CNPC Wins Bid for Afghan Blocks

- CNPC Wins Bid for Afghan Blocks

Tuesday, September 06, 2011
Tethys Petroleum Ltd.

Tethys announced that it understands that the Chinese State Oil Company, CNPC, has won the tender for the Kashkari, Bazarkhami and Zamarudsay blocks in Northern Afghanistan which Tethys was also bidding for.

As a commercial oil and gas company Tethys could not offer the same terms as CNPC which, in Tethys' view, would make the project non-commercial. Tethys still believes there is good oil and gas potential in Afghanistan and will evaluate any other future opportunities there.

Tethys is focused on oil and gas exploration and production activities in Central Asia with activities currently in the Republics of Tajikistan, Kazakhstan and Uzbekistan. This highly prolific oil and gas area is rapidly developing and Tethys believes that significant potential exists in both exploration and in discovered deposits.

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ONGC Chairman: Plan To Bid Aggressively for Overseas Blocks

- ONGC Chairman: Plan To Bid Aggressively for Overseas Blocks

Thursday, August 25, 2011
Dow Jones Newswires
NEW DELHI
by Rakesh Sharma

Oil & Natural Gas Corp. (ONGC) plans to aggressively bid for oil and gas assets overseas in upcoming auctions as part of its strategy to more than double oil production abroad to 20 million tons a year by 2020, the chairman of India's flagship explorer said.

ONGC plans to work with other Indian state-run oil and gas companies through its overseas investment arm ONGC Videsh Ltd., or OVL, to bid for assets overseas, A.K. Hazarika told Dow Jones Newswires in an interview late Wednesday.

"Ours is an import-dependent country and we need energy," Hazarika said. "Although, all the companies can go out and bid, we shouldn't be competing against each other. So we will form joint ventures."

India's state-run companies have lagged behind those from bigger Asian rival China in acquiring energy assets overseas.

OVL's last big acquisition was Russia-focused Imperial Energy in January 2009, which it bought for $2.12 billion.

The federal government is now considering creating a sovereign fund focused on resource asset acquisition overseas to seek energy sources for the world's second-fastest growing major economy.

OVL has been shortlisted to bid in Iraq's forthcoming auction round, Hazarika said, adding his company will form a consortium for bidding.

Iraq is offering 12 exploration blocks in its fourth licensing round, which will take place in January.

He said OVL will also be interested in forthcoming auctions in Brazil and Oman.

Early next year, Brazil is expected to hold the 11th bid round for exploration and production blocks in onshore and offshore basins.

OVL has stakes in one producing block and half a dozen exploratory blocks in Brazil.

Oman is expected to offer about five oil and gas blocks in a new exploration licensing round.

"ONGC will look into the properties and take a call based on due diligence," Hazarika said.

He said OVL, which produced 9.43 million tons of oil and oil equivalent gas in the year ended March 31, has invested INR560 billion ($12 billion) so far in overseas assets.

"Money is not a constraint for us as OVL can easily borrow from the market," Hazarika said. He didn't give details about the company's overseas investment plans.

He said OVL also expects to resume exploratory activities in Libya and explore more investment opportunities once normalcy returns in the African country.

OVL declared force majeure and suspended operations in February in an offshore exploration block in Libya, citing political unrest.

Oil companies active in Libya before the civil war began gearing up for the challenge of resuming operations in the country Monday as rebel forces moved closer to taking over Tripoli.

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

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Max Petroleum Updates Activities in Kazakh Blocks

- Max Petroleum Updates Activities in Kazakh Blocks

Wednesday, August 24, 2011
Max Petroleum plc

Max Petroleum announced an operational update of its activities in the Blocks A&E License area in Kazakhstan.

Drilling Commences at Sagiz West Prospect

Drilling has commenced at the SAGW-1 exploration well on the Sagiz West prospect in Block E, which has estimated unrisked mean resource potential of 26 million barrels of oil ("mmbo") in a four-way, Triassic rim structure. Total depth of the well will be approximately 1,600 meters.

New Drilling Contract for Additional Shallow Rig

The Company has executed a drilling contract with PM Lucas for a ZJ-50 rig capable of drilling to 5,000 meters, to drill the ASK-2 exploration well in the Asanketken Field in Block E. The rig is on location and is expected to commence drilling operations before 31 August 2011. The ASK-2 well is designed to test the field's deep Triassic potential, as well as further evaluate potential reservoirs in the shallower Jurassic section found to be productive in the ASK-1 discovery well.

Status of Pre-salt Drilling on Emba B Prospect

The Company expects to commence drilling operations for the NUR-1 pre-salt exploration well in the Emba B Prospect on Block E in October 2011, based on the Company's latest discussions with the drilling contractor, Saipem. The deep rig is currently completing a well for another operator and is expected to begin mobilization to NUR-1 location by the end of the month.

Expanded Post-salt Prospect Inventory

The Company has matured two additional prospects into the post-salt inventory, including the Uytas North and Karasai South prospects, both of which are four-way, Triassic rim prospects on Block A. Uytas North has unrisked mean resource potential of 11 mmbo with a 38% geological chance of success ("COS"), while Karasai South has unrisked mean resource potential of 12 mmbo and a 34% COS.

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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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Gazprom Neft, Petronas Sign PSA with Cuba on 4 Offshore Blocks

- Gazprom Neft, Petronas Sign PSA with Cuba on 4 Offshore Blocks

Monday, August 01, 2011
Dow Jones Newswires
MOSCOW
by Alexander Kolyandr

Gazprom Neft, which is controlled by state gas company Gazprom, said Monday it has signed a product-sharing contract on four blocks in the Gulf of Mexico offshore Cuba with Petronas, the Malaysian national oil company, and Cubapetroleo, the Cuban national oil company.

