CNOOC Reports Worst Result Since At Least 2011
China's offshore oil and gas producer CNOOC Ltd reported its worst annual result since at least 2011, with revenue from its core oil and gas business tumbling 17 percent last year, but it expects to raise output 2017 as oil prices rebound. CNOOC reported a net profit of 637 million yuan ($92.5 million) in 2016, down nearly 97 percent from 20.2 billion yuan in profit in 2015. Total revenue from oil and gas fell to 121 billion yuan from 147 billion yuan in 2015. "CNOOC managed to eke out a tiny profit thanks to cost efficiencies and the oil price rebound during 4Q…
Maersk Reaches Key North Sea Tax Deal with Denmark
Shipping and oil company A. P. Moller-Maersk on Wednesday reached an agreement with the Danish state that means it will pay less tax on its North Sea oil and gas activities through 2025. The deal, which has been under negotiation for months, makes it viable to redevelop the Tyra field through which 90 percent of Denmark's gas production is processed, and it is seen as crucial for the Danish company that is seeking to spin off its energy assets via a listing or merger. Maersk and its partners in the Danish Underground Consortium (DUC) -- Shell…
Statoil Wins Licences Off UK, 'Resets' Exploration Off U.S.
Norway's Statoil was the second top bidder for 13 oil exploration leases in the U.S. Gulf of Mexico and won six licences offshore Britain, it said on Thursday, in a sign it may be looking to boost reserves after slashing costs. Statoil bid a total of $44.5 million for 13 licences in the U.S. Gulf of Mexico, coming second only to Shell and ahead of Hess Corp, Chevron and Exxon, the latest auction results showed. The company said in a separate statement it had won five new operated licences in the northern North Sea and one in the frontier area west of Scotland, committing to drill at least three wells. Statoil said its bids for licences in the U.S.
Finnish Firms Present Oil Recovery Project Results
A recent seminar held March 7 and 8 in Porvoo, Finland, saw Finnish companies Arctia and Lamor Corporation present the results of the IMOR (Ice Management & Oil Recovery) project, which seeks to enhance oil recovery in ice conditions. The oil recovery seminar, arranged by icebreaking services provider Arctia in collaboration with oil spill response specialist Lamor, was opened by the company’s respective CEOs, Tero Vauraste and Fred Larsen. In his speech, Vauraste stated that oil recovery is a key part of Arctia’s range of services.
Guam Bolsters Oil Spill Recovery Capacity
Lamor recently commissioned itsLSC 4C Side Collecting Oil Skimming System for Guam’s Oil Spill Response Operations Company (OSROCO) and T&T Marine Salvage (T&T) making it the largest skimming system in the region. OSROCO, a wholly owned subsidiary of Cabras Marine, and T&T operate the skimming system as well as an array of small crafts, and other specialized response equipment. OSROCO, Cabras and T&T employees are trained and certified in accordance with the U.S. Federal Government’s oil spill response and safety standards.
Libyan Oil Output Rises after Port Fighting Ends
Libya's oil production has reached 700,000 barrels per day (bpd), the National Oil Corporation (NOC) said on Wednesday, recovering from a drop earlier this month caused by fighting at two key oil ports. "We are working very hard to reach 800,000 barrels by the end of April 2017, and, God willing, we will reach 1.1 million barrels next August," NOC Chairman Mustafa Sanalla was quoted as saying in a statement. The NOC said in a separate statement it hoped to produce 55,000 bpd in the coming weeks from the Abu Attifel and Rimal fields, which are currently closed for maintenance. The fields are operated by Mellitah Oil and Gas, a joint venture between the NOC and Italy's ENI.
US O&G Industry Reaps the Benefits of International Trade
Rising exports have thrown a lifeline to U.S. shale producers and refiners, giving them an additional outlet at a time when the domestic market has been at risk of becoming saturated. The United States exported record quantities of natural gas, propane, gasoline, distillate fuel oil and light crude last year while continuing to import the heavy oils needed by its refineries. Gas exports increased by almost 30 percent in 2016 and have more than tripled in the last decade, limiting the build up of unused gas and supporting prices in recent months despite the warmest winter on record.
EU Lawmakers Reject Call for Ban on Arctic Oil Exploration
The European Parliament rejected a call to ban Arctic oil and gas exploration on Thursday, in a symbolic vote seen as a barometer for future moves by Brussels to regulate to protect the region. Lawmakers who back the ban, which had drawn the ire of Norway, say the European Union needs a strategy for future developments in a region being transformed by climate change. Lawmakers voted 414-180 to reject the non-binding motion calling for the European Commission and member states to work with international forums towards "a future total ban on the extraction of Arctic oil and gas".
