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Tuesday, August 05, 2008

Sinopec steps up to the plate for Imperial Energy

Sinopec steps up to the plate for Imperial EnergyAugust 5, 2008 - Russia Today - China’s state oil company Sinopec has stepped into the bidding war for oil producer Imperial Energy. The news comes after India’s O.N.G.C. had reportedly already offered 2.6 billion dollars for full control of the London-listed oil producer that operates deposits in Russia. The bidders are attracted by Imperial’s steep production growth in the Tomsk region of Siberia. Analysts say that means a premium of about 10 percent to the current market price. Sinopec will have to table a higher bid than the 2.6 billion dollars reportedly offered by its Indian rival O.N.G.C. for 100 percent of Imperial Energy. Artyom Konchin, analyst at Unicredit Aton, says Imperial is an attractive target. They are starting off basically from zero, from scratch, and they can go as high as 80,000 barrels per day, from todays 6 or 7, so you’re looking at a very steep production profile. And also the valuations are quite reasonable, I think the company’s barrel of two key reserves is valued below 2 dollars today. Your average Russian barrel is valued at about 4 and a half to five dollars if its integrated. Experts say Russia’s small independent producers are aiming to grow in scale through acquisitions to finally attract a strategic investor. But Konstantin Batunin of Alfa Bank says a foreign investor will never get control over any energy company in Russia even as small as Imperial Energy. Typically in Russia, it is pursued in such a way as the foreign investor, for instance acquires the entire stake which is on the plate and then issues an option to a state owned company for 50% plus one share. And that’s the potential way it can be done in this case. Imperial Energy received an offer from Gazpromneft a year ago. And it is likely that current bidders will finally sell controlling stake to Gazproms oil subsiduary.

Friday, August 01, 2008

Oil Prices Continue to Fall

01.08.2008 - [Neftegaz.RU] - Oil prices fell further towards US$123 a barrel on Aug 1, as sluggish US economic data prompted fund selling on fears of eroding demand in the world's top energy user. US light crude for September delivery fell 83 cents to US$123.25 (RM403.36) a barrel by 0222 GMT, extending a loss of US$2.69 on Thursday's close. London Brent crude fell 63 cents to US$123.35 a barrel. "High oil prices are taking their toll on western economies. Prices are now on a downward trend due to weaker US economic data," said Gerard Rigby of Fuel First Consulting in Sydney.

Exxon Mobil Broke its Own Record in Profit

01.08.2008 - [Neftegaz.RU] - Exxon Mobil broke its own record for the highest-ever quarterly profit for a U.S. company on Thursday, but it was lower than Wall Street expected largely due to lost output from Venezuela and Nigeria and lower yields from some oil fields, Reuters reports. The average price of a barrel of oil was slightly less than $125 in the quarter, nearly double last year, which also increased earnings reported by three of Europe's largest oil companies, Royal Dutch Shell , Eni and Repsol . Exxon's second-quarter net income rose 14 percent to $11.68 billion, or $2.22 a share, in the quarter. However, after excluding one-time items, Exxon earned $2.27 a share, more than 10 percent below analysts' expectations, according to Reuters Estimates. The miss led to a 4.7 percent slide in Exxon's shares, a major factor in a decline in U.S. stocks on Thursday.

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