In Amenas: Two Statoil Workers Confirmed Dead

Norway's Statoil reported Friday lunchtime (UK time) that two of its employees missing since the attack by Islamist militants on the In Amenas gas facility in southeastern Algeria have been confirmed as dead.

The two are Tore Bech (58 years old) from Bergen, Norway and Thomas Snekkevik (35 years old) from Austrheim/Bergen, Norway.

Statoil Chief Executive Helge Lund commented in a company statement:

"Our thoughts are first and foremost with the families and close friends who have lost their loved ones in this horrific and senseless attack on innocent people.

"All of us in Statoil share their grief and express our deep sympathy during this difficult time. We are still very concerned about our three colleagues who remain missing."

Three Statoil employees are still missing after the attack on In Amenas, which began on Jan. 16.

Late Tuesday, BP Group Chief Executive said he "feared the worst" for four of its employees who were still unaccounted for. Press reports identified these BP staff  Monday.

Fourteen of the 18 BP employees who were at the In Amenas site at the time of the attack have been confirmed safe.

A former engineer, Jon is an award-winning editor who has covered the technology, engineering and energy sectors since the mid-1990s. Email Jon at jmainwaring@rigzone.com.

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SandRidge: No Wrongdoing Found in Corporate Dealings

SandRidge Energy's board of directors found no evidence of wrongdoing in relation to allegations made concerning activities of its Chairman and CEO Tom Ward and the company board's oversight, SandRidge reported Friday.

However, the board will consider requests made by investment firms TPG-Axon and Mount Kellett Capital Management to appoint an independent counsel to conduct an investigation of the matter, the Oklahoma City-based company said in a statement.

Both firms in recent months have called for Ward's resignation and for an overhaul of its board and corporate strategy.

On Tuesday, TPG-Axon, the beneficial owner of 6.7 percent of SandRidge's outstanding shares, started mailing consent solicitation materials to SandRidge stockholders. Among the materials was a letter urging stockholders to support TPG-Axon in its effort to replace the company's CEO and make other changes to maximize shareholder value, including amending the company's bylaws and replacing SandRidge's entire board.

"We believe that SandRidge shares are significantly undervalued, and significant appreciation is realistic in the medium term under the right circumstances," TPG-Axon said in a Jan. 22 statement. "However, we believe change is necessary to achieve this value."

TPG-Axon added that the current depressed stock level reflects the destruction of value under current management, and the failure of the current directors to prevent leakage of value from stockholders.

Mount Kellett on Jan. 17 sent a second letter to SandRidge, reiterating concerns regarding TPG-Axon's allegations of front running and calling for the board to retain an independent law firm and forensic accounting firm to conduct a 'thorough and independent' investigation of these allegations.

Both firms claimed that Ward and WCT Resources, an independent oil and gas company formed in 2002 by irrevocable trusts established in 1989 for Ward's children, have engaged in "front running" and "flipping" leasehold interests to the company.

Front Running is defined as the unethical practice of a broker trading an equity based on information from the analyst department before their clients have been given the information. TPG-Axon has alleged that Ward and his son acquired mineral rights from third parties ahead of the SandRidge, and then 'flipped' them to SandRidge or other oil and gas companies at a profit, often retaining a participating interest in future wells in transactions with SandRidge.

TPG-Axon also noted that WCT actively competes with the company in the Mississippian Lime play. Meanwhile, Mount Kellett has voiced concerns regarding the allegations made by TPG-Axon.

"The management of WCT Resources is vested entirely in managers, including Mr. Ward's son, who are independent from the company and have no access to non-public information concerning the company's land and mineral acquisition programs," SandRidge commented, noting that Ward has no control over the trusts or WCT Resources and does not participate in its management, operations or business.

"Thus, contrary to TPG-Axon's assertions, neither the company nor Mr. Ward has the power to 'allow' WCT Resources to engage in any business regardless of whether it competes with the company," SandRidge said in a statement. "As an ongoing business not controlled by the company or Mr. Ward, WCT Resources is free to engage in whatever commerce it deems suitable wherever it chooses."

SandRidge noted that transactions between WCT Resources and SandRidge have occurred rarely and involve less than one-quarter of one percent of the acreage leased by the company in the Mississippian play. Furthermore, SandRidge asserted the transactions were reviewed in advance by disinterested board members.

The fact that WCT Resources owns leasehold acreage adjacent to acreage held by the company is an "entirely unremarkable fact," given SandRidge's interests in over 7,500 sections of the Mississippian play that cover nearly five million acres, according to SandRidge officials.

The acreage held by SandRidge in the play were acquired over a long period of time, well before SandRidge was formed, through TLW Land & Cattle, in which Ward holds an ownership interest. TLW has owned ranch land and other acreage in Oklahoma and Kansas, as well as associated mineral rights, for many years, SandRidge concluded.

Karen Boman has more than 10 years of experience covering the upstream oil and gas sector. Email Karen at kboman@rigzone.com.

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Crude-Oil Futures Rally Stalls Below $96 a Barrel

NEW YORK--Crude-oil futures prices ended slightly weaker Friday amid mixed economic signals and concerns about refinery maintenance curbing near-term U.S. oil demand.

Traders said disappointing data on U.S. new home sales in December negated the impact of day-earlier figures showing a five-year low in weekly jobless claims. The Commerce Department said home sales dropped by 7.3% from November, to 369,000 homes. That fell short of forecasts for sales of 385,000 homes in the month.

With the shine off the economic picture, the focus shifted to bearish U.S. oil data, which showed refiner demand for crude oil last week was cut dramatically--to a 20-month low--by operating snags and seasonal maintenance. The drop in crude runs of 895,000 barrels a day was the most since September 2008, when Hurricane Ike ravaged Gulf Coast refineries. Crude stocks rose by more than expected in the week, to 363 million barrels, the highest for the week on 30 years of EIA data.

The housing data "took the wind out of the rally," said Gene McGillian, broker and analyst at Tradition Energy, adding that the EIA data also "isn't supportive for a breakout to the upside."

Demand for distillate fuel (diesel/heating oil) in the latest four weeks was the lowest since July 2009, lagging the year-earlier level by 8.2%, the EIA said.

Light, sweet crude oil for March delivery on the New York Mercantile Exchange settled 7 cents lower, at $95.88 a barrel, after trading in a range of $95.43 to $96.56 a barrel. After the February contract expired Monday at a four-month high of $96.24 a barrel, front-month crude has failed to settle above $96 a barrel. March crude dropped 16 cents from a week earlier. ICE North Sea Brent crude oil ended unchanged at $113.28 a barrel and carried a premium to Nymex crude of $17.40 a barrel, after topping $20 a month ago.

The market is still puzzling out issues surrounding movement of crude oil on the Seaway pipeline, which moves crude out of storage at Cushing, Okla. to refineries in the key Gulf Coast region. Capacity on the line nearly tripled to 400,000 barrels a day this month and has recently helped lift Nymex prices on the notion that U.S. crude would fetch higher prices in the Gulf, where it would compete with costlier imports.

But the pipeline operator has said flows along the full length of the line have been impacted by maintenance work at a large Texas refinery, and hasn't given precise figure how much oil is now running through the line. Crude oil stocks recently built up to record high levels at Cushing and may take longer to drain, depending on the state of Seaway operations, analysts said.

February-delivery reformulated gasoline settled 1.25 cents higher at $2.8754 a gallon, the highest level since Oct. 12. February heating oil settled lower by 2.96 cents, or 1%, at $3.0568 a gallon, recording the biggest single-day drop since Jan. 15, after prices ended Thursday at their highest level since Oct. 30.

Copyright (c) 2012 Dow Jones & Company, Inc.

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Halliburton 4Q, Full Year 2012 Revenues Rise

Halliburton announced Friday that income from continuing operations for the fourth quarter of 2012 was $589 million, or $0.63 per diluted share. This compares to reported income from continuing operations for the third quarter of 2012 of $608 million, or $0.65 per diluted share. Adjusted income from continuing operations for the third quarter of 2012 was $625 million, or $0.67 per diluted share, excluding a $30 million after-tax ($0.03 per diluted share) acquisition-related charge and a $13 million after-tax ($0.01 per diluted share) gain from the settlement of a patent infringement case.

Halliburton’s total revenue in the fourth quarter of 2012 was $7.3 billion, compared to $7.1 billion in the third quarter of 2012. Total operating income was $981 million in the fourth quarter of 2012, compared to $954 million in the third quarter of 2012. Strong growth in our international regions, particularly in Middle East/Asia and Latin America, more than offset seasonally lower activity levels in North America.

Halliburton’s total revenue was $28.5 billion for the full year 2012, an increase of $3.7 billion, or 15 percent, from 2011. Total operating income decreased $578 million, or 12 percent, from 2011 mainly due to higher guar costs and pricing pressure for production enhancement services in North America and a $300 million charge for an estimated loss contingency related to the Macondo well incident. Income from continuing operations for the full year 2012 was $2.6 billion, or $2.78 per diluted share, compared to full year 2011 income from continuing operations of $3.0 billion, or $3.26 per diluted share.

"I am very proud to say that our company delivered industry-leading revenue growth in 2012, resulting in a record year," commented Dave Lesar, chairman, president and chief executive officer.

