Technip, Global Industries Agree to Merge

- Technip, Global Industries Agree to Merge

Monday, September 12, 2011
Technip

Technip announced Monday an agreement to acquire the entire share capital of Global Industries and reinforce its leadership in the fast-growing subsea segment of oil services. The two companies have entered into a definitive merger agreement whereby Technip will pay US$8.00 per Global Industries share. The transaction values Global Industries at US$1,073 million (EUR768 million at current exchange rates), including approximately US$136 million of net debt. The Board of Directors of Global Industries has unanimously approved the transaction.

The transaction price represents a 55% premium to Global Industries' share closing price on September 9, 2011, the last day prior to announcement of the transaction. The transaction is to be funded using existing cash balances and credit facilities.

Global Industries brings to Technip its complementary subsea know-how, assets and experience, comprising 2,300 employees operating 14 vessels, including notably two newly-built leading edge S-Lay vessels, as well as strong positions in the Gulf of Mexico (US and Mexican waters), Asia-Pacific and the Middle East.

Technip's global presence, world-class technologies, assets and services and strong project management track record will realize the full value and potential of Global Industries' know-how, assets and experience, and broaden opportunities for Global Industries' employees.

The acquisition of Global Industries reinforces Technip's leadership in the fast-growing subsea market. Strong revenue synergies are expected as the acquisition will substantially increase Technip's current capabilities and expand its addressable market by around 30% in deep-to-shore subsea infrastructure. Cost synergies are estimated to be at least US$30 million.

Given the anticipated synergies, the transaction is expected to be accretive to Technip's earnings per share by around 5 to 7% in 2013.

The transaction is expected to close early in 2012. The management teams of Global Industries and Technip will work closely together to define the integration plan. Thierry Pilenko, Chairman and Chief Executive Officer of Technip, said:

"The acquisition of Global Industries reinforces Technip's leadership in Subsea, one of our three market segments alongside Onshore and Offshore. The subsea market looks likely in 2011 to show a record amount of orders for our industry and our own backlog at end-June 2011 is above its previous peak. We see that our customers continue to firm up a substantial number of large offshore developments with Brazil, the Gulf of Mexico, West Africa and Asia Pacific leading the way to drive future growth. Our investment in Global Industries substantially expands our addressable market in subsea. Global Industries' capabilities, know-how and experience, notably in S-Lay and Heavy Lift, add to our already unique vertically integrated range of products and services, enabling us to offer our clients greater value in the execution of complex projects from deep-to-shore. We expect that the application of Technip's own skills in offshore and subsea developments, its commercial footprint and its project management experience will drive a rapid deployment of the Global Industries teams and assets on customer projects. The transaction is expected to meet our hurdle rate, create value for Technip's shareholders, and raise earnings per share starting by around 5 to 7% in 2013."

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Cobalt Names COO

- Cobalt Names COO

Wednesday, September 07, 2011
Cobalt International Energy Inc.

Cobalt announced that Van P. Whitfield has been promoted to the new position of Chief Operating Officer. Mr. Whitfield previously held the position of Executive Vice President, Operations and Development.

Joseph H. Bryant, Cobalt Chairman and Chief Executive Officer said, "Van has been an indispensable member of Cobalt's management team from the earliest days of the company, and I believe this new role will take advantage of the full range of his management talent and experience. Van's many years of senior management experience in worldwide operations will serve him well in his expanded role. As Cobalt executes its deepwater exploration program in two of the world's highest potential basins, the Board of Directors and I are very pleased that Van has accepted this position, and are confident that he will excel in this new role."

Mr. Whitfield joined Cobalt in May 2006. Mr. Whitfield has 37 years of experience leading oil and gas production operations and marketing activities in North America, the United Kingdom and Europe, Africa, the Middle East and Asia. Prior to joining Cobalt, Mr. Whitfield served in executive positions at CDX Gas LLC, BP Exploration (Angola) Limited, and was seconded to ExxonMobil Saudi Arabia (Southern Ghawar) Ltd in the position of Vice President, Power and Water. Mr. Whitfield has also held the positions of Senior Vice President of BP Global Power, President and General Manager of Amoco Netherlands BV and Production Manager of Amoco (U.K.) Exploration Company. In addition, he has held numerous operational and technical leadership positions in various Amoco Production Company locations throughout the globe. Mr. Whitfield has a Bachelor of Science Degree—Petroleum Engineering from Louisiana State University and is a graduate of the Executive Program at Stanford University.

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Commodity Corner: Oil Edges Lower on Econ Woes

- Commodity Corner: Oil Edges Lower on Econ Woes

Tuesday, September 06, 2011
Rigzone Staff
by Saaniya Bangee

Light, sweet oil edged lower Tuesday on lingering concerns about the global economy.

Oil futures traded 43 cents lower at $86.02 a barrel on the New York Mercantile Exchange.

Concerns that the European debt crisis might worsen pushed prices and equities lower Tuesday. Traders worry that the economic plague could spread to neighboring countries.

