www.upstreamonline.com http://www.upstreamonline.com/ www.upstreamonline.com Short-list narrows for NT pipeline http://www.upstreamonline.com/live/1396020/short-list-narrows-for-nt-pipeline Four left standing in bid to build pipeline to connect Australia's northern and eastern gas markets Josh.Lewis@upstreamonline.com (Josh Lewis) http://www.upstreamonline.com/live/1396020/short-list-narrows-for-nt-pipeline Wed, 01 Apr 2015 04:35:28 +0000 live The government revealed on Wednesday proposals from APA Group, Duet Group, Merlin Energy Australia and Jemena had been nominated by a panel of experts to go through to the final stage of the bidding process.

“The quality of the submissions through the government’s competitive process for the pipeline’s construction has been so high that we now feel it is inevitable that this vital pipeline will be built,” the Northern Territory's Chief Minister Adam Giles said.

“The submissions give us confidence that this project is seen by the private sector as being commercially viable and that the focus of government support will be around facilitating approval processes. Put plainly, the numbers seem to be stacking up.”

The new short-list follows a pre-qualification process last year where 11 companies were selected to submit proposals, with those now missing out including Berkshire Hathaway Energy, Enbridge, GdF Suez, Macquarie Capital, Marubeni, OSD Midstream and Quanta Capital.

The Northern Territory and New South Wales governments signed a memorandum of understanding last year to work together on the development of a pipeline to connect Australia's northern and eastern gas markets to help ease a potential east coast gas shortage.

Several routes are being considered, ranging in length from 600 kilometres to 1100 kilometres over remote, rugged countryside.

The Territory is hoping the construction of the pipeline will help it unlock the more than 200 trillion cubic feet of gas resources it is estimated to hold across six onshore basins, with a further 30 Tcf estimated to be held offshore.

“The current local industry can't support gas exploration and development on its own without the market confidence this pipeline provides,” Giles said on Wednesday.

“This pipeline will connect them with the volume of customers they need to fund the scale of exploration the Territory needs to fuel new industries into the future.

“Through this pipeline, the government is setting up a long term framework that grows gas supply, creates a more competitive energy market and provides access to plentiful, cheaper gas for use by local industry and domestic energy production.”

The government has previously stated it hopes to wrap up the bid process for the pipeline by late September.

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ExxonMobil to supply Port Morseby power http://www.upstreamonline.com/live/1396016/exxonmobil-to-supply-port-morseby-power Key component executed under MoU signed earlier this year with PNG government Josh.Lewis@upstreamonline.com (Josh Lewis) http://www.upstreamonline.com/live/1396016/exxonmobil-to-supply-port-morseby-power Wed, 01 Apr 2015 03:43:52 +0000 live Under the deal, ExxonMobil has agreed to supply up to 25 megawatts of electricity to PNG Power, which will, in turn, build the necessary infrastructure to the LNG plant in order for supply to commence.

“With the signing of this agreement, we are continuing to demonstrate our commitment to the government and people of Papua New Guinea by contributing to the current power generation needs of Port Moresby,” ExxonMobil PNG managing director Andrew Barry said.

The deal is one of the commitments made under a memorandum of understanding between ExxonMobil and the PNG government for the former to provide domestic gas for power generation for Port Moresby.

The MoU also sets out terms for the supply of long-term gas sales to a new state-owned gas-fired power generation unit to be built near the PNG LNG plant.

It also provides for the award of a petroleum development licence and associated pipeline licences for the P’nyang gas discovery which could enable an expansion of the PNG LNG project.

 

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Oil dips as Iran deadline extended http://www.upstreamonline.com/live/1396019/oil-dips-as-iran-deadline-extended Prices fall as supply expected to increase amid low demand Josh.Lewis@upstreamonline.com (Josh Lewis) http://www.upstreamonline.com/live/1396019/oil-dips-as-iran-deadline-extended Wed, 01 Apr 2015 04:05:04 +0000 live Talks between Iran and six world powers to settle a dispute around Tehran's nuclear programme extended beyond a Tuesday deadline, as the parties edged towards a deal but failed to agree to crucial details such as the lifting of UN sanctions.

Efforts to reach a framework deal were scheduled to continue on Wednesday in the Swiss city of Lausanne. Russian Foreign Minister Sergei Lavrov said a general agreement had been reached over all key aspects of a future deal, TASS news agency quoted him as saying.

A diplomat, speaking on condition of anonymity, later denied that an agreement had been reached.

Talks had appeared to bog down, after the US warned that it was ready to abandon the talks altogether and Iran affirmed its "nuclear rights", with officials cautioning any agreement would probably be fragile and incomplete,

"Whether or not there is an Iranian nuclear deal, we do not expect a flood of oil into the market as a consequence," head of commodity markets strategy and oil strategy at BNP Paribas, Harry Tchilinguirian, told Reuters Global Oil Forum.

"Which sanctions will be lifted and the uncertainty in the timing of lifting suggest that Iran will not be in position to significantly add to the current oversupply in the market," he said.

Brent crude for May delivery was down 8 cents at $55.03 a barrel in early trading on Wednesday, after settling down $1.18 on Tuesday. The contract had fallen 8% over the last week amid expectations of a nuclear deal.

US crude for May delivery was trading 25 cents lower at $47.35 a barrel, after settling down $1.08.

Higher Opec supply also put pressure on oil prices, after a Reuters survey showed the oil cartel increased supply in March to its highest since October as Iraq's exports rebounded after bad weather and Saudi Arabia pumped at close to record rates.

Higher Libyan exports could also add to a glut on world markets, after the state oil company said Libya two biggest oil ports, Ras Lanuf and Es Sider, will be able to open once security checks are made

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Chevron execs see pay raise http://www.upstreamonline.com/live/1396009/chevron-execs-see-pay-raise US supermajor approves raises for several key figures, including outgoing head of upstream Kirkland Luke.Johnson@upstreamonline.com (Luke Johnson) http://www.upstreamonline.com/live/1396009/chevron-execs-see-pay-raise Tue, 31 Mar 2015 22:17:19 +0000 live Outgoing executive vice president of of upstream George Kirkland is also getting a pay raise ahead of his planned retirement in June, announced earlier on Tuesday.

Watson, who has helmed the California-based oil company since 2010, will see his annual pay increase by $27,500 for a base salary of around $1.86 million, Chevron said in a regulatory filing.

