Ecuador expects to raise block 6 gas output by 61% next year

QUITO -- Ecuador expects to increase its natural gas output in block 6, in the Amistad field, by 61%, to 100  Mcfpd by the end of next year, state run company Petroecuador said.In a press release, the company said four new development wells will be drilled in the field, thanks to a rented rig that recently arrived in Ecuador and expected to start operations in December.
The rig was rented by Petrex, a unit of Italy's Eni, that will run the operations over 18 months.
The cost of renting the rig is about $48 million and includes perforation of two additional exploratory wells and a workover of another two.
Petroecuador also aims to raise gas production from the field to 85 Mcfpd from the current 62 Mcfpd by the end of this year.
Last March, Petroecuador said it had upgraded the size of the reserves in the Amistad field to about 1.7 Tcf of natural gas, following a review and reinterpretation of seismic testing in the Amistad Norte, Santa Clara, BBJ, BBJ Sur and Amistad Suroeste areas.
The Amistad gas field was formerly operated by a local unit of Noble Energy, but Petroecuador took it over after the U.S. company refused in 2010 to change its production sharing contract to a new service agreement.

Cnooc and CPC plan joint deepwater exploration pact

TAIPEI -- State controlled energy firms in China and Taiwan are preparing to jointly explore for natural gas in deepwater in the Taiwan Strait, having failed to make significant shallow-water finds despite nearly a decade of prospecting together.
Chinese oil and gas giant Cnooc and CPC are now drawing up a pact to jointly explore the northern end of the 180 km wide Taiwan Strait, and may invite a foreign partner to join them, a CPC official told the Wall Street Journal. He declined to be named.
Energy-deficient China's search for offshore oil and gas reserves has pit it against several of its neighbors, resulting in naval jousting with Japan, Vietnam and the Philippines near disputed islands and atolls.
CPC has been working with Chinese oil companies in several overseas exploration ventures for over a decade. But since China friendly Ma Ying Jeou became Taiwan's President in 2008 and the subsequent signing of a landmark trade pact with China, both Beijing and Taipei have been expanding economic cooperation.
Large gas reserves have already been found in undisputed Chinese waters south of Hong Kong by Husky Energy, working with Cnooc's listed unit, Cnooc. Gas from their Liwan field is due to be piped onshore from late 2013.
No other major discoveries have been made in the South China Sea since then, and in the meantime China's energy deficit has resulted in soaring natural gas imports in the first nine months of 2012 they rose 35.5% to 30.5 Bcm.
Taiwan imports more than 95% of its energy needs, shipping in 14 to 15 Bcm of LNG annually, mostly from Qatar, Indonesia and Malaysia.
The new Cnooc-CPC project follows the failure a 2002 Cnooc-CPC joint venture to find gas under shallow waters in the southern end of the Taiwan Strait and the Chaozhou Shantou Basin off the coast of China's Guangdong province, officials at the two energy firms said. That deal is due to be terminated later this year.
Under the new deal, the CPC official said, Cnooc and CPC will explore off the coast of Keelung and Hsinchu counties of Taiwan. A formal agreement is expected by late 2013.
Cnooc is transforming itself from a shallow water domestic oil producer to a global player with deepwater, unconventional and conventional hydrocarbon assets in countries ranging from Uganda to Argentina and the United States
In July, Cnooc agreed to acquire Nexen for $15.1 billion, which if approve by the government will allow it to absorb deepwater drilling technology Nexen is using in six Gulf of Mexico prospects.
Cnooc is now working domestically with foreign partners in at least 11 deepwater projects in an effort to grow its oil and gas reserves at home.
All foreign companies exploring in deepwater in South China Sea have signed production sharing contracts with Cnooc, which retains the right to take a majority interest in any commercial oil or gas discovery.
However, it isn't clear what arrangement will apply to the new Cnooc-CPC joint venture. Among international energy majors active in the South China Sea are Chevron, BP and ENI.

