MONITOR NewsBase
COMMENTARY 2 NEWS THIS WEEK…
Reddy for action 2
Abu Dhabi confirms ADOC role in raising
oil output
MARKET COMMENTARY
3
4
Reddy for action
Stoking the fire 4
New Indian Petroleum Minister Jaipal Reddy
PIPELINES & TRANSPORT 7 outlined his action plan for the oil and gas industry
Coastal signs US$88m vessel sales deals7 in an exclusive interview with AsianOil.
INVESTMENT 7
Indonesia second bottom for oil and gas Reddy, who has replaced Murli Deora as Indian
investments 7 petroleum minister in a recent cabinet reshuffle,
Report sees tax incentives boosting
faces several major challenges both at home and
Malaysian investments 8
IOC still keen on Turkish oil refinery 8 abroad. (Page 2)
PERFORMANCE 9
Ramba Energy makes surprise oil
Reddy said he would largely follow the policy
discovery at West Java gas field 9 framework that was laid out by Deora. (Page 2)
EPIC full-year profit surges 38% 9
Horizon Oil reports positive results from Payment issues with Iran, the upcoming NELP-IX
PNG well 10 bid round and ongoing consideration of the Cairn-
Carnarvon Petroleum provides positive Vedanta deal are all pressing matters for the new
Thailand update 10
POLICY 11 minister. (Page 2)
ONGC share sale planned for March as
part of shake-up
Petronas keeps a close eye on Sudan 11
11 Solid as ADOC
PTTEP and Petronas to expand joint gas Japan’s Abu Dhabi Oil Co. (ADOC) has solidified
exploration 12
Thai energy minister advocates alternative
its position in Abu Dhabi, one of the country’s key
energy projects 13 strategic oil suppliers.
PROJECTS & COMPANIES 13
Japanese major farms into Iraq’s Gharaf ADOC has been granted an extension to three
oilfield 13 existing oilfields in Abu Dhabi. (Page 3)
Japanese consortium wins LNG plant deal
in Australia
CGE ties up with Essar
14
14 Tax and spend
Dayang wins Petronas contract 14
Premier to spud Vietnam appraisal well 15
A new report claims that Malaysia’s new tax
NEWS IN BRIEF 16 incentives should encourage greater spending in the
TENDERS & CONTRACTS 22 country’s oil and gas sector in 2011. (Page 8)
For analysis and commentary on these and other stories, plus the latest oil and gas developments, see inside…
Copyright © 2011 NewsBase Ltd.
www.newsbase.com Edited by Ryan Stevenson
All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All
reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
AsianOil 16 February 2011, Week 06 page 2
COMMENTARY
COMMENTARY
COMMENTARY
This will include drilling appraisal between the countries. Abu Dhabi Gas Liquefaction Company
wells to develop and produce oil drawing Sour gas injection is a process in which (ADGASs), an operating subsidiary of
on ADOC’s existing facilities in the area. dissolved hydrogen sulphide and carbon the government-owned ADNOC,
dioxide are recovered from extracted oil launched a study of the feasibility of
Significance and pumped back underground. developing Hail gas in 2008, but no
“The new concession agreement The gases help to push out more crude contracts were awarded for the project.
symbolises the excellent bilateral and are eventually stored permanently in The inclusion of the Hail area in the
relations between the UAE and Japan,” the depleted oilfield. new ADOC concession may indicate that
Cosmo Oil said in a statement. the proposed sour gas development has
“ADOC will commence exploration And challenges been shelved, with the emphasis now on
activities in the Hail field, which will But the Japanese consortium will also oil.
include drilling appraisal wells, and will face up to some of Abu Dhabi’s tough The fast-track development of the Shah
develop and produce crude oil in a highly gas challenges too, as well as simply sour gas project by ADNOC and the US’
efficient and cost-effective manner producing more oil. Occidental Petroleum, however, could
through full utilisation of ADOC’s Abu Dhabi National Oil Company provide valuable insight into how to tap
existing facilities, taking into high (ADNOC) has already established the Hail gas safely and commercially.
consideration the protection of the presence of a deep gas field in rock Like other oil pumped in Abu Dhabi,
environment in the area,” it added. formations below the Hail oil pools. Hail’s crude is also likely to contain
ADOC’s experience of more than 40 The trouble is the gas contains a high hydrogen sulphide, although at a much
years in Abu Dhabi and the various concentration of hydrogen sulphide. lower concentration than in the
environmental protection activities The presence of the toxic and corrosive underlying gas.
carried out by the company – utilising impurity makes the Hail gas technically This highlights the importance of
advanced technology such as zero gas challenging to produce. ADOC’s commitment to develop the oil
flaring and sour gas injection into Any gas leak could pose a serious in an environmentally responsible
reservoirs – are additional factors that threat to public health given the field’s manner, which it has pledged.
will continue to boost bilateral relations proximity to coastal settlements.
MARKET COMMENTARY
Only a week after it raised interest rates around 5.3 million barrels per day, the fact that demand for oil is “real,” in
for a third time in as many months, among the highest rates of crude the sense that it is derived from industrial
China’s voracious appetite for crude oil importing ever seen in China. demand, transportation and other similar
imports remained undimmed this week. Moreover, this is 20% higher than at activities. Power generation in China has
While it is Chinese property prices and around the end of 2009. It is only the also driven a surge in consumption of
financial markets that are the main start of the year, of course, and 2011 is diesel, which has created a shortage in
targets of the tightening of monetary perhaps still expected to see some the country.
policy, global markets have been moderation of growth, but there is little These facts are being noted in the
anticipating that a dampening effect sign of it so far. It is becoming clearer context of the interest rate rise, and oil
would be observed in the oil market as that oil markets may not see any material markets are perhaps quickly realising that
well. Not so far. effect from the stringent direction of oil demand in China is not going to be
monetary policy, and in fact may not see dented by changes in monetary policy.
