts are heavy as we reflect on the thousands of lives lost and the enormous damage due to the earthquakes and the tsunami. Shell has been part of the Japanese community for more than 100 years. Financial support will not dull the pain of this tragedy, but it is important in helping to rebuild lives."

"Given the scale of this catastrophe and resulting human suffering, we want to do our part to assist with the relief and reconstruction efforts," said Shigeya Kato, Chairman of Showa Shell Sekiyu K.K.
All Showa Shell Sekiyu and Shell employees in Japan are safely accounted for and Showa Shell's refineries, marketing and distribution businesses are operational, apart from numerous retail service stations and a small number depots which were impacted in the Tohoku area. However, as a result of the earthquake and tsunami, and the nuclear power plant issues, Japan has suffered significant power generation loss, and refinery and depot shutdowns.

The shutdown of power plants in Japan and rolling power blackouts in the northern half of the main island, including around Tokyo, has seen an increase demand for imports of Liquefied Natural Gas (LNG) and other fuels. Shell and its LNG joint ventures are working with their Japanese customers to help ensure continuing and additional supplies of LNG into the country to meet these critical requirements. Since the time of the earthquake, six shipments of LNG from Brunei, two from Sakhalin and one diverted cargo from Nigeria have unloaded in Tokyo Bay, as well as cargoes to other locations in Japan, providing much needed gas supply. Further cargoes are expected to follow in the coming days.

In addition to the financial donation, Showa Shell Sekiyu has an emergency task force working with the Japanese government in prioritizing supply of petroleum products to the affected areas and maintaining the energy supply 'lifeline'. Its actions include:

In addition to the financial donation, Showa Shell Sekiyu has an emergency task force working with the Japanese government in prioritizing supply of petroleum products to the affected areas and maintaining the energy supply 'lifeline'. Its actions include:

* Terminating the export of refined petroleum products, including gasoline and diesel, this month to strengthen supply to the domestic market;

* Working around the clock to supply petroleum products to its service stations, and supplying other petroleum companies and government agencies in response to their requests;

* Expanding its distribution capabilities in Tokyo by strengthening the deployment of lorries;

* Providing food relief to the disaster area.


Exillion Discovers Oil in West Siberia

Exillion Discovers Oil in West Siberia

EWS I - 38
EWS I - 38 well which was spudded on 2 March 2011 was drilled in 17 days on an eastern part of the East EWS I field on a turn-key contract for a total consideration of 0.8 million.

The well encountered the Jurassic P reservoir at 1,858m which is 2m higher than previously thought. Results of wire line logging combined with oil shows and sample analysis whilst drilling, have confirmed the presence of at least 9m of net oil pay within the Jurassic. Testing of the well will be completed mid-April.

The well was drilled directionally 1.1km to the north-east from the existing well pad. On completion of testing the well will be connected up to existing production facilities. The well is a result of the continued application of 3D seismic combined with a thorough understanding of reservoir geology.

EWS I - 1

Exploration well EWS I -1 is located on the southern part of the EWS I field. The well was originally drilled in 1971, and was subsequently suspended due to the absence of production infrastructure.

In March 2011, after re-interpreting the well logs, the Group saw that wire line logging indicates the presence of 7.2 m of net oil pay within the Jurassic P reservoir, which represents more than a three fold increase from the previous estimate. The Group perforated additional intervals and the well flowed water-free oil naturally to the surface with a flow rate of 530 bbl/day on a restricted 8 mm choke.


Honda, Toyota extend Japan production halt

Honda (HMC) and Toyota (TM) are extending their shutdown of auto production in Japan due to a shortage of parts following a major earthquake and tsunami, the Associated Press reports. Toyota says its shutdown of 11 factories will be extended until Saturday because of difficulty securing components, while Honda will continue its production halt through Sunday


Northern Oil and Gas, Inc. Announces Upcoming Conference Presentations

Northern Oil and Gas, Inc. Announces Upcoming Conference Presentations

Tuesday, 22 March 2011 06:50 PR Newswire

Northern Oil and Gas, Inc. (NYSE/AMEX: NOG) ("Northern Oil") today announced that it has been selected to present at two forthcoming energy...

