Feature Stories

New Offers Keep Petroplus Refinery on Life Support

Just hours away from going into liquidation, Petroplus' Petit Couronne refinery was given hope of a stay of execution Monday after French Industry Minister Arnaud Montebourg announced he had received a nonbinding letter of interest from Libya's sovereign wealth fund (SWF). Petroplus also confirmed interest from four other potential suitors, including fresh offers from Dubai's NetOil and Hong Kong-based Alafandi Petroleum.

Speaking to International Oil Daily, a spokeswoman for the Libyan Investment Authority (LIA) confirmed that the SWF had expressed interest in the stricken refinery near Rouen in France's Normandy region.

Rouen's commercial court, which is overseeing the insolvency process of the 154,000 barrel per day plant, has confirmed that a hearing will take place Tuesday to take stock of offers of intent received by the Nov. 5 deadline, Petit Couronne's management said in a statement Monday, providing hope that France's oldest refinery may benefit from an extension to the deadline.

"The administrators, who have received several new expressions of interest, had expressly asked the [commercial] court [in Rouen] to convene this hearing for Nov. 6, in order that an assessment might be made of the state of the sale process for the refinery," the statement said. "In the course of this hearing a date for examining offers could therefore be firmed up and, if the need arises, a new deadline for the submission of offers could be fixed."

In addition to the letter of interest from LIA, two resubmitted offers have been received from NetOil and Alafandi Petroleum -- after their initial offers were rejected -- as well as two unnamed offers, which will be made public Tuesday, a spokeswoman for Petroplus told IOD Monday.

Roger Tamraz, head of NetOil, told Reuters that his company had improved its offer, and said that UK major BP was interested in supplying the refinery at volume of 120,000 b/d for a three-year period.

Petroplus was once Europe's largest independent refiner with facilities across the continent, but over the past 10 months the now insolvent Swiss firm has sold three and shut one of its five refineries.

Germany's Ingolstadt and Belgium's Antwerp plants were both sold to commodity trader Gunvor, while Petroplus' Swiss refinery, Cressier, was sold to the Varo joint venture, between the Netherland's Vitol Group and Belgium-based private investment company AtlasInvest.

Petroplus' UK refinery in Coryton, however, while being the bankrupt firm's most profitable, failed to find a buyer and is now in the process of being converted into the UK's first deepwater fuel import terminal in a joint venture between Vopak, Royal Dutch Shell and Greenergy (IOD Jun.27'12).

Petroplus filed for insolvency proceedings in January this year after failing to agree with creditors to extend deadlines on loan repayments.

Edward Gomersall, London


Canada Extends Review of CNOOC-Nexen Deal Again

As it works on drafting clearer rules for foreign investment in the country, Canada has again extended its deadline for a decision on the controversial bid for oil sands player Nexen by China National Offshore Oil Corp. (CNOOC) (IOD Oct.26'12).

Industry Minister Christian Paradis said late on Friday that the government will extend its decision until Dec. 10 so "the required time will be taken to conduct a thorough and careful review of this proposed investment."

The federal government's decision on the CNOOC bid is seen as setting an important precedent for foreign state-owned companies that seek to buy Canadian companies outright. The Chinese company has offered US$15.1 billion for Nexen, and the deal is worth about US$17.9 billion including assumed debt.

Controversy surrounding the issue of foreign takeovers was ratcheted up recently when Ottawa blocked a bid by Malaysia's state-owned Petronas -- worth about US$5.9 billion including assumed debt -- for shale gas explorer Progress Energy Resources.

That proposed deal had previously attracted far less attention than CNOOC's bid for Nexen, which would be the largest ever foreign purchase by a Chinese company, if it ultimately wins approval (IOD Oct.23'12).

Under current law, the government has to assess whether foreign investment deals will provide a "net benefit" to Canadians, a rather nebulous condition that the government intends to replace with clearer criteria.  

Although it has provided few clues so far, Ottawa may ultimately tear a page out of Australia's foreign investment playbook, which features a two-tier approach that differentiates between publicly-held companies and state-owned firms.

The government could even further postpone a decision on Nexen's fate, provided that CNOOC consents to another extension. But whatever it decides at the end of the day, it is likely to have a big impact on Canada's oil and gas industry.

A report issued last week by Calgary-based investment bank Peters & Co. estimated that some C$17 billion (US$17 billion) worth of oil sands assets are currently up for sale -- roughly equal to the value of oil sands assets sold over the the past decade.

Sellers of oil sands assets include US oil and gas companies while potential buyers include big state-owned companies based in Asia. The Peters & Co. report said that US firms now prefer tight oil plays back home over Canadian oil assets, which have been hampered by low prices over the past year or so because of pipeline transportation bottlenecks.

At a recent foreign investment conference in Calgary, a lawyer specializing in energy takeovers told International Oil Daily that he knew of "at least a dozen" Canadian oil and gas assets being eyed by Chinese companies.

“The current high level of oil sands assets potentially for sale results from the cost-intensive nature of developing these assets, combined with the lower netbacks compared to other crude oil plays in North America,” the Peters & Co. report stated.

It can be difficult to keep track of foreign investments that fall below 10% of a Canadian oil and gas company's total assets since the law does not require these to be made public. In the US, a 5% ownership stake in a public company has to be disclosed.

Oil sands assets currently up for sale include those owned by US firms Marathon Oil and Murphy Oil. Marathon has said it is in talks to sell part of its 20% stake in the Athabasca Oil Sands project, while Murphy Oil is looking at selling its 5% stake in the Syncrude oil sands project.

