www.upstreamonline.com http://www.upstreamonline.com/ www.upstreamonline.com Santos in Cooper basin farm-in http://www.upstreamonline.com/live/1381005/Santos-in-Cooper-basin-farm-in South Australian exploration licence estimated to potentially hold more than 20 Tcf of gas Josh.Lewis@upstreamonline.com (Josh Lewis) http://www.upstreamonline.com/live/1381005/Santos-in-Cooper-basin-farm-in Thu, 23 Oct 2014 00:31:31 +0000 live New Standard revealed on Thursday it had reached a deal to divest the majority of its 52.5% stake in the onshore exploration licence, with Santos set to gain a 35% operated interest.

In exchange, Santos will pay New Standard A$7.5 million in cash and has agreed to pay 75% of the latter's remaining expenditure commitments associated with its A$42.5 million earn-in obligations, of which roughly A$300,000 has been spent to date.

New Standard said the deal enhanced its balance sheet and would allow it to focus on its primary growth target, the development of its Eagle Ford shale assets in Atascosa County, Texas.

“The agreement with Santos reduces New Standard’s exploration expenditure considerably while retaining meaningful exposure to exploration and development success of a large permit in a proven petroleum system for New Standard’s shareholders,” New Standard managing director Phil Thick said.

New Standard picked up its original stake in PEL 570 last year from Ambassador Oil & Gas in exchange for funding a five-year exploration programme over the block up to a maximum of A$42.5 million.

The exploration commitments over the block include the gathering of 3D seismic and the drilling of at least three exploration wells, the first of which is planned next year.

New Standard noted that Santos had indicated it would pursue a collaborative approach in relation to technical and operational input from New Standard's major shareholder, US player Magnum Hunter Resources, as the exploration programme evolves.

PEL 570 lies in the gas-prone Patchawarra Trough and has been estimated to hold more than 20 trillion cubic feet of gas-in-place, including 13 Tcf in coalbeds, more than 8 Tcf in tight rocks and 1.5 Tcf in shale.

Following the completion of the deal, Santos will hold a 35% operated interest in the licence, with New Standard seeing its interest reduced to 17.5% and Drillsearch Energy, which completed a takeover of Ambassador earlier this year, holding the remaining 47.5% equity.


Oil Search to refocus in PNG http://www.upstreamonline.com/live/1381006/Oil-Search-to-refocus-in-PNG Strategic reviews says all roads lead to PNG bianca.bartucciotto@upstreamonline.com (Bianca Bartucciotto) http://www.upstreamonline.com/live/1381006/Oil-Search-to-refocus-in-PNG Thu, 23 Oct 2014 00:42:34 +0000 live The board has unanimously supported the findings of a strategic review, which is set to be the company’s “roadmap for growth for the next five to seven years”.

Oil Search managing director Peter Botten said a number of major investors and independent experts were quizzed about the best way forward for the company.

“The strategic review provides Oil Search with a renewed vision about what our goals and targets should be, mindful at all times of where we operate and our responsibilities,” he said.

Botten added that despite the fact that the current oil price has bottomed out, the company remains confident it will be able to tap into a growing demand for liquefied natural gas in the Asia-Pacific.

Oil Search holds a 29% interest in the $18.8 billion Papua New Guinea LNG project, which started production earlier this year.

The 6.9 million-tonne-per-annum project will add to the company’s production base and boost the company’s annual cash flow to about $1.5 billion.

“I’m pleased that the strategic review has identified several high-returning growth opportunities in PNG, with enough gas in our existing portfolio to support at least two and, with modest drilling success, three additional LNG trains, which we are well-positioned to pursue.”

The company will implement six key strategies, mainly focused around its PNG development.

In PNG, the company plans to optimise existing assets, including PNG LNG, find more resources to expand beyond three trains, and pursue other high value opportunities in PNG and overseas.

Oil Search will also drive social programmes to address social and economic challenges, protect its knowledge and relationships and prioritise the payment of a dividend.

The result of the last strategic review led to the acquisition of Chevron Texaco’s PNG assets, taking over operatorship of all the company’s PNG oilfields.

AusTex secures Snake River funding http://www.upstreamonline.com/live/1381007/AusTex-secures-Snake-River-funding Northern Oklahoma drilling now fully funded Josh.Lewis@upstreamonline.com (Josh Lewis) http://www.upstreamonline.com/live/1381007/AusTex-secures-Snake-River-funding Thu, 23 Oct 2014 01:41:30 +0000 live AusTex revealed on Thursday it had entered into a binding term loan agreement with Macquarie Bank to allow it to “rapidly continue” its drilling development programme at Snake River.

The three-year loan has an immediate draw down facility of $20 million, with additional availability for up to a further $40 million.

AusTex said the Macquarie package removed the bank’s involvement from the determination of the reserves, which the board determined was more durable than the other proposals made to the company.

“With this funding, AusTex aims to capitalise on drilling out the roughly 270 locations that exist on its current acreage as well as using current funds to consider the acquisition of other acreage and production opportunities that may arise in the Snake River area,” AusTex co-managing director Rich Adrey said.

“This funding also allows AusTex to continue its recent transition from junior explorer to producer and now to an oil and gas company of significant size and opportunity.”

The company now plans to increase its rate of drilling at the 10,500-acre Snake River project from four wells per month to six wells in the spring, following the rainy season.

In the near term, it said it would focus on the northern and eastern acreage, with a plan to capitalise on new gas infrastructure at the project.

The Snake River project lies in Kay County, about five miles south-west of Ponca City, and is being developed via vertical wells which are targeting the Mississippian interval, about 4300 feet below the surface.

Oil dives on US stocks build http://www.upstreamonline.com/live/1381002/Oil-dives-on-US-stocks-build US crude approaches $80 per barrel after data showed inventory increase Kathrine.Schmidt@upstreamonline.com (Kathrine Schmidt) http://www.upstreamonline.com/live/1381002/Oil-dives-on-US-stocks-build Wed, 22 Oct 2014 22:44:22 +0000 live Oil had a brief period of tentative consolidation in choppy morning trade. Then prices fell steadily throughout the afternoon as dealers absorbed data showing US crude inventories rose much more than expected in the latest week.

The rising US dollar and falling equity markets also pressured oil.

Brent December crude fell $1.51 to settle at $84.71 a barrel. Brent has been slumping for nearly four months and last week touched a four-year low of $82.60.

US crude fell $1.97 or 2.5% to settle at $80.52 a barrel, just above the session low of $80.28.

The Energy Information Administration said US crude inventories rose by 7.11 million barrels, more than double the 2.7 million-barrel increase analysts expected.

Refiners reduced runs amid seasonal maintenance. Midwest plants were running at their lowest mid-October rates in at least four years.