WAYZATA, Minn., March 22, 2011 /PRNewswire/ -- Northern Oil and Gas, Inc. (NYSE/AMEX: NOG) ("Northern Oil") today announced that it has been selected to present at two forthcoming energy conferences.  Management of Northern Oil will present at the Howard Weil Energy Conference March 27th - 31st, 2011, in New Orleans, LA and at the Independent Petroleum Association of America's Oil and Gas Investment Symposium in New York, NY April 11th – 13th, 2011.

Michael Reger, Chief Executive Officer, is scheduled to present at the Howard Weil Energy Conference in New Orleans, LA on Tuesday, March 29th at 11:35 AM Eastern.

Ryan Gilbertson, President, is scheduled to present at the Independent Petroleum Association of America's Oil and Gas Investment Symposium in New York, NY on Tuesday, April 12th at 4:35 PM Eastern.


Northern Oil and Gas, Inc. is an exploration and production company based in Wayzata, Minnesota. Northern Oil's core area of focus is the Williston Basin Bakken and Three Forks trend in North Dakota and Montana.

More information about Northern Oil and Gas, Inc. can be found at or by calling investor relations at 952-476-9800.


This press release contains forward-looking statements regarding future events and our future results that are subject to the safe harbors created under the Securities Act of 1933 (the "Securities Act") and the Securities Exchange Act of 1934 (the "Exchange Act").  All statements other than statements of historical facts included in this report regarding our financial position, business strategy, plans and objectives of management for future operations, industry conditions, and indebtedness covenant compliance are forward-looking statements.  When used in this report, forward-looking statements are generally accompanied by terms or phrases such as "estimate," "project," "predict," "believe," "expect," "anticipate," "target," "plan," "intend," "seek," "goal," "will," "should," "may" or other words and similar expressions that convey the uncertainty of future events or outcomes.  Items contemplating or making assumptions about actual or potential future sales, capital expenditures, market size, collaborations, and trends or operating results also constitute such forward-looking statements.

Forward-looking statements involve inherent risks and uncertainties, and important factors (many of which are beyond our Company's control) that could cause actual results to differ materially from those set forth in the forward-looking statements, including the following: oil and gas prices, our ability to raise capital, general economic or industry conditions nationally and/or in the communities in which our Company conducts business, changes in the interest rate environment, legislation or regulatory requirements, conditions of the securities markets, our ability to raise capital, changes in accounting principles, policies or guidelines, financial or political instability, acts of war or terrorism, other economic, competitive, governmental, regulatory and technical factors affecting our Company's operations, products, services and prices. 

We have based these forward-looking statements on our current expectations and assumptions about future events.  While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control.

Investor Relations
Erik Nerhus

Cairn Energy profits boosted by Indian oil field

Cairn Energy profits boosted by Indian oil field

 The company made US$1.1bn (£674m) in pre-tax profits last year, before extensive exceptionals, compared with US$53m (£32m) in 2009.

Production from the Mangala field began in August 2009, and has risen to 125,000 barrels per day.

 Cairn's exploration programme off Greenland will continue this year.

The company is awaiting permission to increase that to up to 240,000 barrels.

A more significant obstacle for the oil company is the need for Indian government approval of a sale of its majority stake in its Cairn India subsidiary.

Chief executive Sir Bill Gammell told BBC Scotland that the company is funded to continue its drilling programme off the coast of Greenland, even if it does not release capital on schedule from the sale of its controlling stake to India-based Vedanta Resources for at least US$6bn (£3.8bn).

He said Cairn Energy has been operating in India for 15 years, and that experience should be a help in unravelling the dispute with the state-owned oil company ONGC.

'Strong relationships'

Sir Bill said: "It's been difficult. I've always taken the view you're a guest in other people's country.

"It's been frustrating for us, there are rules, it's up to the Indian government how to play it.

"We've built strong relationships and partnerships, and in the end of the day, we tend to get the right resolution".

He added that "sanctity of contract" is important in India.

Cairn's main argument has been a government approval to break the previous deal with ONGC would undermine foreign investors confidence in India as having a reliable legal system.

On the 15 April deadline for the deal between Cairn and Vedanta, the chief executive said it was important to get "clarity" before that date.

Cairn's exploration programme off Greenland is scheduled to continue this year, with drill vessels hired for the drilling of four wells as well as seismic surveys.

It began last year, with results described as "encouraging".