"From a revenue perspective, we set new records this year in all of our regions and both of our divisions. From an operating income perspective, we achieved new records in our Latin America region and in five of our twelve product lines.

"In the fourth quarter, revenue of $7.3 billion was up three percent sequentially and represents the highest quarterly revenue in company history. All three of our international regions and eight of our 12 product lines set new revenue records.

"Fourth quarter operating income of $981 million was flat with adjusted results from the prior quarter. These results were driven by our international regions, where we also saw fourth quarter revenue and operating income growth of 20 percent and 39 percent, respectively, compared to the fourth quarter of 2011. I am also proud to say that both our Latin America and Middle East/Asia regions, as well as our completion tools product line, achieved record operating income.

"Latin America revenue was up 14 percent sequentially, despite a two percent drop in the rig count, and adjusted operating income increased 25 percent sequentially. Increased drilling fluids service activity, along with higher software sales in Mexico and Colombia, led the growth for the region.

"In the Eastern Hemisphere, revenue grew 11 percent sequentially, and operating income increased 35 percent sequentially, driven by year-end sales of completion tools, software, and other equipment. We believe activity levels will continue to grow in 2013, and anticipate full-year margins should average in the upper teens.

"Sequentially, Middle East/Asia revenue and operating income increased 14 percent and 46 percent, respectively. The growth was driven by higher year-end software, equipment, and completion tools sales, as well as increased service activity in Saudi Arabia and Australia.

"In Europe/Africa/CIS, we saw revenue and operating income increase eight percent and 23 percent, respectively, compared to the prior quarter. The improvement was driven by the seasonally higher year-end completion tool sales in Angola and the North Sea, greater demand for drilling services in the North Sea and Russia, and increased service activity in East Africa.

"North America revenue was down five percent compared to the previous quarter, in line with the sequential five percent drop in the United States land rig count. Operating income was down 22 percent compared to adjusted third quarter results, driven mainly by an unusually high post-Thanksgiving decline in activity levels with key customers, increased consumption of our high priced supply of guar, and continued pricing pressure around hydraulic fracturing contracts.

"Our North America margins are also temporarily being negatively impacted by the upfront roll out costs of our Frac of the Future initiative, by our commitment to our customers to remain active in the North America natural gas basins at lower margins, and by our decision to stack equipment during the fourth quarter.

"In 2013, we anticipate the North America rig count will improve from fourth quarter levels but will be down slightly compared to 2012. We are committed to our leadership position in North America, and are focused on rebuilding margins as we recover from last year’s elevated guar costs, reap the benefits of our strategic initiatives, and look at all of our costs. Lastly, we remain laser-focused on capital discipline, especially in pressure pumping," concluded Lesar.

2012 Fourth Quarter Results

Completion and Production

Completion and Production (C&P) revenue in the fourth quarter of 2012 was $4.3 billion, an increase of $44 million, or one percent, from the third quarter of 2012. Higher completion activity in the Gulf of Mexico and increased direct sales internationally more than offset seasonally lower activity levels in the United States land market.

C&P operating income in the fourth quarter of 2012 was $603 million, an increase of $12 million, or two percent, from the third quarter of 2012. Excluding the impact of the acquisition-related charge in the third quarter, C&P operating income decreased $36 million, or six percent. North America C&P operating income decreased $68 million, or 18 percent, compared to the third quarter of 2012.

Excluding the third quarter acquisition-related charge, North America C&P operating income decreased $108 million, or 26 percent, from the third quarter of 2012, primarily due to seasonally affected activity levels, higher input costs, and pricing pressure associated with production enhancement services.

Latin America C&P operating income improved $17 million, or 43 percent, compared to the third quarter of 2012. Excluding the third quarter acquisition-related charge, Latin America C&P operating income improved $9 million, or 19 percent, compared to the third quarter of 2012, as improved profitability in Argentina more than offset lower completions activity in Mexico.

Europe/Africa/CIS C&P operating income increased $19 million, or 22 percent, from the third quarter of 2012, driven by increased completions activity in Angola and Norway.

Middle East/Asia C&P operating income improved $44 million, or 55 percent, compared to the third quarter of 2012, as a result of higher activity in most product lines in Saudi Arabia and Australia, as well as increased direct sales in China and Saudi Arabia.

Drilling and Evaluation

Drilling and Evaluation (D&E) revenue in the fourth quarter of 2012 was $3.0 billion, an increase of $135 million, or five percent, from the third quarter of 2012, as higher drilling activity in Latin America and year-end software sales more than offset seasonally lower activity levels in the United States land market.

D&E operating income in the fourth quarter of 2012 was $484 million, an increase of $54 million, or 13 percent, from the third quarter of 2012. North America D&E operating income decreased $24 million, or 14 percent, from the third quarter of 2012, primarily due to lower drilling and wireline activity in the United States land market, which was partially offset by increased demand for drilling services in Canada and the Gulf of Mexico and year-end software sales. Latin America D&E operating income increased $30 million, or 28 percent, from the third quarter of 2012, as increased software sales, fluids activity, and consulting services in Mexico and Colombia were partially offset by lower wireline activity and software sales in Brazil.

Europe/Africa/CIS D&E operating income increased $16 million, or 25 percent, from the third quarter of 2012 as a result of increased demand for drilling services in the North Sea, year-end software sales in Russia, and higher wireline profitability in Angola, which were partially offset by lower profitability for fluid services in Norway. Middle East/Asia D&E operating income increased $32 million, or 37 percent, from the third quarter of 2012, due to seasonally higher year-end software and activity improvements across the region.

Corporate and Other

During the fourth quarter of 2012, Halliburton invested an additional $36 million, pre-tax, in strategic projects aimed at strengthening Halliburton’s North America service delivery model and repositioning technology, supply chain, and manufacturing infrastructure to support projected international growth. Halliburton expects to continue funding this effort in 2013.

Significant Recent Events and Achievements

Halliburton was selected by TNK-BP to provide an integrated services solution to increase production from the complex and challenging tight oil reserves in the Em-Yoga license area of Russia's Krasnoleninskoe oil and natural gas field in Nyagan, Western Siberia. The two-year contract calls for Halliburton to provide subsurface consulting, project management, well construction, and completion services, including directional drilling, logging-while-drilling, fluids, bits, cementing, completion tools, coiled tubing, and multistage fracturing stimulation services, for multiple wells in Nyagan.

Halliburton, Apache Corporation, and Caterpillar have developed innovative dual-fuel technology capable of safely and efficiently powering the pumping equipment used for fracturing treatments with a mixture of natural gas and diesel.

Halliburton was recognized at the 11th Annual World Oil Awards with “Best” awards for its Frac of the Future equipment suite in the Best Health, Safety, Environment/Sustainable Development Onshore category and for its DecisionSpace well planning software in the Best Visualization and Collaboration category.

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Karoon Strikes Oil Offshore Brazil with Kangaroo-1 Exploration Well

Karoon Gas revealed Friday that it has made an oil discovery in its Kangaroo-1 exploration well, in the Santos Basin offshore Brazil.

Mudlog, wireline petrophysical and MDT pressure data confirmed that Kangaroo-1 had intersected an 82 foot (25 meter) gross light oil column with an oil water contact in Eocene aged rocks.

"A wireline program is underway and full results are expected in the coming days. A decision to run a drill stem testing program will be assessed at the completion of the wireline evaluation program," Karoon said in a statement.

Karoon added that, while the oil column is not its primary target at Kangaroo-1, the discovery provides additional confidence in the other prospects within the company’s blocks, including the Emu/Cassowary and Bilby exploration targets.

Kangaroo-1 is located within Blocks S-M-1101 and S-M-1165. The evaluation program is expected to continue through February with results being released as they become available.

After completing drilling works in Kangaroo-1, Karoon will move on to drill the Emu-1 and Bilby-1 wells in blocks S-M-1102, S-M-1137 and S-M-1166. These wells will evaluate multiple targets at Miocene, Eocene, Maestrichtian, Campanian and Santonian levels.

Karoon’s Santos Basin blocks BM-S 1037, 1101, 1102, 1165 and 1166 are sited 124 miles (200 kilometers) off the coast of the Santa Catarina region of Brazil, south of Rio de Janeiro. The blocks, in shallow water depths of around 984 feet (300 meters), are on trend with oil and gas fields such as the Piracucá, Caravela, Vampira, Merluza and Mexilhão fields.

Karoon is the operator and the sole owner of all the blocks.

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Johan Sverdrup Appraisal Well Successful

Sweden's Lundin Petroleum and the Norwegian Petroleum Directorate (NPD) announced Friday that the 16/2-16AT2 appraisal well on the Johan Sverdrup discovery on production license 501 has been successfully completed.

The well was drilled as a side track to well 16/2-16 on the northeastern flank of the Johan Sverdrup field – approximately 0.6 miles to the west of the main bore hole. The objective of the side track was to improve the understanding of the lateral variations in reservoir qualities and relations to oil-water contacts in the neighboring wells.

Lundin (the operator, with a 40-percent interest) reported that the well encountered a gross oil column of approximately 98 feet with "largely excellent" reservoir quality within the Jurassic reservoir sequence. The acquired data also confirms an oil-water contact at approximately the same level as in well 16/2-10, which is the deepest observed at Johan Sverdrup.

"We are very pleased with the results of the latest appraisal well which has encountered excellent reservoir as well as confirming the deep oil water contact at this location," Lundin CEO Ashley Heppenstall commented in a company statement.

