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16 February 2011

AsianOil Issue 262


 News
 Analysis
Week 06

ASIA OIL & GAS  Intelligence


Published by

MONITOR  NewsBase
COMMENTARY 2 NEWS THIS WEEK…
 Reddy for action 2
 Abu Dhabi confirms ADOC role in raising
oil output
MARKET COMMENTARY
3
4
Reddy for action
 Stoking the fire 4
New Indian Petroleum Minister Jaipal Reddy
PIPELINES & TRANSPORT 7 outlined his action plan for the oil and gas industry
 Coastal signs US$88m vessel sales deals7 in an exclusive interview with AsianOil.
INVESTMENT 7
 Indonesia second bottom for oil and gas  Reddy, who has replaced Murli Deora as Indian
investments 7 petroleum minister in a recent cabinet reshuffle,
 Report sees tax incentives boosting
faces several major challenges both at home and
Malaysian investments 8
 IOC still keen on Turkish oil refinery 8 abroad. (Page 2)
PERFORMANCE 9
 Ramba Energy makes surprise oil
 Reddy said he would largely follow the policy
discovery at West Java gas field 9 framework that was laid out by Deora. (Page 2)
 EPIC full-year profit surges 38% 9
 Horizon Oil reports positive results from  Payment issues with Iran, the upcoming NELP-IX
PNG well 10 bid round and ongoing consideration of the Cairn-
 Carnarvon Petroleum provides positive Vedanta deal are all pressing matters for the new
Thailand update 10
POLICY 11 minister. (Page 2)
 ONGC share sale planned for March as
part of shake-up
 Petronas keeps a close eye on Sudan 11
11 Solid as ADOC
 PTTEP and Petronas to expand joint gas Japan’s Abu Dhabi Oil Co. (ADOC) has solidified
exploration 12
 Thai energy minister advocates alternative
its position in Abu Dhabi, one of the country’s key
energy projects 13 strategic oil suppliers.
PROJECTS & COMPANIES 13
 Japanese major farms into Iraq’s Gharaf  ADOC has been granted an extension to three
oilfield 13 existing oilfields in Abu Dhabi. (Page 3)
 Japanese consortium wins LNG plant deal
in Australia
 CGE ties up with Essar
14
14 Tax and spend
 Dayang wins Petronas contract 14
 Premier to spud Vietnam appraisal well 15
A new report claims that Malaysia’s new tax
NEWS IN BRIEF 16 incentives should encourage greater spending in the
TENDERS & CONTRACTS 22 country’s oil and gas sector in 2011. (Page 8)

For analysis and commentary on these and other stories, plus the latest oil and gas developments, see inside…
Copyright © 2011 NewsBase Ltd.
www.newsbase.com Edited by Ryan Stevenson
All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All
reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
AsianOil 16 February 2011, Week 06 page 2

COMMENTARY

Reddy for action


New Indian Petroleum Minister Jaipal Reddy faces several major challenges both at home
and abroad as he takes office
By Siddharth Srivastava
 Jaipal Reddy replaced Murli Deora as Indian petroleum minister in the country’s recent cabinet reshuffle
 Reddy told AsianOil he would largely follow the policy framework that was laid out by Deora
 Issues with Iran, NELP-IX and the Cairn-Vedanta deal are all pressing matters for the new minister
The appointment of Jaipal Reddy as “Despite the successes of Reliance [in tackled,” said Reddy.
Indian petroleum minister in place of the KG basin] and Cairn [in Rajasthan],
Murli Deora in the country’s recent India needs to ramp up its hydrocarbon Iranian issues
cabinet reshuffle was an unexpected base given the rapidly rising demand and Reddy admitted the relations with Iran
move. dependence on imports,” said Reddy. were “not easy” because the country had
Some political analysts in India believe “We are looking to attract global energy been “isolated” by Western sanctions led
Reddy was brought in because Deora players [that have been reluctant] to by the US. The sanctions regime has
was perceived to be lobbying on behalf invest in India by removing policy created major problems for New Delhi
of various corporate interests. However, uncertainties, promoting transparency with regard to paying Tehran for oil and
others are less surprised by the and creating an open playing field.” fuel supplies.
appointment, noting that Reddy is an old New Delhi is offering 34 exploration “The most difficult part is finance,
ruling Congress Party hand and is known blocks in 10 sedimentary basins covering whether loans for investments or money
to be close to major players such as an area of about 88,807 square km. transactions owing to the sanctions,” said
Sonia Gandhi and Indian Prime Minister Under the NELP regime, 87 oil and gas Reddy, adding that Indian firms such as
Manmohan Singh. discoveries have already been made in 26 ONGC had been seeking advice on the
Such ties could help Reddy to push exploration blocks. NELP-IX, however, issue from the government.
through the crucial decisions that are could well be the last in the series, as the However, Reddy added that India
necessary to shore up India’s energy bidding process is scheduled to be remained committed to its relations with
security. But the minister will be replaced by the new Open Acreage Iran and stressed that the latest payment
hamstrung by the perennial problems that Licensing Policy (OALP). issues would be resorted with Tehran
faced his predecessor, such as high oil without disruption to oil supplies.
prices and fuel subsidies. Cairn-Vedanta deal The minister went on to say that India
Speaking to AsianOil in an exclusive Another pressing matter for the new was still pushing for the Iran-Pakistan-
interview, Reddy said he would follow petroleum minister to deal with is India (IPI) gas pipeline to be built. But he
the policy framework that was laid out by Vedanta Resources’ bid to take over stressed that the project had its
Deora, including the promotion of Cairn India. Reddy says he wants all “complications [because of] security and
unconventional energy sources such as issues relating to the proposed US$9.6 transit issues with Pakistan and dealing
shale gas. billion takeover “sorted” without “losing with Iran.”
“I am not a new minister of a new time.” Reddy did say, however, that India
government. I am a new minister in the “My officials have been meeting the hoped for a “better result” with the
same government ... whatever decisions parties concerned, including ONGC, Turkmenistan-Afghanistan-Pakistan-
were taken by Murli Deora ... were taken Cairn and Vedanta. The law ministry and India (TAPI) pipeline project. “The
collectively by the cabinet.” the prime minister’s office are looking at success of TAPI could be a template for
the various aspects [of the deal]. We will IPI. India needs to bolster every oil and
NELP-IX go by the rule book,” Reddy said on the gas source,” he said.
One immediate task for Reddy is to issue of the government consenting to the The ongoing issues with Iran allied
oversee the ninth bid round under the deal’s completion. with the slow progress on the Cairn-
New Exploration Licensing Policy The minister added, however, that the Vedanta deal and the upcoming NELP
(NELP-IX). India hopes that this auction government would seek to protect the auction mean India’s new petroleum
will see investment from super-majors interests of state-run ONGC, which has minister has a full in-tray. The next few
such as BP, Chevron and ExxonMobil. raised some questions regarding the deal. months will determine if he is ready,
The closing date for bids is March 18. “Objections by ONGC need to be willing and able.

Copyright © 2011 NewsBase Ltd.


www.newsbase.com Edited by Ryan Stevenson
All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All
reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
AsianOil 16 February 2011, Week 06 page 3

COMMENTARY

Abu Dhabi confirms ADOC


role in raising oil output
Japan’s Abu Dhabi Oil Co. has secured and extended its position in Abu Dhabi, one of the
country’s key strategic oil suppliers
By Andrew Mollet
 ADOC has been granted an extension to three existing oilfields in Abu Dhabi
 The group will also develop a new field, Hail, as part of its 30-year concession
 Japan is Abu Dhabi’s single biggest oil customer, taking 40% of its crude exports
After months of waiting, Abu Dhabi Oil biggest single buyer of Abu Dhabi crude, Electric Power Co., each with 1.8%.
Co. (ADOC) has been granted a new taking about 40% of the emirate’s total
concession agreement by Abu Dhabi’s petroleum exports. Potentials
Supreme Petroleum Council, and handed The new ADOC agreement covers It is an important deal for the Japanese
an extension to its existing oil rights in three existing fields: Mubarraz, Umm al- group, even though the fields are
the emirate. Anbar and Neewat al-Ghalan, plus an considered only minor compared to Abu
An oil operating company working in additional, new concession area, the Hail Dhabi’s main offshore oilfields, Umm
Abu Dhabi, ADOC is a subsidiary of field. It is valid for 30 years from Shaif, Zakum and Upper Zakum.
Japanese refiner Cosmo Oil and various December 6, 2012, after the expiration of The current output from Mubarraz is
other Japanese partners. the current accord. about 18,000 barrels per day (bpd),
It is the latest sign the UAE ADOC will hold a 100% interest in the compared with more than 550,000 bpd
government is intent on expanding its oil four fields covered by the new pumped from Upper Zakum.
production capacity by renewing concession. But it underscores Abu Dhabi’s
concessions with established Cosmo leads the ADOC consortium continued belief in the Japanese market,
international partners, some of which with a 63% stake, and is joined by JX and further entrenches an already strong
date back 75 years. Holdings Inc.’s exploration unit with and thriving trade partnership.
It is also an endorsement of Japan’s 31.5%, plus Tokyo Electric Power Co., In 2009, Abu Dhabi signed a deal to
own partnership with the UAE as the Kansai Electric Power Co. and Chubu store oil in Japan for marketing in the
wider Asia-Pacific region.
The latest agreement for oil
concessions freshens up this established
relationship.
ADOC has been pumping oil from the
Mubarraz, Umm al-Anbar and Neewat
al-Ghalan fields for some time, under a
45-year agreement due to expire next
year.
Going forward, the combined output
from several undeveloped reservoirs
within the Hail field could peak at a level
matching ADOC’s existing production,
the group said. The new field, Hail, is
located adjacent to ADOC’s existing
operating fields and includes some
undeveloped reservoirs.
The Japanese group is now free to
commence exploration work in the
field.

Copyright © 2011 NewsBase Ltd.


www.newsbase.com Edited by Ryan Stevenson
All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All
reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
AsianOil 16 February 2011, Week 06 page 4

COMMENTARY
This will include drilling appraisal between the countries. Abu Dhabi Gas Liquefaction Company
wells to develop and produce oil drawing Sour gas injection is a process in which (ADGASs), an operating subsidiary of
on ADOC’s existing facilities in the area. dissolved hydrogen sulphide and carbon the government-owned ADNOC,
dioxide are recovered from extracted oil launched a study of the feasibility of
Significance and pumped back underground. developing Hail gas in 2008, but no
“The new concession agreement The gases help to push out more crude contracts were awarded for the project.
symbolises the excellent bilateral and are eventually stored permanently in The inclusion of the Hail area in the
relations between the UAE and Japan,” the depleted oilfield. new ADOC concession may indicate that
Cosmo Oil said in a statement. the proposed sour gas development has
“ADOC will commence exploration And challenges been shelved, with the emphasis now on
activities in the Hail field, which will But the Japanese consortium will also oil.
include drilling appraisal wells, and will face up to some of Abu Dhabi’s tough The fast-track development of the Shah
develop and produce crude oil in a highly gas challenges too, as well as simply sour gas project by ADNOC and the US’
efficient and cost-effective manner producing more oil. Occidental Petroleum, however, could
through full utilisation of ADOC’s Abu Dhabi National Oil Company provide valuable insight into how to tap
existing facilities, taking into high (ADNOC) has already established the Hail gas safely and commercially.
consideration the protection of the presence of a deep gas field in rock Like other oil pumped in Abu Dhabi,
environment in the area,” it added. formations below the Hail oil pools. Hail’s crude is also likely to contain
ADOC’s experience of more than 40 The trouble is the gas contains a high hydrogen sulphide, although at a much
years in Abu Dhabi and the various concentration of hydrogen sulphide. lower concentration than in the
environmental protection activities The presence of the toxic and corrosive underlying gas.
carried out by the company – utilising impurity makes the Hail gas technically This highlights the importance of
advanced technology such as zero gas challenging to produce. ADOC’s commitment to develop the oil
flaring and sour gas injection into Any gas leak could pose a serious in an environmentally responsible
reservoirs – are additional factors that threat to public health given the field’s manner, which it has pledged.
will continue to boost bilateral relations proximity to coastal settlements.