Allies Expand Libya Air Campaign, Debate Chain of Command

Allies Expand Libya Air Campaign, Debate Chain of Command

March 22, 2011, 8:34 AM EDT

(Updates with oil prices in fifth paragraph, Erdogan in seventh, Turkish offer in 13th. For more on Middle East turmoil, see EXTRA and MET.)

March 22 (Bloomberg) -- Allied forces expanded their air campaign over Libya to thwart Muammar Qaddafi’s fighters and enable rebels to regain control of cities, as leaders debated who should be in overall control of the operation.
Aerial strikes enabled rebel forces to push out from their eastern stronghold of Benghazi as the United States Africa Command indicated that an F-15E jet crashed because of technical difficulties. At the same time, Norway is keeping its fighters grounded until there is clarity on the chain of command as France, the U.K. and allies including Turkey and the Arab states struggle to agree on whether NATO should guide the operation.
“The biggest obstacle to the Libyan intervention right now isn’t the Arab world but rather differences among France, the U.K. and the U.S. about who’s in charge,” Jan Techau, director of the Carnegie Endowment for International Peace in Brussels and former NATO defense analyst, said by telephone.

The conflict, which began in February in Benghazi, is the bloodiest in a series of uprisings that have spread across the Middle East this year and ousted the leaders of Egypt and Tunisia. Five members of the UN Security Council abstained from last week’s resolution that authorized the military operation, which is intended to limit civilian casualties.

Oil Markets

Oil traded near the highest price in more than a week as the airstrikes threatened to prolong a supply disruption. Crude for April delivery on the New York Mercantile Exchange was at $102 a barrel, down 33 cents, at 11 a.m. London time, after rising as high as $102.67. Yesterday, it gained $1.26 to $102.33, the highest settlement since March 10. Tension in the region is adding a risk premium of $15 to $20 a barrel to Brent oil prices, according to Societe Generale SA.

Libyan rebels in Benghazi said they have created a new national oil company to replace the corporation controlled by Qaddafi. Its assets were frozen by the United Nations Security Council. Libya has the largest oil reserves of any country in Africa, according to the BP Statistical Review of World Energy.

The option of the North Atlantic Treaty Organization taking charge of military operations may hinge in part on the extent of reservations expressed by Turkish Prime Minister Recep Tayyip Erdogan. Dialogue with the Libyan regime must continue, the premier said today in a speech to his party in parliament. Turkey has doubts over whether military intervention is justified, he said.

NATO Debate

Both Britain and Italy supported giving leadership to NATO, which requires unanimous approval from its member countries, including Turkey. The Italian Foreign Ministry said in a statement yesterday that NATO should “take on the command and control” of military operations.

Complicating matters, Arab League countries, who called for the no-fly zone, may not want to operate under NATO’s leadership, U.S. Defense Secretary Robert Gates said at a news conference March 20.
U.S. Vice Admiral Bill Gortney said Spain, Belgium, Denmark and Qatar have joined the coalition. The U.S., the U.K., France, Italy and Canada have at least 25 ships off the coast of Libya, including the French aircraft carrier Charles de Gaulle and the Italian carrier Giuseppe Garibaldi
The U.K. and U.S. were angered by France’s decision to launch the first attack March 20 without fully consulting its allies, the London-based Financial Times reported today, citing unidentified diplomats.

India's State Oil Companies Lose $90 Million a Day

India's State Oil Companies Lose $90 Million a Day

MARCH 22, 2011, 8:20 A.M. ET


NEW DELHI – India's state-run oil marketing companies are suffering a revenue loss of 4.08 billion rupees ($90.7 million) each day due to discounted fuel sales, Hindustan Petroleum Corp.Finance Director Bhaswar Mukherjee said Tuesday.

India's state-run fuel retailers, Hindustan Petroleum, Bharat Petroleum Corp. and Indian Oil Corp. sell some fuels at government-mandated below-market rates to help control inflation. Due to high global crude oil prices, revenue losses are mounting.

Hindustan Petroleum is currently losing 14.03 rupees for each liter of diesel sold and 23.55 rupees on each liter of kerosene, Mr. Mukherjee told reporters.

The state-run company is also losing 289.36 rupees for each liter of cooking gas, or liquefied petroleum gas, Mr. Mukherjee added.

