SBM Offshore CEO to Step Down after Cost Over-runs Hit Profits

- SBM Offshore CEO to Step Down after Cost Over-runs Hit Profits

Thursday, August 18, 2011
Dow Jones Newswires
AMSTERDAM
by Robin van Daalen & Patrick Buis

SBM Offshore Thursday reported semi-annual results that bested analyst expectations, but announced plans to replace its chief executive after a large cost-overrun pushed its results into the red.

SBM, which owns and operates offshore units for the oil and gas industry, reported a net loss of $265.3 million, a big drop from the $77.6 million net profit a year ago, but somewhat higher than analyst expectations. SBM pointed to record orders and cited heavy interest for additional work from Brazil, Angola and other petroleum centers.

But company results have been tarnished by a $450 million impairment charge related to two problem projects that has weighed on shares since it was announced in July. SBM announced that "in light of recent events," Chief Executive Tony Mace would step down and it would recommend Chief Operating Officer Bruno Chabas for the top spot.

"Stepping down is a matter of taking responsibility," Mace said at a meeting without giving further detail.

SBM shares opened higher Thursday following the disclosure, but later gave up their gains following a broader market retreat. At 11:52 GMT, SBM shares were down 3.2% to EUR13.50, while the Amsterdam index was down about 2.6%.

SBM Offshore booked a $450 million impairment charge after it was unable to reach a settlement for additional compensation for cost overruns on SBM Offshore's Yme and Deep Panuke platforms which have been installed on their respective offshore locations in Norway and Canada. Legal action in the case of the Deep Panuke platform has been initiated in April against EnCana and arbitration proceedings were initiated in January for the Yme platform against Talisman But SBM said the outcome is uncertain.

Neither EnCana nor Talisman were available for comment Thursday. Talisman Chief Executive John Manzoni has publicly complained that a "poorly executed fabrication contract" has hindered the project.

ING said SBM's underlying results were "reasonable" and praised the decision to replace Mace as "a valuable step" that could spur a "fresh look" at the firm. But ING said it wanted more details on the "huge" $450 charge.

Turnover for the first six months of 2011 rose 6% to $1.46 billion, driven by fleet operations, where SBM operates Floating Production Storage Offloading (FPSO) units for its clients on a leasing basis.

Earnings before interest and taxes, or Ebit, excluding the impairment charge was $236 million, compared to $146 million a year ago. The increase was mainly driven by the solid performance of the Turnkey Systems segment, the company said.

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

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Judge Strikes Down US Policy on O&G Permits

- Judge Strikes Down US Policy on O&G Permits

Monday, August 15, 2011
Dow Jones Newswires
WASHINGTON
by Ryan Tracy

A federal judge has struck down an Obama administration policy related to drilling permits on public lands, leading oil and gas companies to hope more permits in the western U.S. will be forthcoming.

But it wasn't clear Monday how the Interior Department, which processes the permits, would respond. The ruling, issued Friday by the U.S. District Court in Wyoming, rejected a policy that had required more extensive environmental review of some drilling permits.

Interior "had no authority" to adopt the policy last year "without public notice and an opportunity for comment," Judge Nancy D. Freudenthal wrote. She ruled in favor of an industry group and vacated the policy nationwide.

An Interior Department spokesman said the agency was reviewing the ruling and declined to comment further.

The ruling "holds the promise of new jobs and economic growth," said Kathleen Sgamma, director of government and public affairs for the Western Energy Alliance, which filed the suit and represents Devon and Anadarko, among others.

Permitting on U.S. land quickened under the Bush administration and hit a peak during the 2007 fiscal year, when Interior approved 7,124 permits to drill for oil and gas on federal lands. The Obama administration, by contrast, approved 4,487 such permits in 2009 and 4,090 in 2010, according to data from Interior's Bureau of Land Management, or BLM.

Some of that drop can be attributed to lower demand as a result of the economic downturn, but the industry says permits are also taking longer to obtain.