"The large crude oil build is the dominant feature of the report, making it bearish overall," said John Kilduff, partner at Again Capital LLC in New York.

Brent has tumbled from $115 in June on abundant supply, OPEC's reluctance to curb output and concerns that slowing economic growth in Europe and China would dent oil demand.

Some traders have suggested that prices may be bottoming out, citing growing expectations that a price near $80 a barrel could slow growth in production from the booming US shale oil patch or Canada's costly oil sands reserves.

Others remain anxious about the downside.

"The market is going to push $80 again because they want to test OPEC into cutting production," said Andrew Lipow of Lipow Oil Associates. "Other countries in the region require higher prices in order to sustain their spending, but lower oil prices just make the neighborhoods that Saudis and Kuwaitis live in that much more difficult."

OPEC has not yet indicated that the organization would limit oil production to drive prices back up. Nigeria is basing its 2015 budget on an assumed price of $78 per barrel, up from $77.50 in 2014, Reuters reported.

Libya's OPEC governor said OPEC should cut oil production at least half a million barrels per day, with his country exempt as it recovers from months of fighting and protest.

US gasoline stocks last week fell to 204.37 million barrels, more than expected in today's EIA report due to maintenance and refiners selling transition gasoline ahead of the switch to winter grade, analysts said.

Chouest, Chevron sued in piracy case http://www.upstreamonline.com/live/1380995/Chouest-Chevron-sued-in-piracy-case Boat captain alleges vessel company, US supermajor lacked adequate security measures against kidnapping Kathrine.Schmidt@upstreamonline.com (Kathrine Schmidt) http://www.upstreamonline.com/live/1380995/Chouest-Chevron-sued-in-piracy-case Wed, 22 Oct 2014 20:14:57 +0000 live Captain Wren Thomas of the C-Retriever contends he was kidnapped by Nigerian pirates, held captive and tortured for 18 days in November 2013 after Edison Chouest is alleged to have ignored repeated requests to step up safety measures amid threats from militant groups.

"Defendants knowingly, intentionally and willfully sent their employees, including Captain Thomas, into an area where pirates were targeting ECO vessels," said the 14-page suit filed in a court in Houston's Harris County.

"Defendants failed to take adequate steps to provide appropriate levels of security and safety for their employees."

The suit seeks a jury trial and unspecified damages for "serious and permanent physical and emotional injuries" that have rendered him unfit to work.

Galliano, Louisiana-based Edison Chouest did not immediately respond to a request for comment. Chevron said any comment was premature as it had not been served with the lawsuit.

Upstream reported at the time that the captain and chief engineer were taken from the C-Retriever on 23 October 2013 reportedly on its way to Chevron’s oil-producing deep-water Agbami field off Bayelsa state.

Reports on 12 November indicated Edison Chouest with support from the FBI helped negotiate their return after a ransom was paid.

In his complaint, plaintiff Thomas, made captain of the vessel in 2011, began expressing numerous concerns that the vessel was "too old, too slow and not equipped with state-of-the art piracy countermeasures."

Among the complaints were that vehicle communications remained over radio, not satellite phones, where militants could listen in on destination and route information for vessels. The vessel also lacked a "cidatel" or safe room to keep pirates out.

Chevron and Chouest also lacked adequate policies and procedures to cope with piracy, the suit contended.

Company bosses also sent the vessel on a supply run through "pirate-infested" waters from Onne, Nigeria to the Mere and Pennington fields days after detailed threats and death threats had been received and reported against the crew and vessel.

The 2013 incident followed multiple other pirate attacks on Chouest vessels, exemplified by attacks on the Fast Servant in 2010 and C-Endeavor in 2011.

Restructured OGX 'could list in New York' http://www.upstreamonline.com/live/1380993/Restructured-OGX-could-list-in-New-York Report suggests new incarnation of bankrupt Brazil independent to emerge from corporate overhaul Kathrine.Schmidt@upstreamonline.com (Kathrine Schmidt) http://www.upstreamonline.com/live/1380993/Restructured-OGX-could-list-in-New-York Wed, 22 Oct 2014 18:37:19 +0000 live A reorganisation process is expected to wrap up in April, company executives told Reuters in an interview. This will take place under the eye of controlling shareholders who put up money to keep the company going after its $5 billion bankruptcy nearly a year ago.

Those shareholders now have 65% stake in the company renamed as OGPar, with original creditors 25% and original shareholders 10%. Those holdings will be rolled into a new OGX entity targeted for the listing, new chief executive Paulo Narcelio told the news wire.

"We will emerge from this as one of the biggest independent oil companies in Brazil," he said. "It will be almost debt free and will be a producing oil company."

The bankruptcy filing came after the explorer said four of its five flagship fields were non-commerical, a spectacular business collapse that has confronted founder and former Brazilian magnate Eike Batista with allegations of market manipulation and insider trading.

OGPar does have modest production in Brazil of about 18,000 barrels per day, the bulk of which is at the Tubarao Martelo field which is expected to peak in 2016 at some 30,000 barrels per day. It is currently producing about 15,000 bpd.

The Tubarao Azul field, the first to fall widely short of expectations, will produce at least through March as output has dwindled to 3000 bpd.

OGPar does have other holdings throughout Brazil such as at the Atlanta field alongside fellow independents QGEP and Barra Energia, but has struggled to meet investment committments.

In another headache for OGPar, a separate report from the news wire indicated that fellow independent HRT has asked regulators to require the halt of production at Tubarao Martelo because resources overlap with the Polvo field.

The production stop is requested until the companies can work out a unitisation agreement to manage income and reserves there.

Moody's cuts Petrobras rating http://www.upstreamonline.com/live/1380990/Moodys-cuts-Petrobras-rating Agency outlook negative but investment grade maintained for Brazil giant led by Maria das Gracas Foster Kathrine.Schmidt@upstreamonline.com (Kathrine Schmidt) http://www.upstreamonline.com/live/1380990/Moodys-cuts-Petrobras-rating Wed, 22 Oct 2014 16:46:53 +0000 live The ratings agency dropped the pre-salt powerhouse to Baa2 from Baa1 given the company's "high financial leverage", it said it a statement.

The situation is expected to worsen after 2016 contrary to initial predictions given lower oil prices, high capex and a weakened local currency, according to Moody's.

"While Petrobras has been relatively successful in executing on its ambitious capital program and has delivered on aggressive production targets, leverage continues to grow in 2014 given mainly its inability to pass through costs related to imported oil products, local currency devaluation, and an aggressive capex programme", said Nymia Almeida, vice president at Moody's.

Petrobras issued a release on the development, saying:

"Petrobras' Baa2 rating is supported by its large-scale reserve base and dominance in the Brazilian oil industry with a leading position, pre-salt significant discoveries, growing production and technological expertise."