OCIMF Encourages Adoption of Inert Gas Systems
The Oil Companies International Marine Forum’s (OCIMF) latest information paper, released on March 13, addresses the use of inert gas for the carriage of flammable oil cargoes. In the paper, titled Inert Gas Systems: the use of inert gas for the carriage of flammable oil cargoes, OCIMF fully supports the IMO introduction (from January 1, 2016) of the mandatory fitting to new build tankers 8,000 DWT and over, of an inert gas system when carrying flammable cargoes. “The safety benefits of inert gas in cargo tanks are well recognized throughout the tanker industry…
VLCC Rates to Remain Weak on Output, Tonnage Woes
Freight rates for very large crude carriers (VLCCs), which fell to a near six-month low on Thursday, will remain weak until the Asian refinery maintenance season gets completed, starting April-end. "I haven't seen a collapse in rates like this for some time. People are taking insane rates," said Ashok Sharma, managing director of ship broker BRS Baxi in Singapore. Output cuts by oil producers, refinery maintenance in Asia and the reactivation of older vessels previously used as…
Shell Signs 3-year Contract to Lease Oil Tanks in Panama
Oil company Royal Dutch Shell has signed a three-year contract to lease storage tanks at a large terminal in Panama that had been used by U.S. refining company Tesoro Corp, sources involved in the deal told Reuters. The facility, designed for storage and transshipment of crude oil to tankers, is owned by Petroterminal de Panama (PTP) and includes up to 14 million barrels of storage capacity on the Atlantic and the Pacific shores. "We have signed a contract with Shell for a three-year period involving all the available space we have," said an official from the Panamanian government. The contract still needs final approval by the country's Finance Ministry. (Reporting by Elida Moreno and Marianna Parraga)
Danish Finance Minister to Report on North Sea Oil Negotiations with Maersk
Denmark's finance minister Kristian Jensen will hold a news conference about the government's ongoing negotiations with the Danish Underground Consortium (DUC) about a new tax agreement for North Sea oil and gas operations at 1745 CET on Wednesday, the finance ministry said in a statement. DUC consists of Danish shipping and oil conglomerate A. P. Moller-Maersk, Shell, Chevron CVX.N and state-owned Nordsofonden. The deal is seen as crucial for Maersk as it seeks to focus its operations on the North Sea and spin off its energy assets via a listing or merger. (Reporting by Teis Jensen; Editing by Toby Chopra)
Libyan NOC Official Warns of Force Majeure at Oil Ports as Rivals Mobilize
A senior official at Libya's National Oil Corporation (NOC) warned on Monday of a possible declaration of force majeure at the Es Sider and Ras Lanuf oil terminals, as air strikes continued and rival forces mobilized fighters in the area. NOC board member Jadalla Alaokali said force majeure, a legal waiver for contractual obligations, would "likely" be declared if violence continued, though he gave no timeframe. Libya's eastern-based Libyan National Army (LNA) lost control of Es Sider and Ras Lanuf to a rival faction, the Benghazi Defence Brigades (BDB), 10 days ago. Both sides have since been mobilizing, and the LNA has been conducting daily air strikes in the area. Most workers have left the ports.
TEN Strengthens Vessel Base
Tsakos Energy Navigation (TEN)'s growth has continued unabated in 2017 with the delivery of one VLCC, the Hercules I, one aframax tanker the Marathon TS and the shuttle tanker Lisboa, currently all under long-term employment to solid counterparties. These came on the back of nine vessels that were delivered or acquired in 2016 and will be followed in 2017 by the last four, of nine, aframaxes that were built against long-term employment to a Norwegian oil major. With the delivery of these remaining high-end aframaxes…
Subsea 7 CFO has 'Measured Optimism' of Oil Service Market Recovery
Oslo-listed oil services firm Subsea 7's Chief Financial Officer Ricardo Rosa told an energy conference in Oslo he sees gradual market recovery as oil prices stabilize, and the outlook for subsea project awards increasing within the next 12 months. "Previously all the discussions (with oil companies) were about cutting costs, now we are starting to talk about launching new projects... We have a measured optimism," Rosa said. Rosa said he sees activity is picking up in the Gulf of Mexico, but remains low in western Africa, and doesn't expect anything in Brazil in 2017.