Kirkland took in the second biggest pay rise of the executive group with an extra $25,000 that will bring his annual salary to $1.55 million. The head of Chevron's upstream operations will be replaced by current senior vice president for upstream Jay Johnson.

The increases will be effective 1 April. They come despite a drop in crude prices and a 12% fall in Chevron's share price over the past year.

Chief financial officer Patricia Yarrington will see her pay bump up by $9500 for a total annual base salary of $1.06 million.

Vice president and general counsel Hewitt Pate will get a raise of $24,000 for a base salary of $874,000. Downstream boss Michael Wirth got a $15,800 raise for a total base salary of $1.09 million.

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Brazil engineering player files for bankruptcy http://www.upstreamonline.com/live/1396012/brazil-engineering-player-files-for-bankruptcy Grupo OAS requested protection from creditors for nine units amid corruption probe Kathrine.Schmidt@upstreamonline.com (Kathrine Schmidt) http://www.upstreamonline.com/live/1396012/brazil-engineering-player-files-for-bankruptcy Tue, 31 Mar 2015 23:38:34 +0000 live The filing comes after Grupo OAS struggled for months with the effects of a corruption investigation at Petrobras, as the state oil company is known, which undercut the builder's access to financing and contract payments.

An economic downturn, government austerity and a slumping currency have also taken a toll on the company in recent months.

OAS follows rivals Alumini Engenharia and Galvao Engenharia, two other engineering firms that have filed for bankruptcy protection since January as the Petrobras scandal escalated.

Prosecutors say the three firms were part of a cartel that paid bribes to Petrobras executives and politicians in exchange for contracts.

Sao Paulo-based OAS pledged to sell assets to repay debt and inject cash into its heavy construction unit.

Grupo OAS, founded in 1976 by contractor Cesar Mata Pires and his partners in the northeastern city of Salvador, has about 8 billion reais ($2.48 billion) in debt.

"With almost 40 years in the market, OAS felt forced to kick-start a healthy process of debt restructuring that will allow it to preserve thousands of jobs," Fabio Yonamine, president of OAS Investimentos, said in a statement.

Under terms of the petition, which OAS filed in a Sao Paulo state court, the company sought creditor protection for Construtora OAS, OAS, OAS Imoveis, SPE Gestao e Exploracao de Arenas Multiuso, OAS Empreendimentos, OAS Infraestrutura, OAS Investments, OAS Investments GmbH and OAS Finance.

Brazilian police raided OAS headquarters in Sao Paulo late last year and arrested several executives, including the head of its main construction division, as part of a far-reaching investigation known in Brazil as "Operation Car Wash."

The Petrobras scandal made it harder for the company to refinance debt and borrow fresh cash, precipitating a liquidity squeeze that led to its bankruptcy filing. Early this year, OAS failed to pay interest on $400 million of global bonds and on 100 million reais of debt.

Among the assets that the group has put up for sale are stakes in infrastructure operator Investimentos e Participacoes em Infraestrutura, known as Invepar, as well as shipbuilder Estaleiro Enseada, OAS Empreendimentos, waste management firm OAS Solucoes Ambientais, OAS Oleo e Gas and all of its defense unit OAS Defesa.

Those assets, as well as stakes in two soccer stadiums, were excluded from the petition, the statement said.

Two sources with direct knowledge of the situation told Reuters on Tuesday that talks with potential bidders for the 24.4% stake in Invepar were at an advanced stage.

OAS also faces lawsuits in Sao Paulo and New York from bondholders demanding the seizure of its stake in Invepar. In both cases, plaintiffs argued that OAS spread out the Invepar stake among several units to hide it from creditors.

OAS Investments GmbH's bond due in October 2019 rose about a cent to 15 cents on the dollar on Tuesday.

The bond was trading at 98 cents in early November, before the company missed debt payments, lost contracts and failed to roll over maturing debt.

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Oil falls again as Iran deal looms http://www.upstreamonline.com/live/1396010/oil-falls-again-as-iran-deal-looms Talks on nuclear deal hit difficulties but fears of crude-supply glut persist Luke.Johnson@upstreamonline.com (Luke Johnson) http://www.upstreamonline.com/live/1396010/oil-falls-again-as-iran-deal-looms Tue, 31 Mar 2015 22:39:35 +0000 live The tumble was proof of the hurdles oil faced in establishing a bottom for prices since the selloff that began in June on worries of a supply glut. US crude fell 11% for the quarter.

In Tuesday's session, prices ended off the day's lows as the US, UK, France, Germany, Russia and China faced difficulty in reaching a preliminary nuclear accord with Iran before a Tuesday midnight deadline at the talks in Lausanne, Switzerland, Reuters reported.

Brent oil settled down $1.18, or 2.1%, at $55.11 a barrel, after falling to $54.72 during the session.

US crude finished down $1.08, or 2.2% at $47.60, off its earlier low at $47.28, according to the news wire.

In the past three sessions, oil lost more than 7% on heightened fears that a nuclear deal for Iran would raise the global glut in crude.

US crude inventories were expected to have hit record highs for a 12th straight week after a build of 5.2 million barrels last week, the American Petroleum Institute said on Tuesday. Official stockpile data is due on Wednesday at 10:30 am (1430 GMT).

Tehran is required to accept restrictions on its nuclear programme aimed at preventing it from making a bomb, in exchange for the removal of sanctions on its exports. Aside from the preliminary pact they sought on Tuesday, negotiators have set a 30 June deadline for a full agreement specifying conditions Iran had to meet.

White House spokesman Josh Earnest said the US was willing to continue talks beyond Tuesday to reach the interim agreement, but stressed that discussions had to be productive.

"If we're not able to reach a political agreement, then we're not going to wait... until June 30 to walk away," Earnest told reporters in Washington.

Iranian oil exports have been limited to around 1 million barrels per day by the US-led sanctions.

Tehran could raise output by around 500,000 bpd within six months without the sanctions, and another 700,000 bpd within another year, according to estimates by Facts Global Energy.

Oil was also pressured by a survey showing producer group Opec's crude supplies at five-month highs in May, Reuters said.

