Iraq Energy Panel Approves Gas Deal - Oil Minister

- Iraq Energy Panel Approves Gas Deal - Oil Minister

Monday, September 12, 2011
Dow Jones Newswires
AMMAN
by Hassan Hafidh

A top Iraqi government energy committee has approved a deal with Royal Dutch Shell PLC (RDSA) to capture and exploit gas from its giant southern oil fields, the country's oil minister said Sunday.

The Iraqi oil ministry struck a deal in July with Shell and Japan's Mitsubishi Corp. (8058.TO, MSBHY) to develop gas production in southern Iraq. To become valid the deal needs approval from the Baghdad government.

"It was agreed upon by the energy committee and was sent to the cabinet for approval," Abdul Kareem Luaiby told Dow Jones Newswires on the sidelines of an Iraqi energy meeting in Amman, Jordan.

The committee is chaired by the deputy prime minister for energy affairs, Hussein al-Shahristani, and its members include the ministers of oil, electricity and finance.

Luaiby declined to say when exactly the cabinet would approve the deal. The agreement must first be examined by the cabinet's legal and specialized offices, he said.

The 25-year venture calls for an investment of $17.2 billion to create the Basra Gas Company. Baghdad would have a 51% stake, Shell 44% and Mitsubishi 5%.

Some $12.8 billion would be spent on infrastructure and $4.4 billion on construction of a liquefied-natural-gas facility.

Under the agreement, the company must first meet local demand but can export any gas not used by Iraq's fuel-starved power plants. The planned LNG terminal would handle the export of 600 million cubic feet a day.

Baghdad would contribute $5.236 billion to the venture, including some $1.524 billion in existing infrastructure. Shell and Mitsubishi need to contribute nearly $7 billion, and the remaining money will be financed through the venture's returns, according to the summary submitted by Iraq's oil ministry to the country's parliament.

The venture would process associated gas produced from three supergiant Iraqi fields--Rumaila, West Qurna phase 1 and Zubair--all in Basra governorate.

"We are committed to supply the venture with 1.6 billion cubic feet a day from these fields," Luaiby said.

The joint venture would sell produced gas to Iraq's state-owned South Gas Company, at international standard pricing.

Iraq estimates it should make around $31.1 billion over the 25 years of the project from taxes, fees and raw gas sales to the joint venture, the document said.

An Iraqi oil expert, who asked not to be named, however, said Iraq would make nearly $100 billion from the venture because the gas would substitute for the oil currently used to fuel Iraq's power stations.

Iraq would tax Shell and Mitsubishi profits at 35%, he said. The expert said Shell and Mitsubishi will make a 7% profit on the whole venture.

Iraq has natural-gas reserves totaling 112.6 trillion cubic feet, the 10th largest in the world. But it produces only around 1.5 billion cubic feet a day, because of a lack of infrastructure.

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

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GE Bags Causeway Development Deal

- GE Bags Causeway Development Deal

Tuesday, September 06, 2011
GE O&G

Reinforcing its position as a leading supplier of subsea technology for North Sea oilfield projects, GE Oil & Gas announced at Offshore Europe 2011 that it will provide subsea production equipment to Valiant Causeway Ltd. for the development of the Causeway Field.

GE will supply two subsea production trees, one subsea water injection tree system, rental tooling and installation services for the project, located in the northern sector of the North Sea. The equipment will be manufactured at GE Oil & Gas facilities in Aberdeen, Scotland.

"We are committed to commence production in the second half of 2012, and installation of the subsea tree system is planned to begin in May of 2012," said Bryan Atchison, project manager of Valiant Causeway. "This is a very aggressive schedule and a close working relationship has been established between GE and Valiant to ensure that we are able to meet all of the project requirements."

The Causeway Field is being developed using subsea production technology with a tie-back to the existing North Cormorant Platform. The reservoir development strategy is to maintain production with the use of electrical submersible pumps (ESPs) and water injection. The Causeway Field will comprise one oil-producing well, one contingent oil-producing well and one water-injection well.

"This contract demonstrates GE's strong position and ability to provide reliable technology that is designed to facilitate the installation process," said Matt Corbin, regional leader—United Kingdom and continental Europe for GE Oil & Gas. "Our subsea tree systems are based on extensive field experience and feature well-proven interfaces with the power cables and dual ESPs to be installed in the wells."

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Ukraine, Shell Sign Shale Gas Exploration Deal

- Ukraine, Shell Sign Shale Gas Exploration Deal

Thursday, September 01, 2011
Dow Jones Newswires
KIEV

Ukraine Thursday awarded its first shale gas exploration contract to the Anglo-Dutch giant Shell in a deal worth up to $800 million, Ukraine's state gas exploration company said.