James Irwin, Toronto
 


Libya Eyes Big Investments in Downstream

Libya's oil ministry is formulating its 2013 budget and while considering a range of options, significant investment in downstream operations appears likely, Deputy Oil Minister Omar Shakmak told International Oil Daily.

"It's too early to say what the estimated budget will be, but we expect to allocate significant sums toward downstream activity such as refinery studies as well as prequalifying companies to look at major upgrades to existing refineries. I myself would recommend upgrading the downstream sector in terms of refineries but also petrochemical complexes. It would help the economy and we need to seek out investors," said Shakmak.

He said final decisions on the budget are made based on input from officials from Libya's National Oil Corp. (NOC), the oil ministry, the planning and electricity ministries, as well as First Deputy Prime Minister Sadiq Abdulkarim Abdulrahman Karim. A final summary of the proposed operational and capital expenditures should be finalized by Nov. 25 at the latest, at which point it will be sent to various officials -- including the board of NOC -- for comments and revisions. 

Libya is hoping for a period of relative stability for its oil sector after nominations for the post of oil minister underwent frequent revisions over the last few months. The latest nomination is Abdulbari Ali Elhadi al-Arusi. Al-Arusi, 51, comes from Zawiya in the west, and has studied chemical engineering at UK-based universities. 

Previous incumbents such as Abdurahman Benyezza were felt to be too closely associated with the former Qaddafi regime, leading to the nomination of Mabruk Issa Abu Haroura under the former government of Prime Minister Mustafa Abushagur (IOD Oct.5'12).

Al-Arusi does not suffer from Qaddafi association. From 1982 he worked at state-run Sirte Oil Co., located at Marsa el-Brega, 800 kilometers from Tripoli. Al-Arusi's experience focused on the inspection of the Marsa el-Brega Oil Terminal and the industrial complex at Sirte. After his arrest in June 1998, he was imprisoned for eight years in the Abu Salim prison where many political opponents of the regime were incarcerated. Al-Arusi was released in April 2006 and his brother was killed in the recent uprising against Qaddafi's rule.

Libya's focus on downstream activity could lead to major redevelopments. Energy Cities Development Co. (ECDC) was set up in 2010 as a holding firm to oversee the upgrades to the cities of Marsa al-Brega and Ras Lanuf on the Mediterranean coast, home to the country's largest, 220,000 barrel per day refinery. 

"We are still in the early stages on this project and are talking to potential investors in Cairo and Bahrain where meetings were held in mid-October over the terms of proposed investment contracts," an ECDC representative told IOD. "Petrochemical firms from Saudi Arabia have expressed interest such as Saudi Basic Industries Corp. (Sabic) and logistical firms for the sector such as [Texas-based] Venmar."

US-based Fluor carried out a master plan, calling for a 15-year redevelopment, split into three phases and estimated to cost up to $54 billion. The industrial zone to be created will have new refinery and petrochemical complexes in both cities with associated marine infrastructure. 

Plans at Marsa el-Brega include a 350,000 b/d refinery, an olefins complex and aromatics plant and the refurbishment of the existing 3.2 million ton per year LNG plant, as well as construction of a new 1.1 billion cubic foot per day gas-to-liquids (GTL) plant.

At Ras Lanuf, the refinery will be upgraded and naphtha and ethane crackers and an olefins facility will all be added. Gas developments include two new GTL plants with combined capacity of 2.2 Bcf/d of natural gas and a grassroots 5 million ton/yr LNG facility. 

Tom Pepper, London


British Officials in UAE to Bolster Ties

British Prime Minister David Cameron and BP Chief Executive Bob Dudley paid separate visits to the United Arab Emirates on Monday to meet with senior leaders in Abu Dhabi. UK-UAE relations have been in focus recently, particularly after BP was not invited to prequalify to operate Abu Dhabi's onshore fields after 2014 (IOD Jul.11'12)

Cameron's primary focus was to strengthen ties with the Gulf region, including tightening the defense relationship. "The Prime Minister will use the trip to specifically promote the Typhoon fast jet to Gulf leaders," said a statement from Cameron's office. 

During a talk with Emirati students on Monday, he broached the touchy subject of the Arab Spring, his office said. The prime minister has been under pressure from parliamentarians and UK-based human rights groups over his failure to criticize the UAE over the recent string of arrests of Emirati citizens. The UAE accuses them of being part of a Muslim Brotherhood plot to destabilize the country, while human rights groups call those arrested prisoners of conscience.

He also met with Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed, who sits on Abu Dhabi's 11-member Supreme Petroleum Council -- the oil body that decided to exclude BP from prequalification last June. Cameron met with Sheikh Mohammed over the summer, but so far Abu Dhabi has not reversed its decision to leave out BP. No clear reason has emerged for BP's exclusion so far.

BP acknowledges that it did not receive the prequalification letter, but said Monday that it is still in discussions with Abu Dhabi leadership. It has still not been informed that it has been ruled out of the upcoming bid process, it said.

Dudley was in the country Monday for the third meeting of a UAE-UK business forum, and was not part of Cameron's delegation, International Oil Daily understands. He will be leading BP's delegation to the giant Adipec oil and gas exhibition next week.

Alex Schindelar, Dubai


Market Eye: Saudis Lift Prices for Light Grades to Asia

Saudi formula prices split for December term exports to the Asia-Pacific region, with the lighter grades rising and the heavier grades falling. Some Asian traders felt the term prices were too high, especially for the lighter grades, but overall they did not generate too much market resistance.

