Treaty to Boost Production at Tx. Leases

- Treaty to Boost Production at Tx. Leases

Thursday, September 08, 2011
Treaty Energy Corp.

Treaty reported on its progress on the project to increase production on its Texas oil leases.

Stephen L. York, President and COO of Treaty Energy Corporation, stated, "We want our shareholders to know that our team has faced the hottest and driest summer in Texas since 1980. The extreme heat and dry climate have considerably affected ground conditions. These conditions have caused failures of equipment and electrical transformers which have led to a decline in the overall production on our existing wells."

Mr. York added, "However, the good news is that Treaty Energy's aggressive work-over plan has been able to offset the decline in production and has even greatly increased the production of the re-worked wells."

"Production on the first eight wells that have been re-worked increased from 8 barrels of oil per day to 26.5 barrels per day," explained Mr. York. He explained further, "Treaty Energy has also recently finished re-working an additional eleven wells, and after about a week of steady production, we are expecting to increase production to about 55 barrels of oil per day."

Treaty Energy has four other leases that are currently not producing as they require a work-over on the injector wells and electrical power lines. Work-over of these leases should be completed by the end of September and is expected to increase overall Texas production to 65 to 70 barrels of oil per day by that time.

Beyond the previously mentioned work-overs, Treaty Energy has 15 shut in wells spread over the Great Eight Leases that have been shut in for more than 12 months. Upon completion of all scheduled work-overs, the Company will then be able to more accurately evaluate the additional shut in wells and re-work them as necessary to bring them back into production.

Mr. York added, "The best estimate of Texas production on the currently owned and paid for leases will be 75 to 90 barrels of oil per day after the rework of the 15 shut in wells. Our goal by the end of 2011 is to be at 200 to 350 barrels of oil per day. This production number can vary based on the number of new wells that are expected to be drilled and completed. We expect to exceed 1,000 barrels per day by the end of June 2012. At $80 per barrel, this will translate to about $29.2 million in gross revenues annually from our Texas oil production alone."

CEO of Treaty Energy Corporation, Andrew Reid, stated, "I am pleased with the current production in Texas and noted that all re-works are being done from the bottom of the well to the top, including pressure testing of the tubing prior to re-installation in the wells. This type of work-over may initially cost more and require more time, however Treaty expects to avoid the higher operational costs that can be associated with stripper wells when using the traditional band-aid methods. Treaty's wells, once worked-over, will require much less maintenance compared to the average stripper wells."

Finally, Mr. Reid said, "We plan to release an update in the week of September 12th on the progress in Belize regarding the first well that we are expecting to drill later this month."

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Brazil's Pre-Salt Reserves to Boost Latin American Oil Production Growth

- Brazil's Pre-Salt Reserves to Boost Latin American Oil Production Growth

Friday, August 19, 2011
Rigzone Staff
by Karen Boman

Brazilian state energy company Petrobras' plans to develop its offshore pre-salt oil reserves will contribute in part to what Barclays Capital calls a "sizable upward shift" in hydrocarbons production through 2011 through 2020, according to Barclays' Global Energy Outlook. Brazil and Colombia are expected to experience increases hydrocarbons production during that time period, most concentrated in oil versus natural gas, Barclays noted.

Petrobras has unveiled plans to spend US $127.5 billion, or 57 percent of the resources under Petrobras' 2011-2015 Business Plan of US $224.7 billion, on exploration and production efforts. The company plans to increase total oil and gas output from 2.7 million boe/d in Brazil and abroad to 4 million in 2015 and 6.4 million in 2020.

Pre-salt output alone will add up to nearly 2 million boe/d in 2020, pushing the pre-salt's contribution to production from two percent today to 18 percent in 2015 and 40.5 percent by 2020. Petrobras will achieve this growth by setting up 30 extended well tests over the next five years, including 20 in the pre-salt cluster, and 10 in the post-salt area. Additionally, the company will spend US $1.3 billion per year on technology, which will include funding for efforts explore new frontiers, oil recovery and develop a new generation of offshore and undersea production systems.

Petrobras last month also confirmed the commercial potential of its Lula discovery in the pre-salt Santos Basin in water depths ranging from 6,890 feet to 7, 218 feet. Lula produced 28,436 b/d, according to Subsea IQ, and is the first well to produce from Brazil's high touted pre-salt offshore reserves. The well is interconnected to Cidade de Angra dos Reis FPSO and is the first of six production wells to be connected to the FPSO. Petrobras expects for the FPSO to produce around 100,000 b/d d throughout 2012.

Other companies are seeing significant potential in Brazil's pre-salt area. BG Group in June upgraded its estimate of its pre-salt Santos Basin interests to some 6 billion Boe net to BG Group with an upside potential of 8 billion BOE net. The new estimates results from the company's internal analysis of data gathered from drilling, appraisal and other data, including data collected from 29 wells drilled in BG's existing discoveries.

"Robust economics and solid progress with the fast-track development program will see gross installed production capacity rising steadily to reach more than 2.3 million boe per day by 2017," said BG Group Chief Executive Sir Frank Chapman.

Other companies active offshore Brazil include OGX, which has identified the presence of hydrocarbons in the Santonian section of well 1-OGX-47-RJS in the BM-S-59 block in the shallow waters of the Santos Basin, according to Subsea IQ. The operator found a hydrocarbon column of about 430 feet in sandstone reservoirs of the Santonian section with about 167 feet of net pay. The OGX-47 well, named Maceio, lies about 68 miles off the coast of Rio de Janeiro in a water depth of 607 feet. The Ocean Quest semisub drilled the well.

Chevron reported last month that it plans to drill a well later this year in the pre-salt section beneath its Frade field offshore Brazil. The company will drill the well using Transocean semisubmersible Sedco 706, according to RigLogix. "If successful, we'll be in a great position to take advantage of our existing production facilities," said George Kirkland, vice chairman and EVP of Global Upstream and Gas at Chevron.

Petrobras' ambitious drilling plans include constructing newbuild rigs within Brazil; these plans make it likely that service companies will beef up investments in Brazil to meet their customers' needs. National Oilwell Varco (NOV) this week signed contracts to supply drilling equipment packages for seven drillships to Estaleiro Atlantico Sul, including drilling riser and pressure control equipment. The value, over the term of the deliveries, is approximately $1.5 billion. Pete Miller, Chairman, President and CEO of National Oilwell Varco, said the company is investing heavily in Brazil to manufacture more of the products and technologies National Oilwell Varco provides to its oil and gas customers, and to service the rapidly growing installed base of NOV drilling equipment in the region.