Real demand any effect at all.
China’s January’s crude imports reached Some of the reasons for this arise from
reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
AsianOil 16 February 2011, Week 06 page 5
MARKET COMMENTARY
More evidence of similar trends in bought Japan time, but it has managed to barrier. But it is possible. The spread
other raw commodity markets is noted as “wrong-foot” the market before, and between Brent futures and the Oman
well, such as copper and aluminium, could do so again. future, the so-called “Brent-Dubai swap”
where imports are also running at On global markets, the resolution of has narrowed, reflecting the weight
accelerating rates. the crisis in Egypt helped to contain the attached to Asian demand as a driver of
oil market from a more vigorous upsurge prices, relative to other demand sources.
Beneath the veil this week. Prices have been to some January was a record month for DME,
Because of Asia’s crucial role in driving extent kept in check by the sense of relief with the highest volumes traded on the
oil demand in 2010, oil traders have been felt by traders. But, they have also been exchange since its launch. DME’s chief
waiting keenly to see what the likely left with a warning that political tensions executive, Thomas Leaver, said: “We
trend will be for 2011. And the January in the Middle East are very real, and will continue to work diligently … to
figures point to a healthy pattern. signs of similar instability have been consolidate our position as the
But, whatever China does in 2011, seen in Iran and Algeria. benchmark for crude oil in the Middle
there are some other unknowns in its oil What really worries traders is the East and Asia.”
market presence. The precise nature of its possibility that other oil-producing On the Tokyo Commodity Exchange
oil imports is never completely clear. countries could be impacted by similar (TOCOM), crude oil futures for February
This is owing to its unknown storage civil unrest as was seen in Egypt. This delivery started Week 7 at 49,780 yen
position. In other words, little is known realisation is currently placing a floor (US$594.19) per kilolitre on February 8.
about what volumes China imports for under international crude oil prices. Prices moved higher by the weekend to
storage. close at 50,640 yen (US$604.39) on
It is well known that China has some February 11. The contract gained more
form of reserve, but the terms of its Global oil prices have ground to close at 51,300 yen
management are not disclosed. Hence, (US$612.27) on February 15.
monthly import volume is only ever one
stabilised slightly, and it Kerosene futures continued their habit
part of the picture. A slowdown in may be that the contract of outperforming the market, rising from
China’s economy could easily be 65,280 yen (US$779.23) at the start of
disguised by the fact that crude oil and
will not move through the the week to close at 66,400 yen
other commodities are being imported in US$100 barrier (US$792.6) on February 11, and at
part for storage. 66,800 yen (US$797.38) on February 15.
But, whatever the precise position, Petrol futures began the week at
China’s underlying demand for oil On the markets 59,790 yen (US$713.71), moved higher
appears to be stable. As a result, oil On the Dubai Mercantile Exchange to 60,640 yen (US$723.86) at the
prices were buoyed by the Chinese data (DME), the Oman crude future for April weekend, and closed on February 15 at
during Week 7. began the week at US$96.24 per barrel. 61,200 yen (US$730.54).
Prices firmed slightly as the week Japan’s oil market certainly seems to
On other fronts progressed, driven by the lack of any continue to display a bullish character,
Elsewhere, fears are emerging that the apparent solution to Egypt’s crisis. The which some may find at odds with
effects of Japan’s stimulus may be contract reached US$97.78 per barrel on underlying economic conditions.
waning. Japan recovered strongly in February 10, then slipped back to However, it may be that strong buying
2010, and many market observers were US$97.65 by the weekend. A further for stock replacement purposes is
surprised by its buoyant oil demand modest fall on February 14 to US$97.15 continuing. Kerosene stocks in particular
profile during the year. reflected the market’s decision to refocus were particularly low in Japan in the
But, Japan’s economy saw a sharp on fundamentals as the alarm from Egypt closing months of 2010. This rebuilding
slowing in the closing weeks of 2010, subsided. But, the upward pressure process may be taking longer than some
and the outlook for 2011 is in some created by the first Chinese import data observers may have expected.
contrast to China’s, for example. Its debt for 2011 helped prices up on February 15 In addition, Chinese imports of oil
overhang is stifling consumption and to close at US$99.07 per barrel. products may also be driving up
investment, which spells weak medium- Global oil prices have stabilised TOCOM futures prices.
term underlying conditions. slightly, and it may be that the contract
The stimulus package has perhaps only will not move through the US$100
MARKET COMMENTARY
Source: Tokyo Commodity Exchange (*Change on previous trading day’s close, 1 barrel = 0.159 kilolitre)
INVESTMENT
INVESTMENT
PERFORMANCE
PERFORMANCE
PERFORMANCE
The Thai drilling programme of 34 Appraisal and development will be operating for Carnarvon in Thailand,
wells is intended to grow both reserves carried out on 75% of the wells, while with one at the L44/43 concession and
and production and will be focused over roughly 25% of them will be exploratory another one at L20/50. The second
several areas. The base capital in nature. This is pending the award of a drilling rig will complete the firm’s two-
programme for 2011 of 34 wells is new production licence by the Thailand well programme at L20/50 during the
centred on one drilling rig operating in Department of Mineral Fuels (DMF). first quarter.