The rating also takes into account the support of Brazil's government in the event of an emergency, the company added.

Last October Moody's cut the rating to Baa1 from A3 on concerns about the company's mounting debt and negative cash flow.

Pennsylvania fines midstream player http://www.upstreamonline.com/live/1380994/Pennsylvania-fines-midstream-player Regency hit with penalty over construction of two Marcellus gas pipelines in 2012 and 2013 Luke.Johnson@upstreamonline.com (Luke Johnson) http://www.upstreamonline.com/live/1380994/Pennsylvania-fines-midstream-player Wed, 22 Oct 2014 20:23:10 +0000 live The Department of Environmental Protection (DEP) assessed San Antonio-based Regency with two separate fines, including a $275,000 penalty for "numerous significant violations" related to erosion and sedimentation during the construction of the Canton lateral natural gas pipeline in Lycoming and Tioga counties in 2012 and 2013.

Construction violated the US state's Clean Streams Law, Dam Safety & Encroachment Act and other regulations, DEP said.

"Many of these violations occurred over a significant period of time," DEP oil and gas head John Ryder said in a statement. "We expect that Regency has made operational changes to avoid problems of this nature during future pipeline construction projects."

The pipeline construction was performed by PVR Marcellus Gas Gathering, which was later acquired by Regency.

Inspections of the pipeline construction revealed inadequate erosion and sedimentation controls, unpermitted sediment discharges, stabilisation issues and unpermitted encroachments at two sensitive stream crossings.

DEP cited 39 violations at these two stream crossings during an eight-month period.

The violations have been corrected and the fines have been paid, DEP said.

Pemex calls off storm evacuations http://www.upstreamonline.com/live/1380983/Pemex-calls-off-storm-evacuations Mexican company suspends personnel moves after change in weather conditions Kathrine.Schmidt@upstreamonline.com (Kathrine Schmidt) http://www.upstreamonline.com/live/1380983/Pemex-calls-off-storm-evacuations Wed, 22 Oct 2014 16:23:00 +0000 live The Mexican state oil company, which began evacuations of some 15,000 workers, said in a statement that the low-pressure weather area of concern had changed course.

The US National Hurricane Centre showed Tropical Depression Nine "meandering" over the Bay of Campeche and slowly moving eastward over the Yucatan Peninsula over the next few days.

Already causing showers and thunderstorms, the system is expected to make landfall in Campeche later today as a weak tropical storm.

About 11,000 people had left the area by boat and helicopter and will head back to work when weather conditions permit.

About 16,000 employees directly involved with exploration and production operations remain offshore.

Apache hit with $3m New Mexico fine http://www.upstreamonline.com/live/1380991/Apache-hit-with-3m-New-Mexico-fine Officials force independent to make up for underpaid royalties in western Permian basin Kathrine.Schmidt@upstreamonline.com (Kathrine Schmidt) http://www.upstreamonline.com/live/1380991/Apache-hit-with-3m-New-Mexico-fine Wed, 22 Oct 2014 17:35:01 +0000 live State Land Commissioner Ray Powell said an audit of the company’s operations found Apache had not properly accounted for the state’s share of revenues from oil pumped from state-controlled lands in Lea County, in the Delaware sub-basin of the Permian.

Revenue from state lands in New Mexico is used to fund public schools.

Powell said he error was due to the misapplication of tax incentives that give a royalty break for “stripper” wells that produce very small amounts from legacy fields.

New Mexico recently beefed up its audit programme by doubling the number of state auditors from two to four and increasing the division’s travel budget so it can perform more audits on companies whose headquarters are out of state.

Total names CEO and chairman http://www.upstreamonline.com/live/1380931/Total-names-CEO-and-chairman Patrick Pouyanne to become chief while Thierry Desmarest will return as chairman Bill.Lehane@upstreamonline.com (Bill Lehane) http://www.upstreamonline.com/live/1380931/Total-names-CEO-and-chairman Wed, 22 Oct 2014 11:15:33 +0000 live The French oil major's head of refining, Patrick Pouyanne, has been nominated as chief executive and president of the executive committee.

Former Total chairman Thierry Desmarest, who handed de Margerie the chairmanship in 2010, is to return as chairman of the board of directors.

The roles of chairman and chief executive, which had been combined for de Margerie in 2010, will be split for the new appointments pending shareholder approval.

Once 68-year-old Desmarest reaches the age of 70, the maximum age allowed for board members under Total's bylaws, at the end of 2015 the two roles are to again be combined, the explorer said.

The appointments were approved unanimously by the board after recommendations of Total’s governance and ethics committee.

The Paris-based board of directors also paid tribute to de Margerie's contribution to the French oil company's success.

“He dedicated his brilliant career to the development of the group, enabling its glowing success in the oil and gas sector and more recently in solar energy,” the board said.

“The exceptional human and professional qualities that de Margerie exhibited during his time at Total were largely responsible for the success of the group,” the directors added.

51-year-old Pouyanne had been tipped as the likely successor in the hours leading up to Wednesday’s board meeting.

Pouyanne was tipped by several French newspapers to be preferred over his rival for the top job, Total new energies unit boss Phillippe Boisseau, despite both being seen as having equal capabilities.

Citing sources familiar with the matter, France’s Le Monde newspaper said that Pouyanne was seen as having a stronger personality as well as benefiting from close ties to French government circles thanks to spending a period as departmental chief for former prime minister Francois Fillon in the department of telecoms in the mid-1990s.

Pouyanne is a graduate of the engineering schools Ecole Polytechnique and Ecole des Mines in Paris. He served in various governmental posts between 1989 and 1996, joining Total in 1997 as chief administrative officer of Total E&P Angola.

Two years later he became its representative and chief executive in Qatar, moving on to senior vice president of finance, economics and information systems in exploration and production (E&P) in 2002.

In early 2006 he moved on to senior vice president of strategy, business development and R&D in E&P, also moving onto the management committee that year.

In 2011 he was appointed senior vice president of chemicals and petrochemicals, taking the president mantle of refining and chemicals the year after.

Boisseau joined Total in 1995 after holding a number of governmental positions. He has served the French company in various roles in the likes of Argentina, the US and Middle East, becoming president of gas and power in 2007. He landed his current role in early 2012.

Desmarest was appointed honorary chairman in May 2010 when de Margerie was named chairman and chief executive.

Rosneft ‘looks for more from wealth fund’ http://www.upstreamonline.com/live/1380980/Rosneft-‘looks-for-more-from-wealth-fund’ Russian oil behemoth’s request for assistance from national fund more than previously sought, report indicates Eoin.Ocinneide@upstreamonline.com (Eoin O'Cinneide) http://www.upstreamonline.com/live/1380980/Rosneft-‘looks-for-more-from-wealth-fund’ Wed, 22 Oct 2014 15:58:19 +0000 live The oil behemoth has asked the government for more than 2 trillion roubles ($48.36 billion) from the fund, Reuters cited Finance Minister Anton Siluanov as saying – more than Rosneft was previously reported to have been seeking.