The price differential for naphtha-rich Arab Super Light crude jumped by $1.50/bbl while the differential for Arab Extra Light, which also boasts significant yields of naphtha, rose by 75¢/bbl. 

A Northeast Asian refining executive, who was generally satisfied with most of the other term differentials, complained about the Arab Super Light increase. 

Naphtha crack spreads to benchmark North Sea Brent crude rose by $14.27/ton over the last month to reach $148.70/ton on Nov. 1, the highest level in more than a month and a half. But market players were unconvinced that this alone provided enough justification for the price increaes in Arab Extra Light and Super Light. A second Northeast Asian refining official said that Saudi Aramco had simply "put too much value" on naphtha as the main driver for the lighter grades this month.

Arab Light crude's term differential rose by a more modest 20¢/bbl, a level that was not too far off from the predictions of most market players that International Oil Daily surveyed last week before the formula prices were released. Six out of eight market players believed the Arab Light differential would either remain unchanged or increase by up to 25¢/bbl. But a northeast Asian refiner believed that it should have fallen instead, pointing out that despite the strong naphtha cracks, gasoline and fuel oil cracks have tumbled while middle distillate cracks are just "hanging on" right now. He noted that, overall, refining margins look more likely to move down rather than up -- a sentiment echoed by another trader.

Gasoline crack spreads to Brent plunged by $8.53/bbl over the past month to $4.26/bbl on Nov.1. Fuel oil crack spreads to benchmark heavy sour Dubai crude fell by $3.15/bbl over the last month to a discount of $9.41/bbl on Nov.1. For jet and gasoil, crack spreads to Dubai have not budged much compared to a month ago.

Term differentials for Arab Medium and Arab Heavy fell by 10¢/bbl and 45¢/bbl respectively. Three of the five market players IOD talked to last week predicted that the Arab Heavy differential would slip by levels ranging from 35¢/bbl to 55¢/bbl.

Until more developments unfold, the effect of the Saudi formula prices on the market could be relatively limited at the moment. The northeast Asian refining executive unhappy with the Arab Light term differential worried that the latest Saudi formula prices might undermine his refining margins, forcing a cut in refining run rates. But until other pieces fall into place, such as the release of Abu Dhabi official term prices, it is hard to be more certain. 

The high differentials for the lighter Saudi grades could boost demand for competing Abu Dhabi light sour crudes like Murban, which have naphtha yields that lie closer to Arab Extra Light than Arab Light.

Freddie Yap, Singapore

 

Saudi Arabia Differentials For Formula Prices
(in US$) Market
Link
December November Change
Asia
 Sup. Lt.-50 (O+D)/2 8.05 6.55 1.5
 Extra Light-37 (O+D)/2 5.65 4.9 0.75
 Light-33 (O+D)/2 2.95 2.75 0.2
 Medium-31 (O+D)/2 0.55 0.65 -0.1
 Heavy-27 (O+D)/2 -1.55 -1.1 -0.45
US
 Ex. Lt.-37 Asci 2.6 3.5 -0.9
 Light-33 Asci 0.75 1.25 -0.5
 Medium-31 Asci -1.5 -1.6 0.1
 Heavy-27 Asci -3 -3.8 0.8
NW Europe
 Extra Light-37 B-wave 2.1 0.75 1.35
 Light-33 B-wave -0.2 -1.75 1.55
 Medium-31 B-wave -2.6 -3.95 1.35
 Heavy-27 B-wave -5.2 -6.5 1.3
Mediterranean
 Extra Light-37 B-wave 1.65 0.6 1.05
 Light-33 B-wave -0.55 -1.35 0.8
 Medium-31 B-wave -2.85 -3.5 0.65
 Heavy-27 B-wave -5.25 -6.05 0.8

 Notes: All prices are quoted on an f.o.b. basis. 
Benchmarks are Brent weighted average (NW Europe and Med), Oman/Dubai average (Asia), Argus Sour Crude Index (US).
Source: Saudi Aramco.


Crude, Products Rise on Expections for Higher US Demand

Crude oil and product futures rose on Monday in anticipation of demand picking up again in areas of the US East Coast battered by Hurricane Sandy last week.

On the New York Mercantile Exchange (Nymex) December gasoline futures rose 6.28¢ to $2.6202 per gallon -- even as an influential survey showed that US retail gasoline prices fell 20.75¢ to a nationwide average of $3.5454 per gallon over the past two weeks, their biggest drop since 2008.

Heating oil futures rallied 3.13¢, settling at $2.9828 per gallon ahead of a winter storm expected to lash the US Northeast later this week.

Strength in the products market bolstered crude. In London, December Brent crude futures jumped $2.05 to $107.73 per barrel.

In New York, the December Nymex WTI crude contract gained 79¢, settling at $85.65.

The US Energy Information Administration (EIA) said 73% of filling stations in the New York Metropolitan Area were able to sell fuel on Sunday, up from 62% on Saturday.

Analysts said a surge of preemptive buying ahead of Sandy's arrival had further tightened already low gasoline stocks in the region, while many of those filling stations that had been able to sell gasoline immediately after the storm had quickly run dry.

“It’s more of an electricity problem,” said Jeffry Grossman, president of BRG Brokerage. “There were people who weren’t getting deliveries, but a large number of people just couldn’t pump.”

