BP Moscow Office Resumes Work After Raid; Documents Sealed

- BP Moscow Office Resumes Work After Raid; Documents Sealed

Monday, September 05, 2011
Dow Jones Newswires
MOSCOW
by William Mauldin

BP's Moscow office resumed work Monday following a raid last week by Russian court officials, a spokesman in Moscow for the U.K. oil giant said.

Documents gathered by the court bailiffs are currently sealed inside the office, and no papers have been removed, said the spokesman, Vladimir Buyanov.

BP said Friday that the search had been halted for 10 days and that it would challenge the operation in court.

Russian bailiffs on Wednesday and Thursday entered the BP office with special police armed with automatic weapons, as part of a search requested in a $3 billion lawsuit by investors in a traded unit of the oil company's Russian joint venture.

BP has called the lawsuit "absurd" and the search "unfounded" and directed at the wrong unit of the company.

The minority investors' attorneys said the search was carried out according to Russian law, regardless of which BP unit was searched.

The minority investors are seeking documents related to BP's Russia joint venture, TNK-BP Ltd., and to a failed Arctic deal between BP and state-controlled oil company Rosneft, as part of a lawsuit brought in Siberia's Tyumen Region Arbitration Court.

The minority investors, who live in Tyumen, have filed suits against BP and two of the U.K. company's executives at TNK-BP, claiming at least $3 billion in lost opportunities as a result of the failed Arctic deal with Rosneft.

The raid suggests BP's difficulties in Russia are likely to continue despite its efforts to put the fiasco of the Rosneft deal behind it, energy analysts said. BP initially disclosed the landmark alliance with Rosneft in January but found a deal blocked by opposition from its billionaire partners in TNK-BP Ltd.

Copyright (c) 2011 Dow Jones & Company, Inc.

Oil & Gas Post

Promote Your Page Too
LINK

SBM Offshore CEO to Step Down after Cost Over-runs Hit Profits

- SBM Offshore CEO to Step Down after Cost Over-runs Hit Profits

Thursday, August 18, 2011
Dow Jones Newswires
AMSTERDAM
by Robin van Daalen & Patrick Buis

SBM Offshore Thursday reported semi-annual results that bested analyst expectations, but announced plans to replace its chief executive after a large cost-overrun pushed its results into the red.

SBM, which owns and operates offshore units for the oil and gas industry, reported a net loss of $265.3 million, a big drop from the $77.6 million net profit a year ago, but somewhat higher than analyst expectations. SBM pointed to record orders and cited heavy interest for additional work from Brazil, Angola and other petroleum centers.

But company results have been tarnished by a $450 million impairment charge related to two problem projects that has weighed on shares since it was announced in July. SBM announced that "in light of recent events," Chief Executive Tony Mace would step down and it would recommend Chief Operating Officer Bruno Chabas for the top spot.

"Stepping down is a matter of taking responsibility," Mace said at a meeting without giving further detail.

SBM shares opened higher Thursday following the disclosure, but later gave up their gains following a broader market retreat. At 11:52 GMT, SBM shares were down 3.2% to EUR13.50, while the Amsterdam index was down about 2.6%.

SBM Offshore booked a $450 million impairment charge after it was unable to reach a settlement for additional compensation for cost overruns on SBM Offshore's Yme and Deep Panuke platforms which have been installed on their respective offshore locations in Norway and Canada. Legal action in the case of the Deep Panuke platform has been initiated in April against EnCana and arbitration proceedings were initiated in January for the Yme platform against Talisman But SBM said the outcome is uncertain.

Neither EnCana nor Talisman were available for comment Thursday. Talisman Chief Executive John Manzoni has publicly complained that a "poorly executed fabrication contract" has hindered the project.

ING said SBM's underlying results were "reasonable" and praised the decision to replace Mace as "a valuable step" that could spur a "fresh look" at the firm. But ING said it wanted more details on the "huge" $450 charge.