According to the NPD, the 16/2-16 and 16/2-16A appraisal wells were drilling into Permian and Triassic rocks, with vertical depths of 7,175 feet and 6,760 feet respectively. These wells will now be permanently plugged and abandoned, while the Transocean Winner (DW semisub) rig that drilled them will proceed to production license 388 to drill wildcat well 16/1-17 – where Lundin is also the operator.

A former engineer, Jon is an award-winning editor who has covered the technology, engineering and energy sectors since the mid-1990s. Email Jon at jmainwaring@rigzone.com.

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Oilex Receives Conditional PSC Extension Offshore Timor Leste

Oilex said Friday that it has been advised by the Autoridade Nacional do Petróleo of Timor Leste that the current contract expiry date for the Joint Petroleum Development Area (JPDA) 06-103 Production Sharing Contract (PSC) has been extended by one year to Jan.15, 2014.

The extension, sought by Oilex, the operator of the block with a 10 percent stake, comes with a requirement to secure a suitable rig by June 15, 2013.

"Engineering reviews and negotiations continue in an effort to identify and secure a suitable rig from several possible candidates," Oilex said in its disclosure on Friday.

The partners of the block have been preparing to drill the Bazartete prospect since the middle of last year as the third commitment well under the PSC terms, but they have been unable to spud a well due to a lack of rig availability.

Besides Oilex, other oil operators in the Southeast Asian region are also experiencing difficulties in securing rigs for their drilling programs. Gas2Grid's Director Patrick Sam Yue told Rigzone on Thursday that he has received several requests from regional oil operators seeking to loan the company's rigs, Rig-1 and Rig-2, for drilling their programs this year.

Oilex disclosed in a statement last year that the Bazartete prospect is selected due to its resource potential. The prospect, said Oilex, has an unrisked mean prospective oil resource of approximately 70 million barrels, with a 23 percent success within JPDA 06-130.

The Bazartete prospect is located in the Northern Bonaparte Basin and is near to producing oilfields, Laminaria/Corallina and Kitan as well as the Kuda Tasi oil discovery.

The partners in the PSC, apart from Oilex, are: Videocon JPDA 06-103 (20 percent), GSPC (20 percent), Bharat PetroResources (20 percent), Japan Energy E&P (15 percent) and Pan Pacific Petroleum (15 percent).

JPDA 06-103 is sited within the northern Bonaparte Basin, offshore northwest Australia, within the JPDA where Timor Leste is the designated authority.

Quintella has reported on the upstream and downstream oil and petrochemicals markets from 2004. Email Quintella at quintella.koh@rigzone.com.

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Oilex Receives Conditional PSC Extension Offshore Timor Leste

Oilex said Friday that it has been advised by the Autoridade Nacional do Petróleo of Timor Leste that the current contract expiry date for the Joint Petroleum Development Area (JPDA) 06-103 Production Sharing Contract (PSC) has been extended by one year to Jan.15, 2014.

The extension, sought by Oilex, the operator of the block with a 10 percent stake, comes with a requirement to secure a suitable rig by June 15, 2013.

"Engineering reviews and negotiations continue in an effort to identify and secure a suitable rig from several possible candidates," Oilex said in its disclosure on Friday.

The partners of the block have been preparing to drill the Bazartete prospect since the middle of last year as the third commitment well under the PSC terms, but they have been unable to spud a well due to a lack of rig availability.

Besides Oilex, other oil operators in the Southeast Asian region are also experiencing difficulties in securing rigs for their drilling programs. Gas2Grid's Director Patrick Sam Yue told Rigzone on Thursday that he has received several requests from regional oil operators seeking to loan the company's rigs, Rig-1 and Rig-2, for drilling their programs this year.

Oilex disclosed in a statement last year that the Bazartete prospect is selected due to its resource potential. The prospect, said Oilex, has an unrisked mean prospective oil resource of approximately 70 million barrels, with a 23 percent success within JPDA 06-130.

The Bazartete prospect is located in the Northern Bonaparte Basin and is near to producing oilfields, Laminaria/Corallina and Kitan as well as the Kuda Tasi oil discovery.

The partners in the PSC, apart from Oilex, are: Videocon JPDA 06-103 (20 percent), GSPC (20 percent), Bharat PetroResources (20 percent), Japan Energy E&P (15 percent) and Pan Pacific Petroleum (15 percent).

JPDA 06-103 is sited within the northern Bonaparte Basin, offshore northwest Australia, within the JPDA where Timor Leste is the designated authority.

Quintella has reported on the upstream and downstream oil and petrochemicals markets from 2004. Email Quintella at quintella.koh@rigzone.com.

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Transocean Rig Arrives to Complete Timon Well

Valiant Petroleum announced Friday that the Transocean John Shaw (DW semisub) rig has arrived on location to complete the drilling of the Timon prospect in the UK's northern North Sea.

The Timon well (211/11b-7), located in blocks 211/11b and 211/16b, originally spud in May 2012 before being suspended due to operation problems with the previous drilling rig. The well is now expected to take around 40 days to complete.

Timon is an Upper Jurassic sand play with gross prospective resources estimated at 30 million barrels of oil equivalent.

The partners in the P1633 license, which covers the 211/11b and 211/16b blocks, are MPX North Sea (operator, 15 percent), Agora Oil & Gas UK (25 percent), TAQA Bratani (18 percent), Wintershall E&P (17 percent), Sorgenia E&P (15 percent) and Valiant (10 percent).

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Griffin Americas Names New CEO

Griffin Americas, a division of Griffin Global Group, a global marine and offshore travel specialist, announced Friday the appointment of Judy “J.P.” Peplinski as chief executive officer. J.P. will assume this position for all of North and South America operations for Griffin Global Group. This new appointment will take effect on Feb. 4, 2013. The role has been created following Bob Westendarp's decision to step back from his full time role as president and chief executive officer after 22 years with the Company. Bob will remain active as a significant shareholder, chairman of the Americas Board and director of the Griffin Global Group.

Before joining Griffin, Peplinski held the position of Vice President at CWT Energy Services & MOTLI. She has had a successful career in specialized oil & energy travel management spanning more than 30 years. At CWT, J.P. held various leadership roles including global responsibility and oversight for their Marine & Oilfield Travel Logistics (MOTLI) division, global strategy, safety and security, business development, operations and customer services. J.P. is recognized as a subject matter expert in all energy related travel, providing vision and key market insight, analysis, projections and global strategy specific to the energy sector.

Bob Westendarp said, "Bringing J.P. on board as the new CEO for the Americas is an important strategic move for Griffin. We have always recognized J.P. as a visionary in our industry and we feel very fortunate that she has joined our team. This clearly signifies Griffin’s commitment to remain at the forefront of the marine and offshore travel and logistics management sector."

Simon Morse, executive chairman of Griffin Global Group, commented: "We are delighted that J.P. Peplinski has joined Griffin; she brings a wealth of sector experience to drive Griffin through its next phase of growth. We would also like to extend our gratitude to Bob Westendarp for his valuable contribution to the success of Griffin over the years."

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Noble: SembMarine Jackup Incident Not Linked to Structural Defects

Noble Corporation confirmed late Thursday in an earnings conference call that the Noble Regina Allen (400' ILC jackup), which tilted during a jacking system test on Dec.3, 2012, is now securely berthed by Jurong Shipyard.

Noble Corp's Chairman and CEO David Williams noted that an investigation conducted by Jurong Shipyard and Friede & Goldman (F&G) shows that the legs, jacking system and hull suffered no structural damage.

"Data collected to date by the various investigation teams has ruled out structural or component defects, and teams are now concentrated on the jacking software control logic, electrical components relating to the jacking system, and the break holding capacity," Williams said in a statement.

Jurong Shipyard, a subsidiary of Sembcorp Marine, is still working to isolate the exact cause and rectify the problem. Sembmarine confirmed on Jan.15 that the rig was successfully restored to its upright position, and that the rig is expected to exit the shipyard by the end of 3Q 2013.

Commenting on the health and safety aspect of the incident, Williams remarked that "thankfully, of more than 700 people aboard the rig, there were no serious injuries reported."

Singapore's Ministry of Manpower (MOM) Occupational Safety and Health Inspectorate confirmed that 89 workers were injured as a result of the incident. A stop-work order (SWO) imposed by the MOM, which covers all production works on the rig, is still in place.

After the incident, F&G instructed Chinese state-owned shipbuilder, Dalian Shipbuilding Industry Offshore (DISC), to suspend the construction of jacking systems for F&G JU-2000E rigs for Prospector Offshore Drilling.

Prospector Offshore Drilling, incorporated in Luxembourg in 2010, is new to the drilling industry. It has six high-spec jackups under construction, four by DISC and two by Shanghai Waigaoqiao (SWS) with deliveries from 1Q 2013 to 1Q 2014.

CIMB Research's analyst, Lim Siew Khee, noted in a report issued in late December that DISC and SWS were awarded these rig contracts due to attractive payment arrangements that required as little as one percent in deposits.

Quintella has reported on the upstream and downstream oil and petrochemicals markets from 2004. Email Quintella at quintella.koh@rigzone.com.