Following the signing, Gazprom Neft becomes a party in the contract and acquires 30% stake in the project, while Petronas retains 70% in the project. Prior to the agreement Petronas had a 100% stake in the project.

In October 2010, Gazprom Neft and Petronas signed the Farm-out Agreement

"This partnership with Petronas will help Gazprom Neft to enforce its competence in the sphere of deep water development and expand its expertise in projects outside of Russia," Alexander Dyukov, chairman of Gazprom Neft management board said.

Apart from Cuba, Gazprom Neft participates in international exploration and production projects in Iraq, Equatorial Guinea, Venezuela and--through its Serbian affiliate company--in Angola, Romania and Hungary.

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

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Petroceltic-Hess JV to Explore Iraqi Blocks

- Petroceltic-Hess JV to Explore Iraqi Blocks

Wednesday, July 27, 2011
Petroceltic International Inc.

Petroceltic announced that, in partnership with Hess Middle East New Ventures, a subsidiary of Hess Corporation ("Hess"), it has executed two Production Sharing Contracts ("PSCs") with the Kurdistan Regional Government of Iraq ("KRG"). The PSCs are in respect of the Dinarta and Shakrok exploration blocks ("Dinarta" and "Shakrok") in the central north of the Kurdistan Region of Iraq.

Dinarta

Dinarta is a highly prospective undrilled block in a proven but largely unexplored area along trend from existing discoveries in the Kurdistan Region of Iraq. The block, which covers an area of 1319 sq km, is located approximately 75 kms north of Erbil and along trend from the significant Shaikan, Atrush and Swara Tika oil discoveries.

The block itself contains a number of identified surface structures, the largest of which, the Chinara Anticline, is 25 kms along strike from the Swara Tika-1 well, currently reported to be testing a significant new oil discovery. The other structures on the block also have significant potential surface closure areas with multiple reservoir targets believed to be likely to be present in the Jurassic and Triassic strata preserved in this block. The resource potential of the identified structures is considered by Petroceltic to be very significant.

Shakrok

Shakrok is a highly prospective undrilled block in a proven but largely unexplored area along trend from existing discoveries in the Kurdistan Region of Iraq. The block, which covers an area of 418 sq km, is located approximately 50 kms north east of Erbil and is along trend from the nearby Taq Taq oil field and the recently announced Bina Bawi oil discovery.

The block itself contains significant surface anticlines, and, similar to Dinarta, multiple reservoir targets are believed to be likely to be present in the Jurassic and Triassic strata preserved in the block. The resource potential of the identified structures and the Shakrok Anticline in particular is considered by Petroceltic to be significant and in line with other discoveries that have recently been made in the region.

PSC Commitments and Work Program

Each PSC has an initial 3 year exploration period during which the joint venture plans to acquire 2D seismic and drill a minimum of one exploration well. Based on the anticipated work programs, Petroceltic's total financial commitment during the first license period is expected to be approximately $72 million, the majority of which will be incurred over the next 6 months. These amounts are inclusive of all signature and capacity building bonuses payable to the KRG under the terms of the PSC's.

Petroceltic holds its 16% participating interest (20% paying interest) in the PSCs, through a wholly owned subsidiary, Petroceltic Kurdistan Limited ("PKL"). Both blocks will be operated by Hess and the KRG has a carried interest of 20% in each PSC through all phases of operations.

Commenting, Brian O'Cathain, Chief Executive of Petroceltic, said, "The signature of the Dinarta and Shakrok PSCs represents Petroceltics entry into an exciting new region and with an outstanding partner in Hess. These highly prospective blocks add further high impact exploration potential to our portfolio and complement our ongoing exploration and appraisal activities in Algeria and Italy.

"While significant discoveries have already been made, the Kurdistan Region of Iraq remains, a vastly under explored area with huge potential. Our exploration activities in the region are already progressing and we plan to open an office in Erbil in the coming months.

"We have worked closely with the KRG and our co-venturer Hess to conclude these agreements, and are now delighted to have signed the PSCs. We are committed to continuing to work closely with the KRG to maximize the value of these blocks for both the Government and people of the Kurdistan Region of Iraq, and our shareholders."

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BP Scoops Up Blocks Offshore Trinidad

- BP Scoops Up Blocks Offshore Trinidad

Monday, July 25, 2011
BP plc

BP has been awarded two deepwater exploration and production blocks by the Government of the Republic of Trinidad and Tobago.

BP was awarded a 100 percent interest in blocks 23(a) and TTDAA 14, both in deepwater frontier acreage offshore Trinidad's east coast, under production sharing contracts.

The success follows detailed subsurface research and evaluation by BP whose Trinidad operations account for more than half of Trinidad and Tobago's natural gas output and 12 percent of BP's global oil and gas production. The awards will double the acreage held by BP controlled companies in Trinidad and Tobago.

"BP has a long history and major business in Trinidad and Tobago, and we are keen to participate in the next phase of exploring the country's resources," said Bob Dudley, BP group chief executive. "These awards mean BP has gained access to 31 new upstream blocks across the world since July last year, a significant step up in new access.

"Increasing our efforts in exploration and applying our deepwater experience and expertise to new basins around the world is a key part of BP's strategy to deliver long-term value growth. We are pleased to see the confidence that governments across the world have placed in BP to carefully explore and develop resources."