Turnover for the first six months of 2011 rose 6% to $1.46 billion, driven by fleet operations, where SBM operates Floating Production Storage Offloading (FPSO) units for its clients on a leasing basis.

Earnings before interest and taxes, or Ebit, excluding the impairment charge was $236 million, compared to $146 million a year ago. The increase was mainly driven by the solid performance of the Turnkey Systems segment, the company said.

Copyright (c) 2011 Dow Jones & Company, Inc.

Oil & Gas Post

Promote Your Page Too
LINK

Indonesia After OPEC

- Indonesia After OPEC

Monday, August 15, 2011
Rigzone Staff
by Barbara Saunders

Back in 1990, former Indonesian OPEC minister Ginandjar made a jarring statement: his country would become a net oil importer and "have to drop out of OPEC" and also, that the large, multi-island Southeast Asian nation would have to diversify its energy sources to fuel its growing and modernizing population.

A few years ago, in 2008, Ginandjar's prediction came true as Indonesia pulled out of OPEC. Now, Indonesia's petro-regulatory agency BPMigas has confirmed that oil production is declining – but announced 10 new projects heavily tilted toward natural gas that should help with the energy diversification goal and Indonesia's continuation as a major LNG exporter.

The announced projects represent a total investment of $4.725 billion and are slated to come onstream between this year and 2014, the agency reported. Anticipated output is 1.750 million cubic feet of gas per day (MMcfd); 20,000 barrels oil per day (bpd); and 26,000 bpd of oil condensate, BPMigas spokesman Gde Pradnyana said in a statement.

"This reflects that the future of Indonesia's oil and gas industry will be dominated by gas," Pradnyana added. He emphasized that domestic markets, which are burgeoning with demand for gas, will get priority but did not rule out the possibility of exports.

The 10 projects are as follows:

Slated for First Production 2011 –
• Pengembangan Lapangan Jambi Merang, Pertamina-Talisman, Gas 155 MMcfd, Condensate: 12.50 bpd , 2Q 2011
• Ujungh Pangkah, Hess Indonesia & Pangkah, Oil 20,000 bpd, Gas 150 MMcfd 3Q 2011
• Gajah Baru, Premier Oil, Gas 210 MMcfd , 4Q 2011;

 

Slated for First Production 2012 –
• Terang Sirasun Batur, Kangean Energy Indonesia, Gas: 300 MMcfd 2Q 2012
• South Mahakam Phase 1 & 2, Total E&P Gas: 128 MMcfd; 5,900 bpd condensate, 3Q 2012

 

Slated for First Production 2013 -
• Ruby Gas Field Development, Pearl Oil and Sebuku, Gas 100 MMcfd, 3Q 2013
• South Belut, ConocoPhillips Indonesia, Gas 120 MMcfd, 1,000 bpd condensate, 4Q 2013
• Naga-Pelican, Premier Oil Natuna, Gas 130 MMcfd, 4Q 2013
• Sisi Nubi 2B, Total E&P Indonesia, Gas 350 MMcfd, 2Q 2013

 

Slated for First Production 2014 –
• Madura BD Deveopment, Husky Oil Madura, Gas Production 100MMcfd, Condensate 6,600 bpd, 4Q 2014

Meanwhile, the government reported recently that state revenues from the oil and natural gas sector, as of May 2011, has reached nearly US $14 billion, exceeding the state budget target by 39 percent or US $10.062 billion.

BPMIGAS chairman R. Priyono stated that as of July 2011, oil and condensate this year is estimated at 920 thousand bpd, while natural gas lifting is projected to reach 7.769 trillion Btu per day. Total lifting is proposed at 2.259 million barrels oil equivalent per day (boepd), changing from 2.31 million boepd.

"Average optimum production potentials as much as 920 thousand bpd may be achieved with fulfilled conditions, which are all new projects [being] completed on time," he said.