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Samsung Heavy Cuts First Steel for Ichthys LNG Semisub

Inpex revealed Friday that Ichthys LNG is on track to deliver first gas by year-end 2016, with the first steel cutting of the project’s semisubmersible platform conducted by Samsung Heavy Industries in South Korea Friday.

The 492-foot by 361-foot (150 meter by 110 meter) large central processing facility (CPF) will displace 140,000 tonnes and have a peak gas export rate of 1,657 million standard cubic feet per day, making the semisub platform the largest of its kind.

"This is one of the most exciting parts of the project – the first materialization of what has been many years of hard work; it's when the design comes to life," Inpex's President Director Australia Seiya Ito said in a statement.

The platform's hull will be moored by 28 anchor chains weighing more than 25,000 tonnes, while the project's floating production storage offloading (FPSO) vessel will be moored by an additional 15,000 tonnes of anchor chain.

"The total represents more than the yearly worldwide production of large-scale anchor chains," Inpex noted in its disclosure.

Spain's Vicinay is the sole supplier of anchor chains for the Ichthys liquefied natural gas (LNG) Project.

Earlier in the week, the first steel plates of the FPSO vessel's turret were cut in Singapore.

"This is a momentous week for the Ichthys LNG project as it takes its first big step towards reaching its goal of watching the facilities sail from [South Korea] to Australia in late 2015," Ito remarked.

The development plan for Ichthys includes several subsea wells tied-back to the CPF and the FPSO for condensate. A 528-mile (850-kilometer) subsea pipeline will be constructed to transport the gas to a LNG processing plant in Blaydin Point, Darwin.

Onshore installations consist of two LNG trains with a capacity of 4.2 million tonnes per year each and facilities for the extraction and the export of liquefied petroleum gas (LPG) and condensate. In addition to its LNG production, the Ichthys project is expected to generate 1.6 million tonnes per year of LPG and 100,000 barrels of condensate a day at peak.

The entire annual production of LNG from Ichthys LNG (8.4 million tons per year) has already been sold for 15 years under oil-linked price contracts, mostly directed to third-party consortiums of Taiwanese and Japanese buyers.

Ichthys is operated by Inpex with a 66.07 percent interest. The remaining stakes are held by Total (30 percent), Tokyo Gas (1.575 percent), Osaka Gas (1.200 percent), Chubu Electric (0.735 percent) and Toho Gas (0.420 percent).

Quintella has reported on the upstream and downstream oil and petrochemicals markets from 2004. Email Quintella at quintella.koh@rigzone.com.

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Crude-Oil Futures Rally Stalls Below $96 a Barrel

NEW YORK--Crude-oil futures prices ended slightly weaker Friday amid mixed economic signals and concerns about refinery maintenance curbing near-term U.S. oil demand.

Traders said disappointing data on U.S. new home sales in December negated the impact of day-earlier figures showing a five-year low in weekly jobless claims. The Commerce Department said home sales dropped by 7.3% from November, to 369,000 homes. That fell short of forecasts for sales of 385,000 homes in the month.

With the shine off the economic picture, the focus shifted to bearish U.S. oil data, which showed refiner demand for crude oil last week was cut dramatically--to a 20-month low--by operating snags and seasonal maintenance. The drop in crude runs of 895,000 barrels a day was the most since September 2008, when Hurricane Ike ravaged Gulf Coast refineries. Crude stocks rose by more than expected in the week, to 363 million barrels, the highest for the week on 30 years of EIA data.

The housing data "took the wind out of the rally," said Gene McGillian, broker and analyst at Tradition Energy, adding that the EIA data also "isn't supportive for a breakout to the upside."

Demand for distillate fuel (diesel/heating oil) in the latest four weeks was the lowest since July 2009, lagging the year-earlier level by 8.2%, the EIA said.

Light, sweet crude oil for March delivery on the New York Mercantile Exchange settled 7 cents lower, at $95.88 a barrel, after trading in a range of $95.43 to $96.56 a barrel. After the February contract expired Monday at a four-month high of $96.24 a barrel, front-month crude has failed to settle above $96 a barrel. March crude dropped 16 cents from a week earlier. ICE North Sea Brent crude oil ended unchanged at $113.28 a barrel and carried a premium to Nymex crude of $17.40 a barrel, after topping $20 a month ago.

The market is still puzzling out issues surrounding movement of crude oil on the Seaway pipeline, which moves crude out of storage at Cushing, Okla. to refineries in the key Gulf Coast region. Capacity on the line nearly tripled to 400,000 barrels a day this month and has recently helped lift Nymex prices on the notion that U.S. crude would fetch higher prices in the Gulf, where it would compete with costlier imports.

But the pipeline operator has said flows along the full length of the line have been impacted by maintenance work at a large Texas refinery, and hasn't given precise figure how much oil is now running through the line. Crude oil stocks recently built up to record high levels at Cushing and may take longer to drain, depending on the state of Seaway operations, analysts said.

February-delivery reformulated gasoline settled 1.25 cents higher at $2.8754 a gallon, the highest level since Oct. 12. February heating oil settled lower by 2.96 cents, or 1%, at $3.0568 a gallon, recording the biggest single-day drop since Jan. 15, after prices ended Thursday at their highest level since Oct. 30.

Copyright (c) 2012 Dow Jones & Company, Inc.

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Brazil's HRT: Namibia Regulators Approve Stake Sale to Galp

RIO DE JANEIRO--Brazilian oil startup HRT Participacoes em Petroleo SA (HRTPY, HRTP3.BR) said late Thursday that Namibia's Mines and Energy Ministry approved the sale of a stake in three offshore blocks to Portugal's Galp Energia (GALP.LB).

In the deal, first announced in November, the two companies said that Galp had acquired a 14% stake in the three exploration blocks in return for covering a portion of drilling costs.

The deal helps clear the way for HRT to start drilling in the highly prospective region off Namibia's coast, which geologists believe could hold an area similar to Brazil's subsalt because the two areas were connected millions of years ago. Billions of barrels of crude oil were discovered under a thick layer of salt in the Atlantic Ocean off Brazil.

"We can confirm we will commence operations in [first-quarter 2013] for our exploratory campaign in Namibia," HRT Chief Executive Marcio Rocha Mello said in a statement. Earlier this month, HRT recently received the drilling rig that will be used to drill exploration wells in the offshore blocks.

Oil-industry consultants DeGolyer and MacNaughton pegged average prospective resources for HRT's offshore acreage in Namibia at 7.4 billion barrels of oil equivalent. Average prospective resources are a preliminary measure used by the industry to indicate oil volumes that could be recovered from undiscovered deposits.

HRT holds operating stakes in 10 blocks and minority shares in two others in the Walvis, Orange and Namibe basins.

Copyright (c) 2012 Dow Jones & Company, Inc.

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Will New York Join the Fracking Club?

New York. It's where dreams are made, right? Well, not so much for the oil and gas industry. The state has been in a gridlock with the industry and environmentalists holding fast to their opinions about shale development and hydraulic fracturing. So much so, that the state's government has been debating the same issue for more than four years. But time is running out.

The New York State Department of Environmental Conservation (DEC) has been reviewing the comments and proposed regulation on the revised draft of the Supplemental Generic Environmental Impact Statement (SGEIS) and preparing responses that are set for release Feb. 27, 2013.

The department began the public process to develop the draft Supplemental Generic Environmental Impact Statement (dSGEIS) in 2008 by hosting public scoping sessions in order to issue hydraulic fracturing permits to recover natural gas in the Marcellus and Utica shale plays, which covers most of New York and ranges in depths down to 7,000 feet below the surface.

Since 2008, the department has collaborated with industry experts to analyze information about the proposed operations and the potential adverse impacts of these operations on the environment, as well as carving out criteria and conditions for future permit approvals and other regulatory action.

In September 2009, the state released draft regulations for public review and comment. The draft regulations are set to create a legal framework for implementing the proposed mitigation measures in the revised draft Supplemental Generic Environmental Impact Statement.

After much public comment in 2010, the DEC revised the draft and made the Preliminary Revised Draft document available in July 2011. Additional information was added and another revision was released Sept. 7, 2011.

This revision, titled the Revised Draft SGEIS, was posted and provided for public comment in November 2011. The New York State Department of Environmental Conservation held its fourth and final public hearing, which brought in around 6,000 people.

"The turnout of 6,000 people at the hearings demonstrates how strongly New Yorkers feel about this important issue," said Joe Martens, DEC Commissioner, in a December 2011 statement. "Public input on the draft environment impact statement is an important and insightful part of developing responsible conditions for this activity as well as determining whether it can be safely conducted."

Governor Andrew Cuomo has publicly remained neutral on the issue. Last year he ordered a health review of fracking before finalizing his decision, but the Nov. 29, 2012 health review deadline was missed and delayed, again.

This delay caused the DEC to apply for a 90-day extension, "in order to give New York State Commissioner of Health, Dr. Nirav Shah time to complete his review of the dSGEIS," stated DEC spokeswoman Emily DeSantis in a November 2012 statement.

She added that this extension is necessary in order for DEC to have time to review the doctor's comments.

The public comment period ended Jan. 11, 2013.

This issue has been very controversial, partially due to the state's close proximity to Pennsylvania, where the state has benefitted from fracking.

The Joint Landowners Coalition wrote a letter on Jan. 10, 2013 to the governor saying the latest obstacle is a "breach of faith" in government, said Dan Fitzsimmons, president of the organization overseeing 77,000 New York landowners working with gas companies hoping to receive fair deals.