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US upholds results of Arctic lease sale http://www.upstreamonline.com/live/1396008/us-upholds-results-of-arctic-lease-sale Decision, slammed by environmentalists, pushes Shell another step closer to Alaska return this year Luke.Johnson@upstreamonline.com (Luke Johnson) http://www.upstreamonline.com/live/1396008/us-upholds-results-of-arctic-lease-sale Tue, 31 Mar 2015 21:52:53 +0000 live The US Department of Interior reaffirmed the lease award to Shell, clearing the way for the company to begin drilling as soon as this summer. The company must first get its revised exploration plan approved by the Bureau of Ocean Energy Management and obtain the necessary drilling permits.

Interior Secretary Sally Jewell said in a statement that the Arctic is "an important component" of US President Barack Obama's national energy strategy.

"We remain committed to taking a thoughtful and balanced approach to oil and gas leasing and exploration offshore Alaska," Jewell said.

Environmentalists at Greenpeace slammed the move by the Interior Department, calling the decision to uphold the lease sale results "indefensible".

"The Arctic has become the iconic battleground for the global climate movement, so we can expect to see a huge reaction against this in the US and across the globe," said Greenpeace Arctic campaigner Ian Duff.

Shell is eyeing a return to the frigid waters of the Chukchi Sea almost three years after a failed exploration campaign that ended in te Kulluk barge rig running aground during a tow.

The operator said this week that is has begun moving two rigs - drillship Noble Discoverer and Transocean semi-submersible Polar Pioneer - from Asia to Alaskan waters in anticipation of the potential resumption of activity during the annual drilling windown during the North American summer.

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Crude by rail up 1700% since 2010 http://www.upstreamonline.com/live/1395999/crude-by-rail-up-1700-percent-since-2010 Oil shipments soar to more than 1m barrels per day, EIA says Noah.Brenner@nhst.no (Noah Brenner) http://www.upstreamonline.com/live/1395999/crude-by-rail-up-1700-percent-since-2010 Tue, 31 Mar 2015 19:35:28 +0000 live In 2010, just 55,000 barrels of oil per day traveled by train within the US or between the US and Canada but by 2014 more than 1 million bpd of oil moved via rail, according to the latest figures from the US Energy Information Administration.

The largest volume of shipments originated in the  Midwest (known as PADD 2), which is home to both the Bakken tight oil play in North Dakota as well as the Cushing oil hub in Oklahoma, and traveled down to both the East Coast and Gulf Coast to feed refineries there.

That figure skyrocketed as rail became the go-to option for many operators in plays like the Bakken in North Dakota because it could come into service more quickly than pipelines and offered more flexible access to markets with better prices.

Constrained pipeline infrastructure often left markets around the Bakken and the Permian basin trading at a discount to benchmark West Texas Intermediate.

Overall, US oil production increased by the largest volume on record in 2014 and showed the largest percentage increase in more than 50 years, according to the latest US government figures.

Total oil and condensate volumes jumped by 1.2 million barrels per day in 2014 to 8.7 million bpd, which is the largest volume increase since the government began keeping such records in 1900.

The 16.2% production growth was the largest increase since 1940, the (EIA) said.

Most of the increase is attributable to growth in the Bakken, Eagle Ford and Permian tight oil plays, the EIA said.

The US has now registered production increases in the last six years but it had shown declines in 23 of the previous 24 years before 2008.

While the EIA is still projecting US production to grow in 2015 overall, the agency warned that the growth is supposed to slow to 8.1% in 2015 and 1.5% in 2016 as a dramatic drop in activity curbs the production increases.

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Stress tests for offshore financiers http://www.upstreamonline.com/live/1395998/stress-tests-for-offshore-financiers Bankers begin to see signs of difficulty in oilfield services books as industry-wide downturn drags on Luke.Johnson@upstreamonline.com (Luke Johnson) http://www.upstreamonline.com/live/1395998/stress-tests-for-offshore-financiers Tue, 31 Mar 2015 19:27:52 +0000 live Financial institutions invested in offshore oil and gas have begun stress-testing their portfolios, particularly as global majors giants like Saudi Aramco, Petrobras and Pemex negotiate for lower dayrates and cancel existing contracts.

"From a bank perspective, we have seen a surge in companies having difficulties, starting with subsea and seismic companies, which are usually the leading indicators for a downturn," Philippe Wulfers, vice president, offshore finance for DVB Transport, said on Tuesday.

"We are seeing this trickle down to supply vessels and now rig owners as well."

The market downturn began to take root as early as late 2013 as exploration and production companies began to scale back capital spending amid massive escalations in costs for offshore developments. The halving of global oil prices in the last nine months or so, driven by increasing production from US shale plays, only exacerbated that trend.

Banks do not see a quick rebound either, expecting the languid conditions to persist for another 18 to 24 months.

Still, bankers speaking at an offshore finance forum in Houston on Tuesday reaffirmed they are in the business for the long haul and see promise in the market long-term.

"We're trying to minimise the losses and focusing on our relationship clients," said Jan Weismuller, vice president at KfW IPEX-Bank.

"I think this particular downturn can be developed by focusing on quality."

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Taqa hits full capacity at Bergermeer http://www.upstreamonline.com/live/1395997/taqa-hits-full-capacity-at-bergermeer Abu Dhabi-based company says it will start injecting gas into reservoir on Wednesday Luke.Johnson@upstreamonline.com (Luke Johnson) http://www.upstreamonline.com/live/1395997/taqa-hits-full-capacity-at-bergermeer Tue, 31 Mar 2015 18:20:54 +0000 live The company said it will start injecting gas into the reservoir on Wednesday "at full capacity in preparation for the winter heating season".

The underground storage facility, operated by Taqa, is aimed at helping gas suppliers match fluctuations in demand and help improve security of gas supply. Its capacity is 46 terawatt hours (4.1 billion cubic metres) - enough to supply 2.5 million Dutch households for a year.

Taqa operates the €850 million ($913.2 million) facility on a 60% stake with partners Dutch state energy company EBN and Russia’s Gazprom.

"The investment in Gas Storage Bergermeer has helped improve resilience and is an important milestone for the creation of the integrated European Energy Union," said Maria van der Hoeven, executive director of the International Energy Agency.

Located near the city of Alkmaar, Gas Storage Bergermeer consists of the depleted Bergermeer gas reservoir, a gas treatment facility and connecting pipeline network. Construction started in 2012. The project started limited commercial operations in April 2014.

The facility is fully contracted through 31 March 2016. Taqa will auction capacity for the 2016 storage season in September 2015.

The facility's launching customers include EDF, Gazprom, Statoil and Vattenfall.