Concessions L44/43 and L33/43. Two drilling rigs are currently
POLICY
Petronas keeps a
close eye on Sudan
Malaysia’s national oil company (NOC) contributed 26% of Petronas’ total Malaysia has maintained close ties with
Petronas is “closely monitoring” the overseas production, which has become Sudan’s northern-based government but
situation in Sudan following the national an increasing source of revenue. must now “build a similar relationship
referendum in favour of splitting the “We are closely monitoring the with authorities in the South ahead of the
country into two. development with regard to the secession,” said a report in The Star
Petronas has major interests in several referendum and we have been taking newspaper, which quoted official
onshore blocks in the African country. adequate steps and actions to serve our government news agency Bernama. “We
The blocks are spread across the line rights and interests best,” Petronas said in have had and are in continuous
along which the country is to be divided. a statement on Sudan last week. The discussions and high-level engagements
The state-owned firm also operates retail firm’s partners in Sudan include China with all relevant officials and parties,
fuel stations and port terminals in Sudan. National Petroleum Corp. (CNPC) and including with the government of South
In 2010, crude oil from Sudan Sinopec, plus local Egyptian firms. Sudan,” the Petronas statement said.
POLICY
The secession of the South is expected said it had evacuated employees and their operation of a liquefied natural gas
to take place in mid-2011. families from Egypt because of the (LNG) plant in the country.
The petroleum revenue rights of North political unrest there. Petronas has Petronas said it had contributed
and South Sudan are among a number of several onshore and offshore interests in US$650,000 towards the Malaysian air
major problems that have first to be Egyptian exploration blocks with force’s cost to fly other Malaysian
resolved before the split. partners such as Shell and BG Group. It citizens out of Egypt.
Elsewhere in North Africa, Petronas is also involved in the construction and
reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
AsianOil 16 February 2011, Week 06 page 13
POLICY
Premier to spud
Vietnam appraisal well
UK exploration and production firm barrels of oil per day plus 8.1 million directly south of BP’s producing gas
Premier Oil has begun drilling at its cubic feet (229,400 cubic metres) of gas fields (Lan Tay and Lan Do) and south-
CRD-2X appraisal well in the Nam Con per day, through a 48/64-inch choke. No east of Premier’s Dua and Chim Sao
Son Basin, offshore Vietnam. water was produced from either zone. discoveries. If commercial, Ca Rong Do,
On February 10, Pan Pacific Petroleum Spanning 1.2 million acres (4,855 meaning Red Emperor, could be a
(PPP), Premier’s joint venture partner in square km), Block 07/03 is located near a standalone development, or tied back to
the project, said that the semi- number of oil and gas discoveries, lying Dua or Chim Sao, both of which are
submersible Ocean General currently being developed.
had arrived on Block 07/03, The Nam Con Son Basin
and was preparing to and Natuna Sea region is
commence drilling of the considered a key point of
well. focus for Premier. Alongside
CRD-2X aims to evaluate Chim Sao and Dua, which
the oil and gas discovery are slated to begin
made by the CRD-1X well on production in 2011, the
the Ca Rong Do prospect in company also operates the
June 2009. Tuna production-sharing
At the time, PPP described contract (PSC) in the East
the find as “very encouraging Natuna Sea and its
for future exploration” successful Anoa gas field in
because of multiple leads and West Natuna, where the
prospects in the block, with Naga, Iguana & Garah Baru
Premier Oil estimating “mid- fields are also under
point” discovered resources development.
at 60 million barrels of oil Premier operates Block
equivalent. 07/03 with a 30% interest,
When drilled, the CRD-1X along with partners PPP
well tested two reservoir (5%), Pitkin Petroleum
zones, which flowed oil at a (40%), Pearl Oil (15%) and
combined rate of 3,265 PetroVietnam (10%).
NEWS IN BRIEF
Moody’s also believes that the sector will
OIL face increasing cost pressures. Eni to exit Rajasthan
“With the recovery in oil prices, Asian block
Moody’s gives stable companies will have their cash margins
India’s Directorate General of
squeezed due to an increasing cost base,
outlook to AP E&P although they enjoy better cost structures
Hydrocarbons (DGH) has recommended
sector when compared to their US and
that Eni (India) Ltd should be allowed to
exit Rajasthan onland block RJ-ONN-
Moody’s Investors Service says that the European counterparts,” says Lam.
2003/1, after completing the first phase
outlook for Asia Pacific’s oil and gas Finding and development costs will
of explorations. The regulator has also
exploration and production (E&P) sector increase, driven by the growth in
said that the Italian multinational E&P
is stable. investment and capital expenditure
major should be exempted from its
“A significant rebound in oil prices since budgets. Debt issuance is also expected
unfinished contractual obligations for
their trough is supporting growth in the to rise.
this phase of explorations.
profits and cash flow of E&P players,” “As most of these E&P players will
IP, February 14, 2011
says Renee Lam, a Moody’s Vice increase their investments in the next
18 months, we expect the sector’s
President and Senior Analyst.
leverage to increase,” says Lam.