Prices fell as low as $83.20 a barrel in intraday trading as U.S. stock indexes plummeted for a third consecutive session. They peaked at $86.50. Earlier today, the Dow Jones Industrial Average fell 308 points but rebounded after the Greek government indicated swifter economic reforms.

Traders are waiting to take cues from President Obama and the Federal Reserve's speech later this week.

Brent crude, which is used to price many international oil varieties, gained $2.81 Tuesday to settle at $112.89 a barrel. Brent took its cues from production problems in the North Sea and a continued absence of Libyan oil in the market.

Likewise, natural gas for October delivery added 6.6 cents to settle at $3.94 per thousand cubic feet. Prices fluctuated between $3.85 and $3.95 Tuesday.

The U.S. National Hurricane Center reported that a new weather system west-southwest of the Cape Verde Islands had a 90 percent chance of becoming a cyclone in the next 48 hours.

After trading between $2.77 and $2.84, front-month gasoline lost 1.7 cents to settle down at $2.82 a gallon.

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Halliburton: 'Phenomenal' Opportunities for Global Pressure Pumping Growth

- Halliburton: 'Phenomenal' Opportunities for Global Pressure Pumping Growth

Tuesday, September 06, 2011
Dow Jones Newswires
HOUSTON
by Ryan Dezember

Halliburton Chief Executive David Lesar said Tuesday there are "fantastic and phenomenal opportunities" for oilfield service companies to expand shale drilling beyond North America, but that growth may come slowly.

"There is a lot to be excited about in the shale plays, but there are obstacles that need to be overcome and that's good because I don't think the industry today could serve a number of increasing shale plays outside the U.S.," Lesar told investors during a webcast presentation in New York.

Halliburton and other oilfield service companies have profited greatly in recent years as North American producers rush to unlock troves of oil and natural gas from deeply buried rock formations, called shales.

Demand for pressure pumping, which enables producers to crack open shales to release oil and gas, has outstripped Halliburton and its competitors' ability to provide the service, for example. In the last ten years pressure pumping has leap-frogged land drilling, offshore construction and offshore drilling to become the largest segment of the oilfield services industry, Lesar said.

While North America holds an estimated 15% of worldwide shale reserves, it has about 80% of global pressure pumping capacity.

"Even then we cannot keep up with the demand," Lesar said. "The challenge is going to be getting ramped up to address the shale opportunities outside the U.S."

Lesar said Australia, Poland and Argentina each have great potential for significant shale development, but that Australia is the only market that currently has the necessary geology, regulatory environment, pricing and infrastructure. Poland, he said, is lacking in oilfield infrastructure and in Argentina, where Halliburton recently completed South America's first shale well for Apache, government regulated natural gas prices are too low.

"Shale gas could develop very quickly in Argentina, but only at the right price and we're not there yet," Lesar said.

Global demand for natural gas should foster overseas shale development, though. Lesar said Halliburton expects worldwide demand for natural gas to rise 52% by 2030, three times the growth rate of oil demand.

Halliburton also forecasts increasing demand for deep-water drilling services. Lesar said the company is mobilizing for 31 jobs around the world, many in regions new to Halliburton, including Tanzania, Vietnam and Brunei.

Mobilizing for such jobs "doesn't come cheap," he said. "The up-front costs will weigh heavily on our margins and have weighed heavily on our Eastern Hemisphere margins, but I can tell you, this investment will pay off in the future."

Much of the work is being ordered by national oil companies, who are less likely than they have been in the past to share their resources with international oil companies, instead turning to service companies to help them extract their reserves, Lesar said. Four of Halliburton's top ten customers are now national oil companies, he said.

Lesar also said that Halliburton's pending purchase of Multi-Chem Group LLC., a deal that was announced earlier Tuesday, will give Halliburton the fourth largest production and completion chemical maker. Expected to close in the fourth quarter, the acquisition will also help Halliburton become less reliant on its peers' productions.

"It's been frustrating pumping competitors chemicals through our equipment," Lesar said.

Terms of the acquisition were not disclosed.

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

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Global Petroleum CEO Embarks On Appointment

- Global Petroleum CEO Embarks On Appointment

Thursday, September 01, 2011
Global Petroleum Ltd.

Global Petroleum advised that Mr. Peter Hill has commenced his appointment as Managing Director and Chief Executive Officer of the Company.

Mr. Hill's immediate focus will be to expedite the exploration of Global's highly prospective oil and gas exploration interests in offshore Namibia following completion of the acquisition of Jupiter Petroleum Limited on August 26, 2011. The Company is currently completing its review of historical seismic data with a view to participating in a new seismic survey in the coming months.

Mr. Hill will be based in the Company's office in London. Please refer to the announcement dated August 2, 2011 for further details on Mr. Hill's appointment.

Commenting on taking up his appointment, Peter Hill said, "I am delighted to be joining Global Petroleum at such a pivotal time for the Company. With production established in the USA and significant exploration opportunities in Africa, especially offshore Namibia, Global Petroleum has an active and very exciting future."

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Xodus Adds Director Duo to Support Global Growth

- Xodus Adds Director Duo to Support Global Growth

Wednesday, August 24, 2011
Xodus Group

Xodus Group has made two senior appointments to support its strategy for further international growth.