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Petrobras in $101m Argentina asset sale http://www.upstreamonline.com/live/1395975/petrobras-in-usd-101m-argentina-asset-sale Beleaguered Brazilian giant offloads raft of onshore concessions to CGC Eoin.Ocinneide@upstreamonline.com (Eoin O'Cinneide) http://www.upstreamonline.com/live/1395975/petrobras-in-usd-101m-argentina-asset-sale Tue, 31 Mar 2015 14:39:42 +0000 live The Brazilian state-controlled major is offloading all of its assets in the Austral basin to local player Compania General de Combustibles (CGC), it said on Tuesday.

The assets include 26 onshore exploration and production concessions in the Santa Cruz province, currently producing about 15,000 barrels per day of oil equivalent, as well as the entire infrastructure required for distribution, treatment and storage.

It marks the first disposal of a previously announced divestment programme totaling $13.7 billion to be carried out by the end of 2016.

The proceeds from the sale will be accounted for in Petrobras' first-quarter result. The sale is expected to result in an impact of $65 million in net income.

The conclusion of the transaction is subject to the approval of regulatory entities in Argentina.

CGC has upstream assets in northern, central and southern Argentina. It also has a 26% stake in an onshore concession in Venezuela alongside local state player PDVSA, PetroEcuador and Korea National Oil Corporation.

The company also has midstream assets in Argentina.

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BG in Knarr re-start http://www.upstreamonline.com/live/1395972/bg-in-knarr-re-start UK major resumes production off Norway following recent small fire on FPSO Eoin.Ocinneide@upstreamonline.com (Eoin O'Cinneide) http://www.upstreamonline.com/live/1395972/bg-in-knarr-re-start Tue, 31 Mar 2015 13:35:27 +0000 live A BG Group spokesman told Upstream: "BG Group confirms that the Petrojarl Knarr FPSO in Norway has re-started production following the minor incident last week."

Knarr started production on 18 March but was shut in on 24 March when a small electrical fire broke out in a heating, ventilation and air conditioning unit in a technical room.

The fire was extinguished quickly and no-one was hurt.

Investigations by Norway's Petroleum Safety Authority and the operator are under way.

The FPSO has the capacity to produce 63,000 barrels of oil equivalent per day and is equipped with an 800,000-barrel storage capacity.

Start-up of the field, originally scheduled for 2013, was delayed several times.

Sailaway of the FPSO from the Aibel yard in Haugesund, Norway was stalled by an earlier fire on board last year, while commissioning of the unit was also hit by weather-related issues.

BG operates Knarr with a 45% working interest and is partnered by Japan's Idemitsu on 25% as well as German company Wintershall on 20% and DEA on 10%.

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Buhari 'wins Nigeria election' http://www.upstreamonline.com/live/1395919/buhari-wins-nigeria-election Incumbent Jonathan reportedly concedes to ex-military ruler who maintains strong ballot lead Eoin.Ocinneide@upstreamonline.com (Eoin O'Cinneide) http://www.upstreamonline.com/live/1395919/buhari-wins-nigeria-election Tue, 31 Mar 2015 08:00:07 +0000 live The former Nigerian military ruler led by more than 3 million votes late on Tuesday, with results in from 28 out of 36 states, plus the capital Abuja.

Jonathan had closed Buhari's lead since Monday night by claiming, as expected, the key oil-producing state of Rivers by a landslide.

However, multiple reports have indicated that Jonathan called Buhari to congratulate him on the victory.

The full election result is expected to be announced later on Tuesday.

In order to avoid a run-off election, the winner must win at least 25% of the vote in three quarters of Nigeria’s 36 states. Both parties have now achieved this.

Saturday’s election spilled over into a second day of voting following glitches with some electronic card readers, which were introduced to help prevent electoral fraud.

There were also security fears in some areas, with an electoral headquarters in oil-producing Rivers State burned down. Some regions saw protests over alleged killing of opposition workers and voting irregularities, but fears that the Boko Haram insurgency would try to disrupt the election did not come to pass.

Jonathan is head of the Peoples Democratic Party (PDP), while Buhari heads the All Progrssive Congress (APC). The pair last week signed an agreement aimed at preventing any violence during voting, a hallmark of previous elections. That deal was brokered by ex-military ruler Abdulsalami Abubakar.

Nigeria sealed off its land and sea borders in an effort to hold a free and fair election and an attempt to impose strict security measures during voting time.

Saturday’s poll was originally set for 14 February but was delayed in order to allow the country to guarantee a greater degree of security amid the ever-present threat from Islamic militant group Boko Haram.

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US start-up IRM gets $500m boost http://www.upstreamonline.com/incoming/1395986/us-start-up-irm-gets-usd-500m-boost Newcomer to target onshore acquisitions in the Mid-Continent and Rockies with private equity cash (Anamaria Deduleasa) http://www.upstreamonline.com/incoming/1395986/us-start-up-irm-gets-usd-500m-boost Tue, 31 Mar 2015 15:29:08 +0000 live IRM has been awarded a line-of-equity investment of up to $500 million from private equity giant Warburg Pincus.

The Houston-based start-up intends to target onshore oil and gas acquisitions and play extension opportunities in the Mid-Continent and Rockies regions of the US, with an initial focus on the Anadarko basin, it said.

"This investment will enable us to acquire a meaningful footprint in targeted plays and optimally delineate and develop that hydrocarbon resource over time," chief executive Mike Van Horn said.

IRM will focus on “plays with large amounts of hydrocarbons in place and low recovery factors, where advanced drilling and completion techniques can create compelling risk-adjusted returns,” it said.

“The opportunity to grow a start-up E&P company fits within our investment thesis and our track record of success,” according to managing director at Warburg Pincus, James Levy.

The founding team of IRM includes Mike Van Horn, who previously worked as a senior vice president at Newfield Exploration, and co-fouding chief executive officer John Nicholas, a former general manager for the Appalachia Division at Southwestern Energy.

Warburg Pincus currently has more than $35 billion in assets under management.

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Apache in Desert drive http://www.upstreamonline.com/live/1395962/apache-in-desert-drive US indie ramps up output from two oil discoveries in lightning fast development effort Steve.Marshall@upstreamonline.com (Steve Marshall) http://www.upstreamonline.com/live/1395962/apache-in-desert-drive Tue, 31 Mar 2015 12:32:45 +0000 live The Berenice and Ptah fields in the Faghur basin were discovered last November and December, respectively, and brought online in the same months after development leases for the pair were approved in a matter of days by state-run Egyptian General Petroleum Corporation (EGPC).