The governor is getting cold feet in the face of growing opposition, added Fitzsimmons in an interview with Rigzone.

"This situation is taking away the rights from landowners and our mineral rights - and our ability to move forward. If you look at all forms of energy, there are consequences with everything. Nothing is perfect," Fitzsimmons said.

"The health effects of fracking have already been studied extensively, and numerous other states and nations have used the process successfully for years. We only have to look across the southern border into Pennsylvania, to see the economic benefits that gas drilling can bring," Fitzsimmons said.

"It's so frustrating," he lamented, who sees "thriving" businesses in Pennsylvania, and farmers repairing their homes and barns, and buying new tractors. "Natural gas is one of the cleanest products that we have," said Fitzsimmons. "It is what we should be doing."

However, the opposition for allowing this widely-used procedure is growing louder. In January 2013, environmental advocates walked to the governor's office and delivered 50 boxes of what they said were 204,000 anti-drilling comments to the DEC.

Some comments included concern over the proposed Constitution Pipeline, a joint venture between Williams Partners LP and Cabot Oil and Gas Corp., and how the pipeline will hinder the environment and private property.

The 121-mile pipeline will connect natural gas production in northeastern Pennsylvania to the Iroquois Gas Transmission and Tennessee Gas Pipeline systems in Schoharie County, N.Y. The proposed project route will mainly follow Interstate 88 and is designed to transport natural gas that has already been produced in Pennsylvania.

Before the pipeline can be constructed, Constitution Pipeline Company must first obtain a federal Certificate of Public Convenience and Necessity from the Federal Energy Regulatory Commission (FERC). The company has requested that FERC initiate a pre-filing environmental review of the proposed pipeline route. Following the pre-filing period, the company will file an application with FERC in the spring of 2013 seeking approval to construct the pipeline.

With more than 10 years of journalism experience, Robin Dupre specializes in the offshore sector of the oil and gas industry. Email Robin at rdupre@rigzone.com.

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BP CEO Says Four BP Staff Most Likely Died In Amenas Attack-E-Mail

LONDON--Four members of BP PLC's (BP) staff have most likely died in the terrorist attack last week on an Algerian gas plant, the company's chief executive said Friday, adding that the U.K. oil giant will learn lessons from the tragedy.

An attack by Islamist militants in Algeria's Sahara on the In Amenas gas plant--run by BP, Statoil ASA (STL.OS) and Algerian state oil company Sonatrach--left at least 37 foreign workers dead. The event highlighted a formidable new threat for oil companies investing in the region.

In an internal e-mail to staff, BP CEO Bob Dudley said "it is now clear that four of our colleagues in all likelihood lost their lives in the attack on the In Amenas joint venture." Over the weekend, he had said the company had feared "the worst" for them.

Using unusually harsh language, Mr. Dudley said the plant was "attacked by murderers on what should have been an ordinary working day. This was an appalling act of evil--a barbarous and pre-meditated criminal attack."

But he insisted BP would help governments investigate the tragedy as well as learn lessons to avoid it being repeated.

"Governments will also be conducting their enquiries. BP will participate fully and share what knowledge and insights we have," Mr. Dudley said. "We will ensure any lessons are applied to prevent such an outrage occurring again."

The e-mail also hinted that the tragedy could hurt staff morale.

"This has been a heavy blow for BP and I can imagine people across the company asking many questions," the CEO said in the e-mail. "I am very clear about where BP goes. We go on."

Copyright (c) 2012 Dow Jones & Company, Inc.

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Rural Oil Well Could Be Revisited by Energy Company

A vast well of oil near Biscathorpe which was overlooked' by BP in 1987 could be revisited after a company confirmed plans to drill.

Egdon Resources UK Ltd have revealed they have identified an oil-bearing area of sand between one and two metres thick, 2,000 metres under land north east of the village, which could be home to up to 25 million barrels of oil.

The company say they have identified a suitable site to drill and will shortly be submitting a full planning application to Lincolnshire County Council, who confirmed that discussions with Egdon have taken place.

The find could dwarf the nearby Keddington oil field which was taken over by Egdon in 2007, which produces 50 barrels a day and is estimated to house around four million barrels.

Mark Abbott, managing director or Egdon, said: "Egdon are intending to drill an exploration well to test the structure some distance from the original well where we expect this sand to have thickened.

"The processes has been undertaken for the proposed Biscathorpe-2' well and we now believe we have a suitable site identified.

"As part of the process we also undertake pre-application consultation with stakeholders including the planning authority and local people.

"To avoid any doubt, the prospect at Biscathorpe is a conventional oil prospect similar to the significant number previously drilled in the region and I can confirm that no hydraulic fracking' would be undertaken as part of the proposed operations."

Neil McBride, development manager for the county council, said: "We have had discussions with Egdon's consultants but have not yet received a planning application.

"All applications are assessed against the National Planning Policy Framework and the Development Plan, which in this case is the Lincolnshire Minerals Local Plan, and are subject to a consultation and publicity process.

"The consultees in this case will include the district council, parish councils and the Environment Agency."

Copyright 2013 Johnston Press Plc. All Rights Reserved.

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In Amenas: Two Statoil Workers Confirmed Dead

Norway's Statoil reported Friday lunchtime (UK time) that two of its employees missing since the attack by Islamist militants on the In Amenas gas facility in southeastern Algeria have been confirmed as dead.

The two are Tore Bech (58 years old) from Bergen, Norway and Thomas Snekkevik (35 years old) from Austrheim/Bergen, Norway.

Statoil Chief Executive Helge Lund commented in a company statement:

"Our thoughts are first and foremost with the families and close friends who have lost their loved ones in this horrific and senseless attack on innocent people.

"All of us in Statoil share their grief and express our deep sympathy during this difficult time. We are still very concerned about our three colleagues who remain missing."

Three Statoil employees are still missing after the attack on In Amenas, which began on Jan. 16.

Late Tuesday, BP Group Chief Executive said he "feared the worst" for four of its employees who were still unaccounted for. Press reports identified these BP staff  Monday.

Fourteen of the 18 BP employees who were at the In Amenas site at the time of the attack have been confirmed safe.

A former engineer, Jon is an award-winning editor who has covered the technology, engineering and energy sectors since the mid-1990s. Email Jon at jmainwaring@rigzone.com.

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RusPetro to Boost Production with New Heat Exchanger

RusPetro reported Friday that a heat exchange system is expected to come on line on the firm's Krasnoleninsky Arch field, which is located in the Khanty-Mansiysk region of West Siberia.

RusPetro said that the heat exchanger will enable condensate production to increase from a current level of 1,400 barrels of oil per day (bopd) towards 4,000 bopd, bringing total crude and condensate production from around 6,500 bopd to approximately 9,000 bopd.

The firm has updated its development plan and aims to produce average crude and condensate at a rate of 10,000 bopd in 2013, with a targeted exit rate of 13,000 bopd for the year. For the end of 2014 and 2015, it plans exit rates of 20,000 bopd and 31,000 bopd respectively.

RusPetro also announced that it has strengthened its balance sheet. The firm has commenced an offering of senior secured notes, which will be used to repay a senior term loan and for general corporate purposes. It is also proposing to convert Limolines Transport's outstanding shareholder loan into new shares in the company. Most significant, however, has been the establishment of a new revolving credit facility at an initial level of $50 million with Sberbank.

RusPetro Chief Executive Don Wolcott commented in a company statement:

"We are delighted to announce our plans for strengthening of our balance sheet through a range of actions today, including the notes offering, Limolines loan conversion and the new Sberbank facility. These will simplify our capital structure and raise new funds that can be deployed in to the field. Our business is now operating cash flow positive and we believe that our strategic development plan will put the business on a firm trajectory for growth in 2013 and beyond."

Analysts who follow the company at London-based FoxDavies Capital saw the update as positive.

A former engineer, Jon is an award-winning editor who has covered the technology, engineering and energy sectors since the mid-1990s. Email Jon at jmainwaring@rigzone.com.

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Brazil Oil Workers to Stage 24-Hour Warning Strike Monday--Union

RIO DE JANEIRO--A union representing oil workers at Brazil's state-run energy company Petroleo Brasileiro (PBR, PETR4.BR), or Petrobras, said late Friday that workers will stage a 24-hour "warning" strike to protest the company's latest profit-sharing offer, although crude oil output is not expected to be affected.

The National Federation of Oil Workers, or FNP, said its members voted to approve the strike this week. The FNP is an umbrella union representing about half of Petrobras's 80,000 employees. Workers at a sister umbrella union known as the Brazilian Oil Workers Federation, or FUP, will also participate in the strike.

Workers are protesting Petrobras's initial profit-sharing proposal made in December, which was less than half the payment oil workers received last year, said Eduardo Henrique Soares da Costa, a director for the FNP. "This is a 24-hour warning strike to add a little pressure to the negotiations and let Petrobras know that it needs to improve its offer," Mr. da Costa said.

Oil workers will decline to change shifts and halt services at installations across the country, but Mr. da Costa said that production will not be affected by the work action.

Strikes such as the one planned for Monday typically involve slowdowns and work-to-rule actions that have limited affect on Petrobras's operations because of their short duration. The work action, however, comes as Petrobras struggles to boost crude-oil output amid ongoing maintenance at offshore platforms. Petrobras faced a similar 24-hour strike in September during salary negotiations.