Occidental awarded $1.77 billion in Ecuador case

WASHINGTON DC -- A World Bank arbitration tribunal has aawarded Occidental damages of $1.77 billion in a claim the United States oil company brought against the government of Ecuador, according to the ruling posted on the International Centre for Settlement of Investment Disputes website.
The Washington based arbitration tribunal ruled that Ecuador illegally nullified Occidental's exploration and production rights in 2006, violating the Ecuador Bilateral Investment Treaty.
The country violated the treaty by "failing to accord fair and equitable treatment to Occidental's investment," and by "expropriating" the company's investment, according to the written ruling released by the tribunal.
Ecuador canceled Occidental's operating contract in May 2006, during the administration of President Alfredo Palacio, alleging that Occidental broke the terms of its contract by transferring a 40% stake to Encana without obtaining approval from the country's energy ministry.
The tribunal agreed that Occidental did fail to get approval for its farm out agreement, so the $1.77 billion award is a 25% reduction from what the tribunal otherwise would have awarded.
The tribunal also ordered Ecuador to pay interest on the award at the rate of 4.188% per year, compounded annually from May 16 of 2006. Ecuador's government, currently led by President Rafael Correa, has taken a hard-line stance with resource-extraction companies operating in the Andean nation, legislating to increase the government's control of production.
Mr. Correa told to reporters in Quito that the Andean country would ask for the ruling to be declared null. Mr. Correa said the country is reviewing the ruling, although there are "unacceptable things" and his government "will appeal" the tribunal decision and "will ask to annul it."
Previously, the office of Ecuador's attorney general said the government "categorically rejects this award," claiming the annulment of Occidental's contract in Ecuador was "in compliance with our domestic laws and the contract." The attorney general's office said it will make an official announcement, although it added Ecuador respects domestic and international laws and investment treaties.
Raymond James analyst Pavel Molchanov said the tribunal has no mechanism to enforce its ruling if Ecuador doesn't comply. The Ecuadorean government previously has said it would pay up to $417 million, and Mr. Molchanov said Occidental may be unable to recover more than that.
I think Occidental is going to find it very difficult to make Ecuador pay anything more than what Ecuador wants to pay, he said.

GE technology to power Cheniere Energy’s LNG export facility in Louisiana

LONDON -- GE Oil & Gas will supply gas compression trains for Cheniere Energy’s Sabine Pass liquefaction expansion project in Cameron Parish, La., about 170 miles west of Baton Rouge. Adding liquefaction capabilities will transform the existing Sabine Pass LNG terminal into the first LNG terminal capable of importing and exporting LNG in the U.S.

GE will supply 12 PGT25+G4 aeroderivative gas turbines to drive the first two liquefaction trains of the Sabine Pass Liquefaction Project currently under construction. Each train will have the capacity to produce approximately 4.5 million mtpa of LNG. Cheniere has received regulatory approvals from the Federal Energy Regulatory Commission to construct up to four liquefaction trains at Sabine Pass. Cheniere is expected to reach a final investment decision on its third and fourth liquefaction trains in the first quarter of 2013, with construction of those trains expected to commence shortly thereafter.
GE’s PGT25+G4 aeroderivative gas turbine, which has been selected for the Sabine Pass liquefaction project, features high efficiency and reliable performance. The G4—derived from CF6 aircraft engines—contains a rugged GE high-speed 34-megawatt gas turbine, the LM2500+G4, coupled with a two-stage high-speed power turbine module with increased flow capacity. A highly efficient machine for mechanical and generator drive applications, the PGT25+G4 was developed based on GE’s extensive experience with heavy-duty gas turbines.
“We’re pleased that our well-proven technology has been selected for the Sabine Pass liquefaction project. We have been able to build a strong presence in the LNG sector by leveraging our gas turbine, compressor and offshore production technology for many of the world’s leading LNG projects,” said Prady Iyyanki, president and CEO—turbomachinery for GE Oil & Gas.
“Technology innovation and economies of scale have been the two key contributors to the oil and gas industry's progress. GE Oil & Gas has played a key role in the evolution of LNG technology. Our sustained commitment to innovative design and world-class engineering and our production and testing capabilities have allowed us to push the envelope of highly reliable, advanced LNG solutions,” added Iyyanki.

