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Showing posts with label China. Show all posts
Showing posts with label China. Show all posts

Thursday, September 8, 2011

Dart Commences Drilling Ops at China Daijing Proj.

- Dart Commences Drilling Ops at China Daijing Proj.

Thursday, September 08, 2011
Dart Energy Ltd.

Dart Energy has commenced drilling activities at the Dajing project in Xinjiang Province, China, with the spudding of the first two exploration wells (DJD-02E and DJD-10E). This is part of an initial exploration program which will see a total of up to 14 exploration wells drilled prior to year end, and assuming no program delays, Dart would expect first core drilling results to be available in the first quarter of 2012.

This follows approval in August of the 2011 exploration program and budget by the Dajing Joint Management Committee (JMC). The JMC is comprised of representatives of both Dart and its partner at Dajing, China National Petroleum Corporation (CNPC).

In addition to the spudding of the first wells, the following other activities have been completed at the Dajing project:
  • 4 drilling rigs have been mobilized to site
  • 3 on-site desorption units and 2 permeability testing units have been mobilized to site
  • 3 work camps established on-site
  • Site and road construction for 2 other exploration wells has been completed (DJD-O1E; DJD-O4E), with those wells expected to be spud within the next week

Nick Davies, Dart Executive Chairman, said, "We are now operationally underway at Dajing, which is a major milestone for Dart. Dajing has the potential to be a project of substantial scale within the Dart global portfolio, and our attention is completely focussed on executing the exploration drilling campaign diligently, quickly and safely. Dart Energy looks forward to working collaboratively with our partner, CNPC, to unlock the potential of this block."

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Friday, September 2, 2011

China Ocean Watchdog Orders Operations Halt at Penglai 19-3 Oil Field

- China Ocean Watchdog Orders Operations Halt at Penglai 19-3 Oil Field

Friday, September 02, 2011
Dow Jones Newswires
BEIJING
by Wayne Ma

China's State Oceanic Administration said Friday it is ordering a halt to all drilling and oil and gas production at the Penglai 19-3 oil field at Bohai Bay, which is operated by ConocoPhillips China.

The directive comes amid mounting public criticism against the U.S. oil company that it has been slow to act and provide information about oil spills at the field beginning in early June.

ConocoPhillips submitted a report Wednesday to the SAO and said it believed it had satisfied all the requirements laid out by the SOA for cleaning up and investigating the spill.

A ConocoPhillips spokesman said the company couldn't immediately respond to the statement, which was posted on the SOA's website.

Conoco must submit a marine environmental impact report and won't be able to restart operations until it receives approval, the SOA said.

The U.S. company hasn't satisfied the requirements for cleaning up and investigating the oil spill, it said, adding that Conoco was slow to act on the plan to clean up and investigate the spills though it made some progress in later stages.

The field's platform C hasn't been fully cleaned up and there are still leaks in the surrounding area, while cleanup measures at platform B are insufficient, it said

While operations are halted, Conoco should be willing to be strictly supervised by its joint-venture partner China National Offshore Oil Corp., or Cnooc., to prevent any new oil spills or environmental hazards, it said.

Conoco said last week that while it has sealed off all leaks at the field, residual oil, which is expected to dissipate, continues to seep from two leaks at the rate of one or two liters a day.

ConocoPhillips is responsible for operating the oil field, which has the capacity to produce 160,000 barrels of crude oil a day, in its joint venture with Cnooc.

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

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Friday, August 26, 2011

ConocoPhillips Finds New Leaks Off China's Northern Coast

- ConocoPhillips Finds New Leaks Off China's Northern Coast



Aug 26, 2011

ConocoPhillips (NYSE:COP) has found seven new leaks off China's northern coast.

According to the State Oceanic Administration's North China Sea branch, ConocoPhillips found the new leaks near the Platform C of 19-3 Oilfeld in Bohai Bay.

Last week, the company reported nine leaks near the same platform, and is facing legal action for the spills.

ConocoPhillips (NYSE:COP) has a potential upside of 28.9% based on a current price of $64.24 and an average consensus analyst price target of $82.8.

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Thursday, August 25, 2011

ConocoPhillips Faces Suit in China Over 2 Oil Spills

- ConocoPhillips Faces Suit in China Over 2 Oil Spills

Thursday, August 25, 2011
International Herald Tribune
by Edward Wong

The spills at the country's largest offshore oil field, developed by ConocoPhillips and China National Offshore Oil Corp., have released about 3,200 barrels of oil and drilling fluids into the sea.

