IOCs evacuate staff from Libya

Italian energy giant, ENI, has responded to the escalating violence in the capital by moving fifteen members of its staff out of Tripoli. The employees were moved to the offshore Bouri oilfield before being whisked away to Malta and onto Italy.

French company Total has also moved its staff out of the capital, getting them out of the country by road to Tunisia. The United Nations has also pulled its remaining staff out of the country. 

Following the abduction and beheading of a Filipino construction worker on 15 July, the Philippines government ordered its estimated 13,000 nationals in Libya to leave the country, instructing them to contact the embassy in Tripoli for instructions on "mass evacuation."

Yet how such evacuations are going to take place while the airport is out of action and with little prospect of its restarting operations any time soon is unclear. 

Although the airport at Zawara is preparing to take both domestic and international flights, it is still going to take several days before it is in a position to do so. It also still requires the agreement and support of the Ministry of Transport and the Civil Aviation Authority. More importantly there are still question marks over safety and insurance issues.  

Meanwhile there are growing fears about evacuation by road given that the confrontation has now spilled beyond the airport area and out to Janzour. 

For more news and expert analysis about Libya, please see Libya Focus and Libya Politics & Security.

© 2014 Menas Associates

Another new oil minister in Yemen

Ahmed Abdul Qader Shayyeh, who was appointed minister of oil and minerals in early June, resigned a few days later on health grounds, suggesting that the process of consulting him may have gone wrong. A new minister has now been appointed, having received a phone call from President Abd Rubuh Hadi while in London.

He is Hussein Rashid Jamal Alkaff. Alkaff is well known in oil circles in Yemen and the region, as he was a deputy minister of oil in the last years of the People’s Democratic Republic of Yemen and held the same position in the first years of unity. He subsequently became CEO of Al-Nimr, a private Saudi oil company owned by the Bin Mahfouz family, who are of Yemeni origin.

For the last few years, Alkaff has functioned as a consultant on Middle East oil, and he and his sons are the owners of Sahra Petroleum, a London- and Sana’a-based oil, gas and mining services company.

He is widely respected in the sector and has provided advice on oil policy to the government and the National Dialogue Conference. He is not a political figure, however, and has no independent power apart from through the now limited prestige of the Al-Kaff Sayyids.

For more news and expert analysis about Yemen, please see Yemen Focus.

© 2014 Menas Associates

Algeria awards US$4 billion of power and gas sector contracts

Sonelgaz announced on 19 February the award of contracts worth US$4 billion to South Korean and Spanish companies to build six power plants with a combined capacity of 1,200-1,600 MW. The contracts were awarded to three South Korean enterprises - a partnership of Hyundai Engineering and Daewoo International; Samsung and GS/Daelim; and Spain's Duro Felguera. 

The US$1.37 billion contract with the South Korean consortium is to build two power plants for Sonelgaz’s Société Algerienne de Production de l'Electricité (SPE) subsidiary in Biskra and Jijel wilayas. Construction is expected to be completed 39 months. 

Samsung C&T Corp said on February 20 that it had won two orders worth a combined US$1.37 billion to build two power plants for SPE in Mostaganem and Naama wilayas, worth US$763.64 million and US$608.89 million, respectively. Both contracts are expected to be completed by August 2017. 

Samsung has also been awarded a contract worth US$800 million by the Groupement Timimoun (GTIM) - a joint venture between Sonatrach (51%), Total (37.75%) and CEPSA (11.25%) – for the construction of a central processing facility and related pipelines for the Timimoun gas field in south-west Algeria. The turnkey project, to be completed by April 2017 calls for Samsung Engineering to draw up the plans, handle procurement, carry out construction, and conduct a trial run. 

Details of the Duro Felguera contact have not yet been released. It is therefore unclear whether this is the same contract awarded to the company in December for the construction of a combined cycle plant in Djelfa, or a new contract.

For more news and expert analysis about Algeria, please see Algeria Focus and Algeria Politics & Security.

© 2014 Menas Associates

Government calls for more Caspian development

The government has called for further development of the Caspian shelf's energy wealth, adding to speculation that some new Production Sharing Agreements could be on the cards.

Economy and Development Minister Basimmyrat Hojamammedov said in late August that PSAs are “rapidly developing” in Turkmenistan, and that the government's priority was signing new PSAs on offshore fields. Specifically (and a little unusually given that talks are still underway), he said that negotiations were being held with companies including “Chevron, ExxonMobil, Total, Gas de France, Eni, ConocoPhilips, Midland Oil & Gas, British Petroleum and several companies from the Far East and the Persian Gulf”.