Nigel Ross joins as business development director from Wood Group GTS where he was global key account director. Maggie Leitch has been appointed global director for technical safety and risk (TSR) and joins from PSN where she was global head of safety & environmental engineering, managing a team she grew from 12 to 70.

Nigel brings more than 30 years' international industry experience and has helped to develop oil and gas businesses in key energy regions including West Africa, Middle East, the Caspian and Russia. He will sit on the board of the firm's XMOS joint venture in Nigeria and will help to expand the multi-disciplined global team.

A Russian speaker, Nigel is determined that his industry experience and contacts will be instrumental to Xodus achieving its bold growth targets in the coming years. He said, "Xodus is an ambitious, top flight consultancy on the cusp of further international expansion and I'm very keen to apply my global experience and structured business development and market entry skills to help the company achieve its growth target of 1,000 employees by 2015."

Nigel joins Xodus after 18 months at Wood Group where he worked as Global Key Account Director. Prior to this he worked at Petrotechnics Ltd as a business development manager overseeing a number of high-profile projects in the Middle East, West Africa and Brunei. Previously, Nigel worked in Shell International, SDPC Nigeria and Shell UK fronting up and downstream capital projects after starting his career with Scottish Enterprise where he spent 11 years developing export links with the former Soviet Union, on behalf of Scottish-based businesses.

Maggie Leitch joins Xodus with an extensive background within safety, loss prevention and risk management, boasting 22 years' industry experience.

Maggie worked at PSN as chief of safety and environmental engineering for over eight years. While there she was responsible for developing best practice and global policies for safety and environmental engineering groups, developing strategic plans for international growth and promoting personnel and industry development.

Further to this, Maggie set up her own internal consultancy which at peak boasted 22 technical specialists attracting its own external international clients. She previously worked at Atkins Process as the principal safety engineer building upon her past expertise at Total Fina Elf Exploration UK where Maggie spent the bulk of her early career.

Between 1989 and 2002 she performed various roles at TFEE UK ranging from process engineer to her peak position as the head of safety engineering and subsequently the senior project engineer on the £30 million Alwyn Systems Upgrade Project.

She said, "I'm looking forward to the challenge ahead and my aspiration is to help Xodus excel in the field of technical safety and risk. I want Xodus to be both the employer of choice for technical safety, value systems, risk and reliability engineers and the consultant of choice for clients."

Colin Manson, CEO of Xodus Group welcomed the duo to the team. He said, "We are very pleased to be appointing two high-caliber industry specialists and these new positions will help to greatly strengthen our management team as we continue to expand in the UK and new markets overseas."

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A Snapshot of Brazil

- A Snapshot of Brazil

Friday, August 19, 2011
Rigzone Staff
by Trey Cowan

Brazilian offshore drilling activities are faring much better than worldwide operations. Total average utilization for Brazil's mobile offshore drilling fleet is 94 percent, which compares quite favorably to the global average of 80 percent. Similarly, average dayrates are much higher in Brazil than compared to the rest of the world. Currently, rigs (i.e. drillships, jackups, and semisubs combined) are garnering rates in the high-$310s while global average dayrates are in the mid-$230s.

The favorable disparity for both operating efficiency and dayrates is due largely to fleet mix. Most of the rigs operating off the coast of Brazil are exploring for oil in deeper waters. Hence, very little drilling in the region is accomplished using jackups; which typically command the lowest dayrates in the industry.

Brazil's semisub fleet utilization (a regional fleet of 52 competitively marketed rigs) is 98 percent, quite high by industry standards. Its drillship fleet, while much smaller at 17 marketed rigs, will continue to grow as newbuild equipment is delivered into the region. The jackup fleet is the smallest of the mix with just three competitive rigs on lease in the region. All three are currently under contract. Given the vast quantity of Brazil's discoveries, demand for offshore rigs shows only signs of growing as the country looks to further tap its ample reserves.

Recent News From the Region

• Pacific Drilling announced that its ultra-deepwater drillship the Pacific Mistral has been awarded a three-year contract by Petróleo Brasileiro S.A. (Petrobras) for operations in Brazil. The contract is expected to commence in the fourth quarter of 2011. Estimated maximum contract revenues, including mobilization and client requested modifications, are approximately $536 million.
• Rockhopper recently completed interpretation of its fast track new seismic data in PL032 and PL033. Seismic data shows that the Sea Lion Main Complex ("SLMC") will extend to the south and a new high case area extends over 90km2. Also, two new fan prospects were identified within the new seismic data, Casper and Kermit. Following completion of drilling operations on well 14/10-6, Rockhopper is committed to drill three further wells using the Ocean Guardian.
• Petrobras has commenced production from the P-56 platform at the Marlim Sul field in the Campos Basin. The unit began production through well 7-MLS-163HPRJS and will potentially generate around 16,000 bopd. The P-56 platform, installed in a water depth of 5,479 feet (1,670 meters), is designed to handle up to 100 Mcf/d when it reaches maximum capacity. This is expected to take place in the first quarter of 2012.
• The Sevan Brasil, which is under construction at Cosco Shipyard in China, is on schedule to be delivered during the first quarter of 2012. Upon delivery, the rig will set sail for Brazil to begin its six-year contract with Petrobras.

