BP's Dudley Says He's Open to Radical Restructuring of Company

- BP's Dudley Says He's Open to Radical Restructuring of Company

Tuesday, July 26, 2011
Dow Jones Newswires
LONDON
by Alexis Flynn

BP hasn't ruled out a major restructuring along the lines of the recent overhaul announced by ConocoPhillips, but the British giant will prosper either way once it gets beyond the current difficult transition period, Chief Executive Bob Dudley said Tuesday.

"We're not ruling it in or out. What we do often is review our portfolio and consider our options," Dudley told reporters.

Speculation has grown in recent weeks as to whether BP might consider following ConocoPhillips (COP) in separating its exploration and production, or upstream, and refining and marketing, or downstream, divisions into different businesses. Those questions took on new immediacy Tuesday after BP reported quarterly earnings that missed expectations due in part to a big drop in oil and gas production. The news drove BP shares down more than 2%.

Dudley Tuesday was non-committal on the Conoco plan, while BP's top refining executive pointed out the two companies have very different downstream profiles.

Analysts and some shareholders have argued that a major ConocoPhillips-style shakeup would lead to an immediate improvement in the value of BP stocks, which has lost a third of its value since the Deepwater Horizon disaster last year.

Dudley insisted that BP was capable of radical change if needed. Dudley said he was "committed to seeing the true value of the business more strongly reflected in our share price," but that 2011 was a "year of consolidation," as BP recovered from the fallout of the Gulf of Mexico oil spill.

But head of refining and marketing Iain Conn made it clear Tuesday that the company still believes refining can be a good business. "If you look at Conoco's downstream earnings per unit of throughput, its about half ours," said Conn.

"We're a very different downstream company, we have a global downstream company unlike Conoco, which is largely a U.S. one, and we have large sources of growth in that downstream company," said Conn.

While BP said plans to sell its U.S. Texas City and Carson refineries were progressing, Dudley said Tuesday it planned to invest $1 billion over the next five years in modernizing the Whiting refinery in Indiana.

Separately, Chief Financial Officer Byron Grote said the BP's completion of the $30 billion divestment program aimed at recovering some of the costs from the Gulf of Mexico doesn't necessarily mean it will cease asset sales. BP has so far sold about $25 billion in assets of the $30 billion it has targeted since the U.S. Gulf accident.

"We will continue to actively look at the portfolio. The end of the $30 billion doesn't mean the end [of our asset sales]," said Grote.

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

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Govt Says Open to Review of Profit-Sharing Formula

- Govt Says Open to Review of Profit-Sharing Formula

Tuesday, June 21, 2011
Knight Ridder/Tribune Business News
by Utpal Bhaskar, Mint, New Delhi

In an attempt to deflect criticism by the country's apex auditor, petroleum minister S. Jaipal Reddy said the government was open to revisiting its profit-sharing formula for awarding hydrocarbon blocks and will strengthen the office of the oil regulator.

The Comptroller and Auditor General of India (CAG) had criticized Reddy's ministry and regulator Directorate General of Hydrocarbons (DGH) for allegedly allowing Reliance Industries Ltd (RIL) to inflate development costs on the D6 block in the Krishna-Godavari (KG) basin.

RIL has denied the charge.

Under India's new exploration licensing policy (Nelp), companies win exploration blocks in a competitive bidding process that involves revenue-sharing (or production-sharing) agreements with the government. According to this contract, the government's share from hydrocarbon blocks, known as profit petroleum, comes only after the companies recover all their costs.

"Today's formula of investment multiple was evolved in 1995. If (a) more foolproof formula is possible, why not look at that," said Reddy. "If there is an alternative formula which is less controversial and is fail-safe, then why not?"

Reliance Natural Resources Ltd (RNRL) had earlier alleged that RIL had "gold-plated" exploration costs in KG D6 by almost four times--from $2.47 billion in 2003 to $8.83 billion--to undermine its demand for cheaper gas.