Sedco 706

The significant distance at which pre-salt reserves lie offshore Brazil means that operators will likely continue to favor floating production systems as field development solutions. Brazilian waters will be the most active region for future floating production projects, with 50 potential floater projects in the planning cycle, according to a recent report by International Maritime Associates Inc. Of the 50 potential projects, 26 are planned for ultra-deepwater, or water depths greater than 4,921 feet; five are planned for deepwater, or water depths between 3,280 feet and 4,921 feet, and 19 for water depths less than 3,280 feet.

Keppel Shipyard is on track to complete the modification and upgrade of FPSO OSX-1, the first floating production storage and offloading FPSO unit for OSX Brazil S.A. Chartered to OGX Petroleo e Gas Participacoes S.A., the FPSO will be deployed in the Waimea field in the Campos Basin offshore Brazil. The FPSO is expected to leave Keppel in this year's third quarter; production is expected to begin in this year's last quarter at a rate of up to 20,000 b/d from the OGX-26 well.

OGX in June unveiled its business plan related to discoveries in the Campos and Parnaibas basins. Waimea and the Waikiki production is expected to begin in the fourth quarter of 2013. In 2013, the company expects to have three Floating Production Storage Offloading FPSOs (OSX-1, OSX-2 and OSX-3) and two Wellhead Platforms "WHPs" (WHP-1 and WHP-2) in place with a total of ten horizontal production wells onstream in these two projects. OGX expects to achieve 150,000 b/d of production from the Campos Basin in 2013 in these two production complexes from 10 horizontal wells producing an average of 15,000 b/d each.

The gas production ramp-up in the Parnaíba Basin is expected to begin in the second half of 2012. OGX has one project covering two accumulations in the PN-T-68 block, which is 46.7% owned by OGX, and is expected to achieve gross production of 5.7 million m3 of natural gas per day (approximately 200 MMcf/d), or approximately 36,000 BOE/d in 2013 (approximately 15,000 BOE/d net to OGX).

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Venezuela, Iran to Hold Talks; Seek to Boost Ties Within OPEC

- Venezuela, Iran to Hold Talks; Seek to Boost Ties Within OPEC

Wednesday, August 17, 2011
Dow Jones Newswires
CARACAS
by Kejal Vyas

Venezuela will host a summit for bilateral talks with Iran next month as the two member states of the Organization of Petroleum Exporting Countries look to strengthen their alliance.

In a statement, the Venezuelan Foreign Ministry said President Hugo Chavez spoke to Iran's President Mahmoud Ahmedinejad to organize the summit and "agreed on the need to boost the levels of coordination within OPEC" in a bid to combat "the adverse effects of the economic crisis faced by the world's dominant powers."

Chavez and Ahmedinejad also spoke on the implications of "imperial aggressions" against countries such as Libya and Syria, the ministry's statement said.

Both Venezuela and Iran are fierce critics of the U.S. and other western nations and have looked to strengthen political and economic ties in recent years.

In June, Iran and Venezuela, both known to be fierce oil-price hawks, worked together to block an OPEC agreement to raise oil output, while opponents, including Saudi Arabia, said they planned to increase production to meet higher demand.

Within Venezuela, Iran is helping with financing and construction of housing units, part of an initiative by Chavez as he prepared to bid for another six-year term in next year's elections.

Earlier this month, the two countries signed a $1 billion deal to build 10,000 houses in the South American country over the next 18 months but they didn't say how much each side would be contributing.

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

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Kosmos to Boost Jubilee Production, Exploration Targets

- Kosmos to Boost Jubilee Production, Exploration Targets

Thursday, August 11, 2011
Kosmos Energy Ltd.

Kosmos announced financial and operating results for the second quarter ended June 30, 2011. The Company generated a net loss of $9.1 million in the second quarter of 2011, or $0.03 pro forma basic and diluted net loss per share attributable to common shareholders. This compares with a net loss of $32.5 million for the same period in 2010.

Second-quarter 2011 oil revenues were $124.1 million on sales of 996 thousand barrels of oil, or $124.62 per barrel. Jubilee Field average production for the quarter was approximately 66 thousand barrels of oil per day (bopd) gross. EBITDAX was $102.5 million for the second quarter of 2011, compared with $9.7 million for the second quarter of 2010.

The Company's cash on hand at the end of the second quarter grew to $818 million. Total liquidity, including cash and available borrowing under the existing debt facility was nearly $1 billion.

"Kosmos' recent initial public offering enhanced our strong financial foundation and provided additional capacity to continue accelerating the development and exploration of our assets. The commissioning of the Jubilee Field Phase 1 development is ongoing, with water and gas injection facilities now progressing well. We are seeing continued improvement in operating uptime, and field production is anticipated to further ramp up during the remainder of 2011. The Company's near-term outlook includes growing Jubilee production and a number of exploration and appraisal drilling targets. In addition, we are progressing our inventory of discoveries in Ghana, and our exploration team continues to enhance our overall portfolio with significant new areas," said Brian F. Maxted, President and Chief Executive Officer.

Operational Update

Ghana

Current gross production at the Jubilee Field is approximately 80 thousand bopd. With final commissioning of process and injection facilities, completion of the remaining wells and the sidetrack of an existing well, the Company is targeting production reaching the FPSO capacity around year-end 2011. Planning for the next phase of Jubilee Field development is underway, and Kosmos expects implementation to commence during 2012.

The Atwood Hunter semi-submersible rig is currently drilling the Akasa-1 exploration well on the Kosmos-operated West Cape Three Points Block. The Akasa-1 well is expected to reach final target by the end of August 2011. In addition, the Company plans to further appraise the Teak discovery with an initial two-well program, commencing as early as late 2011.

Appraisal activity to support development planning continues on the adjacent Deepwater Tano Block. Drillstem tests were recently performed on the Tweneboa-2 and Tweneboa-4 wells as part of an integrated reservoir evaluation program. Kosmos also anticipates drilling two additional appraisal wells in the Enyenra Field later this year.

Cameroon

Kosmos continues to perform an extensive technical evaluation of the Kombe N'sepe Block following initial drilling results. The Kombe N'sepe Block operator recently has exercised a contractual right for a six-month extension to the current exploration phase. The Company anticipates drilling the Liwenyi prospect on the Kosmos-operated N'dian River Block in 2012.

Morocco

The Company recently entered into two new petroleum agreements covering the Foum Assaka and Cap Boujdour areas offshore the Kingdom of Morocco. The Foum Assaka license covers approximately 1.6 million acres, and Kosmos will be the operator with a 37.5 percent working interest. The Cap Boujdour license agreement covers 7.3 million acres. Kosmos also will be the operator of the Cap Boujdour license with a 75 percent working interest.