The Chinese maritime authority is preparing to sue ConocoPhillips, the American oil company, over two oil spills that took place in June and engulfed large swaths of Bohai Bay in north China, according to a report by Xinhua, the state news agency.

The report, which appeared Wednesday, said the government agency, the State Oceanic Administration, was aiming to prepare a team of lawyers by the end of the month. It cited an agency spokesman as saying that 49 Chinese law firms had applied to provide legal assistance in the lawsuit, which would demand compensation.

The two spills at Penglai 19-3, the country's largest offshore oil field, covered at least 840 square kilometers in Bohai Bay and was the biggest oil disaster in China since a pipeline explosion in Dalian in July 2010 resulted in a leak into the Yellow Sea. About 3,200 barrels of oil and drilling fluids have spilled into Bohai Bay from the June accident. Penglai is being developed by ConocoPhillips and China National Offshore Oil Corp., commonly known as Cnooc.

John Roper, a spokesman for ConocoPhillips, which is based in Houston, said in an e-mail Thursday that the company had not received any notice of litigation.

"As far as compensation goes, we will listen to any requests and follow Chinese law, but we have not received any notification of claims," he said. "Cleanup efforts are going very well. We are more than 95 percent finished with the cleanup of mineral oil-based drilling mud and expect to reach our target of being 100 percent by the end of August."

Mr. Roper added that there was no more oil sheen on the surface of the water.

The Xinhua report said the oil spills had spread to beaches in the provinces of Hebei and Liaoning and were being blamed for a slowdown in local tourism and for economic damage to aquatic farming industries. The report also said "nine new oil spill sources" had been found in the bay as of last Saturday.

Mr. Roper said those nine seeps were not from new leaks but rather were residual oil and drilling mud from the June 17 spill that were now migrating to the surface. "Divers were only able to see them once the drilling mud was cleared away from the seafloor," he said. The seeps are small, are clustered together and are releasing a total volume of fluids of one to two liters per day "that is being immediately contained and cleaned up."

In Hong Kong on Wednesday, the chairman of Cnooc, Wang Yilin, addressed the compensation issue.

"If Cnooc is ruled to pay any form of compensation, we will certainly fulfill our commitment and do the right thing," Mr. Wang said at a news briefing after the company announced its first-half earnings, according to Bloomberg News. "Cnooc is a responsible company, and we honor our long-term commitment to the country, people and the environment."

Georg Storaker, president of ConocoPhillips China, said at a news conference in Beijing on Wednesday that the spill in Bohai Bay should not be compared with the disastrous spill in 2010 in the Gulf of Mexico for which BP was blamed.

(C) 2011 International Herald Tribune. via ProQuest Information and Learning Company; All Rights Reserved

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ROC Pumps Oil at Zhanghai Block Offshore China

- ROC Pumps Oil at Zhanghai Block Offshore China

Thursday, August 25, 2011
Roc Oil Co. Ltd.
by SubseaIQ

Roc Oil (Bohai) Company, a wholly owned subsidiary of ROC, advised that production has commenced from the first appraisal well drilled in the new Zhanghai block – one of two adjoining blocks added to ROC's existing Zhao Dong Block Contract in March 2011 with the aim of commercializing previous near field discoveries in the area and encouraging further appraisal activity.

The appraisal well (ZD CP2N-H-1) commenced drilling from the Zhao Dong C4 platform on July 15 and intersected 310 meters of horizontal reservoir section. The well was completed and production through existing C4 facilities has commenced at an initial rate of 3,546 BOPD. PetroChina exercised its rights under the PSC to participate with a 51% interest in the new Zhao Dong blocks on the commencement of completion activities and commercial development of the well, effective August 12. The interests in the two new additional blocks are now PetroChina 51%, ROC 39.2% and Sinochem 9.8%.

ROC is now planning to drill a second appraisal well (ROC 80% cost obligation on dry hole basis) during 2012.

Commenting on the success of the well, ROC's Chief Executive Officer, Alan Linn, stated, "One element of ROC's strategy is to generate future growth by commercializing near field opportunities through existing infrastructure. Extension of the Zhao Dong block provides an opportunity to incrementally develop a number of existing discoveries through existing Zhao Dong facilities in parallel with ongoing development drilling activities. Exploration opportunities within this acreage could also impact the future profitability and recovery life of the existing assets.