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Commodity Corner: Oil Declines on GDP Data

- Commodity Corner: Oil Declines on GDP Data

Tuesday, August 16, 2011
Rigzone Staff
by Matthew V. Veazey

The WTI and Brent contracts settled lower Tuesday after the release of a key European Union economic indicator supported a pessimistic outlook for global crude oil demand.

Light sweet crude oil for September delivery lost $1.23 to end the day at $86.65 a barrel while Brent slipped 44 cents to settle at $109.47 a barrel. Eurostat, the statistical arm of the EU, on Tuesday announced that gross domestic product throughout the bloc rose by only 0.2 percent in the second quarter. GDP growth during the first quarter was a more robust 0.8 percent; however, Eurostat pointed out that the latest second quarter figure beats that of the corresponding period in 2010 by 1.7 percent.

The WTI contract price fluctuated from $85.62 to $87.93 during Tuesday's session.

Front-month natural gas lost nine cents to settle at $3.93 per thousand cubic feet. Forecast models show milder temperatures from the Midwest to the Northeast through the remainder of this month, chilling cooling demand projections for the regions.

The September natural gas contract traded within a range from $3.90 to $4.04 Tuesday.

The price of a gallon of reformulated gasoline fell two cents to end the day at $2.85. September gasoline peaked at $2.87 and bottomed out at $2.83.

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Fracking, Testing Ops Commenced at Global Petroleum's Eagle Ford Well

- Fracking, Testing Ops Commenced at Global Petroleum's Eagle Ford Well

Wednesday, August 10, 2011
Global Petroleum Ltd.

Texon has advised that fracking and testing operations on the second Eagle Ford well in which Global has an interest (Tyler Ranch EFS #2H) began on August 8, 2011. The project involves 17 stages (compared with 15 in the first Eagle Ford well), with fracking expected to take about a week followed by testing.

Initial flow test results are expected to be available in two weeks.

The surface location of the well is close to the production facilities associated with the first Eagle Ford well so the well will be able to be immediately connected for production.

Global has a 7.939% working interest in approximately 1,651 acres beneath the Olmos formation including the Eagle Ford Shale. Global's interest in the Leighton prospect also includes a 15% working interest in approximately 873 acres from the surface down to the stratigraphic equivalent of the Olmos formation.

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First Subsea Names Global Sales, Business Development Manager

- First Subsea Names Global Sales, Business Development Manager

Tuesday, August 09, 2011
First Subsea Ltd.

First Subsea has appointed John Shaw as global sales and business development manager. Formerly head of Engineered Products Group at Trelleborg Offshore, he will be responsible for developing First Subsea's innovative ball and taper connector business worldwide.

In addition to the Ballgrab range of subsea mooring connectors, ball and taper has been successfully used for pipeline recovery and decommissioning tools, ROV and diverless bend stiffener connectors for risers and umbilicals, pipeline repair, hose connectors, heavy lift and buoy mooring and retrieval applications.

A Fellow of the Institute of Mechanical Engineers, Mr. Shaw is no stranger to the connector technology. At Trelleborg Offshore, he worked with First Subsea on the development of the diverless bend stiffener connector. "The simplicity of the ball and taper connection, and its powerful multi-point grip, makes it a very flexible solution to offshore connections in many demanding applications. My role will be to work with clients to develop existing and new applications for the ball and taper connector," he said.

First Subsea has successfully developed the ball and taper connector technology for drilling applications both onshore and offshore. One of this year's OTC Spotlight on Technology Awards included Canrig Drilling Technology's SureGrip Automated Casing Running Tool featuring the ball and taper gripping mechanism for handling drill piping.

"The ease of ball and taper connection makes it suitable for any application involving gripping, pulling and holding connections under load. John Shaw's experience will allow us to consolidate and improve our current product range, as well as developing opportunities for the connector in new markets," commented Brian Green, general manager, First Subsea Ltd.

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Global Petroleum Names New CEO

- Global Petroleum Names New CEO

Tuesday, August 02, 2011
Global Petroleum Ltd.

Global Petroleum announced the appointment of highly respected energy industry executive Mr. Peter Hill as Managing Director and Chief Executive Officer of the Company.

Mr. Hill has extensive experience in the energy sector as a senior executive with a significant track record worldwide in high-level M&A and business development roles, primarily in the oil industry. Most recently Mr. Hill was the global head of Corporate M&A for Statoil ASA, where he was responsible for several large transactions, being a key member of the team responsible for Statoil's merger with Norsk Hydro Oil & Gas in December 2006, and leading the acquisition of EnCana's Gulf of Mexico deepwater assets in 2005. Prior to agreeing to join Global, Mr. Hill was responsible for supervising execution of the IPO of Statoil's Energy & Retail division in the latter part of 2010.