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Reef Resources to Boost Production at Ausable Field

- Reef Resources to Boost Production at Ausable Field

Thursday, August 04, 2011
Reef Resources Ltd.

Reef Resources announced that significant progress is being made on determining the Ausable #5 future flow rate. The presence of very light oil, blended with natural gas condensates, creates foamy oil conditions and consequently the current mechanical bottom hole pumping configuration is operating at very low efficiency causing erratic flow rate and high fluid levels in the wellbore. The Ausable field has now been shut in for a period of time to provide fluid level and pressure build up data that is necessary to determine the Ausable #5 likely flow rate using industry accepted inflow analysis technique and will be reported as soon as all data is processed.

When the likely ultimate flow rate has been estimated Reef will be able to design and execute a plan for long term lifting of the well fluids using revised pumping techniques that will allow the full potential of the well to be realised.

The removal of the frac tools from Ausable # 2 is also progressing. The first stage of tubing cuts have been successfully executed and will now concentrate on extracting the frac tools over the course of the next few days. Once the frac tools are removed the Company will report on the status of Ausable #2.

Arnie Hansen stated, "While still at a preliminary state, Ausable # 5 is looking very positive and the Company's engineering team is working on a solution to increase pumping efficiencies therefore increasing production. This is the first stage of optimization with next goal to acquire and inject natural gas to re-pressure the reef that will significantly increase production and demonstrate the true value of the Ausable pool."

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Commodity Corner: Debt Talks Boost Crude

- Commodity Corner: Debt Talks Boost Crude

Tuesday, July 26, 2011
Rigzone Staff
by Saaniya Bangee

Crude prices briefly passed the $100-mark Tuesday as investors remained uncertain about the U.S. economy.

Tuesday's trading volumes were moderate as oil traders anticipated the upcoming deal. Oil prices fluctuated between $97.76 and $100.62 during the trading session. Republican and Democrat lawmakers are trying to compromise on a deal to raise the federal government's debt ceiling ahead of the Treasury Department's Aug. 2 deadline.

Likewise, the political maneuvering surrounding the debt ceiling prompted the dollar to drop against the euro. Against a basket of six other major currencies, the dollar index fell 0.6 percent to 73.595.

Light, sweet crude for September delivery settled at $99.59 a barrel Tuesday.

In other economic news, consumer confidence rose to 59.5 in July, according to a Conference Board report. In addition, the Commerce Department reported a 5-month high in new single family homes.

Its European counterpart, Brent crude added 34 cents, settling at $118.28 a barrel. Brent prices traded between a range of $116.59 and $118.98 Tuesday.

Meanwhile, natural for August delivery slid lower Tuesday, ending the session at $4.37 per thousand cubic feet. Natural gas prices fluctuated between $4.316 and $4.391 Tuesday.

The front-month contract expires at the close of Wednesday's trading session.

RBOB gasoline added 1.68 cents to settle at $3.15 a gallon. The intraday range was $3.095 to $3.17 Tuesday.

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Resaca to Boost Production before Year-End

- Resaca to Boost Production before Year-End

Friday, July 22, 2011
Resaca Exploitation Inc.

Resaca provided an update on the Company's progress in implementing the current capital expenditure program and announced the sale of a non-core property.

Capex Program Progress

Overview

Resaca announced a $13 million capital expenditure program in February of 2011. The objective of the program is to increase production to 1,000 barrels of oil equivalent per day ("boepd") before year-end and double operating cash flow. Successful execution of the program should position the Company to embark on a longer term strategy of fully exploiting the Company's 35.7 million barrels of oil equivalent ("mmboe") reserve position. Key elements of the current program include the re-pressurization of multiple reservoirs through waterflood injection, select well refrac projects to immediately boost production and well deepening operations designed to access previously non-producing reservoirs.

To date, Resaca has completed approximately 75% of the program and has experienced encouraging results. Production across the portfolio has increased from an average of 616 net boepd in January to an average of 728 boepd during the first half of July, an increase of almost 20%. Production reached 800 net boepd on several days in the last thirty (30) days. Average daily production rates at the Company's key Cooper Jal Unit have increased by almost 30% between January and July, from 293 net boepd to 372 net boepd.

Cooper Jal Unit ("CJU")

Scheduled projects intended to increase production include fifteen refracs at the Company's CJU property. To date, Resaca has completed eleven of the planned fifteen refracs with positive results. Post refrac initial production rates from the eleven wells have averaged twenty-four (24) boepd, which is four (4) boepd better than expectations. The Company hopes to duplicate this initial success with the remaining four planned refracs.

An integral part of Resaca's strategy at CJU is to increase reservoir pressure through optimization and expansion of the existing waterflood. To that end, the Company has completed seventeen water injection well cleanouts, converted four shut-in wells to water injection wells and installed a new horizontal water injection pump at CJU. As a result of this work, the current injection rate at the field is just over 20,000 barrels of water per day ("bwpd"), up from 17,000 bwpd earlier this year. Management expects to achieve the goal of a 25,000 bwpd injection rate over the next few months, once the remaining field work is completed.

In addition to refracs and water injection projects, Resaca has increased the speed of its pumping units on ten wells at CJU and has seen positive volume increases from these wells as a result of these efforts. The Company continues to evaluate additional well candidates for this process.

Management continues to focus on projects to reach our goal of CJU production of 450 net boepd.

Jordan San Andres Unit ("JSAU")

Resaca's strategy for improving production at the JSAU is twofold: increase pressure through waterflood operations and access non-producing reservoir through select well deepening operations. Efforts on the waterflood project at Jordan include the installation of a high capacity water injection pump at our Tract 79 and the completion of five water well injection cleanouts. The result of these efforts is a doubling of the injection rate at Jordan from 3,500 bwpd to 7,000 bwpd. In addition, these projects have expanded the Jordan waterflood to a much larger percentage of the reservoir.

The company has completed the first of four planned well deepening operations at JSAU into the Lower San Andres interval resulting in a 20 boepd well flow rate. In response to this success, management is currently evaluating a possible horizontal well at Jordan to more effectively access the Lower San Andres interval. Should the operation succeed, management would likely embark upon additional horizontal wells at JSAU. Encouraged by the Lower San Andres opportunity, the Company has acquired 1,375 acres in leases adjacent to the JSAU, which has substantially increased Resaca's footprint in this promising field.