MARKET COMMENTARY

Stoking the fire


China’s strong oil import data for January have reassured the market that despite stringent
monetary policy the country’s oil demand remains stable
By David Flanagan

Only a week after it raised interest rates around 5.3 million barrels per day, the fact that demand for oil is “real,” in
for a third time in as many months, among the highest rates of crude the sense that it is derived from industrial
China’s voracious appetite for crude oil importing ever seen in China. demand, transportation and other similar
imports remained undimmed this week. Moreover, this is 20% higher than at activities. Power generation in China has
While it is Chinese property prices and around the end of 2009. It is only the also driven a surge in consumption of
financial markets that are the main start of the year, of course, and 2011 is diesel, which has created a shortage in
targets of the tightening of monetary perhaps still expected to see some the country.
policy, global markets have been moderation of growth, but there is little These facts are being noted in the
anticipating that a dampening effect sign of it so far. It is becoming clearer context of the interest rate rise, and oil
would be observed in the oil market as that oil markets may not see any material markets are perhaps quickly realising that
well. Not so far. effect from the stringent direction of oil demand in China is not going to be
monetary policy, and in fact may not see dented by changes in monetary policy.
Real demand any effect at all.
China’s January’s crude imports reached Some of the reasons for this arise from

Copyright © 2011 NewsBase Ltd.


www.newsbase.com Edited by Ryan Stevenson
All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All

reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
AsianOil 16 February 2011, Week 06 page 5

MARKET COMMENTARY
More evidence of similar trends in bought Japan time, but it has managed to barrier. But it is possible. The spread
other raw commodity markets is noted as “wrong-foot” the market before, and between Brent futures and the Oman
well, such as copper and aluminium, could do so again. future, the so-called “Brent-Dubai swap”
where imports are also running at On global markets, the resolution of has narrowed, reflecting the weight
accelerating rates. the crisis in Egypt helped to contain the attached to Asian demand as a driver of
oil market from a more vigorous upsurge prices, relative to other demand sources.
Beneath the veil this week. Prices have been to some January was a record month for DME,
Because of Asia’s crucial role in driving extent kept in check by the sense of relief with the highest volumes traded on the
oil demand in 2010, oil traders have been felt by traders. But, they have also been exchange since its launch. DME’s chief
waiting keenly to see what the likely left with a warning that political tensions executive, Thomas Leaver, said: “We
trend will be for 2011. And the January in the Middle East are very real, and will continue to work diligently … to
figures point to a healthy pattern. signs of similar instability have been consolidate our position as the
But, whatever China does in 2011, seen in Iran and Algeria. benchmark for crude oil in the Middle
there are some other unknowns in its oil What really worries traders is the East and Asia.”
market presence. The precise nature of its possibility that other oil-producing On the Tokyo Commodity Exchange
oil imports is never completely clear. countries could be impacted by similar (TOCOM), crude oil futures for February
This is owing to its unknown storage civil unrest as was seen in Egypt. This delivery started Week 7 at 49,780 yen
position. In other words, little is known realisation is currently placing a floor (US$594.19) per kilolitre on February 8.
about what volumes China imports for under international crude oil prices. Prices moved higher by the weekend to
storage. close at 50,640 yen (US$604.39) on
It is well known that China has some February 11. The contract gained more
form of reserve, but the terms of its Global oil prices have ground to close at 51,300 yen
management are not disclosed. Hence, (US$612.27) on February 15.
monthly import volume is only ever one
stabilised slightly, and it Kerosene futures continued their habit
part of the picture. A slowdown in may be that the contract of outperforming the market, rising from
China’s economy could easily be 65,280 yen (US$779.23) at the start of
disguised by the fact that crude oil and
will not move through the the week to close at 66,400 yen
other commodities are being imported in US$100 barrier (US$792.6) on February 11, and at
part for storage. 66,800 yen (US$797.38) on February 15.
But, whatever the precise position, Petrol futures began the week at
China’s underlying demand for oil On the markets 59,790 yen (US$713.71), moved higher
appears to be stable. As a result, oil On the Dubai Mercantile Exchange to 60,640 yen (US$723.86) at the
prices were buoyed by the Chinese data (DME), the Oman crude future for April weekend, and closed on February 15 at
during Week 7. began the week at US$96.24 per barrel. 61,200 yen (US$730.54).
Prices firmed slightly as the week Japan’s oil market certainly seems to
On other fronts progressed, driven by the lack of any continue to display a bullish character,
Elsewhere, fears are emerging that the apparent solution to Egypt’s crisis. The which some may find at odds with
effects of Japan’s stimulus may be contract reached US$97.78 per barrel on underlying economic conditions.
waning. Japan recovered strongly in February 10, then slipped back to However, it may be that strong buying
2010, and many market observers were US$97.65 by the weekend. A further for stock replacement purposes is
surprised by its buoyant oil demand modest fall on February 14 to US$97.15 continuing. Kerosene stocks in particular
profile during the year. reflected the market’s decision to refocus were particularly low in Japan in the
But, Japan’s economy saw a sharp on fundamentals as the alarm from Egypt closing months of 2010. This rebuilding
slowing in the closing weeks of 2010, subsided. But, the upward pressure process may be taking longer than some
and the outlook for 2011 is in some created by the first Chinese import data observers may have expected.
contrast to China’s, for example. Its debt for 2011 helped prices up on February 15 In addition, Chinese imports of oil
overhang is stifling consumption and to close at US$99.07 per barrel. products may also be driving up
investment, which spells weak medium- Global oil prices have stabilised TOCOM futures prices.
term underlying conditions. slightly, and it may be that the contract
The stimulus package has perhaps only will not move through the US$100

Copyright © 2011 NewsBase Ltd.


www.newsbase.com Edited by Ryan Stevenson
All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All
reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
AsianOil 16 February 2011, Week 06 page 6

MARKET COMMENTARY

SETTLEMENT PRICES – DME OMAN FUTURES, February 15, 2011

Product Price at Dubai close Change* (US$)


(US$)

Oman crude Apr 2011 99.07 +1.92


(bbl)

Source: Dubai Mercantile Exchange (*Change on previous trading day’s close)

CLOSING PRICES – TOCOM FUTURES, February 15, 2011

Product Price at Tokyo close Change* (yen)


(yen)

Kerosene Mar 2011 66,800 -110


kilolitre

Petrol Mar 2011 kilolitre 61,200 -380

Source: Tokyo Commodity Exchange (*Change on previous trading day’s close, 1 barrel = 0.159 kilolitre)

Crude and Products Market Projections for Week 8


Chinese import figures for January 2011 gave a signal to the market that its demand for oil would continue in a
similar energetic pattern. The high volume during the month appears to be unaffected by monetary policy moves.
Oman futures rose on the news, and it looks likely that more evidence will emerge that demand for raw materials
and commodities will continue to climb in the early weeks of 2011.
In the meantime, prices in Week 8 for the Oman crude future ought to remain roughly stable.
In Japan, products prices appear unwilling to end their relentless rise. TOCOM futures appear likely to increase
modestly in the week ahead. Demand from China for Japanese exports of oil products may also be driving up the
market.
Price projection for April Oman crude futures for Week 0: US$97.00-101.00
Price projection for March TOCOM kerosene futures for Week 0: 67,500 yen (US$806.11)
Price projection for March TOCOM petrol futures for Week 0: 62,000 yen (US$740.83)

Copyright © 2011 NewsBase Ltd.


www.newsbase.com Edited by Ryan Stevenson
All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All
reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
AsianOil 16 February 2011, Week 06 page 7

PIPELINES & TRANSPORT

Coastal signs US$88m


vessel sales deals
Malaysian shipbuilder Coastal Contracts listed Swiber Group, which offers a full net assets per share of the Coastal group
announced it had secured new vessel range of offshore engineering, for the financial years ending December
sales contracts worth a total of about 268 procurement, construction, installation 31, 2011, [FY11] and FY12,” the
million ringgit (US$88 million) via its and commissioning (EPCIC) and marine company said in a statement.
three wholly-owned subsidiaries. support services to support the entire Coastal’s executive chairman, Ng Chin
The three subsidiaries are Coastal spectrum of offshore oil and gas Heng, said: “These latest contracts will
Offshore (Labuan), Pleasant Engineering exploration projects. be the largest vessel sale orders for the
and Thaumas Marine. According to Coastal did not disclose the buyers of Coastal group since December 2009, and
Sabah-based Coastal, the new contracts the three tugboats and two oil barges. will significantly replenish our vessel
are for the sale of seven offshore support Coastal currently has about 760 million sales order book. We see this as a
vessels (OSVs), three tugboats and two ringgit (US$249 million) worth of vessel positive development and believe that it
oil barges. sales orders awaiting delivery to may just kick off the start of more
Of the seven OSVs, six were customers up to 2012, Coastal said. That contract inflows,” he said.
purchased by New York-listed Tidewater number takes into account the new Looking ahead, the Coastal official
Group, the world’s largest provider of contracts. said: “The long-term fundamentals of the
marine support services for the offshore “The revenue stream from the latest OSV shipbuilding industry look
industry. contracts is expected to contribute positive.”
The other OSV was sold to Singapore- positively to the earnings per share and

INVESTMENT

Indonesia second bottom


for oil and gas investments
Indonesia has been ranked the second Philippines and Brunei Darussalam. The level of bureaucracy was also
least attractive destination for oil and gas In the study, the Fraser Institute said a questioned, with investors required to
investors in the Asia-Pacific region in a number of factors had contributed to the meet a number of government offices
new study, which has listed widespread country’s poor performance, including before permission could be granted. The
corruption, poor government “corruption and poor data access” and a previous law called for a single meeting
transparency and a lack of skilled shortage of skilled labour, adding: “terms and the signing of a profit-sharing
workers as reasons for the low ranking. are always being tightened, yet contract (PSC) with the national oil
The report, by Canadian research prospectivity is no better than in other company, Pertamina.
organisation Fraser Institute, placed countries.” The legislation, known as Law
Indonesia 14th out of 15 states and The paper also warned potential No.22/2001, was described as legally
territories, with only Timor Leste – its investors that “profit-sharing contract “flawed and paralysed” by the report
former province – ranking lower. This terms are not always honoured”, but it is because of Indonesia’s Constitutional
marked the second year in a row that “impossible to sue the government”. Court’s removal of several main articles
Indonesia finished in 14th, although the In particular, Indonesia’s main oil and that conflict with the country’s 1945
addition of Timor Leste to the list this gas bill was singled out for criticism, constitution.
time moved the country up from last with the number of taxes due during “Unfortunately, both the President and
place. exploration thought to be excessive. the Minister of Energy and Mineral
Globally, Indonesia fared little better, Under a previous law, overseas firms Resources of the country do not take any
ranking 111th out of 133 countries – were only required to pay tax after they action to fix the situation,” it added.
lower than Papua New Guinea (PNG), found and produced oil and gas.