Since July 2010 BP has gained new exploration access in Azerbaijan, Brazil, Indonesia, Australia, the UK and China. In addition, BP reached agreement in February with Reliance Industries to take a 30 percent interest in 23 oil and gas licences offshore India.

"BP is very pleased to be given this opportunity to be pioneers as we work to unlock Trinidad's deepwater potential using the best in class technology and expertise, potentially bringing additional benefits from our existing business and infrastructure," added BP Trinidad and Tobago regional president Norman Christie. "The decision to participate in this bid round demonstrates BP's long term commitment to Trinidad and Tobago."

Block 23(a), located approximately 300 kilometers north east of BP Trinidad and Tobago's (bpTT's) Galeota Point operations base, covers approximately 2,600 square kilometers in water depths averaging 2,000 meters. Block TTDAA 14 which is located next to block 23(a) covers a further 1,000 square kilometers in water depths averaging 2,000 meters.

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Manas Begins Second Seismic Survey at Mongolian Blocks

- Manas Begins Second Seismic Survey at Mongolian Blocks

Thursday, July 14, 2011
Manas Petroleum Corp.

Manas announced the commencement of the second seismic survey on the two Mongolian blocks - Zuunbayan-XIV Block and Tsagaan Els-XIII Block - owned by Gobi Energy Partners GmbH.

This year's seismic survey includes up to 1,700 km of 2D seismic. It covers 10 prospective areas over both blocks, which were identified by our integrated interpretation. The program is laid out in 8 phases without any interruption between the phases; however, some phases show interdependencies. Preparation and mobilization has commenced and the acquisition is expected to begin in mid-August. The seismic work will be conducted with vibrators.

Through its wholly-owned subsidiary, DWM Petroleum AG, Manas owns record title to 100% of the issued and outstanding shares of GEP GmbH, though 26% is held in trust for others. GEP GmbH owns 100% of Gobi Energy Partners LLC ("Gobi"), the Mongolian operator of the oil and gas projects on the two blocks. Gobi signed the agreement for Seismic Services with Sinopec Mongolia, a wholly-owned subsidiary of China Petrochemical Corporation (Sinopec Group), on July 12, 2011. Sinopec has extensive seismic experience in this area. Sinopec offers all services from seismic to drilling and drilling related services. Sinopec will use Sercel equipment for the survey. The total cost of the program, including mobilization and demobilization, is projected to be US $4.2 million. Nine companies participated in the tender.

This seismic survey is being carried out in an effort to improve the quality of existing data and increase the chances of success of exploratory wells the company intends to drill upon completion and interpretation of the new data. The first well is anticipated to be spudded in the second quarter of 2012.

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ERHC Awarded Chad Oil Exploration Blocks

- ERHC Awarded Chad Oil Exploration Blocks

Thursday, June 30, 2011
ERHC Energy

ERHC Energy Inc. today announced that the government of the Republic of Chad has formally awarded the company three oil blocks for exploration and development. The company expects to announce a concluded production sharing contract in respect of the blocks as early as next week. ERHC's financial officer, Mr. Sylvan Odobulu, has led a team of legal, technical and financial experts in negotiating the production sharing contract on behalf of ERHC.

The specific blocks in the award are Block BDS 2008, Manga and Chari-Ouest Block 3. The award of these blocks follows several months of negotiations between ERHC and the government of Chad.

"This is another significant milestone in the remarkable history of ERHC," said ERHC CEO Peter Ntephe. "Among the independents operating in Africa, we are already one of the largest holders of exploration acreages in terms of number and size of blocks. This new award increases our holding considerably while also strategically diversifying our portfolio beyond the Gulf of Guinea."

The West African nation of Chad is one of sub-Saharan Africa's significant crude oil producers. It shares borders with Cameroun and Sudan, which both produce oil, and Nigeria which is Africa's largest oil producer. Chad has proven oil reserves of 1.5 billion barrels with studies establishing the prospect of more discoveries.

Apart from the new award, ERHC currently holds working interests in six Blocks in the Nigeria-São Tomé & Príncipe Joint Development Zone (JDZ). ERHC also holds 100% of Blocks 4 and 11 of the São Tomé & Príncipe Exclusive Economic Zone (EEZ) with an option to acquire up to 15 percent working interests in two other EEZ Blocks.

ERHC management will host a live online chat at 5:00 p.m. Central Time Wednesday, July 6, 2011. CEO Peter Ntephe will respond to questions posted live at www.erhc.com/chat. Those unable to participate live will be able to review the online interaction afterward.

About ERHC Energy

ERHC Energy Inc. is a Houston-based independent oil and gas company focused on growth through high impact exploration in Africa, including within the highly prospective Gulf of Guinea. ERHC is committed to creating and delivering significant value for its shareholders, investors and employees, and to sustainable and profitable growth through risk balanced smart exploration, cost efficient development and high margin production. For more information, visit www.erhc.com.

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Petrobras Acquires Blocks Offshore Gabon

- Petrobras Acquires Blocks Offshore Gabon

Friday, June 17, 2011
Petrobras

Petrobras, has acquired, by means of its wholly-owned subsidiary Petrobras Participaciones S.L. – PPSL, 50 percent of the stakes in the Ntsina Marin and Mbeli Marin Blocks, located in the Coastal Basin of Gabon, offshore the Gabonese Republic, on the Western Coast of Africa. The region has geological structures that are considered comparable to the areas developed in Brazil.

The blocks were purchased from Ophir Energy, which is headquartered in the UK and will keep the remaining 50 percent of the interests. The deal was completed today and is pending final approval by the Government of Gabon.

