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Wednesday, November 19, 2008

Mustang Wins Contract for Abu Dhabi CCS Project

November 18, 2008 - Downstream Today - Masdar, an Abu Dhabi government initiative, owned by Mubadala Development Company, announced the selection of Houston, Texas-based Mustang Engineering, a subsidiary of international energy services company John Wood Group PLC, to provide front-end engineering and design (FEED) services for Masdar's Carbon Capture and Storage (CCS) project in the United Arab Emirates. The project constitutes the first phase in a series of facilities capturing carbon dioxide emissions from Abu Dhabi's industrial and power generation plants. The CO2 will be transported in a pipeline network and injected in Abu Dhabi's oil reservoirs for enhanced oil recovery. The objective of the CCS network is to reduce Abu Dhabi's carbon footprint and replace the vast amount of natural gas currently re-injected into oil reservoirs. The first phase consists of five million tons of CO2 gas captured per year as of end 2013 from three emission sources: a gas-fired power plant, an aluminum smelter and a steel mill. "This project marks a major milestone in our leadership's vision to provide clean energy, reduce carbon emissions and promote sustainable development," said Masdar CEO Dr. Sultan Al Jaber. "We selected Mustang Engineering because of their industry-leading position in CO2 recovery, conditioning and injection projects, as well as their expertise in energy production projects worldwide. This series of projects will reduce our carbon footprint, and position Masdar and Abu Dhabi as global leaders in clean power." The FEED follows a successful eight-month feasibility study conducted by Masdar in 2007 to investigate CO2 emission sources in Abu Dhabi and evaluate the technical and economic feasibility of CO2 capture and transportation to oil reservoirs. "Mustang is excited to be part of this strategic initiative with Masdar. This world-class CCS development greatly complements our extensive experience with CO2 related projects. We are committed to the support of sustainable development and look forward to seeing the impact this project will have on the environment of the region," said Steve Knowles, Mustang president. J P Kenny, also a Wood Group company and operating from their Abu Dhabi office, will be responsible for FEED services for the CO2 pipeline network that will connect the capture sites in Abu Dhabi to the oilfield injection sites. This work is scheduled for completion in the 4th quarter 2009.

Monday, November 17, 2008

Wintershall wins another exploration license in Qatar

//Company signs agreement as sole operator Doha/Kassel
17 Nov. 2008 - Your Oil&Gas News - Wintershall is continuing to expand its activities in the Gulf region: the wholly owned BASF subsidiary has been awarded another exploration license in Qatar’s territorial waters. An agreement for the exploration of Block 4N (Khuff) was signed today (17 November 2008) in Doha with the Deputy Prime Minister and Minister of Energy and Industry of Qatar, H.E. Abdullah bin Hamad Al-Attiya, on behalf of the national oil company Qatar Petroleum. Germany’s largest crude oil and natural gas producer, which is based in Kassel, will explore for gas in Block 4N (Khuff) offshore Qatar as operator and 100 percent license holder. The block is located close to the North Field, the largest natural gas field in the world and covers 544 km² in water depths of 70 meters. The existing seismic data will be reprocessed and interpreted and in the next two years Wintershall plans to acquire additional seismic data with the first two exploration wells to be drilled by 2010. Depending on the results of the intensive exploration campaign, Wintershall would develop a discovery through further drilling, and subsequently produce natural gas and condensate. The Block 4N (Khuff) Exploration and Production Sharing Agreement has a 25-year term. “Having already received the license for Block 3 last year, we are now very pleased to be able to expand our exploration activities in this strategic region. Block 4N (Khuff) is a very promising exploration target and fits very nicely with our existing portfolio in Qatar”, explained Reinier Zwitserloot, Chairman of the Board of Executive Directors of Wintershall, at the signing ceremony of the agreement. “We are working very constructively and successfully with the Qatar government and the state oil company Qatar Petroleum. This success represents a milestone in our engagement in Qatar and the entire Middle East”, Zwitserloot underlined. Wintershall already operates in two neighbouring blocks Wintershall took over as operator of offshore Block 11 in Qatar in 2000. Today, the block is operated by Wintershall (41%) in partnership with the US company Anadarko Qatar Block 11 Company (29.5%) and Cosmo En-ergy Exploration and Development Ltd of Japan with 29.5%. Offshore Block 11 is located north-east of the Qatar coast in the direct vicinity of Block 4N. Since 2007, Wintershall has also been exploring Block 3 as operator with a 40% participation. The other partners in this block are Cosmo Energy Exploration and Development Ltd, which holds 35%, and Indonesia’s PT Pertamina (Persero) with 25%. Seismic surveys are planned to be conducted in the area, which covers 1,666 km². Two exploration wells are planned in 2010. Wintershall, based in Kassel, Germany, is a wholly-owned subsidiary of BASF in Ludwigshafen. The company has been active in the exploration and production of crude oil and natural gas for over 75 years. Wintershall focuses on selected core regions, where the company has built up a high level of regional and technological expertise. Today the company is Germany’s largest producer of crude oil and natural gas and with its subsidiary, WINGAS, it is also an important gas supplier to the German and European market.

