KUALA LUMPUR: Malaysia’s Petroliam Nasional Berhad (PETRONAS) said on Sunday its subsidiary would buy a 10 percent stake in Oman’s Al Khazzan gas field, following a bidding exercise held by the exploration arm of state-owned Oman Oil Company.
The PETRONAS unit, PC Oman Ventures Ltd, would acquire the stake in Block 61 of the field, which is expected to produce around 1.5 billion cubic feet of natural gas per day by 2020.
The PETRONAS unit, PC Oman Ventures Ltd, would acquire the stake in Block 61 of the field, which is expected to produce around 1.5 billion cubic feet of natural gas per day by 2020.
“Completion of the transaction is subject to closing conditions,” PETRONAS said in a statement.
“Further information will be made available, as and when appropriate.”
Oman Oil Company Exploration and Production (OOCEP) said in a statement on Twitter that the sale was “subject to approval from the Sultanate of Oman’s government and other closing conditions”.
OOCEP holds a 40 percent stake in the block, while Britain’s BP holds the remaining 60 percent. – Reuters
Source: The STAR Online
South Korea has stopped importing crude oil from Iran ahead of the U.S. sanctions that will enter into effect on November 5, Reuters reports, citing customs data. The country imported zero Iranian oil in September for the first time in six years.
The news is the expected end of a process: since the start of 2018, South Korean imports of Iranian crude had fallen by 49.1 percent from 2017, as of the end of September, to a total 7.15 million tons. The country’s total September imports also declined on an annual basis, by more than a tenth to 10.83 million tons.
The share of U.S. crude went up five-fold to 668,704 tons in the reported month, while imports of Saudi crude declined by 6.9 percent to 3.41 million tons.
South Korea is the world’s fifth-largest crude oil importer, and as such an important client for Iran’s oil alongside China and India. Yet South Korea is a close ally of the United States, and it is no surprise the country opted for full compliance with Washington’s insistence on importers to cut their intake of Iranian crude to zero.
Perhaps the country’s government hopes it will be rewarded with a sanction waiver so it can restart purchases of Iranian oil, although it would be at a much lower rate in all likelihood. Since the start of the Iranian year, in late March, South Korea had been buying Iranian crude at a daily rate of almost 300,000 barrels.
Earlier this year, reports emerged that South Korea was planning to stop buying Iranian oil in July, but official Korean sources refuted the claims, made by unnamed sources. In September, Bloomberg reported that South Korea had stopped importing Iranian earlier, in August, citing shipping data. Yet with Iranian tankers cloaking their journeys to crude oil buyers, official tracking data may not be as reliable as it used to be.
Fresh off a decision by Royal Dutch Shell and its partners to construct the country’s first liquefied natural gas development, the energy industry is growing confident it will propel other Canadian LNG proposals to move ahead.
LNG Canada CEO Andy Calitz, front left, believes a positive final investment decision has given “a degree of comfort and encouragement” to similar LNG proposals.
The chief executive of LNG Canada believes the positive final investment decision has given “a degree of comfort and encouragement” to similar proposals trying to make it across the finish line.
“There are a number of other projects in (the) advanced development stage and they will feel emboldened by what we have done,” Andy Calitz said Wednesday before speaking at the Energy Roundtable conference in Calgary.
“Based on the understanding of the state of development of at least three other projects in B.C., I will not be surprised if there is one more FID.”
Last week’s announcement that Shell, PETRONAS, PetroChina, Mitsubishi Corp. and Korea Gas Corp. will build the project at Kitimat, B.C., was a game-changing moment for the country’s energy industry.
The $40-billion project is not only the largest private-sector investment in the country’s history, it represents something else for the oilpatch: confidence.
After seeing big-ticket projects like Northern Gateway, Energy East, the Pacific NorthWest LNG and Aurora LNG projects flail and finally fail, five international companies have committed to investing billions of dollars in this country.
“It’s brought real credibility back into the Canadian energy sector,” said Pieridae Energy CEO Alfred Sorensen, who is working on the $10-billion Goldboro LNG project in Nova Scotia.
“It’s almost like … internationally, people have said, ‘OK, it looks like LNG from Canada is do-able, if it’s done the right way,'” added Victor Ojeda, president of Steelhead LNG, which wants to build a facility on the west coast of Vancouver Island.