The Global Business Guide Indonesia commented, "The state oil and gas company Pertamina is targeting 1 million bpd by 2015 to once again make the country a net oil exporter; but this will be no easy task. The energy sector faces the challenge of meeting its export commitments, satisfying domestic demand and effectively leveraging its resources for economic growth."

Oil & Gas Post

Promote Your Page Too
LINK

Oil Drops Near $96 After Weak US GDP Report

- Oil Drops Near $96 After Weak US GDP Report



Jul 29, 2011

The price of oil dropped $96 a barrel on Friday after the U.S. government said the economy is at an insufficient 1.3% annual rate in the Q2.

The data raised questions about demand for oil over the months. The Commerce Department also revised the January to March figures to display growth in the first six months was the weakest since the recession ended two years ago.

Oil prices have varied over the month, from $94.90 a barrel on July 1 to 98.87 on July 22 before making another fall.

Oil & Gas Post

Promote Your Page Too

BP Shares Drop after Earnings Miss Expectations

- BP Shares Drop after Earnings Miss Expectations

Tuesday, July 26, 2011
Dow Jones Newswires
LONDON
by Alexis Flynn

BP faced fresh scrutiny from investors Tuesday after quarterly earnings beat last year's level but came in below expectations following a big drop in oil and gas production.

BP posted a 12% rise in adjusted profit for the second quarter as it benefited from higher crude prices and better refining margins. But oil and gas production fell a whopping 11% compared with the 2010 quarter due in part to anemic output in the Gulf of Mexico and unexpected maintenance in the North Sea and Angola.

BP shares were down 11 pence to 464p at 803 GMT, the biggest drop Tuesday morning in the FTSE 100. Analysts also had pointed questions on the slow resumption of BP activities in the Gulf of Mexico, its growth strategy after the demise of a major proposed deal in Russia and the effectiveness of much-touted safety upgrades following a recent fire in the North Sea that has further crimped output.

The U.K.-based energy giant said its clean replacement cost of supplies, a keenly-watched figure that strips out gains or losses from inventories and other non-operating items, for the three months ended June 30 totaled $5.60 billion, compared with $4.98 billion for the second quarter of 2010.

This was below expectations of $6.04 billion in a Dow Jones Newswires poll of 11 analysts. BP said this was due to the loss of production from high-margin areas, such as Angola and the North Sea.

BP Chief Executive Robert Dudley said the company is "making rapid progress" and that the results are in line with expectations that 2011 would be a "year of consolidation" after the travails of recent years.

Total oil and gas production was 3.43 million barrels a day, a decline of almost 11% on the year. BP said that after adjusting for acquisitions and divestitures and entitlement impacts from production agreements, the output decrease was 7% compared with the same period of 2010.

"BP appears to be running a business as usual strategy and we are not convinced that the market will put up with this for much longer," said analyst Dougie Youngson from Arbuthnot Securities. "BP has been significantly under-performing the peer group for some time and this looks set to continue."

Royal Bank of Canada analyst Peter Hutton said investors are anxious about BP's difficulty controlling costs compared with peer companies. A complicating factor is the slow progress in resuming operations in the U.S. Gulf, Hutton added. "Other operators are getting things through and BP has a sum total of zero approvals," Hutton said. "When you rank BP against the others, it is quite stark."

Copyright (c) 2011 Dow Jones & Company, Inc.

Oil & Gas Post

Promote Your Page Too
LINK

BP Evacuates Personnel from Valhall Platform after Fire Erupts

- BP Evacuates Personnel from Valhall Platform after Fire Erupts

Wednesday, July 13, 2011
Rigzone Staff
by Robin Dupre

BP has evacuated personnel from its Valhall oil platform in the Norwegian sector of the North Sea after a fire erupted, stated a Reuters report.

The fire started in a compressor on the production platform in the oil field on Wednesday.

"No persons are injured and no one is missing," BP spokesman Jan Erik Geirmo told state broadcaster NRK. "We see this as a serious incident."