Previously Mr. Hill set up the international business of Waterous & Co as Managing Director in the UK, and before that worked for Enterprise Oil plc for many years, latterly as Head of International New Ventures. Mr. Hill started in the energy industry with Total Oil Marine and is a UK qualified Solicitor, having commenced his career with Clifford Chance. He holds an MA in Law from Oxford University.

Mr. Hill's immediate focus will be to expedite the exploration of the highly prospective project located in Namibia upon completion of the acquisition by Global of Jupiter Petroleum Limited, which is expected to occur in late August 2011.

The Board is delighted that an executive with Mr. Hill's reputation and market standing has agreed to join the Company at such a pivotal time in the development of its oil and gas projects. Mr. Hill is expected formally to commence his role with the Company at the beginning of September 2011.

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Floating LNG to Play Greater Role in Global Gas Development

- Floating LNG to Play Greater Role in Global Gas Development

Thursday, July 21, 2011
Rigzone Staff
by Karen Boman

While floating liquefaction technology has yet to be commercially proven, the success of floating liquefied natural gas (FLNG) could open previously stranded or non-commercial gas reserves worldwide.

In May, Shell made the final investment decision to proceed with the development of its Prelude floating LNG project. Shell's Prelude facility, which will be deployed in the Browse Basin offshore Northwest Australia, will be the largest floating structure ever built.

While Shell's decision to push ahead with the Prelude project is a major breakthrough for FLNG liquefaction, the unit will not come on stream until the second half of the decade, said Douglas-Westwood analyst Lucy Miller. There are a number of other projects ongoing, but it's likely that these will also fall into this timeframe; no other projects have been approved. "On the whole, onshore developments are still favored; however, FLNG may prove to be more competitive in certain cases depending on the specific project's requirements."

Austral-Asia is seen as a key region for FLNG, particularly the Timor Sea offshore Australia and Papua New Guinea; other key areas include Southeast Asia and offshore Brazil, Miller said.

Douglas Westwood last year estimated that over $23 billion would be spent on FLNG development from 2010 to 2016, most of which will be spent on liquefaction facilities. During that time, Australia is expected to dominate the FLNG market with $5.3 billion in projects, followed by Africa with $5.2 billion in projects and Asia with $4.7 billion in projects. While North America has the greatest number of FLNG prospects, North American projects are expected to account for only seven percent of global expenditures from 2010 to 2016.

Douglas-Westwood views FLNG solutions as a solution for monetizing stranded gas assets that lie far offshore and distant to production infrastructure, addressing the security issues of onshore facilities and pipelines or boundary disputes such as the Timor Sea and South China Sea, and creating a market for gas that would normally be flared.

Accessing stranded gas reserves will be critical to meet the anticipated rise in global gas demand due to population and economic growth, particularly in emerging economies such as China. Douglas-Westwood notes that 6,531 Tcf of gas reserves remain worldwide; 3,000 Tcf of these reserves are considered stranded gas assets.

FLNG may allow Europe other gas supply options that could wean its dependence on Russian gas. More than 40 percent of the European Union's gas is imported -- about half of which comes from Russia – and imports are expected to rise to 75 percent by 2030. Europe's dependence on Russian imports makes it vulnerable to price hikes and supply cut-offs, as demonstrated when Gazprom doubled prices and cut supply going to the Ukraine, Lithuanian, Belarus and Georgia from 2006-2009.

FLNG import terminals are operating in Argentina, Brazil, Kuwait, the UK and the U.S. These include a mix of technological concepts such as regasification vessels and floating storage and regasification units. Some of the technologies involved in proposed FLNG projects have yet to be proven, Douglas-Westwood noted. Technical challenges facing FLNG development include development of sloshing-resistant containment systems; cryogenic offloading, side by side by loading arms or by tandem offloading; marinisation of liquefaction processing equipment; field specific and general topside modules; and the need to develop multiple small-scale or large-scale FLNG vessels, or vessels between 1 and 3 mmtpa and greater than 3 mmtpa.

Besides Shell, other companies seeking to develop liquefaction FLNG facilities include Flex LNG, Petrobras, SBM Offshore, Bluewater, Hoegh LNG, Excelerate Energy, ConocoPhillips and Sevan Marine are developing FLNG liquefaction design concepts, but no specific fields have been announced.

The anticipated start of operations on Flex LNG's FLNG project in Papua New Guinea (PNG) in 2014 is "perfect timing" for the anticipated wave of Asian LNG demand, Flex LNG reported earlier this year. Flex LNG in April entered agreements agreement with Interoil, Pacific LNG, Liquid Niugini Gas Ltd., and Samsung Heavy Industries for a FLNG project in PNG that would liquefy natural gas from the onshore Elk and Antelope gas fields in PNG's Gulf Province.

Samsung last month began field specific front-end engineering and design work (FEED) for the hull portion of the FLNG vessel. WorleyParsons and Kanfa Aragon will carry out the FEED work for the topsides. Samsung will remain responsible for the overall design, engineering, construction and commissioning of the FLNG vessel. FEED is set to be completed in time for the project to reach a Final Investment Decision before the end of this year, with operations in PNG targeted to begin in 2014.