Apache’s local joint venture with EGPC, Khalda Petroleum, has so far drilled five wells – including the discovery holes – at the two fields that are now flowing at a combined rate of 13,600 barrels per day without the need for fracture stimulation and have produced around 1 million barrels to date.

The US operator is targeting investments totalling $49 million on production facilities and is drilling more development wells, with the aim of boosting output from the pair to 17,500 bpd by mid-2015.

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Johnson replaces Kirkland at Chevron http://www.upstreamonline.com/live/1395970/johnson-replaces-kirkland-at-chevron US supermajor confirms new upstream boss as current executive heads for retirement Eoin.Ocinneide@upstreamonline.com (Eoin O'Cinneide) http://www.upstreamonline.com/live/1395970/johnson-replaces-kirkland-at-chevron Tue, 31 Mar 2015 13:12:06 +0000 live The 56-year-old, currently senior vice president for upstream, is to take on the top role from 16 June, the day after Kirkland leaves the supermajor.

Johnson was promoted to his current role only in early 2014, having previously been president of Chevron's Europe, Eurasia and Middle East exploration & production operations and managing director of its Eurasia business unit.

In the latter role he was responsible for upstream and transportation activities in Kazakhstan, Azerbaijan, Russia and Turkey.

Previously Johnson has also served as managing director of Chevron’s Australasia business unit, responsible for exploration and planning for the development of the Wheatstone and Greater Gorgon area gas fields.

Kirkland, 64, has held the top upstream role since 2005 and was elected vice chairman in 2010. He has variously been president of Chevron's North America and international upstream businesses as well as working for the company in Indonesia and Nigeria.

"Under his stewardship, the company ... applied advanced gas injection technology to grow production at the Tengiz field in Kazakhstan, developed groundbreaking Lower Tertiary resources at the Jack-St Malo fields in the Gulf of Mexico, assembled a world-class shale oil and gas position in North America, enhanced functional capabilities and base business reliability, and developed long-lived liquefied natural gas assets at Gorgon and Wheatstone in Australia," Chevron said of Kirkland's time at the helm.

Chief executive John Watson added: "George’s business acumen and deep operational knowledge of our industry have helped create enormous value for Chevron and our shareholders over many years.

"I am confident our track record of success in the upstream will continue under Jay’s leadership, as his broad base of experience has prepared him well for the job."

Chevron also revealed that Joe Geagea, senior vice president for technology, projects and services, has been promoted to executive vice president for that division.

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Azonto re-tenders Gazelle project http://www.upstreamonline.com/live/1395912/azonto-re-tenders-gazelle-project Sanctioning of gas field project off Ivory Coast delayed again as player 'considers assets sale' Eoin.Ocinneide@upstreamonline.com (Eoin O'Cinneide) http://www.upstreamonline.com/live/1395912/azonto-re-tenders-gazelle-project Tue, 31 Mar 2015 07:03:18 +0000 live The junior also said it is considering strategic alternatives for its business and may be open to selling the company or assets.

The London-listed company has quashed the deal it had with Rosetti Marino, which had already paid a lump sum for construction of the project in Block CI-202.

Azonto said on Tuesday that the amount received from Rosetti for construction of the offshore and onshore elements of the project was "higher than expected".

"In order to achieve a realistic breakeven gas price, and to capitalise on current downward pressure on drilling and other construction costs, the Vioco board therefore has decided to re-tender the construction package," Azonto said.

"This will result in a delay in sanctioning the Gazelle project," Azonto continued.

Azonto holds a 35% interest in the Vioco Petroleum venture that operates the project on an 87% interest, while Swiss oil trading giant Vitol holds a 65% interest in Vioco. State company PetroCI holds the remaining 13% in Gazelle.

Shares in Azonto slumped more than 15% by 8am in London on Tuesday.

The partners in the project had said at the end of last year that they remained on course for a final investment decision on Gazelle in the first half of this year after gaining an exclusive exploitation authorisation from the country’s president, Alassane Ouattara.

If it was sanctioned in the first half of next year, the field 30 kilometres south-east of the capital Abidjan could have seen first gas within 14 to 16 months, or as soon as the first half of 2016, the explorers said in December.

Previously expected to see an FID last year, the project has been held up by midstream funding issues tied to its gas buyer CI Energies’ ability to secure debt capital that has prevented progress on pipeline construction, while the Ivorian company is also now looking at a dual-fuel power plant.

Azonto also revealed on Tuesday that is board is reviweing "a range of strategic options for the company to preserve shareholder value and reduce operating costs".

It continued: "The company is currently considering several such strategic options, including but not limited to a sale of its assets and / or a sale or merger of the company."

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Aphrodite blueprint on table http://www.upstreamonline.com/live/1395928/aphrodite-blueprint-on-table Noble Energy set to submit plan later in 2015 to develop Cyprus gas find using FPSO: partner Steve.Marshall@upstreamonline.com (Steve Marshall) http://www.upstreamonline.com/live/1395928/aphrodite-blueprint-on-table Tue, 31 Mar 2015 08:59:08 +0000 live The US operator proposes to exploit the field using a floating production, storage and offloading vessel with output capacity of about 800 million cubic feet per day under the preliminary plan, Delek revealed in its results statement.

Noble, together with partners Delek Drilling and Avner Oil Exploration that are both units of Delek Group, intend to tap estimated resources of 4.5 trillion cubic feet of gas and 9 million barrels of condensate from the deep-water Aphrodite find made in Noble-operated Block 12 in 2011.

Gas will be supplied to the local market on the Mediterranean island state as well as exported via pipeline to other markets, including Egypt.

Noble was reported to have started talks earlier this year with the Nicosia government on a possible development of the discovery, having earlier considered wrapping it in to its much larger Leviathan gas field in nearby Israeli waters.

Delek said investment decisions on both the Leviathan and Tamar gas development projects remain subject to an awaited ruling from Israel’s Anti-trust Authority, led by commissioner David Gilo, that has been delayed to next month.

Operator Noble has suspended work on the multi-billion dollar, 22 trillion-cubic-foot Leviathan scheme, which was dealt a further blow earlier this month when Palestine Power Generation Company cancelled a 20-year gas supply deal.