"Production from the first appraisal well in the additional Zhao Dong blocks is a positive outcome for all joint venture partners and represents the achievement of another of ROC's key strategic objectives for 2011: to deliver a new production or pre-development opportunity in China."

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Thursday, August 18, 2011

ConocoPhillips China Resumes Some Production at Bohai Bay Oil Field

- ConocoPhillips China Resumes Some Production at Bohai Bay Oil Field

Thursday, August 18, 2011
Dow Jones Newswires
BEIJING
by Wayne Ma

ConocoPhillips China said Thursday that it has restarted production at 14 production and water-injection wells at its Penglai 19-3 oil field in Bohai Bay.

The company has received approval from China's State Oceanic Administration to resume production after the wells were shut on July 13 because of an oil spill, it said in a statement on its website.

"Flowing these wells reduces the overall pressure in the subsurface formation, which will assure that the seeps stop and the fault, which was previously activated, naturally seals," the company said.

ConocoPhillips expects to have the oil spill cleaned up by the end of August, it added.

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

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Tuesday, August 2, 2011

Philippines Set to Seek Oil in South China Sea

- Philippines Set to Seek Oil in South China Sea

Tuesday, August 02, 2011
Dow Jones Newswires
MANILA

The Philippines plans to auction off areas of the South China Sea for oil exploration despite worsening disputes with China over the territory, an official said Tuesday.

Energy Undersecretary Jose Layug said several foreign firms, including China's state-owned CNOOC, had already expressed interest in drilling in waters off the western Philippine island of Palawan.

The areas set for exploration are far from the disputed Spratly islands and well within the Philippines' 200-nautical-mile exclusive economic zone, he said on the sidelines of an energy conference in Manila.

"These are not disputed areas. The area we are offering for bidding is definitely within the territory of the Republic of the Philippines."

However, China is known to claim most of the South China Sea, including areas the Philippines says are clearly Filipino territory.

Aside from CNOOC, two other Chinese firms are among those interested in contracts to drill in the area, Layug said without naming the other two.

The Philippines is to name the winning bidders next year, Layug said.

He expressed confidence the Chinese wouldn't try to harass Philippine-sanctioned oil exploration vessels there.

"These areas are near Palawan which means they (winning bidders) will have to come to the Philippines to do it," he said.

Tensions have risen in recent months, with countries in the region claiming China has been more aggressive in enforcing its claims on parts of the South China Sea.

China, the Philippines, Vietnam, Malaysia, Brunei and Taiwan have overlapping claims to all or parts of the sea, which is believed to be rich in oil and gas deposits.

Last February, two Chinese vessels allegedly harassed a Filipino-commissioned exploration vessel off Reed Bank, an islet north of the Spratlys.

The Philippines has also accused Chinese forces of shooting at Filipino fishermen and placing markers on some of the islets.

The Reed Bank, which Manila calls "Recto Bank" and is also claimed by China, is 273 kilometers from Palawan.

Philippine officials said Manila had previously authorized drilling in that area without any Chinese opposition.

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

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Wednesday, July 27, 2011

WellDog, Excel Ink MOU to Introduce Natural Gas Services in China

- WellDog, Excel Ink MOU to Introduce Natural Gas Services in China

Wednesday, July 27, 2011
Gas Sensing Technology Corp.

WellDog and Excel Team Holdings have signed a Memorandum of Understanding under which Excel will introduce WellDog's suite of technical services to the fast-growing coalbed methane (CBM) and shale gas markets in China.

"This is an exciting moment for both companies as China is gearing up unconventional gas (CBM) activities in its 12th 5 year plan," said Peter Ho, Chairman and CTO of Excel. "Our group will be acting as a main technology bridge between top notch North America CBM technology groups such as WellDog and companies that are engaged in exploiting China's vast unconventional gas resources. WellDog's alliance with us will provide the crucial technical service support for the complex coal environment in China. We look forward to WellDog's service expansion into China soon!"

The MOU covers all of WellDog's business lines, including its award-winning pre-production gas testing services, its established pressure monitoring sales and installation services, its new permeability testing services, and its reservoir engineering services, as well as its business line based around a sustainably-focused downhole water/gas separation and re-injection technology.