Copyright © 2011 NewsBase Ltd.


www.newsbase.com Edited by Ryan Stevenson
All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All
reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
AsianOil 16 February 2011, Week 06 page 8

INVESTMENT

Report sees tax incentives


boosting Malaysian investments
Malaysia’s new tax exclusion incentives, practices. marginal field initiatives,” he continued.
alongside a management restructuring of This was attributed to Malayasia’s new In addition, Petronas’ newly
national energy company Petronas, will Economic Transformation Programme, restructured board of directors and
lead to a significant increase in activity in which aims to turn Malaysia into a high- management committee “consists of
the country’s oil and gas sector in 2011, a income economy by 2020, and features a more leaders familiar with the industry”,
new study by market research firm Frost number of measures designed to promote Razeen said, which will lead to a greater
& Sullivan has said. diversification in the energy industry. focus on domestic exploration,
The report, released in Singapore on “The Malaysian governments has development and production activities.
February 7, went on to say that this announced revisions in its Petroleum “Malaysia’s rising economy brings the
would include more strategic Income Tax Act, with new tax exclusion nation closer to being a net importer of
collaborations in joint venture incentives to be given to domestic oil, putting a need for bigger reserves
developments with fellow ASEAN investments in order to attract [money] discovery,” he added.
countries, a greater number of into the oil & gas sector,” said Razeen “In view of this, the government and
acquisitions of proven or marginal fields, Khalid, Frost & Sullivan’s Asia Pacific Petronas have aligned a capital
rapid investments in new technology to programme manager. expenditure allocation of approximately
tap into new oil and gas boundaries, and “This incentive is expected to bring in 40 billion ringgit [US$13 billion] for
an Enhanced Oil Recovery (EOR) drive foreign investments for the capital- 2011. This huge domestic investment
to improve on the nation’s reserves intensive deepwater projects as well as will benefit local oil and gas service
recovery ratio and reservoir management attract private investors for smaller, providers and contractors of all sizes.”

IOC still keen on Turkish oil refinery


India’s flagship refiner-marketer, state- Potentially, ONGC could explore off sale within three to four months.”
owned Indian Oil Corp (IOC), is the Black Sea coast, where US firm New Delhi intends to sell a 10% stake
conducting feasibility studies for a US$5 Chevron and Brazil’s Petrobras have in IOC, while the company will offer an
billion refinery in Turkey, India’s Junior been scouting for gas. equal number of new shares. IOC is the
Trade Minister Jyotiraditya Scindia said Only tiny amounts of oil and gas are country’s largest state-owned company
this month. available in Turkey, forcing the country in the downstream sector, operating 10 of
IOC “is looking at setting up a 15 to import 95% of its hydrocarbon needs. India’s 18 refineries and controlling
million tonne per annum refinery However, observers say that IOC will about three-quarters of the domestic oil
company in Turkey. They are evaluating only be able to pull off the project if its pipeline transportation network.
the feasibility of this,” Scindia said. He finances are sound. The company has earmarked US$1
added that IOC and state-owned explorer As things stand, crude oil prices at billion for overseas acquisitions in the
Oil and Natural Gas Corp. (ONGC) were US$100 per barrel will hit the IOC exploration and production sector.
also looking at oil and gas exploration bottom line, as it is forced to sell fuel “We are looking for good-quality
opportunities in Turkey. (diesel, cooking gas and kerosene) at assets abroad,” Bansal said last
IOC had earlier planned to construct a below cost, as part of India’s official September. IOC refineries in India
refinery with Turkey’s Calik Holding at policy to protect the poor and check include the 8.5 million tonne per year
the Mediterranean port of Ceyhan, where inflation. Such under-recovery has forced (171,000 barrel per day) facility at
pipelines carrying Iraqi and Azeri crude IOC to postpone a follow-on public offer Mathura (Uttar Pradesh) and a 12 million
terminate. However, the plans could not of shares originally scheduled for tonne per year (241,000 bpd) unit at
be implemented owing to the 2008 global January that would have fetched US$5-6 Panipat (Haryana). IOC already
financial crisis. Investment in a pipeline billion. Last month, IOC’s chairman, B maintains an international profile in
project also did not materialise. M Bansal, said: The “government has places as diverse as Libya, Iran, Yemen,
Scindia did not mention whether IOC decided this is not the right time to Nigeria, Venezuela, Gabon and Timor-
and Calik would be partners. divest,” and “will decide on the share Leste.

Copyright © 2011 NewsBase Ltd.


www.newsbase.com Edited by Ryan Stevenson
All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All
reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
AsianOil 16 February 2011, Week 06 page 9

PERFORMANCE

Ramba Energy makes surprise oil


discovery at West Java gas field
Singapore Exchange-listed Ramba working interest. change the economics of the Jatirarangon
Energy has announced a surprise The other 30% working interest is block.”
discovery of oil at a gas field in West owned by Wahana Sad Karya as a non- However, further in-depth geological,
Java in Indonesia. operator. geophysical and reservoir studies,
In an announcement the company said Ramba said that the current flow rate seismic acquisition, as well as a well-
the oil discovery was made by its wholly from the JRR-3 ST well tested at 90 intervention programme, will be
owned subsidiary, Ellipse Energy barrels of oil per day and 500,000 cubic considered before the true potential of
Jatirarangon Wahana (EEJW) during a feet (14,160 cubic metres) of gas per day. the discovery can be determined, he
work-over at the Jatirarangon gas- Prior to the workover, JRR-3 ST had added.
producing field (Jati Block) in Cikarang, been shut-in. But owing to the oil The studies will be carried out in
West Java. discovery, the company has now decided consultation with Indonesian state oil and
The Jati block has been in commercial to forego the perforation of the gas company, Pertamina. Among the key
gas production since October 2004 and Cibulakan and Cisubuh zones in the well. objectives of the workover, which began
currently supplies gas to Perusahaan Gas Daniel Jol, Ramba’s commercial December 2010, was the perforation of
Negara (PGN) under a contract which director, said: “This is an unexpected the gas prospective zones at the Baturaja,
lasts until 2014. EEJW operates the surprise and we are delighted with this Cibulakan and Cisubuh zones.
Jatirarangon block and holds a 70% find. The presence of oil may potentially

EPIC full-year profit surges 38%


Malaysian oil and gas services company fourth quarter of the last fiscal year that the group will be able to achieve
Eastern Pacific Industrial Corp. (EPIC) totalled 53.311 million ringgit (US$17.45 satisfactory results for the financial year
said that its group pre-tax profit surged million), up 7.6% from 49.545 million ending December 31, 2011, compared to
38.4% in the fiscal year ended on ringgit (US$16.22 million) a year earlier. 2010,” the company said.
December 31, 2010, from a year earlier. The company’s group pre-tax profit in EPIC provides energy-related services
EPIC, operator of the Kemaman the October-December period amounted and facilities, tubular threading and
Supply Base (KSB), a major petroleum to 18.117 million ringgit (US$5.93 maintenance services and sludge
supply base, as well as the Kemaman million), up 47.6% from 12.275 million management services to the oil and gas
Port in Terengganu, posted a group pre- ringgit (US$4.02 million) a year earlier. industry. The company also offers port
tax profit of 75.392 million ringgit EPIC painted a rosy picture of its services, ICT services, fabrication
(US$24.68 million) in the last financial performance prospects in the current services and other services to its
year, compared with 54.459 million fiscal year. “Barring any unforeseen customers.
ringgit (US$17.83 million) a year earlier. circumstances, the directors are confident KSB is located in the Petroleum
The company’s group revenue soared Development Zone in Kemaman,
28.2% to 235.136 million ringgit “The increase in both Terengganu. According to EPIC, KSB
(US$76.97 million) in the last fiscal year, hosts more than 250 services companies
compared with 183.466 million ringgit revenue and profit before supporting the petroleum industry with
(US$60.05 million) a year earlier. tax was mainly owing to services such as fabrication, engineering
“The increase in both revenue and works, manufacturing and assembly,
profit before tax was mainly owing to increases in port wire line and rigging, equipment testing
increases in port operations and oil and operations and oil and gas and inspection, handling and supplies,
gas activities,” EPIC said in a statement. amongst others.
The company’s group revenue in the activities”

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AsianOil 16 February 2011, Week 06 page 10

PERFORMANCE

Horizon Oil reports positive


results from PNG well
Horizon Oil has announced positive was designed to appraise the the prospective zones have been acquired
results from its Stanley-2 well, located in gas/condensate accumulation. The and a core cut in the lower part of the
PRL4 onshore Papua New Guinea (PNG) estimate of the most likely recoverable Toro formation.
in the Toro formation. resources in the primary Toro formation This was found to contain 23 metres of
The oil exploration, development and reservoir is roughly 300 billion cubic feet net gas pay, in line with the pre-drill
production company has operations in (8.5 billion cubic metres) of gas and 9 prognosis. In a statement the company
China, New Zealand, PNG and the US. million barrels of condensate. said that the reservoir quality was
The well is located around 1.6 km Stanley-2 was spudded using a Parker “significantly better than in the Stanley-1
south-east of the Stanley-1 discovery Rig 226 and drilled to a total depth of well.” A second pay zone was
well, drilled in 1999. The Stanley-2 well 3,173 metres. Pressure measurements of encountered below the Toro, containing
43 metres of net gas pay.
Pressure measurements indicate that
the Toro and the Kimu sands at Stanley-2
are in connection with each other.
“This suggests that the gas/condensate
ratio of 30 barrels per million cubic feet
[28,320 cubic metres] measured during
the testing of Stanley-1 will persist
throughout the accumulation,” the
company said the statement. The forward
plan is to drill the second producer well,
Stanley-4, from the current surface
location to a bottomhole location around
1 km south-east of Stanley-2.
Horizon Oil’s CEO, Brent Emmett,
said: “This is a very good result and has
met or exceeded the criteria that Horizon
Oil required to make a field development
decision … it is too early to comment on
a resource/reserve revision, although I
expect that there will be a material
increase to the current figures.”