Russian newspaper Vedomosti reported in mid-August that Rosneft asked the government for more than $41 billion to help ride out the effect of sanctions imposed on it and other Russian institutions, companies and individuals by the US and European Union.

According to that report, a letter sent by Rosneft chairman Igor Sechin to the Ministry of Economic Development suggested that the fund spend 1.5 trillion Russian roubles (worth $41.64 billion at the time but today worth $36.26 billion) on Rosneft bonds.

Net debt at the Moscow-based player stood at 1.5 trillion roubles at the end of June.

In early September, Vedomosti said the Russian government was considering “types of support” for Rosneft following that request from the company.

Rosneft and Sechin himself have found themselves on the end of sanctions imposed by Western governments over the annexation of Crimea from Ukraine earlier this year. Sanctions were stepped up further in the wake of the downing of a Malaysia Airlines flight over eastern Ukraine in July, killing almost 300 people.

Shell confirms Gabon find http://www.upstreamonline.com/live/1380908/Shell-confirms-Gabon-find Supermajor says 'substantial gas column' found at frontier offshore well, confirming earlier Upstream report Eoin.Ocinneide@upstreamonline.com (Eoin O'Cinneide) http://www.upstreamonline.com/live/1380908/Shell-confirms-Gabon-find Wed, 22 Oct 2014 08:11:19 +0000 live The Anglo-Dutch supermajor hit around 200 metres of net gas pay in a pre-salt reservoir at the Leopard-1 wildcat on its deep-water BDC-10 permit.

Upstream reported last Friday that the oil giant was understood to have made a pre-salt gas-condensate discovery at the well.

The well, located around 145 kilometres off Gabon, was drilled to 5063 metres in waters 2110 metres deep, using the Noble drillship Globetrotter II.

"Shell and partners are planning to undertake an appraisal programme to further determine the resource volumes," Shell said on Wednesday.

Upstream international director Andy Brown said: "Shell has been exploring in Gabon for over 50 years. This latest deep-water discovery is testament to the innovation of our explorers in pursuing new plays, and application of our global sub-surface expertise."

This is the second pre-salt discovery in Gabon’s deep waters, following Total’s Diaman-1 probe in 2013, which also found gas and condensate. Diaman is located in the Diaba permit south of BCD-10.

The Globetrotter II had mobilised to BCD-10 immediately after drilling Shell’s first Gabonese pre-salt wildcat - N’komi-1 - in the BC-9 permit immediately to the north.

Sources said N’komi-1, drilled in 1200 metres of water, was unsuccessful.

Shell operates BCD-10 on 75% and is joined by China National Offshore Oil Corporation on 25%.

Norway tax puts Arctic finds 'on ice' http://www.upstreamonline.com/live/1380952/Norway-tax-puts-Arctic-finds-on-ice Oslo needs to follow fiscal lead of other countries to unlock costly fields in frontier region: analyst Steve.Marshall@upstreamonline.com (Steve Marshall) http://www.upstreamonline.com/live/1380952/Norway-tax-puts-Arctic-finds-on-ice Wed, 22 Oct 2014 14:17:30 +0000 live The high tax burden in Norway “poses a challenge to commerciality” when compared with the Russian, Canadian and US fiscal regimes for the region, with Russia having introduced tax breaks for offshore Arctic developments earlier this year, said GlobalData’s upstream fiscal analyst Will Scargill.

He highlighted the fact that Oslo’s right-wing coalition government, led by Conservative Prime Minister Erna Solberg, failed to introduce measures in its recently announced 2015 Budget to mitigate the effects of an earlier unpopular tax hike despite indications it would do so.

The tax change, introduced by the previous Labour-led administration last year, reduced uplift on capital expenditure and also increased the petroleum tax, hitting marginal greenfield projects with high costs in the Arctic where there is little existing infrastructure.

“This change had a particularly detrimental impact on the potential economics of projects requiring high capital outlay, and the effects are especially visible in the marginal commerciality of Statoil’s proposed Johan Castberg project in the Barents Sea,” he said. 

The state-owned operator has delayed an investment decision on the project to develop the field due to high costs and resource uncertainty, as well as the tax raise, with a costly $15.5 billion concept involving a pipeline to onshore terminal currently being re-evaluated.

Further major discoveries have since been made in the region, notably Lundin Petroleum’s Gohta and Alta finds to the south of Castberg in the Loppa High area and OMV’s Wisting strike that has opened the Hoop play in the extreme north.

However, the analyst warned the challenging economics of the Johan Castberg project indicate that, without fresh tax incentives, “new developments are unlikely to be commercially viable farther north in the Barents Sea, where costs are expected to be higher”.

“On the other hand, the Canadian and US Arctic regimes would likely enable a project with Johan Castberg’s cost profile to generate a fair return on investment,” he claimed.

Scargill pointed out though that international oil companies must balance the attractiveness of different countries’ fiscal regimes with other obstacles, such as stringent environmental regulations off Canada and Alaska, that could offset more promising economics.

Meanwhile, Norway Petroleum & Energy Minister Tord Lien was quoted as saying by Reuters this week that several oil and gas projects with development plans due to be submitted next year will be delayed due to high costs and technological challenges, while several will move forward.

While not naming specific projects, he said those that will be delayed will eventually be developed over the long term.

He called on the oil and gas industry to get a grip on spiralling costs that have led to Statoil and other operators cancelling or postponing field projects as they exercise stricter capital discipline to boost project profitability amid dwindling returns for shareholders.

RWE Dea recently decided to shelve development of the Zidane gas field in the Norwegian Sea where Shell earlier has also put on hold its Linnorm scheme and Statoil has cancelled the Kristin gas export project.

Recent falling oil prices, now at around $86 per barrel, are likely to put further pressure on the economics of projects, particularly in the underdeveloped Barents where a higher price is required for projects to break even.

The Goliat oilfield being developed by Eni in the region is reported to be based on a break-even price of $95 per barrel.

Statoil will though bring to fruition four mega-projects off Norway over the next four years comprising Valemon, due online by year-end, Gina Krog and Aasta Hansteen with start-up scheduled for 2017, and the giant Johan Sverdrup field at the end of 2019.

Earlier this year, the state operator launched production from the Gudrun field – its first operated development for nearly a decade – to kick off the succession of new projects.

In addition, Statoil is on course to implement a subsea gas compression scheme at the Aasgard field next year and is also developing the Polarled pipeline in association with Aasta Hansteen.