Uruguay signs $1.65 billion in offshore exploration deals

MONTEVIDEO -- Uruguay's government has signed offshore exploration deals with four oil and gas companies that have committed to invest $1.65 billion over the next three years.
The companies include BP, BG, Total, and Ireland's Tullow Oil. They will join Uruguay's state-owned energy company, Ancap, to explore in eight offshore blocks, according to a statement on the Uruguay president's website.
The blocks are located in waters that range from 500 m to 2,500 m deep. BP and BG will each explore three blocks, while Total will explore one and Tullow another.
"This is the most significant event in the search for energy resources in recent years," Industry, Energy and Mining Minister Roberto Kreimerman said in the statement.
Mr. Kreimerman said the projects aim to diversify Uruguay's energy matrix. "We have the chance for a country that is not an oil producer to have new wealth through this exploratory work, which will be done over the next three years, as well as the exploitation that follows," he said.
Mr. Kreimerman expects the drilling work to begin in mid-2013. He also said that by 2015 half of Uruguay's energy matrix will come from renewable energy.

Tanzania delays offshore oil and gas licensing round

KAMPALA, Uganda -- The Tanzanian government said that it would delay a licensing round for up to nine deep sea oil and gas blocks, previously slated for this month, to allow parliament first to ratify a new natural gas policy next month.
In a statement, the state-run TPDC said that the delay will allow the policy to be ratified before the start of the next round.
"As TPDC is the key player in the preparation and consultation of this policy document, their management and staff will be unable to attend the previously scheduled roadshow events throughout september and october," TPDC stated.
The licensing round will include nine blocks sitting between 1,200 m and 3,500 m of water depth. The blocks on offer include new areas and blocks that have been relinquished by current operators.
According to TPDC, despite the postponement, bid round data packages will be available for review and purchase by the end of september. "This will allow potential investors in Tanzania an extended the time period to evaluate the technical data and assess the prospectivity of the nine blocks on offer," TPDC said.
Tanzania continues to attract international oil and gas companies following a spate of huge natural gas discoveries. In june, the country announced that new natural gas discoveries had pushed its reserve estimates up to 28.7 Tcf from 10 Tcf.
The East African nation is trying to revamp its natural resource laws and policies to ensure that it "benefits" more from the recent gas discoveries.
In July, the government announced that it would renegotiate the production-sharing agreement with Pan African Energy, which operates the country's largest gas field Songo Songo to enable TPDC to get "better profit-sharing arrangements".
Among the companies with oil and gas exploration licenses in Tanzania are ORC, Statoil and Exxon Mobil.
The United States geological survey estimates that East Africa's coastal region holds up to 441 Tcf of natural gas.

U.S. offshore leasing plan limited to explored areas of Gulf of Mexico and Alaska Arctic

WASHINGTON – Secretary of the Interior Ken Salazar and Bureau of Ocean Energy Management (BOEM) Director Tommy Beaudreau today announced the release of a proposed final offshore oil and gas leasing program for 2012-2017 that is mostly limited to the already-explored areas of the Gulf of Mexico and Alaska Arctic.
The 15 scheduled potential lease sales contained in the plan will occur in six planning areas – the Western and Central Gulf of Mexico, the portion of the Eastern Gulf Of Mexico not currently under Congressional moratorium, and the Chukchi Sea, Beaufort Sea and Cook Inlet Planning Areas offshore Alaska.
In the Central and Western Gulf of Mexico Planning Areas, the Proposed Final Program includes annual area-wide sales of all available, unleased acreage, as has been the typical practice in the Central and Western Gulf of Mexico. Additionally, two sales are scheduled within a portion of the Eastern Gulf of Mexico Planning Area.
The Proposed Final Program re-affirms existing protections for Arctic coastal areas by continuing to exclude certain areas from leasing, including a 25-mile buffer area near the coast of the Chukchi, as well as two subsistence whaling areas in the Beaufort near Barrow and Kaktovik, Alaska. The program also identifies an additional exclusion area in the Chukchi, near Barrow, that will not be made available for leasing because of input received from Native Alaskan communities and because the area is known to be of particular importance for subsistence hunting and fishing. With respect to all other areas in the Arctic that are open to oil and gas exploration and development in the Proposed Final Program, BOEM will identify targeted areas to offer in the lease sales based on information the agency will gather about industry interest, resource potential, subsistence hunting and fishing, wildlife, and environmental sensitivities.
As is mandated by the OCS Lands Act, the Proposed Final Program has been submitted to Congress. The Secretary may implement the Program in 60 days, however no further action is needed prior to its implementation, and BOEM is on track to hold the first sale under the new program later this year. Earlier this month, BOEM held a lease sale for nearly 39 million acres in the Central Gulf of Mexico, which attracted more than $1.7 billion in high bids for more than 2.4 million acres. That follows on a Western Gulf of Mexico lease sale held in December 2011, in which 21 million acres were offered for lease.