No term hitting
“The oil price recovery has been driven
by financial investment demand, Finally, regulatory issues, particularly on value: Cairn
as well as physical oil stock demand,” pricing and environmental concerns, will Cairn India today said it would not
says Lam, who was speaking on the continue to impact the sector. accept any government condition that
release of Moody’s latest outlook – NEWSBASE, February 16, 2011 will negatively impact its value, in any
which she authored – on the sector. acquisition deal with Vedanta. “The
Moody’s rates eight E&P companies in OVL annual plan Cairn India board of directors has stated
Asia Pacific (range: B2 to Aa3), and two ONGC’s international arm, ONGC that any condition tied to the approval of
integrated oil and gas companies which Videsh Ltd (OVL), plans to spend Rs the transaction, which can negatively
have heavy exposure to E&P (A1 and 86.8 billion on its E&P projects impact the value of the company, cannot
A3). worldwide during the year 2011-12. Out be accepted,” the company said in a press
Furthermore, continued strong demand of the total plan outlay, the company statement here.
growth in non-OECD countries, plans to finance Rs 52.3 billion from its PTI, February 14, 2011
especially from China and India, internal resources and the remaining Rs
provides medium- to long-term support 34.8 billion will be raised by borrowing Save on royalty:
to oil and gas prices. China’s oil demand from banks and other financial ONGC
is forecast to grow at a CAGR of 6.35% institutions. The company expects to earn Refuting the claims made by Cairn India,
over 2010-2011, such that its portion of revenues of Rs 140 billion during the ONGC has said the government will save
global demand will increase to 10.7% in next financial year. US$2 billion if royalty paid on the
2011. OVL, February 14, 2011 prolific Rajasthan oilfields is allowed to
However, continued acquisitions and
be cost-recovered. ONGC owns a 30%
capital expenditure remain a key risk. OVL to exit Egypt stake in the Barmer oilfields and pays
“Many Asian E&P players are sovereign-
ONGC Videsh Ltd (OVL) has decided to royalty to the state government not just
owned, directly or indirectly, and they
withdraw from two major E&P ventures on its share, but also on the balance 70%
are keen to boost reserves through
in the politically torn country of Egypt. owned by Cairn India. Over the life of
acquisitions for strategic reasons,” says
These blocks include the North East the field, ONGC estimates it will pay
Lam.
Mediterranean Deepwater Concession over US$3.15 billion in royalty on behalf
There is also a trend to purchase
(NEMED) and North Ramadan Block 6. of Cairn India.
unconventional assets – such as shale gas
OVL had discovered gas in the NEMED ET, February 14, 2011
and oil sands – as most global oil and gas
block, while oil had been struck in North
reserves are approaching maturity, and
technological advancements have been
Ramadan Block 6. However, both these Sasol may buy into
improving the project economics of the
discoveries were too small to be CIL
commercialised, forcing the E&P major
business. South Africa’s Sasol has expressed its
to relinquish these blocks.
“These unconventional assets require willingness to acquire a minority stake in
INDIANPETRO, February 14,
higher up-front capital investments and a a joint venture (JV) with Indian state-
2011
longer exploration and development owned miners Coal India Ltd (CIL) and
period before commercial production is NMDC Ltd to produce liquid fuel
realised,” says Lam.
NEWS IN BRIEF
from coal, a little over a year after it Afghanistan and Pakistan. Official
formed a-50:50 venture with Tata Steel Cairn mobilises land sources said Turkmengas, the national oil
Ltd for a similar project. Sasol is rig firm of Turkmenistan first sought a price
pursuing global opportunities to linked to fuel oil but later changed it to
Cairn Energy India Ltd (CEIL) has
commercialise its coal-to-liquids naphtha reasoning that natural gas was
mobilised a jack-up rig at its Ravva
technology. The company’s readiness for meant to replace these liquid fuel power
block, located in the East Coast of India,
a second joint venture was conveyed plants.
for a fresh drilling programme. A senior
during coal minister Sriprakash Jaiswal’s HINDU, February 14, 2011
Cairn executive said that a five-well
recent visit to South Africa, according to
Partha S. Bhattacharyya, CIL’s chairman.
drilling programme is currently IFFCO purchases
underway in the contract area. One well
LIVE MINT, February 9, 2011
has already been drilled under the infill
spot R-LNG
RIL Mahanadi drilling campaign, sources added. Fertiliser giant Indian Farmers Fertiliser
IP, February 14, 2011 Cooperative Limited (IFFCO) recently
Reliance Industries Ltd (RIL) is likely to chose to purchase R-LNG on the spot
embark upon an ambitious five-well Cairn contests ONGC market from GSPC in the face of falling
drilling programme in its Mahanadi claim supplies from RIL’s KG-D6 block. The
deepwater contract area MN-DWN- gas will be purchased at the rate of
2003/1 ahead of schedule. Top company ONGC’s claim that it will incur an actual
US$11.08 per MMBTU. The company
sources said that the proposed drilling loss of US$3.16 billion on the Barmer oil
was facing a shortage of around 0.2
programme – under Phase-I of Minimum block in Rajasthan has been contested by
mmscmd in KG-D6 gas supply for its
Work Programme (MWP) – may get its partner Cairn India, which says the
plant in Kallol.
underway by August 2011. state-owned oil firm will only lose about
IFFCO, February 14, 2011
IP, February 14, 2011 US$564 million. ONGC says the 6.5
billion barrels block in Barmer district is NTPC Nigeria
ONGC mobilises rig a losing proposition for it on account of
venture
the over US$3 billion royalty it will pay
ONGC’s tender evaluation committee
on behalf of Cairn India over the life of NTPC may revive its plans to set up coal
has recommended extension of the
the field. and gas-based power projects in Nigeria,
mobilisation date of the 300-feet,
ET, February 13, 2011 a proposal scrapped by the company
cantiliver-type, jack-up rig – dubbed
earlier due to a delay in finalising a
Deepsea Fortune – for the seventh time,
GAS partner for the proposed venture in the
along with the levy of liquidated
African nation. “NTPC may look at
damages (LD). There would, however,
not be any additional impact of LD on IPI work completion Nigeria for coal and gas-based projects ...