"In case of successful exploration work and the start of intense project development, Shell's total investment under the agreement may come to $800 million," Ukrgazvydobuvannya said in a statement issued after the signing.

Ukraine is widely believed to be one of Europe's largest holders of the new energy resource, with estimated reserves up to 1.5 trillion cubic meters, according to industry analysts.

No official estimate has been made and there is no confirmed figure of how much shale gas might be hidden in the six blocks awarded to Shell near northeastern city of Kharkiv.

Ukraine lacks the advanced technology necessary to produce the hard-to-recover resource and is also holding negotiations with such Western majors as the U.S. firms Chevron and ExxonMobil.

The former Soviet republic has few other natural resources and relies on Russia for most of its gas imports.

But it has been trying to lower its energy dependence on its neighbor since a price dispute temporarily cut Russian gas flows in January 2009 and is now focusing on other sources of energy that include coal.

"The agreement with Shell will be one of the first examples of Ukraine's successful cooperation in hydrocarbons development with an international energy company," Ukrgazvydobuvannya chief Yuriy Borysov said.

Ukrgazvydobuvannya said Shell would be operating in Ukraine through a joint venture but offered no other immediate details.

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

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Repsol: Sacyr, Pemex Deal Excludes Majority of Shareholders

- Repsol: Sacyr, Pemex Deal Excludes Majority of Shareholders

Tuesday, August 30, 2011
Dow Jones Newswires
MADRID
by Santiago Perez

Spain's Repsol YPF SA (REP.MC) said Tuesday that it will seek to ensure that the interest of all shareholders is met after two of its top shareholders joined forces to control close to 30% of the voting rights at the oil firm.

As with previous attempts by Sacyr to sell a stake in Repsol to Russia's Lukoil Holdings (LKOH.RS), the Spanish oil company "will ensure that the interest of all shareholders is met, particularly in light of an agreement that excludes a majority of shareholders," Repsol spokesman Kristian Rix said in an emailed statement.

As part of an agreement disclosed late Monday by Spanish construction firm Sacyr-Vallehermoso SA (SYV.MC), Mexican state-owned oil company Petroleos Mexicanos will increase its Repsol stake to 9.8% from 4.8%, and vote together on key company issues with Sacyr.

The two companies said they want to split the chairman and chief executive roles, which are now both held by Antonio Brufau. Brufau has the backing of Catalan lender Caixabank SA (CBNK.MC), Repsol's second-largest shareholder with a stake of about 12%.

In 2008, Sacyr, owner of about 20% of Repsol, sought to sell Repsol shares to Lukoil as part of an effort to cut down on debt.

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

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Eni, Libyan Rebels Sign Deal to Restore Pre-Civil War Role

- Eni, Libyan Rebels Sign Deal to Restore Pre-Civil War Role

Tuesday, August 30, 2011
Knight Ridder/Tribune Business News
by Adnkronos International, Rome

Paolo Scaroni, chief executive officer of Eni met with Libyan rebel leaders in Benghazi Monday where they signed a non-binding agreement to restore the Italian oil company's pre-civil war role as the North African country's biggest oil and natural producer.

"With the memorandum, Eni and the National Transition Council (NTC) are working to recreate the conditions for a swift return of Eni's activities in the country," the Rome-based company said in a statement.

The agreement would allow Eni to resume gas imports to Italy via the Greenstream pipeline, a move that Scaroni last week said was important ahead of winter when demand for the fuel increases.

Scaroni's trip to Libya makes him the first head of a major oil company to visit Libya since rebels last week took over the capital Tripoli, putting an end to Muammar Gaddafi's 42-year-old authoritarian government.

News reports said Scaroni met with the head of Libya's National Oil company, in addition to the NTC, the rebel's political leadership.

Eni is expected to supply Libyan rebels with fuel as part of an international effort to create security and infrastructure in post-Gaddafi Libya.

Oil traders said Eni was trying to hire a tanker to travel to Libya this week, Reuters news agency reported.

Eni needs between 6 and 18 months to restart its oil and gas fields in Libya, Scaroni said Thursday in Milan following a meeting with NTC prime minister Mahmoud Jibril.

Eni has been in the country since 1959 and got 13 percent of its revenue from Libyan natural resources prior to the conflict that broke out in February.

(c)2011 Adnkronos International (Rome). Distributed by MCT Information Services.