FLEX LNG has already completed a generic FEED in 2009 and the field specific FEED will tailor the vessel for the PNG project where the FLNG vessel is expected to be moored alongside a jetty and have a nominal production capacity of close to 2 million tons of LNG per annum and to process an estimated 2.25 trillion cubic feet of gas over a firm 25-year period. The Elk and Antelope gas fields have substantial certified gas resources, with 6.5 Tcf of P90 resources and 8.6 Tcf and 10 Tcf in P50 and P10 estimates respectively.

Flex LNG reported that LNG projects are more costly than ever to develop, as the capital expenditures/ton of installed liquefaction capacity has made a permanent shift over the last decade from an average figure below 500USD/ton to typical range of 1,500-2,500 USD/ton. Due to the uniqueness of projects, current LNG development costs exceed the average cost for the oil and gas industry. Flex LNG anticipates that it will be in the lower end of the USD550-700 ton/liquefaction capacity CAPEX range for its PNG project.

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Global LNG Market Grows, New Markets Emerge

- Global LNG Market Grows, New Markets Emerge

Monday, July 18, 2011
Rigzone Staff
by Karen Boman

The global liquefied natural gas (LNG) market continues to expand and transform as the volume of LNG traded globally keeps rising and new and existing players enter the market or expand LNG activity.

In 2010, the volume of LNG traded globally hit 223.8 million tones/annum (MMtpa), the International Gas Union's (IGU) World LNG Report 2010 noted, a 41 MMtpa increase from 2009 and the largest year-on-year growth experienced by the industry, thanks to newly-commissioned liquefaction trains and the ramp-up in output from trains commissioned in 2009. When compared to the 143 MMtpa of LNG traded in 2005, the market has grown by over 50 percent over the past five years.

The year 2010 started with an LNG market facing record supply growth, driven mostly by Qatar, and a weak demand environment due to the aftermath of the economic crisis and the U.S. shale gas boom, according to the IGU report. However, demand recovered impressively, as did LNG imports, with most countries importing more LNG in 2010 than in the pre-crisis year of 2008.

The structure of LNG trading is evolving from a market focused on long-term arrangements between buyers and sellers to a market with more spot LNG trading, according to the report. Spot LNG trading has grown steadily since the 1990s and has experienced more rapid growth during the last five years. Up until 2005, spot trading accounted for only 10 percent of total LNG traded; since that time, spot trading has grown to more than a fifth of the market, or 47 mmtpa last year.

In 2005, 11 countries were active spot LNG exporters and 12 countries were spot cargo importers. By end 2010, these numbers have since increased to 16 and 22 respectively. "The appetite to buy LNG on a spot basis has increased significantly as the list of spot buyers has nearly doubled, whereas the list of spot sellers has increased, albeit at a slower pace," the report said.

The LNG trade also has spread in terms of geography, In 2005, 13 countries exported LNG, including Algeria, Australia, Brunei, Egypt, Indonesia, Libya, Malaysia, Nigeria, Oman, Qatar, Trinidad & Tobago, the United Arab Emirates (UAE) and the U.S. From 2006 through 2010, Equatorial Guinea, Norway, Peru, Russia and Yemen also began exporting LNG.

During that time period, Argentina, Brazil, Canada, Chile, China, Kuwait, Mexico, and the UAE begin importing LNG, joining 15 existing importers that included Belgium, Dominican Republic, France, Greece, India, Italy, Japan, Portugal, Puerto Rico, South Korea, Spain, Taiwan, Turkey, the UK and the U.S.

The growth in the global LNG industry is being fueled by Southeast Asia's growing economies and the Japanese earthquake and tsunami, which knocked offline nuclear power facilities in the country. The role of nuclear power is now being questioned by other countries; earlier this year, Germany announced it would shut down all of its 17 nuclear power plants by 2020. A decline in nuclear power generation would likely create long-term demand for gas.

Challenges remain in getting stranded supplies to markets, including accessing resources held by nations that limit participants in the oil and gas sector. Rising LNG development costs also present a challenge, meaning that the low hanging fruit has been picked and the ladder to the next level is becoming more expensive, said Peter Cleary, VP of corporate strategy and development for Santos Ltd., at the Asian Oil and Gas Conference on June 7.

Latin America is a key growth area for LNG as gas consumption increases in cities across the region, with countries such as Brazil, Chile, Jamaica, Mexico and Uruguay planning new terminals. "The region is a key area for floating regasification vessels as they can be used to elevate season demand shortages," said Douglas-Westwood analyst Lucy Miller. LNG also is being exported from South America. In 2010, Peru commissioned its first liquefaction plant, making it the 18th country to have liquefaction capacity to export LNG and the second LNG exporter in South America, IGU noted.

Growing gas demand in the Middle East, which is expected to account for about 20 MMtpa of LNG demand by 2020, will create a new market for LNG imports. Emerging LNG markets such as Dubai and Kuwait, which recently started importing LNG, and summer demand to power air conditioning are boosting LNG imports into the Middle East. Importing LNG for consumption is allowing Kuwait to allocate more liquefied petroleum gas for export. Dubai's domestic gas consumption also creating demand for LNG in that country; so far, Dubai has imported 26 Bcf, or less than 1 Bcf/d total since November 2010.