Europa gains Kiln Lane planning nod http://www.upstreamonline.com/live/1380968/Europa-gains-Kiln-Lane-planning-nod UK junior aims to spud East Midlands oil probe by year's end Bill.Lehane@upstreamonline.com (Bill Lehane) http://www.upstreamonline.com/live/1380968/Europa-gains-Kiln-Lane-planning-nod Wed, 22 Oct 2014 15:42:46 +0000 live The AIM-listed explorer said that Grimbsy Town Hall had green-lighted the East Lincolnshire well subject to final documentation, with the Environment Agency's approval the only outstanding step in the process.

Chief executive Hugh Mackay said the probe remained on track to spud by year’s end, adding that testing operations would start next month on the Wressle 1 well on an adjacent licence that uncovered 30 metres of pay last month.

Europa operates the PEDL 181 licence containing the Kiln Lane oil and gas prospect on a 50% stake along with Celtique Energie and Egdon Resources on 25% each.

The Kiln Lane probe is targeting oil potential in Carboniferous sandstone reservoirs with gross prospective resources of 2.9 million barrels.

Depending on the source rock uncovered, the well could also de-risk other leads on the South Humber basin licence as well as offer more data on the area’s shale gas potential, the explorer said previously.

BP awards dual Tangguh FEED studies http://www.upstreamonline.com/live/1380921/BP-awards-dual-Tangguh-FEED-studies Two consortia to vie for contract to build third Indonesia LNG train Bill.Lehane@upstreamonline.com (Bill Lehane) http://www.upstreamonline.com/live/1380921/BP-awards-dual-Tangguh-FEED-studies Wed, 22 Oct 2014 09:08:24 +0000 live Two consortia will conduct the 12-month FEED studies on adding a third train to the project before BP chooses one of them will go on to be the LNG engineering procurement and construction contractor.

The BP-led venture has also signed a sales and purchase agreement with Indonesian state electricity company PLN to supply up to 1.5 mtpa of LNG from 2015 to 2033.

Supply to PLN will initially be provided from Tangguh’s existing two LNG trains while 40% of annual production from the third train is committed to the domestic market.

BP chief executive Bob Dudley said that the awards represented significant progress for a project that will “deliver significant value, including much-needed energy to Indonesia”.

The first FEED consortium groups Japan’s Chiyoda with Indonesia’s Tripatra and Italy’s Saipem, while the other pairs Japan’s JGC Corporation with KBR of the US.

The expansion will see a third train with a capacity of 3.8 million tonnes per annum added to raise total capacity to 11.4 mtpa at the project in Teluk Bintuni Regency in Papua Barat province.

Last month BP said it was still waiting on government approvals before awarding the pair of studies, having previously hoped to award the contracts in April.

BP operates Tangguh on a 37% stake along with a clutch of partners: MI Berau on 16.3%, CNOOC Ltd with 13.9%, Nippon Oil Exploration on 12.23%, KG Berau-KG Wiriagar on 10%, Indonesia Natural Gas Resources with 7.35% and Talisman Energy on 3.06%.

BP has not yet taken a final investment decision for Tangguh, which would be subject to further regulatory and partner approvals.

Norway 'licence to operate' for Fridman http://www.upstreamonline.com/live/1380906/Norway-licence-to-operate-for-Fridman Russian tycoon's LetterOne 'gains official nod' to take over RWE Dea permits despite sanctions: report Steve.Marshall@upstreamonline.com (Steve Marshall) http://www.upstreamonline.com/live/1380906/Norway-licence-to-operate-for-Fridman Wed, 22 Oct 2014 07:36:24 +0000 live The Petroleum & Energy Ministry gave its approval in June for the exploration and production unit of German utility RWE to continue to hold licences off Norway under its new Russian owner just before the imposition of wider Western sanctions on the Kremlin over the Ukraine crisis, news wire NTB reported.

The ruling, which is a formal requirement when assets change hands off Norway, stands in marked contrast to the stance of the British government, which last week signalled it would block the handover of five gas fields to the Russian player due to sanctions on Russia.

Luxembourg-based investment outfit LetterOne, backed by Mikhail Fridman and partner German Khan, earlier this year agreed the €5.1 billion ($7.1 billion) deal to acquire RWE Dea’s assets in the UK, Norway, Germany and Egypt, which was recently approved by Germany’s Economy Ministry.

However, the US and European Union have recently widened sanctions against Russia, which is alleged to be backing separatists in eastern Ukraine, to include exports of equipment and oilfield services for exploitation of Arctic offshore and deep-water as well as onshore shale plays.

They have also added companies such as state-owned Rosneft and Gazprom Neft, as well as Lukoil, to the list of sanctioned players while cutting off access to Western finance, having earlier imposed travel bans and asset freezes on certain individuals with close ties to Russian President Vladimir Putin.

While Fridman is not part of Putin’s inner circle and is not on the sanctions list, the UK move appears to indicate that Russian individuals with Western contacts could also feel the brunt of sanctions.

A spokesman for the Norwegian ministry was quoted as saying it had no comment beyond its 27 June statement giving its approval for RWE Dea’s continued participation in licences off the country.

It was reticent on whether Petroleum & Energy Minister Tord Lien was now reviewing the decision in the light of heightened sanctions.

Labour Party parliamentary representative Per Rune Henriksen is reported to have submitted a written question to the minister on whether there would be a re-evaluation of LetterOne’s acquisition of RWE Dea assets off Norway amid sanctions, though has yet to receive a reply.

Henriksen claimed the ministry had apparently acted hastily and “without any political consideration” in making its decision to approve the licence handover, saying the issue of Russian ownership of Norwegian assets should first have been referred to parliament.

LetterOne is set to step into 33 licences – including five operatorships – held off Norway by RWE Dea, which has also recently participated in the landmark Alta find in Lundin Petroleum-operated production licence 609 where the German partner holds a 30% stake.

RWE Dea has also made the operated Titan and Zidane discoveries in the North and Norwegian seas, respectively, though development of the latter has been put on hold.

A spokesman for Norway’s Foreign Ministry was quoted as saying that sanctions applied largely to exports of certain equipment and services for use in Russia and were “not relevant” for participation by foreign players in concessions off Norway.

Amerisur, Talisman in Colombian JV http://www.upstreamonline.com/live/1380904/Amerisur-Talisman-in-Colombian-JV Duo look to team up to explore block in the Putumayo basin Josh.Lewis@upstreamonline.com (Josh Lewis) http://www.upstreamonline.com/live/1380904/Amerisur-Talisman-in-Colombian-JV Wed, 22 Oct 2014 06:59:47 +0000 live Amerisur said it had formed a 50:50 joint venture with Talisman affiliated company, Talisman Colombia, and presented a request to Colombia's Agencia Nacional de Hidrocarburos for a partial assignment of interest, rights and obligations in the contract.