For its part, BLM has argued that its new permitting policies are more efficient because a stronger up-front review will lead to fewer lawsuits and delays down the road.

At issue in Friday's court ruling was a provision in the 2005 Energy Policy Act that allowed oil and gas companies to skip federal environmental reviews under certain circumstances -- for example, if a well was being drilled from an existing site where drilling had occurred within the previous five years.

In May 2010, Interior instructed its staff to allow such exceptions under "extraordinary circumstances." Freudenthal said that decision amounted to an "about-face" from past practice, so the agency must formally propose the change and solicit public input.

Sgamma said she hoped Interior would rescind the current policy for now. The department might also keep it in place and appeal the ruling.

"It's not like we'll start to get permits quicker here on out in the short term," Sgamma said. "We'll have to wait to see what the government does."

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

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Schlumberger CEO Steps Down

- Schlumberger CEO Steps Down

Thursday, July 21, 2011
Schlumberger Ltd.

Schlumberger announced that Andrew Gould, Chairman and Chief Executive Officer of Schlumberger Limited will retire as Chief Executive Officer effective August 1st 2011. Mr. Gould will continue to serve as Chairman of the Board until the annual general meeting of the company's stockholders in April 2012. It is the Board's intention that its directors will select the current independent lead director, Tony Isaac, to be the new non-executive Chairman upon Mr. Gould's departure.

Andrew Gould will be succeeded as Chief Executive Officer by Paal Kibsgaard, Chief Operating Officer of Schlumberger Limited. During more than 14 years of employment with the company, Mr. Kibsgaard has held operational and management responsibility in the Middle East, Europe and the U.S., and has been involved in all aspects of the company's operations. Prior to his appointment as Chief Operating Officer, Mr. Kibsgaard served as President of the Reservoir Characterization Group after assignments as Vice President, Engineering, Manufacturing and Sustaining; and Vice President of Personnel following a series of earlier international positions.

Commenting on the move, Tony Isaac, the current independent lead director of the Schlumberger Board remarked, "The Board joins me in thanking Andrew for his 36 years of service to Schlumberger and appreciates the significant contributions he has made in driving the company's strong business results during his tenure as Chief Executive Officer."

Mr. Isaac continued, "The Board welcomes Paal Kibsgaard as Chief Executive Officer, and is highly confident that Schlumberger will continue to grow and prosper under his leadership."

Kibsgaard has served as Chief Operating Officer since February 2010, and as a member of the Schlumberger Limited Board since April 2011.

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Commodity Corner: Oil Down on Bernanke Comments

- Commodity Corner: Oil Down on Bernanke Comments

Thursday, July 14, 2011
Rigzone Staff
by Saaniya Bangee

Oil futures plummeted Thursday after Federal Reserve Chairman Ben Bernanke stifled expectations of the Federal Reserve providing additional monetary aid. During the Fed's semiannual policy report, Bernanke explained that as of now, the central bank would not be releasing further funds.

The news sent the dollar soaring. A stronger greenback pressures oil prices making the dollar-denominated commodities more expensive for foreign buyers.

Easing the drop in prices, the U.S. Labor Department reported that the number of claims for unemployment benefits decreased by 22,000—the lowest in three months. In spite the decrease, application levels remain above 400,000, representing a weak job market.

In early trading, crude futures rose as high as $98.88 a barrel, before settling at $95.69 on the New York Mercantile Exchange (NYMEX).

Front-month Brent ended the August contract at $118.32 a barrel on the ICE Futures exchange. The intraday range for Brent crude was $117.73 to $119.40 a barrel.

Meanwhile, natural gas for August delivery lost 2.9 cents to end Thursday's session at $4.36 per thousand cubic feet. According to the U.S. Energy Information Administration, natural gas inventory grew by 84 billion cubic feet. Prices peaked at $4.41 and bottomed out at $4.25 Thursday.