The region the two blocks are in covers an area of 6,683 square kilometers, in water depths ranging from shallow to up to 2,400 meters. Petrobras commits to carry out a minimum program, which includes 2,000 square kilometers of 3D seismics until March 2012.

After this stage, Petrobras has the right to assess whether or not it will remain in the next phase of the exploration program, which includes drilling wells.

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Gulf Keystone Focused on Adding Volumes to Iraqi Blocks

- Gulf Keystone Focused on Adding Volumes to Iraqi Blocks

Thursday, June 16, 2011
Gulf Keystone Petroleum Ltd.

Gulf Keystone provided an update on its operations in the Kurdistan Region of Iraq highlighting that:

• Shaikan-2 deep appraisal well is currently at a depth of 3,166 meters with the final total depth (TD) still planned for the lower Triassic or the upper Permian
• Sheikh Adi-1 exploration well is currently at a depth of 3,515 meters in the Triassic Kurre Chine B and a cased hole testing program will be undertaken once the drilling has reached TD
• After spudding on May 27, 2011, the Shaikan-4 deep appraisal well is currently at a depth of 462 meters
• Preliminary results of the Shaikan 3D seismic data interpretation suggest a larger structure (by 5-10%) than originally mapped based on the earlier 2D seismic data
• Bekhme-1 exploration well on the Akri-Bijeel block is drilling ahead at a depth of 2,828 meters.

John Gerstenlauer, Gulf Keystone's Chief Operating Officer commented, "With three Gulf Keystone wells underway on the Shaikan and Sheikh Adi blocks, the second exploration well being drilled in partnership with MOL on the Akri-Bijeel block, and the first exploration well expected to be drilled on the Ber Bahr block in partnership with Genel later in 2011, we are firmly focused on adding further oil-in-place volumes in all four blocks in the Kurdistan Region of Iraq."

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East West Petroleum Enters MOU to Develop Romania Blocks

- East West Petroleum Enters MOU to Develop Romania Blocks

Wednesday, May 25, 2011
East West Petroleum Corp.

East West Petroleum and Naftna Industrija Srbije j.s.c. Novi Sad ("NIS") announced the final stage of conclusion of agreements for upstream cooperation which is to rapidly advance the development of its four Romanian onshore blocks EX-2 (Tria), EX-3 (Baile Felix), EX-7 (Periam) and EX-8 (Biled). The joint exploration programs planned will include the collection and processing of approximately 900 km of 2D and 600 sq km of 3D seismic data with a minimum of 12 wells to be drilled on the four blocks in Romania. The terms of the agreement are: NIS will fully fund all environmental work, 2D and 3D seismic acquisition and processing, and the drilling of 12 wells, to earn an 85% participation interest. NIS will also refund 100% of EWP's sunk costs which total C$525,000 and EWP will retain a 15% carried interest to commercial production on all four blocks.

In an earlier agreement the Company signed Concession Agreements for four onshore exploration blocks EX-2 (Tria) EX-3 (Baile Felix), EX-7 (Periam) and EX-8 (Biled) with the Romanian National Agency of Mineral Resources.

The new petroleum licenses are located in the western region of Romania within the prolific Pannonian Basin. The blocks have a combined area of approximately 1,000,000 acres. The blocks, which contain multiple exploration targets, lie within a major producing region of western Romania. The blocks have been only moderately explored, with previous exploration on the acreage generally limited to shallow structural traps. The Company has identified a number of structural and stratigraphic leads in the deeper section and plans to focus its exploration activities on the conventional oil and gas potential in addition to unconventional shale gas potential.

EWP and NIS plan to cooperate extensively to explore for and produce oil and gas from the four concession areas. Both conventional and unconventional resource potential has been identified on the acreage, which is situated close to numerous oil and gas fields. The joint work programs planned will include the acquisition and processing of approximately 900 km of 2D and 600 sq km of 3D seismic data during the first two years of operations. The new seismic data will be used to high-grade a number of prospective conventional oil and gas leads already identified on the acreage, to further study the unconventional shale potential and select drilling sites. Under the terms of the agreement East West will retain a 15% carried interest through Phase 1 (compulsory) and Phase 2 (optional) exploration periods as well as a carried interest on any discovery through to the declaration of commerciality. EWP will retain a 15% share of all production realized from the four concessions.

NIS is a leading explorer in this sector of the Pannonian Basin. NIS is currently carrying out extensive E&P operation in the Vojvodina region of northern Serbia, immediately adjacent to the Romanian Periam and Biled Concessions. NIS's operational capabilities and knowledge of regional geology are expected to contribute significantly to the success of the Romanian exploration programs.

The exploration programs are subject to final ratification of the Concession Agreements by the Government. The farmout to NIS will be subject to further agreements and approval of NAMR, which is expected to take place soon after the Government of Romanian ratifies the Concessions.

"The cooperation agreement with East West will allow NIS to expand its presence outside Serbia and to implement NIS's strategy of becoming an active player in the Balkan energy market. Participation of NIS in the project as operator will allow us to further our experience in the region and to apply innovative technologies for developing conventional and unconventional resources," commented Kiril Kravchenko, NIS Chairman of the Management Board.

Denis Sugaipov, the COO of NIS Company said, "The deal with East West Petroleum has several operational synergies for both companies and benefits for the Romanian energy sector. NIS's geological knowledge of Pannonian basin and its success in development can be applied to an area which is analogous to the Serbian North Banat region. In addition, EWP can contribute its technical expertise in unconventional resources. I hope that this deal will show results in the near future and contribute to the development of the Romanian energy sector, enabling the sustainable development of the entire region."