EC Wants Its Own Gazprom Competitor

Open Gallery...11–17–2008 – Kommersant – The European Commission is proposing to create the Caspian Development Corp., which would buy natural gas in Central Asia and coordinate investment in oil and gas production and transport in the region. The measure is part of a package of measures to ensure European energy security through 2050. Natural gas would move across the Caspian Sea and bypass Russia, destroying Gazprom’s monopoly on gas supplies from Central Asia. Even Germany, Gazprom’s closest ally in Europe, supported the measure. The corporation will invest in infrastructure in Turkmenistan and Kazakhstan and in the Transcaspian Pipeline. The ultimate goal of the project is to delivery 60-120 billion cu. m. of gas to the European Union through southern routes, including the Nabucco and Trans-Saharan pipelines as well, and reducing dependence on Russian gas supplies. The EU consumes 500 billion cu. m. of natural gas per year. Sixty-one percent of that gas is imported, and that figure is expected to increase to 84 percent by 2030. Russian gas now makes up 42 percent of European imports. The cost of imported energy is about €700 per European citizen. EU antimonopoly bodies will examine the project now and the EC will invite ministerial representatives of Turkmenistan, Kazakhstan and Azerbaijan to discuss the timing of agreements and a report will be made to the European Parliament in the middle of next year. Observers point out that Russia’s and Iran’s approval will be needed for the pipeline (which they are opposed to) and it is unclear where the gas to fill it will come from, since Turkmenistan has expressed its willingness to increase gas exports only by 10 billion cu. m. per year.

Austrian OMV in Talks with BP and Shell on Azeri and Iraqi Gas

17.11.2008 - [Neftegaz.RU] - OMV spokesman Thomas Huemer explained the reason the company started the talks with BP - it is considered to play the leading role in the Shakh-Deniz project in Azerbaijan, while Shell has signed a gas deal with Baghdad that could lead to it becoming a major producer there. The Nabucco consortium hopes that gas from phase two of the Shakh-Deniz project will be the bedrock of supplies to help start the pipeline, with additional supplies coming later from Iraq and possibly Iran and the Caspian region. The shareholders are OMV, Romanian pipeline operator Transgaz, German utility RWE, Hungarian oil firm MOL, Turkish pipeline operator Botas and Bulgarian state gas firm Bulgargaz.

Thursday, November 13, 2008

EU looks to diversify energy supplies

EU looks to diversify energy supplies after Gazprom head says era of cheap hydrocarbons is over13 November 2008 - Russia Today - EU looks to diversify energy supplies after Gazprom head says era of cheap hydrocarbons is over The European Commission has unveiled new plans to diversify its energy imports - reducing reliance on Russia, which supplies most of its oil and gas. It wants the EU to develop alternative sources of energy, including a North Sea offshore grid, and new infrastructure projects in the Baltic States and Mediterranean. The Commission also wants the EU to get firm commitments from alternative gas suppliers in the Middle East and Central Asia, and new transit pipelines. The plan comes just a day after the CEO of Russia's Gazprom, Alexei Miller, said the days of cheap hydrocarbon supplies were over. “The era of cheap hydrocarbons is over. We can see that due to the disparity between supply and demand. Oil companies are underinvesting in the sector. The deficit of oil which was the prognosis for the medium term, will apparently happen earlier than expected.”