Carnarvon Petroleum provides


positive Thailand update
Thailand-focused Carnarvon Petroleum Energy (POE) is the operator of the JV in In a statement, Carnarvon said that the
has announced a positive update to its the concession. budget would “incorporate up to 34
Thai operations. In January 2011, Carnarvon averaged development, appraisal and exploration
The company said that at its onshore 1,300 barrels per day in net Thai oil wells onshore Thailand.” The company is
L33/43 and L44/43 concession joint sales. There is also around 1,200 bpd targeting an annual production of 1-1.5
venture, in which it holds a 40% interest, (net) of additional production capability million barrels of oil per year (2,740-
it had proposed a firm capital budget of that is currently shut-in at the WBEXT- 4,110 bpd) from the two concessions.
US$26 million (net) in 2011. Pan Orient 1A, WBEXT-1, and WBEXT-1B wells.

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AsianOil 16 February 2011, Week 06 page 11

PERFORMANCE
The Thai drilling programme of 34 Appraisal and development will be operating for Carnarvon in Thailand,
wells is intended to grow both reserves carried out on 75% of the wells, while with one at the L44/43 concession and
and production and will be focused over roughly 25% of them will be exploratory another one at L20/50. The second
several areas. The base capital in nature. This is pending the award of a drilling rig will complete the firm’s two-
programme for 2011 of 34 wells is new production licence by the Thailand well programme at L20/50 during the
centred on one drilling rig operating in Department of Mineral Fuels (DMF). first quarter.
Concessions L44/43 and L33/43. Two drilling rigs are currently

POLICY

ONGC share sale planned for


March as part of shake-up
The new chairman of India’s state-owned Vedanta Resources plc is interested in government on oil output from these
Oil and Natural Gas Corp. (ONGC), A K acquiring the stake and in August 2010 blocks and seeks to share this more
Hazarika, has confirmed that a planned proposed acquiring 51%-60% of Cairn evenly, before the government approves
share sale in the company may open on India for between US$8.5 billion and the Cairn-Vedanta transaction.
March 15. ONGC has mandated six US$9.6 billion in a bid to widen its In a statement to local media, Indian
banks for its follow-on public offer to footprint in the energy sector. Oil Minister Jaipal Reddy said that his
raise about US$3 billion. However, ONGC maintains it has pre- government would support the Cairn-
The government is planning to divest emptive rights in the blocks held by Vedanta deal in principle, although
5% of its 74.14% stake in the company. Cairn India, which are part of the “some of the concerns of ONGC need to
The move is part of a wholesale shake-up proposed deal. ONGC has a stake in be addressed legitimately and
in the ownership and management of eight out of the 10 oil and gas properties substantially before clearing the deal.”
India’s largest oil and gas exploration held by Cairn India. Its key assets are the Cairn Energy’s CEO, Bill Gammell,
and production company. The shake-up massive oilfields in the northwestern said the company would not extend the
is expected to have repercussions in state of Rajasthan, which produce deadline for the proposed sale beyond
Cairn Energy’s proposed sale of 60% of 125,000 barrels per day, around 17% of April 15.
its stake in its Indian unit, Cairn India. India’s total crude output.
London-listed mining company ONGC pays a 100% royalty to the

Petronas keeps a
close eye on Sudan
Malaysia’s national oil company (NOC) contributed 26% of Petronas’ total Malaysia has maintained close ties with
Petronas is “closely monitoring” the overseas production, which has become Sudan’s northern-based government but
situation in Sudan following the national an increasing source of revenue. must now “build a similar relationship
referendum in favour of splitting the “We are closely monitoring the with authorities in the South ahead of the
country into two. development with regard to the secession,” said a report in The Star
Petronas has major interests in several referendum and we have been taking newspaper, which quoted official
onshore blocks in the African country. adequate steps and actions to serve our government news agency Bernama. “We
The blocks are spread across the line rights and interests best,” Petronas said in have had and are in continuous
along which the country is to be divided. a statement on Sudan last week. The discussions and high-level engagements
The state-owned firm also operates retail firm’s partners in Sudan include China with all relevant officials and parties,
fuel stations and port terminals in Sudan. National Petroleum Corp. (CNPC) and including with the government of South
In 2010, crude oil from Sudan Sinopec, plus local Egyptian firms. Sudan,” the Petronas statement said.

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reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
AsianOil 16 February 2011, Week 06 page 12

POLICY
The secession of the South is expected said it had evacuated employees and their operation of a liquefied natural gas
to take place in mid-2011. families from Egypt because of the (LNG) plant in the country.
The petroleum revenue rights of North political unrest there. Petronas has Petronas said it had contributed
and South Sudan are among a number of several onshore and offshore interests in US$650,000 towards the Malaysian air
major problems that have first to be Egyptian exploration blocks with force’s cost to fly other Malaysian
resolved before the split. partners such as Shell and BG Group. It citizens out of Egypt.
Elsewhere in North Africa, Petronas is also involved in the construction and

PTTEP and Petronas to


expand joint gas exploration
Thailand’s PTT Exploration and hydrocarbon resources in the area. details on the proposal with Petronas, he
Production (PTTEP) said it was in talks “PTTEP is planning to produce said.
with Malaysia’s Petronas on the petroleum in the Gulf of Thailand as long PTTEP, which is a subsidiary of PTT,
possibility of expanding natural gas as we can. Some may expect natural gas Thailand’s largest oil and gas
exploration in the Malaysia-Thai Joint to be exhausted in the next 20 years. conglomerate, and Petronas’ E&P arm
Development Area (JDA) in the Gulf of With new technology, we expect to Petronas Carigali have been involved in
Thailand. extend the production period longer than the MTJDA-B17 joint project. The
PTTEP is promoting the move as its that,” Sirisaengtaksin was quoted as project consists of the B-17, C-19 and B-
seeks to meet rising natural gas demand saying by Reuters. 17-01 blocks and covers an area of 8,000
in Thailand, the company’s CEO, Anon PTTEP has earmarked a budget of up square km.
Sirisaengtaksin, said last week. to 20 billion baht (US$649.6 million) to PTTEP International (PTTEPI) and
The Malaysia-Thai JDA was explore for gas in its fields, including Petronas Carigali JDA (PC JDA) were
established in 1979 to satisfy overlapping those in the JDA. However, the company awarded exploration rights for the B-17
sovereignty claims by the countries over has not concluded its talks or agreed and C-19 blocks in 1994, and for the B-
17-01 block in 2004.
PTTEPI and PC JDA established
Carigali-PTTEPI Operating Company
(CPOC) in 1994 as the operator of the
joint project. PTTEPI and PC JDA hold
stakes of 50% each in CPOC.
In February last year, PTTEP said that
the MTJDA-B17 joint project had started
natural gas production at the Muda and
Jengka fields, with supplies to be
directed to Thailand. PTTEP also said at
the time that CPOC had found natural
gas and crude oil in several fields,
namely Tapi, Andalus, Tanjung, Muda
and Jengka.
Sirisaengtaksin said last week that the
joint project produced about 335 million
cubic feet (9.5 million cubic metres) per
day of natural gas last year, which
accounted for 10% of Thailand’s
domestic consumption of the fuel.

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reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
AsianOil 16 February 2011, Week 06 page 13

POLICY

Thai energy minister advocates


alternative energy projects
Thai Energy Minister Wannarat energy research and development if imported liquefied petroleum gas (LPG),
Channukul said that spending tens of diesel prices continued to be held below compressed natural gas (CNG) for
millions of US dollars on subsidising the 30 baht (US$1) per litre. “We have to vehicles, E20 gasohol and E85 gasohol at
retail price of diesel was “nonsensical.” face the truth that global oil prices will a total cost of US$195 million per month,
The minister said the money should tend to rise, so we must adjust,” he said the energy ministry confirmed.
instead be used to fund alternative energy last week. The diesel subsidy was introduced on
projects. However, the National Energy Policy December 17, 2010, to contain rising
The Thai government has spent over Committee, which is chaired by Thai inflation. At the time, Wannarat said the
US$130 million since mid-December Prime Minister Abhisit Vejjajiva, ignored subsidy, which is 8.5% of the retail price,
2010 on keeping the diesel price below Wannarat’s warning and agreed to extend would be removed once allocated funds
US$1 per litre while crude oil prices the diesel subsidy until mid-April. had been used up. However, the subsidy
climbed to over US$100 per barrel. On The extension was made “because of has been extended twice since then and is
February 11, a top government continuing volatility in the global oil being propped up using additional state
committee decided to continue the price,” said Abhisit. finance.
subsidy regime, which Wannarat said He added that the subsidy support fund Thailand’s state-controlled oil group
could cost the country a further US$400 had reserves of US$750 million but if it PTT is also suffering losses to its
million. fell below 10 billion baht (US$326 profitability by subsidising imports of
In a public statement, the minister million) the government would have to LPG and other fuels.
warned that the government would have “reconsider” the diesel subsidy.
no money left to support alternative The state oil fund is also subsidising

PROJECTS & COMPANIES

Japanese major farms


into Iraq’s Gharaf oilfield
The state-run Japan Oil, Gas and Metals production to start in 2012 at 50,000 bpd, million bpd national crude production
National Corporation (JOGMEC) has rising to 230,000 bpd of plateau output capacity within the decade, rivaling the
said it expects to provide about 16.3 from 2016. Although it sits on the top Middle East producer Saudi Arabia.
billion yen (US$198 million) of capital in world’s third largest crude oil proven The Gharaf consortium reportedly paid
2011-2012 to Iraq’s Gharaf oilfield reserves, Iraq’s oilfields have suffered a signature bonus of US$100 million and
development project. years of neglect. This has been will receive a remuneration fee of
According to a Reuters report on compounded by the effects of the US$1.49 for each additional barrel
February 11, JOGMEC said it would take widespread violence and the sabotage to produced over 35,000 bpd.
a stake of less than 50% in a subsidiary hydrocarbons infrastructure in the wake Reserves at the field are estimated at
of Japan Petroleum Exploration of the 2003 US-led invasion, which has 900 million barrels. Illustrating the
Company (Japex), which has a 30% stake seen Iraq unable to reach even its pre-war progress that some foreign majors have
in the project. The consortium is led by output levels of oil. Gharaf is one of already made, BP said in January that it
Malaysia’s state oil firm Petronas, which series of oilfields that are now being had met a major milestone in the re-
holds a 45% stake in the oilfield rehabilitated as a result of deals struck development of the super-giant Rumaila
development and production service with foreign oil companies in 2010, via field in southern Iraq, by increasing
project. Iraq holds a 25% stake in the two oil auctions. production by more than 10% above the
consortium, which expects to invest up to The ultimate aim is to boost Iraq’s 1.066 million bpd initial production rate
US$8 billion, and anticipates oil oilfields in a bid to attain a massive 12 agreed in December 2009.