Write to Rakesh Sharma at

Moscow scolds Bulgaria over oil pipeline

Moscow scolds Bulgaria over oil pipeline
March. 22, 2011 at 8:25 AM

MOSCOW, March 22 (UPI) -- The Bulgarian government is in part to blame for all-but shutting down plans for the Burgas-Alexandroupolis oil pipeline, a Russian energy executive said.

Russian Energy Minister Sergei Shmatko said in February that Moscow was interested in the project but had to suspend most of the work because of delays from Sofia.

Bulgaria in 2007 signed an agreement with Russia and Greece to build the 174-mile oil pipeline to bypass crowded waterways near Turkey by crossing an overland route to the Aegean Sea.

Mikhail Barkov, a vice president at Russian pipeline company Transneft, was quoted by Russia's state-run news agency RIA Novosti as saying the project would be scaled down if Sofia doesn't take it seriously.

"If the Bulgarian side fails to treat the Burgas-Alexandroupolis positively, and does not adopt a positive environmental assessment for the oil pipeline, there will be a decision to put the company into a hibernation mode," he said.

Moscow claims the Bulgarian government owes about $10.3 million to the project consortium.

Bulgarian officials brushed off past threats from Moscow, however, saying the rhetoric was intended more as a negotiation tactic than as a statement of intent.


[Oil and Gas] - Libya oil faces steep hurdles before return to global markets

Libya oil faces steep hurdles before return to global markets

March 21, 2011, 8:17 p.m. EDT

By Claudia Assis, MarketWatch

Reuters - Rebels walk past a burning Al-Sedr Oil Terminal after it was hit by pro-Gaddafi forces during clashes between Ras Lanuf and Bin Jawad March 9, 2011.

 The Iraq invasion was a major conflict in which much of the oil infrastructure suffered not only damage through warfare but also through looting.
SAN FRANCISCO (MarketWatch) — Caught between Libyan rebels, outside forces and Moammar Gadhafi, it could take years before much of Libya’s oil flows to world markets, energy analysts cautioned Monday.

The crisis, which deepened after western forces began bombing Libyan defenses Saturday, bears a resemblance to the situation in fellow OPEC-member Iraq, where output was severely disrupted by two Gulf wars and a diplomatic battle over who controlled the revenue from its sale.

Some of the Libyan oil fields could avoid major damage because they are far away from cities and towns, the target of much of the past weeks’ fighting.

“However, there are no guarantees Gadhafi and his motley crew of fellow believers ... will not follow a scorched earth policy,” said Leo Drollas, chief economist at the Centre for Global Energy Studies in London.

That’s one danger facing Libyan oil fields. As Iraqi forces under Saddam Hussein withdrew from Kuwait during the first Gulf war, they burned oil wells, Drollas noted.

The United Nations on Friday authorized military action in Libya to protect civilians amid fighting between forces loyal to Gadhafi and rebels seeking an end to his rule. Fighting is mostly concentrated in eastern Libya -- where most of the country’s oil’s production is located. Even the most optimistic analysts don’t expect Libyan oil back on line until after the first half of the year.

Output has already been severely curtailed. Most estimates point to production down by about 1 million barrels a day, J.P. Morgan said in a note to clients Monday. Production before the uprising was estimated around 1.6 million to 1.8 million barrels a day, mostly exported to Europe and, to a lesser degree, to Asia.

“U.N. sanctions have effectively imposed an embargo on Libyan exports. Based on the experience in Iraq, we continue to emphasize Libyan production will remain low and volatile for many years,” they said.

Support for crude-oil prices is likely to rise as demand ramps up ahead of the Northern hemisphere summer, although experts say most of Libya’s strife has been factored into the recent high prices for oil futures.

Oil futures for April delivery /quotes/comstock/21n!f:cl\j11 (CLJ11 102.21, -0.12, -0.12%)   rose 1.3% to $103.33 a barrel on the New York Mercantile Exchange Monday, extending the year’s gains to roughly 13%. Oil topped the $100 mark as some pro-democracy protests in North Africa and the Middle East turned to violent conflicts with the ruling regimes, particularly in Libya. Brent crude, the European benchmark, has shot even higher.

Iraq comparisons

Iraq’s oil output following the wars is serving as a model for energy analysts trying to determine how long Libyan oil could be unavailable to European and other refiners.

Production in Iraq was around 2.5 million barrels a day right before the invasion in March 2003
It was back at such levels only in 2007, Drollas said. Recent estimates put Iraq’s current production at 2.8 million barrels a day, Drollas added.