Reformulated August gasoline blendstock also traded lower, settling at $3.12 a gallon. Gasoline futures traded between $3.094 and $3.159 Thursday.

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Deep Down Secures Large Carousel Orders

- Deep Down Secures Large Carousel Order

Thursday, July 07, 2011
Deep Down Inc.

Deep Down has just completed the assembly and test running of its own 3,200 MT carousel located at Core Industries near Mobile, Alabama and has recently been awarded two more large carousel contracts in excess of $8 million. Deep Down is presently under full construction of a 3,000 MT onshore carousel system with a delivery date at the end of the third quarter 2011 for one of the world’s leading umbilical manufacturers.

The 2nd carousel awarded, a 3,500 MT offshore system will be DNV certified and will be completed in the first quarter of 2012 for an international installation contractor. As an extra bonus, Deep Down has just undergone and passed several audits by our clients and safety organizations supporting the safety, and quality of our company and the upcoming construction of the carousels. Both carousels will be manufactured in Channelview, Texas, then placed on a barge and assembled for our clients in Mobile, Alabama.

Ronald E. Smith, Chief Executive Officer stated, "We have always had innovative approaches to handling terminations, transporting and putting umbilicals into the water. This award winning carousel system, as described in the Deep Down news release on May 18, 2011 is exciting and its compact nature allows our clients to place a large amount of product on an optimum foot print which opens the doors for both onshore and offshore applications. We believe these orders will have a significant impact on the Company’s future growth. We have several more systems quoted where the delivery schedules are ideal."

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NZOG Chief Executive To Step Down

- NZOG Chief Executive To Step Down

Thursday, June 30, 2011
NZOG

NZOG (New Zealand Oil & Gas Ltd) advises that Chief Executive and Managing Director David Salisbury has given six months notice of his resignation.

David Salisbury joined NZOG in April 2007. He is resigning for personal reasons and his last day with the company will be 29 December 2011.

NZOG Chairman Tony Radford said "the Board is disappointed to be losing someone of David's calibre. David has made a tremendous contribution during a period of growth for our business that has included many significant challenges.

"David has brought great enthusiasm, rigour, discipline and insight to our business strategy. I know he is keen to conclude a number of important initiatives over the coming months."

Tony Radford said the six month notice period provides time to ensure a smooth transition and a process will commence shortly to recruit a replacement Chief Executive.

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N. Dakota Official: Floods Have Idled 5 Rigs, Shut Down 45 Wells

- N. Dakota Official: Floods Have Idled 5 Rigs, Shut Down 45 Wells

Tuesday, June 28, 2011
Dow Jones Newswires
HOUSTON
by Angel Gonzalez

Bad weather, flooding and road restrictions are disrupting oil production in North Dakota, shutting down the transportation by rail of 50,000 barrels a day of crude, a state official said.

"No one was prepared to deal with floods that are breaking records set 130 years ago," said Lynn D. Helms, director of the North Dakota Industrial Commission's Department of Mineral Resources said in an e-mail sent late Monday. Helms said the temporary shutdown of the rail transportation will last until it can be re-routed west, but didn't give an estimate as to when that might occur.

The weather has forced the shut in of 45 wells and idled five drilling rigs and is delaying the arrival of service crews to 500 wells waiting to be fractured, Helms said.

North Dakota sits atop the Bakken Shale, one of the richest deposits of oil in the U.S.--but one that requires intensive fracturing activity to yield crude. Last year, it produced an average of about 307,000 barrels of oil per day.

Michael Marino, an analyst with the investment bank Stephens, said moving drilling supplies in and crude out of the oil patch is the main problem in the Bakken.

"Overall the biggest impact has been on the (exploration and production companies)trying to get oil out of the region because service companies have been able to work around issues to some extent," he said.

Bad weather and flooding have affected not only energy production, but also the agricultural sector and have severely damaged several cities, including Minot, in the western part of the state, where many residents had to evacuate.