"We've been examining the China market landscape for two years, and Excel is exactly the market entry channel that we've been seeking," said John M. Pope, Ph.D., president and CEO of WellDog. "Rational investigation indicates that China will become the leading unconventional gas market soon -- both as a consumer and as a producer that needs best-in-class services. We're pleased to now be able to help China unconventional gas producers make more gas with less environmental impact, as we have in many other markets."

Excel recently announced that it has opened up a new Unconventional Gas Research Centre in Harbin, via its subsidiary Multi Century Energy Technology (Beijing), to provide equipment and expertise to Coal Field Geology Bureau of Heilongjiang Province. The Research Centre will provide a leading platform for foreign CBM technology providers such as WellDog to showcase and demonstrate unique CBM expertise and penetrate into China's growing upstream CBM market.

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Friday, July 22, 2011

China North East Petroleum Briefs Preliminary Results for 2Q11

- China North East Petroleum Briefs Preliminary Results for 2Q11

Friday, July 22, 2011
China North East Petroleum Holdings Ltd.

China North East Petroleum Holdings announced preliminary second quarter 2011 oil production results and second quarter 2011 drilling results for its oil drilling and service subsidiary, Tiancheng.

The Company's crude oil production for the 2011 second quarter was 160,600 barrels, a 1.5% decrease sequentially from 162,990 barrels in the 2011 first quarter. The total number of wells in production as of June 30, 2011 was 295 compared to 295 wells in production as of March 31, 2011.

Additionally, the Company's oil drilling and service subsidiary, Tiancheng, completed drilling contracts for 40 wells with a total drilling depth of 60,817 meters (199,531 feet) in the second quarter of 2011 compared to 26 wells drilled with a total drilling depth of 45,327 meters (148,711 feet) in the first quarter of 2011.

Mr. Jingfu Li, CEO of China North East Petroleum commented, "We were pleased that our oil production results for the second quarter were within our quarterly production guidance range of 160-180 thousand barrels. There was a slight decrease in our sequential quarterly production results due to the short-term closure of approximately twenty wells in the second quarter to conduct fracture work which, after completion, typically results in greater oil production yields.

"Tiancheng's drilling activity improved considerably in the second quarter compared with the first quarter 2011. The 54% sequential improvement in wells drilled at our Tiancheng subsidiary was due to increased drilling activity by PetroChina ('PTR') Jilin and the return to a more consistent work schedule by our drilling crew. We are encouraged to observe increased drilling activity for PTR Jilin and hope to continue to benefit from expanded drilling initiatives at PTR as well as with private operators in the second half of 2011. We look forward to updating investors on our initiatives when we officially report our second quarter 2011 results in August."

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Wednesday, July 13, 2011

China Orders ConocoPhillips to Stop Penglai Operations

- China Orders ConocoPhillips to Stop Penglai Operations

Wednesday, July 13, 2011
Dow Jones Newswires
SHANGHAI
by Jing Yang

China's State Oceanic Administration said Wednesday that it has ordered ConocoPhillips to halt operations at platforms B and C at the Penglai 19-3 oil field in northeastern China's Bohai bay, due to slow progress in containing an oil spill at the field.

Oil is still leaking at the platforms, an oil slick still extends over the nearby area and there are signs that another oil spill could occur at Platform B, the administration said in a statement on its website.

"The measures that ConocoPhillips has taken so far are temporary and remedial...[and] risks of an oil spill recurring still exist" posing a significant threat to the Bohai marine ecosystem, it said.

Bohai bay has been the site of two spills in recent weeks, including a spill at Cnooc Ltd.'s offshore Suizhong 36-1 oil field.

The agency has asked the U.S.-based energy major to investigate thoroughly to ensure the source of the oil leak is plugged. "Operations aren't permitted to resume until oil spill risks are fully eliminated," it said.

ConocoPhillips said last week that the oil spill at Penglai 19-3--a joint venture with Cnooc Ltd.--had been contained and that output had fallen by 10%-15% due to the cleanup efforts. The company's China unit isn't immediately available to comment.

The Penglai field, discovered in 1999, produced an average 56,000 barrels a day in 2010, and is expected to reach 60,000 barrels a day this year, according to ConocoPhillips, which operates of the field.