David Sidoo, Chairman of East West commented, "These agreements are the culmination of many months of hard work and we are confident that in Naftna Industrija Srbije, a subsidiary of Gazprom Neft, we have sourced a key and strategic partner, with substantial operating experience and the necessary financial and operating capabilities which can be applied to the Romanian concessions and can very quickly advance with the development of the Romanian concessions."

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Statoil Farms-In Blocks Offshore Indonesia

- Statoil Farms-In Blocks Offshore Indonesia

Tuesday, May 24, 2011
Statoil

Statoil has farmed in to three offshore exploration licenses in Indonesia, significantly expanding the presence in the country.

Statoil will acquire a 40% equity interest in a North Makassar Strait Production Sharing Contract (PSC) and a similar interest in two additional offshore PSCs (West Papua IV and Halmahera-Kofiau).

The three production sharing contracts (PSC) will be operated by Niko Resources Ltd.

Given exploration success, Statoil has the option to become the operator in the development and production phases.

"This is an early access opportunity that adds significant additional acreage to our portfolio," said Pål Haremo, senior vice president for Exploration.

"Our focus is to support Statoil's exploration strategy, by adding materiality to our existing portfolio in Indonesia and increasing Statoil's acreage position in general," he added.

The agreement signed includes one exploration well commitment for the North Makassar Strait PSC.

The agreement is effective from 1 January 2011, and is subject to governmental approval in Indonesia.

Statoil is already an operator in the Karama offshore PSC in Indonesia and partner in the neighboring Kuma PSC in the Makassar Straits.

Exploration drilling is planned for both these licenses in 2011.

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BG Group Inks PSC for Blocks Offshore Keny

- BG Group Inks PSC for Blocks Offshore Keny

Tuesday, May 17, 2011
BG Group plc

BG Group has signed Production Sharing Contracts with the Government of Kenya for two offshore exploration blocks - L10A and L10B.

BG Group will be operator on both blocks and will hold a 40% equity interest in block L10A and a 45% interest in block L10B. The initial work program consists of a commitment to acquire seismic data during an initial exploration period of two years.

Blocks L10A and L10B together cover an area of more than 10,400 square kilometers in the southern portion of the Lamu Basin, offshore Kenya, located in water depths ranging from around 200 meters to in excess of 1 900 meters.

BG Group Executive Vice President and Managing Director, Africa Middle East & Asia, Sami Iskander, said, "BG Group looks forward to working with our partners and the Kenyan Government to play an active role in the exploration for oil and gas offshore Kenya."

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BP Clears Hurdle to Acquire Brazil Blocks from Devon

BP Clears Hurdle to Acquire Brazil Blocks from Devon

Wednesday, May 11, 2011
BP plc

BP on Tuesday announced it has received final approval to complete the purchase of ten exploration and production blocks in Brazil from Devon Energy.

The regulatory approvals from the Brazilian National Petroleum, Natural Gas and Biofuels Agency (ANP) were the last required to conclude the agreement announced in March last year. It is expected formal completion of the acquisition will take place shortly.

The blocks acquired will give BP a diverse and broad deepwater exploration acreage position offshore Brazil with interests in eight license blocks in the Campos and Camamu-Almada basins in water depths ranging from 330 to 9,100 feet (100-2,780 meters), as well as two onshore licenses in the Parnaiba basin. The Campos basin blocks include four discoveries — Xerelete, pre-salt Wahoo, Itaipu and Fragata — and the Polvo field, which is currently producing around 25,000 barrels of oil per day.

"We are pleased to receive the approvals. The completion of this acquisition delivers a material position in some of Brazil's most important hydrocarbon basins and reinforces the group's strategy of securing strong exploration positions in such basins and working with strong national champions," said BP group chief executive Bob Dudley. "We believe these blocks add distinctive value to our asset base, and offer significant long-term growth potential."

"It is exciting to participate in the development of the oil industry in such an important country as Brazil and the Devon acquisition provides us with an excellent growth platform," said Guillermo Quintero, BP Brazil Regional President.

Last month BP completed the acquisition of the majority control of Brazilian producer of ethanol and sugar Companhia Nacional de Acucar e Alcool (CNAA). BP paid approximately $ 680 million to acquire 83% of the shares and refinance 100% of the company's long-term debt. BP will now be responsible for operating two ethanol plants located in Ituiutaba (Minas Gerais) and Itumbiara (Goias), with current capacity of processing 5 million tons of sugar cane per year.

The blocks are part of the transaction between BP and Devon Energy announced in March 2010. Most of Devon's employees in Brazil are expected to join BP. The transaction is a corporate share sale whereby BP will obtain ownership of Devon Energy do Brasil Ltda., the Devon entity that owns interests in the blocks.

The acquisition gives BP interests in one currently producing field (Polvo) and 4 existing discoveries (Xerelete, Itaipu, Wahoo and Fragata). BP becomes operator of the Polvo field, and of blocks BM-C-32 (containing the Itaipu discovery) and BM-C-34 (consisting of C-M-471 and C-M-473, and containing the Fragata discovery) in the Campos Basin; Block BM-CAL-13 in the Camamu-Almada Basin; and onshore Block BT-PN-2 in the Parnaiba Basin.

BP also gains non-operating interests in blocks BM-C-30 (containing the Wahoo discovery), BM-C-35 and the Xerelete discovery (formerly the BC-2 block), all in the Campos Basin; as well as onshore Block BT-PN-3 in Parnaiba Basin.

