Max Petroleum Starts Drilling at East Kyzylzhar Prospect

- Max Petroleum Starts Drilling at East Kyzylzhar Prospect

Tuesday, July 12, 2011
Max Petroleum plc

Max Petroleum has commenced drilling the KZIE-1 exploration well on the East Kyzylzhar I prospect in Block E. Total depth of the well will be approximately 1,500 meters, targeting potential Jurassic and Triassic reservoirs.

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Iraq Oil Minister, Shell Confirm Preliminary Gas Accord

- Iraq Oil Minister, Shell Confirm Preliminary Gas Accord

Tuesday, July 12, 2011
Dow Jones Newswires
LONDON
by Hassan Hafidh

Iraq's Oil Minister Tuesday and oil giant Shell reached a preliminary accord on a long-stalled $12 billion gas deal to capture and exploit associated gas from southern Iraq oil fields.

The agreement still needs to be approved by the Iraqi Cabinet.

"The Iraqi Oil Minister Abdul Kareem Luaiby announced today that Iraq has signed an initial contract with Shell and Japan's Mitsubishi to develop gas production in southern Iraq," the Iraqi statement said.

A Shell statement said the Anglo-Dutch oil giant was "very pleased the Basrah Gas Company Joint Venture agreements have been initialized" and that the Anglo-Dutch giant will now "look forward" to Cabinet approval.

The long-delayed agreement is important to Iraq's goals of boosting long-term oil production, because of the need to produce "associated" natural gas produced concurrently with rising oil output.

The two sides signed an initial agreement in 2008 to begin negotiations, but the talks have been delayed mainly over the pricing of produced gas that the joint venture would sell to the Iraqi government for much-needed power generation in Iraq. It wasn't immediately clear Tuesday how the agreement resolved the long-standing impasse.

The deal concerns the huge volumes of gas from three giant southern oil fields: Rumaila, Zubair and West Qurna Phase 1.

Deputy Oil Minister Ahmed al-Shammaa, who was present at the signing ceremony, said that the deal would help to increase Iraq's gas production to more than 2.5 billion cubic feet a day.

Iraq, holder of the world's 11th gas reserves, produces some 1.5 billion cubic feet a day, with half of that amount is being flared daily, because of lack of infrastructure to produce and market the gas.

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

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Chevron Sees Increase in 2Q Earnings on Higher Oil Prices

- Chevron Sees Increase in 2Q Earnings on Higher Oil Prices

Tuesday, July 12, 2011
Chevron Corp.

Chevron reported in its interim update that earnings for the second quarter 2011 are expected to be higher than in the first quarter 2011. Upstream results are projected to improve between sequential quarters, benefiting from higher crude oil prices.

Basis for Comparison in Interim Update

The interim update contains certain industry and company operating data for the second quarter 2011. The production volumes, realizations, margins and certain other items in the report are based on a portion of the quarter and are not necessarily indicative of Chevron's full quarterly results to be reported on July 29, 2011.

Unless noted otherwise, all commentary is based on two months of the second quarter 2011 versus full first quarter 2011 results.

UPSTREAM

U.S. net oil-equivalent production during the first two months of the second quarter was in line with the first quarter 2011. International net oil-equivalent production declined 76,000 barrels per day, largely reflecting maintenance activity in Kazakhstan.

U.S. crude-oil realizations for the first two months of the second quarter increased about $18 per barrel to $111.11, and International liquids realizations improved approximately $13 to $108.46 per barrel. U.S. natural gas realizations increased $0.28 to $4.32 per thousand cubic feet, and international natural gas realizations increased $0.41 to $5.44 per thousand cubic feet.

International Upstream earnings in the second quarter are expected to reflect higher exploration expenses.

The company's general guidance for the quarterly net after-tax charges related to corporate and other activities is between $250 million and $350 million. Due to foreign currency effects and the potential for irregularly occurring accruals related to income taxes and other matters, actual results may significantly differ from the guidance range.

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Lundin Tastes Sweet Success Offshore Malaysia

- Lundin Tastes Sweet Success Offshore Malaysia

Tuesday, July 12, 2011
Lundin Petroleum AB

Lundin has discovered gas in the Tarap-1 well that was drilled in Block SB303, offshore Sabah, East Malaysia.

Tarap-1 was drilled with the Offshore Courageous rig in a water depth of approximately 70 meters. The well was directionally drilled to a measured depth of 2,675 meters.

The Tarap discovery is a stratigrahic trap and the well encountered gas in each of the 5 independently sealed stacked Miocene sands targeted. Gross total vertical pay thickness for the sands encountered is approximately 150 meters. An extensive data acquisition program was completed including pressure measurements, sampling and a mini flow test in selected zones.

The data recovered from the well will be analyzed further in order to determine a range of resource estimates.

Ashley Heppenstall, President and CEO of Lundin Petroleum commented, "This is an encouraging start to the drilling campaign in Malaysia and provides strong support for our strategy in South East Asia of pursuing organic growth and value creation in focused core areas. With a large number of prospects and leads already identified within SB303, I'm confident that we can continue grow our resource base in this area in the coming years.

"Sabah currently has two gas demand centres located in Kota Kinabalu and Labuan Island that are supplied from existing offshore infrastructure. The addition of a third demand center with the construction of the Sabah Oil and Gas Terminal at Kimanis and the Sabah-Sarawak gas pipeline gives us a broad range of options to explore for gas monetization in the area."

The rig will now move to drill the Cempulut prospect, also in SB303, the second well in Lundin Petroleum's five well drilling campaign in Malaysia in 2011.

Lundin Petroleum holds a 75 percent interest in SB303 through its subsidiary Lundin Malaysia BV. Lundin Malaysia BV's partner is PETRONAS Carigali Sdn Bhd with a 25 percent interest.

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