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Commodity Corner: Oil Down 6.3% for the Week

- Commodity Corner: Oil Down 6.3% for the Week

Friday, June 17, 2011
Rigzone Staff
by Matthew V. Veazey

Crude oil for July delivery lost $1.94 to settle at $93.01 a barrel Friday. Since June 10, oil futures have fallen 6.3 percent.

Pessimism about the U.S. economic outlook and its implications for oil demand contributed to Friday's selloff. A source of this negative investor sentiment was the International Monetary Fund (IMF), which on Friday observed that global economic activity is slowing down "temporarily." In addition, the IMF lowered its 2011 economic growth forecast for the U.S. by three percentage points to 2.5 percent.

Providing a cushion to falling oil futures, however, was a stronger euro. Priced in dollars, crude oil becomes more attractive to investors holding other currencies when the greenback weakens. The euro rose 1.25 percent against the U.S. dollar Friday as the prospects brightened for a resolution to the Greek debt crisis. The leaders of European Union heavyweights France and Germany presented a more unified front Friday in working toward a plan to help Greece restructure its crushing national debt.

French President Nicolas Sarkozy and German Chancellor Angela Merkel lately have had differences of opinion on the role that private banks should play in the bailout, with Merkel arguing that private institutions should be pressured to assume some of the risk. After meeting with Sarkozy Friday, Merkel relented somewhat from her earlier position by advocating a more voluntary role by private banks.

Crude oil traded within a range from $91.84 to $95.40 Friday.

July natural gas continued to be buffeted by weather forecasts showing milder temperatures in the Upper Midwest and Northeast. The front-month contract lost 8.5 cents to end the day at $4.325 per thousand cubic feet.

Natural gas fluctuated from $4.32 to $4.45. For the week, it is down 9.1 percent.

July gasoline ended the day flat, again settling at $2.95—the intraday high. The contract price bottomed out at $2.87, and it is down 2.3 percent for the week.

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Cairn Energy CEO Steps Down amid Sweeping Board Changes

- Cairn Energy CEO Steps Down amid Sweeping Board Changes

Thursday, June 16, 2011
Dow Jones Newswires
LONDON
by Alexis Flynn

Cairn announced a sweeping overhaul of its senior management team, as the company looks to strengthen its exploration emphasis following the expected completion of a delayed transaction in India.

Cairn said its founder and long-standing chief executive, Sir Bill Gammell, will relinquish his position at the helm of the Edinburgh-based oil and gas explorer in favor of Legal and Commercial Director Simon Thomson. Gammell will in turn replace Norman Murray as chairman, who leaves to take up the same position at oil and gas services company Petrofac Ltd. (PFC.LN).

Two other board members will also step down. The company will retain some other figures, including Deputy Chief Executive Mike Watts, a leader in its exploration venture.

The changes come amid expectations that Cairn will soon close a deal to sell a majority stake in its India unit to Vedanta Resources. The time-frame of the Vedanta deal, worth about $9.6 billion in cash, has been delayed amid a royalty dispute with the Indian government. Indian Oil Minister Jaipal Reddy said recently the matter could be discussed at a cabinet meeting later this month.

Following the reorganization, Gammell, 58, will retain his position as chairman of Cairn India, tasked with overseeing the successful conclusion of the company's India deal.

In addition to the change to the firm's top leadership, Cairn said two other board members would be stepping down. Chief Operating Officer Malcolm Thoms and Engineering and Operations Director Philip Tracy will also depart, said Cairn.

Finance Director Jann Brown will take up the position of managing director, reporting to new CEO Thomson.

"Cairn's key strength of entrepreneurial exploration remains the focus, offering investors significant growth potential in combination with underlying asset value and balance sheet strength," said Thomson.