Petrobras said it was taking "all administrative and operational measures" to guarantee normal operations on Monday. "Petrobras continues to be open to negotiations with the unions so that all parties can reach an understanding about [the profit-sharing payment]," the company said in an email.

The last major strike at Petrobras took place in July 2008, when oil workers walked off the job for five days to protest work issues and profit-sharing proposals. The strike cost Petrobras about 63,000 barrels of crude oil production per day.

Copyright (c) 2012 Dow Jones & Company, Inc.

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UK Energy Secretary Expects 28 New Fields on UKCS in 2013

The UK Secretary of State for Energy and Climate Change Ed Davey confirmed at a meeting in Parliament Wednesday night that the government expects around 28 new oil and gas fields on the UK Continental Shelf to get approval this year, following the approval of 29 projects in 2012.

Speaking at the British Oil & Gas Industry All Party Parliamentary Group at its annual reception at Westminster Palace, which was attended by Rigzone, Mr Davey reiterated the UK government’s support for the UK oil & gas industry.

"Oil and gas will form an integral part of the UK energy mix for decades to come. Over 70 percent of the UK's primary energy demand may still be filled by oil and gas into the 2040s. With 20 billion barrels or more still to be drawn from the UK’s North Sea fields, having an indigenous source helps prevent overreliance on imports from more volatile parts of the world," Mr Davey said.

"So the UK oil and gas industry is a vitally important strategic resource now and over the next half century, to help fulfill our energy needs and as a contribution to the UK’s energy security."

Davey illustrated how the UK government has been acting to encourage investment and innovation in the oil and gas sector.

"Introducing, for instance, new field allowances West of Shetland; extending the small fields allowance; and putting in place new allowances for shallow-water gas fields."

The result of this has seen the level of investment in new oil and gas fields increase significantly in recent years, the Energy Secretary pointed out.

"The level of investment in new oil and gas projects sanctioned in 2011 was over 10 times the amount of 2009. 18 projects with a total value of $20.5 billion (GBP 13 billion) were approved. In 2012, 29 projects [were] approved with capital expenditure of over $17.3 billion (GBP 11 billion). In 2013, we are already expecting around 28 new fields to get approval."

Also at the meeting was Oil & Gas UK Chief Executive Malcolm Webb, who commented in his own speech: "We welcome the Coalition government’s new long-term approach to the UK oil and gas industry which is already reaping rewards for the British economy... With improvements to the tax regime as a result of better engagement with the Treasury, no less than 30 new offshore oil and gas developments were approved in the last twelve months.

"Furthermore, 167 new licences to explore for petroleum in UK offshore waters were awarded in the latest licensing round. This upturn is set to continue and presents excellent business opportunities right across our world-class supply chain to the benefit of the UK’s energy security, balance of trade and tax revenues. Most importantly at this time however, it has, as predicted, resulted in thousands of new and well paid jobs."

Statoil said in December that its recent decision to go ahead with its $7 billion-plus Mariner heavy oil field in the UK North Sea was positively affected by the expansion of the UK's Ring Fence Expenditure Supplement – a measure taken by the UK government to support investment in marginal fields.

A former engineer, Jon is an award-winning editor who has covered the technology, engineering and energy sectors since the mid-1990s. Email Jon at jmainwaring@rigzone.com.

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Atwood Oceanics Secures Work for Jackup

Atwood Oceanics, Inc. announced that one of its subsidiaries has been awarded a drilling services contract for the Atwood Orca (400' ILC) by Mubadala Petroleum. The Atwood Orca, currently under construction at PPL Shipyard PTE LTD in Singapore, will have a rated water depth of 400 feet, 1.5 million pound hook load capacity, accommodation for 150 personnel and significant offline handling capabilities. The agreement is for a firm duration of two years.

The Atwood Orca is expected to be delivered from the PPL shipyard in early May 2013, ahead of its scheduled June delivery after which it will mobilize for a period of approximately ten days to its first location offshore Thailand. This contract adds $116 million in revenue backlog, bringing Atwood's total revenue backlog to approximately $2.6 billion as of January 22, 2013.

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Atlas Copco Names New Business Dev't Manager

Victor Coetzer has accepted the position of business development manager, store channel, for Atlas Copco CMT USA’s Mining and Rock Excavation Technique Service division. In his new position, Coetzer reports directly to Jess Kindler, business line manager, MRS, and will be based on Commerce City, Colo.

Coetzer has held various positions within Atlas Copco since joining the company in 2003 as a solutions developer for Atlas Copco in South Africa. Since joining Atlas Copco CMT USA in 2010, Coetzer has worked as a financial analyst and assistant business controller.

"With his broad experience, Victor is very well suited for his new position,” Kindler said. “I know he is looking forward to helping the store channel build on what has already been accomplished, while continuing to improve its MRS businesses."

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Fincantieri Aims to Buy STX OSV for $1.2B

Singapore-listed STX OSV, a global builder of offshore support vessels, revealed Wednesday that Italian shipbuilder Fincantieri is looking to acquire it's business for $1.2 billion (SGD 1.5 billion). 

Fincantieri successfully acquired 50.75 percent of STX OSV shares Wednesday at a price of 0.99 (SGD 1.22) per share, totaling $594 million (SGD 730 million). Fincantieri is now offering an unconditional cash offer for the remainder of STX OSV's shares. The offer from the Italian firm will be kept open for 28 days.

"This acquisition marks Fincantieri's entry into a market segment complementary to its current ones. With 21 shipyards in three different locations, Fincantieri will double its size to become the fifth largest shipbuilder worldwide behind four Korean peers," STX OSV said in its disclosure.

At present, South Korea's Hyundai Heavy Industries is the largest shipbuilder in the world. 

OSK Research's analyst Jason Saw told Rigzone Wednesday that he views the sale price as "somewhat low."

"The depressed sale price could be primarily driven by desperation of the STX Group to sell its assets to pare down debts. The STX Group is also looking to sell its shipping unit, STX Pan Ocean, as part of its group restructuring process," Saw said.

Saw is also of opinion that Fincantieri's general offer for STX OSV's remaining shares is unlikely to be successful. Fincantieri needs to own at least 90 percent of STX OSV in order to squeeze the remaining shareholders. Och-Ziff, the second largest shareholder, has a 12 percent stake.

STX OSV employs 9,200 people globally, and operates ten shipyards around the world. The company builds anchor handling tug supply vessels, platform supply vessels and offshore subsea construction vessels. It is also involved in seismic survey.

Quintella has reported on the upstream and downstream oil and petrochemicals markets from 2004. Email Quintella at quintella.koh@rigzone.com.

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Will Mariner Jumpstart UK's Heavy Oil Revolution?

Statoil's decision in December to go ahead with spending an estimated $7 billion-plus on developing the Mariner heavy oil field was a welcome boon for the UK oil and gas sector.

Already in early 2013, Statoil is recruiting people for the project – which will see an estimated 700 people directly employed by the firm in long-term, full-time positions. Two hundred of these roles will be onshore jobs at the firm's operation center in Aberdeen, while more than 500 will be offshore positions. Statoil plans to recruit most of the people it will need for the project in the UK, particularly in Scotland in the Aberdeen region.

But far more than 700 jobs will be created thanks to the project, according to Oil & Gas UK Economics Director Mike Tholen.

"What you tend to see is that there is a ratio of about two or three to one. So, for every direct job there are two-to-three indirect jobs supporting them one way or the other," Tholen told Rigzone in a recent phone interview.

This suggests that perhaps as many as 2,000 indirect jobs can be created from the project.

Mariner "will have a wider impact, obviously. Everything from the trivial, such as office services, through to the substantial: engineering, manufacturing and other technical work. So, it's bound to enlarge the skills, demand and work not just in Aberdeen but beyond as well."

Discovered more than 30 years ago, the Mariner Field consists of two shallow reservoirs: the Maureen Formation and the Heimdal Sandtsones of the Lista Formation. With nearly two billion barrels of heavy oil in place (with gravity ranging from 12 to 14 API), the development of the field will be the biggest on the UK Continental Shelf for a decade.

The Mariner field development concept

Statoil expects to begin production from Mariner in 2017 and once developed it is expected to produce for 30 years. The average production is estimated at around 55,000 barrels of oil per day for the first three years of the development's life.

Statoil has stated that the project will require pioneering technology for it to work. Discovered in 1981, the Mariner field was subject to a number of development studies by different operators – all to no avail. This changed when Statoil came on board as operator in 2007.

Mariner "was discovered more than 30 years ago but no operator has until now been able to put forward a development concept that allows for a possible development," Bård Glad Pedersen, a Statoil spokesman, explained to Rigzone recently. "We are proud that we have been able to do it. The challenge with heavy oil is obviously to get it out of the ground effectively and to reach a recovery factor that is satisfactory."

It also helps that Statoil already has some heavy oil experience.

"Previously we have done the field development of Grane on the Norwegian Continental Shelf and Peregrino, offshore Brazil," Pedersen added.

Oil & Gas UK's Tholen agrees with this view.

"The sort of technologies they are relying on have really continued to develop a lot over recent years and Statoil, because of the experience they have elsewhere, are very much ahead of the game in how to process and handle this sort of oil," he said.