It added that the joint venture was also looking at the potential for Amerisur to take over operatorship of the block.

Amerisur chief executive John Wardle said the company had extensive operating experience in the area with its Platanillo field and Put-12 Block.

“In Put-30 we will explore to evaluate the potential of producible heavy oil deposits in the Neme formation,” he said.

“The presence of this heavy oil zone has been demonstrated in many wells within this part of the basin over the years, and we believe the time has now come to add such prospects within our portfolio.

“The potential resources of the area are of significant size and we look forward to a rapid and efficient exploration and evaluation programme.”

Talisman was awarded the Put-30 exploration contract in the Ronda Colombia 2014 licensing round.

The successful bid included an additional royalty to the state of 4% above the baseline 8% royalty and the commitment to complete a total work programme at an estimated cost of $26.9 million during the first 36-month exploration phase.

The work programme includes the gathering of 209 kilometres of 2D seismic and the drilling of one exploration well.

The block covers about 38,514 hectares in the Putumayo basin, and lies roughly 55 kilometres north of Amerisur's 100% owned Platanillo field and 60% owned Put-12 Contract.

HitecVision raises Rocksource stake http://www.upstreamonline.com/live/1380912/HitecVision-raises-Rocksource-stake Private equity investor bolsters dominant holding with further share buys in Norwegian minnow Steve.Marshall@upstreamonline.com (Steve Marshall) http://www.upstreamonline.com/live/1380912/HitecVision-raises-Rocksource-stake Wed, 22 Oct 2014 08:24:34 +0000 live The Stavanger-based private equity player’s investment vehicle EPSI now owns a 31.24% shareholding in the Oslo-listed company for which it has splashed out a total of Nkr184.2 million ($30 million) under its Nkr6 per-share offer to existing shareholders.

It has now acquired 30.7 million shares on strong shareholder acceptance, compared with an original purchase order of 19.7 million, but does not hold other rights to shares in the company, according to a Rocksource statement.

As a result, Rocksource’s former majority owner Larsen Oil & Gas, backed by Norwegian investor Berge Gerdt Larsen, has been relegated to second place in the shareholder rankings with a stake of 28.6%.

However, Larsen was reported to have welcomed the entry of a new, well-funded backer into the company, telling Norwegian business daily Finansavisen it would give it greater financial strength to have two big shareholders.

Nevertheless, shares in Rocksource retreated by around 4% on Wednesday to trade at around Nkr5.54, having surged by nearly 74% over the past week from a lowly Nkr2.90, to give it a market capitalisation of Nkr547 million, compared with an implied value of around Nkr589 million from the HitecVision offer.

Analysts at Swedbank First Securities were supportive of the offer, saying the timing was right given that Rocksource risks running out of cash to fund further exploration next year and may otherwise be required to carry out a dilutive share issue.

Russia calls for Ukraine gas cash http://www.upstreamonline.com/live/1380939/Russia-calls-for-Ukraine-gas-cash Latest talks to resolve supply dispute falter as Moscow demands to see colour of Kiev's money: report Steve.Marshall@upstreamonline.com (Steve Marshall) http://www.upstreamonline.com/live/1380939/Russia-calls-for-Ukraine-gas-cash Wed, 22 Oct 2014 11:51:53 +0000 live The latest talks in Brussels on Tuesday, brokered by the European Union, snagged on a question mark over Kiev’s ability to pay for supplies from Russian state-owned Gazprom, which cut off deliveries to Ukraine in June due to gas debts totalling a reported $5.3 billion.

The two sides have agreed a gas price of $385 per thousand cubic metres as long as it is paid in advance for deliveries.

However, Russian Energy Minister Alexander Novak was reported as saying by Reuters that Moscow was seeking assurances on how Kiev would find the cash to pay for its supplies.

"Today we should establish the availability of financial resources for advance payments for November and December. We haven't received these assurances, either from [state utility] Naftogaz and Ukraine or the European Commission,” he said.

Ukraine, which earlier agreed to pay off $3.1 billion by the end of the year, was reported to be seeking a loan of €2 billion ($2.55 billion) from the EU to meet gas payments to Moscow.

EU Energy Commissioner Gunther Oettinger is seeking to push through a preliminary pact that would ensure gas deliveries of at least 5 billion cubic metres to Ukraine until 31 March.

There are fears the ongoing stand-off could lead to disruption of gas supplies to European countries during critical winter months, amid sanctions imposed on Russia by the US and EU over its alleged support for separatists in eastern Ukraine.

Oettinger said after the latest talks: "We made another step towards a possible solution and are close to an agreement on important elements. Others still need to be addressed, such as the financial gap."

He said he believed the next meeting scheduled for 29 October in Brussels would be the final trilateral talks, with a deal expected to be signed.

Meanwhile, Russian President Vladimir Putin was quoted as saying Ukraine’s debt for gas supplies stood at $4.5 billion, significantly less than the $5.3 billion previously demanded by Gazprom.

Songa offloads rig liabilities http://www.upstreamonline.com/live/1380922/Songa-offloads-rig-liabilities Rig player cuts term and dayrate of bareboat charter for Songa Venus after sale to Opus Steve.Marshall@upstreamonline.com (Steve Marshall) http://www.upstreamonline.com/live/1380922/Songa-offloads-rig-liabilities Wed, 22 Oct 2014 09:16:56 +0000 live The Oslo-listed rig contractor was originally on the hook for a dayrate of $120,000 for the 1975-built semi-submersible Songa Venus under its bareboat charter with Opus, which acquired the unit and another rig, Songa Mercur, in a $200 million deal.

Songa has though been struggling to secure an employment contract for the Venus and suffered a $31.2 million impairment in the second quarter to offset lower earnings for the rig pair.

The company said in a statement it has now curtailed the termination date of the bareboat charter to 15 February, from the original date of 31 March, next year with $3 million payable by the buyer for the contract amendment.

Opus will also be liable for operating expenses for the Songa Venus from 1 November, although Songa will continue to pay a dayrate of $35,000 from this date until the revised expiry of the charter, as well as $1 million to cover maintenance costs.

Songa will no longer pursue work for the rig and will cease to report operating and earnings efficiency data for the unit in its fleet updates, the company stated.

BHP boosting production http://www.upstreamonline.com/live/1380892/BHP-boosting-production US onshore production helps Australian company grow numbers bianca.bartucciotto@upstreamonline.com (Bianca Bartucciotto) http://www.upstreamonline.com/live/1380892/BHP-boosting-production Wed, 22 Oct 2014 00:44:59 +0000 live The company said production totalled 67.4 million barrels of oil equivalent, as onshore US liquids volumes sky-rocketed by 49% to a record 11.5 million boe.