Bahrain, Israel and Lebanon also are considering construction of LNG import facilities. Qatar remains the world's largest LNG exporter at present, though a moratorium on further development of Qatar's North Field means that no new LNG capacity is likely to come online before the end of the decade.

Indonesia is developing a series of LNG import terminals along its coast to satisfy domestic demand, said Miller. However, the country, which is a major exporter of LNG, has new LNG export terminals projects in development which target other Asia countries, such as the Donggi-Senoro and Abadi FLNG projects. Indonesia also has coalbed methane reserves which it believes can eventually be used for gas export, though this is many years ago, Miller said. Eastern Europe is another emerging LNG market, with construction underway on an import terminal in Poland, with others planned along the Baltic Coast and a few terminals planned for the Black Sea coast.

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Maersk Extends Rig Fleet with $1.3B Drillship Order

- Maersk Extends Rig Fleet with $1.3B Drillship Order

Tuesday, July 05, 2011
A.P Moller - Maersk Group

Maersk Drilling, a business unit within the A.P. Moller- Maersk group, has declared its option to build two ultra deepwater drillships at Samsung Heavy Industries in South Korea.

The drillships are scheduled for delivery in the second and third quarters of 2014, respectively. The total project cost for the two drillships is approximately USD 1.3 billion, which includes a turnkey contract with the yard, owner furnished equipment, project management, commissioning, start-up costs and capitalized interest. Simultaneously, Maersk Drilling has obtained a new option for the construction of two additional drillships.

"We have an ambition of becoming one of the leading drilling contractors in the ultra deepwater segment and this order is another important step in taking a bigger share of this attractive market segment," said Claus V. Hemmingsen, CEO of Maersk Drilling and member of the Executive Board of the A.P. Moller – Maersk Group. "The order reflects our commitment to grow our rig fleet enabling us to serve our customers in the ultra deepwater segment on a more regular basis," Claus V. Hemmingsen continued.

Year to date, Maersk Drilling has invested USD 3.8 billion in two new jack-up rigs and four drillships.

Maersk Drilling had a revenue of USD 1.6 billion and a profit of USD 399 million after tax in 2010.

Hemmingsen sees a strong market for deepwater drilling rigs as the global demand for oil is increasing while at the same time production from mature fields is declining.

"This means that about six times the current Saudi production must be brought on stream over the next 20-25 years which will drive a solid growth in the demand for drilling services. The main part of this growth will take place in frontier areas such as deepwater," he said.

The two drillships will be of similar design to the two drillships Maersk Drilling ordered from Samsung in April 2011. The 228 meter long drill ships will be able to operate at water depths up to 12,000 ft (3,650 m) and will be capable of drilling wells of more than 40,000 ft (12,200 m).

Similar to the design philosophy on Maersk Drilling's ultra deepwater semi-submersibles the drillship design includes features for high efficiency operation including a dual derrick, which allows for parallel and offline activities. The extensive storage areas and tank capacities provide an advantage when operating in areas with less developed infrastructure and limited presence of suppliers. Together with the higher transit speed the increased capacity will reduce the overall logistics costs for the oil companies. The drillships will have accommodation capacity for 230 people.

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Global Petroleum Updates Jupiter Acquisition

- Global Petroleum Updates Jupiter Acquisition

Friday, July 01, 2011
Global Petroleum Ltd.

Global Petroleum advised that the Notice of Meeting whereby Global will seek shareholder approval for the acquisition of Jupiter Petroleum Limited ("Jupiter") has been finalized and submitted for regulatory review.

Under the sale and purchase agreement, Global will acquire Jupiter which holds prospective oil and gas exploration interests in offshore Namibia and in offshore Juan de Nova, a French dependency in the Mozambique Channel.

The sale and purchase agreement is conditional on the satisfaction of a number of conditions precedent, including due diligence investigations, obtaining necessary consents from governmental authorities, a report from an independent expert that the transaction is fair and reasonable to Global shareholders, and shareholder approval at a General Meeting.

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WATER STANDARD Inks Global Frame Agreement with Shell

- WATER STANDARD Inks Global Frame Agreement with Shell

Wednesday, June 15, 2011
WATER STANDARD

WATER STANDARD has signed a global frame agreement with Shell for engineering services related to the development of water based enhanced oil recovery methods and produced water treatment.

"We are extremely pleased to be working with Shell in support of Shell's ground breaking global enhanced oil recovery programs" said Amanda Brock, CEO of WATER STANDARD. "WATER STANDARD has been working with Shell to develop sustainable long term water treatment solutions. We look forward to our continued collaboration."

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Google Signs Deal With SolarCity

- Google Signs Deal With SolarCity



Jun 14, 2011

Google Inc. (NASDAQ:GOOG) said on Tuesday that it has made a deal with SolarCity, and it is the biggest deal it has ever made. SolarCity will use the Google fund to help finance rooftop installations. Google Inc. is creating a $280-million fund to help finance the rooftop installations.