Eni starts up gas production offshore Egypt

ROME -- Eni has started production of gas from the offshore field of Seth, located in the Ras El Barr concession, approximately 37 miles (60 kilometers) from the Mediterranean coast of Egypt.

After an initial ramp-up phase, the field will produce approximately 4.8 million cubic meters of gas per day, of which Eni's equity 1.7 million cubic meters (approximately 11,000 boepd). The partners of the Ras El Barr license are Eni (50 percent), through its subsidiary IEOC, and BP (50 percent) as operator.

The Seth project, whose construction and operations has been assigned by Eni and BP to Petrobel, a joint venture between IEOC and the Egyptian state company EGPC, consists of a platform placed at a water depth of 262 feet (80 meters), two production wells and a pipeline of 6.8 miles (11 kilometers). The pipeline links the platform to the onshore processing facility in El Gamil, which handles around 20 percent of the gas produced in Egypt, through the existing transport network.

The development of this project is further evidence of Eni's involvement in Egypt and its contribution to satisfying the growing gas demand in the country through the exploration and development of gas reserves in the Mediterranean Sea.

Eni is the leading foreign oil operator in Egypt with total operated production of approximately 236,000 barrels of oil equivalent per day in 2011. Eni operates in the country through IEOC, which directly executes the exploration activities and participates in the production activities through joint ventures with the Egyptian state company EGPC.

Petrobras Argentina makes second major discovery in Santa Cruz

BUENOS AIRES -- Petrobras Argentina, the Argentine unit of Brazil's oil and gas company Petroleo Brasileiro, has found an estimated 6 MMboe in the province of Santa Cruz.
The discovery is the second at Petrobras's Estancia Agua Fresca concession in the province, where it already produces almost 3,000 bopd and close to 3.2 MMcfd.
Petrobras Argentina operates the concession and is a 50% shareholder in it along with Compania General de Combustibles, according to a statement Petrobras Argentina sent to the Buenos Aires Stock Exchange Tuesday.
In November, Petrobras Argentina said it would invest $800 million over the next four years in Santa Cruz.

Technip awarded contract for Ichthys FPSO unit

PARIS - Technip was awarded a services contract for the Ichthys floating production storage and offloading (FPSO) unit. The FPSO unit will be located in the Browse basin, Western Australia, at a water depth of 250 m. Technip will provide these services to Daewoo Shipbuilding & Marine Engineering (DSME).

This contract covers detailed engineering and procurement assistance for the topsides(1) facilities of the 1.2-million-bbl storage capacity Ichthys FPSO.

The Ichthys LNG project is a joint venture between INPEX (operator) and Total. Gas from the Ichthys field, in the Browse basin approximately 200 km offshore Western Australia, will undergo preliminary processing offshore to remove water and extract condensate. The condensate will be pumped to the FPSO facility anchored nearby, from which it will be transferred to tankers for delivery to markets.

The gas will then be exported to onshore processing facilities in Darwin via an 889 km subsea pipeline. The Ichthys LNG project is expected to produce 8.4 million tonnes of LNG and 1.6 million tonnes of LPG per annum, along with approximately 100,000 bbl of condensate per day at peak.