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reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
AsianOil 16 February 2011, Week 06 page 14

PROJECTS & COMPANIES

Japanese consortium wins


LNG plant deal in Australia
A consortium of two Japanese firms has launched a joint feasibility study on the value of the FEED contract with ESG.
won a front-end engineering and design new LNG plant in May 2010. The The Australian company plans to make a
(FEED) contract for a new medium-scale Japanese firms said the FEED work final investment decision (FID) on the
liquefied natural gas (LNG) plant in would involve optimisation, design and LNG plant construction project by the
Australia. detailed costing of the LNG project, first quarter of 2012 and start exporting
Hitachi and Toyo Engineering said the including the LNG storage tank, jetty and the cleaner-burning fuel in 2015.
contract had been awarded by Eastern loading facilities. The FEED work is due The new plant will have an initial
Star Gas (ESG), an Australian natural gas to be completed by the end of 2011. production capacity of 1 million tonnes
and coal-bed methane (CBM) developer. The Japanese firms said the US’ Chart per year of LNG. The annual production
Under the contract, the Japanese Energy & Chemicals would support them capacity is to be raised to 4 million
consortium is to provide FEED work for by providing its proprietary IPSMR tonnes in the future, the Japanese firms
the new electric-motor-driven LNG plant process technology and core equipment said.
in Newcastle, New South Wales. for the gas liquefaction process.
Hitachi and Toyo Engineering The Japanese team did not disclose the

CGE ties up with Essar


Australia’s Clean Global Energy (CGE) corporate or government authority. While six months.”
has signed a binding heads of agreement the final bidding approvals are not yet CGE said that Essar would free-carry it
(HoA) to provide its underground coal complete, CGE said that both companies for 20% equity through to a commercial
gasification (UCG) technology and were “confident” of obtaining approved UCG Syngas plant, at which time CGE
expertise to India-based oil and gas UCG blocks. The Australia-based will pay for that equity at cost, which
multinational, Essar Group. company is currently assisting Essar to should have a valuation of at least
CGE said that the key terms of the complete the bidding approval process, US$100 million based on NPV
agreement were confidential, but during which it will generate fee-based modelling.
explained that the February 10 agreement income under the HoA. It said the anticipated revenue streams
entailed the delivery and operation of a John Harkins, CGE’s chairman, said: involved licensing and project
pilot and subsequent commercial UCG “We believe the partnership with Essar management fees worth US$50-60
Syngas plant. Using a Technology has the potential to generate major million during design, construction and
Licence Agreement (TLA), CGE will revenue for our company through commissioning, and production royalties
hand over operations of the plant to Essar licensing fees that represent the of US$15 million to US$20 million after
within 3 years of commissioning the significant value of our UCG technology, achieving commercial production.
commercial plant. service fees to build and operate the “Licence fees are per project and we
CGE reported that the TLA would be UCG Syngas plant, and royalty income expect to enter into more technology
triggered if Essar were granted one or from delivered Syngas product to be sold licence agreements under similar terms
more UCG blocks by Coal India Limited by Essar. We expect to be generating the and conditions,” Harkins said.
(CIL), its subsidiaries or any other body first licence and service fees in the next

Dayang wins Petronas contract


Another Malaysian domestic business Dayang Enterprise has been awarded a including in Sarawak and Sabah.
has won a substantial contract to provide five-year contract worth US$262 million In early February, Petronas awarded
offshore services to oil and gas giant to provide structural maintenance in three first contracts for work on waning
Petronas. domestic areas of Petronas’ operations, marginal domestic offshore fields to

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reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
AsianOil 16 February 2011, Week 06 page 15

PROJECTS & COMPANIES


local firms Kencana Energy and analysts, including the RHB Research oilfield services vessels, to AWH Equity.
SapuraCrest Petroleum under a new Institute, because of its recent good Dayang said it intended to use the
system designed to stimulate new performance. Dayang also operates a US$44 million from the sale as working
production. fleet of vessels through its subsidiary capital to pursue new contracts in its
The new service contracts give DESB Marine. brownfield speciality role.
Petronas ownership of production but “Dayang appears to be focusing on The contract with Petronas will involve
pay redevelopers an agreed price for oil regular offshore maintenance work, working on offshore sites in Sarawak and
or gas. The contracts, which include while some of its local rivals, like Sabah on Borneo as well as platforms
government tax benefits, have been Kencana, are more keen to move into the closer to peninsular Malaysia. Some of
created as Malaysia’s oil and gas new, financially risky marginal field the work will be on a call-up
production slowly declines. reinvigoration work,” Bangkok-based arrangement.
Dayang, which describes itself as one analyst Sar Watana told AsianOil. Dayang said the deal would make a
of Malaysia’s leading brownfield and In December, however, Dayang positive contribution to its earnings and
topside maintenance businesses, was announced it would sell its 40% stake in profitability for the current financial year
tipped to be on the verge of a major Syarikat Borcos Shipping of Sarawak, ending in December.
contract in January by a number of local which operates a fleet of more than 30

Premier to spud
Vietnam appraisal well
UK exploration and production firm barrels of oil per day plus 8.1 million directly south of BP’s producing gas
Premier Oil has begun drilling at its cubic feet (229,400 cubic metres) of gas fields (Lan Tay and Lan Do) and south-
CRD-2X appraisal well in the Nam Con per day, through a 48/64-inch choke. No east of Premier’s Dua and Chim Sao
Son Basin, offshore Vietnam. water was produced from either zone. discoveries. If commercial, Ca Rong Do,
On February 10, Pan Pacific Petroleum Spanning 1.2 million acres (4,855 meaning Red Emperor, could be a
(PPP), Premier’s joint venture partner in square km), Block 07/03 is located near a standalone development, or tied back to
the project, said that the semi- number of oil and gas discoveries, lying Dua or Chim Sao, both of which are
submersible Ocean General currently being developed.
had arrived on Block 07/03, The Nam Con Son Basin
and was preparing to and Natuna Sea region is
commence drilling of the considered a key point of
well. focus for Premier. Alongside
CRD-2X aims to evaluate Chim Sao and Dua, which
the oil and gas discovery are slated to begin
made by the CRD-1X well on production in 2011, the
the Ca Rong Do prospect in company also operates the
June 2009. Tuna production-sharing
At the time, PPP described contract (PSC) in the East
the find as “very encouraging Natuna Sea and its
for future exploration” successful Anoa gas field in
because of multiple leads and West Natuna, where the
prospects in the block, with Naga, Iguana & Garah Baru
Premier Oil estimating “mid- fields are also under
point” discovered resources development.
at 60 million barrels of oil Premier operates Block
equivalent. 07/03 with a 30% interest,
When drilled, the CRD-1X along with partners PPP
well tested two reservoir (5%), Pitkin Petroleum
zones, which flowed oil at a (40%), Pearl Oil (15%) and
combined rate of 3,265 PetroVietnam (10%).

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reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
AsianOil 16 February 2011, Week 06 page 16

NEWS IN BRIEF
Moody’s also believes that the sector will
OIL face increasing cost pressures. Eni to exit Rajasthan
“With the recovery in oil prices, Asian block
Moody’s gives stable companies will have their cash margins
India’s Directorate General of
squeezed due to an increasing cost base,
outlook to AP E&P although they enjoy better cost structures
Hydrocarbons (DGH) has recommended
sector when compared to their US and
that Eni (India) Ltd should be allowed to
exit Rajasthan onland block RJ-ONN-
Moody’s Investors Service says that the European counterparts,” says Lam.
2003/1, after completing the first phase
outlook for Asia Pacific’s oil and gas Finding and development costs will
of explorations. The regulator has also
exploration and production (E&P) sector increase, driven by the growth in
said that the Italian multinational E&P
is stable. investment and capital expenditure
major should be exempted from its
“A significant rebound in oil prices since budgets. Debt issuance is also expected
unfinished contractual obligations for
their trough is supporting growth in the to rise.
this phase of explorations.
profits and cash flow of E&P players,” “As most of these E&P players will
IP, February 14, 2011
says Renee Lam, a Moody’s Vice increase their investments in the next
18 months, we expect the sector’s
President and Senior Analyst.
leverage to increase,” says Lam.
No term hitting
“The oil price recovery has been driven
by financial investment demand, Finally, regulatory issues, particularly on value: Cairn
as well as physical oil stock demand,” pricing and environmental concerns, will Cairn India today said it would not
says Lam, who was speaking on the continue to impact the sector. accept any government condition that
release of Moody’s latest outlook – NEWSBASE, February 16, 2011 will negatively impact its value, in any
which she authored – on the sector. acquisition deal with Vedanta. “The
Moody’s rates eight E&P companies in OVL annual plan Cairn India board of directors has stated
Asia Pacific (range: B2 to Aa3), and two ONGC’s international arm, ONGC that any condition tied to the approval of
integrated oil and gas companies which Videsh Ltd (OVL), plans to spend Rs the transaction, which can negatively
have heavy exposure to E&P (A1 and 86.8 billion on its E&P projects impact the value of the company, cannot
A3). worldwide during the year 2011-12. Out be accepted,” the company said in a press
Furthermore, continued strong demand of the total plan outlay, the company statement here.
growth in non-OECD countries, plans to finance Rs 52.3 billion from its PTI, February 14, 2011
especially from China and India, internal resources and the remaining Rs
provides medium- to long-term support 34.8 billion will be raised by borrowing Save on royalty:
to oil and gas prices. China’s oil demand from banks and other financial ONGC
is forecast to grow at a CAGR of 6.35% institutions. The company expects to earn Refuting the claims made by Cairn India,
over 2010-2011, such that its portion of revenues of Rs 140 billion during the ONGC has said the government will save
global demand will increase to 10.7% in next financial year. US$2 billion if royalty paid on the
2011. OVL, February 14, 2011 prolific Rajasthan oilfields is allowed to
However, continued acquisitions and
be cost-recovered. ONGC owns a 30%
capital expenditure remain a key risk. OVL to exit Egypt stake in the Barmer oilfields and pays
“Many Asian E&P players are sovereign-
ONGC Videsh Ltd (OVL) has decided to royalty to the state government not just
owned, directly or indirectly, and they
withdraw from two major E&P ventures on its share, but also on the balance 70%
are keen to boost reserves through
in the politically torn country of Egypt. owned by Cairn India. Over the life of
acquisitions for strategic reasons,” says
These blocks include the North East the field, ONGC estimates it will pay
Lam.
Mediterranean Deepwater Concession over US$3.15 billion in royalty on behalf
There is also a trend to purchase
(NEMED) and North Ramadan Block 6. of Cairn India.
unconventional assets – such as shale gas
OVL had discovered gas in the NEMED ET, February 14, 2011
and oil sands – as most global oil and gas
block, while oil had been struck in North
reserves are approaching maturity, and
technological advancements have been
Ramadan Block 6. However, both these Sasol may buy into
improving the project economics of the
discoveries were too small to be CIL
commercialised, forcing the E&P major
business. South Africa’s Sasol has expressed its
to relinquish these blocks.
“These unconventional assets require willingness to acquire a minority stake in
INDIANPETRO, February 14,
higher up-front capital investments and a a joint venture (JV) with Indian state-
2011
longer exploration and development owned miners Coal India Ltd (CIL) and
period before commercial production is NMDC Ltd to produce liquid fuel
realised,” says Lam.