Delek meanwhile reported a net loss of 120 million shekels in the fourth quarter, and a reversal of 765 million shekels for the full year, compared with corresponding profit figures of 125 million and 740 million a year earlier.

The group said it suffered from total writedowns of more than 1 billion shekels last year due to the sale of non-core assets - including the pending disposal of a 52% stake in Phoenix Holdings that resulted in a 508 million-shekel goodwill impairment - and a revaluation of other assets.

Delek said it has also decided to postpone a planned London stocklisting “due to the volatility in international energy markets”.

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Northern stalls rig deliveries http://www.upstreamonline.com/live/1395910/northern-stalls-rig-deliveries John Fredriksen-backed contractor forced to delay newbuild pair amid market doldrums Steve.Marshall@upstreamonline.com (Steve Marshall) http://www.upstreamonline.com/live/1395910/northern-stalls-rig-deliveries Tue, 31 Mar 2015 06:53:09 +0000 live The high-specification units, Energy Engager and Energy Encounter, will now be delivered in December 2016 and June 2017, respectively, after the Oslo-listed rig contractor negotiated a nine-month delay with the Dalian yard.

Northern, part of the business empire of shipping and offshore billionaire John Fredriksen, has so far failed to find employment for the speculatively ordered rigs as drilling demand has slumped on oil company cutbacks in exploration and development work amid low oil prices.

The company has also recently suffered the termination by Russia’s Rosneft of a contract for its jack-up Energy Endeavour, which had been lined up to work in the Russian Arctic.

Chief executive Gary Cresswell said the delivery delay would “enable us to better match contract opportunities in what we believe will be a more robust market at that time”.

He added it would also allow the contractor to defer $22 million in expenditure on owner-supplied equipment for the two rigs from this year to 2016.

Northern’s remaining existing jack-up, Energy Enhancer, is chartered to Denmark’s Maersk Oil under a contract due to expire in July, while it also has a semi-submersible rig, Energy Driller, under charter to India’s Oil & Natural Gas Corporation until April.

Earlier this year, the company was forced to cancel a contract with Camac Energy for its drillship Energy Searcher and is now pursuing a compensation claim against the US independent.

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Rex nets JV cash for Butler http://www.upstreamonline.com/incoming/1395961/rex-nets-jv-cash-for-butler US explorer to use private equity funds to chop capex and push key development (Anamaria Deduleasa) http://www.upstreamonline.com/incoming/1395961/rex-nets-jv-cash-for-butler Tue, 31 Mar 2015 12:13:08 +0000 live The JV with ArcLight Capital Partners will develop 32 “specifically designated wells” in Rex’s Moraine East area and legacy Butler operated area, Rex said, although no exact details were given.

The total value of the transaction will be $67 million, with $16.6 million received at closing.

ArcLight will fund 35% of the designated well cost, according to Rex.

The US explorer announced its search for a partner last year when it lowered its capital expenditure for 2015.

The newly signed agreement is expected to reduce the company's 2015 capex by $60 million to between $135 and $145 million, from the previously announced figures of $180 - $220 million.

ArcLight will also have the option to participate as a 20% working interest partner in 17 additional Moraine East wells in 2016, Rex said.

Pennsylvania- based Rex added that it expects full year 2015 production volumes to range from 185 million to 195 million cubic feet equivalent per day, a 23% increase compared to 2014 production volumes.

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Total in Uganda 'tax row' http://www.upstreamonline.com/live/1395952/total-in-uganda-tax-row French giant seeking arbitration to resolve dispute over acquisition of block: report Steve.Marshall@upstreamonline.com (Steve Marshall), (News Wires) http://www.upstreamonline.com/live/1395952/total-in-uganda-tax-row Tue, 31 Mar 2015 10:29:26 +0000 live The company’s local subsidiary informed Reuters it has filed a request for arbitration with the International Center for Settlement of Investment Disputes (ICISD), an arm of the World Bank.

"The dispute relates to the imposition of stamp duty by the Uganda Revenue Authority (URA) on the acquisition of Total's interest in Exploration Area 2," Total E&P Uganda was quoted as saying.

Total has not disclosed how much tax is at the heart of the dispute, or why it objects to the tax levy, but a source at the URA said it was worth about $30 million.

The source said that Total argues its production sharing agreement for the block includes a tax waiver.

Total and China National Offshore Oil Corporation (CNOOC) each acquired stakes in three Lake Albert exploration blocks under a $2.9 billion deal with Tullow Oil in 2012.

The move by the French supermajor could lead to further delays to the start of commercial oil production in Uganda, which has been repeatedly stalled by earlier disputes over taxes and development plans.

Tullow also has an ongoing case at the ICISD while British explorer Heritage Oil earlier sold its exploration assets and pulled out of Uganda over tax.

Uganda has found commercial hydrocarbon deposits along its border with the Democratic Republic of Congo, with crude reserves estimated at 6.5 billion barrels by government geologists.

CNOOC is looking to develop its $2 billion Kingfisher oil project in the Lake Albert play, while the Kampala government recently launched its first competitive licensing round offering acreage in the Albertine Graben.

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Petronas in Toho Gas deal http://www.upstreamonline.com/incoming/1395932/petronas-in-toho-gas-deal Malaysian state-owned oil company to sell seven to nine LNG cargoes a year to Japan (Anamaria Deduleasa) http://www.upstreamonline.com/incoming/1395932/petronas-in-toho-gas-deal Tue, 31 Mar 2015 09:21:01 +0000 live The Malaysian state-owned oil company is set to supply Toho with seven to nine LNG cargoes a year starting in April 2017.

“We entered into an agreement for a purchase of LNG by portfolio supply with the objective of flexibility of quantity and diversification of the price-index,” Toho Gas said in a statement.

Petronas said it will use its LNG portfolio in Bintulu, Malaysia, and “other multiple sources” as a supply source for the agreement.

The prices will be linked to crude and US Henry Hub prices, with an option to change the destination on condition of obtaining the seller's prior consent, Toho Gas added.

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DNO halts Yemen output http://www.upstreamonline.com/incoming/1395921/dno-halts-yemen-output  Oslo-listed operator to secure its facilities and remove non-essential staff (Anamaria Deduleasa) http://www.upstreamonline.com/incoming/1395921/dno-halts-yemen-output Tue, 31 Mar 2015 08:07:01 +0000 live "The company continues to monitor the situation closely and has initiated plans to secure its facilities and remove non-essential staff,” DNO said.