The company closed the field's production until further notice.

The Valhall oil field lies in the Norwegian North Sea on Blocks 2/8 and 2/11 in 230 feet (70 meters) of water. Hess currently owns 64% of the Valhall field, while BP holds the remaining 36%.

Oil & Gas Post

Promote Your Page Too
LINK

Transocean: Rig Off Ghana Remains Stable after Taking On Water

- Transocean: Rig Off Ghana Remains Stable after Taking On Water

Friday, July 08, 2011
Dow Jones Newswires
HOUSTON
by Ryan Dezember

Transocean said Thursday that the deep-water drilling rig off Ghana that was evacuated Wednesday after it took on water remains stable.

The company is working on unmooring the Transocean Marianas, which is anchored some 46 miles offshore, and plans to tow it to sheltered water to inspect damage, spokesman Guy Cantwell said.

It will likely be at least a week before a full damage assessment can be made, Cantwell said.

There have been no injuries and a skeleton crew remain aboard the vessel, Cantwell said. And because the rig was not drilling when it began taking on water, there is no risk of an oil spill.

Transocean owned the Deepwater Horizon, which exploded last year while drilling a well for BP in the Gulf of Mexico, killing 11 and touching off the worst offshore oil spill in U.S. history. Since then Transocean has faced scrutiny over its safety procedures and maintenance of the world's largest offshore drilling fleet.

More than 100 workers were evacuated from the Marianas on Wednesday when it was discovered to have taken on water. A semisubmersible rig, the Marianas floats on large ballast tanks, or pontoons, which are filled with water for stability during drilling and emptied to ease transport. It was built in 1976 and upgraded to drill in depths up to 7,000 feet in 1998.

The rig had been drilling for ENI and was in the process of being moved to drill an exploration well for Kosmos Energy and partners that include Anadarko, Tullow Oil and Ghana's national oil company.

The Marianas was expected to arrive on site next week and Kosmos on Thursday asked Ghana for more time to begin drilling the prospect while it searches for a new rig.

The loss of income from the Marianas, which earned $450,000 a day on its contract with ENI, will likely trim Transocean's earnings by 15 cents per share this year, analysts with Tudor, Pickering, Holt & Co. said in a client note.

"As of now we are assuming rig does not work for rest of 2011," the Houston-based analysts said.

Copyright (c) 2011 Dow Jones & Company, Inc.

Oil & Gas Post

Promote Your Page Too
LINK

IEA 'Still Assessing' Oil Market after OPEC Stalemate

- IEA 'Still Assessing' Oil Market after OPEC Stalemate

Tuesday, June 14, 2011
Dow Jones Newswires
PARIS
by Geraldine Amiel

The International Energy Agency is in talks with member countries following last week's OPEC meeting and is "still assessing" the oil market situation before considering any potential response, Executive Director Nobuo Tanaka said Tuesday.

Tanaka reiterated that the IEA "stands ready to act" if the market requires additional oil. At the same time, Tanaka, whose organization represents consuming countries, expressed confidence that Saudi Arabia could pump additional oil to meet supplies, he said in an exclusive interview with Dow Jones Newswires. The IEA has authority to coordinate an emergency response of oil from its member governments.

Tanaka's remarks came less than a week after a Vienna meeting of the Organization of Oil Exporting Countries concluded in acrimony after members failed to agree to boost output to meet anticipated demand growth. The surprising outcome continued to reverberate Tuesday, as OPEC's Secretary General expressed concerns that oil prices could rise later this year.

OPEC split last week on whether to boost output by some 1.5 million barrels a day, a plan favored by Saudi Arabia and some other Gulf producers. Some OPEC members, including Iran, were skeptical additional supplies were needed. The members that fought the increase have also tended to favor somewhat higher oil prices.