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Odfjell Inks Management Deal for Semisub

- Odfjell Inks Management Deal for Semisub

Monday, August 29, 2011
Odfjell Drilling AS

Odfjell Drilling has signed a management agreement for the semisubmersible drilling rig Island Innovator owned by Marine Accurate Well ASA – Maracc (OTC MARA). The rig will be ready for operations in Norway 4Q 2012.

Odfjell Drilling CEO Simen Lieungh stated, "We are very pleased to announce this management agreement with Marine Accurate Well
ASA for the Island Innovator. The expansion of the Odfjell Drilling management portfolio is a part of the company growth strategy, and we will actively tender the rig both in Norway and Internationally. The Island Innovator is a drilling and intervention rig perfect for
operations at the NCS among others. We are looking forward to a prosperous and successful collaboration with Marine Accurate Well ASA."

Odfjell Drilling will be responsible for management including crew, quality systems and technical operation. The co-operation will start immediately and Odfjell Drilling will commence mobilization of personnel and crew into the project and the operation.

The rig is currently under completion at Cosco in China. The rig will be ready for operations in Norway 4Q 2012.

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Oliver Valves Seals Supply Deal with Brazilian Co

- Oliver Valves Seals Supply Deal with Brazilian Co

Friday, August 26, 2011
Oliver Valves

Oliver Valves has secured a £7.2m deal to supply two projects for Brazil's leading oil and gas firm.

The deal, which is the biggest single contract in the firm's 30-year history, is for delivery of 391 valves, ranging in size from 2" to 12" in diameter.

Delivery of the first units has already begun and all installations are scheduled to be completed by September 2012.

The valves will be used on two Floating Production, Storage and Offloading (FPSO) vessels operating of the coast of Rio de Janeiro.

David Cornwell, managing director of Oliver Valves, said, "This is a landmark contract for the business as it is not only the biggest we have ever secured but it also represents a major success in an international market that is relatively new to us.

"Just five years ago, Brazil was hardly even on our radar in terms of sales, but this year it will generate more revenue for the business than any other territory.

"We secured this project on the basis of our technical ability, rather than by beating our competitors commercially.

"We undertook nine months of specification work before securing the project and we committed the time up front to ensure we would be delivering the best possible solution.

"This approach has clearly paid off and this demonstrates that it is possible for British manufacturers to compete internationally by outperforming others in terms of quality, if not always on price."

The win follows a series of other international contract wins in 2011 including a £1 million order to supply subsea valves for a project in the Gulf of Mexico, a separate £800,000 order from a major Brazilian oil company, and Oliver Valves' first subsea contract in Chinese waters – worth £400,000.

David Cornwell said, "We have achieved a lot of success in securing new orders in the past six months, and delivering these projects will mean increasing the capacity of the business through significant recruitment."

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Bridge Inks Farm-In Deal with TAQA Offshore UK

- Bridge Inks Farm-In Deal with TAQA Offshore UK

Thursday, August 25, 2011
Bridge Energy ASA

Bridge announced that, along with its current license partners, it has signed a farm-in agreement with TAQA Bratani Limited ("TAQA") relating to UKCS License P201 Block 211/22a North West Area (Bridge 10%) whereby TAQA has agreed to carry the cost of an exploration well to earn an interest in the license.

Under the terms of the agreement and subject to the approval of the UK Department of Energy and Climate Change ("DECC"), TAQA will assume operatorship and drill an exploration well on a prospect known as Contender in the southern area of the block from the TAQA-operated Cormorant North Platform. The well will target the Jurassic Brent sequence of sandstones at a projected drilling depth of 16,900 feet, less than two kilometers east of the Cormorant North Field. The well is expected to spud during the first half of 2012 and will be completely funded by TAQA.

If successful, TAQA will earn 60% interest in the southern area of the block (the "Contender sub-area") and 35% interest in the northern part (the "Kerloch sub-area"). Bridge's remaining interests will be 4% in the Contender sub-area and 6.5% in the Kerloch sub-area.

Tom Reynolds, Bridge's Deputy Chief Executive, said, "We are delighted to have TAQA as a partner in the Kerloch and Contender license area and encouraged that a further exploration well will be drilled within the Bridge portfolio in 1H 2012; in addition to the existing four wells on our 2012 drilling program. TAQA has been successful in the area with the Cormorant North Field and is well placed to further explore the Contender prospect.

"Subject to exploration success; the testing of the well and delivery of production could be conducted at minimal cost and within a short time-frame."