Foreign flagged vessels have now started to bring gasoline and heating oil to terminals in Brooklyn and New Jersey, one ship broker said, following the federal government’s recent decision to waive Jones Act requirements temporarily.

Meanwhile, power supplies were resumed to the massive fuel hub in Linden, New Jersey, late on Sunday. Colonial Pipeline said it resumed deliveries of refined products to about a third of its clients’ terminals that same day.

The National Guard and the Defense Logistics Agency are also moving hundreds of thousands of gallons of fuel into the region, and traders say motorists may soon be able to fill their tanks without a half hour wait at the pump.

On the other hand, analysts say regional supplies will still be hampered by damage to several terminals and the continuing outage at Phillips 66’s 238,000 b/d Bayway refinery in New Jersey.

Phillips 66 said it was resuming limited deliveries to wholesale customers from its Linden terminal, and that “the company is working on alternative arrangements to continue supplying the Linden Terminal until the Bayway Refinery resumes normal operations.”

“The whole supply chain is breaking down, and probably will continue to over the next few days,” said Matt Smith of Schneider Electric, who said that terminals were the weakest link in the chain as they had sustained most damage in the storm.

But Smith added that Sandy had mainly been a demand destruction event, despite the media's focus on the long lines at filling stations in the region.

Frans Koster, New York


Mideast/Africa

Total, BP Move Ahead in Libya

Total and BP are pressing ahead with onshore and offshore exploration programs in Libya.

Total received expressions of interest from firms on Monday for a 3-D seismic survey over onshore Areas 70/1 and 87/3 in the Sirte Basin in the east of the country, which extends out into the Mediterranean Sea. Meanwhile, BP has selected a firm to carry out an offshore geotechnical survey.

French major Total is seeking a company to process 1,200 sq km of 3-D seismic. Up to 500 sq km of existing data will be reprocessed and 700 sq km of new seismic will be shot. An additional 200 sq km may also be reinterpreted.

BP will use its survey findings to plan where to drill exploration wells ahead of an upcoming offshore $2 billion drilling program in 2014. "The geotechnical contract is for finalizing the exact well locations and testing the near-surface or seabed conditions," says a BP representative. 

BP will start an onshore drilling campaign in the second half of 2013. The firm plans to drill a total of 17 new wells under its original exploration commitment -- five offshore wells and 12 onshore. At least 14,000 sq km of 3-D was shot in the onshore Ghadames Basin in the west. 

International oil companies' upstream plans were set back due to last year's Libyan revolution. "We were days away from starting to drill onshore in February 2011 when we had to evacuate the rig site," said the BP representative. BP lifted force majeure in Libya in late May (IOD May30'12).


Oman Offers Up Seven Blocks

In an ongoing bid to inject fresh investment into Oman's oil and gas sector, the country's oil ministry has offered up seven blocks in a new licensing round.

The licensing round was launched on Sunday, according to the local press. Interested parties will have until Jan. 31, 2013, to submit bids for the blocks, the local press said.

The bid round includes three offshore and four onshore blocks. The four onshore blocks include Blocks 43A, 48, 56 and 57. The three offshore blocks, which stretch along the northern and eastern coasts of Oman, include Blocks 18, 41 and 59 (IOD Oct.17'12).

As it launches the latest round, the oil ministry is also in the process of finalizing awards with interested companies for other blocks offered up in a series of bid rounds since 2010.

Late last month, Oil Minister Mohammed al-Rumhy projected average annual output this year of around 915,000 b/d, with current output standing around 900,000 b/d (IOD Oct.26'12).


US Extends Sanctions on Sudan

The US has renewed economic sanctions against Sudan that prohibit trade and investment in the country's petroleum sector out of continued concern for conflict and humanitarian crises in the region.  

The Executive Order signed by President Barack Obama last week extends the sanctions regime against Sudan that has been renewed on an annual basis since first put in place by the Clinton administration in 1997.

A statement released by the US State Department acknowledged progress between Sudan and neighboring South Sudan over their disputes. The two sides reached an agreement in August over oil transit fees which was expected to pave the way for South Sudan to resume exports northward after suspending them earlier this year (IOD Sep.28'12).

But the State Department justified an extension of sanctions by citing outstanding issues over the disputed Abyei region and warning that "the ongoing conflict in Southern Kordofan, Blue Nile, and Darfur continue to threaten regional stability."  

Following the independence of South Sudan last year, the US eased economic sanctions by issuing general licenses authorizing "all activities and transactions relating to the petroleum and petrochemicals industry" of the newly formed African nation. But sanctions against Khartoum have remained in place.   


Anadarko Sets Kenya Drill Date

Anadarko is scheduled to begin exploring for oil and gas in Kenya in December, with plans to drill two wells, the Ministry of Energy's top official said Monday, continuing the East African country's surge of exploration activity.

The two wells, known as the Kiboko prospect in Block L11B and the Kubwa prospect in Block L7, will be drilled back-to-back and cost about $140 million each.

In recent months East Africa has been a center of oil and gas exploration after several big discoveries, including Kenya's second-ever oil find announced by British explorer Tullow Oil and Canadian venture partner Africa Oil last week.

Independent US oil and gas company Anadarko has not yet decided which well will be bored first, but drilling is scheduled to start on Dec. 13, according to Patrick Nyoike, Kenya's permanent secretary of energy.

The company is "drilling in Block L7 and Block L11B, back-to-back. We are now preparing them to start the drilling. I guess next year ... I'll be talking about billions of barrels discovered in Kenya," Nyoike told reporters on the sidelines of a nuclear power workshop.