RIL scouts for additional shale gas assets

NEW DELHI -- Reliance Industries, India's second largest company by market value, is scouting for more shale gas assets in the US, Canada and Poland, investment bankers working on the potential assets said.

"RIL is looking for large shale gas assets, which will need investments of anywhere between $500 million and $2 billion," one of the bankers looking for assets said. The company has chosen not to appoint a specific investment bank, but has given indications to bankers to scout for such assets. "They have hinted at looking at assets brought to the table."
"We will not comment on market speculation," RIL spokesperson said in a email response. Shale gas will strengthen energy security for the US to a net exporter in several years.

RIl, which has more cash of R70,252 crore than its debt, has raised $1.5 billion as long-term loans through its US subsidiary Reliance Holdings USA. RIL had invested in excess of $3.5 billion for three shale gas assets in the US in the past few years.

The company has invested $2.14 billion in Pioneer shale gas fields, $1.04 billion in Chevron's shale gas field and $0.59 billion in Carrizo fields. "There has been been a seven-fold increase in RIL's share of gross production," the company told its shareholders on its website.

"Petroleum and refining, which will be the core of RIL, will be a capacity driven business with no chances of growth year after year," said Alok Deshpande, oil and gas analyst at Elara Capital, a brokerage. "In exploration and production, even with low investment, they can get a good find which can be their future growth avenues."

The US energy department is now accessing how exports could affect job creation, trade and domestic price of natural gas and is expected to release a report later this year. Some companies have been allowed to export gas in small quantities.

Cheniere Energy has been allowed to supply 3.5 million tonnes of liquid gas every year from 2017 to India's largest gas distributor Gas Authority of India. Other gas producers are pushing for exports.

The demand for gas could come from China, Japan and India. "China's large shale gas reserves could even be bigger than North America's, yet the country is arranging long-term natural gas supplies via ships and new pipelines," Peter Voser, Royal Dutch Shell's chief executive, said at an industry conference in Malaysia on June 5. "Between now and 2050, we see energy demand will double and gas will play a much larger role in meeting that demand."

The rise in Japan's demand is triggered by the closure of n-power plants following the 2011 Fukushima Daichi nuclear accident as it switches to gas to generate electricity. As India's demand for gas overshoots supply, many oil companies are scouting for gas field assets across the globe to reduce energy deficit.

On March 30, 2012, India's largest hydrocarbon explorer Oil and Natural Gas Corp signed an agreement with ConocoPhilips, America's third-largest energy company, to cooperate in areas including equity partnership in shale gas assets and deep water oil and gas exploration blocks. The Indian company will ride on the technological expertise of the US company.

RIL acquisition of shale gas assets have given them an early mover advantage with their peers in the US. One, it gives enough time to gain technological expertise and, two, prepare itself to bid for shale gas assets in India. Petroleum minister Jaipal Reddy told parliament on March 13, that his ministry is working on a strategic policy on shale gas assets and will be finalized by end of 2013 fiscal.

Chinese companies have invested roughly $17 billion in shale gas assets in the US to gain expertise before it starts exploring in their home country.

The Financial Express

Sinopec mulling large buy of Chesapeake Energy assets

OKLAHOMA CITY -- China Petroleum & Chemical Corp., or Sinopec, is considering a multi-billion-dollar purchase of Chesapeake Energy Corp. assets, and has conducted due diligence on the matter, the Financial Times reported Wednesday on its website, citing people familiar with the move.
Sinopec Chairman Fu Chengyu was in Oklahoma this week as part of the company's due diligence, the newspaper reported.