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Beach Seals Tie-In Deal with Senex

- Beach Seals Tie-In Deal with Senex

Friday, August 19, 2011
Beach Energy Ltd.

Beach has signed an agreement with Senex to tie-in the Growler Field (Beach 40%) to the Lycium oil field. It has also agreed with Senex to construct a trunkline from Lycium to the Moomba facility, however, the tie-in of this section remains subject to approval from the South Australian Cooper Basin (SACB) Joint Venture (~Santos Ltd 67%, Beach 20%, Origin Ltd 13%).

It is anticipated that the flowline from the Growler Field will be constructed in two main sections. The first section, directly from the Growler Field to the Lycium oil field, will consist of a six inch flowline with an initial capacity of approximately 8,000 barrels of oil per day. The equity interests for this section of flowline will be Beach 40% and Senex 60%.

Pending approval from the SACB Joint Venture, the main trunkline will service the whole of Beach's operated and non-operated Western Flank acreage and is planned to run between Lycium and the Moomba facility. The capacity of this eight inch trunkline is expected to be in the order of 15,000 barrels of oil per day. The equity interests for this section will be Beach 60% and Senex 40%.

Beach will undertake both the construction and operatorship of the flowlines, with the total cost of approximately $40 million to be effectively shared between Beach and Senex.

These flowlines will provide Beach with access to the Growler Field during times of flooding in much the same way it has for Beach's PEL 92 acreage during the recent flooding events. The second trunkline will also provide for increased production flows from Beach's operated PEL 91 and PEL 92 acreage as a result of recent development, appraisal and exploration success in the area.

The six well approved exploration program set down for PEL 104 and PEL 111 is expected to commence in October 2011, when flood waters are forecast to recede to levels where access can be restored. A number of Birkhead targets have been identified by the Operator which has had an exploration drilling success rate of 80% in the acreage to date.

The tenure of the Beach Operated Western Flank PEL's 91 and 92 have been granted a twelve month extension by PIRSA in acknowledgment that flooding has delayed exploration in the area. It is expected that the flowlines will be commissioned around June 2012.

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BHP Billiton-Petrohawk Deal Gets Final Nod

- BHP Billiton-Petrohawk Deal Gets Final Nod

Thursday, August 18, 2011
BHP Billiton plc

BHP Billiton and Petrohawk announced that on August 17, 2011, BHP Billiton and Petrohawk received notice from the Committee on Foreign Investment in the U.S. (CFIUS) that CFIUS has concluded that there are no national security issues of concern in relation to the transactions contemplated by the merger agreement between BHP Billiton and Petrohawk, including BHP Billiton's tender offer for all of the issued and outstanding shares of common stock of Petrohawk for US $38.75 per share in cash. As previously announced, on July 22, 2011, BHP Billiton and Petrohawk received notice from the U.S. Federal Trade Commission of early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act in relation to the tender offer. Accordingly, all regulatory approvals conditions to the tender offer have been satisfied.

The documents related to the tender offer have been filed with the U.S. Securities and Exchange Commission (the SEC). As previously announced, the tender offer has been unanimously recommended by the Petrohawk board of directors and is being made pursuant to the merger agreement between BHP Billiton and Petrohawk. The tender offer is scheduled to expire at midnight, New York City time, at the end of Friday, August 19, 2011, unless the tender offer is extended or earlier terminated in accordance with the rules and regulations of the SEC and the merger agreement.

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EMAS AMC, Chevron Cement Installation Services Deal

- EMAS AMC, Chevron Cement Installation Services Deal

Tuesday, August 16, 2011
EMAS

EMAS and operating brand for Ezra continues to boost its orderbook of marine and/or offshore construction contracts. The latest contract win was awarded to EMAS AMC, the Group's offshore construction division, by Chevron Thailand Exploration and Production Ltd, Chevron Offshore (Thailand) Ltd and Chevron Pattani Ltd (collectively, "Chevron Thailand").

This award will see EMAS AMC installing a number of wellhead platforms and associated pipelines in the Gulf of Thailand. This project is expected to commence in early 2012 for a three year firm period (2012 – 2014) with an option period for an additional two years (2015 – 2016), which in aggregate is estimated to increase the orderbook for EMAS AMC to over US $600 million.

Mr. Lionel Lee, EMAS's Managing Director, said, "This award is an important milestone for us and reaffirms the growing relationship that we have with Chevron in the Asia Pacific region."

"The total subsea orderbook for EMAS AMC is now past the halfway mark and is closer to our short-term target of US $1 billion for the segment. EMAS AMC is moving steadily closer towards becoming fully integrated within the EMAS Group and the combined entity will propel us towards our objective of being a global leader in marine and offshore construction."

