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Oil and Gas Energy News Update

Sunday, April 10, 2011

Kuwait seeks to import Iraqi gas in Shell deal

Kuwait seeks to import Iraqi gas in Shell deal

Apr 11, 2011
Tamsin Carlisle

Kuwait is seeking to import gas from Iraq through a deal with Royal Dutch Shell.
The emirate burns large volumes of oil in its power plants as it has insufficient supplies of cleaner-burning gas.

It has contracts with Shell for summer imports of liquefied natural gas (LNG) and for a complex project to exploit deep gasfields near its border with Iraq, but that project will take years to develop.

In the meantime, Kuwait is seeking to boost imports, some of which may come from the vast gas resources of its neighbour.

"Kuwait is not negotiating with the Iraqi government in this regard, but with international oil companies in Iraq that are developing oil and gas fields there," the Kuwaiti newspaper Al Jarida has reported, citing a source in the state gas industry.

The emirate was hoping to secure a deal for Iraqi gas to start being delivered within the next 12 to 18 months, the official said.

"It is likely that the Kuwaitis have approached Shell, which is in the final stages of negotiating an associated gas-gathering and monetisation joint venture with state-owned South Gas Company in Iraq and Japan's Mitsubishi," said Samuel Ciszuk, the senior Middle East energy analyst at IHS Global Insight.

The much delayed Shell-led venture would gather large gas volumes produced from southern Iraq's big oilfields. The gas there is now being flared, or burnt off.

The priority use for the gas is to fuel Iraq's electricity sector but surplus may be available for export in the first few years of the project while power plants are built.

Shell has suggested temporary exports through a proposed floating LNG terminal it could build within 18 months of signing a contract.

"The Iraqis and Shell might in the end prefer the flexibility of LNG over piping gas to Kuwait," Mr Ciszuk suggested.

At an oil and gas summit in Kuwait last week, Mohammed Hussain, the deputy chairman of Kuwait Oil Company (KOC), said gas supply had become a critical issue for Kuwait and KOC had a long-term plan to nearly quadruple gas output to 4 billion cubic feet a day by 2030.

But LNG imports to Kuwait, which began in 2009, would continue to be needed for some time before the emirate could sufficiently boost its domestic gas output, said Hashim al Rifai, the managing director of planning at Kuwait Petroleum Corporation, the parent of KOC.
The imports have come from as far away as Sakhalin Island in Russia.

Some of the additions to Kuwait's domestic gas output are expected to be associated with increased oil production.

But the emirate faces an uphill battle to develop its marginal oil resources and refurbish large oilfields that were badly damaged in the First Gulf War.

Partnership in clean energy prospers

Partnership in clean energy prospers

Apr 11, 2011
Guy Warrington

While fossil fuels may have been the framework within which energy co-operation between the UK and the UAE began, we are now increasingly focusing on working together to develop and pioneer new technologies based on alternative and renewable energy.

The Abu Dhabi Future Energy Company's Masdar City is the prime example. This features the expertise of British companies such as Foster+Partners, which has designed the city's Master Plan and completed the recently inaugurated Masdar Institute, and Mott MacDonald, which is delivering infrastructure development and design.

The Masdar Institute complex uses 51 per cent less energy than a typical building of its size.
Further collaboration between the UK and the UAE is reflected in the work being done on the London Array, an offshore wind farm under construction in the Thames Estuary, which will generate enough power for almost 500,000 homes.

Its first foundations were installed last month, and it is expected to become the world's largest offshore wind farm when completed. Mubadala Development, a strategic investment company owned by the Abu Dhabi Government, has invested more than Dh1.7 billion (US$462.8 million) in this project through Masdar.

Both our governments recognise that energy sources of the future must diversify. However, in the short term, reality will follow vision only if profitability is not compromised.

Adapting to an uncertain climate: a world of commercial opportunities, an Economist Intelligence Unit report commissioned by UK Trade & Investment, focuses on the commercialisation of low-carbon goods and services.

About 150 companies based in the Gulf, among a global total of more than 700, were polled about the potential business opportunities involved in adapting to anticipated changes in the global climate.

The results show that while the Middle East and Africa are right on the global average in responding actively in terms of planning or adapting to the effects of climate change, the UAE is well above the average in taking action on these issues. This is not surprising, given the leadership the UAE has shown in committing to a low-carbon economy, which is leading a drive of wider engagement by the business community.

It has become clear that successful businesses of the future will be those that see the opportunities, and act on them.

Many British companies, such as Atkins, the engineering consultancy responsible for UAE landmarks such as the Burj Al Arab and the Dubai Metro, have embraced the challenge, building adaptation into their short and long-term business plans. Professional service companies, such as PricewaterhouseCoopers in the UK, have teams to help businesses capitalise on climate-fuelled opportunities, as well as manage the risks.

The British government is also working to boost investment and create innovation in the UK energy market by creating a green investment bank, and launching an ambitious electricity market reform programme.