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

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Thursday, June 30, 2011

ABS, China Classification Society Meet on Deepwater China

- ABS, China Classification Society Meet on Deepwater China

Thursday, June 30, 2011
ABS

The growing importance of deepwater exploration and production developments offshore China led classification societies ABS and CCS (China Classification Society) to conduct a joint “Deepsea Developments in the China Offshore Industry” meeting on 17 June 2011. The meeting, which was held in Beijing, brought together leading offshore industry professionals to discuss a wide range of energy development issues.

More than 100 representatives from the Chinese government, shipbuilders, designers, research institutes, energy corporations and universities attended. Topics included a discussion of the global energy market outlook from research firm Infield Systems, the challenges and latest solutions proposed for deepwater development from offshore solutions technology leader Horton Wison and a look at risk-based operations and new approaches toward minimizing risk with deepwater exploration from global engineering, procurement and construction firm Worley Parsons.

ABS discussed the regulatory changes resulting from the Macondo incident in the Gulf of Mexico and the broader impact on regulatory schemes worldwide while CCS highlighted the impact of deepsea development on the technology standards for the region’s offshore industry.

“This industry meeting illustrates the cooperative spirit between ABS and CCS,” says ABS CEO and President Christopher J. Wiernicki. “Over the past decade, China has significantly grown in its importance to both the maritime and offshore industries. With our experience and leadership in setting standards for the offshore industry, ABS can bring valuable assistance to the region as it faces new exploration and production challenges.”

It is this experience that led to ABS’ and CCS’ joint involvement on the massive Liwan 3-1 gas field development in the South China Sea. The Liwan 3-1 development is China’s largest offshore natural gas discovery to date and will be the first deepwater development project.

It is widely known that China has begun to invest heavily in deepsea exploration as the country’s economic growth demands more energy resources. “We are helping to support our country’s efforts by providing the technical guidance necessary for safe and efficient exploration,” said Li Kejun, CCS Chairman and President. “This industry meeting shows our commitment to helping achieve deepsea technological advancements in the region.”

Also in attendance was President of the China Association of the National Shipbuilding Industry (CANSI) Guangqin Zhang. While China’s shipbuilding industry has been challenged by the global economic recession, the accomplishments of China’s shipbuilding industry are well known, as is its rapid diversification into the gas and offshore sectors. “Meetings such as these contribute to the intellectual discussion and allow for the introduction of new offshore technologies in our shipyards, new technologies that will position the region for successful deepsea exploration,” Zhang said.

Calling it a new era in deepwater development for China, Vice Chief Engineer for China National Offshore Oil Corporation (CNOOC) Hengyi Zeng concluded the meeting by saying “we appreciate both class societies and the years of support and cooperation they have provided to expand China’s offshore development.”

In November 2010, ABS and CCS strengthened their collaborative efforts, formally established in 1993, by entering into a new Cooperative Agreement with offshore as a key area of focus for the two classification societies.

As a further demonstration of ABS’ long-term commitment to the Greater China region, in May 2011, ABS established the ABS China Offshore Technology Center (COTC) in partnership with Shanghai Jiaotong University (SJTU). While the research efforts will support development activities in the Greater China region, applied research will also be conducted on a wide range of energy development issues. The COTC is ABS’ fourth offshore-focused research center, which are strategically positioned around the world to support clients’ activities.

The ABS Greater China Division has more than 500 employees operating from more than 30 offices across mainland China, Hong Kong and Taiwan.

Founded in 1862, ABS is a leading international classification society devoted to promoting the security of life, property and the marine environment through the development and verification of standards for the design, construction and operational maintenance of marine-related facilities.

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Tuesday, June 28, 2011

China Ministry Held First Shale Gas Block Auction Monday -Official

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

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

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

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

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

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

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

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

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

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

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

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

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

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Monday, June 27, 2011

BG Group Signs MOU with Bank of China for $1.5B Funding

- BG Group Signs MOU with Bank of China for $1.5B Funding

Monday, June 27, 2011
BG Group plc

BG Group and Bank of China have signed a key cooperation agreement that enhances the existing close working relationship between the organizations and also allows for up to $1.5 billion of new funding options to support the Group's major growth program.

The Memorandum of Understanding (MOU) signed today builds upon existing commercial relationships between BG Group and Bank of China and confirms the intention to make extended credit facilities available that can be used to help deliver the Group's global growth plans - including its operations in China where the Group has an established commercial presence and where an initial offshore exploration program is underway.