For those who want to see the country export its energy resources beyond the United States, the LNG Canada decision is a seminal moment. By the middle of next decade, supercooled natural gas from Western Canada will be shipped into thirsty Asian markets, including China, Korea and Japan.
According to a National Energy Board report, the regulator has received 43 LNG export licence applications since 2010, representing 24 projects — including 18 on the Pacific coast.
Most proposals stalled out after global LNG prices fell several years ago. With demand for natural gas growing to replace coal, a new wave of projects is expected to be built by the middle of the next decade.
A report by energy consultancy IHS Markit said the decision by Shell and its partners to build could act “as a starting gun” for other LNG projects to proceed.
“We will see a renewal in liquefaction projects being approved globally. Whether or not Canada gets those projects is still a bit of an open question,” said Ian Archer, associate director of North American natural gas for IHS.
Each proposal on the drawing board will face its own set of challenges.
At the energy conference, Calitz spoke about the “long and winding road” it took to attain approval for the megaproject, including a two-year delay that allowed the proponents to whittle down costs.
Unlike other developments, he noted LNG Canada is located exclusively within British Columbia, the proponents have a good long-term relationship with affected First Nations and local communities, the project is cost-competitive and it will use hydro electricity to lower its greenhouse gas emissions.
“Energy projects have so many hurdles to cross,” he said. “We got it in the golden spot of taking an FID.”
Energy producers and other LNG proponents are hoping the decision will put wind in their sails.
“It’s good for Canada, good for investor confidence. It resonates very strongly across the corporation,” said Frank Cassulo, president of Chevron Canada, which has its own Kitimat LNG Project, a joint venture with Australia’s Woodside Petroleum.
While there are 18 proposed LNG projects on the books for the west coast, only three are “going concerns” — Steelhead LNG, Woodfibre LNG and Chevron’s Kitimat project — according to a B.C. government official.
Archer believes the Woodfibre LNG project is the most advanced and likely to proceed, with its plans to construct a smaller processing and export facility southwest of Squamish, B.C.
Woodfibre officials are working on an engineering, procurement and construction contract with Houston-based KBR Inc., and expect construction to start sometime in 2019.
Other proponents hope the LNG Canada will give the Canadian energy sector some momentum and make believers out of the naysayers.
“It takes a long time to get the first project out of the gate in any new jurisdiction,” said Ojeda.
“It is really a survival-of-the-fittest sort of process.”
On the east coast, Pieridae is moving toward the finish line on giving a green light to the Goldboro project, which would ship natural gas from Alberta to Nova Scotia for eventual export into Europe.
The company is waiting for the provincial government to issue construction permits within the next two weeks. A final investment decision is expected to take place in late November.
While the court decision that quashed the federal approval of the Trans Mountain oil pipeline expansion in August sent out a negative signal about building energy projects in the country, the new LNG decision “was the exact opposite,” Sorensen said.
“It really brings confidence back to investors,” he told reporters after the conference.
“For big investors who may have had a negative view of investing in Canada, I think a lot of that has eased off.”
KUCHING: Sarawak and Sabah are on the same page on how to approach the amendments to the Federal Constitution and the Malaysia Agreement 1963 (MA63).
This assurance came from the chief minister of both states – Datuk Patinggi Abang Johari Tun Openg (Sarawak) and Datuk Seri Mohd Shafie Apdal (Sabah).
Abang Johari (left) and Minister of Tourism, Arts, Culture, Youth and Sports Datuk Abdul Karim Rahman Hamzah (right) accompanying Shafiee leaving his office at the new DUN Complex.
Abang Johari said the amendments to the Federal Constitution and MA63 were some of the issues discussed during his meeting with Shafie at his office in the new DUN Complex here yesterday.
“We talked about it, but we did not discuss it in detail,” he told a press conference after the courtesy call by his counterpart from Sabah.
Shafie, who sat beside Abang Johari at the same press conference, even gave a greater assurance that: “I can be sure we are on the same page because the signing of the agreement was done within the book – which involved Sarawak, Sabah and Peninsular Malaysia.
“We realise that. We have to be together to ensure that the works are done accordingly. We are not going to sing different songs,” he said.
He noted that the amendments and return of Sarawak’s and Sabah’s rights under the MA63 were for the benefit of Sarawakians and Sabahans.
He believed it was high time that the federal government looked into the demands from Sabah and Sarawak seriously.