Edwards Grayburg Unit ("EGBU")

The injection facilities upgraded by the Company at EGBU in the spring are fully installed and operational. In addition, the Company has completed four planned water injection well cleanouts at EGBU. As a result, water injection rates at EGBU have doubled from 1,500 bwpd to 3,000 bwpd. The Company has also cleaned out and stimulated eight producing wells at EGBU. The result of these projects is an increase in field production from approximately 40 net boepd to over 60 net boepd. Resaca is encouraged by the results to date and expects continued production improvement at EGBU.

Property Sale and Acquisition Activity

On July 15, 2011, Resaca closed on the sale of the Grand Clearfork Unit ("GCFU"), one of the Company's non-core properties. Average net production from the GCFU was 42 boepd for the month of June, 2011. The GCFU property was sold for approximately $98,000 per boepd of net production and $7.95 per boe of proved reserves. A minor amount of the company's current capital expenditure program was allocated to the GCFU. The property was sold prior to the initiation of these projects.

Resaca used the $4.1 million of sale proceeds to pay down its senior revolving bank facility, providing additional borrowing capacity. The Company currently has approximately $8.6 million of available borrowing capacity remaining under the senior bank facility. Management plans to use these funds for capital expenditures on core properties or strategic acquisitions. Management is currently in active discussions on a variety of attractive, strategic acquisition opportunities that are consistent with Resaca's strategy and current asset base.

Commenting on the operations update and property disposal, J.P. Bryan, Chairman and CEO of Resaca, said, "We are pleased with our progress to date on the Company's capital expenditure program. We look forward to completing the remaining projects and reaching our water injection rate and production rate targets within the year. We feel these short term achievements are crucial steps in Resaca's efforts to fully exploit the Company's 35.7 mmboe in reserves. Further, we believe the capital associated with the Grand Clearfork sale provides Resaca with significant flexibility to pursue a growth oriented acquisition or expend additional resources on our core, high upside-potential properties. "

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Max Petroleum to Boost Daily Production at Kazakh Field

- Max Petroleum to Boost Daily Production at Kazakh Field

Wednesday, July 20, 2011
Max Petroleum plc

Max Petroleum provided a production update for the Zhana Makat Field.

The ZMA-ET1 well has been connected to temporary production facilities for long-term production testing and is currently producing at a stable rate of approximately 650 bopd barrels of oil per day ("bopd") from perforations in the T4 Triassic reservoir at depths from 1,282 to 1,288 meters. The current production rate has been restricted to 650 bopd while the Company monitors the level of gas production from the well.

The Company has also perforated the ZMA-ET2 appraisal well, successfully flowing 48 degree API oil at an equivalent rate of approximately 450 bopd from perforations in the T5 Triassic reservoir from depths of 1,315 to 1,321 meters during a limited flow-back period. The well will be connected to temporary production facilities and brought onto long-term production testing in August 2011. The Company expects the well to produce at a stabilized rate of approximately 500 bopd.

Michael B. Young, President and CFO, commented, "We are on track to increase aggregate daily production during the current quarter to approximately 3,500 bopd, which is a significant milestone for the Company."

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Commodity Corner: QE3 Expectations Boost Oil

- Commodity Corner: QE3 Expectations Boost Oil

Friday, July 15, 2011
Rigzone Staff
by Matthew V. Veazey

Light sweet crude oil for August delivery rallied Friday on expectations that a third attempt by the Federal Reserve to stimulate the economy would be bullish for commodities.

After reaching $97.74 and bottoming out at $95.21, the WTI gained $1.55 for the day to settle at $97.24 a barrel. The September Brent contract traded within a range from $115.25 to $117.65 before ending the day at $117.26, representing a $1.00 gain from Thursday. The August Brent contract, which expired Thursday, had settled at $118.32.

Testifying before a congressional panel this week, Fed Chairman Ben Bernanke roused markets Wednesday by suggesting that the Federal Reserve may launch a third round of quantitative easing. The "QE3" strategy would aim to improve liquidity in the U.S. economy by printing more money to buy Treasury bonds, encouraging banks to pursue riskier investments by boosting lending to businesses and consumers. Because more money would be available to banks, the value of the U.S. dollar against other currencies would diminish. Hence crude oil would be a better buy for investors using currencies other than the greenback.

On Thursday, the dollar gained strength and oil futures plunged after Bernanke stressed that the Fed had no immediate plans to set QE3 in motion. Investors on Friday, however, appeared to assume that such a policy decision would eventually be implemented.

With temperatures expected to approach or perhaps exceed the triple digits from the Upper Midwest to the East Coast, demand for electricity to power air conditioners and fans is set to be high well into next week. As a result, August natural gas surged well over four percent before ending the day at $4.55 per thousand cubic feet.

The front-month contract price for gas traded from $4.38 to $4.56 Friday.

Gasoline for August delivery edged upward by one cent to settle at $3.13 a gallon. The intraday high and low prices for gasoline were $3.15 and $3.10, respectively.

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Commodity Corner: Oil Gets Boost from EIA, Bernanke

- Commodity Corner: Oil Gets Boost from EIA, Bernanke

Wednesday, July 13, 2011
Rigzone Staff
y Matthew V. Veazey

Oil futures received a boost Wednesday from the latest inventory data from the U.S. Energy Information Administration as well as testimony by Federal Reserve Chairman Ben Bernanke. The WTI benchmark on the New York Mercantile Exchange gained 62 cents to settle at $98.05 a barrel. Brent futures, meanwhile, rose $1.03 to end the day at $118.78 a barrel.

The EIA reported that U.S. commercial crude oil inventories declined sharply last week. According to the agency, oil stocks fell by 0.9 percent to 355.5 million barrels. The 3.1 million barrel week-on-week decline exceeded analysts' expectations. A panel of analysts surveyed by Platts, for instance, predicted a relatively modest 2.1 million-barrel draw.

Testifying before a U.S. House panel Wednesday, Bernanke hinted that the central bank may initiate a third attempt to stimulate the economy by printing more money to buy Treasury bonds. This "quantitative easing" monetary policy approach is designed to improve liquidity in the economy by enticing banks to make more loans to businesses and consumers. A third round of quantitative easing, or "QE3," would be bullish for oil because the Fed would weaken the value of the U.S. dollar by making money more widely available to banks. For investors holding currencies other than the greenback, dollar-denominated crude oil would become a better value.

The WTI peaked at $99.21 and bottomed out at $96.53 while Brent futures fluctuated from $117.01 to $119.50.

Front-month natural gas gained seven cents to settle at $4.40 per thousand cubic feet. Sizzling temperatures extending from the Midwest to the East Coast, with more to come beginning this weekend after a brief respite, have boosted cooling demand.