Liquids output grew by 19% quarter-on-quarter, underpinned by strong performance from its Black Hawk field and assets from the Permian basin in the US where output grew by 49% and 11.5% respectively

“We remain confident that shale liquids volumes will rise by approximately 50% in the 2015 financial year,” the company said in a statement.

The company’s conventional business also grew quarter-on-quarter, as production from the Atlantis field in the US Gulf of Mexico increased by 38% during the September quarter, after two production wells were completed in the June quarter.

Output from the Pyrenees oil project in Australia also rose by 24% following the completion of five new production wells.

Natural gas production remained stagnant quarter-on-quarter, with a 2% increase due to higher demand from the Bass Strait in Australia and stronger uptime performance from the North West Shelf.

This was partially offset by natural field decline at the company's onshore US dry gas assets.

Chief executive officer Andrew Mackenzie said the company was now on track to grow production by 16% over the two years to the end of 2015.

“Our relentless focus on productivity continues to yield strong results. With our focus now on maximising the value of existing infrastructure, we plan to reduce costs and invest judiciously in very low capital cost debottlenecking initiatives,” he said.

Production guidance for 2015 remains unchanged at 255 million boe, up by 5% on the previous year.

Profits surge for Havila http://www.upstreamonline.com/live/1380926/Profits-surge-for-Havila Strong earnings from anchor-handlers lift quarterly result for Norwegian vessel owner Steve.Marshall@upstreamonline.com (Steve Marshall) http://www.upstreamonline.com/live/1380926/Profits-surge-for-Havila Wed, 22 Oct 2014 09:55:22 +0000 live The company said it had recorded its best-ever quarter after reporting an operating result of Nkr305.1 million ($46.2 million), compared with Nkr211.4 million a year earlier, as revenue rose 29% year on year to Nkr519.6 million.

However, Havila’s operating costs were up 13% over the year at Nkr214.5 million and the company was left with a net profit of Nkr72.1 million after higher net financial items and taxes, versus Nkr67 million in the same period of 2013.

Its nine-month net profit figure has though almost doubled from last year to Nkr125.8 million.

The company said it had benefited from high utilisation and strong dayrates during the quarter for its anchor-handling tug supply vessels operating in a strong North Sea spot market, though rates were weaker for platform supply vessels.

Havila’s 27-vessel fleet currently has contract coverage of 87% for the fourth quarter and 79% in 2015, excluding options.

InterOil strikes in PNG http://www.upstreamonline.com/live/1380901/InterOil-strikes-in-PNG Wildcat intersects hydrocarbons in Kapau limestone bianca.bartucciotto@upstreamonline.com (Bianca Bartucciotto) http://www.upstreamonline.com/live/1380901/InterOil-strikes-in-PNG Wed, 22 Oct 2014 05:46:14 +0000 live The company intersected 200 metres of Kapau limestone during drilling, with wireline logs indicating the presence of hydrocarbons.

InterOil will now carry out well testing to shore up the hydrocarbon type, column, flow rate and reservoir quality.

This is just one well in a trio of wildcats designed to test what the company sees as enormous remaining potential in the area ahead of a planned liquefied natural gas development.

Raptor-1 is about 12 kilometres west of InterOil’s Elk-Antelope gas field.

InterOil is the operator of the well and holds a 65.2% interest, while Pacific Rubiales Energy holds a 12.9% interest, with other minority interest holders making up the remaining 21.8%.

The company’s Bobcat-1 well in PPL476 was successfully drilled through the Orubadi seal section and into the Kapau limestone.

InterOil is now preparing to drill further into the target zone.

InterOil holds a 78.1% interest in the well and is operator. The remaining 21.8% interest is held by minority interests.

Thailand kicks off acreage auction http://www.upstreamonline.com/live/1380905/Thailand-kicks-off-acreage-auction New onshore and offshore blocks on the table according to government official (News Wires) http://www.upstreamonline.com/live/1380905/Thailand-kicks-off-acreage-auction Wed, 22 Oct 2014 07:03:13 +0000 live Interested investors are required to submit their proposals by 18 February, 2015, Kurujit Nakornthap, deputy permanent secretary at the energy ministry, said in a statement.

Thailand, which uses natural gas to generate nearly 70% of its power, has been struggling to secure long-term energy supplies as growth in output and reserve replacement have not kept up with demand.

Brent sits near four-year low http://www.upstreamonline.com/live/1380899/Brent-sits-near-four-year-low Oil price recovering after being slugged by supply (News Wires) http://www.upstreamonline.com/live/1380899/Brent-sits-near-four-year-low Wed, 22 Oct 2014 04:57:09 +0000 live Expectations that oil demand may pick up in the near term have helped the crude benchmark regain ground after weeks of steep losses that have cut the price by a quarter since June.

"Brent has been recovering, and seeing that oil prices have plunged enough, it's looking like this level is a good opportunity to buy," Newedge Japan commodity sales Yusuke Seta told Reuters.

"I don't expect any further sharp declines because even though economic activity is still limited, especially in Europe, it's recovering in Asia and hopefully demand for crude should recover after another 3 to 4 weeks of refinery maintenance in the US."

Brent crude for December delivery was up $0.03 at $86.25 by Wednesday morning, pulling further away from last week's low of $82.60, which was its weakest since 2010.

December US crude was down $0.02 at $82.47 per barrel.

US crude inventories rose 1.2 million barrels last week, less than the forecast increase of 2.7 million barrels, data from the American Petroleum Institute showed on Tuesday.

Implied oil demand in China, the world's second largest oil consumer, jumped 6.2% in September from August to hit a seven-month peak, as crude runs soared to their second-highest point this year.

The numbers released on Tuesday helped offset pessimism from data showing China's economy expanded by its slowest pace since 2009 in the third quarter.

Standard Chartered Bank oil analyst Paul Horsnell, known for forecasting the market's long rally a decade ago, is sticking with a bullish bias despite the slump in prices this year.

Horsnell and his team have cut their Brent forecast for 2015 by $5 but still expect $105, among the more bullish forecasts.

"According to our supply and demand tabulations and those of the main agencies, there is no immediate oil glut," they wrote in a note.

While there was no excess supply in the fourth quarter, that situation would emerge in the first quarter of 2015, which would require the Organization of the Petroleum Exporting Countries (OPEC) to take oil off the market, StanChart analysts told Reuters.

While some OPEC members, including Saudi Arabia and Kuwait, have indicated that the group was unlikely to cut production to rescue prices, others such as Libya are pushing for a reduction.

Falling oil prices have prompted Iran to accuse fellow Muslim countries of plotting with the West to bring down oil prices as a way of further undermining its sanctions-hit economy.