Cairn shares were lower in line with other U.K. oil producers following the announcement. At 1107 GMT, they were down 8 pence, or 1.9%, at 403p, underperforming the broader FTSE 100 index, which was down 1.1%.

Deutsche Bank said it viewed the changes "to be a constructive step forward that is focused on energizing the group for its next steps of growth."

Deutsche highlighted the fact that Watts will remain as a positive. Watts has been the architect of Cairn's Greenland operations, where the company is currently drilling exploratory offshore wells.

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

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Floodwaters Shut Down 30 Oil Wells in Williston Area

- Floodwaters Shut Down 30 Oil Wells in Williston Area

Friday, May 27, 2011
The Bismarck Tribune, Bismarck, North Dakota
by Lauren Donovan, The Bismarck Tribune, N.D.

About 30 oil wells were shut off ahead of the rising water on the Missouri River west of Williston and a few of those wells are now under water.

John Axtman, who heads the Oil and Gas Division's Williston office, said he started alerting well operators Monday morning to prepare for high water and found that several of them were on top of the situation.

The Missouri River was expected to crest somewhere around 27.5 feet late Wednesday, slightly lower than anticipated.

However, the high water put some wells under water, some partially under water and some are now surrounded by water, Axtman said.

He said well operators shut down the wells, removed any chemicals and motors from the site and drained oil from tank batteries, refilling them with fluid so they'd be too heavy to become buoyant.

Axtman said the wells were primarily older wells, but even at a 50-barrel per day, would cost the well owner a fair amount of money in lost production.

Randy Samuelson, a production manager for Brigham Oil and Gas, said his company shut down one well that's now under water and a couple more are a concern.

"I hope the well restarts easily and that we don't have to rebuild the whole location," Samuelson said.

Samuelson said rebuilding a pad and well site will cost upward of $200,000.

Axtman said damage to the electrical systems will be one of the major repair issues at the flooded wells

While some wells aren't flooded, owners shut them down anyway because roads leading to them are under water and they can't get in to haul out produced oil and waste water, Axtman said.

Water has backflowed across a vast low-lying area south and west of Williston, which is near the confluence of the Missouri and Yellowstone rivers.

Williams County Emergency Manager Mike Hallesy said the revised lowered crest was good news.

"When you're pushing the upper limits, inches seem like miles," he said. "High water pushed all the systems early this week."

He said much of the flooded land behind Williston is either owned by the U.S Army Corps of Engineers, as part of the Garrison Dam project, or managed as a wildlife refuge.

Further back in Trenton, farmers were having a difficult time getting any crops planted with rain and now flooding in the lowlands.

"I'm going to say that river is a couple of miles across," Hallesy said.

Copyright (c) 2011, The Bismarck Tribune, N.D.

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ConocoPhillips to Drill Off Australia to Evaluate Natural Gas Discovery

- ConocoPhillips to Drill Off Australia to Evaluate Natural Gas Discovery



May 17, 2011

Shares of ConocoPhillips (COP) are down on a Bloomberg report that the oil giant plans to begin drilling in the Browse Basin off Australia's northwest coast.

The move will come in the second or third quarter in an effort to judge the potential of discovering natural gas in the area.

ConocoPhillips shares are down 0.76%, or $0.54, to $70.89.

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Commodity Corner: Oil Down 14.7% for the Week

Commodity Corner: Oil Down 14.7% for the Week

Friday, May 06, 2011
Rigzone Staff
by Matthew V. Veazey

June crude oil returned to triple-digit territory Friday but only temporarily.

Oil ultimately lost $2.62 to settle at $97.18 a barrel, but it peaked at $102.38 after the U.S. Department of Labor reported encouraging nonfarm payroll figures. The agency reported that nonfarm payroll employment added 244,000 jobs last month, beating expectations. In addition, it announced that the private sector added 268,000 jobs during the same period.