The intraday range for natural gas during midweek trading was $4.31 to $4.42.

Gasoline futures rose by a nickel to end the day at $3.15 a gallon. The commodity traded within a range from $3.08 to $3.175.

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Orca to Boost Gas Production in Tanzania

- Orca to Boost Gas Production in Tanzania

Monday, July 11, 2011
Orca Exploration Group Inc.

Orca has signed an agreement with Songas Limited to increase the capacity of the Songo Songo gas field processing plant from 90 MMcfd to a potential of 110 MMcfd. This will increase the overall infrastructure capacity that processes and transports the gas to Dar es Salaam to 105 MMcfd.

With this higher system capacity the Company expects that Orca's Additional Gas sales will increase to an average of approximately 45 – 50 MMcfd from July 1, 2011 (compared with an average of 37 MMcfd in 2010) with a beneficial impact on cash flow.

This increase in Additional Gas production capacity is available for urgently needed power generation in Tanzania. The April and May long rains failed to replenish the reservoirs that the country depends on to generate up to 550 MWs of hydro power. As a consequence Tanzania's installed hydro power capacity is now dramatically reduced and an increase in reservoir levels is not expected until the advent of the short rains near the end of the year.

To address this shortfall, TANESCO recently re-commissioned a 112 MW gas fired power plant in Dar es Salaam (owned and operated by Symbion Power LLC). This will increase the total generation potentially consuming Additional Gas to 301 MWs (or approximately 66 MMcfd at peak load). Further additions to Tanzania's generating capacity are scheduled for next year. TANESCO has contracted Jacobsen Elektro to install a new 105 MW plant (maximum demand of 22 MMCfd) in Dar es Salaam and this is forecast to be operational by the end of 1Q 2012. In addition, Songas is making good progress with its Expansion Project to further increase Songo Songo infrastructure capacity to 140 MMcfd by 1 2013.

These increases in production capacity in Tanzania come at a time of growth and strengthening of Orca's management team and Board of Directors. Orca is now well positioned to fully utilize the breadth of experience and the proven skills of a team committed to take the Company to the next level.

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Westmont to Boost Production at Marcellus Wells

- Westmont to Boost Production at Marcellus Wells

Wednesday, July 06, 2011
Westmont Resources Inc.

Westmont Resources has completed the review of the June 2011 production revenue for operations in our 3,400 acre leaseholds in the Marcellus Shale region in the southwest tier of Pennsylvania and northwest tier of West Virginia. Preliminary production on the leaseholds has 41 working wells, of the 120 currently drilled on the properties, producing .6 to .9 barrels of oil per day per well. Total daily production is averaging 29.93 barrels of oil per day from these 41 working wells. June production totaled 891 barrels or $112,526.30 in gross revenue from production.

Westmont began implantation of Phase 1 of it operations plan to increase production to over 3,500 barrels per month by the end of the 2011 calendar year. Westmont anticipates placing into production an additional 12 wells by the end of July 2011 for a total of 53 working wells. We anticipate revenue to increase to over $145,000 per month by the end of July 2011 from the production of these first 53 working wells. Upon completion of the first phase of our production program, Westmont anticipates having 170 of the 212 existing wells in production earning estimated gross revenues of $321,300 per month based on current oil pricing in excess of $90 per barrel.

"Our specialty is applying cutting-edge technology in order to 'wring additional value from' long-lived, low risk natural gas and oil properties - To squeeze more oil out of mature basins. These new Pennsylvania and West Virginia assets are an excellent fit with our existing core areas and will expand our portfolio. Phase 2 of our production program will include the implementation of our patented, proprietary technology to increase production by a factor of 6 with anticipated production in excess of 5 barrels a day per well. Our estimated monthly gross revenue would increase from an estimated $321,300 to over $2,295,000 after implantation of our technology on all existing wells," said Glenn McQuiston, Westmont's President.

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Bakken, Oklahoma Plays Boost PADD 2 Production

- Bakken, Oklahoma Plays Boost PADD 2 Production

Thursday, June 23, 2011
Rigzone Staff
by Karen Boman

BENTEK Energy reports that crude oil production in the U.S. PADD 2 (Midcon) region is on pace to increase 60 percent over the next five years, with continued Bakken drilling activity and emerging oil plays in Oklahoma expected to push oil production in PADD 2 to 1.4 million b/d by 2016.

The Montana and North Dakota Bakken will contribute 418,000 b/d over the five-year period, while the continued development of conventional resources in PADD 2, especially in Oklahoma, contributing 90,000 b/d to the total growth. "This rapid increase in oil production is expected to put additional pressure on the already constrained Cushing market," BENTEK noted.

PADD 2 is home to some of the hottest unconventional oil and rich-gas plays in the U.S. Besides the Bakken, PADD 2 is home to several Oklahoma plays, including the Granite Wash, Cleveland Sandstone, Tonkawa, Cana Woodford, Arkoma Woodford and Mississippi Lime plays.

"Historically, thousands of wells were drilled in the region, often bypassing the oil trapped in these tight, unconventional reservoirs," BENTEK said in its Crude Oil Production Monitor Report for June 2011. "The transfer of shale gas technology has opened the door of opportunity and producers are now employing horizontal drilling and multi-stage fracturing techniques in order to release the once reluctant oil."

The unconventional oil play focus in PADD 2 has pushed the active oil-rig count to a recent high of 528, passing the peak reached in the summer of 2008, mostly due to horizontal rigs moving into PADD 2. The region currently has 313 horizontal rigs drilling, compared to 199 at the peak in summer 2008.

The rapid commercialization of liquids-rich U.S. shale plays has buoyed expectations for domestic U.S. oil production, with a large part of that volume making it way to the oil pipeline hub at Cushing, Oklahoma, Barclays Capital noted in a June 21 report. While production growth from Midcontinent reservoirs is not significant yet, it has been dramatic for the localized market around PADD 2, depressing WTI prices relative to other light, sweet crude oil benchmarks.

"WTI prices recently have widened to discounts of more than $20/bbl versus Brent, unheard of until recent months," Barclays said. Barclays said it sees U.S. Midcontinent crude oil production as the biggest factors influencing WTI differentials over the next few years.

Oil-directed drilling has spread across the Midcontinent, with more drilling in the Permian and Williston basins and expansion in the Anadarko and Eagle Ford basins. The shift to oil drilling has been "steady and relentless", not surprising given current pricing differentials between oil and gas. Barclays said two main constraints, the availability of high horsepower rigs that are capable of drilling horizontally, and the scarcity of oil acreage versus gas acreage, could moderate the pace of growth in the oil rig count.