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Sterling Declares Force Majeure at Black Sea Blocks

Sterling Declares Force Majeure at Black Sea Blocks

Thursday, April 28, 2011
Sterling Resources Ltd.

Sterling Resources has declared Force Majeure on its Midia and Pelican Blocks in the Black Sea after the Company has been unable to undertake Petroleum operations for reasons outside of its control.

In early 2011, after extensive and lengthy efforts, the Company finally obtained from the relevant Governmental authorities the environmental and drilling permits necessary for operations on the Midia and Pelican Blocks. The National Agency of Mineral Resources ("NAMR") has given approval to a 2011 work program based on which Sterling is obligated to undertake certain offshore activities which include the drilling of 2 offshore wells, acquiring 1,050 linear kilometers of 2D seismic and undertaking investigations and studies to bring the Ana and Doina discoveries forward for development.

However, in July 2009 the Romanian Parliament passed a law requiring construction permits for certain offshore activities. Sterling has sought clarification of this requirement from relevant authorities, as the activities contemplated under the 2011 work program clearly appear to have aspects that will require a construction permit. It is Sterling's view that, after having received responses from certain relevant governmental authorities, that the authorities are currently unable or unwilling to provide construction permits for offshore oil and gas activities.

The effect of this situation, which the Company views as political in nature, is to render it impossible for the Company to undertake Petroleum Operations at the present time. Sterling has thus issued a notice to NAMR, stating that the total lack of clarity on the applicable procedure and authority for issuance of construction permits constitutes an event of Force Majeure under the Concession Agreement.

Under the terms of the Concession Agreement NAMR must, within 15 days of this notification, either agree with the invocation of Force Majeure, the effect of which would be to extend the duration of the Concession Agreement, or reject the Company's invocation putting the two parties into a dispute resolution procedure which could ultimately be decided in international arbitration.

Mike Azancot, Sterling's Chief Executive Officer, said, "Despite this unfortunate situation we look forward to working with the NAMR and other Romanian authorities to find a resolution that will allow the Company to fulfill its obligations, preserve its rights and ultimately achieve success for the Company and the people of Romania. With a satisfactory resolution achieved, we are hopeful that we can advance our plans to undertake further exploration on these very prospective blocks and bring Ana and Doina to production within 3 years. This will bring significant benefits to Romania in terms of greater energy self-sufficiency, the likely award of construction and oil service contracts to local companies, and encouraging a wide range of companies to explore offshore Romania."

Range Enters HOA to Acquire Trinidad Blocks

Range Enters HOA to Acquire Trinidad Blocks

Wednesday, April 20, 2011
Range Resources Corp.

Range has entered into a binding Heads of Agreement ("HOA") to acquire through SOCA Petroleum ("SOCA") its right to purchase a 100% interest in a Trinidad holding company whose two wholly owned subsidiaries hold production licenses for three blocks in producing onshore oilfields in Trinidad together with a local drilling company.

The production acreage and operating wells cover the Morne Diablo, Beach Marcelle and South Quarry oilfields, with the total acreage covering 16,253 gross acres on the southern coast of onshore Trinidad. Current production from the fields is approximately 600 bopd, however Range believes a minimal work program could potentially lift production to more than 4,000 bopd within 36 months on the known reserves.

In addition to the holding company parent of two subsidiaries holding production licenses for the onshore acreage, the proposed Range acquisition also includes a 100% interest in a wholly owned drilling company (located in Trinidad), which owns onshore drilling equipment and related facilities.

The Company is planning to use company-owned drilling rigs and equipment and, with cashflow from existing production supplemented by a well advanced financing facility (to be finalized) to fund its development and exploration program which aims to increase the production from 600 bopd to 4,000 bopd within 36 months from known reserves without taking into account any exploration upside.

In addition to the known reserves, significant potential exists in the deeper Herrera Formation. The Deeper Herrera Formation will be a primary target of future drilling using company-owned drilling rigs, which are capable of reaching the depth of these formations. Subject to the successful drill testing of this formation, the Company is ultimately targeting an increase in the production level to between 8,000 - 10,000 bopd.

Range's Executive Director, Peter Landau commented today, "With the recent strength and growth in Range's asset base and market capitalization, the 100% acquisition represents an incredible opportunity to compliment Range's asset base of good value exposure to early stage, low risk production / mature exploration opportunities whilst retaining significant exposure to considerable measurable exploration upside."

"Onshore Trinidad is a low cost, high operating margin environment with oil production sold at the wellhead and transported to the Pointe-a-Pierre Refinery, which has capacity for all additional planned production."

"The Company believes that there is significant potential for value enhancement given the known management team and will target (subject to exploration success) an ultimate production profile of up to 10,000 bopd over the next 2-3 years," he added.

Consideration

Under the terms of the Agreement with SOCA Petroleum, Range will pay the following to acquire the remaining 90% interest in SOCA that it doesn't already own:

• US $52m upon formal completion of the acquisition (scheduled to happen imminently upon all necessary closing actions being completed);
• The issue of 35,842,293 fully paid ordinary shares upon completion; and
• The potential issue of two parcels of a further 17,921,146 fully paid ordinary shares upon production from the SOCA licenses reaching 1,250 bopd and 2,500 bopd respectively.

To help provide funding for the cash component of the acquisition consideration, Range has received commitments to a placement of 117,647,059 shares at an issue price of £0.17 per share to raise £20 million. The placement was undertaken through the Company's UK broker, Old Park Lane Capital, to a number of sophisticated and institutional investor. The placement was well oversubscribed and Company is looking at accepting up to £5m in over subscriptions due to demand.