He said when the people of Sarawak and Sabah make the demand it doesn’t mean they don’t love Malaysia.
“We love Malaysia. But what is due, what has been there, put there by our forefathers, we got to realise that.
“To realise that, we have to fulfil what have been there,” he said.
Shafie believes that if there is adjustment to be made, they need to discuss it because when our forefathers formed Malaysia it was done in a peaceful manner, through negotiation and through discussion, not like other nations where all sorts of things happened.
He also stressed that the demand for 20 per cent royalty was not only for Sarawak but also for Sabah, which is also an oil and gas producing state.
“I have raised the oil royalty issue; it’s not based on net but on gross.
“I realise in the beginning due to high cost of operation may not be enough to PETRONAS, but since 1974 there must be some adjustment.
“We are not asking for 100 per cent. We are asking for 20 per cent only,” he said.
Shafie believed Sarawak and Sabah did not mind to share the wealth from oil and gas with the country, saying they were asking for was what was due to them.
It has been over one-and-a-half years since the announcement to set up Petroleum Sarawak Berhad (PETROS) was made and till today, no specifics have been released by the Sarawak government nor by its Chief Minister Abang Johari Tun Openg.
Further, as days go by, more and more looming questions emerge such as what would be the initial paid-up and working capital the Sarawak state government will inject to get PETROS operational and who will constitute the senior management.
This besides the grand announcement of Saau Kakok, a former special projects vice-president of US-based independent oil company Hess Corporation being appointed as the chief executive officer (CEO) of PETROS.
To recap, Abang Johari, when announcing the setting up of (PETROS) back in 2017, said, “PETROS is expected to be in operation within six months because we must get our side ready for us to get involved in the upstream oil and gas (O&G) activities”.
He was also quoted as saying that PETROS needs expertise and thus the state government’s approach must be correct, saying, “The one I’m talking about is our own state-owned company which will work together with PETRONAS.”
Following that, the news of the appointment of Saau Kakok was announced despite very strong interest from numerous applicants for the post.
The chief minister was quoted as saying that Saau, a Bidayuh, had spent almost 40 years in the oil and gas industry and his experience, professionalism and network within the oil and gas fraternity made him an ideal choice to lead a competent and high-integrity PETROS operational team.
It is then perplexing that PETROS has chosen to maintain an elegant silence on calls to be transparent on its negotiations with PETRONAS or any other party to “reclaim” the state’s right to regulate and develop its O&G resources from PETRONAS.
Neither Saau nor his team has weighed in with an experienced and professional opinion on increased oil royalties for the state or even attempted to offer a commercially-viable method of calculating it for the benefit of Sarawak and the nation’s oil and gas industry.
PETRONAS’ track record since it was incorporated may have given ordinary people and even state politicians a mistaken perception that the O&G business is easy and provides very good returns. Nothing can be further from the truth, of course.
If the GPS government and its politicians think that this is so, they need to be educated by PETROS and its very experienced board members including Hamid Bugo the chairperson, who is also a director with Sapura Energy, Medan Abdullah who is ex-PETRONAS and Sharbini Suhaili who is Sarawak Energy CEO and also ex-PETRONAS.
The business is cyclical, highly capital-intensive and high-risk. Sarawak should already have an inkling of that from the participation of the state-owned Sarawak Economic Development Corporation (SEDC) in a venture called Blackgold in the 1980s under the administration of the Taib Mahmud government.
The venture never took off but the corporation and ultimately the state lost tens of millions of ringgit of the Sarawak people’s money perhaps even more.
Urgently now, the burning question for Sarawak is whether setting up PETROS is any less of a business risk or perhaps a much bigger one.
And if the state wants to now start from scratch, how steep a learning curve will it be for it and the executives hired by PETROS before any real profit comes to Sarawak’s coffers and the people?
Or will it be another Hollywood production where cronies and opportunistic foreign companies with vested interests embark on an oil field grab and virtually nothing goes back to the people of Sarawak?
PETROS has been entrusted with a heavy responsibility by the current state government.
The previous Adenan Satem administration was against such a move. It is now incumbent upon PETROS and its experienced and professional management team and board to lay out its plans on why and how it would be the right solution to meet Sarawak’s oil and gas and socio-economic aspirations.
KUCHING: Petroliam Nasional Bhd (PETRONAS) is expected to produce oil next month from the D28 offshore oil field, which is about 85 km north-west of Bintulu.