They are likely to revisit the proposal,” a
the contractor, Jagson International Iran on Tuesday said 90% work on the senior Power Ministry official told PTI.
Limited, as the 5% LD leviable under the Iran-Pakistan-India gas pipeline was PTI, February 13, 2011
contract has already been exhausted. complete within its territory and it was
ONGC, February 14, 2011 open for having trade arrangements with Natural gas
any country in the energy sector. Iran’s
Cairn completes Ambassador to India Seyed Mahdi
discovered in
seismic surveys Nabizadeh said work was also in Myanmar
progress on the Pakistani side and it was A natural gas well with a production
Cairn recently completed a large cache of
ready to start 50 per cent of the total 60 capacity of 2.1 million cubic feet per day
time-lapse seismic surveys at Ravva. The
mcm capacity once the pipeline was in has been found in Pale Township in
seismic programme – shot over 280 sq
place. Monywa District, Sagaing Division, the
km – made use of 4D technology.
ET, February 14, 2011 state-run newspaper The Mirror reported
Besides monitoring of fluid movements,
4D seismic analysis allows pressure on Monday. Myanmar Oil and Gas
changes in petroleum reservoirs during
Oil linked price for Enterprise and its partner Sinopec
production, thus contributing to TAPI gas International Exploration and Production
improved recovery rates. Turkmenistan is seeking a price linked Corporation (SIPC) found natural gas at
BL, February 14, 2011 fuel oil or naphtha for the natural gas it Thingadon Test-well No. (1), which is
plans to sell to India through a US$ 7.6 located about 10 miles to the east of
billion pipeline passing through Kyaw Village in Pale Township in the
Mahutaung Region.
Copyright © 2011 NewsBase Ltd.
www.newsbase.com Edited by Ryan Stevenson
All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All
reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
AsianOil 16 February 2011, Week 06 page 18
NEWS IN BRIEF
Officials said the well had a production The single well is on the Ruru customers globally. More importantly,
capacity of 2.1 million cubic feet of prospecting block, 40km offshore from the API certification will also allow us to
natural gas per day. South Taranaki. It's next to the Maui gas expand our market to customers that we
MIZZIMA, February 14, 2011 field, which is due to run out in about ten previously have not worked with”, said
years. Mr Ting Teck Jin, Executive Chairman
India, Turkmenistan CEO Rob Jager says there are still and CEO of EMS Energy.
disagree opportunities to get more gas out of Maui NEWSBASE, February 16, 2011
and extend the field's life He will know
Turkmenistan and India are at odds over
in a couple of months whether there's any High pay for
how to set the prices for gas that will be
pumped through the proposed
oil or gas there. The drill ship Noble contractors
Discoverer is contracted for one well.
Turkmenistan-Afghanistan-Pakistan- Australian energy companies are paying
Jager says New Zealand has to compete
India (TAPI) pipeline, media sources engineers, geologists and other
with the Bass Strait in Australia and the
reported on Tuesday. India has rejected contractors 35% more this year as
North West Shelf to attract drilling
Turkmenistan’s idea to link the price of liquefied natural gas ventures fuel
operators.
natural gas transported by the pipeline to competition for labour, the UK’s largest
RADIO NEW ZEALAND, February
oil or naphtha, the United Press recruiting firm said, according to
15, 2011
International (UPI) news agency reported Bloomberg. Contractors in Australia are
on Tuesday. SERVICES receiving A$1,080 a day, on average,
CAN, February 15, 2011 compared with A$800 a day last year,
Matt Underhill, a Sydney-based
East Natuna gas EMS awarded API managing director of oil and gas for Hays
reserved for certifications Plc, said. That’s almost A$22,000 a
domestic Singapore’s EMS Energy Limited said its month, assuming 20 days’ work.
Average salaries for “professionals” in
consumption subsidiary, Engineering & Marine
the Australian oil and gas industry for
Services (Pte) Ltd (EMS), has been
Gas pumped from the East Natuna block awarded several American Petroleum 2011 are 90% above the global mark,
will be allocated for domestic use only, Institute (API) certifications. rising 5% to US$143,700, compared with
the government says. The API certifications that EMS has a little-changed US$75,813 worldwide,
Coordinating Minister for the Economy received cover the following: API Hays found in a survey conducted in
Hatta Rajasa said gas from the block Specification Q1, API Specification 4F September and October.