The placement is scheduled to settle on April 27, 2011, other than 4,426,271 shares which are scheduled to settle on May 10, 2011.

Technical Overview of Trinidad assets to be acquired

Historical and current oil production is from the Forest and Cruse Formations which are shallow fluvio-deltaic reservoirs with current total estimated Proved plus Probable plus Possible Reserves (3P) (on SOCA's and third parties' licenses) of 20 million barrels of oil (MMbo) (Forest A. Garb & Associates report1). Current production is approximately 600 bopd from the Morne Diablo, South Quarry and Beach Marcelle fields.

Significant potential exists in the Deeper Herrera Formation. The Deeper Herrera Formation is a Miocene-aged deepwater turbidite. Production is typically found in the northeast to southwest thrusted structures to the east and north of the subject acreage, where the Penal field has produced more than 60 MMbo to date. 3D Seismic was used to identify prospective drilling locations in the license area that have a further undiscovered oil potential of 100 MMbo.

The Deeper Herrera Formation will be a target of future drilling using company-owned drilling rigs, which have the capability to reach these formations.

Rocksource Scoops Up Blocks Offshore Norway

Rocksource Scoops Up Blocks Offshore Norway

Friday, April 15, 2011
Rocksource ASA

Rocksource has been awarded 4 new licenses in the 21st Licensing Round on the Norwegian Continental Shelf (NCS) announced by the Ministry of Oil and Energy on the April 15, 2011. All licenses contain high potential, low risk prospects that have been de-risked using Controlled Source Electromagnetic (CSEM) data, processed in the proprietary software system ‘Rocksource Discover’, prior to application. These awards mark another significant milestone in the Company’s development and add multiple, high value drillable prospects to the Rocksource prospect inventory.

 

PL 602. Blocks 6706/10 (part), 6706/11, 6706/12 (part)

This license is located on the Vema Dome in the Vøring Basin (Norwegian Sea), immediately west of the Luva, Haklang and Snefrid discoveries. Several prospects have been mapped and de-risked using 3D seismic data and CSEM. The prospects have potential targets at multiple reservoir levels.

• The license group consists of:
  
  • Statoil (Op.): 40%
  • Petoro: 20%
  • Centrica: 20%
  • Rocksource: 20%
• The work program consists of:
  
  • Year 1-3: Acquire new 2D seismic and reprocess 3D seismic. Decide on drill or drop.
  • Year 4-5: Drill exploration well.
  • Year 6: Decide on continuation or drop.

 

PL 528 B. Block 6707/10 (part)

This license is located in the Vøring Basin in the Norwegian Sea, directly northeast of the Luva, Haklang and Snefrid discoveries. The license is an extension to PL 528, and the new acreage is securing ownership of the full extent of the Ivory prospect which was awarded in the 20th Round.

• The license group consists of:
  • Suncor Energy (Operator): 40%
  • Centrica: 30%
  • Rocksource: 30%

The work program follows PL 528, where a drill or drop decision must be taken within April 2012.

 

PL 601. Blocks 6609/3 and 6610/1

This license is located in the eastern part of the Træna Basin, in the Norwegian Sea. Several leads and prospects have been mapped and de-risked using 3D seismic data and CSEM.

• The license group consists of:
  • Wintershall (Op): 40%
  • Edison International: 20%
  • North Energy: 20%
  • Rocksource: 20%
• The work program consists of:
  • Year 1-3: G&G work, reprocessing of existing 3D seismic, acquisition of minimum 250 sq.km. new 3D seismic. Carry out G&G studies where evaluation and possible CSEM acquisition is included. Decide on drill or drop.
  • Year 4-5: Drill exploration well.
  • Year 6: Decide on continuation or drop.

 

PL 610. Blocks 7722/2 and 7722/3

This license is located at the eastern margin of the Loppa High, in the Barents Sea, immediately north of the Obesum discovery. The prospectivity has been mapped and de-risked using 2D seismic data and CSEM.

• The license group consists of:
  • GDF Suez E&P (Op.): 50%%
  • Spring Energy: 25%
  • Rocksource: 25%
• The work program consists of:
  • Year 1-3: Acquisition of new 3D seismic. Decide on drill or drop.
  • Year 4-5: Drill exploration well.
  • Year 6: Decide on continuation or drop.

Rocksource's COO Gregor Maxwell commented, "These awards further add to Rocksource’s existing portfolio of prospects which have been de-risked using an integrated evaluation of EM data in combination with conventional seismic and well information. We believe each award contains low risk, high value prospectivity which we look forward to maturing with our partners."

BPZ Concludes Seismic Work at Peru Blocks

BPZ Concludes Seismic Work at Peru Blocks

Tuesday, April 12, 2011
BPZ Resources Inc.

BPZ Resources provided an update to its operations in northwest Peru.

Production

For the first quarter ended March 31, 2011, total production was approximately 381,000 barrels of oil (4,233 barrels of oil per day, "bopd") from the offshore Corvina and Albacora fields in Block Z-1. This compares to total production of 414,000 barrels of oil (4,500 bopd) in the fourth quarter of 2010. The lower production in first quarter was due to shutting in well A-14XD in the Albacora field on January 24, 2011.