The MOU also identifies other areas of potential cooperation including investment banking services, derivatives products, bank deposits, insurance and international settlement and trade finance facilities. Separately, BG Group already has a US$200m lending facility in place with Bank of China which is just one of a series of committed lending facilities that the company has with a group of international banks. These lending facilities in aggregate have been recently increased and extended and now total US$4.4 billion.

On signing the MOU with the Chairman of the Bank of China Gang Xiao, BG Group Chief Executive Sir Frank Chapman said, "This is a significant agreement for BG Group. It affirms and enhances our existing excellent relationship with the Bank of China. BG Group has a well established presence in China as a result of our LNG sales into this valuable and rapidly growing market, through a long-term sales and equity agreement with CNOOC in our QCLNG project in Australia, and with an extensive exploration program offshore China that has already produced a discovery.

"This agreement builds on our existing facilities with Bank of China and provides the option for substantial additional funding for our commitments in China and also our global growth program."

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Thursday, June 23, 2011

Petsec Finalizes Interest Sale in China JV

- Petsec Finalizes Interest Sale in China JV

Thursday, June 23, 2011
Petsec Energy Ltd.

Petsec advised that the final tranche of consideration in respect of the sale of its China Joint Venture interest has been received. The transaction was completed under the previously announced Sale and Purchase Agreement whereby Horizon Oil acquired Petsec's wholly owned subsidiary, Petsec Petroleum LLC, which held the Company's 25% working interest in the Block 22/12 Beibu Gulf project in China.

The sale for A$38 million in cash, plus 15 million Horizon share options with an exercise price of A$0.37, follows Petsec's previous announcements that it is debt free after eliminating US $100 million of debt over the past three years.

Petsec Energy Ltd's Chairman, Mr Terry Fern, said the Company will use the sale proceeds to fund the expansion and transition of its existing USA oil and gas operations to onshore areas of the USA, and to participate in the rapidly expanding shale oil industry.

"The Company's strategy is to not only move into areas where the shale source rocks are oil-prone but also to continue with our structured transition to a greater focus on exploration for liquid rich reserves in general," Mr. Fern said.

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Wednesday, June 22, 2011

Platts: China's Oil Demand Up 8% YOY

- Platts: China's Oil Demand Up 8% YOY

Wednesday, June 22, 2011
Platts

China's apparent oil demand in May reached 39.4 million metric tons (mt) or an average of 9.31 million barrels per day (b/d), which was 8% higher year on year, as state-owned enterprises continued to increase output to meet local market supply needs, according to a Platts analysis based on recent statistics released by the Chinese government.

Still, May's apparent oil demand was lower than April's oil demand at 9.37 million b/d. It was also the second consecutive month of single-digit demand growth following the October 2010 to March 2011 period of monthly demand growth in excess of 10%.

"China's crude oil imports and refinery throughput continued to grow last month, albeit at a slower pace," said Calvin Lee, Platts senior writer, China. "More importantly, demand appears to have dropped another notch last month, contributing to rising inventories."

Chinese refiners processed a combined 38.47 million mt of crude oil in May, or an average of 9.1 million b/d, equating to a 7.5% increase year over year.

Tasked by the central government to maintain adequate supplies of refined products in the local markets, domestic refineries continued to run at a rapid pace last month in a bid to prevent any oil shortages in the country. Yet, May's throughput was only marginally higher than April's crude runs at 9.09 million b/d.

With China refineries experiencing very low or negative margins, the Chinese companies are not well motivated to process more crude to meet the potential diesel demand surge, industry consultancy FACTS Global Energy said in a brief earlier this month.

In the meantime, net product imports last month were only 930,000 mt, or an average of 0.21 million b/d. Thus, net imports in May were the lowest this year, reflecting the fact that Chinese companies' appetite for imports has ebbed due to high prices in the global markets.

According to an estimate released earlier this month by the National Development and Reform Commission (NDRC), China's consumption of refined products in May grew 5.2% year on year to 20.19 million mt. But consumption was down 28,000 mt from April.

Coupled with increased production, the May drop in consumption helped to boost inventories and oil product stocks at month’s close were one million mt greater than a year ago, the country's top economic planning agency said in its monthly industry report.