Anadarko is the operator of Blocks L7 and L11B and holds 45% of the licenses in each. French oil major Total has a 40% stake, and Cove Energy holds the remainder.

Energy officials expect explorers to drill at least a dozen more wells in the next 12 months onshore and offshore Kenya. (Reuters)


Asia-Pacific

China Closer to Fuel Price Cut

China's domestic fuel prices could be lowered this month due to falling international crude oil prices, according to local consultancies monitoring the situation.

Gasoline and diesel prices are forecast to be cut by 300-350 yuan ($48-$56) per metric ton by mid-November, with some market players already reducing wholesale and retail prices on the back of weak demand and the anticipation of an official price adjustment by China's National Development and Reform Commission (NDRC).

China's average diesel wholesale price has fallen by 83 yuan/ton from two weeks ago to 8,283 yuan/ton now, while gasoline wholesale prices have slipped by 175 yuan/ton to 9,017 yuan/ton. State firms Sinopec and PetroChina have reportedly both set their ex-refinery prices 100-300 yuan/ton lower than the NDRC prices. Around 26% of Beijing's retail stations have started giving customers discounted prices, with some outlets selling at as much as 7% below the official levels.

Crude prices are down by more than 3% since China's last fuel price adjustment on Sep. 11, close to the 4% fluctuation that would trigger another change. A price cut -- unlike a price hike -- would not be politically sensitive ahead of China's 18th National Congress from Nov. 8 (IOD Sep.11'12).

Traders expect gasoline buying interest to remain weak but stable until the end of the year because of low seasonal demand. As winter kicks in, however, diesel is set to see higher demand from coal trucks.

Chinese refinery throughput is still very high, with run rates expected to be at over 85% in November, according to energy consultancy C1, leaving China's oil product market over-supplied.


China to Offer Shale Subsidies

Top energy consumer China will offer subsidies to shale gas developers as the government looks to replicate the production boom seen in the US.

The government will offer 0.40 yuan (6¢) for each cubic meter of shale gas produced, the Ministry of Finance said in a statement on Monday, twice the subsidy offered to coalbed methane.

China has been hunting for the unconventional resource since late 2009 but has no commercial production to date.

China is estimated to have what could be the world's largest shale gas reserves, but it is still unclear whether the country will be able to develop them on a commercial scale due to geological and technological challenges.

While it does not have any commercial production of shale gas yet, it has set an ambitious target for production to reach 6.5 Bcm by 2015, accounting for about 6% of its current total gas output. Output is targeted to reach 60 Bcm-100 Bcm by 2020.

Companies that have already started developing and utilizing shale gas, as well as those who have already installed equipment to do so, could qualify for the subsidies, the ministry said. (Reuters)


Myanmar Investment Law Signed

Myanmar President Thein Sein signed late last Friday the country's new foreign investment law, just one day after the parliament passed the revised bill. 

Daily newspaper Myanmar Times confirmed on Monday that among the 10 amendments proposed by the president last week, and accepted, was the removal of a 50% upwards limit and 35% minimum on foreign investment in 13 restricted sectors. "Under the final version, the investment ratio is negotiable between the investor and their local business partner," the newspaper said, a move that should ease oil companies' minds.

Energy was said not to be among the 13 restricted sectors targeted by the law but some oil companies were wary about investing before the law was passed and signed into law, a consultant based in Myanmar said.


Europe/FSU

Norway Recommends New Pipes

Gassco has recommended that oil from the Edvard Grieg and Ivar Aasen discoveries in Norway's section of the North Sea is landed at the Sture terminal near Bergen.

Norway's petroleum and energy ministry commissioned state pipeline operator Gassco in February to assess infrastructure solutions for oil from future developments in the Utsira High area.

This work has been conducted in close dialogue with the licensees in the Edvard Grieg, Ivar Aasen and Johan Sverdrup discoveries as well as with the Norwegian Petroleum Directorate.

Gassco said it had looked at the feasibility of a collective transport solution for the Utsira High fields but decided that installing a system of this kind to start up in 2015 "wouldn't be appropriate."

The company recommends that oil from Edvard Grieg and Ivar Aasen is piped via the existing Grane oil pipeline to the Sture terminal, requiring a new pipe to be laid from Edvard Grieg and tied into Grane. Plans call for the latter and Ivar Aasen to come on stream in 2015 and 2016, respectively.

Work on assessing various infrastructure solutions for oil from Johan Sverdrup will continue until a concept is decided before end-2013. Based on expectations about Johan Sverdrup's production volume, Gassco considers a new pipeline to Sture or Mongstad further north to be the most relevant solution for this field. Plans call for it to come on stream in 2018.

Gassco's recommendation to the ministry is supported by the licensees in the above-mentioned discoveries.


BG Secures New Credit Facility

BG Group on Monday announced a new five-year, $3 billion syndicated committed credit facility which replaces $2.3 billion of expiring bilateral committed credit lines. The execution of this new revolving credit facility was coordinated by Bank of America Merrill Lynch and HSBC and includes a diversified group of international banks.

The new facility is in addition to the $2.2 billion of five-year bilateral committed credit lines secured in 2011, taking the total of BG Group's undrawn committed bank borrowing facilities to $5.2 billion.

BG's share price collapsed by 14% last Wednesday, when it announced third-quarter results, and remains well under levels at the start of last week. Investors have expressed concerns about strains on the company's balance sheet related to large capital commitments. 