The positive development was short-lived, however. Dragging oil back downward were a higher U.S. unemployment rate and a stronger dollar. In the case of unemployment, the Labor Department announced the country's unemployment rate rose from 8.8 to 9.0 percent in April.

Meanwhile, the euro weakened against the dollar on a German media outlet's claim that the Greek government is weighing leaving the euro zone. Greece's Finance Ministry denied the claim, calling the report "completely untrue." A stronger dollar makes crude oil less attractive to investors holding other currencies.

Crude oil bottomed out at $94.63 Friday. Since last Friday, oil has fallen 14.7 percent. The indicators of slowing economic growth, coupled with a higher-than-expected build in inventories as reported Thursday by the U.S. Energy Information Administration, have also ended natural gas' recent rally. Natural gas for June delivery lost 2.5 cents Friday to settle at $4.235 per thousand cubic feet.

June natural gas fluctuated from $4.22 to $4.34 during Friday's session. For the week, gas is down 11 percent.

Front-month gasoline lost a penny to end the day at $3.09 a gallon. The June contract traded within a range from $2.99 to $3.18. Gasoline is down 10.7 percent for the week.

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BP Profit, Output Still Weighted Down by GOM Effects

BP Profit, Output Still Weighted Down by GOM Effects

Wednesday, April 27, 2011

Dow Jones Newswires

by Alexis Flynn

BP Wednesday posted a 5% fall in adjusted profit for the first quarter, as the damage wrought by the Deepwater Horizon disaster last year continued to weigh down its earnings and petroleum production outlook despite high oil prices.

The oil giant's results narrowly missed expectations for "clean replacement cost of supplies," which strips out gains or losses from inventories and other non-operating items. Profits under this keenly-watched benchmark totaled $5.37 billion for the quarter, compared with $5.65 billion for the first quarter of 2010. Analysts had expected $5.71 billion.

On the positive side, BP's latest charge of $400 million in Gulf of Mexico cleanup costs was more modest than some analysts feared. But BP said year-on-year oil and gas output dropped 11% in the first quarter, and signaled continued weakness in the second quarter, partly the result of increased maintenance procedures instituted after the 2010 U.S. drilling disaster.

While BP shares "look attractive," the "risk remains high for now" due to the uncertain status of BP's efforts in Russia, said Evolution Securities analyst Richard Griffith.

Analysts and investors will be looking for guidance on the company's ongoing Russian travails when Chief Financial Officer Byron Grote discusses the first-quarter results this afternoon at 1300 GMT.

BP's $16 billion share-swap and exploration deal with Russian state-owned giant Rosneft was blocked by an arbitration court last month following objections from BP's partners in its TNK-BP joint venture, and the U.K. firm could be forced to pay substantial compensation for it to go ahead. TNK-BP is also scheduled to report earnings Wednesday.

BP said it booked an additional $400 million charge related to the Gulf of Mexico spill, citing higher cleanup costs. But analyst Jason Kenney of ING said investors were relieved the latest charge was not higher.

Total oil and gas production was 3.58 million barrels a day, a decline of 11% on the year. This drop was partly the result of asset sales to pay for the Gulf of Mexico cleanup and production effects from due to the ongoing drilling shutdown in the U.S. Gulf. But BP said its output was also weighed down by higher maintenance in the North Sea and Angola, and by an interruption in the Trans-Alaska oil pipeline.BP said its second-quarter oil and gas output would also reflect these impacts.

"The main impact by far on production is the Gulf Of Mexico moratorium," a BP spokesman said. "There's also higher turnaround activity that we've been doing as we go through the increased spending on safety, particularly in the North Sea."

In the year since the disaster, BP has re-emerged as a fundamentally different company: it is smaller than before, having already shorn some $22 billion of assets; and with a different strategic focus, looking to fresh opportunities abroad to underpin its future growth.

However, a key part of this new strategy already appears to be floundering, with the challenge to the Russian deal.

BP didn't receive a dividend from TNK-BP for the period, the first time it hasn't received a payout from its Russian joint venture since the first quarter of 2009.