RIL, an oil-to-yarn conglomerate, is controlled by Mukesh Ambani. RNRL is controlled by his brother Anil.

The accusations were made at a time when the brothers were at loggerheads, before patching up in May 2010.

The Communist Party of India (Marxist), or CPM, and the main opposition Bharatiya Janata Party have criticized the Congress-led United Progressive Alliance (UPA) government over the findings in the CAG's draft report. The CPM has demanded "immediate amendment of the present pricing formula in the production-sharing contract in consultation with CAG" and "immediate action" against the officials involved, including former director general of hydrocarbons V.K. Sibal.

It has also demanded that the price of gas be "delinked from international dollar price of crude" and the price of KG basin gas "be revised on the basis of actual cost of production and a cost-plus formula."

CAG's draft report also states that the British Gas Exploration and Production India Ltd-operated Panna/Mukta and Tapti fields, which have other partners such as RIL and state-owned Oil and Natural Gas Corp. Ltd (ONGC), too, increased development costs, and that Cairn India Ltd was allowed to carry out exploration in areas not covered under its RJ-ON-90/1 block in Rajasthan. "The institution of DGH is not capable of handling the technical and financial issues of this size," Reddy said.

The ministry of petroleum and natural gas has sought eight weeks to submit its response to CAG's draft report. "Our ministry will approach the subject with an open mind... we will not hesitate to correct ourselves," Reddy said.

Reddy declined to comment on whether CAG's draft report will affect approval for RIL's proposed move to offload a 30% stake in its hydrocarbon blocks to London-based BP Plc., only saying the deal "was under consideration."

In a separate development, Reddy said the cabinet committee on economic affairs (CCEA) may take up this week Vedanta Resources Plc.'s proposed acquisition of a majority stake in Cairn India Ltd.

A group of ministers (GoM) set up to vet the deal has recommended that CCEA approve the transaction but with riders to protect the interests of Cairn's partner, ONGC.

The state-owned company had made the resolution of a royalty payment dispute with its partner a precondition for approving the deal. The ministry had placed the issue before CCEA, which, in turn, recommended it to a GoM. An external spokesperson for RIL and a Cairn spokesperson declined comment.

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Greece Looks to Open South Gas Corridor Via ITGO Project

- Greece Looks to Open South Gas Corridor Via ITGO Project

Thursday, June 02, 2011
Knight Ridder/Tribune Business News
by A. Badalova, Trend News Agency, Baku, Azerbaijan

The Turkey-Greece-Italy gas pipeline must act as the starting point for the South Gas Corridor for gas supplies from the Caspian region to Europe, Greek Environment Minister Tina Birbili said at a meeting with BP senior representatives, Athens News reported.

Birbili later said after there are additional volumes of gas, other pipelines will be connected.

This position was voiced by the Greek environment minister during a meeting with BP Vice President Alasdair Cook.

Gas produced within the second stage of Shah Deniz's development is regarded as the main source, not only for ITGI project.

The peak production is forecasted at over 9 billion cubic meters and 50,000 barrels of condensate. According to the forecasts, gas production can be brought up to 24 billion cubic meters a year within the second stage of field development.

Shah Deniz reserves are estimated at approximately 1.2 trillion cubic meters of gas.

First gas is expected to be received within the second stage of field development in 2017.

ITGI Transport Corridor includes the renovated Turkish pipeline infrastructure, as well as ITG projects and IGI. Edison (Italy) and Depa (Greece) established IGI Poseidon SA for the design and construction of IGI pipeline, known as Poseidon.

Copyright (c) 2011, Trend News Agency, Baku, Azerbaijan

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SapuraCrest, GE Open O&G Services Facility in Malaysia

- SapuraCrest, GE Open O&G Services Facility in Malaysia

Friday, May 27, 2011
GE O&G

Strengthening its long-term partnership with GE, SapuraCrest Petroleum Berhad, Malaysia's largest integrated oil and gas service provider and a subsidiary of Sapura Group, has opened an expanded, state of the art Regional Services Center (RSC) in Kuala Lumpur, Malaysia.