It is hardly a secret that most of these companies are interested in Turkmenistan's reserves: in particular the dogged efforts of Chevron and ExxonMobil to secure an offshore block are a long-running saga in Ashgabat. The decision to flag up the negotiations now could suggest that the government is moving towards signing new deals. However it's significant the news came from the Economy and Development Ministry – something of an outlier on energy policy - rather than the State Agency for Hydrocarbons, the Oil and Gas Ministry, or Baymurad Hojamuhammedov.

President Gurbanguly Berdymuhammedov also called for increased oil and gas development and “cooperation with foreign partners, including the world's leading companies with advanced technologies and know-how.”

Analysts will be keeping a close eye out as to whether this actually leads to any new deals being signed, particularly as conference season approaches. There is no sign that the government is prepared to budge on its refusal to grant PSAs onshore.

For more news and expert analysis about the Caspian region, please see Caspian Focus.

© 2012 Menas Associates

Iraq warns IOCs over Kurdish oil deals

Iraq's Deputy Prime Minister for Energy Hussain Shahristani has said that Total would face “full consequencies” if it signed oil deals with the semi-autonomous Kurdistan.

Shahristani told Reuters: “The position of the Iraqi government will be the same as with the other oil companies, that no company has a right to sign a contract without the approval of the central government of Iraq…Any such contract has no standing with the Iraqi government, and the companies have no right to work on the Iraqi territories and they bear the full consequences."

Shahristan's comments came after Iraq opened a new Gulf crude export outlet in the southern oil hub of Basra on Sunday 12th February, which is expected to increase Baghdad's exports by about 300,000 b/d once the crud begins to flow.

According to Reuters, the plan should raise exports from Iraq's southern oilfields to approximately 1.9 million b/d by March and bring Iraq's total shipments to 2.3 million b/d. After years of war and sanctions, Iraq has recently signed deals with a number of IOCs including, Shell, ExxonMobil and BP to develop its southern oilfields.

Speaking about ExxonMobil, Shahristani said that the US major would not be able to participate in Iraq's fourth energy bidding round because of its agreements with Kurdistan, which has its own regional government and military force.

He noted: “Exxon was informed about the Iraqi government position clearly and openly. They asked for some time, and we are waiting for their final answer to inform them of our final decision…But right now they are not qualified to participate in the fourth bidding round."

The friction between Baghdad and Kurdistan remains as both regions claim autonomy over their oilfields, however, Baghdad is adamant that the central government has control over the country's oil reserves.

On Friday 10th February, Total Chief Executive Christophe de Margerie said the company would not seek contracts in the Iraqi bidding round due to conditions being unattractive but added that it was considering Kurdistan deals.

When asked by Reuters to respond to Margerie's comments Shahristanti said: "If they don't find it attractive enough, they are most welcome to withdraw from it." He also said that as he understood Iran would not carry out a threat to close down the Strait of Hormuz because Iranian oil supplies also relied on the shipping lane and the closure would be detrimental to Tehran.

He explained: “My understanding is that the Iranians would not close the Strait because they don't benefit anything from its closure…They are exporting most of their oil through the Strait of Hormuz, of course it is not to their benefit."

Sources: Reuters, News Wires, WSJ

For more news and expert analysis about Iraq, please see Iraq Focus.

Yemen: Nexen may leave, Total hopes for extension

Canadian oil company Nexen, which has been active in Yemen since 1987, has announced that it is “reconsidering” its position after it was prevented from renewing its concession for the Masila oil field, which was due to end on 17th December. The company said that, “while we are disappointed we did not receive an extension, we are proud of the accomplishments we’ve achieved there. Our operations at Masila have generated significant value for our company, enabling us to deploy the cash flow to build our current portfolio of legacy assets.” The government has set up Masila Company for Petroleum Exploration and Production (PetroMasila) to take over the field and its proceeds will go to the ministry of finance. Production at the field has dropped to only about 10 per cent of its 2003 peak of 225,000 b/d. Nexen still has another small field at East Al- Hajr, producing 6,000–8,000 b/d.

Earlier this year, Yemeni government sources were signalling that the concession would be renewed. More recently, Nexen indicated that it was planning for a withdrawal should negotiations fail, suggesting that it did not expect to win. It is possible that the government desperately needs as much revenue as it can get from the field to make up for the reduction in income as Yemen’s other oil exports fall. The opposition says that the people will not see any of the money, as it will be squandered by the regime for political purposes.

The affair sends a very bad signal to other companies still looking to enter Yemen, either to farm into existing concessions or try to get new ones. Others are interested in Yemen’s considerable mining potential. Yemen clearly needs to do all it can to encourage foreign investment in both building on the promise of the transition arrangements and the international willingness to help Yemen overcome its problems.