A BP spokesman said the decision to withhold the dividend was made by TNK-BP's board. However its partners in the joint venture, the Alpha-Access Renova group, in April threatened to withhold dividend payments for the year. BP is currently engaged in a dispute with AAR over its proposed alliance with Rosneft.

Net profit for the quarter was up 17% at $7.12 billion, compared with $6.08 billion a year ago.

Adjusted profit from BP's downstream business improved substantially year on year, nearly trebling to $2.07 billion, although the company cautioned that this was due to a favorable refining environment and a good performance by its trading division, and was unlikely to be repeated in the second quarter.

Kuwait eyes LNG project Down Under

Kuwait eyes LNG project Down Under

Apr 7, 2011
Tamsin Carlisl

KUWAIT CITY // The Kuwait Foreign Petroleum Exploration Company (Kufpec) expects D-Day in August for a final investment decision on its participation in a A$20 billion (Dh75.83bn) Australian liquefied natural gas (LNG) project.

Development of the Wheatstone LNG project off the coast of north-west Australia is slated to start next year, Ali al Shammari, the deputy managing director of Kufpec, told a conference in the Kuwaiti capital.

Kufpec, which is the Kuwaiti government's overseas oil and gas investment arm, has joined forces with the US oil and gas producer Apache to explore and develop gas prospects including the Julimar and Brunello fields off the north-west coast of Australia. The Kufpec-Apache partnership's licences are for areas close to the Wheatstone gasfield, operated by the US oil major Chevron, and the Gorgon and Pluto fields, where two other large LNG projects are under development.

Kuwait, which started importing LNG in 2009, is expected to do so until it boosts production from its own gasfields.
Kimimasa Mayama / Bloomberg News

"We selected Australia as an exploration focus due to stable fiscal terms and high geological potential," Mr al Shammari said.

In October 2009, Kufpec and Apache signed an agreement with Chevron to supply gas to Wheatstone LNG in return for equity stakes in the project. Kufpec now holds a 7 per cent interest in the project, after the South Korean utility Kogas also signed up as an equity partner.

"Wheatstone is a potential game-changer for Apache, unlocking 2.1 trillion cubic feet of gas reserves at two of Apache's largest discoveries and generating steady production for 15 years at prices pegged to world oil markets," G Steven Farris, the chairman and chief executive of Apache, said at the 2009 signing ceremony.

On completion, the planned LNG plant at Ashburton North, in the state of Western Australia, will have an annual production capacity of 15 million tonnes of the super-chilled fuel. The first phase of the project, already under development, will export up to 8.9 million tonnes per year of LNG to Asian customers including Kogas, and the Japanese utilities Tokyo Electric Power and Kyushu Electric Power.

The power companies have already signed long-term gas purchase contracts with the Wheatstone partners. Exports are expected to commence in 2014.

Japanese plans to import gas from Wheatstone are unlikely to be affected by the recent earthquake disaster and nuclear crisis in the country. Analysts expect Japan to require substantial additional LNG imports to compensate for potential nuclear plant closures and slower nuclear development.

Natural gas is an important part of Kufpec's development portfolio.
The company is also involved in a Singapore project that exports gas to industrial users in South East Asia and a Chinese project supplying gas for domestic power generation. It has interests in producing gasfields in Pakistan and expects soon to bring a new Indonesian field into production and to sanction the development of a Malaysian field with 1 trillion cubic feet of reserves, a company official said yesterday.


The overseas gas projects are part of a Kuwaiti government plan to increase the emirate's access to global gas supplies and to broaden its oil and gas industry technical expertise.
"We are looking at an area in which we can transfer technology. LNG is an area where we were lacking," Mr al Shammari said.

Kuwait started importing gas in 2009. The LNG imports are expected to continue until the emirate completes complex projects to boost production from deep gasfields in the north of the country.