One of Russia’s leading oil companies is asking the High Court in London for an urgent order to stop the Government introducing in the UK this weekend sweeping new economic sanctions announced by the US and Europe. Lawyers for OJSC Rosneft Oil Company are seeking a “stay” on the sanctions, which are due to take effect in Britain on Saturday (November 29), until their legality can be challenged in an application for judicial review.
UK natural gas rose for an eighth day, the longest such streak since March 2011, as field outages in Norway continued to curb supply amid increased demand for the fuel used in heating. Front-month gas in the UK, Europe’s biggest market, climbed as much as 3.1 percent on the ICE Futures Europe exchange in London. The within-day contract reached the highest price since March 3 on the National Balancing Point hub, broker data on Bloomberg showed. Norway, Britain’s biggest foreign supplier, has flow constraints at three fields, with a reduction at Aasgard adding to continued limited flows from Troll and Skarv. Demand for the fuel is forecast to exceed seasonal norms. Prices also climbed as European Union carbon permits touched the highest level since March 3 in London trading.
The last time that U.S. oil drillers got caught up in a price war orchestrated by Saudi Arabia, it ended badly for the Americans. In 1986, the Saudis opened the spigot and sparked a four- month, 67 percent plunge that left oil just above $10 a barrel. The U.S. industry collapsed, triggering almost a quarter-century of production declines, and the Saudis regained their leading role in the world’s oil market. So while no one expects the Saudis to ramp up output now like they did then and U.S. shale oil companies are pledging to keep drilling regardless, the memory of that bust looms large for American industry executives on the eve of OPEC’s meeting tomorrow. As the Saudis gather with officials from the 11 other OPEC nations in Vienna, analysts are split on whether the group will cut output to lift prices or leave production unchanged to fight for market share with shale drillers. “1986 was the big price collapse and the industry did not see it coming,” said Michael Lynch, president of Strategic Energy and Economic Research in Wakefield, Massachusetts, who has covered the oil sector for 37 years. “It put a lot of them out of business. You just don’t forget it. It’s part of the cultural memory.” The Organization of Petroleum Exporting Countries, responsible for about 40 percent of the world’s output, pumped 31 million barrels a day in October, exceeding its official target of 30 million. West Texas Intermediate, the U.S. benchmark contract, rose 8 cents from the lowest price in more than four years to $74.17 a barrel in electronic trading on the New York Mercantile at 6:28 a.m. New York time. Brent, the marker for more than half of the world’s crude, gained 19 cents to $78.52. “Someone has to blink,” said Sarah Emerson, managing principal of ESAI Energy Inc., a consulting company in Wakefield, Massachusetts. “OPEC is saying ‘Does it really have to be us?’” Saudi Arabia wasn’t the first to blink in 1986. The kingdom had been the world’s swing producer for years, boosting output when prices rose and scaling back when they dropped. As fellow OPEC members pumped more crude, the kingdom’s production fell to 3.175 million barrels a day in 1985 from more than 9 million in 1981, according to data compiled by Bloomberg. That left the country facing a growing budget deficit, according to Daniel Yergin’s Pulitzer Prize-winning book The Prize.
Otto Energy has been granted an extension by the Philippines Department of Energy (DOE) for drilling of the Hawkeye-1 well in the Palawan Basin. The company said it will continue its farm-out process to secure quality joint ventures to participate in the drilling of the Hawkeye-1 exploration well. It had previously been in a farm-out agreement with BHP Billiton, with the deal ending earlier this year.
LLeni Gas and Oil (LGO) is to buy Tabaquite from Trinity Exploration & Production for $2million, it was confirmed today. Tabaquite is due to receive a license for the Tabaquite Block in Trinidad, the most northerly onshore producing block in the area. Production from the existing license is 25 barrels of oil per day with LGO claiming to have identified 30 well targets in the area.
A decision date on two proposed exploration sites for shale gas will be next year as more consultation is needed, a council said today. Energy firm Cuadrilla is seeking planning permission to drill, hydraulically fracture and test the flow of gas from up to four exploration wells across two sites in the Fylde area of west Lancashire. Councillors at Lancashire County Council are set to make a decision on both applications, with drilling likely to start several months later if approved and the fracking to follow.
Karoon Gas has encountered five separate oil bearing reservoir sand intervals in its Kangaroo-2 appraisal well in the Santos Basin. The company said it had made the discovery within the Palaeocene and Maastrichtian formations in waters offshore Brazil. Work is now continuing to assess the impact of the well results on the resource size as no gas cap was penetrated and there was shallower oil water in some of the sands.
No one should cut oil production amid faltering prices, Saudi Arabia’ oil minister today said. Ali Al-Nami was speaking ahead of OPEC’s highly anticipated meeting tomorrow in Vienna, when he insisted crude prices would once again right themselves.
Woodside Petroleum has signed a reconnaissance licence with the Office National des Hydrocarbures et des mines to explore a block offshore Morocco. The block, known as the Rabat Ultra Deep Offshore area, comprises a total of 36,737km2 with depths ranging from 1700m to 4400m.
Tag Oil has hit hydrocarbon bearing sands in the onshore Taranaki Basin in New Zealand. The Cheal-E6 step out well intersected more than nine metres of net oil and gas bearing sands in the Mount Messenger formation.