The wellhead platform, the final component of the D28 phase one oil drilling project, is ready for installation at the oil field in a few days’ time.
Sarawak Deputy Chief Minister Tan Sri Dr James Masing launched the sail away of the D28 topside, which was constructed by OceanMight Sdn Bhd, a subsidiary of KKB Engineering Bhd, at the company load-out jetty, in Jalan Bako yesterday.
OceanMight had earlier completed the D28 jacket which was installed at the oil field in August 2018.
The D28 phase one is a greenfield project located in the Balingian oil and gas fields and has a water depth of some 35m. D28 has 5.44 million stock tank barrels (mmstb) of recoverable oil reserves.
PETRONAS vice-president (project delivery and technology) Zakaria Kasah said D28 was expected to produce 5,000 gallons of oil a day.
“D28 is a super fast track project that is delivered in nine months by OceanMight against the required usual duration of 15 months,” he said, commending OceanMight for a job well done.
Yesterday, OceanMight celebrated a major safety milestone after recording 280,000 man hours work without lost time injury.
PETRONAS Carigali Sdn Bhd awarded the D28 contract for the engineering, procurement, construction and commissioning (EPCC) to OceanMight in March this year.
OceanMight secured a second project – EPCC of wellhead platform for D18 phase two project – from PETRONAS Carigali in August.
The D18 phase two project aims to develop 12.5 mmstb of oil reserves, also located in the Balingian oil fields.
“D18 is also a super fast track project required to be completed in 15 months (second half 2019),” said Zakaria.
He said the award of D28 and D18 contracts to OceanMight was testament of PETRONAS’ commitment to nurture and grow the business of Sarawak’s oil and gas companies, and that the national oil company would continue to groom local talents .
OceanMight chief executive officer Datuk Kho Kak Beng, who is also KKB chairman and group managing director, said the company had secured RM300mil worth of fabrication contracts for offshore structures this year, on top of RM250mil worth of four contracts which it had delivered on time to its clients between 2014 and 2017.
Source: The STAR Online
OSLO (Reuters) – U.S. oil firm Chevron will become the first oil major to formally exit the Norwegian continental shelf (NCS) as it transfers its last stake in an exploration license, according to a government letter.
A Chevron gas station sign is seen in Del Mar, California, in this April 25, 2013 file photo.
Oil majors, including Exxon Mobil, BP and Shell, have scaled down their presence in Norway by selling or merging their assets in the mature region to focus on new growth opportunities elsewhere.
Chevron is also seeking to sell assets in the British North Sea in order to focus on growing U.S. onshore shale production as well as the giant Tengiz field in Kazakhstan.
According to a letter from the Norwegian oil and energy ministry to Chevron dated Sept. 28. and obtained by Reuters, Chevron has agreed to transfer its 20-percent stake in an exploration license in the Arctic, called PL859, to Norway’s DNO.
The decision means that “Chevron Norway shuts down its activities in Norway and leaves the NCS permanently”, the ministry wrote.
A spokeswoman for Chevron confirmed to Reuters that the company reached the deal with DNO in July but did not disclose its value.
“The transaction is subject to certain conditions and approvals, and is expected to take a number of months to close,” she said.
Oil industry trade paper Upstream was the first to report the existence of the letter on Wednesday.
The ministry said it has agreed on the transfer of the stake provided Chevron guarantees to cover its share of decommissioning costs at Draugen, an oilfield currently in production.
Chevron sold its 7.56 percent stake in the Draugen field to Austria’s VNG in 2014 for an undisclosed sum.
Norway’s Equinor, the PL859 operator, made a small, non-commercial gas discovery in 2017 but postponed plans to drill a second well permitted by the license until 2019.
BP no longer holds direct stakes in the Norwegian fields, but owns 30 percent of Norway’s Aker BP, which operates a number of producing fields and exploration licenses.
Equinor said on Oct. 1 it had agreed to buy Chevron’s 40-percent stake in the Rosebank field off the Shetland Islands.
Oct. 10 (UPI) — Shell United Kingdom Ltd. announced on Wednesday an investment decision in the North Sea to develop a gas field, just a day after Royal Dutch Shell CEO said the group was bullish regarding expectations of natural gas demand growth.
The company announced a “final investment decision for the Arran gas and condensate field” and said that it will become the operator of the project, in partnership with Rockrose Energy and Dyas U.K. Ltd.