would be exported only if there was a for Substructures at PSL 1 (refers to The more than $30 billion in Queensland
production surplus. Drilling and Well Servicing Structures) state coal-seam gas-to-LNG ventures
“I am sure that we can still export the and API Specification 2C for Offshore approved by BG Group Plc and Santos
East Natuna gas as the reserve is so Pedestal Mounted Cranes. Ltd. are set to increase labour demand
huge,” he said as quoted by Kontan.co.id. With the certifications, EMS has been and drive up pay further. “That’s going
The East Natuna block was originally authorised by API to use the official API to put everything into overdrive,”
called the Natuna D Alpha block. State- Monogram and APIQR marks. Underhill said.
owned oil and gas firm PT Pertamina and EMS has been manufacturing quality BLOOMBERG, February 11, 2011
PT Total E&P Indonesie and PT Petronas products for oil and gas assets worldwide
Niaga Indonesia are jointly running the since 1977. In recent years, the company
L&T receives order
block, whose gas reserve is estimated at has successfully delivered several Engineering major Larsen & Toubro on
222 trillion cubic feet (TCF). drilling modules and offshore cranes that Monday said it has received Rs.11billion
THE JAKARTA POST, February comply with API standards. As the order from Gujarat State Electricity
9, 2011 Company’s new products will henceforth Corporation (GSECL) for setting up a
bear the API monogram, it will provide 375-MW gas-based power plant at
Further drilling could an added quality assurance that is easily Dhuvaran, near Baroda. The project will
take place in Maui recognised by international customers be executed by the gas-based power
Shell Todd Oil Services says further with whom the Company is targeting to projects business unit of Baroda-based
drilling could take place as early as next expand its business. L&T Power, L&T said in a statement.
summer, if a new exploration well near “The award of the API certification will L&T will procure advance gas turbines
the Maui gas field proves successful, further strengthen the confidence and and high-efficiency steam turbines for
Radio New Zealand reported. enhance the trust placed in the products the plant from Siemens AG, Germany.
and services that EMS offers to its valued PTI, February 14, 2011
reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
AsianOil 16 February 2011, Week 06 page 19
NEWS IN BRIEF
This new generation rig is a showpiece of Mr Chow Yew Yuen, President (The
Seadrill under fire our cumulative experience in designing Americas) of Keppel O&M, said,
Seadrill, a Norwegian firm, has drawn and constructing cutting-edge harsh “Keppel has worked closely with various
criticism for returning to Burmese waters environment solutions. international drillers and fleet owners
in February 2011 to do drilling work for “In choosing to build up to four units of operating in Brazil for some 30 years.
Thailand’s state-owned oil company, this innovative design, our faithful Today, in replicating Keppel O&M’s
PTTP. According to Burma’s state customer Ensco has given strong proven systems and practices in Brazil,
owned the New Light of Myanmar, endorsement to the KFELS Super A we are able to offer a full range of
Seadrill’s new ‘jack-up’ rig, the West Class, which is well-suited for operating offshore solutions in construction,
Juno, was set to arrive in Burmese waters conditions in the UK, Danish and Dutch conversion, repair and modification, as
in mid-January to commence drilling for sectors of the North Sea. We are pleased well as the fabrication and integration of
PTTEP, the international exploration to take our partnership with Ensco to the production topsides, among others.
wing of Thailand’s state-owned oil firm next level and support its ongoing “We are heartened that SBM and
which holds concession in blocks M-7 enhancement of an already advanced MTOPS have reaffirmed our position as
and M-3 for a 4 month period. drilling fleet.” the choice solutions partner in Brazil’s
MIZZIMA, February 14, 2011 A viable and cost-effective solution for offshore and marine industry with these
harsh environments and cold climate contracts to fabricate and integrate
Keppel to build harsh areas, the new KFELS Super A Class modules for their latest FPSOs. As we
boasts the distinctive qualities of Keppel grow our competencies and track record
class jackups FELS’ proven jackup rig designs. as the most established shipyard in Latin
Keppel FELS Limited has secured a The KFELS Super A Class rig can America, we will continue to nurture
contract to build two enhanced KFELS operate in water depths of 400 feet and win-win relationships with our valued
Super A Class harsh environment jackup drill to depths of 40,000 feet. It features customers. We see the market improving
rigs from a subsidiary of Ensco plc at a advanced automated drilling systems and our yard has the capacity and
shipyard price of about US$440 million. with 2.5 million pounds of static hook capability to take on more jobs.”
These rigs are scheduled for delivery in load, a spacious deck and comprehensive Keppel FELS Brasil’s contract with SBM
the second and fourth quarters of 2013. amenities for the comfort of a 150-person is for the fabrication and installation of
As part of its contract with Keppel FELS, crew. It also has an offline stand building topside modules on the Floating
Ensco has options to order two more capability to handle drill pipes Production Storage and Offloading
similar jackup units. efficiently, boosting overall rig (FPSO) vessel Cidade De Paraty, which
Mr Dan Rabun, Chairman and CEO of performance and productivity. was awarded in association with Queiroz
Ensco plc, said, “The new rig orders For enhanced operational safety, the Galvão Óleos e Gás S.A. (QGOG) and is
reflect our commitment to continually KFELS Super A Class is equipped with currently undergoing conversion at
high-grade our fleet. Operators’ the latest pinion overload detection, rack Keppel Shipyard in Singapore.
requirements will continue to increase phase difference detection, and brake Mr Chow added, “Like our recent
over time and it is Ensco’s strategy and failure and overload protection devices, delivery of P-57, this project
intention to maintain our position at the thus meeting even the stringent Health, demonstrates the synergy of the Keppel
high end of the premium jackup market. Safety and Environment (HSE) standards O&M shipyards in providing a
“Keppel-designed rigs, which make up of various sectors in the North Sea. comprehensive suite of services to our
about 20 percent of our current jackup NEWSBASE, February 16, 2011 customers and brings to bear our near
fleet, have been delivering exceptional market, near customer strategy.”