A month ago, NDRC reported that consumption of oil products in April grew at a faster pace of 8.3% year over year to 20.4 million mt. Oil product inventories at the end of April were 450,000 mt more than a year earlier.

In a separate report earlier this month, the NDRC said China's state-owned oil majors Sinopec and PetroChina held in storage by late May more than 13 million mt of refined products, a level which the NDRC termed as a "reasonable level."

"A recent supply crunch appears to have dissipated for now. But it could be a different story if power shortages worsen, forcing industrial users to fall back on diesel power generators, and peak summer demand for transportation fuels cause another tightening in supply," Lee said.

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Thursday, June 16, 2011

CAMAC Commences Drilling at China Well

- CAMAC Commences Drilling at China Well

Thursday, June 16, 2011
CAMAC Energy Inc.

CAMAC announced the spudding and progress of its ZJS-04 well in China. Drilling is expected to take about 50 days to reach the well's target depth of approximately 5,900 feet. Currently the penetrating depth is 2,630 feet drilled towards the main target formations.

"We are very pleased to announce the spudding of this well," said Chief Executive Officer, Kase Lawal. "The work program in China continues to move forward, which is an important step towards further evaluating the resource potential of the Zijinshan Gas Asset."

The ZJS-04 well is the second well of the three wells planned to be drilled in 2011, in accordance with the annual work program as approved by CAMAC Energy and its Chinese Partner, PetroChina CBM Co.

The Company's Zijinshan Gas Asset covers an area of 175,000 acres in the Ordos Basin in the Shanxi Province, the second largest petroleum bearing basin in China. It is in close proximity to major infrastructure, including the West-East Gas pipeline and the Ordos-Beijing Pipelines.

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Tuesday, June 14, 2011

China Says Won't Use Force in South China Sea

- China Says Won't Use Force in South China Sea

Tuesday, June 14, 2011
Dow Jones Newswires
BEIJING

China said Tuesday it wouldn't resort to the use of force in the tense South China Sea, after its neighbors expressed concern about its more assertive maritime posture.

"We will not resort to the use of force or the threat of force," Foreign Ministry spokesman Hong Lei told reporters.

"We hope relevant countries will do more for peace and stability in the region," Hong said.

Vietnam on Monday staged live-fire exercises following recent confrontations at sea with China, which reignited a long-standing dispute over the sovereignty of two potentially oil-rich archipelagos--the Paracels and Spratlys.

Hong insisted Vietnam was to blame for the recent flare-up, sparked by a confrontation between Chinese surveillance vessels and a Vietnamese oil survey ship.

"Some country took unilateral actions to impair China's sovereignty and maritime rights and interests, and released groundless and irresponsible remarks with the attempt to expand and complicate the issue of the South China Seas," Hong said, in a thinly veiled reference to Hanoi. "This is where the problem lies."

He said China was willing to hold direct negotiations with the other nations embroiled in territorial disputes in the South China Sea within the framework of a code of conduct agreed to in 2002.

Tensions have also risen this year between China and the Philippines, another claimant to the Spratlys, which on Monday said it would from now on refer to the South China Sea as the "West Philippine Sea".

Taiwan at the weekend reiterated its claim to the Spratlys, and said missile boats and tanks could be deployed to disputed territory.

Brunei and Malaysia have also staked claims in the area.

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

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Philippines Welcomes US Help to Contain China

- Philippines Welcomes US Help to Contain China

Tuesday, June 14, 2011
Dow Jones Newswires
MANILA

Philippine President Benigno Aquino said Tuesday his country needed help from longtime ally the United States in its increasingly tense dispute with China over rival claims in the South China Sea.

Aquino accused China of breaking international law by sending vessels into waters claimed by the Philippines and close to its landmass, while portraying his country as weak compared with its militarily superior Asian neighbor.

"Of course they (China) are a superpower, they have more than 10 times our population. We do not want any hostilities to break out," Aquino told reporters when asked about recent Chinese actions in the disputed area.

"Perhaps the presence of our treaty partners, the United States of America, ensures that all of us will have freedom of navigation (and) will conform to international law."

The U.S. and the Philippines are bound by a 1951 Mutual Defense Treaty that calls on both parties to come to one another's aid if either were to be attacked by an external party.

Aquino's comments came after the U.S. ambassador to the Philippines, Harry Thomas, Tuesday said the U.S. remained committed to helping its former colony in any dispute over the South China Sea.