Bayerngas Names CEO

German gas marketer Bayerngas has appointed Gunter Bauer its new chief executive from Dec. 1.

He succeeds both acting CEO Thomas Rupprich, who after six months in the job will revert to his previous role as gas supply chief, and the previous CEO Marc Hall who stepped down in June. 

Since 2006 Bauer has been head of strategy at Munich city utility Stadtwerke Munchen (SWM), the largest Bayerngas shareholder with a 48.66% interest. Six other Bavarian city utilities and one in Austria make up the other shareholders in Bayerngas, understood to be Germany's fifth-largest gas marketer. Bauer also pioneered development of SWM's renewables portfolio. 

UK-born Hall's career was spent mostly at Austrian oil group OMV until 2008 when he took up the top Bayerngas job. 


Americas

Mitsui Boosts Eagle Ford Outlay

Japan's Mitsui has agreed to an expanded development program at the Eagle Ford shale project in Texas, in which it holds a 12.5% working interest. The move will result in the company's total project expenditure rising to over $1.8 billion, from the $1.2 billion estimated in June 2011 when Mitsui announced the acquisition of the stake from US company SM Energy (SME). 

The project's operator, Anadarko Petroleum, will accelerate exploration activity as well as expand gathering and processing facilities, as it seeks to increase the total number of wells drilled over the next decade.  

Mitsui has adjusted up its expected net share of peak daily output to between 24,000 boe and 30,000 boe, from an original estimate of 20,000 boe/d. The Japanese company acquired its stake from SME by agreeing to carry up to $680 million of the latter's future development costs in the project. Mitsui sees the Eagle Ford becoming one of its core businesses in the future. SME still holds 14.5% stake.

Mitsui in 2010 also entered a separate deal with Anadarko relating to the development and production of Marcellus Shale gas in Pennsylvania, which the Japanese company has deemed a core project as well. Under the deal, Mitsui would carry $1.4 billion of Anadarko's development cost in return for 32.5% of the latter's interest in the project leases. Mitsui had estimated its total Marcellus project cost to be $3 billion-$4 billion, with a net peak daily production share of 360-460 MMcf/d.


Petrobras Loses Tax Case

Brazil's state-led oil company Petrobras may have to pay a 4.78 billion real ($2.35 billion), decade-old tax claim related to the lease of foreign offshore oil platforms after a judge ruled against the company, Petrobras said on Monday.

Brazilian federal judge in Rio de Janeiro quashed an injunction won by Petrobras in March allowing it to avoid payment until a court challenge of the tax ruling was resolved, Petrobras said in a filing with Brazilian securities regulators.

Brazil's authorities are seeking taxes allegedly owed on payments to foreign companies between 1999 and 2002, Petrobras said. The payments to lease offshore oil platforms were made in countries where taxation of platforms is lower than in Brazil.

Petrobras, miner Vale SA, and other Brazilian multinationals have been fighting what they consider to be double taxation of their activities by Brazilian authorities. Officials allege that some companies improperly move business offshore to avoid taxes in Brazil.

Petrobras has included provisions for the payment related to the latest judicial ruling in its accounts for years, the company said in the statement. It also said it is considering options for an appeal.

Petrobras leases many of its oil-production platforms, ships and drilling rigs from its own Netherlands-based shipping subsidiary as well as from other foreign companies it does not own, such as Transocean. (Reuters)


YPF Mulls New Refinery

Argentina's state-controlled energy company YPF is evaluating the construction of a new refinery that would have the capacity to process about 200,000 b/d of crude oil.

The refinery's first set of facilities would be up and running by 2018 or 2019, while a second set would be operational in 2023, said Daniel Palomeque, head of the company's La Plata refinery. An industry source with knowledge of the project said the first stage would require a roughly $7 billion investment.

Palomeque told participants at a conference in Buenos Aires that YPF aims to invest $12.5 billion in refining and logistics in the next five years. The company had already said it seeks to invest about $7 billion a year through 2017 to boost Argentina's flagging oil and natural gas production.

YPF operates three of the country's biggest oil refineries: La Plata, which has a capacity of 180,000 b/d; Lujan de Cuyo, with 106,000 b/d; and Plaza Huincul, with 25,000 b/d. (Reuters)


Tables

Stock Market Scorecard Nov. 5, 2012

All data are produced by International Oil Daily in cooperation with Reuters.

 

Integrated Majors
  Close 1-Day % Chg.
Nov.5 Chg. % Chg. 10-Day 52-Wk YTD
Hess 54.90 +1.51 +2.83 +1.14 -12.73 -3.35
Chevron 109.19 +0.82 +0.76 -3.70 +2.88 +2.62
Exxon Mobil 90.63 +0.36 +0.40 -1.65 +14.93 +6.93
Statoil 24.42 +0.04 +0.16 -5.28 -4.68 -4.65
Shell-B 71.54 +0.04 +0.06 +1.75 -1.26 -5.88
Shell-A 69.34 -0.12 -0.17 +0.87 -1.92 -5.13
BP 42.24 -0.30 -0.71 -2.00 -4.04 -1.17
Suncor 34.57 -0.26 -0.75 +1.71 +5.01 +19.91
Total 49.98 -0.44 -0.87 -2.74 -4.23 -2.21
Eni 45.05 -0.59 -1.29 -1.92 +2.60 +9.16
EIF Index 393.81 -0.08 -0.02 -2.53 +7.65 +3.70

 