Gas exports, which will be of increasing importance to Yemen, have not been interrupted. Total is negotiating arrangements over its oil concessions. This will no doubt be helped by the high-profile (for Yemen in these dangerous days) visit by the French ambassador to its Block 10 field in Hadhramaut.

For more news and expert analysis about Yemen, please see Yemen Focus.

© 2011 Menas Associates

Azerbaijan's gas reserves boosted by Total find

The French oil and gas major Total has discovered a major gas field off the coast of Azerbaijan, the company announced on 9th September. The field is believed to be one of the country's largest, providing a major boost to Azerbaijan's reserves.

The new field lies within the Ashberon block, which Total has been operating through a subsidiary since it made an agreement with Azerbaijan's state energy firm SOCAR in 2009. Total holds 40 per cent, as does SOCAR, while GDF Suez holds the remaining 20 per cent. The block is located around 100km east of the capital Baku, and around 25km north of the enormous Shah Deniz gas field.

The exact size of the discovery remains open to speculation at present. Total announced that the field as a whole had potential for “several trillion cubic feet of gas and associated condensates”, but on 12th September, SOCAR claimed that the discovery holds around 350 billion cubic metres of gas and 45 million tons of gas condensate.

Whatever the exact size of the field, it provides a major fillip to Azerbaijan's energy reserves, perhaps bringing them to 2.55 trillion cubic metres. Contrary to the hopes expressed by some analysts and officials, however, the new discovery is not necessarily a saving grace for the EU's Nabucco project to bring Caspian gas to Europe. Azerbaijan already possesses sufficient gas for Nabucco to get underway, mainly in the second phase of the Shah Deniz field and recent discoveries in the Umid field.

The problems with developing Nabucco have not therefore been about gas reserves – they have been about building pipelines to export the gas, as well as the technical work to actually extract the gas. This is particularly true in the deep and challenging waters of the Caspian Sea. First Vice-President of SOCAR Khoshbakht Yusifzadeh acknowledged this, saying that extraction from the new field was unlikely to begin before 2021 or 2022. Meanwhile negotiations over the pipeline project which will bring gas to Europe continue.

Azerbaijani officials are nonetheless exuberant over the find, with President Ilham Aliyev calling it a “truly remarkable event” and stating that it shows “that our country possesses great opportunities, great potential and bright future.”

Sources: News.az, Wall Street Journal, Financial Times

For more news and expert analysis about the Caspian region, please see Caspian Focus.

Sea Trucks gets Hyundai contract

The Sea Trucks Group has announced a contract award from Hyundai Heavy Industries (HHI) for Total in Nigeria. The project comprises the charter of a DP3

accommodation support vessel and associated services for 430 company personnel at the USAN FPSO, located 100km offshore Nigeria inwater depths of 750 m to support the mooring, hook-up, commissioning, and start-up activities of the FPSO.

One of Sea Trucks' DP3 offshore construction/ accommodation vessels, with fleet number Jascon 30, will be used for the project with a new custom-built portable accommodation block installed on deck to provide extra facilities for 184 people. After Akpo in Nigeria and Girassol and Pazflor in Angola this is the fourth accommodation services project the group will execute for Total.

The work is expected to start at the end of July and to continue for a minimum of nine months with options to extend.

For more news and expert analysis about Nigeria, please see Nigeria Focus and Nigeria Politics & Security.

© 2011 Menas Associates

Algeria's oil and gas exports up by 38.3 per cent

Algerian's oil and gas exports have gone up by 38.3 per cent in the first six months of 2010, said the country's Central Bank Governor Mohamed Laksaci. He also told the parliament that foreign companies operating Algeria gas exported lower quantities of energy in the first half of this year compared with 2009.

"(The value of) energy exports reached $27.6 billion in the first six months of 2010, an increase of $7.65 billion or 38.3 percent from the same period last year.The exported quantities remained stable. They increased only by 1.65 percent compared with their level in the first six months of 2009. This time (first half of 2010), the quantities exported by (foreign) partners declined," said Laksaci.

Total, BP, Amerada Hess, StatoilHydro and Anadarko are among the main foreign energy companies in Algeria, which is also the world's eighth biggest exporter of crude.

Laksaci said the earnings rise was made possible by higher oil prices, which he said averaged $77.5 per barrel during the January-June period this year versus $52.2 in 2009.

Source: Reuters

For more news and expert analysis about Algeria please see Algeria Focus and Algeria Politics & Security.