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AsianOil 16 February 2011, Week 06 page 17

NEWS IN BRIEF
from coal, a little over a year after it Afghanistan and Pakistan. Official
formed a-50:50 venture with Tata Steel Cairn mobilises land sources said Turkmengas, the national oil
Ltd for a similar project. Sasol is rig firm of Turkmenistan first sought a price
pursuing global opportunities to linked to fuel oil but later changed it to
Cairn Energy India Ltd (CEIL) has
commercialise its coal-to-liquids naphtha reasoning that natural gas was
mobilised a jack-up rig at its Ravva
technology. The company’s readiness for meant to replace these liquid fuel power
block, located in the East Coast of India,
a second joint venture was conveyed plants.
for a fresh drilling programme. A senior
during coal minister Sriprakash Jaiswal’s HINDU, February 14, 2011
Cairn executive said that a five-well
recent visit to South Africa, according to
Partha S. Bhattacharyya, CIL’s chairman.
drilling programme is currently IFFCO purchases
underway in the contract area. One well
LIVE MINT, February 9, 2011
has already been drilled under the infill
spot R-LNG
RIL Mahanadi drilling campaign, sources added. Fertiliser giant Indian Farmers Fertiliser
IP, February 14, 2011 Cooperative Limited (IFFCO) recently
Reliance Industries Ltd (RIL) is likely to chose to purchase R-LNG on the spot
embark upon an ambitious five-well Cairn contests ONGC market from GSPC in the face of falling
drilling programme in its Mahanadi claim supplies from RIL’s KG-D6 block. The
deepwater contract area MN-DWN- gas will be purchased at the rate of
2003/1 ahead of schedule. Top company ONGC’s claim that it will incur an actual
US$11.08 per MMBTU. The company
sources said that the proposed drilling loss of US$3.16 billion on the Barmer oil
was facing a shortage of around 0.2
programme – under Phase-I of Minimum block in Rajasthan has been contested by
mmscmd in KG-D6 gas supply for its
Work Programme (MWP) – may get its partner Cairn India, which says the
plant in Kallol.
underway by August 2011. state-owned oil firm will only lose about
IFFCO, February 14, 2011
IP, February 14, 2011 US$564 million. ONGC says the 6.5
billion barrels block in Barmer district is NTPC Nigeria
ONGC mobilises rig a losing proposition for it on account of
venture
the over US$3 billion royalty it will pay
ONGC’s tender evaluation committee
on behalf of Cairn India over the life of NTPC may revive its plans to set up coal
has recommended extension of the
the field. and gas-based power projects in Nigeria,
mobilisation date of the 300-feet,
ET, February 13, 2011 a proposal scrapped by the company
cantiliver-type, jack-up rig – dubbed
earlier due to a delay in finalising a
Deepsea Fortune – for the seventh time,
GAS partner for the proposed venture in the
along with the levy of liquidated
African nation. “NTPC may look at
damages (LD). There would, however,
not be any additional impact of LD on IPI work completion Nigeria for coal and gas-based projects ...
They are likely to revisit the proposal,” a
the contractor, Jagson International Iran on Tuesday said 90% work on the senior Power Ministry official told PTI.
Limited, as the 5% LD leviable under the Iran-Pakistan-India gas pipeline was PTI, February 13, 2011
contract has already been exhausted. complete within its territory and it was
ONGC, February 14, 2011 open for having trade arrangements with Natural gas
any country in the energy sector. Iran’s
Cairn completes Ambassador to India Seyed Mahdi
discovered in
seismic surveys Nabizadeh said work was also in Myanmar
progress on the Pakistani side and it was A natural gas well with a production
Cairn recently completed a large cache of
ready to start 50 per cent of the total 60 capacity of 2.1 million cubic feet per day
time-lapse seismic surveys at Ravva. The
mcm capacity once the pipeline was in has been found in Pale Township in
seismic programme – shot over 280 sq
place. Monywa District, Sagaing Division, the
km – made use of 4D technology.
ET, February 14, 2011 state-run newspaper The Mirror reported
Besides monitoring of fluid movements,
4D seismic analysis allows pressure on Monday. Myanmar Oil and Gas
changes in petroleum reservoirs during
Oil linked price for Enterprise and its partner Sinopec
production, thus contributing to TAPI gas International Exploration and Production
improved recovery rates. Turkmenistan is seeking a price linked Corporation (SIPC) found natural gas at
BL, February 14, 2011 fuel oil or naphtha for the natural gas it Thingadon Test-well No. (1), which is
plans to sell to India through a US$ 7.6 located about 10 miles to the east of
billion pipeline passing through Kyaw Village in Pale Township in the
Mahutaung Region.
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AsianOil 16 February 2011, Week 06 page 18

NEWS IN BRIEF
Officials said the well had a production The single well is on the Ruru customers globally. More importantly,
capacity of 2.1 million cubic feet of prospecting block, 40km offshore from the API certification will also allow us to
natural gas per day. South Taranaki. It's next to the Maui gas expand our market to customers that we
MIZZIMA, February 14, 2011 field, which is due to run out in about ten previously have not worked with”, said
years. Mr Ting Teck Jin, Executive Chairman
India, Turkmenistan CEO Rob Jager says there are still and CEO of EMS Energy.
disagree opportunities to get more gas out of Maui NEWSBASE, February 16, 2011
and extend the field's life He will know
Turkmenistan and India are at odds over
in a couple of months whether there's any High pay for
how to set the prices for gas that will be
pumped through the proposed
oil or gas there. The drill ship Noble contractors
Discoverer is contracted for one well.
Turkmenistan-Afghanistan-Pakistan- Australian energy companies are paying
Jager says New Zealand has to compete
India (TAPI) pipeline, media sources engineers, geologists and other
with the Bass Strait in Australia and the
reported on Tuesday. India has rejected contractors 35% more this year as
North West Shelf to attract drilling
Turkmenistan’s idea to link the price of liquefied natural gas ventures fuel
operators.
natural gas transported by the pipeline to competition for labour, the UK’s largest
RADIO NEW ZEALAND, February
oil or naphtha, the United Press recruiting firm said, according to
15, 2011
International (UPI) news agency reported Bloomberg. Contractors in Australia are
on Tuesday. SERVICES receiving A$1,080 a day, on average,
CAN, February 15, 2011 compared with A$800 a day last year,
Matt Underhill, a Sydney-based
East Natuna gas EMS awarded API managing director of oil and gas for Hays
reserved for certifications Plc, said. That’s almost A$22,000 a
domestic Singapore’s EMS Energy Limited said its month, assuming 20 days’ work.
Average salaries for “professionals” in
consumption subsidiary, Engineering & Marine
the Australian oil and gas industry for
Services (Pte) Ltd (EMS), has been
Gas pumped from the East Natuna block awarded several American Petroleum 2011 are 90% above the global mark,
will be allocated for domestic use only, Institute (API) certifications. rising 5% to US$143,700, compared with
the government says. The API certifications that EMS has a little-changed US$75,813 worldwide,
Coordinating Minister for the Economy received cover the following: API Hays found in a survey conducted in
Hatta Rajasa said gas from the block Specification Q1, API Specification 4F September and October.
would be exported only if there was a for Substructures at PSL 1 (refers to The more than $30 billion in Queensland
production surplus. Drilling and Well Servicing Structures) state coal-seam gas-to-LNG ventures
“I am sure that we can still export the and API Specification 2C for Offshore approved by BG Group Plc and Santos
East Natuna gas as the reserve is so Pedestal Mounted Cranes. Ltd. are set to increase labour demand
huge,” he said as quoted by Kontan.co.id. With the certifications, EMS has been and drive up pay further. “That’s going
The East Natuna block was originally authorised by API to use the official API to put everything into overdrive,”
called the Natuna D Alpha block. State- Monogram and APIQR marks. Underhill said.
owned oil and gas firm PT Pertamina and EMS has been manufacturing quality BLOOMBERG, February 11, 2011
PT Total E&P Indonesie and PT Petronas products for oil and gas assets worldwide
Niaga Indonesia are jointly running the since 1977. In recent years, the company
L&T receives order
block, whose gas reserve is estimated at has successfully delivered several Engineering major Larsen & Toubro on
222 trillion cubic feet (TCF). drilling modules and offshore cranes that Monday said it has received Rs.11billion
THE JAKARTA POST, February comply with API standards. As the order from Gujarat State Electricity
9, 2011 Company’s new products will henceforth Corporation (GSECL) for setting up a
bear the API monogram, it will provide 375-MW gas-based power plant at
Further drilling could an added quality assurance that is easily Dhuvaran, near Baroda. The project will
take place in Maui recognised by international customers be executed by the gas-based power
Shell Todd Oil Services says further with whom the Company is targeting to projects business unit of Baroda-based
drilling could take place as early as next expand its business. L&T Power, L&T said in a statement.
summer, if a new exploration well near “The award of the API certification will L&T will procure advance gas turbines
the Maui gas field proves successful, further strengthen the confidence and and high-efficiency steam turbines for
Radio New Zealand reported. enhance the trust placed in the products the plant from Siemens AG, Germany.
and services that EMS offers to its valued PTI, February 14, 2011

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AsianOil 16 February 2011, Week 06 page 19