Kazakhs eyes 3% Oman CPC stake

13 November 2008 - Upstream OnLine - Kazakhstan wants to buy from Russia roughly half of the 7% stake in the Caspian Pipeline Consortium (CPC) that Moscow has acquired from Oman, a senior Kazakh energy official said today. The pipeline group is led by US major Chevron and includes Russian pipeline company Transneft, ExxonMobil, Shell,Lukoil and BP. The group exports Kazakh and Russian oil CPC-E from a terminal near the Russian port of Novorossiisk. Russia owns 31% in CPC while Kazakhstan has 19%. "We are discussing with Russia a purchase of about 3% out of the 7% (previously owned by Oman)," Reuters quoted Askar Batalov, the Executive Secretary of Kazakhstan's Energy Ministry, told reporters. He said the talks would take "a month or two." Russia's state property agency, which holds Oman's former stake, declined to comment on the issue. Russia is involved in protracted discussions with other shareholders of the group on terms by which the route's capacity could be expanded. Industry sources have said Oman was frustrated with delays in the planned expansion of the route. CPC has been shipping oil since 2001. It pumps up to 750,000 barrels per day to Russia for re-export to the Mediterranean.

Russia, Iran, Qatar may form gas venture

iranqatarrussiaMOSCOW, Nov 12, 2008 (Reuters by Dmitry Zhdannikov) - Russia, Iran and Qatar are expected to discuss a joint venture to produce and sell Iranian gas at a meeting of top officials and executives from the three countries in Doha on Wednesday. Russian gas monopoly Gazprom said in a statement on Wednesday the three could team up to develop Iran's South Pars, the world's biggest gas field, which is being developed in multiple phases by Iran and global energy majors. "At the meeting in Doha, Qatar, the participants will focus on exploration, production, processing and deliveries of natural gas, including LNG (liquefied natural gas)," the statement said without giving details. Russia, Iran and Qatar -- respectively ranked first, second and third in the world in terms of gas reserves -- agreed to boost coordination at a meeting in Tehran last month. After the meeting, Iran said there was consensus to set up a gas grouping similar to the Organization of the Petroleum Exporting Countries (OPEC), drawing criticism from the European Union which opposes any group that could act like a cartel. Russia referred to a "big gas troika", which should become a permanent body, holding regular meetings. Business daily Kommersant reported on Wednesday that Gazprom, Qatar Liquefied Gas Company Ltd and National Iranian Oil Company may agree to build a pipeline from South Pars to Qatar, where gas will be liquefied. The deal could pave the way for Iran to supply greater volumes of gas to world markets despite U.S. sanctions. But Jonathan Stern, director of gas research and Gazprom expert at Oxford Institute of Energy Studies, said it seemed unlikely Russia or Qatar would invest heavily in Iran. "I think its all purely political posturing and I will wait until I see any real agreements signed and any money invested before I'm likely to believe otherwise," he said. Kommersant said the three partners would hold 30 percent each in the venture and reserve a 10 percent stake for a trading partner or a top customer, such as China's CNPC or Korea's KOGAS. Analysts say a gas body would not be able to turn gas taps on and off as OPEC does with oil, but it could share insights on upstream contract terms when it deals with gas investors. Gas consumers like the United States and European states have opposed the formation of any gas body like OPEC, arguing that the market should set prices.