Lyndon Rive, chief executive of SolarCity said "Google's leading the way and other companies could follow suit...It's not just about a dramatic environmental impact, it's also a good return." SolarCity is known for its lease programs and power purchase agreements, which allow customers to avoid the thousands of dollars of upfront expenses.

SolarCity is Google's first dip into the solar market, but the company has put nearly $700 million into wind farms, solar power systems, and electric vehicle programs. The buses at Google's Mountain View, California headquarters are equipped with solar panels.

Google has a potential upside of 40.1% based on a current price of $508.15 and an average consensus analyst price target of $711.8.

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Global Deficit Between Oil Consumption and Production Remains the Norm

- Global Deficit Between Oil Consumption and Production Remains the Norm

Monday, June 13, 2011
Rigzone Staff
by Trey Cowan

The Economist Online recently posted a short article entitled "Running Dry" which offered another perspective that would support OPEC raising its quotas. Taking a page out of BP's recently released "Statistical Review of World Energy 2011", The Economist highlighted BP's global data showing that average daily crude oil consumption exceeded production by over five million barrels per day during 2010. This is the widest daily gap on record going back to 1965. As you can see from our graphic which subtracts annual consumption from production, you have to go back to 1981 to find the last year where production outpaced consumption. So to sound any alarms based on the most recent year of BP's data seems a bit short-sighted.

However, looking at the data over the long run still seems to verify the obvious facts. First, new discoveries coming on line at levels sufficient to offset reservoir declines and growing global energy demand is not the current reality. Second, the growing fundamental imbalance between supply and demand will favor increasing prices over an extended time period.

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But we did find something in the data that we thought readers would also find interesting. Whether coincidental or not - you be the judge. When the annual surpluses and shortages are added together, starting with 1965, the first year in BP's Statistical Review; the point where crude oil actually went into a deficit position (per BP's data) is around the same time oil prices really started to surge (i.e. 2004).

Our commentary is that current prices reflect the anticipated levels of supply and demand, whether an imbalance will or does exist, and whether it's growing or shrinking. Setting aside storage costs and the time value of money; out month futures for crude at higher prices than current suggest the world's level of supply is not sufficient. However, a persistent global economic slowing over the next six to twelve months (if it does occur) would likely prove OPEC's decision leave quotas as is, a good call. Considering the mixed agenda's behind OPEC's recent quota setting (instead of a unified view that there is plenty of oil available to meet world demand), then if they did get it right this time it will likely be for the wrong reasons.

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Global Petroleum Gets Namibian Nod for Jupiter Acquisition

- Global Petroleum Gets Namibian Nod for Jupiter Acquisition

Wednesday, June 08, 2011
Global Petroleum Ltd.

Global Petroleum has received notification from the Namibian Competition Commission approving the acquisition of Jupiter Petroleum Limited by Global.

Under the sale and purchase agreement, Global will acquire Jupiter which holds prospective oil and gas exploration interests in offshore Namibia and in offshore Juan de Nova, a French dependency in the Mozambique Channel.

The sale and purchase agreement is conditional on the satisfaction of a number of conditions precedent, including due diligence investigations, obtaining necessary consents from governmental authorities, a report from an independent expert that the transaction is fair and reasonable to Global shareholders, and shareholder approval at a General Meeting.

As previously advised, consent for the transaction was required from the Namibian Competition Commission, and the Company is pleased that this requirement has been satisfied.

The Company is continuing to work towards satisfying the remaining conditions precedent as soon as possible and, subject to regulatory review, anticipates sending a Notice of Meeting to shareholders by the end of June.

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Global Petroleum Briefs on Jupiter Acquisition

- Global Petroleum Briefs on Jupiter Acquisition

Thursday, May 26, 2011
Global Petroleum Ltd.

Global Petroleum provided an update on its acquisition of Jupiter Petroleum, which holds prospective oil and gas exploration interests in offshore Namibia and in offshore Juan de Nova, a French dependency in the Mozambique Channel.

The sale and purchase agreement to acquire Jupiter is conditional on the satisfaction of a number of conditions precedent, including due diligence investigations, obtaining necessary consents from governmental authorities, a report from an independent expert that the transaction is fair and reasonable to Global shareholders, and shareholder approval at a General Meeting.

As previously advised, consent for the transaction is required from the Namibian Competition Commission. Submissions for approval of the acquisition have been lodged with the Commission and the parties are awaiting a response.

The Company is continuing to work towards satisfying the conditions precedent as soon as possible. In order to allow sufficient time to meet the conditions precedent for completion, the parties to the sale and purchase agreement have agreed to extend the end date for satisfaction of the conditions precedent from June 30, 2011 to August 31, 2011.

Global is in the process of preparing the Notice of Meeting seeking shareholder approval for the Jupiter transaction. The Notice of Meeting will include the independent expert report. Approval will also be sought at the same meeting for the incentive options to a director and consultants announced on May 13, 2011.

Allowing for the completion and dispatch of the Notice of Meeting, the Company now expects the meeting to be held in mid to late July.

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