NEWS IN BRIEF
This new generation rig is a showpiece of Mr Chow Yew Yuen, President (The
Seadrill under fire our cumulative experience in designing Americas) of Keppel O&M, said,
Seadrill, a Norwegian firm, has drawn and constructing cutting-edge harsh “Keppel has worked closely with various
criticism for returning to Burmese waters environment solutions. international drillers and fleet owners
in February 2011 to do drilling work for “In choosing to build up to four units of operating in Brazil for some 30 years.
Thailand’s state-owned oil company, this innovative design, our faithful Today, in replicating Keppel O&M’s
PTTP. According to Burma’s state customer Ensco has given strong proven systems and practices in Brazil,
owned the New Light of Myanmar, endorsement to the KFELS Super A we are able to offer a full range of
Seadrill’s new ‘jack-up’ rig, the West Class, which is well-suited for operating offshore solutions in construction,
Juno, was set to arrive in Burmese waters conditions in the UK, Danish and Dutch conversion, repair and modification, as
in mid-January to commence drilling for sectors of the North Sea. We are pleased well as the fabrication and integration of
PTTEP, the international exploration to take our partnership with Ensco to the production topsides, among others.
wing of Thailand’s state-owned oil firm next level and support its ongoing “We are heartened that SBM and
which holds concession in blocks M-7 enhancement of an already advanced MTOPS have reaffirmed our position as
and M-3 for a 4 month period. drilling fleet.” the choice solutions partner in Brazil’s
MIZZIMA, February 14, 2011 A viable and cost-effective solution for offshore and marine industry with these
harsh environments and cold climate contracts to fabricate and integrate
Keppel to build harsh areas, the new KFELS Super A Class modules for their latest FPSOs. As we
boasts the distinctive qualities of Keppel grow our competencies and track record
class jackups FELS’ proven jackup rig designs. as the most established shipyard in Latin
Keppel FELS Limited has secured a The KFELS Super A Class rig can America, we will continue to nurture
contract to build two enhanced KFELS operate in water depths of 400 feet and win-win relationships with our valued
Super A Class harsh environment jackup drill to depths of 40,000 feet. It features customers. We see the market improving
rigs from a subsidiary of Ensco plc at a advanced automated drilling systems and our yard has the capacity and
shipyard price of about US$440 million. with 2.5 million pounds of static hook capability to take on more jobs.”
These rigs are scheduled for delivery in load, a spacious deck and comprehensive Keppel FELS Brasil’s contract with SBM
the second and fourth quarters of 2013. amenities for the comfort of a 150-person is for the fabrication and installation of
As part of its contract with Keppel FELS, crew. It also has an offline stand building topside modules on the Floating
Ensco has options to order two more capability to handle drill pipes Production Storage and Offloading
similar jackup units. efficiently, boosting overall rig (FPSO) vessel Cidade De Paraty, which
Mr Dan Rabun, Chairman and CEO of performance and productivity. was awarded in association with Queiroz
Ensco plc, said, “The new rig orders For enhanced operational safety, the Galvão Óleos e Gás S.A. (QGOG) and is
reflect our commitment to continually KFELS Super A Class is equipped with currently undergoing conversion at
high-grade our fleet. Operators’ the latest pinion overload detection, rack Keppel Shipyard in Singapore.
requirements will continue to increase phase difference detection, and brake Mr Chow added, “Like our recent
over time and it is Ensco’s strategy and failure and overload protection devices, delivery of P-57, this project
intention to maintain our position at the thus meeting even the stringent Health, demonstrates the synergy of the Keppel
high end of the premium jackup market. Safety and Environment (HSE) standards O&M shipyards in providing a
“Keppel-designed rigs, which make up of various sectors in the North Sea. comprehensive suite of services to our
about 20 percent of our current jackup NEWSBASE, February 16, 2011 customers and brings to bear our near
fleet, have been delivering exceptional market, near customer strategy.”
performance. The new KFELS Super A Keppel wins two rig Work is expected to commence at
Class rigs, which are being customised to contracts Keppel FELS Brasil’s BrasFELS
Ensco’s requirements, will give us even shipyard in Angra dos Reis, Rio de
more high-specification assets to match Keppel Offshore & Marine Ltd (Keppel
Janeiro in the first quarter of 2011. The
the drilling demand for increased drilling O&M), through its subsidiary Keppel
vessel is scheduled to arrive in the first
capabilities in each market.” FELS Brasil, has secured two contracts
quarter of 2012 with delivery in the
Mr Tong Chong Heong, CEO of Keppel totalling R$500 million (approx.
fourth quarter of 2012.
Offshore & Marine, said, “The KFELS US$297.64 million) - one from Single
The work scope will include the
Super A Class hails from our proven Buoy Moorings Inc. (SBM), and another
fabrication and installation of six process
KFELS MOD V-A Class jackup, which from the joint venture company MODEC
modules and a riser gantry as well as the
has been widely deployed by our and Toyo Offshore Production Systems
installation and integration of another six
international customers, including Ensco. (MTOPS).
process modules supplied by SBM.

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AsianOil 16 February 2011, Week 06 page 20

NEWS IN BRIEF
The FPSO Cidade de Paraty will be technology, which we have been combustion machinery emissions, safe
deployed in the pre-salt region of the advocating through our highly successful use of refrigerants and have a Green
Santos Basin and will have a production new building programme as we are Passport Inventory for recycling the ship.
capacity of 120,000 barrels of oil per acutely sensitive about our Drydocks World is engaged in
day, and be able to compress 5 million environmental obligations. We have addressing the wide-ranging needs of the
cubic metres of gas per day. proved once again that our engineering industry through a new building
In its contract with MTOPS, a joint and construction capabilities are among programme involving its yards in Dubai-
venture company between MODEC and the best for highly specialised vessels UAE, Nanindah, Graha, Pertama, in
Toyo Engineering Corporation, that address niche markets. Seismic Indonesia and Singapore.
BrasFELS will undertake the module technology is constantly evolving and NEWSBASE, February 16, 2011
fabrication and integration of the FPSO improving and we are fully equipped to
Cidade de Sao Paulo MV23, which was adapt and address the challenging PETROCHEMICALS
awarded in association with Schahin construction needs,” said Khamis Juma
Engenharia S.A. Buamim, Chairman of Drydocks World Pertamina to export
Work is expected to begin at BrasFELS and Maritime World.
in the first quarter of 2011. The yard’s Polarcus Alima incorporates
more lubricant
scope includes the fabrication of topsides sophisticated seismic technology and is State owned oil and gas firm Pertamina
modules such as riser manifolds, capable of towing 12 streamers, with a says its lubricant exports would to
laydown areas and the flare tower, as 100 metre lateral separation between increase to 546,000 kiloliters this year,
well as the assembly and integration of streamers. It is a 3D/4D seismic vessel up from 458,000 kiloliters last year.
fabricated pancakes/skids. built to the highly merited Ulstein SX134 Pertamina marketing and trade director
To be completed in the 4Q 2012, the design and ULSTEIN X-BOW® hull. It Djaelani Sutomo said Wednesday the
FPSO will be deployed in the pre-salt includes all the latest marine equipment company would continue to improve its
region of the Santos Basin. The FPSO and innovative efficiency enhancing lubricant quality to meet overseas
will have a production capacity of features. It is suitably equipped with demand. Pertamina’s lubricant has been
120,000 barrels of oil per day, and be environment friendly systems such as exported to Australia, the United Arab
able to compress 180 million cubic feet diesel-electric propulsion, high Emirates, Singapore, Myanmar, China
of gas per day and store 1,600,000 specification catalytic converters, double and Japan.
barrels of oil. hull and water treatment systems. THE JAKARTA POST, February
Ongoing at BrasFELS is the upgrading Polarcus Samur is built to the Ulstein 14, 2011
and repairing of Noble’s Brazil-based SX133 design with an ULSTEIN X-
drillships with delivery stretching into BOW® hull. The original 6 streamer Panipat naphtha
2012. version was upgraded to an 8 streamer plant dedicated
NEWSBASE, February 16, 2011 version that is capable of towing both
India’s largest Naphtha Cracker plant at
conventional and wide tow spreads. It is
IOC’s Panipat Complex was dedicated to
Drydocks World equipped with the most advanced seismic
the nation by petroleum minister S Jaipal
names seismic technology commercially available and is
Reddy. The Naphtha Cracker Complex,
highly environment friendly complying
vessels built at a cost of Rs 144.39 billion, will
with DNV clean design notation that
Drydocks World said the ultra-modern provide significant impetus to IOC’s
stipulates defensive design, accident
high ice class seismic vessels Polarcus ambitious foray into petrochemicals. The
prevention and consequence limitation
Alima and Polarcus Samur were named naphtha would be sourced from IOC’s
requirements, thus providing additional
in the presence of key personnel from Gujarat Refinery in western India and
environmental protection. The vessels are
both organisations and specially invited Panipat and Mathura Refineries in north.
fully equipped for controlling and
industry dignitaries at its Dubai shipyard. The Naphtha Cracker Unit at Panipat will
limiting operational emissions and
The two vessels are part of a series of six produce 800 KTA of Ethylene and 600
discharges. These cover fuel tanks’
built for Dubai based geophysical KTA of Propylene.
protection from grounding damage,
operator Polarcus. Three vessels PTI, February 15, 2011
handling of ballast water, fuel oil,
belonging to the series have been sewage and garbage, have environment
delivered. friendly antifouling, have controlled
“The vessels use highly advanced green

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AsianOil 16 February 2011, Week 06 page 21

NEWS IN BRIEF
process 540,000 barrels of crude oil a Tackling the current informal structure of
REFINERIES day. fuel subsidies would help investors put a
Formosa Petrochemical owns three better valuation on proposed share sales
Refining capacity naphtha processing plants with a for Indian Oil Corp (IOC) and ONGC.
combined annual capacity of 2.935 MC, February 15, 2011
rise million tonnes of ethylene, a raw material
India’s annual crude refining capacity is for plastics, chemicals and synthetic Indonesia may delay
expected to rise 240 million tonnes in fibers. subsidised fuel
two years, Oil Secretary S. Sundareshan The Directorate General of Budget,
said on Tuesday. He also said the country
restrictions
Accounting and Statistics last month
could be exporting 80-90 million tonnes revised its GDP growth forecast for The government may postpone the
of oil products annually in two years’ Taiwan for this year to 5.03 percent from introduction of a policy to restrict the
time. a November estimate of 4.51 percent distribution of subsidised fuels, to avoid
REUTERS, February 15, 2011 because of the global economic recovery. unrest, a legistator says.
TAIPEI TIMES, February 16, 2011 Satya W. Yudha, a member of House of
Oil refiner expects Representatives Commission VII
better diesel market FUEL overseeing energy, said increases to
global oil prices had forced the
Formosa Petrochemical Corp, the government and the House to rethink
nation’s only publicly traded oil refiner, No fuel price hike
social impacts that the policy might have.
expects the diesel market to improve this Customers of auto fuels can get some “The restriction may cause unexpected
year as economic growth boosts demand respite, with the fuel prices likely to unrest, because the prices of non-
for fuel. remain at the same levels for the subsidised fuels have climbed steeply
This should be a “better year” for the moment. The Petroleum Minister, Jaipal over the last several months,” Satya said
diesel market than last year, Lin Keh- Reddy, said on Tuesday, “Since prices Wednesday, on the sidelines of a hearing
yen, a company spokesman, said are going up we can’t decrease petrol with the Energy and Mineral Resources
yesterday. “It’s a bull market for diesel.” prices. But we are also not going to Ministry.
Diesel accounted for 24 percent of increase price of any commodity at the He added that the House could ask the
Formosa Petrochemical’s sales in the moment.” government to delay implementation of
first nine months of last year and was the “There is no proposal given to oil the restriction to seek better mechanisms
biggest single revenue source, according companies to increase petrol prices at the to control the distribution of non-
to a Nov. 4 company presentation to moment,” he said. subsidised fuels.
analysts. BL, February 15, 2011 “If the government insists on not
The fuel producer rose 0.6 percent to subsidising non-subsidised fuels, I’m
close at NT$91.10 in Taipei trading, after Fuel taxes maybe afraid it will anger private car owners,”
declining as much as 2.8 percent. tweaked he said.
While the outlook for the full-year has Under the restriction policy, the
improved, the profit in Asia for turning India, struggling to balance between
cutting its costly fuel subsidies and government plans to only allow
crude oil into diesel will probably slide motorcycles, public transportation
from the current US$18 a barrel in the curbing inflation, may tweak fuel taxes in
the February 28 budget to cushion the vehicles and fishing vessels to purchase
coming months as fuel demand for subsidised fuels.
heating drops, Lin said. blow of rising global crude prices on
state-run oil retailers, officials said. NEWSBASE, February 16, 2011
The company’s Mailiao refinery can

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AsianOil 16 February 2011, Week 06 page 22