All expatriates have been reportedly relocated to Dubai.

Prior to the suspension, combined oil production from DNO’s operated blocks 32 and 43 averaged 1950 barrels per day on a gross basis and 950 bpd on a working interest basis.

The company did not release details on when production will be resumed or how staff relocation will affect its operations in Yemen.

Earlier this month DNO was left with an operating loss of $243 million for 2014, compared with a year-earlier profit of $68 million, as it was hit by impairments of $297 million on the value of its Middle East & North Africa assets in Kurdistan, Oman, the United Arab Emirates and Yemen.

The suspension of activity by DNO follows air strikes on Yemen by a Saudi Arabian-led coalition of Arab states in response to an insurgency by Houthi rebels who have seized the capital Sanaa.

The rebels are seeking to depose embattled President Abdabbuh Mansour Hadi, who is supported by the Saudis and has taken refuge in Riyadh due to the upsurge in violence in his country.

French supermajor Total has also evacuated all expatriate staff from the group’s Sanaa and Kharir sites in Yemen.

The evacuation was reportedly a response to a military raid that took place on 26 March in the area where Total operates.

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Mnazi Bay gas deliveries delayed http://www.upstreamonline.com/live/1395918/mnazi-bay-gas-deliveries-delayed Commissioning and start-up of Tanzanian pipeline held-up, while partners prepare to spud new development well Eoin.Ocinneide@upstreamonline.com (Eoin O'Cinneide) http://www.upstreamonline.com/live/1395918/mnazi-bay-gas-deliveries-delayed Tue, 31 Mar 2015 07:43:53 +0000 live French explorer Maurel & Prom (M&P) and London-listed Wentworth Resources are now expecting to see first gas delivery in July, as opposed to an earlier estimate of April, the latter said.

Although the Mtwara - Dar es Salaam pipeline is now 100% complete and the two associated processing facilities are almost fully ready, the partners have been told by Tanzania Petroleum Development Corporation (TPDC) that “some delays have been experienced in commissioning and start-up of the gas pipeline project”.

Construction has, however, commenced on tying in the four existing development wells at Mnazi Bay and installing flowlines to supply gas to the central pipeline. Two of these development wells are now fully tied in.

Drilling operations are also set to begin on the MB-4 development well “in the next few days”, Wentworth said. The well will intersect the Mnazi Bay upper and lower gas-bearing sands. It is planned to reach a total depth of 2089 metres and take around two months to drill and complete.

France's M&P operates Mnazi Bay with an around 48% production interest with Wentworth Resources on just under 32% and TPDC on 20%.

The partners have executed a gas sales and purchase agreement with the Government of Tanzania under which they will supply discovered natural gas from the Mnazi Bay concession at a price of $3.00 per million thermal unit escalating with the US consumer price index annually over a 17-year term.

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Eni, Reliance win Myanmar offshore blocks http://www.upstreamonline.com/live/1395926/eni-wins-myanmar-offshore-blocks Italian and Indian players scoop acreage in country’s latest offshore bid round Eoin.Ocinneide@upstreamonline.com (Eoin O'Cinneide) http://www.upstreamonline.com/live/1395926/eni-wins-myanmar-offshore-blocks Tue, 31 Mar 2015 08:28:28 +0000 live Eni landed the production sharing contracts for blocks MD-2 and MD-4 in the latest offshore bid round.

Block MD-2 is in the Rakhine basin in the southern Bay of Bengal, some 135 kilometres from shore and west of the Yadana field. It covers around 10,330 square kilometres and sits in water depths of between 500 and 2400 metres.

MD-4 is in the Moattama-South Andaman basin around 230 kilometres from shore and west of the Yetagun gas field. It covers around 5900 square kilometres and sits in water depths ranging from 1500 to 2200 metres.

The PSC calls for a two-year study period followed by a six-year exploration period, split into three phases.

Eni will operate the blocks on 80%, with its Vietnamese partner on 20%.

Reliance has won blocks M-17 and M-18 in the Tanintharyi basin, together encompassing 27,600 square kilometres and sitting in waters up to 914 metres.

The Indian giant will operate both blocks with a 96% share, while local player United National Resources Development Services will hold the remainder.

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Terms changed on Athena FPSO contract http://www.upstreamonline.com/live/1395909/terms-changed-on-athena-fpso-contract Ithaca Energy agrees terms with BW Offshore to place floater on a rolling contract Josh.Lewis@upstreamonline.com (Josh Lewis) http://www.upstreamonline.com/live/1395909/terms-changed-on-athena-fpso-contract Tue, 31 Mar 2015 06:23:15 +0000 live BW revealed on Tuesday it had received a notice of termination for the FPSO contract from Ithaca and instead agreed to a revised contract for the vessel.

The new deal will see the floater remain on the field beyond the expiry of the firm contract period on a revised compensation scheme.

This will involve the Athena partners making an advanced demobilisation fee and sharing positive cashflow from the field.

The firm period for the Athena contract is due to expire in the second quarter of the year, however last year the field partners agreed to five-year extension, with the ability to terminate the contract on a rolling 12-month notice.

Under the new deal, both parties have the right to terminate on a 60-day notice period.

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Wood Group lands Total gig http://www.upstreamonline.com/live/1395913/wood-group-lands-total-gig Aberdeen-based service provider to carry out work for French company on the UK continental shelf Josh.Lewis@upstreamonline.com (Josh Lewis) http://www.upstreamonline.com/live/1395913/wood-group-lands-total-gig Tue, 31 Mar 2015 07:06:46 +0000 live The deal will see Wood Group PSN provide engineering, procurement, construction and commissioning services to the offshore Alywn, Dunbar, Elgin and Franklin platforms, as well as the St Fergus gas terminal and the Shetland gas plant, when it starts up next year, onshore.

It sees Wood Group extend its 12-year history of providing services to the four platforms and the St Fergus terminal.

The new contract will start immediately and run for a period of five years and carries two one-year extension options.

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Tyra online for Maersk http://www.upstreamonline.com/live/1395915/tyra-online-for-maersk Danish operator launches output from unmanned platform off Denmark Steve.Marshall@upstreamonline.com (Steve Marshall) http://www.upstreamonline.com/live/1395915/tyra-online-for-maersk Tue, 31 Mar 2015 07:06:53 +0000 live The oil and gas field has been brought online within a four-year timeframe for a total investment of Dkr4.5 billion ($649 million) by the Maersk-led Danish Underground Consortium (DUC), including the Danish-built 4700-tonne platform, as well as pipelines and drilling work.

