no responsesEvery 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
The Israeli government is receiving hearings on its interim gas policy recommendations this week.
Monday 14th May: Australia’s Department of Resources, Energy and Tourism should announce the first offshore 2012 tender.
Tuesday 15th May: Kunlun Energy AGM; Statoil AGM; Petrobras reports Q1 2012 earnings; work on a 65-69 km section of Azerbaijan’s Hajikabul-Gazakh trunk gas pipeline should be completed.
Wednesday 16th May: Tullow Oil interim management statement and AGM; ExxonMobil conference call on executive pay; Aminex AGM.
Thursday 17th May: Korea Electric Power earnings; Cairn Energy interim management statement and AGM.
Winners & Losers
Winner: Royal Dutch Shell has received written consent from the government of Mozambique for the $1.8 billion acquisition of Cove Energy, which holds an 8.5% interest in one of Mozambique’s most prospective offshore licences. Shareholders of Cove now have until 1pm BST on 23 May to accept the offer. The receipt of approval is a positive indication of the Mozambican government’s accommodating attitude towards oil and gas development in the East African country, which will be needed to support the development of the two-train LNG project proposed by Anadarko.
Winner: Cheniere Energy’s proposed Sabine Pass LNG project has secured financial backing from Singapore’s sovereign wealth fund Temasek and Asia-focused private equity firm RRJ Capital. Temasek and RRJ Capital have agreed to buy a $468 million share in Cheniere, which will use the proceeds to buy a chunk of the $2 billion equity offering from its subsidiary, Cheniere Energy Partners, which will be used to finance its proposed Sabine project on the US Gulf Coast. The three entities are also considering a strategic partnership to develop Asian markets for LNG from Sabine Pass and Cheniere’s proposed Corpus Christi liquefaction plant in Texas.
Winner: Spanish giant Repsol reported an increase in first-quarter earnings on Thursday, reflecting the company’s overall financial strength despite the expropriation of its Argentine business YPF in April. Net profit in the three months to 31 March, including YPF, increased by 3.5% year-on-year to €792 million ($1.03 billion). Adjusted to exclude the Argentine business, Repsol’s net profit would have increased by 12.4% to $832 million. “The improved results are mainly due to the improvement of Repsol’s crude oil and gas realisation prices, which increased by 15.5% and 12.1% respectively, as well as the return to normality of activity in Libya, and the excellent results achieved by the LNG division,” the company said in a statement.
Winner: Austria’s OMV announced an increase in earnings for the first quarter 2012 buoyed by the consistently high oil price and a return to production stability in Libya. OMV said that its clean earnings were 9% up from the same period in 2011 to €800 million ($1.01 billion), beating market expectations. “The year 2012 started very favourably for OMV”, the company’s Chief Executive Gerhard Roiss said in a statement. “In Libya, production has quickly returned to approximately 85% of pre-crisis levels and these volumes contributed positively to the operating result in Q1, 2012.”
Loser: Indonesia’s oil and gas regulator BPMigas, is worried an ongoing blockade by local villagers of the main access road to the ConocoPhillips-operated Suban gas field in South Sumatra could disrupt the country’s power supply. “If there is production disruption at the Suban field, it will cause disturbances in electricity supply for industries in Jakarta and West Java, as well as hinder the fulfilment of gas delivery contracts between Indonesia and Singapore,” Gde Pradnyana, a BPMigas spokesperson, warned. The protestors are opposed to a permit issued by the Indonesian Forestry Ministry to Conoco in 1999 to convert a strip of land in the village of Bintialo into road access to the Suban gas field.
Loser: Unconventional gas exploration in the Czech Republic will be put on hold, as the Czech government is preparing to implement a two-year moratorium on shale gas exploration while legislation is drafted to manage the sector, the country’s Ministry for Environment said on Monday. There are no reliable estimates for unconventional gas reserves in the Czech Republic, although Hutton Energy-owned BasGas and the UK’s Cuadrilla Resources expressed an interest in exploring in the Moravia region last year.
Quotes of the Week
“I hope that you appreciate that the matter of the Recto Bank, Spratlys, Scarborough Shoal and other disputed areas are critical to our country. It seems critical to China as well,” Manuel Pangilinan, chairman of the Philippines’ Philex Petroleum, told reporters last week after meeting with CNOOC to discuss developing a gas prospect in the disputed South China Sea.
“There’s no point being very present in the transportation if we are not very present in the upstream,” Christian Giudicelli, general manager of Total in Azerbaijan, told Interfax on Tuesday when asked how big a stake Total is eyeing in the Trans-Anatolian gas pipeline. Total will not be a major investor, he said.
“There is no point investing in new projects if they are going to be idle,” Indian Minister of Power Shushil Kumar Shinde told Interfax on Wednesday, referring to the ministry’s decision to lower India’s capacity addition target for 2012-2017 from 100,000 MW to 75,000 MW because of the country’s gas shortage.
“The current rise in gas prices is a head-fake, because the storage overhang is just too massive,” Mark Papa, the chief executive of United States independent EOG Resources, said during the company’s first-quarter 2012 earnings call on Wednesday. The recent rise in US gas prices is not an indication of a sustained recovery, he argued.
Week in Numbers
Sudan attack
$0.41: Fee paid by Chad to Sudan for oil transit.
$0.69: Fee South Sudan offered to pay Sudan for transit.
$69: Fee Sudan has demanded for transit from South Sudan.
Source: Interfax
Sanctioned
1977: Year of BP’s feasibility study for Iranian LNG.
2012: Likely startup date of Iran LNG plant, according to company president.
57%: Stage of completion as of December 2011.
Source: Interfax
Queensland ransom
$20.4 billion: Estimated capex for BG Group’s Queensland Curtis LNG project
36%: Increase from the previous capex estimate.
20%: Appreciation of the Aussie dollar in time between two estimates.
Source: Interfax
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