These present great opportunities for future partnership, especially given the UAE's commitment to being a world-class low-carbon leader.

Areas for future development include the world's largest offshore wind regime and new nuclear power construction across the UK.

While climate change is an issue that will affect businesses in all sectors of the economy, creating, identifying and acting on opportunities for innovation and commercialisation are significant.

By working together in partnership, as governments and through enterprise, the UK and the UAE can lead the way in securing prosperity through adaptation, for today, and for generations to come.

BP investors poised to voice anger at executive bonuses

BP investors poised to voice anger at executive bonuses

10 April 2011

London. BP is preparing for an acrimonious showdown with investors at its annual meeting on Thursday as disgruntled shareholders object to boardroom bonuses and US Gulf Coast residents fly to London to confront top directors over last year's Deepwater Horizon oil disaster.

The Association of British Insurers (ABI) has issued an "amber top" alert to fellow institutional investors warning them to examine the issues surrounding bonuses of more than £100,000 to two of BP's top executives – finance director Byron Grote and downstream chief Iain Conn.

Critics view the payments as inappropriate following the environmentally catastrophic oil spill. BP argues that the executives met targets in their particular roles and that neither played any part in its offshore exploration division.

"Shareholders have to decide if they think these bonuses are appropriate after the year the company had," said an ABI spokesman.

Meanwhile, the corporate governance consultancy Pirc has urged investors to oppose BP's remuneration report over payouts to outgoing executives, including former chief executive Tony Hayward, who got £1m compensation for loss of office and has share awards yet to vest worth as much as £8m. Glass Lewis, a large US shareholder advisory firm, is urging a vote against BP's report and accounts.

BP is approaching the first anniversary of the blowout of its Macondo oil well off the Louisiana coast. The explosion last April of BP's Deepwater Horizon rig killed 11 people and caused a spill that polluted fishing areas and fouled hundreds of miles of beaches. Groups including Greenpeace and Christian Brothers Investment Services will make their voices heard. Some will attempt to present BP with a "black planet" award for ecological failures.

A delegation from the Gulf Coast will be at the meeting, to be held at the ExCel centre in Docklands. Among them will be Diane Wilson, a fourth-generation shrimper from Texas who was arrested last year for pouring an oil-like substance over herself in a congressional committee room while Hayward was giving evidence.

Wilson says oil is still washing up on the beaches around her home town of Seadrift, Texas – and that paperwork surrounding compensation for victims is impenetrable. She told the Observer she is planning "something more than just getting up" and asking a question: "What they're messing with is an entire way of life."

Others object to BP's £1.6bn "Sunrise" project to excavate oil from Canada's tar sands. But unlike last year, there will be no formal resolution protesting at BP's conduct.

Shell joins the project as a gas supplier and equity participant

Shell joins the project as a gas supplier and equity participant

10 April 2011 14:43

San Ramon. Chevron Corporation (NYSE: CVX) today announced the signing of agreements with Shell Development (Australia) Pty Ltd to bring Shell into the Chevron-operated Wheatstone Project as a natural gas supplier and equity participant.

George Kirkland, vice chairman, Chevron Corporation, said, "Chevron is pleased to welcome another participant into the Wheatstone Project. The Wheatstone hub will provide a reliable new source of energy to Australia and the region. It will also further enhance Chevron's position as a leading supplier of liquefied natural gas (LNG) in Asia-Pacific."

Under the unitization agreement with Chevron's Australian subsidiaries, Shell will assume an 8 percent participating interest in the Wheatstone and Iago natural gas fields in the Chevron-operated permits WA-253-P, WA-17-R and WA-16-R, located offshore northwest Australia.
The Wheatstone and Iago gas fields will supply Trains 1 and 2 of the Wheatstone Project, located onshore at Ashburton North in Western Australia.

Shell will also assume a 6.4 percent participating interest in the project facilities, with Chevron remaining project operator.

Chevron Australia managing director, Roy Krzywosinski, said front-end engineering and design (FEED) activity on the Wheatstone Project is nearing completion.

"The Wheatstone Project is set to become one of Australia's largest resource projects and Australia's first LNG hub. A final investment decision is expected in the second half of this year once environmental approvals and other associated agreements are finalized with various levels of government."

The first phase of the Wheatstone Project consists of two LNG processing trains with a combined capacity of 8.9 million tonnes per annum (MTPA) and a domestic gas plant.

Chevron is one of the world's leading integrated energy companies, with subsidiaries that conduct business worldwide. The company's success is driven by the ingenuity and commitment of its employees and their application of the most innovative technologies in the world. Chevron is involved in virtually every facet of the energy industry.

The company explores for, produces and transports crude oil and natural gas; refines, markets and distributes transportation fuels and other energy products; manufactures and sells petrochemical products; generates power and produces geothermal energy; provides energy efficiency solutions; and develops the energy resources of the future, including biofuels. Chevron is based in San Ramon, Calif.

More information about Chevron is available at