Putin Denies Plan of OPEC-Style Gas Cartel

November 11, 2008 - Rigzone News - Prime Minister Vladimir Putin sought to ease fears Tuesday over the possibility of Russia joining an Opec-style cartel of gas exporting countries, he said in talks with his Egyptian counterpart Ahmed Nazif. "We support this idea. But we know about apprehensions and even fears voiced by certain energy consumers," Putin was quoted by news agency Interfax as saying. "I wish to state once and for all: there are no grounds for such fears." He said energy exporting countries should coordinate policy to ensure "uninterrupted" energy supplies to consumers, but added that Russia would not forgo its independence to sign a cartel agreement with other states. "None of us is going to cede part of our sovereignty in making decisions," Putin noted. The possibility a gas cartel was previously discussed among Russia, Qatar and Iran. Putin met with the Egyptian prime minister, as the latter was paying a four-day visit to Moscow. "I regard Egypt as a leading country of the Arab world," Putin told his counterpart Tuesday. Experts say there was little substance in modeling a gas cartel on OPEC because gas contracts are often signed over the long-term and differ significantly in export-methods from country to country. "It's like the Russian fairytale of three very different animals pulling the cart," said Thane Gustafson, a senior director at consultancy Cambridge Energy Research Associates. Russian exports almost exclusively through pipelines, Qatar mostly deals in liquefied natural gas (LNG), while Iran is not going to be an exporter at all, Gustafson said. Major world gas exporters such as Norway and Algeria have so far also stayed aloof from the planned gas forum. Putin's comments came one day after he said the country had to act to bolster oil prices hit by the global economic crisis. His comments suggested that Russia was aiming to become a swing producer. "As one of the major exporters and producers of oil and petroleum products, Russia cannot sit out from the formulation of global prices for this natural resource," Putin was quoted by local media as saying Monday. "We have to develop a full set of measures that will enable us to actively influence the market."

Wednesday, November 12, 2008

Beijing, Baghdad sign deal to develop Iraqi oil field

BEIJING, November 11 (RIA Novosti) - China and Iraq have signed a deal to jointly develop an oil field in Iraq, the Xinhua news agency said on Tuesday. Under the $2.9-billion deal, China National Petroleum Corporation (CNPC) will help develop the al-Ahdab oil field in eastern Iraq's Wasit province. "This is an important participation from the Chinese side to develop the Iraqi oil fields, and we are looking forward for more participation in rebuilding Iraq," the agency quoted Iraqi Oil Minister Hussein al-Shahristani as saying at the signing ceremony. The oil field is expected to produce over 110,000 barrels of oil per day, which will be supplied to the Zubaiduyah power plant, "and the surplus would go for export," the minister added. China and Iraq signed their first oil deal in 1996, during Saddam Hussein's rule. However, it never got off the ground and was postponed indefinitely after the UN imposed economic sanctions on the country and the U.S.-led invasion in 2003.

Tuesday, November 04, 2008

Shale Region Could Meet US Gas Needs for 14 Years

04.11.2008 - [Neftegaz.RU] - A geologist says the Marcellus shale region of the Appalachians could yield seven times as much natural gas as he earlier estimated, meaning it could meet the entire nation's natural gas needs for at least 14 years. Penn State University geoscientist Terry Engelder said in a phone interview Monday that he now estimates 363 trillion cubic feet of natural gas could be recovered over the next few decades from the 31-million-acre core area of the Marcellus region, which includes southern New York, Pennsylvania, West Virginia and eastern Ohio. Engelder and geologist Gary Lash of the State University of New York at Fredonia touched off a gas rush in the region last January with their study estimating that the Marcellus could yield as much as 50 trillion cubic feet of natural gas. Geologists have long known about the existence of the Marcellus shale, but exploration there accelerated only recently when the price of natural gas rose high enough to make it economically feasible to use the advanced drilling techniques necessary to produce gas from the hard rock thousands of feet underground. Production on the Marcellus gas field, or "play," is considered to be in the early stages, but the sheer size of it is drawing heavy interest from the exploration industry. "It has the potential to be the biggest gas field in the United States," John Pinkerton, chairman and chief executive of Range Resources Corp., said last week in an interview at the Fort Worth, Texas-based company's office in western Pennsylvania. Engelder first presented his new numbers in Pittsburgh last week at a conference on Appalachian gas sponsored by the energy information firm Platts. He said he based his revised estimate on new figures from Chesapeake Energy Corp, the nation's largest natural gas producer. Oklahoma-based Chesapeake recently told investors and analysts that each square mile in the Marcellus could contain 30 billion to 150 billion cubic feet of gas. Engelder and Lash initially estimated 9 billion cubic feet per square mile. Chesapeake also said the thickness of the gas-containing shale ranged from 50 to 300 feet, while Engelder and Lash assumed a thickness of 50 feet. Applying his own calculations to numbers presented by Chesapeake, Engelder came up with his new estimate of how much gas the region might be able to produce over the next few decades, given enough time and money. "Geologists are still trying to size this play," Engelder said. "We don't really know how much gas is there and how much can be recovered."

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