U.S. Central Gulf lease sale drew $1.7 billion in winning bids

HOUSTON  - U.S. Interior Secretary Ken Salazar said Wednesday that the first lease sale in the central U.S. Gulf of Mexico since the Deepwater Horizon oil spill drew $1.7 billion in winning bids from energy companies.
The central area of the Gulf is considered the most promising by the oil and gas industry, and has yielded a huge bounty of oil in the past two decades. It is also where in 2010, a well blow-out destroyed the Deepwater Horizon rig, killed 11 and unleashed the largest offshore spill in U.S. history.
The high demand for drilling leases in the central region underscores both its potential and the eagerness of oil and gas companies to ramp up activities in the area after months of acrimonious exchanges with U.S. authorities over tough revisions of drilling regulations.
The sum of winning bids is the fourth largest raised in a lease sale for the central Gulf, which includes waters off the coast of Louisiana, Mississippi and western Alabama. It is also the largest amount in bids in a sale held after the Deepwater Horizon incident. In December, a lease sale in the less developed western part of the Gulf raised $337 million.
Mr. Salazar, who called the sale "record-breaking," said the interest is "proof positive" that the oil and gas industry is confident it can meet new drilling rules put in place following the 2010 accident.
"The Gulf of Mexico is a crown jewel for oil production," Mr. Salazar said, adding that the total bids indicate that " this is the right place to be."
Norway's Statoil ASA (STO) offered the highest single bid, $157 million, for a block in the Mississippi Canyon area, Salazar said. Anglo-Dutch oil giant Royal Dutch Shell Plc (RDSA) submitted the highest total value of bids, $406.5 million.
If fully developed, the U.S. government estimates that the leases for sale could result in the production of up to 1 billion barrels of oil and 4 trillion cubic feet of natural gas.
At Wednesday's lease sale, 56 companies made 593 bids on 454 blocks. There were 7,250 blocks up for lease, comprising 39 million acres.
Several environmental groups filed suit in federal court seeking to block Wednesday's sale, including Oceana, the Center for Biological Diversity, Defenders of Wildlife and the Southern Environmental Law Center.
"It's premature to increase drilling in the Gulf before we know how much damage has already been done to the ecosystem," said Jacqueline Savitz, vice president for North America at Oceana. "The big question remains--can endangered species like sea turtles, and commercially important ones like Bluefin tuna, handle more drilling?"
Since 1954, the U.S. government has conducted 112 offshore lease sales, including Wednesday's sale.
The record bid for a U.S. Gulf of Mexico lease came in 1973 when a consortium of Mobil Oil Corp, Champlin Petroleum Co. and Exxon Corp. bid $212 million for a block off the Alabama coast. But entering the winning bid hardly guarantees a big payout for companies. That particular block, known as Destin Dome 162, came up with seven dry holes drilled by the companies.
In another instance, in the 1960s, Texaco Inc. spent more than $280 million on acreage that turned out to be light on oil but heavy with natural gas, which at the time was less desirable to exploration and production companies.
Another firm, Pennzoil Co., was unable to develop all of the acres it successfully bid on in the early 1970s, leading the company to sell the leases or bring in partners to develop them.

Ernst & Young: Banner year for growth through drilling

HOUSTON -  As a result of strong oil prices and technology advances making domestic shale resources accessible, the US oil and gas industry had a banner year for growth across several categories. Combined exploration and development spending increased 38% in 2011, according to Ernst & Young's annual U.S. E&P benchmark study. Oil reserves grew by 9%, or 1.7 billion barrels, in 2011, while oil production increased 3%. Gas reserves and production rose 4% and 9%, respectively in 2011. Oil and gas revenues experienced 23% growth in 2011.
"Long thought of as an oil region in decline, the combination of strong prices for oil and ever-improving technology has turned the US into a growth market," said Marcela Donadio Americas Oil & Gas Sector Leader for Ernst & Young. "The tremendous success of oil production in the Bakken formation, for example, is a true testament to the domestic opportunity and the industry's ability to act on that opportunity."
Capital expenditures
Total capital expenditures for the companies reviewed were down 16% as a result of lower property acquisition activity. But significant capital went into identifying new resources and developing existing reserves with an investment of $106.1 billion for exploration and development spending in 2011. The smaller independent producers led the growth in exploration and development spending with a 51% increase over 2010; while the large independents increased spending by 39% and the integrated oil companies increased their investments by 25%. Three companies increased exploration and development spending by more than $2 billion in 2011: large independents Occidental Petroleum and Chesapeake Energy along with Hess (an integrated). Ninety-six percent of the companies surveyed increased their capital budgets for exploration and development spending in 2011.
The cost to find and develop new reserves rose from $17.78 per BOE in 2010 to $19.38 per BOE in 2011, reflecting the higher cost of activity in the current economic environment.
Oil and gas reserves
End-of-year oil reserves increased 9% from 18.6 billion barrels in 2010 to 20.3 billion barrels in 2011. This growth was primarily driven by extensions and discoveries of 2.4 billion barrels, the highest level in five years. Oil production rose 3% to 1,403.5 million barrels in 2011.
The growth in oil reserves over the five-year period studied was driven by the independents and large independents with increases of 92% and 37%, respectively.
Led by development in unconventional shale gas or tight gas formations, natural gas reserves experienced a 4% increase to 178.2 Tcf in 2011, while gas production increased 9% to 12.9 Tcf.
"The year-over-year growth in US reserves is impressive," said Donadio. "Increases in exploration and production budgets in light of new potential resources create a very positive outlook for future production potential."
Revenues and profits
Strong oil prices drove a 23% increase in revenues from $147.8 billion in 2010 to $181.4 billion in 2011. US production costs, however, rose 27% in 2011 as the costs for labor, services and other expenses rose by $5.8 billion and production taxes increased $3.9 billion. After-tax upstream profits were $45.6 billion in 2011, an increase of 21% over 2010.