performance. The new KFELS Super A Keppel wins two rig Work is expected to commence at
Class rigs, which are being customised to contracts Keppel FELS Brasil’s BrasFELS
Ensco’s requirements, will give us even shipyard in Angra dos Reis, Rio de
more high-specification assets to match Keppel Offshore & Marine Ltd (Keppel
Janeiro in the first quarter of 2011. The
the drilling demand for increased drilling O&M), through its subsidiary Keppel
vessel is scheduled to arrive in the first
capabilities in each market.” FELS Brasil, has secured two contracts
quarter of 2012 with delivery in the
Mr Tong Chong Heong, CEO of Keppel totalling R$500 million (approx.
fourth quarter of 2012.
Offshore & Marine, said, “The KFELS US$297.64 million) - one from Single
The work scope will include the
Super A Class hails from our proven Buoy Moorings Inc. (SBM), and another
fabrication and installation of six process
KFELS MOD V-A Class jackup, which from the joint venture company MODEC
modules and a riser gantry as well as the
has been widely deployed by our and Toyo Offshore Production Systems
installation and integration of another six
international customers, including Ensco. (MTOPS).
process modules supplied by SBM.
reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
AsianOil 16 February 2011, Week 06 page 20
NEWS IN BRIEF
The FPSO Cidade de Paraty will be technology, which we have been combustion machinery emissions, safe
deployed in the pre-salt region of the advocating through our highly successful use of refrigerants and have a Green
Santos Basin and will have a production new building programme as we are Passport Inventory for recycling the ship.
capacity of 120,000 barrels of oil per acutely sensitive about our Drydocks World is engaged in
day, and be able to compress 5 million environmental obligations. We have addressing the wide-ranging needs of the
cubic metres of gas per day. proved once again that our engineering industry through a new building
In its contract with MTOPS, a joint and construction capabilities are among programme involving its yards in Dubai-
venture company between MODEC and the best for highly specialised vessels UAE, Nanindah, Graha, Pertama, in
Toyo Engineering Corporation, that address niche markets. Seismic Indonesia and Singapore.
BrasFELS will undertake the module technology is constantly evolving and NEWSBASE, February 16, 2011
fabrication and integration of the FPSO improving and we are fully equipped to
Cidade de Sao Paulo MV23, which was adapt and address the challenging PETROCHEMICALS
awarded in association with Schahin construction needs,” said Khamis Juma
Engenharia S.A. Buamim, Chairman of Drydocks World Pertamina to export
Work is expected to begin at BrasFELS and Maritime World.
in the first quarter of 2011. The yard’s Polarcus Alima incorporates
more lubricant
scope includes the fabrication of topsides sophisticated seismic technology and is State owned oil and gas firm Pertamina
modules such as riser manifolds, capable of towing 12 streamers, with a says its lubricant exports would to
laydown areas and the flare tower, as 100 metre lateral separation between increase to 546,000 kiloliters this year,
well as the assembly and integration of streamers. It is a 3D/4D seismic vessel up from 458,000 kiloliters last year.
fabricated pancakes/skids. built to the highly merited Ulstein SX134 Pertamina marketing and trade director
To be completed in the 4Q 2012, the design and ULSTEIN X-BOW® hull. It Djaelani Sutomo said Wednesday the
FPSO will be deployed in the pre-salt includes all the latest marine equipment company would continue to improve its
region of the Santos Basin. The FPSO and innovative efficiency enhancing lubricant quality to meet overseas
will have a production capacity of features. It is suitably equipped with demand. Pertamina’s lubricant has been
120,000 barrels of oil per day, and be environment friendly systems such as exported to Australia, the United Arab
able to compress 180 million cubic feet diesel-electric propulsion, high Emirates, Singapore, Myanmar, China
of gas per day and store 1,600,000 specification catalytic converters, double and Japan.
barrels of oil. hull and water treatment systems. THE JAKARTA POST, February
Ongoing at BrasFELS is the upgrading Polarcus Samur is built to the Ulstein 14, 2011
and repairing of Noble’s Brazil-based SX133 design with an ULSTEIN X-
drillships with delivery stretching into BOW® hull. The original 6 streamer Panipat naphtha
2012. version was upgraded to an 8 streamer plant dedicated
NEWSBASE, February 16, 2011 version that is capable of towing both
India’s largest Naphtha Cracker plant at
conventional and wide tow spreads. It is
IOC’s Panipat Complex was dedicated to
Drydocks World equipped with the most advanced seismic
the nation by petroleum minister S Jaipal
names seismic technology commercially available and is
Reddy. The Naphtha Cracker Complex,
highly environment friendly complying
vessels built at a cost of Rs 144.39 billion, will
with DNV clean design notation that
Drydocks World said the ultra-modern provide significant impetus to IOC’s
stipulates defensive design, accident
high ice class seismic vessels Polarcus ambitious foray into petrochemicals. The
prevention and consequence limitation
Alima and Polarcus Samur were named naphtha would be sourced from IOC’s
requirements, thus providing additional
in the presence of key personnel from Gujarat Refinery in western India and
environmental protection. The vessels are
both organisations and specially invited Panipat and Mathura Refineries in north.