The key unconventional plays to watch in the early stage of development are the Bakken Shale and the Eagle Ford shale, Barclays said. "We foresee U.S. liquids production from these locations expanding at a rate of 200-250 thousand b/d in the coming years. We would expect to see the bulk of the growth to come from Bakken and Eagle Ford shale areas (around 100,000 b/d and 70,000 b/d) respectively."

While the presence of oil in the Bakken formation in the Williston Basin has been known for years, production did not take off until 2006 due to higher oil prices and advances in drilling techniques. North Dakota's production growth resulted in a record high of 5,200 active wells in March, and the state's oil output had grown to 350,000 b/d, 70 percent of which is Bakken production. The state has seen previous drilling booms in the past, but the current cycle has been the most prolific, thanks to horizontal drilling and enhanced recovery methods, "and is likely to be sustainable for longer, in our view."

Local and state government officials in North Dakota, where 80 percent of the Bakken play lies, welcome the oil and gas industry and the jobs and revenue it brings to the local economy, said Dan K. Eberhart, chief executive officer of Frontier Energy Corp., at Platts' 6th Annual Oil & Gas Shale Developer conference in Houston this week. The Bakken drilling boom has created a renaissance in rural North Dakota, providing revenue that's allowing the state a chance to update schools, traffic lights and other infrastructure.

Oil and gas activity is not only creating job within the sector, but creating demand for more restaurant workers, teachers, park rangers an ancillary services. The state government has had trouble filling government jobs in Williston as workers are attracted to the higher-paying oil and gas jobs, and has moved positions back from Williston, the hub for drilling activity, to Bismarck and Fargo to find workers.

However, the need to transport water, rigs and other supplies to and from drilling sites has pushed the average Bakken well cost to $6.5 million, and the combination of winter snow, heavy rains and heavy truck traffic has taken a significant toll on the state's road system. With vehicles 5,000 to 6,000 times heavier than the roads were designed to handle, roads are breaking down, with buckling and large holes as deep as six feet or more, said Eberhart.

Companies such as Hess have taken initiatives to support the local road system in North Dakota and communicate with local officials on rig movements, Eberhart said. Efforts such as Adopt-A-Road programs are needed, Eberhart said, and oil and gas producers should donate manpower and supplies to help maintain road infrastructure.

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Husky Raises $1.2B to Boost Growth Strategy

- Husky Raises $1.2B to Boost Growth Strategy

Thursday, June 23, 2011
Husky Energy Inc.

Husky will raise approximately $1.2 billion offering of common shares by way of a bought deal (the "Public Offering") and a concurrent private placement of common shares (the "Private Placement") to its principal shareholders, L.F. Investments (Barbados) Limited, and Hutchison Whampoa Luxembourg Holdings S.a.r.l.

The Company has entered into an agreement with a syndicate of underwriters, led by RBC Capital Markets, Goldman Sachs Canada Inc., HSBC Securities (Canada) Inc., and J.P. Morgan Securities Canada Inc. (the "Underwriters") under which the Underwriters have agreed to purchase for resale to the public, on a bought deal basis, 36,968,500 common shares in the capital of Husky (the "Common Shares"), at a price of $27.05 per Common Share resulting in aggregate gross proceeds of $1 billion. The Public Offering is made pursuant to a prospectus supplement to the Company's universal base shelf prospectus filed November 26, 2010 with the securities regulatory authorities in all provinces of Canada and to the Company's universal base shelf prospectus filed June 13, 2011, with the U.S. Securities and Exchange Commission ("SEC").

Pursuant to the Private Placement, the principal shareholders L.F. Investments (Barbados) Limited and Hutchison Whampoa Luxembourg Holdings S.a.r.l. will subscribe for a combined total of $200 million in Common Shares (a total of 7,393,714 Common Shares) on a private placement basis at the same price as the Public Offering.

The Company continues to execute on its strategic initiatives to accelerate near-term production and reserve growth. Husky expects production for 2011 to be towards the higher end of its previously announced guidance range.

The Public Offering and Private Placement is a key strategic element of the Company's proactive financing plan announced in November 2010 and will provide additional financial flexibility to advance its growth strategy. Proceeds will be used to accelerate exploration and development of the Company's emerging oil and gas resource portfolio and the continued development of its growth pillars in the Oil Sands, South East Asia and the Atlantic Region, including the Liwan Gas Project offshore China and Phase 2 of the Sunrise Energy Project in the oil sands of northern Alberta.

With the additional capital raised, the Company projects that production for the 2011 to 2015 time frame will be towards the high end of previous guidance of three to five percent average annual growth and is expected to be sustained at three to five percent average annual growth through to 2021. It is also anticipated an annual reserves replacement ratio of 140 percent will be achieved through the same period.

The Public Offering and Private Placement are expected to close on or around June 29, 2011 and are subject to customary closing conditions, including the approval for listing of the additional Common Shares on the TSX.

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Statoil, Partners Aim to Boost Recovery Rate at Njord License

- Statoil, Partners Aim to Boost Recovery Rate at Njord License

Wednesday, June 22, 2011
Statoil

Statoil and its partners in the Njord license in the Norwegian Sea have decided to invest in low-pressure field production. This, combined with other measures, will prolong the lifetime of the field until 2020.

Reservoir pressure on Njord is falling and the field has entered tail-end production. By lowering the pressure on the first and second stage separators it will be possible to increase production from individual wells and maintain production in each for an extended period.

"Owing to the complexity of the Njord reservoir the recovery rate of proven resources is currently roughly 23%. The aim is to increase the recovery rate to 30%. This type of measure is important with a view to maintaining production on the Norwegian continental shelf (NCS)," stated Ivar Aasheim, head of NCS field development.

There is currently a great deal of activity in the Njord area. The Njord northwest flank project six kilometers northwest of the Njord platform is now being carried out. It consists of two new long-distance wells drilled directly from Njord and tied back to the platform.

Several wells will be drilled in coming years. In addition, Hyme fast-track is being processed via Njord.

"In combination with the low-pressure production project these measures will prolong the lifetime of Njord until 2020," explained Njord production head Arve Rennemo.

The low-pressure production project on Njord will boost volumes by roughly 18.5 million barrels of oil equivalents alone and extend the field's working life by two to three years.

Investments in low-pressure production amount to roughly NOK 500 million.

The contracts for Njord low-pressure production modification and the Hyme topside has been awarded to Reinertsen. The contract for compressor procurement and installation was awarded in March of this year to GE Oil & Gas.

Project execution will take place in the autumn of 2012 and the start-up of low pressure production on Njord is scheduled for the fourth quarter of 2012.