Thomas emphasized at a public forum in Manila that the Philippines and the U.S. were "longstanding treaty allies" and "strategic partners".

"We will continue to consult each other closely on all issues, including the South China Sea and Spratly Islands," Thomas said.

Aquino welcomed Thomas's comments, which are likely to irk China as it has long insisted that the U.S. has no role to play in resolving its territorial disputes with Asian countries.

"We are pleased by that, especially the reiteration that we are a strategic partner," Aquino said when asked to respond to Thomas's comments.

Aquino's remarks continued an escalation in tensions between China, the Philippines and other rival claimants to the strategically vital and resource-rich South China Sea over recent months.

The Philippines and Vietnam, in particular, have expressed alarm at what they say are increasingly aggressive actions by China in the disputed waters.

The Philippines has accused China of putting up posts and a buoy in Philippines-claimed areas of the Spratlys, an archipelago of more than 100 islands and reefs in the South China Sea.

It also accused China of sending naval vessels to intimidate Filipino fishermen and the crew of an oil exploration ship near an atoll called Reed Bank.

Aquino on Tuesday specifically highlighted recent "incidents" at Reed Bank, pointing out it was well within the Philippines' exclusive economic zone of 200 nautical miles.

He said the Reed Bank was just 80 miles from the nearest major Philippine landmass, but 576 miles from Chinese territory.

"Five-hundred-and-seventy-six miles is obviously greater than 200 miles, so why is there suddenly a dispute if we are all conforming to international law," he said.

Under the United Nations Convention on the Law of the Sea, a country's exclusive economic zone extends to 200 miles from its continental shelf.

In response to earlier complaints from the Philippines, China has denied taking any aggressive actions and insisted it remained committed to resolving territorial disputes with its neighbors peacefully.

Aside from China, the Philippines and Vietnam, Taiwan, Brunei and Malaysia have overlapping claims to sections of the South China Sea.

The area is believed to hold major oil and gas deposits, and has commercial shipping lanes that are vital for global trade.

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

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Thursday, June 2, 2011

Google Edging Higher as Wall Street Digests News of Gmail Hacking

- Google Edging Higher as Wall Street Digests News of Gmail Hacking



Jun 2, 2011

Google (NASDAQ:GOOG) is modestly firmer in pre-market trading as investors continue to react to news of Gmail hacking.

Google swung to losses in the after-hours session following the company's announcement that "hundreds" of Gmail accounts had been hijacked through malware or "phishing" scams, getting users to share passwords.

The company said on its blog, "This campaign, which appears to originate from Jinan, China, affected what seem to be the personal Gmail accounts of hundreds of users including, among others, senior U.S. government officials, Chinese political activists, officials in several Asian countries (predominantly South Korea), military personnel and journalists."

On Thursday, the Chinese government rejected suggestions that it was linked to the attack.

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Monday, May 23, 2011

Commodity Corner: Oil Falls on EU, China Fears

- Commodity Corner: Oil Falls on EU, China Fears

Monday, May 23, 2011
Rigzone Staff
by Matthew V. Veazey

The July contract price for a barrel of crude oil fell to $97.70 a barrel Monday.

Monday's selloff occurred as the dollar strengthened amid fears of a spreading debt crisis in the European Union. Stoking concerns was Standard and Poor's decision to revise Italy's credit outlook from stable to negative. The Dollar Index, which gauges the value of the U.S. Dollar against a basket of other major world currencies, rose 0.93 percent Monday. Priced in dollars, oil becomes a less attractive value for investors holding other currencies.

Also contributing to the lower oil price was a report by HSBC that manufacturing growth in China hit its lowest point in nine months in April. The bank, in releasing its latest Purchasing Managers Index (PMI) report, observed that new order growth in China is below the long-run trend.

July crude oil peaked at $100.04 and bottomed out at $96.37 during Monday's session.

Weather forecasters expect Americans in the southern and eastern regions of the U.S. to experience hotter-than-normal temperatures through next week. As a result, demand for air conditioning—and the natural gas used to generate electricity—is expected to strengthen during the period.

Front-month natural gas gained 12 cents Monday to settle at $4.35 per thousand cubic feet. June natural gas traded within a range from $4.22 to $4.38.

The June gasoline contract price remained flat at $2.94 a gallon Monday. It fluctuated from $2.87 to $2.955.

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