The administration of Iranian President Hassan Rouhani has been scrambling for alternative sources of income to meet its forecast for revenue in the current budget, which is based on an oil price of $100 per barrel.

Japanese oil demand falls http://www.upstreamonline.com/live/1380898/Japanese-oil-demand-falls Oil imports down in September but liquefied natural gas imports are up 10.5% on a year earlier Josh.Lewis@upstreamonline.com (Josh Lewis) http://www.upstreamonline.com/live/1380898/Japanese-oil-demand-falls Wed, 22 Oct 2014 04:12:52 +0000 live Japan's customs-cleared oil imports fell 3.7% in September from the same month a year earlier, while LNG imports rose 10.5%, Reuters reported citing figure from the Ministry of Finance.

Japan, the world's fourth-biggest crude buyer, imported 3.39 million barrels per day of crude last month, the preliminary data showed.

Japan's imports of LNG totalled 7.28 million tonnes last month, up 10.5% from a year earlier.

For the first half of the fiscal year ending in September, crude import volumes dropped 8.9%, while LNG imports climbed 3.7%.

BC introduces new LNG tax http://www.upstreamonline.com/live/1380889/BC-introduces-new-LNG-tax Rate change could sway investment decisions on more than a dozen projects in Canadian province (Tonya Zelinsky) http://www.upstreamonline.com/live/1380889/BC-introduces-new-LNG-tax Tue, 21 Oct 2014 23:48:13 +0000 live In 2017 companies will be charged an initial LNG income tax rate of 1.5% while capital investments are being deducted, rising to 3.5% once projects begin recouping costs.

From there it will remain flat until 2037 when the income tax increases and caps out at 5%.

This rate comes in much lower than originally projected. When the BC government announced its 2014 budget in February, it proposed a tax structure of 7%.

At the time, proponents said the rate was higher than expected and could colour decisions to proceed with the province's 18 proposed LNG export projects.

Finance Minister Mike de Jong said discussions with industry have been ongoing since the tax framework was initially introduced and the reduced rates are the result of a change in market conditions – specifically declining LNG prices and increased construction costs.

He said the new rate is competitive with other global jurisdictions such as the US and Australia.

"This ensures that proponents have time to build a strong foundation in the communities in which they operate, before the full extent of the tax is applied," he said in a statement.

The province is optimistic the new tax legislation, expected to be passed in November, will result in final investment decisions made by proponents within the next three years.

Senex maintains guidance http://www.upstreamonline.com/live/1380893/Senex-maintains-guidance Quarterly revenue and output up year-on-year but down compared to record June quarter Josh.Lewis@upstreamonline.com (Josh Lewis) http://www.upstreamonline.com/live/1380893/Senex-maintains-guidance Wed, 22 Oct 2014 01:39:09 +0000 live The company generated A$42.9 million (US$37.7 million) in sales revenue over the three months to 30 September, a 7.9% rise on the A$39.3 million generated over the same period last year.

The rise in revenue came as Senex produced 380,000 barrels during the recent quarter, up from 300,000 barrels a year earlier.

“During the September quarter Senex has achieved a strong oil production result, our second highest on record, and delivered a new oil discovery in the Namur formation on the western flank of the Cooper basin,” Senex managing director Ian Davies said.

“As part of its 25+ well drilling program in 2014/15, Senex will drill a series of new wells across its Cooper basin acreage, including an initial exploration campaign of up to eight wells in the under-explored northern Cooper basin.”

Despite the year-on-year rise, output was down 12% on the record high of 430,000 barrels produced during the final quarter of the previous financial year, which ended 30 June.

Senex said output during the recent quarter was affected by mechanical failure issues on key wells in the Growler and Acrasia fields in South Australia.

However, it added that the affected wells were now back online after completing successful remedial workovers.

Senex also noted that a record number of wells were brought online in the previous quarter which had higher initial decline rates on average than mature producing wells.

Despite the drop off in production during the first quarter, Senex maintained its full-year guidance for output to total more than 1.4 million barrels of oil equivalent.


Bechtel starts Tilbury expansion http://www.upstreamonline.com/live/1380895/Bechtel-starts-Tilbury-expansion Canadian LNG project expansion underway on west coast bianca.bartucciotto@upstreamonline.com (Bianca Bartucciotto) http://www.upstreamonline.com/live/1380895/Bechtel-starts-Tilbury-expansion Wed, 22 Oct 2014 02:29:34 +0000 live Bechtel was awarded an engineering, procurement and construction contract to expand the project to add a 1-billion-cubic-foot full-containment storage tank and increase the facility's liquefaction capacity to 1,740 cubic meters per day of liquefaction capacity.

The company is also responsible for start-up and commissioning of the new liquefaction facility.

Construction is expected to be wrapped up by the end of 2016, and will add about 46,000 cubic metres of LNG storage to the project.

FortisBC operates the only two LNG facilities in Western Canada, and has been running Tilbury LNG since 1971.

The company said the expanded plant will be powered by electric drives and the facility will be air-cooled to eliminate the need for cooling water.

Savanna lands Oz rig contracts http://www.upstreamonline.com/live/1380890/Savanna-lands-Oz-rig-contracts Canadian player to supply four rigs to support an Australian LNG project Josh.Lewis@upstreamonline.com (Josh Lewis) http://www.upstreamonline.com/live/1380890/Savanna-lands-Oz-rig-contracts Wed, 22 Oct 2014 00:05:15 +0000 live The contract will see Savanna deploy four new design top drive single 2000 and 3000 drilling rigs under multi-year take-or-pay deals.

"We continue to experience strong utilisation of our existing equipment, are very focused on delivering the additional equipment contracted over the past year, and see strong opportunities for additional business growth in Australia in the future,” Savanna chief executive Ken Mullen said.

“Australia remains a strong diversification platform for Savanna, with market forces distinct from those currently impacting North America."

The first rig under the new contract is expected to begin operations in the first quarter of 2016 and adds to the five drilling rigs and five workover rigs Savanna currently operates in Australia.

The company is also in the process of deploying four additional workover rigs and three flush-by units under long-term take-or-pay contracts which will be operational by the first quarter of 2015.

Savanna did not name the customer of its latest award in Tuesday's release, saying only that they were an existing customer and the rigs would be used to support an east coast liquefied natural gas project.

The Canadian company was awarded a five-year drilling and workover contract in 2009 for the Australia Pacific LNG project (APLNG).

The Queensland LNG project will consist of two trains capable of handling 4.5 million tonnes per annum of LNG each, with exports from the first train currently scheduled to start in 2015 and will be followed by the start-up of the second train in 2016.

The facility will be fed by gas from coalbed methane fields being developed by the joint venture in Queensland’s Surat and Bowen basins.

The APLNG joint venture partners include Orign (37.5%), ConocoPhillips (37.5%) and Sinopec (25%).