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NOV Pens $1.5B Deal for 7 Drillship Equipment Packages

- NOV Pens $1.5B Deal for 7 Drillship Equipment Packages

Monday, August 15, 2011
National Oilwell Varco Inc.

National Oilwell Varco has signed contracts to supply drilling equipment packages for seven drillships to Estaleiro Atlantico Sul ("EAS"), 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, stated "We are pleased to have been selected as the drilling equipment supplier for this prominent project, and excited to work with one of Brazil's premier shipyard companies, EAS. Brazil's extraordinary deepwater discoveries of the past several years have transformed it into one of the most significant offshore markets we serve, and one we expect to continue to grow. We are investing heavily in Brazil to manufacture more of the products and technologies National Oilwell Varco provides to our oil and gas customers, and to service the rapidly growing installed base of NOV drilling equipment in the region.

"Congratulations to our Rig Technology team in securing the largest single order in our company's 150 year history."

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Petronas to Award Second Deal for Marginal Field Soon

- Petronas to Award Second Deal for Marginal Field Soon

Monday, August 15, 2011
The New Straits Times
by Kamarul Yunus

Petroliam Nasional Bhd (Petronas) is expected to announce the second contract to develop a marginal oil field soon.

"Petronas is currently finalizing the second risk services contract (RSC) and will make an announcement in due time," a Petronas spokesman told Business Times.

The spokesman, however, did not identify the field.

In January this year, Petronas said it will award two marginal oil field contracts by April. The only RSC awarded so far is for the Berantai field to the Petrofac-Kencana Petroleum-SapuraCrest Petroleum partnership early this year.

But in its prospectus for listing on Bursa Malaysia last month, Bumi Armada Bhd said it was awarded a floating, storage and offload (FSO) vessel contract for the Sepat field. It is claimed to be the first under the marginal fields initiative of the government's Economic Transformation Program (ETP).

Responding to Business Times' query, the spokesman clarified that Sepat is a field currently being developed under a production sharing contract operated by Petronas Carigali Sdn Bhd, the exploration and production arm of the national oil company.

In December last year, Petronas Carigali awarded the engineering, procurement, construction, installation and commissioning contract for Sepat to Petrofac, which in turn awarded the FSO vessel contract to Bumi Armada.

The development of the marginal oil and gas fields under the new RSC arrangement is part of the initiatives under the ETP.

Malaysia, according to Petronas, has 106 marginal fields, with 580 million barrels of oil.

(C) 2011 The New Straits Times. via ProQuest Information and Learning Company; All Rights Reserved

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Reliance-BP Deal Gets OK from Indian Govt

- Reliance-BP Deal Gets OK from Indian Govt

Tuesday, August 09, 2011
Reliance Industries Ltd.

Reliance Industries Limited has received the Government of India approval for its transformational deal with BP. Reliance Industries is grateful to the Government of India for the approval, which will result in the largest foreign investment in the domestic hydrocarbon sector.

BP will take 30% stake in 21 oil & gas production sharing contracts that Reliance operates in India, including the producing KG D6 block. Following the approval, RIL and BP will work together to conclude the deal expeditiously.

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Seadrill Strengthens Mid East Presence with KJO Deal

- Seadrill Strengthens Mid East Presence with KJO Deal

Tuesday, August 09, 2011
Seadrill Ltd.

Seadrill has been awarded two new contracts by KJO (AL-Khafji Joint Operations) in the joint development zone between the Kingdom of Saudi Arabia and Kuwait for the jackup rigs West Triton and Offshore Resolute. The assignments which will commence in direct continuation of their current contracts in Southeast Asia are each for a firm period of 3 years plus the time required to mobilize to the Arabian Gulf. Each contract also includes an option for KJO to extend the term for a further 1 year.

Alf C. Thorkildsen, Chief Executive Officer in Seadrill Management AS said, "These new contracts will strengthen the relationship with KJO, one of the key customers in the Arabian Gulf. In addition, relocating two rigs for term work and at attractive market rates serves our strategic desire to increase our long term presence in this active oil and gas region."

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CNOOC Extends Oil Sands Presence with $2.1B Deal

- CNOOC Extends Oil Sands Presence with $2.1B Deal

Wednesday, July 20, 2011
CNOOC Ltd.

