Natural Gas Blog

Wildcat’s Pick of the Week

The Wildcat
2 July 2012 | 17:13 GMT

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Wildcat’s Pick of the Week.

Every Monday, Wildcat will give you a headstart on the coming week, as well as a round-up of what mattered in the previous week.

Week Ahead

Monday, 2 July: Bidding for Greece’s Gulf of Patraikos, Katakolo and Ioannina fields closes

Tuesday, 3 July: Caspian Gas Forum, Istanbul (until Thursday); Business breakfast with Lord Browne, London

Wednesday, 4 July: Tullow Oil trading and sales update

Friday 6, July: Thai group PTT’s offer for Cove Energy expires; ENN Energy to vote on acquisition of China Gas Holdings

Winners & Losers

Winner: The Nabucco West project has been selected as the favoured Central European route to transmit Shah Deniz 2 gas from Azerbaijan to Austria, reviving a project that many had written off. The selection of Nabucco West will mean the end of the mooted South East Europe Pipeline project being tentatively developed by the Shah Deniz consortium and partners in Bulgaria, Romania and Hungary, BP said in a statement on Thursday.

Winner: Tanzania has finalised a long-awaited gas pipeline deal with China after agreeing financing terms, a significant step towards alleviating the country’s crippling power shortage, a source with knowledge of the matter told Interfax on Wednesday. The $1 billion agreement was announced in September, but the final financing terms were only agreed last week, with China Exim Bank providing a loan to help build the 532 km gas pipeline and gas processing facilities from Mnazi Bay past Songo Songo Island to Dar es Salaam.

Winner: Germany could have recoverable shale gas reserves of up to 2.3 trillion cubic metres, the German Federal Institute for Geosciences and Natural Resources projected in its first estimates for domestic shale gas reserves on Monday, adding further impetus to the country’s unconventional gas exploration drive. Last week, BNK Petroleum was awarded concessions for unconventional exploration in the North Rhine-Westphalia region, adding to the three licences it already holds in Germany.

Loser: Tensions between China and Vietnam have escalated after China National Offshore Oil Corp. (CNOOC) offered nine offshore blocks in the disputed South China Sea up for exploration. Vietnam “strongly protests and requests that China cease the offer for nine oil and gas blocks”, Foreign Ministry spokesman Luong Thanh Nghi said in a statement on Tuesday, adding that CNOOC’s move was an illegal act that “seriously violated” Vietnam’s sovereign rights and national interests.

Loser: GC Chaturvedi, a ministry secretary at India’s Ministry of Petroleum and Natural Gas, accused Reliance Industries of “over-selling” the gas reserve potential of the Krishna Godavari D6 block. “It was wrong on the part of Reliance Industries to have made the output claims earlier. It is unfair for shareholders and the country at large,” Chaturvedi told Interfax, in response to Niko Resources’ announcement that KG-D6 holds about 80% less gas reserves than previously estimated.

Loser: Nigerian National Petroleum Corp.’s (NNPC) Managing Director Augustine Oniwon has been kicked out and replaced by the company’s former head of exploration and production Andrew Yakubu. Nigerian President Goodluck Jonathan replaced nearly all the top management within NNPC this week as part of a major campaign to address corruption in Nigeria’s oil industry and increase transparency and accountability across his government.

Quotes of the Week

“The move by the Vietnamese National Assembly is a serious violation of China’s territorial sovereignty and is illegal and invalid,” the Foreign Affairs Committee of China’s National People’s Congress said on 22 June in a formal protest after Vietnam passed a law asserting sovereignty over areas in the South China Sea.

“This is absolutely not a disputed area,” Vietnam Foreign Ministry spokesman Luong Thanh Nghi said on Tuesday, demanding that China National Offshore Oil Corp. take back an offer for nine oil and gas exploratory blocks in the South China Sea. The blocks sit near Vietnam’s east coast.

“If you are not careful with policies and politics for the development of that gas, instead of that resource becoming a solution that will promote the development of the country, we may just drown in that gas,” Mozambique’s Minister of Energy Salvador Namburete said at the Africa Energy Forum in Berlin on Tuesday, arguing that the country must stick to transparency rules and develop a profitable energy industry.

Week in Numbers

Pipe lagging

1: Companies which own pipelines in Brazil.

3: Years since law to encourage midstream development.

0: New pipelines proposed since 2009.

Source: Interfax

Free range

6.8 tcm: Recoverable shale reserves in US, according to EIA’s ‘low’ case.

13.7 tcm: Recoverable reserves, according to EIA’s ‘reference’ case.

20.5 tcm: Recoverable reserves, according to EIA’s ‘high’ case.

Source: EIA

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