In Libya, much hinges on how the oil installations fare as the battles rage on, and how soon foreign workers will be able to return to the country, said Samuel Ciszuk, a senior Middle East energy analyst at IHS Global Insight in London.

Oil installations near the town of Ras Lanuf have been damaged as the conflict escalated, but experts say most infrastructure has been spared.

As for replacements for Libya’s light, sweet crude, the world has available oil from Nigeria and Angola, which are similar to Libyan oil. Unlike 2008, when Nigerian oil disruptions contributed to the record high oil price, these and other African countries have been able to keep their production, he said.

Some of the heavier Saudi Arabian oil, although not a perfect substitute, is also appropriate for refineries previously using Libyan oil with the addition of natural gas liquids and other liquid hydrocarbons.

But the full price impact of the conflict in Libya may yet to be seen, said Sarah Emerson, managing director of Energy Security Analysis Inc. in Massachusetts.

“We’re in the shoulder season,” she said. Heading to peak season, there may not be enough light, sweet oil to go around, she added. “We may not have the right quality at the right time of the year.”

More sophisticated refineries in Europe and elsewhere are able to process heavier crude but there’s only so much tweaking refiners will be able to do, Emerson said.

Switching grades “is more than a little throw off. We lost a very specific light sweet crude and it is not that easy to replace it.”

The spectrum of another conflict elsewhere in the world also haunts markets.

“The extra capacity (from Saudi Arabia) is there but it tights up the world capacity,” Drollas said. If oil suffers another shock somewhere, “then we are back at 2008.”

Oil hit a record high in the summer of 2008, when it soared to $147 a barrel only to fall to below $50 before the year was out.

Oil around $150 a barrel this year would mean “a slip back into the recession next year,” Drollas said. Prices are at a level they may be already hurting global growth, he added.

The only possible resolution for the conflict is a Libya without Gadhafi, Drollas said. “A wounded Gadhafi is worse, metaphorically speaking,” he said.

Claudia Assis is a San Francisco-based reporter for MarketWatch


[Oil and Gas Post] - Fuel duty may be frozen, hints George Osborne

Fuel duty may be frozen, hints George Osborne

The government may scrap the rise in fuel duty planned for next month, it has hinted.

Chancellor George Osborne told the BBC's The Andrew Marr Show that he was "looking very carefully" at freezing the duty in Wednesday's Budget.

He said he understood the pressure motorists were under from record-high petrol prices.

Mr Osborne also said the Budget would contain measures to help tackle record-high youth unemployment.


A freeze on fuel duty has been widely anticipated.

The price of petrol has risen sharply in recent weeks to more than £1.30 a litre on average.

The is largely due to increases in the price of oil due to concerns about supply because of unrest in the Middle East and Libya.

Most observers say they expect the price of both petrol and diesel to continue rising, and motoring organisations such as the RAC have called on the government to scrap the planned rise in duty due to take effect in April.

It is due to go up by inflation plus 1p, making a total rise of about 4p per litre.

Others said Mr Osborne should look beyond the cost of fuel.

"The chancellor should tackle the impact of rising fuel prices by focusing on the root of the problem - the UK's economic addiction to oil," said Simon Bullock at Friends of the Earth.

"Urgent measures are needed to make public transport cheaper and more convenient, encourage greener motoring and reduce our dependency on car travel."

Youth unemployment

Shadow chancellor Ed Balls, also speaking on The Andrew Marr Show, reiterated his call for the government to reverse the VAT increase on petrol.

He said it was "nonsense" to argue that the European Union would not permit such a reverse.

The government increased the VAT rate in January from 17.5% to 20%.

Mr Osborne also said he would make available additional help for teenagers to gain access to apprenticeships and "high quality vocational education".

The unemployment rate for 18-24 year olds is currently at a record high of 18.3%.


[Oil and Gas Post] - Gasoline Shipping Profit Seen Rising 24% After Earthquake: Freight Markets

Gasoline Shipping Profit Seen Rising 24% After Earthquake: Freight Markets

By Alaric Nightingale and Ann Koh - Mar 22, 2011 4:28 PM GMT+0700

Profit from shipping gasoline to the U.S. from Europe in the second quarter will rise 24 percent as disruptions to Japanese imports divert cargoes across the Atlantic, increasing demand for vessels.