OPEC Secretary General Abdalla Salem Al-Badri, the official spokesman for the organization, said Tuesday that oil prices "will go up for sure" if the would rise later this year if the supply gap in many official forecasts comes to fruition, Reuters reported. The OPEC official was also quoted as saying high prices will hurt economic growth, Reuters said.

Also Tuesday, EU Energy Commissioner Gunther Oettinger told Dow Jones Newswires in Stockholm that the European Union plans to discuss oil market issues at a meeting with OPEC in Vienna later this month.

"We want to speak (with OPEC) about security of supply for 2011 and 2012 and to speak about what is a feasible price," Oettinger said in an exclusive interview.

Asked whether he was worried about a high oil price, Oettinger said: "No, I'm not worried".

Meanwhile, Tanaka said he was confident Saudi Arabia could use its spare production capacity to put additional oil on the market following the OPEC meeting. Saudi Arabia plans to immediately boost output to as much as 10 million barrels a day, Gulf sources have said.

The issue will be "how fast" the Saudis can put additional oil on the markets, Tanaka added, noting that Saudi domestic oil consumption is expected to increase during the summer.

Tanaka later told the audience that the at the IEA, "we stand ready to take all our options." But Tanaka said the IEA would tap emergency supplies only after a "disruption" such as if Saudi Arabia and other OPEC members were unable to pump more oil. He said some of the current anxieties were reminiscent of the oil market in 2008.

The IEA warned on May 19 that it was prepared to "consider using all tools" if OPEC failed to boost output, a statement that was seen by producers as a veiled threat that the IEA would tap strategic supplies if OPEC didn't pump more oil.

Copyright (c) 2011 Dow Jones & Company, Inc.

Oil & Gas Post

Promote Your Page Too

Commodity Corner: Oil Gains After OPEC Meeting Ends in A Draw

- Commodity Corner: Oil Gains After OPEC Meeting Ends in A Draw

Wednesday, June 08, 2011
Rigzone Staff
by Matthew V. Veazey

Thanks in part to a lack of consensus from OPEC, July crude oil gained $1.65 Wednesday.

The front-month contract settled at $100.74 a barrel after the oil cartel, meeting in Vienna, failed to decide whether to increase production quotas for its 12 member countries.

Saudi Arabia, Qatar, United Arab Emirates, and Kuwait advocated raising production—a position shared by the U.S. and other major oil importers that are trying to bolster their weak economies. Iran, Iraq, Venezuela, and the remaining countries save Nigeria urged keeping production at current levels. Nigeria took neither side in the contentious meeting.

Oil peaked at $101.89 and bottomed out at $98.02 during the midweek session.

Much of the central and eastern U.S. is experiencing a heat wave. Not surprisingly, demand for air conditioning has been on the rise. Also not surprisingly, July natural gas settled higher Wednesday.

Natural gas gained two cents to end the day at $4.85 per thousand cubic feet. The futures price fluctuated from $4.77 to $4.87.

Gasoline for July delivery lost a penny Wednesday, settling at $2.98 a gallon. The front-month contract traded within a range from $2.96 to $3.03.

Oil & Gas Post

Promote Your Page Too

Commodity Corner: Oil Settles Higher After Sharp Drop

- Commodity Corner: Oil Settles Higher After Sharp Drop

Friday, May 20, 2011
Rigzone Staff
by Matthew V. Veazey

Crude oil for June delivery gained $1.05 to end a volatile trading day at $99.49 a barrel.

The front-month contract plunged to an intraday low of $95.99 as the U.S. dollar gained 0.75 percent against the euro. Oil becomes a better value for investors holding non-U.S. currencies when the dollar grows weaker because crude is priced in dollars.

Given the relative value of the expiring June oil contract relative to the higher July contract price, however, oil rebounded later Friday as investors sensed a buying opportunity. Crude topped out at $99.49 for the day and is down less than 0.2 percent for the week.