fully equipped for controlling and
industry dignitaries at its Dubai shipyard. The Naphtha Cracker Unit at Panipat will
limiting operational emissions and
The two vessels are part of a series of six produce 800 KTA of Ethylene and 600
discharges. These cover fuel tanks’
built for Dubai based geophysical KTA of Propylene.
protection from grounding damage,
operator Polarcus. Three vessels PTI, February 15, 2011
handling of ballast water, fuel oil,
belonging to the series have been sewage and garbage, have environment
delivered. friendly antifouling, have controlled
“The vessels use highly advanced green
reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
AsianOil 16 February 2011, Week 06 page 21
NEWS IN BRIEF
process 540,000 barrels of crude oil a Tackling the current informal structure of
REFINERIES day. fuel subsidies would help investors put a
Formosa Petrochemical owns three better valuation on proposed share sales
Refining capacity naphtha processing plants with a for Indian Oil Corp (IOC) and ONGC.
combined annual capacity of 2.935 MC, February 15, 2011
rise million tonnes of ethylene, a raw material
India’s annual crude refining capacity is for plastics, chemicals and synthetic Indonesia may delay
expected to rise 240 million tonnes in fibers. subsidised fuel
two years, Oil Secretary S. Sundareshan The Directorate General of Budget,
said on Tuesday. He also said the country
restrictions
Accounting and Statistics last month
could be exporting 80-90 million tonnes revised its GDP growth forecast for The government may postpone the
of oil products annually in two years’ Taiwan for this year to 5.03 percent from introduction of a policy to restrict the
time. a November estimate of 4.51 percent distribution of subsidised fuels, to avoid
REUTERS, February 15, 2011 because of the global economic recovery. unrest, a legistator says.
TAIPEI TIMES, February 16, 2011 Satya W. Yudha, a member of House of
Oil refiner expects Representatives Commission VII
better diesel market FUEL overseeing energy, said increases to
global oil prices had forced the
Formosa Petrochemical Corp, the government and the House to rethink
nation’s only publicly traded oil refiner, No fuel price hike
social impacts that the policy might have.
expects the diesel market to improve this Customers of auto fuels can get some “The restriction may cause unexpected
year as economic growth boosts demand respite, with the fuel prices likely to unrest, because the prices of non-
for fuel. remain at the same levels for the subsidised fuels have climbed steeply
This should be a “better year” for the moment. The Petroleum Minister, Jaipal over the last several months,” Satya said
diesel market than last year, Lin Keh- Reddy, said on Tuesday, “Since prices Wednesday, on the sidelines of a hearing
yen, a company spokesman, said are going up we can’t decrease petrol with the Energy and Mineral Resources
yesterday. “It’s a bull market for diesel.” prices. But we are also not going to Ministry.
Diesel accounted for 24 percent of increase price of any commodity at the He added that the House could ask the
Formosa Petrochemical’s sales in the moment.” government to delay implementation of
first nine months of last year and was the “There is no proposal given to oil the restriction to seek better mechanisms
biggest single revenue source, according companies to increase petrol prices at the to control the distribution of non-
to a Nov. 4 company presentation to moment,” he said. subsidised fuels.
analysts. BL, February 15, 2011 “If the government insists on not
The fuel producer rose 0.6 percent to subsidising non-subsidised fuels, I’m
close at NT$91.10 in Taipei trading, after Fuel taxes maybe afraid it will anger private car owners,”
declining as much as 2.8 percent. tweaked he said.
While the outlook for the full-year has Under the restriction policy, the
improved, the profit in Asia for turning India, struggling to balance between
cutting its costly fuel subsidies and government plans to only allow
crude oil into diesel will probably slide motorcycles, public transportation
from the current US$18 a barrel in the curbing inflation, may tweak fuel taxes in
the February 28 budget to cushion the vehicles and fishing vessels to purchase
coming months as fuel demand for subsidised fuels.
heating drops, Lin said. blow of rising global crude prices on
state-run oil retailers, officials said. NEWSBASE, February 16, 2011
The company’s Mailiao refinery can
reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
AsianOil 16 February 2011, Week 06 page 22
reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
AsianOil 16 February 2011, Week 06 page 24
reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
AsianOil 16 February 2011, Week 06 page 25
reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
AsianOil 16 February 2011, Week 06 page 26
COURSES
reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
AsianOil 16 February 2011, Week 06 Back Page
NEWSBASE INFORMATION
HEADLINES FROM A SELECTION OF NEWSBASE MONITORS THIS WEEK CUSTOMERS INCLUDE
AfrOil
Madagascar Oil faces an audit of its work and the loss of
most of its licences.
ChinaOil
Chinese hackers have been accused of stealing sensitive
financial information from major Western oil firms.
EurOil
Australian-based European Energy has launched an IPO
to raise funds for exploration in the Czech Republic.
FSU OGM
The US is reportedly offering Ukraine the technology
needed to launch shale gas extraction.
GLNG
India is in talks with Qatar over importing an extra 15
million tonnes per year of LNG.
MEOG
Noble Energy has said it hopes to develop the Leviathan
gas field off Israel by 2016.
NorthAmOil
Hercules has struck a deal to buy bankrupt Seahawk's
shallow-water drilling fleet.
Unconventional OGM
PetroChina is to buy a 50% stake in Encana’s Cutbank
Ridge assets in Canada for over US$5 billion.
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