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Statoil to Boost Output Levels to 2.5MM boepd in 2020

- Statoil to Boost Output Levels to 2.5MM boepd in 2020

Monday, June 20, 2011
Statoil

Statoil presents its long term growth outlook. The company expects to raise production from around 1,9 million barrels in 2010 to above 2.5 million barrels of oil equivalents per day in 2020.

With premium positions on a revitalized Norwegian Continental Shelf (NCS) and a world class project portfolio, Statoil is positioned to deliver strong shareholder returns.

Celebrating its ten years anniversary as a publicly listed company, Statoil expands on its outlook for the coming years at the Capital Markets Day at the New York Stock Exchange.

"We have made significant strategic progress and have proven ability to deliver competitive returns since our IPO in 2001. With a premium project portfolio and strong commitment to leverage the company's competitive strengths, we will continue our journey," said Helge Lund, president and CEO of Statoil.

"The industry has changed considerably since we listed the company. Today we announce a strategy that reflects those changes and how we address them to the benefit of our shareholders," Lund added.

Statoil grew production at a compound annual growth rate (CAGR) of 3% in the last decade, excluding the Hydro merger. Production is expected to continue growing at the same rate over the next ten years, reaching a level of above 2.5 million barrels of oil equivalents (boe) per day in 2020.

• A first wave of new projects will provide a step-up in production in 2012, delivering around 3% CAGR 2010-2012.
• A second wave of projects will give further growth from 2014 and onwards, providing a 2-3% CAGR for the years 2012 – 2016 with production in 2013 expected to be around 2012 level.
• A third wave of projects will provide a 3-4% CAGR from 2016 to 2020, taking production above 2.5 million boe per day in 2020.

This corresponds to an overall CAGR of around 3 % from 2010 till 2020, a growth rate backed by a strong resource base and a portfolio of world class projects. In 2020 the production from NCS is expected to be above 1.4 million boe per day, while the international portfolio is expected to produce above 1.1 million boe per day.

"The NCS has a significant potential and continues to yield long term, superior value creation opportunities in an investment friendly environment. The NCS remains a very attractive and globally competitive province for future oil and gas activities," said Helge Lund.

"To realize the project portfolio Statoil increased investments for 2011 to USD 16 billion, and expects the investments in 2012 to be at the same level."

"Towards 2020 our ambition is to establish material positions in 3 – 5 offshore business clusters outside the NCS and step up our shale gas and liquids production. These positions have significant resource potential and through exploration, business development and the application of our distinct technological capabilities we will lift value creation beyond today's levels," Lund said.

The offshore business clusters include Gulf of Mexico, Brazil, Angola, the Caspian region and Arctic outside the NCS.

Statoil today announces discoveries in both side tracks on the Peregrino South well, immediately adjacent to the newly opened Peregrino field offshore Brazil. The estimates of recoverable volumes in Peregrino South are between 150 – 300 million boe. This discovery brings a phase two development of the Statoil operated Peregrino field considerably closer.

Statoil also confirms an increase in expected volumes from the Skrugard oil discovery in the Barents Sea in Norway. The Skrugard volumes are now estimated at approximately 250 million boe recoverable resources, with a significant upside potential in the license. The Skrugard well has significantly improved Statoil's understanding of other prospects in the area.

"Our recent performance marks an early indication that our sharpened exploration strategy is working. This reaffirms that our competence and experience allow us to pursue an exploration strategy emphasizing early access at scale and priority to high impact opportunities," said Helge Lund.

Statoil expects to drill 20 – 25 high impact wells in the years 2011 – 2013.

Technology focused, upstream strategy

In recent years, Statoil has streamlined its business, reinforcing its position as a technology focused upstream company. While building a leading position on the NCS, Statoil has taken positions in a number of the world's most prolific provinces and established an attractive resource base. Since listing the company has increased its non-Norwegian production more than five fold. The core competencies and capabilities, including innovative development and application of technology coupled with the execution of complex offshore and onshore field development projects, positions Statoil as operator and partner globally.

Statoil's long term strategy focuses on six core building blocks. Firstly, Statoil will further revitalize and expand the NCS horizon with high value barrels. The company's position on the NCS remains a strong cash generator, with a set of premium projects that form the foundation for its growth outlook. Secondly, Statoil will utilize its superior gas position to deliver value in strong and growing markets. Thirdly, the company will leverage its leadership in complex offshore projects, and build material positions in 3-5 business clusters in addition to the NCS. Fourthly, it will continue to strengthen its resource base through leading exploration activities. Fifthly, Statoil will step up the company's shale gas and liquids activity, strengthening performance based on its early entry and core technology competencies. Finally, the company will further enhance shareholder return through active portfolio management.

In addition the focus on renewables concentrated around offshore wind continues. Statoil has taken important positions currently centered on the Sheringham Shoal and Dogger Bank projects in the UK.

A new industrial horizon in Norway

Statoil sees three long term business clusters on the NCS - the North Sea, the Norwegian Sea and the Barents Sea.

The Skrugard discovery provides renewed optimism for the whole Barents region. It also reaffirms the long term perspective of the NCS, where there is a set of opportunities based on current producing assets and access to new, promising areas. The delineation agreement between Norway and Russia, and statements from the Norwegian government on its intent to give access to new acreage, adds to a positive outlook for the Barents Sea.

The company will maximize the value of the North Sea through operational improvements, IOR measures and development of satellite fields. The development of new fields, such as Valemon, Gudrun and Dagny/Ermintrude represents a significant business opportunity. In the Norwegian Sea cluster, the company will fast track the projects in the pipeline, and is looking at further growth options, including opening of the resource rich areas of Nordland VI and VII.

Capturing value from gas

Natural gas is emerging as the most plentiful, cost efficient and cleanest of fossil fuels. There is a particularly strong case for an increased use of gas in power generation. Gas is cost competitive with coal, nuclear and renewables, which allows for even higher gas prices. Growing demand for gas in Asia will also impact prices in Europe through export of LNG. Statoil is well positioned to take part in this expected growth in the gas markets.

The positive outlook for gas, and the opportunities for enhanced value creation in the expanding markets worldwide, covers conventional as well as unconventional resources. Going forward our industrial roadmap for North American will focus on building the Marcellus and Eagle Ford positions, taking on operatorship and growing into new areas.

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House OKs Bill to Boost Drilling for Natural Gas

- House OKs Bill to Boost Drilling for Natural Gas

Wednesday, June 15, 2011
The News & Observer, Raleigh, N.C.
by Michael Biesecker

In a largely party-line vote, the state House approved a Republican-backed bill that rewrites state energy policy to promote and approve of drilling for natural gas on land and off the coast.