Energy experts at professional services firm EY have urged the UK Government to usher in tax breaks to help extend the life of the North Sea oil and gas industry. Its message echoes earlier calls, including from industry body Oil and Gas UK, Aberdeen and Grampian Chamber of Commerce and Aberdeen University petroleum economist Alex Kemp, for Chancellor George Osborne to deliver concessions in his autumn statement next week. The mini-Budget may coincide with the publication of findings from the Treasury's review of the current North Sea tax regime.
Oil and gas firms need a "cultural shift" to make the most of the North Sea's potential, according to a new report. Business advisory firm Deloitte says new regulator the Oil and Gas Authority (OGA), the UK Government and companies should adapt to "a new reality in the basin". Research by Deloitte into the industry’s reaction to Sir Ian Wood’s Maximising Recovery Review showed strong support for the OGA as well as a stable, simple and internationally competitive tax regime.
BG Group’s plan to reward its next chief executive with a pay deal worth £25million is causing growing unrest among investors. The Investment Management Association (IMA), whose members manage more than £5trillion of assets on behalf of UK and overseas clients, has issued a “red top” warning. Legal and General – one of the biggest investment businesses in the UK – has also raised concerns about the offer to Helge Lund, who takes the helm at BG in March.
The oil major will use its Norce Endeavour during its Gulf of Thailand campaign next year.
Shale gas provided the largest share of American natural gas production last year, new figures have shown. The US Energy Information Administration said withdrawals reached a new high of 82billion cubic feet per day (Bcf/d) last year. Shale gas well withdrawals jumped from five bcf/d in 2007, to 33 bcf/d in 2013, representing a 40% increase in total gas production and surpassing production from non-shale gas wells.
Fletcher Shipping has added a new platform supply vessel (PSV) to its fleet. The FS Cygnus was named by Karen Fletcher at Flekkefjord in Norway. It is the first new build for the Fletcher fleet and is one of two sister ships being built by Norwegian shipyard Simek.
The chairman of Leyshon Energy has stepped down from his position with the board. John Manzoni is set to take up a new role as chief executive of the Civil Service with the UK government.
The Government is “backing the wrong horse” in its policy on fracking and needs to invest further in renewables, a Lib Dem MP has warned. Former home office minister Norman Baker argued shale gas extraction had been “over hyped” and could be “damaging rather than helpful” to the country. The MP for Lewes said there was “significant doubt” as to whether or not the reserves of potentially usable shale gas and shale oil were going to be as “exhaustive and extensive as the Government has maintained”. Energy policy aims, he said, were to secure security of supply, help meet climate change targets and use the energy supply to create jobs, help the economy and keep prices down. Speaking at the start of his Westminster Hall debate on fracking, the extraction of shale gas through controversial hydraulic fracturing, he said: “The issue is whether or not the Government’s policy in terms of fracking achieves those objectives and I’m not sure it does and therefore I would suggest to the minister we may be backing the wrong horse or at least putting too much money on the wrong horse.”
Italian contractor Saipem has been awarded a $1billion contract in the Caspian Region by Daewoo Shipbuilding and Marine Engineering. The engineering and construction contract has been awarded through Saipem company ERSAI Caspian Contractor LLC.
Kazakhstan-focused Jupiter Energy will begin drilling one of its wells in its East Akkar field. Well 19, sits between the J-51 AND J-52 wells, both of which have been producing oil under trial production licenses.
Antrim Energy is set to consider a £6.35million offer from Sound Oil. The Canada-focused company said it will consult with its board and legal and financial advisers following the takeover bid. Mediterranean-focused explorer Sound Oil announced yesterday its desire to purchase the company.
Faroe Petroleum has completed the sale of its share in a North Sea gas field to Total for £10million. The company sold its 10% interest in the undeveloped Glenlivet gas field as it looks to directing its focus on projects elsewhere in Norway and the UK.
The labor shortage is squeezing a cattle industry already diminished over the past decade by mad cow disease, drought and floods. The herd in Canada, the world’s eighth-largest beef exporter, is the smallest in 21 years. Beef supplies are so tight that Costco Wholesale Corp. is importing more meat from the U.S., where prices are the highest ever. “It’s impossible to find workers,” said Tim Stewart, 57, who has four unfilled jobs and is considering selling the 4,000- head ranch in Rockglen, Saskatchewan, that his family has owned since 1910. “If someone came along with a big fat checkbook, we’d probably walk away.” In Alberta, Canada’s biggest producer of oil and beef, annual wages for specialized livestock workers was C$44,870, ($39,700) or 63 percent less than petroleum workers at C$73,105, according to a provincial government survey of employers last year. The data showed 72 percent of farm employers experienced hiring difficulties, with 25 percent reporting unfilled vacancies for more than four months.
Oil and gas engineering firm Plexus Holdings said yesterday it had won a £1.9million order from a major oil and gas operator to supply equipment for a gas and condensate exploration well in the UK North Sea. Aberdeen-based Plexus did not reveal the customer's identity but said it was a long-standing client. Plexus will supply high pressure/high temperature (HT/HP) adjustable surface wellhead and mudline casing support systems under the new contract, which is expected to have a duration of 150 days.
Engineering support services company Babcock International said yesterday it had completed its second walk to work (W2W) contract for Total Exploration and Production UK. W2W systems allows oil and gas workers to cross from boats on to platforms by foot. Babcock said more than 18,000 people were transferred this way under Total's central North Sea contract between march and September.