Asia Tankers-VLCC Weighed by Excess Tonnage
MidEast, West Africa rates diverge; oil output curbs in Iraq and West Africa could weigh on tanker market. Freight rates for very large crude carriers (VLCCs) are likely to remain under pressure with hire rates from the Middle East to Asia tracking lower in the face of excess tonnage in the market, brokers said. Cuts in the output from Iraq and West Africa this month as part of an agreement between oil producers to curb crude production to bolster oil prices are also expected to weigh on the tanker market as the number of voyages are curtailed, brokers said.
Despite Sanctions Relief, Shell Still Cool on Iranian Oil Buys
Royal Dutch Shell has bought only three cargoes of Iranian oil since sanctions were eased a year ago, a small fraction of what it used to buy and an indication of the legal difficulties and high prices that still hamper the trade. The Anglo-Dutch firm did not give a reason for the drop in purchases, which were disclosed in its annual report, and the company declined to comment further. But oil trading sources say Iranian oil is often too expensive and in any case remaining sanctions make dealing with the Islamic Republic a legal minefield. As an example of sanctions-related difficulties, Shell's filings showed it had to disclose payments of only a few hundred dollars when its employees bought tickets with Iranian airlines.
GE Shipping Buys New Vessel
The Great Eastern Shipping Company Limited (G E Shipping) signed a contract to buy a Supramax Dry Bulk Carrier of about 52,450 dwt. The 2006 built vessel is expected to join the Company’s fleet in Q1 FY18. The Company’s current fleet stands at 43 vessels, comprising 28 tankers (11 crude carriers, 15 product tankers, 2 LPG carrier) and 15 dry bulk carriers (1 Capesize, 8 Kamsarmax, 6 Supramax) with an average age of 9.56 years aggregating 3.54 mn dwt. The company has also committed to purchase 1 Secondhand Suezmax Crude Carrier.
Ezra Holdings Files for Bankruptcy in US
Oilfield services firm Ezra Holdings of Singapore filed for U.S. Chapter 11 bankruptcy at the weekend, blaming a prolonged slump in the energy industry, Reuters reported. Ezra has been facing hostile actions from creditors at home and abroad as it struggles to recover from a slump in oil prices over the past three years. The company filed voluntary petitions for reorganization under Chapter 11 of the US Bankruptcy Code, according to a stock exchange filing on Sunday. Ezra will…
Total Seeking to Buy Stake in Iranian LNG Project
French oil giant Total held talks with Iranian officials about several projects in the country in 2016, notably a 10 million tonnes per year liquefied natural gas project (LNG), Reuters reported. It has signed an agreement with Iranian authorities for a 50 per cent stake in Iran’s South Pars gas field project which will developed at an investment of $4 billion. Sources told Reuters in February that Total was in talks to buy a multi-billion dollar stake in Iran's partly-built LNG export facility.
OP/Ed: Obama’s Arctic Decision Undercut His Own Legacy
On December 20, 2016, in an 11th hour unilateral action designed to cement his environmental legacy, President Obama withdrew 3.8 million acres in the north and mid-Atlantic Ocean and 115 million acres in the U.S. Arctic Ocean (including the entire Chukchi Sea and a significant portion of the Beaufort Sea) from future oil and gas leasing. Unlike the five year moratoria announced by Canada, President Obama touted these closures as “permanent.” Not only does this short-sighted decision threaten the economic lifeline of Alaska, U.S. energy leadership and U.S.
Britain to Review Tax to Speed up North Sea O&G Deals
Britain will look at ways of making it easier to sell North Sea oil and gas fields by changing tax rules in order to keep them producing for longer, the finance ministry said. The move, which is due to be announced in finance minister Philip Hammond's budget on Wednesday, follows a call by the industry's oil lobby group for a change to decommissioning tax rules that have prevented deals in the North Sea. Owners of oil and gas assets get tax relief on the future costs of dismantling them, but as assets are sold the relief cannot be passed on to new owners. "The UK government will publish a discussion paper and establish a panel of industry experts to consider how tax can assist sales of oil and gas fields, helping to keep them productive for longer," the ministry said in a statement.
Market Volatility Affects Sovcomflot
Sovcomflot is one of the world’s leaders in energy shipping as well as in servicing offshore upstream oil and gas projects. It has reported lower time charter equivalent revenue (TCE) of USD 1,142.2 million (2015: USD 1,240.1 million), EBITDA of USD 706.5 million (2015: USD 780.1 million) and net profit of USD 206.8 million (2015: USD 354.5 million). Sergey Frank, President and CEO of Sovcomflot said: “Sovcomflot has delivered a solid set of results for 2016, despite market volatility in a year that has severely tested our industry.