Statoil's approach to developing Mariner will involve a lot of wells (around 50), as well as sidetracks. This is because of the extraction of heavy oil means low well flow rates. But the process will also be designed to handle large liquid rates and oil-water emulsions because of predicted early water breakthrough.

The field will be developed with a production, drilling and quarters (PDQ) platform with a floating storage unit that will have a capacity of 850,000 barrels. A jackup will also be used for the first four-to-five years of the project.

Statoil has already started awarding contracts to contractors and subcontractors for the Mariner project.

For instance, the contract award for the engineering, procurement and construction of a steel jacket for the platform has been made to Spanish firm Dragados Offshore, who will work with UK-based SNC Lavalin on the detailed engineering of the jacket.

UK-based engineering firms CB&I and Rig Design Services will work with Daewoo Shipbuilding and Marine Engineering Co. to deliver the topside for the platform. Meanwhile, Saipem's UK business has been awarded the contract for heavy lift operations.

But there are still plenty of contracts to be awarded and Statoil has stated that it has already seen a lot of interest from suppliers for Mariner work.

Statoil’s Mariner project is an indication that other heavy oil fields in UK waters can also be developed. The Mariner project has been feasible due to a combination of a can-do operator with the technology to extract heavy oil at a manageable cost, a healthy range of prices for crude oil and a sensible tax regime, Tholen said.

The UK's tax regime "has flexed sufficiently to really encourage this investment", according to Tholen. Indeed, Statoil has pointed out that the UK government's 2012 expansion of the Ring Fence Expenditure Supplement – a measure designed to support investment in marginal fields – was a positive move that affected its decision to develop the Mariner field.

"I think it is very much the fact that in the last couple of years the UK Treasury has been paying a lot more attention to our industry because it recognizes that we mostly can sustain our investment," said Tholen.

"We're not so much 'over the barrel' when it comes to access to finance. Ours is an industry where it is how you attract the investment into the UK given that the investment will, in turn, create both new jobs and new tax yield for the Treasury. So, it sees that this is a good business to be involved in and recognizes, not least in this case, that the tax regime was holding an investment back."

Because of this softening towards the oil and gas industry by the UK's tax authorities, Tholen expects that there will be further heavy oil developments on the UK Continental Shelf.

"I am confident that there are other companies looking at other major heavy oil developments at the minute. No doubt, they'll be looking at the progress of this one as well with interest," he said.

A former engineer, Jon is an award-winning editor who has covered the technology, engineering and energy sectors since the mid-1990s. Email Jon at jmainwaring@rigzone.com.

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Crude-Oil Futures Settle Down 1.5% on Expectations of Rising Inventory

Crude-oil futures prices posted their biggest decline in a month Wednesday, falling 1.5% to $95.23 a barrel, on expectations of a seasonal drop in demand from U.S. refiners.

The decline in prices came after crude climbed nearly $3 a barrel over the previous four days, culminating with the February light, sweet crude oil futures contract on the New York Mercantile Exchange expiring Tuesday at a four-month high.

Profit-takers ruled the day, cashing in on the recent gains, and the selloff accelerated with late-session news of an operating snag on the key Seaway Pipeline, which carries oil out of the Nymex contract delivery point of Cushing, Okla., to the key Gulf Coast refining region.

Capacity on the line recently tripled to 450,000 barrels a day and helped to drive Nymex prices up by $12 a barrel since early December, on hopes that record-high stocks at Cushing would decline and the oil would fetch a higher price in the Gulf.

But operators of the line said "unforeseen constraints" have limited the flow to 175,000 barrels a day for an unspecified period.

"The key is the duration," said Andrew Lebow, senior vice president of energy futures at Jefferies Bache in New York.

The potential for U.S. crudes now bottlenecked at Cushing to compete with imports in the Gulf has lifted Nymex crude at the expense of North Sea Brent, the pricing bases for much foreign crude sent to the U.S.

"Every bank in the world has been advising buy WTI-sell Brent," Mr. Lebow said, referring to the U.S. benchmark, West Texas Intermediate crude oil.

Nymex crude oil for March delivery settled $1.45 a barrel lower, at $95.23 a barrel, the lowest price in a week. The one-day drop was the most since Dec. 21. ICE March Brent crude oil rose 38 cents, to $112.80 a barrel, the highest price since Oct. 17. Brent's premium to the U.S. benchmark of $17.57 a barrel was the highest since Jan. 14.

Mark Waggoner, president of Excel Futures in Bend, Ore., called crude-oil futures "extremely overbought" and said he expects a pullback in the next few weeks to $90 a barrel, where he would be a buyer.

Analysts surveyed by Dow Jones Newswires expect upcoming government oil-inventory data to show crude-oil stocks fell 1.7 million barrels last week, while refineries trimmed operations by 0.4 percentage point, to 87.5% of capacity. Gasoline stocks are expected to show a 900,000-barrel rise, while distillate stocks (diesel/heating oil) are expected to drop by 100,000 barrels.

The data, for the week ended Jan. 18, are set for release by the Energy Information Administration at 11 a.m. EST Thursday, a day later than usual due to the government holiday celebrated Monday.

U.S. refiners have been processing crude at a rate of nearly 15.2 million barrels a day in the first two weeks of January, while the EIA has projected a monthly average of 14.5 million barrels a day, the lowest in a year.

Rising U.S. crude-oil output, now at a 20-year high above 7 million barrels a day, has plumped up crude-oil inventories, which stand 8.8% above the five-year average level, EIA data show. Last week, crude-oil stocks were at a 30-year high for the week. Inventories at Cushing have climbed nearly 14% since early December to record levels near 52 million barrels.

Gasoline stocks last week were the highest for this time of year on records beginning in 1990 and have gained 17% in the past eight weeks. But in the New York Harbor region, the delivery point for the contract, inventories were the lowest on record for this time of year are more than 14% below the five-year average.

February-delivery reformulated gasoline blendstock futures rose for a fifth straight session, up 0.39 cent to $2.8338 a gallon, the highest settlement since Oct. 16.

Gene McGillian, broker and analyst at Tradition Energy, said the rise of more than 12 cents in RBOB futures in the past week, reflects expectation that high inventories will tighten when refinery operations slow. "We're likely to see a more extensive [maintenance] season than maybe some people anticipated," he said.

Nymex heating oil futures settled 0.99 cent higher, at $3.0781 a gallon. The fourth straight rise put prices at the highest level since Oct. 30.

Copyright (c) 2012 Dow Jones & Company, Inc.

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Ukraine, Shell to Sign $10 Billion Shale Gas Deal

KIEV--Ukraine and Royal Dutch Shell PLC (RDSA) will sign a landmark multibillion-dollar agreement Thursday to develop unconventional gas resources, government and company officials said, as the former Soviet republic tries to reduce its dependence on Russian gas supplies.

The $10-billion production sharing agreement will be signed at the World Economic Forum in Davos by Ukrainian President Viktor Yanukovych and Shell Chief Executive Peter Voser, officials said.

Ukraine is trying to wean itself away from costly Russian gas, as Moscow for months has refused its pleas for a discount. Russia has demanded closer economic and political ties in return for lower prices.

Ukraine has Europe's fourth-largest shale gas reserves of about 42 trillion cubic feet (1.2 trillion cubic meters), according to the U.S. Energy Information Administration. Ukraine estimates its reserves are much larger.

Shell won a tender last year for the Yuzivska deposit in eastern Ukraine, which government officials say holds 2 trillion cubic meters of gas and could produce up to 15 billion cubic meters of gas per year by 2020. Chevron Corp. (CVX) won the rights to develop the slightly smaller Olekse deposit in western Ukraine, where nationalist politicians are opposing the project.

Ukraine's upcoming deal with Shell comes as it tries to diversify its energy sources away from Russia's OAO Gazprom (GAZP.RS). Ukraine imported around 32.5 billion cubic meters of Russian gas last year, paying an average of $430 per 1,000 cubic meters, a price that officials say is stifling the economy.

Prime Minister Mykola Azarov said last week that Ukraine plans to cut gas imports from Russian by increasing its own production and importing gas from Germany. Mr. Azarov said Ukraine plans to extract up to 2 billion cubic meters of gas on its Black Sea shelf, and buy up to 5 billion cubic meters of gas from western Europe.

-James Marson in Moscow contributed to this article.

Copyright (c) 2012 Dow Jones & Company, Inc.

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UK Energy Secretary Expects 28 New Fields on UKCS in 2013

The UK Secretary of State for Energy and Climate Change Ed Davey confirmed at a meeting in Parliament Wednesday night that the government expects around 28 new oil and gas fields on the UK Continental Shelf to get approval this year, following the approval of 29 projects in 2012.

Speaking at the British Oil & Gas Industry All Party Parliamentary Group at its annual reception at Westminster Palace, which was attended by Rigzone, Mr Davey reiterated the UK government’s support for the UK oil & gas industry.

"Oil and gas will form an integral part of the UK energy mix for decades to come. Over 70 percent of the UK's primary energy demand may still be filled by oil and gas into the 2040s. With 20 billion barrels or more still to be drawn from the UK’s North Sea fields, having an indigenous source helps prevent overreliance on imports from more volatile parts of the world," Mr Davey said.

