Petronas, Partners to Spend $5.05B to Develop Gas Offshore Malaysia

- Petronas, Partners to Spend $5.05B to Develop Gas Offshore Malaysia

Tuesday, August 23, 2011
Dow Jones Newswires
KUALA LUMPUR
by Ankur Relia

Malaysian state-owned oil and gas producer Petroliam Nasional Bhd. (Petronas) said Tuesday that it plans to spend MYR15 billion ($5.05 billion) with partners to develop marginal gas fields offshore Malaysia to meet growing demand in the country.

The project will likely encourage more investment in exploration activities that could lead to sizable discoveries offshore peninsular Malaysia, where subsidized prices have increased gas demand by 30% in recent years but have capped exploration and development.

"The development of the North Malay Basin project follows the recently introduced incentives by the government, particularly for the development of marginal fields, high [carbon dioxide] gas fields and fields located in high-pressure, high-temperature conditions," Petronas said in a statement.

It said a gradual revision of domestic gas prices also makes the project "more economically feasible."

The government said in May that it plans to raise the price of gas charged to the power sector by MYR3.00 per million British thermal units every six months, and expects the gas to be sold at market prices by 2016. It raised the price of gas for the power sector to MYR13.70 per mmbtu from MYR10.70 from June 1.

Demand for gas has increased by over 30% since prices were regulated in 1997 to keep them below market levels, Petronas said. However this has made investment less profitable, resulting in low levels of exploration and production activity, it said.

The North Malay Basin project comprises nine gas fields located within Blocks PM301 and PM302 and in the Bergading contract area about 300 kilometers off the coast, and includes a 200-kilometer pipeline from the fields to the state of Terengganu, the company said.

Petronas expects the first delivery of 100 million standard cubic feet of gas per day by early 2013, increasing production to 250 mmscf/d by 2015.

Petronas, Malaysia's only Fortune 500 company and the country's most profitable firm, didn't specify the partners it will be working with.

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

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Iran: Will Spend $18B on O&G Fields in South through 2015

- Iran: Will Spend $18B on O&G Fields in South through 2015

Monday, July 11, 2011
Dow Jones Newswires
LONDON
by Benoit Faucon

Iran will invest $18 billion in the development of its oil and gas fields in the hydrocarbon-rich south of the country in a 5-year development plan ending 2015, its deputy oil minister in charge of planning was quoted as saying Sunday.

The remarks comes as Iran is moving forward with projects to develop its oil and gas capacity despite international sanctions.

Speaking to Iran's oil ministry website Shana, Mohsen Khojastemehr said the plan included a $3 billion investment planned for the current Iranian year, which ends March 2012.

"Many plans are being implemented to accelerate development of shared oil and gas fields while the ministry aims to increase oil production in the oil-rich region of the south to 3 million barrels a day," the official told Shana.

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Colombia Oil Group Plans $80B Spend, Govt May Sell 10% -Executive

- Colombia Oil Group Plans $80B Spend, Govt May Sell 10% -Executive

Thursday, June 23, 2011
Dow Jones Newswires
LONDON
by Benoit Faucon

Colombia's Ecopetrol group of oil companies is planning to spend $80 billion through 2020 in a bid to produce 1.3 million barrels a day, a top Ecopetrol executive said Thursday.

Hernando Zerda, head of corporate strategy and business performance, said the government may also sell a 10% stake in Ecopetrol, the main shareholder in the group of oil companies mostly operating in the Latin American nation.

Speaking at the World National Oil Companies Congress here, Zerda said the companies of the Ecopetrol group are set for a total capital expenditure of $80 billion during 2011-2020.

The spending will help achieve a goal to produce 1.3 million barrels a day in the Ecopetrol companies--most of it in Colombia--in 2020, up from just above 700,000 barrels a day today, he said.

The majority of the financing will come from cash generation, but "sometime in the future, we will need to issue new shares" potentially representing 10% of the Ecopetrol capital "if prices are good," he said.

Separately, "the government is considering selling 10%" in Ecopetrol, the executive said.

But both considerations are "not confirmed," he said.

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