Forward freight agreements, traded by brokers and used to hedge or bet on future transport rates, will rise to $14,000 a day on the route, from $11,252 yesterday, said Erik Nikolai Stavseth, an analyst at Arctic Securities ASA in Oslo. His recommendations on stocks of shipping lines returned 24 percent in the past six months, data compiled by Bloomberg show.

The March 11 earthquake and tsunami that battered Japan closed petrochemical plants that buy European naphtha, an oil product than can be converted into gasoline or used to make plastics. European refiners will need to find alternative markets while those plants remain shut, increasing demand and profit for vessels in the Atlantic Ocean at a time when earnings in most shipping markets are slumping.

“It’s highly likely that a surplus of gasoline or naphtha or both will develop in Europe,” Harry Tchilinguirian, the head of commodity markets strategy at BNP Paribas SA in London, said by e-mail March 18. “Refiners will want to export as much of that as possible to the U.S. to support domestic margins.”

Japanese petrochemical plants use naphtha to make ethylene, a material for plastics, and about 22 percent of capacity was curbed by the March 11 disaster, according to Purvin & Gertz Inc., an energy consultant based in Houston. Japan is the second-biggest ethylene producer in Asia after China, data compiled by Bloomberg show. European naphtha shipments to Asia will probably slump by 78 percent to 100,000 metric tons this month, a Bloomberg survey of five traders showed.

Energy Consultant

“The outlook for naphtha is very bearish as six petchem plants are offline and much of the manufacturing activity at Sony, Toyota, Toshiba, etc., has been halted,” Richard Gorry, a director at Vienna-based JBC Energy GmbH, a consultant and researcher, said by phone March 18.

For European refineries, that means a glut of naphtha and one way of dealing with the surplus is to blend it into gasoline and then ship it to the U.S., the largest fuel market, according to Tchilinguirian.

Gasoline at New York Harbor cost as much as 6 percent more than in Europe yesterday, according to data compiled by Bloomberg. The spread is wide enough to allow traders to ship the fuel profitably across the Atlantic Ocean, according to RS Platou Markets AS and Pareto Securities AS, both Norwegian investment banks.

More Cargoes

More cargoes means more demand for the 590-foot tankers used on the route, operated by companies including Copenhagen- based Torm A/S, Europe’s biggest publicly traded oil-products shipping line. Mitsui O.S.K. Lines Ltd., based in Tokyo, and A.P. Moeller-Maersk A/S, headquartered in Copenhagen, also own the vessels, known as medium-range tankers.

Traders of freight forwards are already anticipating the surge in demand in the Atlantic, with second-quarter contracts jumping 8.8 percent on March 18, according to Imarex ASA, an Oslo-based broker of the derivatives.

Rental income on the route jumped 79 percent this year as demand strengthened, according to the Baltic Exchange in London, which publishes rates for more than 50 maritime routes. That beat the 6.6 percent advance in the Baltic Clean Tanker Index, a gauge of six different routes. Returns in the spot, or single voyage, market rose 1.1 percent to $14,607 a day yesterday, Baltic Exchange data show.

Volatile Rates

Rates are volatile, moving 10 percent or more in all but six of the last 31 months. They doubled in four of those months.
The improving returns on medium-range tankers contrasts with a decline for other parts of the merchant fleet. Income on capesizes, used to haul coal and iron ore, slumped 54 percent this year while returns for supertankers carrying crude fell 18 percent, Baltic Exchange data show. Container shipping costs climbed 26 percent, according to a gauge from the Hamburg Shipbrokers’ Association.
Naphtha and gasoline are part of the so-called light-end products derived from crude, accounting for about 35 percent of the total depending on the type of crude and the refinery used to process it, according to data compiled by Bloomberg.
Refineries produce naphtha when they process crude oil. This in turn is split into heavy and light naphtha. While the light variety is more commonly used by the petrochemicals industry, it can be blended into gasoline, said Mike Lazer, vice president of KBC Market Services, an adviser to the energy industry based in Walton-on-Thames, England. Heavy naphtha can be made into gasoline with the addition of high octane components that make it more combustible, he said.