CNOOC has entered into an Arrangement Agreement to acquire OPTI Canada Inc ("OPTI"). The aggregate value of the consideration of the transaction is approximately US $2.1 billion, which includes aggregate cash consideration of US $1.25 billion payable to the holders of the OPTI shares (US $34 million) and the Second Lien Noteholders (US $1.216 billion). In addition, due to a change in control of OPTI as a result of the transaction, OPTI will be required to offer to repay the holders of its outstanding First Lien Notes (US $825 million in principal amount) pursuant to the indentures governing the First Lien Notes. The transaction will be effected by way of a plan of arrangement through concurrent proceedings under the Companies' Creditors Arrangement Act (Canada) and the Canada Business Corporations Act.

The proposed transaction must be approved by the Second Lien Noteholders at a special meeting that is expected to be held in September,2011. Noteholders representing approximately 55.2% of the principal amount of the Second Lien Notes have executed support agreements pursuant to which, among other things, they have agreed to vote in favour of the transaction.

The proposed transaction is also subject to certain terms and conditions, including, among other things, applicable government and regulatory approvals by the relevant authorities in Canada and the People's Republic of China, and Canadian court approval. The transaction is expected to be completed in the fourth quarter of 2011. Upon completion of the transaction, OPTI will become an indirect wholly-owned subsidiary of the Company, and all of the Second Lien Notes will be transferred or assigned, directly or indirectly, to a subsidiary of the Company. All existing options, warrants and other rights to purchase OPTI shares will be cancelled.

The principal asset of OPTI consists of a 35% working interest in the Long Lake and three other project areas located in the Athabasca region of northeastern Alberta. Long Lake project includes steam assisted gravity drainage ("SAGD") Operation and an Upgrader. Nexen Inc. ("Nexen"), a Canadian-based global energy company, holds the remaining 65% and is the sole operator. The Long Lake SAGD Operation is expected to have through-put rates of approximately 72,000 barrels per day of bitumen at full production. It is anticipated that the Long Lake Upgrader will ultimately produce approximately 58,500 barrels per day of products, primarily Premium Sweet Crude (PSCTM).

As disclosed in OPTI's disclosure documents filed with securities regulatory authorities in Canada, OPTI's working interest share, before royalties, of raw bitumen reserves and resources on its oil sands leases is estimated to be 195 million barrels of proved reserves, 534 million barrels of probable reserves, 1,100 million barrels of contingent resources and 335 million barrels of prospective resources. These reserves and resources are estimated to be sufficient to support approximately 430,000 barrels per day (150,000 barrels per day net to OPTI) of bitumen production.

Mr. Yang Hua, Chief Executive Officer of the Company stated, "The transaction strengthens our Canadian presence in the oil sands business. We believe that upside potential of the assets will facilitate local energy supply and our production growth in the long term.

"We are pleased to expand our presence in the oil sands business after our successful investment in MEG. We believe that the upside potential of the acquired assets will benefit the shareholders of CNOOC Limited."

Mr. Li Fanrong, President of the Company said, "We look forward to working with our new partner Nexen, to optimize value from the Long Lake Project and the three other jointly owned oil sands leases."

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Energy Transfer, Southern Union Reach $5.7B Deal

- Energy Transfer, Southern Union Reach $5.7B Deal

Tuesday, July 19, 2011
Dow Jones Newswires
HOUSTON
by Ben Lefebvre

Southern Union agreed to a sweetened $5.7 billion cash-and-stock buyout offer from Energy Transfer Equity, spurning a bid from rival suitor Williams Cos.

The agreement is the latest maneuver in a bidding war that has added more than a billion dollars to Energy Transfer's opening $4.2 billion bid for Southern in mid-June. Energy Transfer and Williams have competed to merge their pipeline assets with those of Southern, with the winner expected to become the largest natural gas pipeline operator in the country.

Williams, whose most recent bid was for $5.6 billion on July 14, said it was "evaluating its options."

Enterprise and Williams have hoped that combining their position in prolific natural gas production areas with Southern's access to markets will make them better able to transport natural gas through what is becoming an increasingly congested system. The glut has been brought about by new drilling technology, which in the past decade has unlocked an unprecedented natural gas bounty from shale formations across the U.S.

The combined company will have capacity to move more than 30 billion cubic feet a day of natural gas--nearly half of the natural gas produced in the U.S.--along nearly 45,000 miles of pipeline.

Southern shareholders may have been swayed by Energy Transfer's use of stock in the deal, which would offer tax benefits and dividends, analysts have said. Energy Transfer's assets in Texas might also fit easier with Southern's position in markets in the Midwest and Florida, said Morningstar analyst Avi Feinberg.