Supporters of Senate Bill 709 said drilling would create revenue for the cash-strapped state government and jobs for North Carolinians by creating a regulatory atmosphere that is more "pro business."

Republican lawmakers brushed aside concerns raised by Democrats about the potential for an offshore spill to negatively affect coastal tourism and the possible contamination of drinking wells through the use of a controversial gas drilling technique that relies on the hydraulic fracturing underground rock, known as fracking.

"It's time to get crackin' on frackin'," said an enthusiastic Rep. John Blust, a Greens boro Republican. "If we're worrying about tourism, do you think $4 a gallon gas is going to affect tourism? We need more fossil fuels in this country."

Democrats objected to the often-repeated GOP talking point that drilling for natural gas will reduce gasoline prices and reduce the nation's dependence on foreign oil. There are not believed to be sizable deposits of oil off the North Carolina coast.

After a study was quoted as saying that increased domestic oil production would have a negligible effect on gasoline prices, Blust countered that such economic analyses were produced by "wackos in an ivory tower."

An attempt by Rep. Pricey Harrison, a Greensboro Democrat, to amend the bill to add renewable energy sources such as wind power and wave power to the list of options for creating new energy was defeated.

Harrison pointed out that tourism generates many more jobs and revenue in the state than even the rosiest forecast for drilling.

"We have a tourism economy that depends on a clean coast," Harrison said.

Republican supporters countered that the bill designates the first $500 million the state earns through offshore drilling royalties to a special fund to clean up the environmental damage from any accident or spill.

The bill, a version of which has already passed the Senate, was approved 67-44.

Copyright (c) 2011, The News & Observer, Raleigh, N.C.

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Eagleford Energy to Boost Productivity at San Miguel Formation

- Eagleford Energy to Boost Productivity at San Miguel Formation

Tuesday, June 14, 2011
Eagleford Energy Inc.

Eagleford Energy has performed a nitrified acid injection treatment in the San Miguel formation on its Matthews/Dyami #3 well. A nitrified acid treatment was injected into the wellbore using a coil tubing unit to improve conductivity around the wellbore, increase productivity and satisfy a condition of the lease purchase agreement. These objectives have been accomplished. The injection operation was successful and fluid level measurements within the wellbore are considerably higher which is indicative of materially improved inflow of oil from the reservoir. The well is currently undergoing production testing and has been recovering minimal amounts of treatment water and is primarily producing oil. The oil gravity is approximately 10 degree API and production rates are varying due to ambient surface conditions.

Under the terms of a Farmout Agreement announced by the Company on April 8, 2011, the farmee may spend up to $1,050,000 on exploration and development to earn a maximum of 50% of the Company's working interest or a 42.50% working interest (31.875% net revenue interest) from surface to the base of the San Miguel formation on the Company's Matthews Lease. The farmee earns an initial 21.25% working interest by paying 100% of the costs to drill, complete, equip and perform an injection operation on the Matthews/Dyami #3. The farmee may increase its working interest to 42.5% by spending the entire $1,050,000 on additional operations on the San Miguel in a good faith effort to produce hydrocarbons.

Albert Dawsey of Dawsey Operating LLC stated, "We are pleased with the initial production results from completing this first San Miguel oil well. The data gathered from drilling this well and the completion results indicate enhanced recovery processes for this heavy oil can sustain production of the field. This new data also supports prior information about the oil in place and the ability to produce significant amounts of oil from the reservoir."

The Company's Matthews Lease comprises 2,629 acres of land in Zavala County, Texas. Zavala County, Texas is part of the Maverick Basin of Southwest Texas and downdip from the United States Geological Studies north boundary of the Smackover-Austin-Eagle Ford total petroleum system. This area is often referred to as the oil window of the present Eagle Ford shale play.

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Calvalley to Boost Production in Yemen

- Calvalley to Boost Production in Yemen

Thursday, June 09, 2011
Calvalley Petroleum Inc.

Calvalley provided an operational update regarding current production development activities on the Company's Malik Block 9 which is approximately 350 kilometers east of Sana'a, the Capital of the Republic of Yemen.

During the current political unrest in Yemen, Calvalley has continued operations at all key production locations, including the Company's Central Production Facility ("CPF") at the Hiswah Field. The Company also continues to deliver blended crude oil from the Hiswah and Ras Nowmah Fields into the Masila Export Pipeline System ("MEPS") through its newly operational Truck Offloading Facility ("TOF").

As well, Calvalley is proceeding with facilities upgrades at the CPF to improve water handling capacity and to increase overall production through-put. This work priority is on schedule and is in anticipation of both increased production from the Hiswah field and increased blending of crude oil from the Ras Nowmah and Al-Roidhat Fields.

Calvalley is an international oil and gas company, with offices in Calgary, Alberta, Canada, that operates its 50% working interest in Block 9 of the Masila Basin, in The Republic of Yemen. Calvalley also operates its 100% working interest in the Gimbi and Metema Blocks of the Blue Nile Basin, in The Republic of Ethiopia.

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Russia Plans to Boost Investments in Iraq's Oil, Energy Sectors

Russia Plans to Boost Investments in Iraq's Oil, Energy Sectors

Tuesday, May 10, 2011
Knight Ridder/Tribune Business News
by Nehal El-Sherif, dpa, Berlin

The Russian government was working to increase its investments in Iraq, especially in the oil and energy sectors, Russian Foreign Minister Sergey Lavrov said Tuesday.

"Russia supports the Iraqi government in its efforts to restore security and develop the economy," Lavrov said at a joint press conference with his Iraqi counterpart Hoshyar Zebari in Baghdad.

"We are also working to increase cooperation and our investments here ... We are delighted that Russian companies are working in Iraq in the energy field," he said.

A consortium led by Russia's private oil company, Lukoil, secured the rights to develop an oilfield in 2009. Lukoil recently announced plans to quadruple its oil production from the massive West Qurna oilfield, to the west of Basra. It said initial production was scheduled for 2012 and full production should begin in 2017.

Iraq has held three international bidding rounds since late 2009 to attract investments in its oil and gas industry.

It relies heavily on oil exports for its revenue and aims to raise production from 2.5 million barrels to 12 million barrels per day within six years.

Lavrov said they also discussed the security situation in Iraq and cooperation in the defense sector. He also said Russia intends to open a consulate in the southern city of Basra, where some of the largest oilfields are located.

Copyright (c) 2011, dpa, Berlin. Distributed by McClatchy-Tribune Information Services.

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