Myanmar inks oil exploration deals with international operators

YANGON -- Myanmar has signed a raft of oil exploration deals with foreign companies as the reformist government seeks overseas investment to spur economic development.
State-owned Myanma Oil and Gas Enterprise has inked nine agreements since early March to allow firms from Asia and Europe to explore for oil and natural gas, the Myanmar Ahlin newspaper reported.
"It was the first time in the history of Myanma Oil and Gas Enterprise to sign nine agreements within such a short period," the report said, without giving financial details.
"More significantly, Myanmar national companies were involved in all nine agreements as partners," it added.
The firms are EPI Holdings of Hong Kong, Geopetro International Holding of Switzerland, Petronas of Malaysia, Jubilant Energy of India, PTTEP of Thailand, Istech Energy of Indonesia and CIS Nobel Oil of Russia.
The report said the energy ministry had decided in principle to grant licenses to foreign companies to invest in Myanmar only if they cooperate with domestically owned firms.
It said 10 foreign companies were exploring for oil at 24 offshore energy fields, while eight overseas firms--as well as seven joint ventures with local companies--were exploring 20 inland fields.
"Many companies are contacting Myanma Oil and Gas Enterprise to explore for oil and natural gas by investing at other inland and offshore fields," it said.
Myanmar's reform-minded President Thein Sein said in a televised speech on Tuesday that economic development would be at the center of his next phase of reforms, which aim to boost the role of the private sector.

BP spill fine may hit $25 billion

HOUSTON--Federal regulators are seeking a settlement of $15 billion to $25 billion from BP PLC (BP) for the 2010 oil spill in the Gulf of Mexico from the ruptured Macondo well, according to report by the Financial Times over the weekend.
Analysts at Tudor Pickering Holt said the $25 billion figure is above what they have assumed BP's liability would be under the Clean Water Act. "It is encouraging that a dialog with the U.S. government appears to be open/ongoing and removal of the threat of criminal prosecution would be helpful to BP shares," analysts said.

ATP Oil & Gas resumes production at Gulf of Mexico Titan platform

ATP Oil & Gas Corporation said it has resumed production at the ATP Titan platform in the U.S. Gulf of Mexico, which was shut-in May 14 due to a temporary closure of a pipeline.
The Titan platform, which services the ATP's Telemark Hub, resumed production after the operator of the Mars pipeline temporarily completed the tie-in of a new platform, the company said in a press release. Production at Titan is proceeding as expected and will ramp up over the next few days, the company added.
ATP also announced that fracturing process on the Mississippi Canyon 941 A-2 well, which is part of the Telemark Hub, is expected to be completed before the end of June and that the well will be placed on production immediately.
ATP operates the ATP Titan and Telemark Hub which is in about 4,000 feet of water with a 100% interest.