Covering approximately 24,000 sq. meters, the new $3.5M investment facility enables Sapura and GE to enhance support to key oil and gas operators in Malaysia and the region, including PETRONAS, Malaysia's national oil and gas company which has both a global frame agreement in place with GE Oil & Gas for the supply of a range of gas turbines and compressors and, secondly, a long-term service agreement in place with Sapura to provide services to GE's fleet of installed equipment in the country.

Dato' Sri Mustapa Mohamed, Malaysia's Minister of International Trade & Industry performed the ribbon-cutting at a ceremony attended by over 120 customers and VIPs, including Datuk Abdullah Karim, CEO of PETRONAS Carigali.

Datuk Shahril Shamsuddin, President and CEO of Sapura Group said, "This is a key milestone in our commitment to further push our capabilities into areas strategic to our growth. The partnership with GE will enable Sapura Service Centre to offer an enhanced value proposition to our Malaysian and regional customers to maintain their oil and gas producing equipment at peak performance levels. We have invested RM12million over the last ten years in this facility, to develop our capabilities, processes and facilities to comply with global standards. This certification by GE positions us even stronger and would also result in faster turnaround and cost savings for our customers."

Stuart Dean, CEO of GE ASEAN added, "The Sapura facility expansion highlights the strength of our partnership with Sapura and GE's overall commitment to a strong, localized presence in Malaysia and the region. Malaysia's dynamic oil and gas industry is an important contributor to world energy markets. GE is now even better positioned to deliver enhanced services capabilities to meet the needs of PETRONAS and other customers operating in the region."

The Sapura RSC provides an enhanced range of GE Oil & Gas turbomachinery related services, including maintenance and repairs, designed to enhance the efficiency and performance of GE's fleet of high-tech heavy duty and aeroderivative gas turbines and compressors installed in Malaysia and the region. The facility will also support GE's continued expansion in the drilling and production industry.

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Solimar to Open 1st Zone in Guijarral Hills Flow Test Prog.

- Solimar to Open 1st Zone in Guijarral Hills Flow Test Prog.

Friday, May 27, 2011
Solimar Energy Ltd.

Solimar announced that flow testing operations using the Orchard Petroleum Rig #2 will commence in the next 24 hours when the deepest zone selected for testing will be perforated and opened for flow into the well bore.

Perforations will be made between 10,370 feet and 10,380 feet within the Lower Gatchell Sandstone and then flow tested to determine whether commercial production is feasible.

The perforations are being restricted to a preferred 10 foot interval although additional potential hydrocarbon pay may be present in the Lower Gatchell Sandstone based on the wireline log data. Initial results from the Gatchell test may be reportable by late next week.
Background to Testing Program

The program will test selected intervals within the following 3 formations:

Formation	Perforation Interval (feet)
Leda Sandstone	8,533-8,540
Lower Avenal Sandstone	9,962-9,982
Lower Gatchell Sandstone	10,370-10,380

The three intervals to be tested have all been productive in the adjacent Guijarral Hills oil and gas field. Each of the zones were characterized by increased shows of hydrocarbons recorded while drilling and anomalies on wireline logs. Petrophysical analysis indicates hydrocarbon pay is present however the flow testing program is necessary to determine whether the hydrocarbon saturations and reservoir quality will support commercial rates of flow.

A total potential net pay estimate of over 135 feet in six separate zones was previously announced for the well. The zones that have been selected for testing are those deemed most likely to provide a definitive series of tests. If successful then the likelihood will be increased that other zones identified with potential pay can also be successfully tested.

Testing of each reservoir will involve perforation of the designated intervals followed by periods of flow and shut in to measure flow rates, pressure response and evaluate fluid properties. The sequence will involve testing of the deepest interval (Lower Gatchell) first and then working up the well as necessary to the shallower intervals.

The testing program cost for the three intervals has been budgeted at approximately US $530,000 although final costs will depend on results and whether these necessitate further procedures such as fracc stimulation.