"So the UK oil and gas industry is a vitally important strategic resource now and over the next half century, to help fulfill our energy needs and as a contribution to the UK’s energy security."

Davey illustrated how the UK government has been acting to encourage investment and innovation in the oil and gas sector.

"Introducing, for instance, new field allowances West of Shetland; extending the small fields allowance; and putting in place new allowances for shallow-water gas fields."

The result of this has seen the level of investment in new oil and gas fields increase significantly in recent years, the Energy Secretary pointed out.

"The level of investment in new oil and gas projects sanctioned in 2011 was over 10 times the amount of 2009. 18 projects with a total value of $20.5 billion (GBP 13 billion) were approved. In 2012, 29 projects [were] approved with capital expenditure of over $17.3 billion (GBP 11 billion). In 2013, we are already expecting around 28 new fields to get approval."

Also at the meeting was Oil & Gas UK Chief Executive Malcolm Webb, who commented in his own speech: "We welcome the Coalition government’s new long-term approach to the UK oil and gas industry which is already reaping rewards for the British economy... With improvements to the tax regime as a result of better engagement with the Treasury, no less than 30 new offshore oil and gas developments were approved in the last twelve months.

"Furthermore, 167 new licences to explore for petroleum in UK offshore waters were awarded in the latest licensing round. This upturn is set to continue and presents excellent business opportunities right across our world-class supply chain to the benefit of the UK’s energy security, balance of trade and tax revenues. Most importantly at this time however, it has, as predicted, resulted in thousands of new and well paid jobs."

Statoil said in December that its recent decision to go ahead with its $7 billion-plus Mariner heavy oil field in the UK North Sea was positively affected by the expansion of the UK's Ring Fence Expenditure Supplement – a measure taken by the UK government to support investment in marginal fields.

A former engineer, Jon is an award-winning editor who has covered the technology, engineering and energy sectors since the mid-1990s. Email Jon at jmainwaring@rigzone.com.

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E&Y: 2012 'Record Year' for O&G Deals

With an average of more than four transactions announced every day in 2012, the oil and gas sector has remained one of the most active global sectors for mergers and acquisitions. According to Ernst & Young's Global oil and gas transactions review, oil and gas transactions recorded a staggering US$402 billion in 2012, representing a 19 percent increase compared to 2011 (US$337 billion). Ninety-two transactions exceeded US$1billion in value compared to just 71 in 2011. This was despite a marginal decrease in oil and gas transaction volumes from 1,664 deals in 2011 to 1,616 in 2012.

Oil and gas transactions activity by segments

Upstream remained the most active segment with US$284 billion worth of transactions accounting for 71 percent of total deal values. North America continued to be the most dominant region for activity, accounting for approximately 52 percent of the upstream transactions volume. However, within North America, transaction volumes were supported by a rapidly growing Canadian deal market whilst the US market contracted.

Andy Brogan, Ernst & Young's Global Leader Oil & Gas Transaction Advisory Services, commented: "2012 saw a continuation of trends we have seen for the last few years supported by a relatively benign oil price environment. The increase in the number of larger deals was a function of more capital becoming available to the right class of buyer together with increased pressure from asset and company owners to crystallize returns."

Transactions values in the downstream segment were flat at US$42 billion, with volumes also fairly stagnant at 162 transactions (6 percent lower than 2011). The decline is particularly evident in the U.S. and South America, where transaction volumes have reduced by eight and seven transactions respectively.

"Companies remain cautious in mature markets due to the continuing downside risks for oil product demand, driven by the uncertain economic outlook and austerity measures. Storage facilities that deliver global connectivity and trading potential remain attractive to acquirers, with conversion of refining facilities also being considered," continued Brogan.

In contrast, transactions volumes in Asia have increased by nine transactions as demand for oil products continues to surge in the region.

The number of transactions in the midstream segment in 2012 decreased by 19 percent from 111 in 2011 to 90 in 2012. The reported deal value decreased significantly, from US$87.3 billion in 2011 to US$50.3 billion in 2012 due to the absence of a blockbuster deal such as Kinder Morgan's acquisition of the El Paso group. North America accounted for 78 percent of all midstream transactions, but this was a decline from the 83 percent dominance of the region in 2011. Midstream activity levels will likely continue to increase outside of North America as infrastructure ownership further disaggregates from upstream assets, driven by capital allocation and regulatory factors.

Oilfield services fastest-growing segment for a second year

The fastest-growing segment for transaction volumes was oilfield services, repeating last year's healthy growth. Total oilfield service volume of 212 deals was up almost 10 percent. The aggregate deal value in 2012 dropped by a third to US$26 billion, reflecting the absence of deals with scale comparable to the US$8.7 billion Ensco-Pride merger of 2011.

Brogan said: "Financial investors showed an increased appetite for oilfield services transactions, playing a role in three of the segment's top 10 deals. Access to new technologies, particularly around subsurface applications, which supports expansion into hard-to-access growth markets, fueled trade players activity.

Transactions activities by region

Africa's transaction volume increased from 93 in 2011 to 97 in 2012. Although there has only been a moderate increase in reported transaction volume with reported transaction values growing significantly with US$11.7 billion of deals in 2012, up from US$7.7 billion reported in 2012. Sinopec's US$2.5 billion acquisition of Total's 20 percent interest in Nigerian deepwater block OML 138, the largest oil and gas transaction in Africa during 2012, gave a significant boost to the average deal value. The expected outlook for 2013 is for greater deal flow and consistency with the 2012 regional trends.

Australia's transaction activity was again relatively subdued. The number of deals remained steady at 86 compared to 84 last year, with limited opportunities available for M&A activity. However, the deal value more than doubled from US$7.8 billion to US$16.2 billion. Consistent with 2011, most of the transactions (88 percent) were in the upstream sector. This trend is likely to continue into 2013.

Canada's oil and gas industry continues to be very active. The volume of transaction activity in 2012 was up 18 percent compared to 2011 (228 vs. 193) but was dramatically higher in terms of deal values, led predominantly by the upstream sector. Deal value increased by 241 percent year-on-year, from US$15.2 billion to US$51.9 billion, mainly as a result of the US$15.1 billion CNOOC and US$5.8 billion Petronas deals. In 2013, Foreign investors will likely be placing renewed emphasis on entering strategic alliances and joint ventures, with Canadian domestic partners retaining some form of control.

The CIS region showed significant activity and the landmark oil and gas transaction of the year. The deal value of transactions in 2012 tripled when compared to 2011 and reached US$77.3 billion, mostly as a result of the acquisition of TNK-BP by the Russian NOC, Rosneft. However, the number of deals was down slightly from 2011.

Europe's oil and gas sector delivered strong activity in 2012. Overall transaction volumes of 179 fell short of 2011's 189 deals, but their combined value of US$29.3 billion exceeded the 2011 level of US$24.1 billion. Upstream, where European activity centers on the North Sea, delivered the greatest share of deal volume. Upstream transaction volume of 139 was down slightly from the 146 deals in 2011. Overall deal value of US$11.7 billion in 2012 compares with US$10.6 billion in 2011.

Asian NOCs continued to invest in overseas acquisitions backed by robust cash reserves. Major transactions were largely driven by the Chinese NOCs that shifted focus slightly to acquiring stakes in upstream assets in more developed countries, particularly unconventional plays in North America.

India's dependence on energy imports continues to increase given the country's stagnant domestic production and heightened demand of oil and gas. Over the coming quarters, deal activity is likely to increase given the various initiatives to augment energy security in the country. India provides significant opportunities, especially in the upstream and LNG segments.

State-owned companies are likely to forge partnerships with foreign companies to carry out E&P activities, especially in deepwater blocks, and to increase production from maturing domestic fields. At the same time, outbound deals are likely to increase as Indian companies step up plans to acquire oil and gas assets abroad.

Middle East transactions in value terms remained concentrated in Kurdistan, with four of the five biggest deals concerning assets or operations on the oil-rich region of Iraq. Overall, there were 45 transactions in the MENA region, an increase of 14 percent over 2011. The size of transactions decreased with the average transaction size reducing from US$3.6billion to US$2.8 billion. Looking forward, we expect activity to continue based on current trends with political uncertainty in North Africa continuing to depress activity there.

The U.S.'s oil and gas transaction market experienced a softening in 2012 vs. modest deal activity in 2011, but still remained over 10 percent above activity during the most recent oil and gas transaction cycle lows experienced in late 2008 and 2009. Overall, deal values decreased 10 percent in 2012 vs. 2011, while volume decreased almost 15 percent over the same period. U.S. transactions still accounted for almost 40 percent of total global oil and gas transactions values and volumes during 2012, down from approximately 50 percent and 45 percent respectively, in 2011. The air of uncertainty looks set to remain for the coming year.

Outlook in 2013

Brogan concludes: "2013 appears to face many of the same geopolitical and economic uncertainties as 2012 and unfortunately these do not seem likely to be fully resolved soon. However, in the absence of material shocks, we currently expect the sector to continue to be resilient in M&A terms as the key strategic drivers remain the same and participants have become accustomed to making decisions in a highly uncertain environment.

"While capital availability is generally improving (especially debt), funding will remain a challenge for smaller companies for both debt and equity, and we continue to expect cash constraints coupled with cost escalation to be a driver for both asset and corporate opportunities. Those at the larger end of the scale with stronger balance sheets are likely to be the beneficiaries of this."

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