This is the fourth investment announcement by the company in the North Sea in 2018 “which will result in further production growth for Shell following the decision to redevelop the Penguins field in the northern North Sea, the Alligin field West of Shetland and the Fram field in the Central North Sea.”
At peak production, the area will produce around 100 million cubic feet of gas and 4,000 barrels of oil per day, which combined is 21,000 barrels of oil equivalent per day.
The announcement comes one day after a speech by the CEO of Royal Dutch Shell, Ben van Beurden, who said that the company is investing heavily in natural gas because of fast-growing demand.
“We have invested heavily in gas to the point that we lead the international oil companies, and we intend to keep it that way,” Beurden said, speaking at the Oil and Money conference in London.
“Why? Because gas is the fastest growing hydrocarbon market. Between 2018 and 2035 Shell expects natural gas demand to grow at an average of 2 percent per year. That is twice the rate of total worldwide energy demand,” Beurden added.
Natural gas is primarily made up of methane. Methane is the most basic hydrocarbon, and is used primarily as fuel for heat and light. It has been associated with reduced carbon dioxide compared with other energy sources like coal and crude oil products.
Methane can also be cooled down to a liquid form in a mix that reduces its size about 600 times, and also contains some ethane. The resulting product, LNG — which can be shipped and stored as long as it remains cooled — will see even greater demand, Beurden said.
“The future of liquefied natural gas looks even better. We expect demand for LNG to increase at an average of 4 percent per year until 2030,” he added.
The growing demand for natural gas “means new projects must come on stream,” Beurden said.
The Arran field is located about 149 miles east of Aberdeen, close to the UK/Norway median line. The resource is located at about 85 meters water depth.
Shell needs to drill two wells to start production. “The natural gas and liquids they produce will be transported via a newly installed subsea pipeline to the Shearwater platform,” the Shell UK statement said.
The objective is “to transform and revitalize Shell’s UK upstream business,” said Steve Phimister, Shell’s vice president for upstream in the U.K. and Ireland. “Arran is an important addition to Shell’s portfolio as we seek to strategically grow our central North Sea production around the Shearwater hub.”
After a prolonged period of weakness, global crude oil prices appear to be on their way back up to level last seen in 2014.
Over the week, the commodity price breached the crucial level of US$82 per barrel due to the tightening of commodity market and the reluctance of the Organisation of the Petroleum Exporting Countries (OPEC) leaders to immediately boost production.
In fact, some pundits believe oil prices could rise back to US$100 per barrel before the end of 2018.
A report by Bloomberg over the week noted that with the US sanctions on Iran taking full effect in early November, the US$100-oil scenario could become more realistic.
Quoting Mercuria co-founder Daniel Jaeggi, the newswire reported that Brent crude could rise to that level in the fourth quarter as the market did not have enough excess capacity to replace Iranian barrels. That bullish prediction was echoed by Trafigura co-head of oil trading Ben Luckock, who said Iran’s supply will be lower than most people had expected.
Adding to positive sentiment were forecasts for a decline in US stockpiles.
Nevertheless, Goldman Sachs Group Inc has poured cold water on oil forecasts of US$100 per barrel.
In a note, the global financial institution said another supply catalyst beyond Iran would likely be needed for prices to meaningfully break to the upside.
Goldman Sachs pointed out that production from other OPEC producers and Russia could offset losses out of Iran, while any big jump in prices this fall ahead of the US mid-term elections would likely lead to President Donald Trump authorising a release from the country’s strategic reserves.
As a result, the bank, said Brent prices would likely stabilise at US$70 to US$80 per barrel by the end of 2018.
Separately, some analysts noted that the escalating trade tensions between China and the US could dampen global economic growth, and hence, put demand for energy at risk in the longer term, and offset the tightening of oil supply.
On that note, Petroliam Nasional Bhd (PETRONAS) president and group CEO Tan Sri Wan Zulkiflee Wan Ariffin said that all oil and gas players should still “tread cautiously” despite the rising optimism in the market amid rising oil prices.
“As encouraging as it is, we can still expect volatility to continue given the prevailing external factors such as trade wars and other geopolitical risks,” Wan Zulkiflee said.
“While it is evident that players are now changing gears from survival to growth mode, I urge all players to tread carefully and respond cautiously to the unpredictable landscape,” he added.
The article was published on The Star