The Danish operator aims to produce around 20 million barrels of oil and 170 billion cubic feet of gas from the field, with peak output targeted at 20,000 barrels of oil equivalent per day in 2017.

The field, located 200 kilometres off Denmark’s west coast, holds recoverable reserves of 50 million boe and is expected to produce for 30 years.

Maersk intends to produce 2600 boepd from the first development well and aims to drill between eight and 12 additional wells over the next two years.

Its parent AP Moller-Maersk holds a 31.2% interest in operating entity DUC, with Shell on 36.8%, Nordsofonden 20% and Chevron 12%.

 

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Business as usual for Cue http://www.upstreamonline.com/live/1395903/business-as-usual-for-cue Focus remains on Indonesian work programme after takeover bid by New Zealand Oil & Gas (Russell Searancke) http://www.upstreamonline.com/live/1395903/business-as-usual-for-cue Tue, 31 Mar 2015 01:13:47 +0000 live NZOG had acquired its equity in Cue as at 27 March when its A$0.10 per share offer closed, and is keen on Cue's interests in New Zealand and Indonesia.

Cue chief executive David Biggs told Upstream at the Advantage New Zealand Petroleum Summit on Tuesday that he could not comment on the next steps with regard to NZOG.

He said it was business as usual for Cue, which has embarked on a strategy to pull away from offshore plays and move into onshore areas because onshore is "a better fit for a company of our size".

Indonesia has become a main focus where it has two operated onshore permits - Mahakam Hilir and Mahato.

One oil exploration well is planned at Mahakam Hilir this year, while two exploration wells are planned in the Mahato area in 2015, added Biggs.

The company also has a non-operated interest in the Sampang offshore block in Indonesia that contains the Oyong and Wortel producing fields.

Well workovers are under way at Oyong to boost production, said Biggs.

In New Zealand, Cue owns 5% of the producing Maari offshore oilfield, and interests in three exploration permits.

Finally in Australia, Cue is looking to farm down its 100% interests in two offshore permits in the Carnarvon basin - Blocks WA-359-P and WA-409-P.

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Oil continues to fall http://www.upstreamonline.com/live/1395906/oil-continues-to-fall Expected rise in US crude stocks weighs on prices along with a stronger dollar Josh.Lewis@upstreamonline.com (Josh Lewis) http://www.upstreamonline.com/live/1395906/oil-continues-to-fall Tue, 31 Mar 2015 03:39:07 +0000 live With a deadline less than 24 hours away, the US, Britain, France, Germany, Russia and China were trying to break an impasse in negotiations aimed at stopping Iran from having the capacity to develop a nuclear bomb, in exchange for an easing of international sanctions.

Officials said talks on a framework accord, which is intended as a prelude to a comprehensive agreement by the end of June, could yet fall apart over disagreements on enrichment research and the pace of lifting sanctions.

"Iran has built up significant oil inventories and could immediately increase exports if sanctions are lifted," analysts at ANZ said in a note.

Shipping sources say Iran is storing at least 30 million barrels of oil on its fleet of supertankers, as Western sanctions keep a lid on sales.

Brent oil was 35 cents lower at $55.94 a barrel in early trading on Tuesday. The contract had settled down 12 cents on Monday. US crude was down 56 cents at $48.12 a barrel, after closing 19 cents lower.

A stronger US dollar also weighed on oil prices. A firm greenback makes dollar-denominated commodities costlier for holders of other currencies.

Iran could increase oil production by some 500,000 barrel a per day in three to six months if sanctions are removed, and by an additional 700,000 bpd within another year, according to estimates by Facts Global Energy.

"Iran will be very reluctant to accept a lower quota given that it has given up so much production due to sanctions," the consultancy said in a note.

Hedge funds, however, increased their bets on rising Brent prices last week to their highest since July 2014, exchange data showed.

This was probably due to spread plays between the North Sea contract and its US rival, traders said.

Short positions in US crude have risen to a record high as traders bet record crude stocks in the United States will keep it under pressure relative to Brent.

US commercial crude stocks are likely to have risen by 4.2 million barrels last week to a record high for a 12th week, a preliminary Reuters poll showed ahead of weekly data by the American Petroleum Institute later in the day.

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Sinopacific delivering first Yamal modules http://www.upstreamonline.com/live/1395905/sinopacific-delivering-first-yamal-modules First of seven modules shipped for Russian LNG project (Xu Yihe) http://www.upstreamonline.com/live/1395905/sinopacific-delivering-first-yamal-modules Tue, 31 Mar 2015 03:19:11 +0000 live Yard sources said that seven modules for pipe racks were being delivered – SPP305,306,307,308,309,351,352 – carrying a total weight of 2200 tonnes.

The first module has been under pre-erection since last Saturday before it was shipped to a port in Shanghai or Jiangsu province for delivery to material offloading facilities at the project site in the Port of Sabetta .

Sources said that Sinopacific will be only responsible for shipping the modules on a free on board basis to a bulk and cargo intermediate storage yard at Arkhangelsk on Russia’s Arctic coast and then the lead contractor will take the shipping over and ship the modules to Sabetta with ice breaker vessels.

Sources said that sailing away is expected in mid May. The loading of the seven modules is expected to be completed in three weeks, according to sources.

Last year, Sinopacific was contracted by Yamal’s lead contractor, Yamgaz, a consortium of Technip, JGC and Chiyoda to build 310 modules for the Yamal LNG project, weighing a combined total of 80,000 tonnes.

Despite possible delays at other yards contracted to build Yamal modules, Sinopacific is “proceeding well” with its fabrication obligations with steel structure building capacity for Yamal modules reaching 100 tonnes per day now. Sources said that it builds Yamal modules at its facilities in Qidong of Jiangsu province.

Yamal LNG is operated by Russian gas independent Novatek, which has farmed out a 20% stake to CNPC while retaining 60%. Total holds the remaining 20%.

The project involves developing the South Tambey gas condensate field and a three-train liquefaction project able to produce 16.5 million tonnes per annum of LNG.

The first phase is scheduled for completion in May 2016 and calls for the construction of two liquefaction trains, each capable of producing 5.5 million tonnes per year.

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