A day after falling 2.6 percent following a U.S. Energy Information Administration report showing a higher-than-expected build in inventories, June natural gas gained 14 cents to settle at $4.23 per thousand cubic feet. Buoying Friday's rally were forecast models predicting above-normal temperatures throughout the eastern U.S. for the remainder of the month. Warmer conditions in the region would likely boost demand for electricity to power air conditioners.

June natural gas traded within a range from $4.08 to $4.26 Friday. It is down 0.5 percent for the week.

The June gasoline contract gained a penny to end the day at $2.94 a gallon. It fluctuated from $2.86 to $2.96. June gasoline has fallen 4.2 percent since last Friday.

Oil & Gas Post

Promote Your Page Too

Chesapeake Resumes Work Three Weeks after Accident

- Chesapeake Resumes Work Three Weeks after Accident

Monday, May 16, 2011
Pittsburgh Post-Gazette
by Laura Olson

Three weeks after the gas-well blowout at one of its Bradford County sites, Chesapeake Energy announced it will resume well-completion operations in Pennsylvania.

The company had voluntarily halted hydraulic fracturing and other procedures to prepare a well for production following an April 19 accident. As workers attempted to seal that well, briny wastewater spilled for several hours into a nearby creek tributary.

Chesapeake's well-completion work resumed in late April at its West Virginia and Ohio sites, but sites here remained idle as state Department of Environmental Protection officials sorted through company paperwork detailing what happened.

DEP spokeswoman Katy Gresh said the agency also was waiting on "assurances" from Chesapeake that they would use local well-control specialists if the company has an accident requiring such assistance. In the Bradford incident, the company called the Houston-based company Boots and Coots, who did not arrive on the scene for 12 hours.

Ms. Gresh said Chesapeake agreed to local well-control specialists in the future, which the company also noted in its statement.

The company attributed the accident's cause to a faulty connection at the wellhead, which allowed fluid to be released. They described the valve failure as "extremely rare," adding that they have since inspected their wellheads and updated how the equipment is assembled.

"We understand that operating in the Commonwealth of Pennsylvania is a privilege," said John Reinhart, Chesapeake's vice president of operations for its eastern division. "We have learned from this and have taken steps to mitigate the risk of this type of event happening in the future."

Of the wastewater that spilled off the well pad, Chesapeake officials said about 240 barrels of "a mixture of well fluid and rain water" flowed onto nearby land and into a small tributary. They estimated that figure included one barrel's worth of highly diluted chemical additives used in hydraulic fracturing.

The spill caused "minimal and localized impact" to the environment, according to the company. They said a small farm pond near the well was drained, and the water treated at a Chesapeake wastewater recycling facility. DEP officials also have reported that an unknown number of amphibians died in the pond.

State environmental officials have not yet issued any fines or violations in response to the incident. Ms. Gresh said the DEP investigation is ongoing.

Copyright (c) 2011, Pittsburgh Post-Gazette

Oil & Gas Post

Promote Your Page Too

Envoy: S. Sudan to Respect India's Oil Deals After Independence

Envoy: S. Sudan to Respect India's Oil Deals After Independence

Thursday, May 05, 2011
Knight Ridder/Tribune Business News
by Julius N. Uma, Sudan Tribune

All contracts for Indian stakes in south Sudan's oil wells and their entities within the semi-autonomous region will be honored after the latter's independence, a special envoy revealed last week.

Priscilla Joseph Kuch, according Indo-Asia News Service (IANS), made these assurances during a meeting she held with S.M Krishna, the Indian external affairs minister in the capital, Delhi.

South Sudan is due to become independent in July after its population overwhelmingly voted for separation during the January self-determination referendum. The plebiscite was a key part of Sudan's 2005 Comprehensive Peace Agreement (CPA), which ended over two decades of war between north and south of the country.

Also discussed, according to Vishnu Prakash, the ministry spokesperson, was India's hydrocarbon interests in the oil-rich South Sudan which, he added, was reportedly "consolidating" and taking stock of agreements in the sector. "Our understanding is that the agreements pertaining to India will be honored," Prakash reportedly told reporters.