ASX listed partners in the Guijarral Hills project, at post drill equities will be:

• Solimar Energy LLC (Operator) 35%
• Neon Energy Limited (ASX: NEN) 15%

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Inpex to Open New Overseas Office

Inpex to Open New Overseas Office

Monday, April 25, 2011

Inpex Corp.

Inpex announced that it will open its newest overseas office in Rio de Janeiro, Brazil.

In Brazil, INPEX is participating and operating in the Frade oil field development project, which began production in 2009, and also in the Block BM-C-31 and the Block BM-ES-23 as exploration projects. INPEX will further expand its exploration, development and production activities in Brazil.

Samson Tiara Gets Green Light to Open Training Facility

Samson Tiara Gets Green Light to Open Training Facility

Wednesday, April 20, 2011
P.T. Samson Tiara

Samson Tiara has received OPITO approval for its new training facility in Senipah, Kalimantan, Indonesia. This will mark the first time internationally accredited safety training will be available in the area.

The OPITO approval for the Senipah training facility covers 4 courses: Tropical Basic Offshore Safety Induction and Emergency Training (T-BOSIET), Tropical Further Offshore Emergency Training (T-FOET), Travel Safely by Boat (TSBb) and Further Travel Safely by Boat (FTSBb).

Mr. David Donaldson, Managing Director of P.T. Samson Tiara commented, "We are pleased to continue our tradition of being a company of firsts. Samson Tiara was the first to offer properly simulated H.U.E.T training in Indonesia in 1994 and continued on to become the first to offer OPITO’s internationally recognized training in Indonesia in 2004. Now, in 2011, we are proud to be the first to offer OPITO training to the rapidly growing Oil & Gas sector in Kalimantan."

This new facility, approximately sixty kilometers from Balikpapan, will allow P.T. Samson Tiara to provide high quality, internationally accredited offshore safety and survival training to the hundreds of companies operating in the area, training that until now was only available from our facility in Cilegon, Banten.

Total: UK Open to Mitigating Effect of Oil Tax Rise

Total: UK Open to Mitigating Effect of Oil Tax Rise

Wednesday, April 06, 2011
Dow Jones Newswires
by  James Herron

The U.K. government appears willing to consider measures to mitigate the effect of a recent large increase in tax on oil and gas producers, following a meeting with oil industry representatives last week, a senior executive at French oil company Total said Wednesday.

Representatives of the Department of Energy and Climate Change and the Treasury "realized that the concerns of industry are real...not just a selfish reaction," said Patrice de Vivies, Total's vice president of Exploration and Production in northwestern Europe.

Oil companies and many industry analysts have said the increase in the supplementary tax charge on their profits to 32% from 20% will hurt investment in the North Sea.
The measure was introduced in response to the rise of oil prices above $100 a barrel, but De Vivies said there is no justification for imposing the tax on gas fields, for which the price is equivalent to $55 a barrel.

"[They] will have to give extra incentives to gas fields," which make up the bulk of remaining U.K. resources, or face declining investment, he said. Total is reviewing all of its potential new projects in the U.K. following the change, he said.

Total Chief Executive Christophe de Margerie will meet soon with U.K. Chancellor of the Exchequer George Osborne to discuss the tax increase, De Vivies said.

Dow Jones Newswires put De Vivies' comments to the U.K. Treasury, who responded by referencing statements made by ministers in the wake of last week's meeting.
Energy and Climate Change Secretary Chris Huhne said at the time: "We're going to be considering some of the points that they [the industry] made. There are elements of what the Chancellor announced which were up for consultation, including the issue of the oil price at which the fair fuel stabilizer operates."

Separately, RWE Dea, the oil and natural gas unit of German utility RWE, said Wednesday the planned tax increase is "unpleasant" and should be retracted.
"We've learned about the U.K. government's plan to increase the tax and indeed found ourselves very flatfooted," said RWE Dea Chief Executive Thomas Rappuhn at the company's annual press conference in Hamburg.