"I think Energy Transfer has the best natural fit with Southern Union," Feinberg said in an interview.

Under Energy Transfer's latest offer, Southern Union holders can elect to receive $44.25 in cash or one Energy Transfer Equity common unit, worth $44.03 as of Monday's close. The total value of the deal, including debt assumption, is about $9.4 billion.

Williams may find going above $44 a share problematic, as the amount could be more than Southern might be worth to shareholders, BMO Capital Markets analysts have said.

Energy Transfer on Tuesday also reached an amended agreement to sell Southern Union's 50% interest in Citrus Corp., owner of the Florida Gas Transmission pipeline system, to Energy Transfer Partners LP for $2 billion. Regulators are requiring Energy Transfer Equity to sell the stake when the Southern Union acquisition closes.

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

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Lukoil, Partners Award Deal to Drill 23 Iraq Wells -Source

- Lukoil, Partners Award Deal to Drill 23 Iraq Wells -Source

Thursday, July 14, 2011
Dow Jones Newswires
LONDON
by Hassan Hafidh

Lukoil and its partners have awarded a deal to a "known" service company to drill some 23 new wells at Iraq's supergiant West Qurna Phase 2, a person familiar with the project said Thursday.

"The central contracts committee at the Iraqi Oil Ministry is studying the contract and we expect them to take a decision shortly," the person told Dow Jones Newswires.

Along with Norway's Statoil and Iraq's state South Oil Co., Lukoil is expected to award four other major deals in August to help develop the 12.9-billion-barrel field located in Basra governorate in southern Iraq.

The four contracts include a crude processing facility, a 126-megawatt power station, an export pipeline linking the field with a tank farm in Tuba near Iraq's southern export terminals, and six large storage tanks, the person said, adding the largest contract would be the crude processing facility.

The person said that Lukoil has shortlisted five oil services companies for this plant--Saipem, SNC-Lavalin Group, Punj Lloyd, Globalstroy-Engineering and South Korea's Samsung Engineering.

For the power station the Russian supermajor has received offers from a number of companies such as Petrofac and Greece's ENKA, the person said.

The contracts are part of an initial development plan to start production from the untapped oil field, set by Lukoil and Statoil and approved by Iraq's Oil Ministry last year. They are expected to help production at the field hit 150,000 barrels of oil a day in 2013, the person said.

Lukoil and Statoil were awarded a 20-year service contract for West Qurna Phase 2 in Iraq's second licensing round held in December 2009. The companies promised to get the southern field pumping at a rate of 1.8 million barrels a day for payment of $1.15 a barrel.

The development project is one of several that Iraq awarded last year with the ambitious objective of expanding its oil production capacity to 12 million barrels a day by 2017. But Iraq's oil minister said last month that Baghdad was considering scaling down this goal and could renegotiate deals.

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

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SapuraCrest, Kencana Petroleum to Merge in $3.95B Deal

- SapuraCrest, Kencana Petroleum to Merge in $3.95B Deal

Monday, July 11, 2011
Dow Jones Newswires
KUALA LUMPUR
by Ankur Relia

Malaysia's SapuraCrest Petroleum and Kencana Petroleum said Monday they have received separate takeover offers from an unlisted company which plans to merge them in a MYR11.85 billion ($3.95 billion) combined deal that could create the country's second largest oil and gas services provider in terms of market capitalization.

Integral Key Sdn Bhd, a shell vehicle wholly owned by Malayan Banking's private equity unit Maybank Ventures Sdn Bhd, has made takeover offers for both SapuraCrest and Kencana, the companies, as well as Integral Key, said in statements Monday. Maybank Investment Bank and CIMB Investment Bank are the joint advisors to the shell company.

"The principal shareholders of SapuraCrest and Kencana are keen to consider the merger," E. Sreesanthan, Integral Key's legal adviser, told reporters at a press conference.

Integral Key plans to acquire all the assets and liabilities of Kencana and SapuraCrest and merge them into an integrated oil and gas service provider, the two companies said in separate exchange filings.

If successful, the merged entity will be the second-largest player in the country's oil and gas services sector after Malaysia Marine & Heavy Engineering Holdings, a unit of national oil company Petroliam Nasional Bhd (Petronas).

Both SapuraCrest and Kencana have been looking to move up the value chain and expand their offerings in order to take advantage of the robust oil and gas industry in the region amid higher global oil prices.

"The merged entity will be in a strong position to undertake larger and more complex projects, thus significantly improving business prospects," Integral said in its letter of offer to both companies. The tie-up will "create a full-fledged integrated oil and gas services provider with strong delivery capabilities across the value chain," it added.