Albacora and Corvina Permits

Authorization for interference testing along with associated gas flaring covering a four month period beginning June 1, 2011, has been received from the Ministry of Energy and Mining of Peru for Albacora. The permits are for the Company's A-14XD, A-9G, and A-13E oil wells, with the latter two having been drilled by a previous operator, which are all currently shut-in at the Albacora platform. As a result, workovers will first be conducted on the A-9G and A-13E wells, with an estimated start in May 2011. Each well is expected to be opened at various intervals, both on an individual basis and simultaneously, during the four-month period to test reservoir connectivity of the sands that were producing at the A-14XD well. Upon completion of the interference testing, the Company plans to open previously untested zones in each of the three wells. However, in order to produce from those new zones, we must request authorization to flare associated gas until the injection equipment is installed at the Albacora platform which is currently scheduled for year-end 2011.

At Corvina, the permanent production facilities including the compressor are operating at expected efficiency levels. The Company has received approval to maintain the wells open while the compressor undergoes scheduled maintenance during the current calendar year. As a result of obtaining the authorization for interference testing at Albacora, the snubbing unit will not be moved to the Corvina platform as originally planned as it will first be used to complete the Albacora workovers.

The additional production from the interference testing at Albacora is expected to offset the anticipated lower than forecasted production from Corvina due to the delay in performing workovers on certain Corvina wells. As such, the Company maintains the previously provided total production guidance of approximately 4,000 bopd for the year 2011.

Seismic Surveys

Block XXIII

The 3-D seismic survey covering approximately 370 square kilometers in the northern section of onshore Block XXIII was completed in January 2011. The 3-D seismic survey was conducted to better delineate the Mancora gas play and the potential oil prospectivity in the Heath formation. To further delineate the oil potential of Block XXIII, in October 2010 we completed a 2-D seismic covering 312 kilometers in the southern section where we are following the trend of the adjacent Talara basin oil fields. Processing is expected to be completed by mid-year 2011.

Block XXII

In March 2011, a 258 kilometer, 2-D seismic survey was completed that covered several oil leads following the trend of nearby oil fields in adjacent blocks. Processing is also expected to be completed by mid-year 2011.

Block Z-1

The Company is continuing the process aimed at securing the permit to acquire the offshore 3-D seismic survey in Block Z-1. The public audiences were completed in January, 2011 and the governmental agencies are finalizing their review. We remain optimistic about obtaining the required seismic permit by the end of the second quarter.

Block XIX - Pampa la Gallina

We have been granted a 45-day deferral on drilling the Pampa la Gallina (PLG) onshore well due to contractor delays in completing the rig refurbishment. This defers the commitment deadline to drill and log the PLG well to mid July 2011. The Company may also request an extension of up to six months beyond the July deadline.

Standby Costs and Other Income

As previously disclosed, the Petrex-09 rig formerly utilized at the Corvina field is being refurbished and upgraded at no cost to the Company in order to enhance its capability in preparation for drilling an exploration well in the onshore PLG prospect in Block XIX. Reduced standby rates for the rig are being charged to the Company during the refurbishment and will continue until the rig is utilized.

Also as previously disclosed, the Petrex-18 rig, formerly utilized at the Albacora field, is under lease to another operator through November 15, 2011. The Company plans to resume drilling at Albacora after the 3-D seismic survey on offshore Block Z-1 is completed and the data is processed and interpreted.

Accordingly, standby costs for calendar year 2011 are expected to range between $10 million and $12 million. However, the Company intends to continue to pursue opportunities to further reduce these standby costs such as subleasing the Petrex-09 rig to another operator while not being utilized by the Company.

In addition, we have reached an agreement to charter to that same operator our BPZ-02 barge that supports the Petrex 18 drilling rig, as well as the Don Fernando construction barge, and are working on the possibility of chartering the Company's floating production, storage and offloading (FPSO) barge, the Namoku, as well. Rental income from these vessels is expected to offset related costs.

President and CEO, Manolo Zuniga commented, "We are very pleased that the seismic work on Blocks XXII and XXIII was completed as planned. This work will allow us to better map the oil and gas leads in these blocks." Mr. Zuniga continued, "The progress we are making on all our growth initiatives has been made possible by our close working relationship with the Peruvian authorities. We are appreciative of the spirit of cooperation that has been established and we look forward to continuing to partner together. Indeed, strong partnerships contribute greatly to the goals we have set for our Company."

Chariot O&G In Talks to Farm-Out Blocks Offshore Namibia

Chariot O&G In Talks to Farm-Out Blocks Offshore Namibia

Thursday, March 31, 2011
Chariot O&G Ltd.

Chariot O&G provided an update on the farm-out process and progress with regard to drilling plans and further exploration work achieved across its license acreage offshore Namibia.

Chariot has been very encouraged with the offers that have been received to date and reported that it is at the advanced negotiation stage on several blocks in the farm-out process. Discussions continue and the Company looks forward to updating the market with further information shortly.

Chariot remains committed to drilling its first well in 4Q 2011 and is pleased to report that a contract has been signed with Senergy (GB) Ltd to provide drilling and support services for its planned wells on the Tapir North (Northern License) and Nimrod (Southern License) prospects. Chariot management and a team from Senergy recently visited Namibia as part of this process, meeting with government officials and local contractors. As previously stated, Chariot is planning to drill one well in 4Q 2011 with a second in 1Q 2012.

Chariot also reports that additional attribute analysis and mapping work has continued on the 3D seismic acquired in the Southern blocks. As a result it expects to release a further resource update following the completion of this work in the early part of the second quarter.

Paul Welch, CEO of Chariot commented, "Our farm-out efforts continue to be our main focus of activity and these discussions are progressing very well. Concurrent to these negotiations, we are very pleased with our developments in regard to moving our drilling efforts forward. This year is going to be one of significant progress for the Company and I look forward to providing updates in due course."