Thirteen IOC's qualify to bid in Iraq's gas auction

Iraq has said that 13 international oil companies have qualified to bid in next week's gas filed auction for the Akkas field, in the western desert, the Mansuriyah field near the Iranian border in the Diyala province and Siba field near Basra. The three oil fields together have estimated reserves of around 11.23 trillion cf of gas.

"Thirteen companies will take part in the gas auction and no more firms will be allowed," said Head Iraq's Oil Ministry's Licensing and Contracting Office Abdul-Mahdy al-Ameedi.

The 13 companies that have qualified to bid include Edison, Eni, Total, Korean Gas Corporation (Kogas), Mitsubishi, TPAO, Itochu, KazMunaiGaz, TNK-BP, Statoil, India's Oil & Natural Gas Corporation (ONGC), Jogmec and Kuwait Energy.

Source: Upstream

For more news and expert analysis about Iraq, please see Iraq Focus.

Algeria: Economic concerns push Kouchner aside

The French government appears to have given in to Algerian intransigence in an effort to improve relations, particularly in the economic sphere, by taking responsibility for the bilateral relationship away from foreign minister Bernard Kouchner. Kouchner is disliked by the Algerian authorities, who have refused to authorise a visit by him to Algiers twice in the course of a year. French President Nicolas Sarkozy has appointed former prime minister Jean-Pierre Raffarin to manage Algerian affairs, alongside the secretary general of the Presidency, Claude Guéant, who has met Algerian prime minister Ahmed Ouyahia frequently over the past year.

Raffarin is now in charge of an economic cooperation mission between the two countries aimed at spurring investment. “If our country is one of the top economic partners of Algeria, nothing is perfect and we must stay alert in order to maintain and increase our position and market as much as possible,” said Sarkozy in a mission statement to the former PM. He also mentioned the “difficulties” experienced by French companies operating in Algeria. By appointing a high-level official in charge of economic relations between the two countries, the French are demonstrating their will to provide tangible support to their presence in Algeria, he said.

France's foreign trade secretary, Anne Marie Idrac, was in Algiers in mid September to discuss French investment in the country. Accompanied by representatives of French businesses, she held discussions with investment promotion minister Mohamed Benmeradi, which centred on Algeria's new regulations contained in the supplementary finance law for 2010. Idrac said that French companies had invested $2.7 billion in Algeria last year, and that French companies were demanding “some advantages” to encourage them to invest further in the country. She also confirmed that French car manufacturer Renault was ready to invest in the country. One of the largest investment deals was drawn up by French energy group Total, which in 2007 announced that it would put $5 billion into the construction of a petrochemicals plant in Arzew.

For more news and expert analysis about Algeria please see Algeria Focus and Algeria Politics & Security.

© 2010 Menas Associates

Total E&P Vietnam discovers oil offshore Vietnam on Block 15-1/05

Total E&P Vietnam, and its partners on Block 15-1/05, have discovered oil in the Lac Da Vang prospect, located in the southern part of the block in the Vietnamese offshore.

The Lac Da Vang well is located approximately 125km east of the city of Vung Tau, about 65km off the coast, and was drilled in water depths of 48m. The well produced up to 3,500 b/d during the tests.

The discovery was made on the second exploration well drilled and the second discovery was made less than a year later. Phu Quy Petroleum Co, a subsidiary of Petrovietnam Exploration and Production Corp, is the operator with a 40 per cent stake. The other partners on Block 15-1/05 are Total E&P Vietnam with a 35 per cent stake and SK Energy Co with a 25 per cent stake.

For more news and expert analysis about Vietnam, please see Vietnam Focus.

© 2010 Menas Associates

Algeria launches third oil and gas licensing round

Algeria has launched its third oil and gas licensing round in hope of new investment for the country's energy industry. Previous bidding rounds in 2008 and 2009 were largely unsuccessful as international oil companies complained that the terms stipulated by Algeria's state oil company, Sonatrach, were too inflexible to be worth the risks.

According to energy industry insiders Sonatrach is unlikely to make major changes in its terms, but a lot will depend on which 10 blocks are put on offer. The contractual conditions will not be disclosed before 30th September and further "clarification meetings" will take place between October and December, with opening of the bids scheduled for 3rd March.

Sonatrach has a 51 per cent stake in all upstream operations and there's a tax on every barrel of oil sold at more than $30. It is estimated that Algeria has 12.27 billion barrels of oil reserves and 4.51 trillion cubic metres of natural gas reserves. Oil and gas account for 97.5 per cent of the country's export, making it the world's third largest exporter of liquefied petroleum gas, the fourth largest exporter of liquefied natural gas and ninth largest oil exporter.