Large Producers
  Close 1-Day % Chg.
Nov.5 Chg. % Chg. 10-Day 52-Wk YTD
Marathon Oil 30.51 +0.56 +1.87 -0.26 +14.10 +4.24
Pioneer 107.77 +1.81 +1.71 +2.35 +14.47 +20.44
EOG Resources 116.81 +1.61 +1.40 +3.31 +16.77 +18.58
EnCana 22.29 +0.19 +0.86 -6.78 +3.53 +20.29
Murphy Oil 59.83 +0.48 +0.81 -3.81 +4.18 +7.34
Anadarko 70.70 +0.44 +0.63 +0.51 -14.54 -7.38
Canadian Natural 30.02 +0.03 +0.10 -3.94 -20.67 -19.67
Devon Energy 57.83 +0.03 +0.05 -6.73 -12.46 -6.73
Talisman 11.11 -0.02 -0.18 -15.32 -23.06 -12.86
ConocoPhillips 57.53 -0.12 -0.21 +0.14 +7.05 +3.56
Apache 80.95 -0.27 -0.33 -6.81 -20.32 -10.63
Occidental 77.83 -0.50 -0.64 -7.73 -18.25 -16.94
Chesapeake 18.27 -0.22 -1.19 -12.21 -37.07 -18.03
Nexen 24.31 -0.33 -1.34 -4.29 +37.81 +52.80

 

Refiners
  Close 1-Day % Chg.
Nov.5 Chg. % Chg. 10-Day 52-Wk YTD
Tesoro 36.93 +1.47 +4.15 -3.22 +33.23 +58.09
Phillips 66 47.76 +1.55 +3.35 +6.99 NA NA
Marathon Petroleum 54.76 +1.71 +3.22 -0.33 +41.61 +64.49
Holly Frontier 38.92 +1.20 +3.18 +1.94 +19.35 +66.32
Valero 28.88 +0.68 +2.41 -2.20 +13.52 +37.20
Alon 12.92 +0.18 +1.41 -1.52 +65.43 +48.34

    

Integrated Energy
  Close 1-Day % Chg.
Nov.5 Chg. % Chg. 10-Day 52-Wk YTD
Enbridge 40.05 +0.23 +0.58 +0.55 +14.72 +7.06
Williams 33.21 +0.14 +0.42 -5.03 +31.07 +23.17
TransCanada 45.45 +0.03 +0.07 +2.71 +7.42 +4.08
Oneok 45.35 -0.34 -0.74 -4.77 +17.76 +4.63
Sempra 68.24 -0.89 -1.29 +0.68 +27.50 +24.07
Duke Energy 64.06 -0.88 -1.36 -2.21 +2.61 -2.94

 

Service Companies
  Close 1-Day % Chg.
Nov.5 Chg. % Chg. 10-Day 52-Wk YTD
Transocean 48.64 +2.58 +5.60 +0.25 -0.73 +26.70
Nabors 13.88 +0.33 +2.44 -6.78 -26.29 -19.95
Patterson-UTI 16.64 +0.33 +2.02 -3.87 -21.62 -16.72
Schlumberger 69.95 +1.18 +1.72 -5.47 -7.88 +2.40
Baker Hughes 42.03 +0.44 +1.06 -6.08 -26.07 -13.59
Halliburton 32.29 +0.18 +0.56 -7.69 -14.69 -6.43
Ensco 58.68 -0.91 -1.53 -0.58 +11.35 +25.06

 

Emerging Markets
  Close 1-Day % Chg.
Nov.5 Chg. % Chg. 10-Day 52-Wk YTD
Sasol (S. Africa) 42.70 +0.60 +1.43 -1.66 -9.61 -9.92
Copel (Brazil) 15.04 +0.21 +1.42 -2.78 -23.58 -28.31
CNOOC (China) 211.30 +2.93 +1.41 +2.13 +8.54 +20.96
Petrobras (Brazil) 21.72 +0.27 +1.26 -4.74 -20.29 -12.60
P'bras Energia (Arg.) 4.40 +0.03 +0.69 -0.90 -37.08 -30.27
Enersis (Chile) 17.26 +0.09 +0.52 +1.65 -10.80 -2.10
Endesa (Chile) 47.99 +0.10 +0.21 -1.32 +0.40 +8.21
PetroChina (China) 136.56 +0.25 +0.18 -2.96 +5.45 +9.85
Sinopec (China) 107.45 -0.87 -0.80 +1.98 +10.76 +2.28
Kepco (S. Korea) 13.11 -0.17 -1.28 +6.07 +18.32 +19.40
TGS (Argentina) 1.50 -0.08 -5.06 -2.60 -53.13 -50.02

     


Latest Market Trends Nov. 5, 2012

     


Daily Oil and Gas Price Review Nov. 5, 2012

All data are produced by International Oil Daily in cooperation with Reuters.