Currently, according to IANS, India's ONGC Videsh Limited is said to have stakes in several wells in Sudan, with production reportedly standing at 160,000 barrels per day. Out of this, 100,000 barrels per day of production is reportedly from oil wells in South Sudan.

"OVL has already offered training and to go beyond the current level of engagement," Rajiv Shahare, the Indian external affairs ministry secretary reportedly revealed.

OVL is a company began operating in Sudan in 2003. It built the pipeline from Khartoum to Port Sudan. It has a 25% stake in Sudan's Greater Nile Oil Project, which produces 280,000 barrels of oil per day. It is looking to expand its reach in South Sudan.

Regarded as being among the biggest players in Sudan's oil sector, along with China and Malaysia, India reportedly made an initial investment of US$1 billion in the sector, which is said to have increased to US$2.5 billion.

Over the years India has reportedly extended a US$566 million line of credit, which includes building a 500 megawatt power plant. Bilateral trade between India and Sudan was about $1 billion in 2010.

In March this year, the Energy and Mining ministry in the Government of South Sudan and Petroliam Nasional Berhad (PETRONAS), a Malaysian-owned oil and gas company signed a two-year memorandum of understanding aimed at boosting mutual cooperation between the two parties.

The document, signed in South Sudan's capital, Juba, outlines the overall principles of cooperation in the oil and gas sector between the government and the Malaysian oil giants, creating an avenue exploiting existing business opportunities in the two regions.

Founded on August 14, 1974, PETRONAS is owned by the Malaysian government. Since its incorporation, the company has reportedly grown to be an integrated international oil and gas company with business interests in 35 countries.

Oil & Gas Post

Promote Your Page Too

Gazprom, ENI to Conclude Elephant Stake Buy after Libyan Unrest

Gazprom, ENI to Conclude Elephant Stake Buy after Libyan Unrest

Wednesday, April 20, 2011

Dow Jones Newswires

by Jacob Gronholt-Pedersen

Gazprom plans to acquire a 33% stake in ENI's Elephant field in Libya has been delayed, and will be finalized when the situation stabilizes in the North African country, Gazprom said Wednesday in a press release.

The announcement came following a meeting in Moscow between Gazprom Chief Executive Alexei Miller and ENI CEO Paolo Scaroni.

The two also discussed France's Electricite de France and Germany's Wintershall joining the South Stream project.

O&G UK Disappointed after UK Tax Talks

O&G UK Disappointed after UK Tax Talks

Tuesday, April 19, 2011
Dow Jones Newswires
by Alexis Flynn

The group representing major U.K. oil and gas producers said Thursday it was disappointed following talks with Chancellor of the Exchequer George Osborne on the impact a large tax increase on North Sea production would have on the industry.

Oil & Gas UK Chief Executive Malcolm Webb said, "Notwithstanding the Chancellor's requirement to raise money, [we] explained why both the unexpected nature and the scale of the increase to between 62% and 81% tax has damaged investor confidence and will hamper investment, maximum recovery of the U.K.'s oil and gas and job creation. Disappointingly, the Chancellor has a different view."

However, Webb said the Treasury requested further talks on how a mooted price floor mechanism, which would see the tax lowered in the event that prices dropped substantially, would work in practice. He said that it also wanted to discuss new and further field allowances, as well as continued dialogue on issues around decommissioning, to be concluded by Budget 2012.

A Treasury spokesperson told Dow Jones Newswires, "Today's meeting was constructive and while the Chancellor was clear that there would be no change in policy, he agreed to work closely with industry on the three areas for discussion set out in the Budget; setting the trigger price, stability in decommissioning and field allowances to support further investment."

[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 ebehrmann1@bloomberg.net
To contact the editor responsible for this story: Andrew Hobbs at ahobbs4@bloomberg.net

Link
http://www.businessweek.com/