According to online sources 70 international companies were qualified to bid in the forthcoming licensing round, including Exxon Mobil, Royal Dutch Shell, Total, Gazprom, BP, Repsol and Eni.

Source: UPI

For more news and expert analysis about Algeria please see Algeria Focus and Algeria Politics & Security.

Azerbaijan increases gas supplies to Turkey by 2 billion m³

The State Oil Company of the Azerbaijan Republic (SOCAR) has increased gas supplies to Turkey from 13-14 million m³ to 16 million m³ per day. The increase in supply is partly due to an explosion near a pipeline transporting gas from Iran to Turkey, which meant that Iranian gas supplies in to the country were suspended. According to Turkey’s Energy and Natural Resources Minister Taner Yildiz supplies will resume in approximately 7 days.

Azerbaijan supplies gas to Turkey under a contract on the Shah Deniz offshore gas field. The countract stipulates that Turkey has to receive 6.6 billion m³ of gas per year during the field's first stage. The field's total reserves are estimated at 1.2 trillion m³.

The contract to develop Shah Deniz was signed 4th June 1996, and includes the following participants BP (operator) with 25.5 per cent, Statoil 25.5 per cent, NICO 10 per cent, Total 10 per cent, LukAgip 10 per cent, TPAO 9 per cent and SOCAR with a 10 per cent share.

Source: Trend Azerbaijan

For more news and expert analysis about the Caspian region, please see Caspian Focus.

Azerbaijan to supply gas to Bulgaria

A Bulgarian-Azerbaijani committee met in Baku this week to discuss the development of a Black Sea route to export natural gas from Azerbaijan to Bulgaria. The project is expected to be completed before 2013, said Bulgaeria's Bulgartransgaz director Ivan Drenovichki.

The committee discussed the options for shipping compressed natural gas to Bulgaria with the participation of Bulgartransgaz, SOCAR and the Shah Deniz consortium represented by Statoil, BP and Total. It is expected that Bulgaria will export some of the gas onward to other European detonations.

Once the all the work is completed Bulgaria is expected to be receiving two billion m³ of natural gas a year, securing as much as 50 per cent of its natural gas consumption with supplies from Azerbaijan.

Source: News Azerbaijan

For more news and expert analysis about the Caspian region, please see Caspian Focus.

Total acquires share of Block 1 in the Joint Development Zone

Total has bought Chevron’s 45.9 per cent share in Block 1 in the Joint Development Zone (JDZ), Nigeria. Total will operate the block collaboratively with a number of international oil producers including Sinopec's subsidiary Addax, Dangote Energy Equity Resources and Sasol Exploration and Production Nigeria.

The acquisition is in line with Total’s plans to expand its operations in Africa, particularly in the Gulf of Guinea. At present Total’s operations in Africa produce around 750,000 barrels of oil equivalent per day accounting for 33 per cent of Total’s overall production.

The JDZ is regulated by a treaty signed by Nigeria and Sao Tomé and Principe in 2001 for a period of 45 years. The license granted to Total extends over an area of approximately 700 m2 in water depths ranging from 1,600 to 1,800m. Within this license, a discovery was made in 2006 (Obo-1 well). The proximity of the Total-operated licenses and facilities in Nigeria will enable cost reductions in developing the license’s resources.

To find out more about Total please visit Total’s web site, which you can find here.

For more news and expert analysis about Nigeria, please see Nigeria Focus and Nigeria Politics & Security.

© 2010 Menas Associates

Total discovers hydrocarbons in western Nigeria

Total has confirmed that Total Exploration & Production Nigeria, and its partner Conoil Producing Ltd, has discovered hydrocarbons in the central fraction of the Oil Mining Lease OML 136, offshore western Nigeria.

The Agge-3B.T1 well, aimed at exploring an undrilled compartment of the Agge structure, was located in a water depth of 140 mt and reached a total depth of 2,710 mt. The well found several gas bearing reservoirs totaling a gross thickness in excess of 150 mt. A production test performed over the lower intervals yielded a production of 21 million cubic feet of gas per day on a 36/64 choke. Total, is presently, conducting studies to assess further development options for the Agge-3B.T1 well, and intends to do so with all other new discoveries on the block.

Developing the country’s deep offshore resources is one of Total’s key aims. The development of the OML 138 Usan field, Total’s second development in deep offshore Nigeria, was launched in early 2008 and the field is expected to come on stream in 2012. The basic engineering studies of Egina field, located near Akpo on OML 130 are also underway.

To find out more about Total please visit Total’s web site, which you can find here.

For more news and expert analysis about Nigeria please see Nigeria Focus and Nigeria Politics & Security.

© 2010 Menas Associates