Premium Demanded

As refineries and factories in Japan shut down this month, the premium demanded for naphtha in Asia relative to Europe fell to $13.97 a barrel so far this month from $15.21 last month, according to data from PVM Oil Associates Ltd., a London-based broker. The premium allows traders in Europe to pay for shipping costs and profit from sending cargoes to Asian customers.
European refiners are losing about $8 for each barrel of naphtha they make and earn about $5 for every barrel of gasoline, according to data compiled by Bloomberg.
More gasoline cargoes to the U.S. may mean more business for Torm, a company founded in 1889 that now operates a fleet of about 130 product tankers of various sizes, carrying everything from jet fuel to diesel. The shares slumped 21 percent this year and the company said March 10 it would probably report a third consecutive annual loss in 2011. Just three of the 12 analysts covering the company and tracked by Bloomberg rate it a “buy.”

Head of Tankers

Tina Revsbech, head of tankers at Torm, said it was too soon to say whether transatlantic cargoes would increase as a result of the events in Japan.
Global shipments of oil products, including naphtha, will advance 3 percent this year, according to data from Clarkson Research Services Ltd., part of the world’s largest shipbroker. The fleet will expand 9 percent to 114.9 million deadweight tons, a measure of carrying capacity, Clarkson estimates.
The prospects for earnings on at least one route may be better than that ratio suggests.
“The product tanker market is expected to move higher in the wake of the Japanese earthquake,” said Stavseth of Arctic Securities. “When Japan stops importing there’s an excess and it really shifts the trade volumes.”
To contact the reporters on this story: Alaric Nightingale in London at; Ann Koh in Singapore at


[Oil and Gas Post] - Oil Slips From Two-Week High on Speculation Mideast Risk Limited to Libya

Oil Slips From Two-Week High on Speculation Mideast Risk Limited to Libya

By Grant Smith and Ann Koh - Mar 22, 2011 4:22 PM GMT+0700

Crude oil retreated from its highest price in almost two weeks amid speculation that supply disruptions from political unrest in North African and the Middle East may be confined to Libya.
Futures slipped after climbing as much as 0.3 percent as demonstrators in Yemen spent the night on streets to maintain pressure on President Ali Abdullah Saleh, who is facing a growing internal revolt. Tension in the region is adding a risk premium of $15 to $20 a barrel to Brent oil prices, according to Societe Generale SA.

“The unrest in Libya seems to be priced in almost completely by now,” Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt, said in an interview with Bloomberg television. “The price will stay at elevated levels of around $110 to $120 for several months and will drop back to $90 by the year-end.”

Crude for April delivery on the New York Mercantile Exchange was at $102.05 a barrel, down 28 cents, at 9:15 a.m. London time, after rising as high as $102.67. Yesterday, it gained $1.26 to $102.33, the highest settlement since March 10. The April contract expires today. The more-actively traded May futures were down 22 cents at $102.87 a barrel. Brent oil for May settlement was at $114.65, down 31 cents, on the ICE Futures Europe exchange in London after rising as much as 0.5 percent. The spread between the two May contracts narrowed to $11.80 a barrel from $11.87 yesterday.

Regional Unrest

Regional turmoil has toppled the leaders of Tunisia and Egypt and reached Yemen, Bahrain and Syria. Societe Generale raised its forecast for Brent by $11 to average $109 a barrel this year as political risks increased, analysts led by Michael Wittner said in a report dated yesterday.

Allied forces are expanding their air campaign over Libya in an effort to thwart Muammar Qaddafi’s fighters and enable rebels to control cities, such as the opposition capital of Benghazi, which had been under attack by troops loyal to the regime. The Libyan leader denounced the coalition allied against him, which includes the U.S., the U.K. and France, as “the party of Satan.”

Libyan output has fallen to fewer than 400,000 barrels a day, Shokri Ghanem, chairman of Libya’s National Oil Co., said on March 19. The country produced 1.59 million barrels a day in January, according to estimates compiled by Bloomberg. Exports may be halted for “many months” because of sanctions and damage to facilities, the International Energy Agency said.

Libyan oil production is likely to remain disrupted for the rest of this year, said Lawrence Eagles, head of commodities research at JPMorgan Chase & Co. in New York.

Protest in Yemen

Thousands of Yemenis spent the night on streets across the country to maintain pressure on President Ali Abdullah Saleh, who is facing a growing internal revolt by army leaders, ministers and diplomats. Yemen produced about 298,000 barrels of oil daily in 2009, according to BP Plc data.