TENDERS & CONTRACTS


PROJECT Indonesia Compressor Module Development
Project Sector Upstream
Location Asia, Indonesia, East Kalimantan/Timur Region
Project Holder/Operator Total
Scope of work EPC - Engineering, Procurement & Construction Contracts
Current /Past Phase Job contracts had been won
Contract Value Estimate Over US$290 million
Start up Timing From 2010
Development Stage Operational Project
Brief The project is associated with the development of T
unu phase 9 facilities
Future & Potential Sales LSTK - Lump Sum Turnkey Contracts
Prospects MC - Multi Contracts
IPP - Independent Power Project Contracts
O&M - Operations and Maintenance Contracts
TC - Term Contracts

PROJECT India Compressor Project


Project Sector Upstream
Location Asia, India, Offshore Area
Project Holder/Operator ONGC - Oil and Natural Gas Corporation
Scope of work MC - Multi Contracts

Current /Past Phase Job contracts had been on completion stages


Contract Value Estimate Over US$785 million
Start up Timing From 2010
Development Stage Operational Project
Brief The project is associated with the development ofBombay/Mumbai High
South field
Future & Potential Sales FC - Framework Contracts
Prospects LSTK - Lump Sum Turnkey Contracts
IPP - Independent Power Project Contracts
O&M - Operations and Maintenance Contracts
TC - Term Contracts
PMC - Project Management Contracts

PROJECT Indonesia Upstream Development


Project Sector Upstream
Location Asia, Indonesia, East Kalimantan/Timur Region
Project Holder/Operator Total
Scope of work EPC - Engineering, Procurement & Construction Contracts
Current /Past Phase Job contracts had been on completion stages
Contract Value Estimate Over US$490 million
Start up Timing From 2010
Development Stage Operational Project
Brief The project is associated with the development ofTunu Field
Future & Potential Sales LSTK - Lump Sum Turnkey Contracts
Prospects MC - Multi Contracts
IPP - Independent Power Project Contracts
O&M - Operations and Maintenance Contracts
TC - Term Contracts

Copyright © 2011 NewsBase Ltd.


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All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All
reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
AsianOil 16 February 2011, Week 06 page 23

TENDERS & CONTRACTS


PROJECT Australia Enhanced Recovery Project
Project Sector Upstream
Location Asia, Australia, Western Area
Project Holder/Operator Chevron
Scope of work CD - Conceptual Design Contracts
Current /Past Phase The project had been on drilling & appraisal phase
Contract Value Estimate Over US$95 million
Start up Timing From 2010
Development Stage Operational Project
Brief The project is associated with the CO2 development of Barrow Island
Carbon reinjection and exploration facilities
Future & Potential Sales PreFEED - Preliminary Design and Engineering Contracts
Prospects FEED - Front End Engineering Design Contracts
EPC - Engineering, Procurement & Construction Contracts
EPCC - Engineering, Procurement, Construction and Commissioning
Contracts
EPCM - Engineering, Procurement, Construction & Management
Contracts
EPIC - Engineering, Procurement, Installation & Commissioning
Contracts
PROJECT India Aromatics Project
Project Sector Downstream
Location Asia, India, Gujarat District
Project Holder/Operator ONGC - Oil and Natural Gas Corporation
Scope of work FS - Feasibility Study Contracts
Current /Past Phase The application for planning consent had been presented
Contract Value Estimate Over US$1 billion
Start up Timing From 2010 - 2011
Development Stage Operational Project
Brief The project is associated with the Gujarat aromatics development of
olefins factory
Future & Potential Sales PreFEED - Preliminary Design and Engineering Contract s
Prospects FEED - Front End Engineering Design Contracts
EPC - Engineering, Procurement & Construction Contracts
EPCC - Engineering, Procurement, Construction and Commissioning
Contracts
EPCM - Engineering, Procurement, Construction & Management
Contracts
EPIC - Engineering, Procurement, Installation & Commissioning
Contracts

PROJECT Thailand PTT Construction


Project Sector Downstream
Location Asia, Thailand, Rayong District
Project Holder/Operator PTT Phenol
Scope of work EPC - Engineering, Procurement &Construction Contracts
Current /Past Phase Job contracts had been on completion stages
Contract Value Estimate Over US$225 million
Start up Timing From 2010
Development Stage Operational Project
Brief The project is associated with the development ofphenol complex
Future & Potential Sales LSTK - Lump Sum Turnkey Contracts
Prospects MC - Multi Contracts
IPP - Independent Power Project Contracts
O&M - Operations and Maintenance Contracts
TC - Term Contracts

Copyright © 2011 NewsBase Ltd.


www.newsbase.com Edited by Ryan Stevenson
All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All

reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
AsianOil 16 February 2011, Week 06 page 24

TENDERS & CONTRACTS


PROJECT Singapore Bulk Polymers Project
Project Sector Down stream
Location Asia, Singapore , Jurong Island Area
Project Holder/Operator Teijin Chemicals
Scope of work O&M - Operations and Maintenance Contracts
Current /Past Phase Job contracts had been on completion stages
Contract Value Estimate Over US $235 million
Start up Timing From 2010
Development Stage Operational Project
Brief The project is associated with the development and e xpansion of
polycarbonate complex
Future & Potential Sales FC - Framework Contra cts
Prospects LSTK - Lump Sum Turnkey Contracts
MC - Multi Contracts
IPP - Independent Power Project Contracts
TC - Term Contracts
PMC - Project Management Contracts

PROJECT Australia Clean Fuels Project


Project Sector Downstream
Location Asia, Australia, Northern Area
Project Holder/Operator DCF - Darwin Clean Fuels
Scope of work FS - Feasibility Study Contracts
Current /Past Phase The project had been on planning phase
Contract Value Estimate Over US$485 million
Start up Timing From 2011
Development Stage Operational Project
Brief The project is associated with thedevelopment of Port Darwin
condensate processing unit
Future & Potential Sales PreFEED - Preliminary Design and Engineering Contracts
Prospects FEED - Front End Engineering Design Contracts
EPC - Engineering, Procurement & Construction Contracts
EPCC - Engineering, Procurement, Construction and Commissioning
Contracts
EPCM - Engineering, Procurement, Construction & Management
Contracts
EPIC - Engineering, Procurement, Installation & Commis sioning
Contracts
PROJECT India Compressor Station Development
Project Sector Midstream
Location Asia, India, Uttar Pradesh Region
Project Holder/Operator GAIL - Gas Authority of India Limited
Scope of work FS - Feasibility Study Contracts
Current /Past Phase The project had been on planning phase
Contract Value Estimate Over US$1.5 billion
Start up Timing From 2013 - 2014
Development Stage Operational Project
Brief The project is associated with thedevelopment of Jagdishpur to Haldia
gas pipeline
Future & Potential Sales PreFEED - Preliminary Design and Engineering Contracts
Prospects FEED - Front End Engineering Design Contracts
EPC - Engineering, Procurement & Construction Contracts
EPCC - Engineering, Procurement, Construction and Commissioning
Contracts
EPCM - Engineering, Procurement, Construction & Management
Contracts
EPIC - Engineering, Procurement, Installation & Commissioning
Contracts

Copyright © 2011 NewsBase Ltd.


www.newsbase.com Edited by Ryan Stevenson
All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All

reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
AsianOil 16 February 2011, Week 06 page 25

TENDERS & CONTRACTS


PROJECT Papua New Guinea Pipeline Project
Project Sector Midstream
Location Asia, Papua New Guinea, Southern Highlands Region
Project Holder/Operator Santos/ExxonMobil/Oil Search/ Nippon Oil Corporation/Government of
Papua New Guinea/AGL
Scope of work EPIC - Engineering, Procurement, Installation & Commissioning
Contracts
Current /Past Phase Job contracts had been on tendering & bidding phases
Contract Value Estimate Over US$980 million
Start up Timing From 2014 - 2015
Development Stage Operational Project
Brief The project is associated with the PNG LNG development of Southern
Highlands to Port Moresby Gas Pipeline
Future & Potential Sales LSTK - Lump Sum Turnkey Contracts
Prospects MC - Multi Contracts
IPP - Independent Power Project Contracts
O&M - Operations and Maintenance Contracts
TC - Term Contracts

PROJECT India Onshore Oil Terminal Development


Project Sector Midstream
Location Asia, India, Tamil Nadu District
Project Holder/Operator CPCL - Chennai Petroleum Corporation Ltd
Scope of work EPCM - Engineering, Procurement, Construction & Mana gement
Contracts
Current /Past Phase Job contracts had been on completion stages
Contract Value Estimate Over US$145 million
Start up Timing From 2011 - 2012
Development Stage Operational Project
Brief The project is associated with thedevelopment of Manali refinery SPM
and pipeline
Future & Potential Sales LSTK - Lump Sum Turnkey Contracts
Prospects MC - Multi Contracts
IPP - Independent Power Project Contracts
O&M - Operations and Maintenance Contracts
TC - Term Contracts

PROJECT Bangladesh Receiving Terminal Project


Project Sector Midstream
Location Asia, Bangladesh, Offshore Area
Project Holder/Operator BPC - Bangladesh Petroleum Corporation
Scope of work CD - Conceptual Design Contracts
Current /Past Phase The project had been on planning phase
Contract Value Estimate Over US$120 million
Start up Timing From 2014 - 2015
Development Stage Potential Project
Brief The project is associated with thedevelopment of Bangladesh oil import
terminal
Future & Potential Sales PreFEED - Preliminary Design and Engineering Contracts
Prospects FEED - Front End Engineering Design Contracts
EPC - Engineering, Procurement & Construction Contracts
EPCC - Engineering, Procurement, Construction and Commissioning
Contracts
EPCM - Engineering, Procurement, Construction & Management
Contracts
EPIC - Engineering, Procurement, Installation & Commissioning
Contracts

Copyright © 2011 NewsBase Ltd.


www.newsbase.com Edited by Ryan Stevenson
All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All

reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
AsianOil 16 February 2011, Week 06 page 26

COURSES

Copyright © 2011 NewsBase Ltd.


www.newsbase.com Edited by Ryan Stevenson
All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All

reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
AsianOil 16 February 2011, Week 06 Back Page

NEWSBASE INFORMATION
HEADLINES FROM A SELECTION OF NEWSBASE MONITORS THIS WEEK CUSTOMERS INCLUDE

Oil and Gas Sector

AfrOil
Madagascar Oil faces an audit of its work and the loss of
most of its licences.

ChinaOil
Chinese hackers have been accused of stealing sensitive
financial information from major Western oil firms.

EurOil
Australian-based European Energy has launched an IPO
to raise funds for exploration in the Czech Republic.

FSU OGM
The US is reportedly offering Ukraine the technology
needed to launch shale gas extraction.

GLNG
India is in talks with Qatar over importing an extra 15
million tonnes per year of LNG.

MEOG
Noble Energy has said it hopes to develop the Leviathan
gas field off Israel by 2016.

NorthAmOil
Hercules has struck a deal to buy bankrupt Seahawk's
shallow-water drilling fleet.

Unconventional OGM
PetroChina is to buy a 50% stake in Encana’s Cutbank
Ridge assets in Canada for over US$5 billion.

For further details on the stories above and NewsBase’s entire product range:

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