ONGC discovers oil well in Golaghat

ONGC said it has discovered a new oil well in the Chalukpather area in Golaghat district and the oil major's Assam and Assam-Arkan basin has started drilling operations at the new site from Wednesday.
"Assam & Assam-Arakan Basin has commenced drilling operations in its new well at Chalukpather. The well will be drilled as a directional well with state-of-the-art technology, having a horizontal drift of 1,240 metres from surface location," said an ONGC official.
He added, "The well was formally spudded by Upper Assam commissioner Syed Iftekar Hussain in the presence of senior district authorities of Upper Assam districts and senior executives of ONGC. After its big find at Merapani in 2010, the ONGC is optimistic to strike it big in the nearby petroleum habitats."
Hussain said ONGC's operations in Upper Assam have resulted in significant development of the region's economy. "I wish all the best to ONGC for its petroleum business here and all communities here should share a sense of ownership with ONGC's operations, which leads to socio-economic development of local communities," he added.
ONGC's Assam & Assam-Arakan Basin manager S K Jain said ONGC is taking up exploration of oil and gas in Upper Assam aggressively. "This northeast basin is unique in the sense that there is both exploration and production of oil and gas. After a long time, the financial fortune of this basin, headquartered in Jorhat, is looking up. We are optimistic to sustain this healthy trend in the days ahead."
After the spudding of the well, a meeting was held between ONGC executives and senior district authorities. ONGC, recently crowned as the most admired company of the northeast, presented some sustainable socio-economic developmental programs to be undertaken in its operational locations to engage and enrich the local communities. The district authorities assured support to ONGC to deliver the programs professionally.
Evincing keen interest in oilfield operations of ONGC, Hussain volunteered for more such meetings between ONGC executives and district authorities on various administrative issues.

PetroMagdalena resumes production at Cubiro block

TORONTO -- PetroMagdalena Energy Corp. announced that production operations have resumed at its Cubiro Block located in the province of Casanare, with the blockade being lifted on the morning of Saturday May 5, 2012. As previously announced on April 24, 2012, public roads in the province of Casanare were being blocked and this led to a lack of public order in the area, impacting production from PetroMagdalena's Cubiro block.

No employees or contractors of the Company were involved. Discussions between all four levels of government are focusing on delivering a long term solution for the local communities.

Chevron begins operations on next-generation drillship in deepwater GOM

SAN RAMON, Calif. -- Chevron Corporation  announced that the Pacific Santa Ana, a deepwater drillship built to Chevron's specifications, has arrived in the Gulf of Mexico to work for Chevron under a five-year contract with a subsidiary of Pacific Drilling S.A.. Pacific Santa Ana is the first drillship designed with the capacity to perform dual gradient drilling (DGD).
"Pacific Santa Ana will enable us to demonstrate dual gradient drilling, which has the potential to change the way deepwater wells are drilled," said George Kirkland, vice chairman, Chevron Corporation. "This new process builds on our record of technology leadership in deepwater."
"The addition of Pacific Santa Ana as Chevron's fifth drillship in the deepwater Gulf of Mexico demonstrates our long-term commitment to developing America's energy resources," said Gary Luquette, president of Chevron North America Exploration and Production Company. "We are bullish on the Gulf, where robust energy exploration and development is vital to our nation's economy and energy security."
Unlike conventional deepwater drilling, which uses a single drilling fluid weight in the borehole, dual gradient drilling employs two weights of drilling fluid - one above the seabed, another below. This allows drillers to more closely match the pressures presented by nature and effectively eliminates water depth as a consideration in well design. DGD also allows drillers to more quickly detect and appropriately react to downhole pressure changes, which can enhance the safety and efficiency of deepwater drilling operations.
Pacific Santa Ana is equipped with a DGD riser, a mud lift pump handling system, six mud pumps - three for drilling fluid and three for seawater - extensive fluid management system enhancements and more than 72,000 feet of DGD-related cables. After additional equipment is installed and tested, Pacific Santa Ana will be used for exploratory and development drilling in the deepwater Gulf of Mexico.