Argentina Suspends Auction for Offshore Blocks

- Argentina Suspends Auction for Offshore Blocks

Tuesday, August 09, 2011
Dow Jones Newswires
BUENOS AIRES
by Taos Turner

Adverse market conditions have led Argentina's state-run energy company Enarsa to suspend plans to auction oil exploration rights at 32 offshore blocks.

"The international context is not very good. It's not a good time to be doing this," a person familiar with Enarsa's plans said Monday. He added that the company remains interested in exploring those areas.

Enarsa planned to begin auctioning the blocks this week to foment offshore oil and gas exploration.

Enarsa will continue evaluating the market and will resume the auction process once conditions are more favorable, the person said.

The blocks are located in the Atlantic Ocean near Argentina's Patagonia and include areas such as the Valdes Peninsula, San Jorge, and Malvinas, among others.

It's unclear how much interest exists in the blocks, though Enarsa already has signed agreements with Petrobras Argentina and YPF to look for and develop resources in the region.

Argentina has been struggling to find new sources of energy as its oil and gas reserves decline.

Oil production fell 18% between 2003 and 2010 to about 34 million cubic meters, according to a document published in March by eight former energy secretaries. The document, which cites Energy Secretariat data, said proven oil reserves fell 11% to 393 million cubic meters during that period. It also said natural gas production fell 43% to 379 billion cubic meters in 2010, while reserves fell 8% to about 47 billion cubic meters.

The former officials, who have criticized current energy policies, said the decline in oil production coincided with a substantial increase in international oil prices, which should have led to increased exploration and production in Argentina.

But that didn't happen, they said, because of ongoing government price caps that have crimped profits and discouraged investment in exploration.

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

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China Ministry Held First Shale Gas Block Auction Monday -Official

- China Ministry Held First Shale Gas Block Auction Monday -Official

Tuesday, June 28, 2011
Dow Jones Newswires
SHANGHAI
by Jing Yang

China's Ministry of Land and Resources held its first shale gas block auction Monday, a ministry official said Tuesday, marking a move to exploit on a large scale the new source of the cleaner-burning fuel.

There are serious concerns about contamination of ground water during hydraulic fracturing--known as fracking, the process by which shale gas is extracted from wells drilled deep into relatively impermeable rock beds--but the country's massive estimated reserves could help to slow its increasing reliance on imported energy.

The auction results will likely be announced in mid-July, and the firms that win blocks will be allowed to work with foreign companies, said the official, who didn't wish to be named.

PetroChina, China Petroleum & Chemical Corp., CNOOC, Shaanxi Yanchang Petroleum Group, China United Coal Bed Methane Co. and Henan Provincial Coal Seam Gas Development and Utilization Co. participated in the auction, the official told Dow Jones Newswires.

The auction covered four blocks in southwestern Guizhou province and Chongqing city, covering an area of 11,000 square kilometers, the state-controlled Xinhua News Agency said.

The ministry is expected to hold at least one more auction later this year, which could allow more companies, such as China Sinochem Group Corp. and China Zhenhua Oil Co., to participate.

Technical advances allowing the development of shale gas have transformed the U.S. energy sector in recent years, prompting a wave of merger-and-acquisition activity and sharply reducing reliance on gas imports.

Earlier this year, CNOOC Ltd. bought into several shale oil and gas leases in the U.S. owned by Chesapeake for $570 million in cash, following a similar deal in October.

The U.S. Energy Information Administration estimated in a report that China holds 1,275 trillion cubic feet of technically recoverable shale gas reserves, the largest in the world.

Beijing has invited U.S. and European companies into its tightly controlled onshore gas acreage in order to gain technical know-how.

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China Short Lists 6 Firms for First Shale Gas Auction

China Short Lists 6 Firms for First Shale Gas Auction

Tuesday, April 26, 2011
Dow Jones Newswires
by Jing Yang

China has short listed six domestic firms to participate in the nation's first shale gas auction, which has been postponed to May, an official with the Ministry of Land and Resources said Tuesday.

Shale gas, which recent technologies have started liberating from relatively impermeable rock, could help China to slow its growing reliance on imported energy. Chinese companies have been gaining know-how in the shale gas drilling from pioneering U.S. partners. The auction marks a move to exploit on a large scale the clean-burning fuel, of which it has identified massive reserves.

The six firms--PetroChina, China Petroleum & Chemical, Cnooc, Shaanxi Yanchang Petroleum Group, China United Coal Bed Methane and Henan Provincial Coal Seam Gas Development and Utilization--will bid for eight shale gas blocks, the official said.

The ministry will likely hold at least one more auction later this year, which could allow more companies, such as Sinochem Group and China Zhenhua Oil Co., to participate. As these two companies don't yet have domestic mining licenses, they can't bid in the current tender, he said.

Technical advances allowing the development of shale gas have transformed the U.S. energy sector in recent years, prompting a wave of merger-and-acquisition activity and sharply reducing reliance on gas imports.

Earlier this year, Cnooc Ltd. bought into several shale oil and gas leases in the U.S. owned by Chesapeake for $570 million in cash, following a similar deal in October.

A recent report from the U.S. Energy Information Administration showed that China holds 1,275 trillion cubic feet of technically recoverable shale gas reserves, the largest in the world.

The nation has invited U.S. and European companies into its tightly controlled onshore gas acreage in order to gain technical know-how. The firms that win blocks in the upcoming auction will also be allowed to work with foreign companies.

PetroChina completed the drilling of China's first horizontal shale gas well last month in Sichuan province. Horizontal shale gas wells are more productive and have proven to be more commercially viable compared with vertical wells.

Production of unconventional gas, such as coal bed methane and shale gas, is expected to reach 20 billion cubic meters annually by 2020, while output of conventional natural gas will rise to 200 billion cubic meters a year, the Research Institute of Economics and Technology of China National Petroleum Corp. forecast in an annual report earlier this year.

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.

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