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.
Winners & Losers
Winner: Total and Gazprom Neft signed contracts to explore for oil in Iraqi Kurdistan this week, a major coup for the Kurdistan Regional Government as it seeks to strengthen its case for full control of all oil and gas licensing and exports from the region. Total has acquired a 35% stake in Harir and Safen from United States explorer Marathon Oil, while Gazprom took an 80% stake in the Shakal block, and a 40% stake in the Garmian block, which it will explore in partnership with Canada’s WesternZagros.
Winner: Eni announced a fifth successful gas discovery offshore Mozambique on Wednesday, adding an extra 282 bcm to the company’s gas-in-place estimate for the block. The company now estimates that 1.97 tcm of gas-in-place lies in Offshore Area 4, next to the maritime border with Tanzania and adjacent to Anadarko Petroleum’s Offshore Area 1.
Winner: United States-based Cheniere Energy’s has reached a final investment decision for the first two trains of its 18 mtpa Sabine Pass liquefaction facility. Cheniere Energy reached financial close on a $3.6 billion project finance facility this week for the project. A total of 11 banks acted as joint lead arrangers on the deal, with market appetite leading to an increase in the amount drawn upon by Cheniere.
Winner: China National Offshore Oil Corp. (CNOOC) has won state approval for an LNG terminal in Shenzhen, a project which will process 4 mtpa when it is operational in 2015. The terminal will mainly target gas-fired power plants in the neighbouring province of Guangdong. Guangdong has the largest concentration of gas-fired power plants in China, and securing them as customers will help CNOOC increase its market share.
Loser: Tehran has cancelled China National Petroleum Corp.’s (CNPC’s) $4.7 billion contract to develop Phase 11 of Iran’s giant South Pars gas field, kicking out one of the few remaining foreign investors in Iran. While international sanctions had limited the funds CNPC invested in the project, the removal of the Chinese major is likely to leave Iran even more cash-strapped. CNPC’s withdrawal from Iran came just one day before the United States announced it will increase sanctions against Iran, closing loopholes in the current legislation that Tehran could exploit to cover the insurance and shipments of its oil.
Loser: The Stockholm arbitration court has ruled against Gazprom’s bid to stop the Lithuanian government from investigating managers in a local utility partly-owned by the Russan company. The court’s ruling has given final confirmation of the Lithuanian government’s right to initiate an investigation into gas company Lietuvos Dujos in the Vilnius district court and has dismissed all of Gazprom’s demands to recover losses.
Quotes of the Week
“This has clearly been a testing quarter,” BP Chief Executive Bob Dudley said in a conference call on Tuesday. BP experienced a torrid second quarter that saw earning plummet as a result of lower oil and gas prices and asset write-downs in its US business.
“PetroTrans rejects the notice as invalid and denies that it is in breach of the PPSAs,” the Chinese group PetroTrans said in a statement to Interfax on Wednesday in response to a notice from the Ethiopian government terminating its petroleum production sharing agreements (PPSAs).
“I think it’s a terrible mistake. It will reduce liquidity and do nobody any good,” David Odling, Oil & Gas UK’s energy policy manager, told Interfax on Thursday. He was referring to an attempt to eliminate speculation within the gas markets by Markets in Financial Instruments Directive rapporteur Markus Ferber.
Week in Numbers
End of an era
1954: Beginning of Japan’s nuclear power programme.
2011: Japan generated 30% of power from nuclear reactors.
2022: Date by when Japan could ‘easily’ replace nuclear power with renewables.
Sources: Interfax, Institute for Sustainable Energy Policies
$65 bln: Size of Libya’s Sovereign Wealth Fund (SWF), Africa’s largest oil-based fund.
$56.7 bln: Size of Algeria’s SWF, Africa’s second-largest oil-based fund.
$0.4 bln: Size of Gabon’s SWF, Africa’s third-largest oil-based fund.
Source: Sovereign Wealth Fund Institute
17.5%: Percentage of Japanese imports in Q1 2012 from Qatar.
17%: Percentage of Japanese imports in Q1 2012 from Malaysia.
15.7%: Percentage of Japanese imports in Q1 2012 from Australia.