Military officers including Ali Muhsin al-Ahmar, commander of the first armored division, and Mohammed Ali Muhssein, commander of the eastern region, abandoned the regime yesterday. Their move was a result of the crackdown three days ago that left dozens dead, said Mohammed al-Sabri, an opposition leader.

Bahrain’s government declared a three-month state of emergency on March 15 after troops from Saudi Arabia and other Arab Gulf states arrived to help in quelling more than a month of protests.

Japan is delivering more relief supplies in areas hardest hit by the March 11 earthquake as workers restored power to two reactors at a crippled Fukushima Dai-Ichi nuclear power plant yesterday, prompting Prime Minister Naoto Kan to say there was “light at the end of the tunnel.”

Short-Term Drop

“The recent tragic events in Japan will result in a sharp short-term drop in economic activity but is likely to be followed by a strong recovery driven by reconstruction and replacement of durables which would boost the demand for many commodities,” Societe Generale’s analysts said.

Japan was responsible for 5.2 percent of global oil demand in 2009, according to BP, which publishes its Statistical Review of World Energy each June. Japan is the third-biggest crude- consuming country, after the U.S. and China.

To contact the reporters on this story: Ann Koh in Singapore at; Grant Smith in London at


[Oil and Gas Post] - Samsung wins $2.76 bn project in Saudi Arabia

Samsung wins $2.76 bn project in Saudi Arabia

SEOUL: South Korea's Samsung Engineering Co. said Tuesday it had signed a $2.76 billion deal to build a natural gas liquid complex in eastern Saudi Arabia .

Under the deal signed with Saudi Arabia's state-run oil company, Aramco , Samsung Engineering will complete the complex in Shaybah oil and gas field by June 2014.

The plant will produce 750,000 barrels of crude oil and more than 200,000 barrels of natural gas liquids a day.

Samsung Engineering has now secured five projects worth a total of $5 billion, including a power plant project in Wasit, 50 kilometres (30 miles) north of the industrial city of Jubail.


[Oil and Gas Post] - Japan’s Coal, Gas Demand to Rise After Quake, New Hope Says

Japan’s Coal, Gas Demand to Rise After Quake, New Hope Says

March 22, 2011, 2:07 AM EDT
By Elisabeth Behrmann

(Updates to add closing share price in fourth paragraph.)
March 22 (Bloomberg) -- Japan’s coal and natural gas demand is likely to rise after the nation’s biggest earthquake this month knocked out nuclear-powered generators, said New Hope Corp., an Australian coal producer.

“I would expect increased requirements to burn coal and gas over the next few years,” Robert Neale, chief executive officer of the Ispwich, Queensland-based company, said today in a phone interview. Coking coal, in particular, would be needed “because you’ll have at least five or more years of reconstruction, which is going to require steel,” he said.

Japan, which depends on imported fuel for most of its needs, is seeking alternatives to nuclear power after the March 11 quake forced the shutdown of 11 reactors. Five years may be needed to rebuild after the disaster, the World Bank said.

New Hope fell 0.2 percent to A$4.89 at the 4:10 p.m. close in Sydney trading. Shares in the company have risen 0.8 percent this year, compared with the benchmark S&P/ASX 200 Index’s 2.2 percent fall.

New Hope reported first-half profit of A$407 million ($409 million), a rise of more than fourfold following the sale of the company’s stake in Arrow Energy Ltd. The company has a cash balance of about A$1.6 billion following the A$238 million acquisition of Northern Energy Ltd., Neale said.

Demand for coal will rise to make up for the lost nuclear capacity because it’s cheaper than oil and gas, and also due to negative public sentiment toward nuclear power, Andrew Harrington, an analyst Patersons Securities Ltd., said in a report. “We believe that the negativity surrounding nuclear energy will see increased demand for fossil fuels including and especially coal.”

Coal producers likely to benefit from increased demand include Gloucester Coal Ltd., New Hope, Whitehaven Coal Ltd. as well as developers Aston Resources Ltd., Cockatoo Coal Ltd. and Riversdale Mining Ltd., said Harrington.

--Editors: Keith Gosman, Andrew Hobbs
To contact the reporter on this story: Elisabeth Behrmann in Sydney at
To contact the editor responsible for this story: Andrew Hobbs at