The entity also stands to benefit from Petronas' MYR300 billion capital expenditure program over the next five years, analysts said. Petronas is planning to replace or refurbish its oil and gas production assets in Malaysia. A merged firm will also be in a better position to bid for contracts outside the country, they added.

The deal, which will be the fourth-largest domestic merger in the Southeast Asian nation and the largest this year, was planned by Malaysia's top two investment banks--Maybank and CIMB-- and has the support of the key shareholders of the two takeover targets.

Integral Key has the support of SapuraCrest's key shareholder Sapura Holdings, which holds 40.1% in SapuraCrest, and Kencana's major shareholder Khasera, which holds 32.4%, CIMB Group Deputy Chief Executive Officer, Corporate and Investment Banking, Charon Wardini Mokhzani said.

Once the merger is complete, Sapura Holdings will hold 20.0% and Khasera will hold 16.2% in the combined entity, according to the merger plan.

SapuraCrest Petroleum said Integral Key is offering to pay MYR5.87 billion, or MYR4.60 a share, through an issue of 2.50 million new shares in Integral Key and a cash payment of MYR875.1 million. The offer price for SapuraCrest represents a 2.4% premium over its Friday closing price of MYR4.49.

Kencana Petroleum said Integral Key is offering to pay MYR5.98 billion, or MYR3.00 a share, through an issue of 2.51 million new shares in Integral Key and a cash payment of MYR968.7 million. The offer price for Kencana represents a 7.1% premium over its Friday closing price of MYR2.80.

Maybank Investment Bank and CIMB Investment Bank expect the deal to be completed in within eight months, post which both SapuraCrest and Kencana will be delisted from the stock exchange, and the merged entity will be listed under a new name.

Kencana said it has hired AmInvestment Bank Bhd and Credit Suisse as the adviser and financial adviser, respectively for the offer; while SapuraCrest said the board will appoint relevant advisers in due course and deliberate the terms of the offer.

Integral Key has submitted the offers to the boards of SapuraCrest and Kencana on Monday and the two companies have until Aug. 15 to respond to the offers.

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

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RIL Asks Govt to Expedite Approvals for $7.2B BP Deal

- RIL Asks Govt to Expedite Approvals for $7.2B BP Deal

Tuesday, July 05, 2011
Knight Ridder/Tribune Business News
by Anupama Airy and Gaurav Choudhury, Hindustan Times

Amidst concerns raised by central intelligence agencies over the $7.2-billion (Rs 32,400-crore) Reliance Industries Ltd (RIL)-BP deal, RIL is pushing for speedy approvals to the deal and has cited BP's entry into India as a "major boost to the energy security of the country." Mukesh-Ambani led RIL had signed a deal to sell a 30% stake in 23 oil and gas fields to BP.

RIL's letter dated June 10, asking the petroleum ministry to "expedite approvals" for its deal with BP, comes within days of a June-1 note of the ministry of home affairs conveying concerns of intelligence agencies. The agencies had voiced concerns over the handling of a "natural resource" such as gas by a new player with BP's financial muscle, which would not only take away a large chunk of the gas marketing and transportation business of India's national gas carrier GAIL India Ltd, but will also raise the cost of oil and gas for user industries.

While conveying its "security no-objection certificate" to the RIL-BP deal, the home ministry has asked the petroleum ministry to "take into account" these observations while "considering the case."

However, RIL said that "BP's entry will add value to India's exploration and production (E&P) sector...BP's entry as an international oil and gas major with proven deep ater experience will be a major boost to the energy security of India."

RIL has rebutted the intelligence agencies' observation that it needs to be ascertained whether the New Exploration and Licensing Policy (NELP) contract has a provision of sale of assets and whether it allows BP to sell or transport gas outside the country.

The gas marketing joint venture "is not part of NELP and is governed by a different policy framework for which we will obtain necessary approvals from the authorities concerned," RIL has told the petroleum ministry.

A RIL spokesperson said the company does not want to comment on any inter-ministerial communication and the June 10 letter to the petroleum ministry was self-explanatory.

The deal marked one of the biggest foreign direct investments in a single year in India. Europe's second-biggest oil company bought a 30% stake in 23 oil and gas blocks owned by RIL by paying $7.2 billion or Rs 32,400 crore. RIL will get another $1.8 billion if it strikes more oil or gas. However, the petroleum ministry approval is a mandatory pre-requisite for the deal to go through.

Copyright (c) 2011, Hindustan Times, New Delhi

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