 

Crude Oil Futures
$/bbl Chg. 1st
Month
5-day
Avg.
2nd
Month
3rd
Month
ICE Brent +2.05 107.73 107.87 106.91 106.27
Nymex Light Sweet +0.79 85.65 85.90 86.14 86.73
DME Oman -2.18 103.42 105.18 102.42 101.82

 

Spot Crudes and Opec Basket
International Crudes ($/bbl)
Cash/Spot Chg. Spot
Price
5-Day
Avg.
Month-
Ago
Year-
Ago
Opec Basket* -1.20 105.06 106.30 108.77 106.35
Brent (Dated) -1.20 106.44 108.96 113.04 111.07
Dubai (UAE) -4.28 105.97 107.55 108.66 103.93
Oman -7.75 103.55 107.04 108.47 110.12
WTI (US, Cushing) +0.72 85.62 85.89 89.23 90.29
Minas (Indonesia) +0.49 107.13 108.76 108.49 114.71
Tapis (Malaysia) +0.04 110.59 112.38 116.16 121.02
Forties (UK) -1.10 106.19 108.60 112.81 110.66
Oseberg (Norway) -1.20 107.19 109.71 112.81 112.06
Bonny Light (Nigeria) -1.20 106.99 106.23 114.29 113.66
Urals (Russia) -5.77 105.04 107.61 111.79 111.01
North American Crudes ($/bbl)
Cash/Spot Chg. Spot
Price
5-Day
Avg.
Month-
Ago
Year-
Ago
WTS (Midland) -0.16 77.62 79.26 86.33 --
LLS (St. James) -0.03 104.62 106.74 109.13 --
Mars (Clovelly) +0.09 99.12 100.82 102.98 --
ANS (California) +0.54 102.65 103.05 107.08 --
Maya (Mexico) +0.51 89.90 91.19 96.72 --
*Opec basket price is for previous day.

 

Refined Product Futures
  Chg. 1st
Month
5-Day
Avg.
2nd
Month
3rd
Month
Nymex (¢/gal)          
RBOB Gasoline +6.28 262.02 266.36 260.01 260.66
Heating Oil +3.13 298.29 302.37 298.82 298.49
ICE (London)          
Gasoil ($/ton) -2.50 922.50 942.25 920.00 918.00
Gasoil (¢/gal.) -0.79 292.86 299.13 292.06 291.43

    

US Gulf Coast Spot Refined Products
Chg. Spot
Price
5-Day
Avg.
Month-
Ago
Gasoline (¢/gal)        
Regular Gasoline +10.19 253.50 246.49 303.83
Premium Gasoline +14.30 259.50 248.07 345.83
Regular RBOB +10.19 253.50 253.19 298.33
Mid-Distillates (¢/gal)        
Heating/Gasoil* +6.04 289.29 291.58 312.92
Low Sulfur Gasoil/Diesel† +3.04 295.54 298.68 322.67
Jet Fuel +2.04 288.54 292.48 315.42
Fuel Oil ($/bbl)        
1% Sulfur 0.00 99.72 100.66 102.78
3%-3.5% Sulfur 0.00 90.97 91.94 96.47
New York Spot Refined Products
Chg. Spot
Price
5-Day
Avg.
Month-
Ago
Gasoline (¢/gal)        
Regular Gasoline +5.19 266.75 270.69 318.33
Premium Gasoline +4.94 277.00 281.14 339.58
Regular RBOB +5.19 266.75 270.69 317.58
Mid-Distillates (¢/gal)        
Heating/Gas Oil* +2.79 298.54 302.74 315.92
Low Sulfur Gas Oil/Diesel† +2.79 300.54 304.34 318.17
Jet Fuel +3.54 301.29 304.79 321.42
*No. 2 Heating Oil in US
†No. 2 Low Sulfur Diesel in US

 

Rotterdam Spot Refined Products*
($/ton) Chg. Spot Price 5-Day
Avg.
Month-
Ago
Gasoline        
Regular Gasoline -13.00 919.00 937.10 1105.00
Premium Gasoline -3.00 925.00 936.60 1119.00
Mid-Distillates        
Heating/Gasoil† +10.50 930.00 941.25 988.00
Low Sulfur Gas Oil/Diesel‡ +8.50 983.00 989.15 1032.00
Jet Fuel +8.50 1004.00 1012.95 1074.50
Fuel Oil        
1% Sulfur NA 601.00 614.00 659.00
3%-3.5% Sulfur -9.00 568.00 581.30 615.00
*All Rotterdam prices are f.o.b. barge quotations.
†No. 2 Heating Oil in US; 0.2% Gas Oil in Rotterdam.
‡No. 2 Low Sulfur Diesel in US; Ultra Low Sulfur Diesel in Europe.

     

Singapore Spot Refined Products
($/ton) Chg. Spot Price 5-Day
Avg.
Month-
Ago
Light Ends        
Naphtha ($/bbl) -0.05 100.49 102.86 104.58
Regular Gasoline ($/bbl) -0.05 112.20 114.55 128.25
Mid-Distillates ($/bbl)        
Gasoil -0.20 120.78 123.20 128.46
Jet/Kerosene -0.20 122.18 124.77 131.28
Fuel Oil ($/ton)        
3% Sulfur -0.20 598.50 612.17 657.10
Mideast Gulf Spot Refined Products
Chg. Spot Price 5-Day
Avg.
Month-
Ago
Light Ends        
Naphtha ($/metric ton) -39.76 899.75 928.32 935.11
Mid-Distillates ($/bbl)        
Gasoil -2.47 119.83 122.61 128.63
Jet/Kerosene -2.48 119.45 122.69 129.15
Fuel Oil ($/ton)        
3% Sulfur -17.14 583.76 602.99 639.65

 

Natural Gas Prices
    Chg. 1st
Month
2nd
Month
US -- Henry Hub (Nymex) $/MMBtu -0.126 +3.554 +3.678
US -- Henry Hub (Cash) $/MMBtu -0.057 +3.342
UK -- NBP (Cash) p/th -1.10 63.70
$/MMBtu -0.18 10.21

 

     

    


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