Wednesday, February 13, 2013

Victoria Finds More Customers for Cameroon Gas

West Africa-focused Victoria Oil & Gas (VOG) announced Wednesday that 15 customers are now taking gas from its Logbaba field in Cameroon. The firm said that since its last update in mid-December a further four customers have been commissioned and begun gas consumption, while another 10 contracted customers are awaiting conversion of their facilities to take gas.

VOG said that weighted average production is currently 2.8 million standard cubic feet per day for a standard operating week. The company, through its wholly-owned subsidiary Rodeo Development, holds a 95-percent interest in Logbaba and is the operator.

VOG added that it has identified more than 60 prospects for gas as well as on-site gas-fired power demand along the existing and planned route of its pipeline.

The firm also announced that Societe Generale has committed to a lending facility of $15 million, which VOG believes will satisfy a substantial part of its future funding requirements.

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New Evidence Highlights Threat to Caribbean Coral Reef Growth: Many Caribbean Coral Reefs Are Starting to Erode

ScienceDaily. Jan. 29, 2013 — Coral reefs build their structures by both producing and accumulating calcium carbonate, and this is essential for the maintenance and continued vertical growth capacity of reefs. An international research team has discovered that the amount of new carbonate being added by Caribbean coral reefs is now significantly below rates measured over recent geological timescales, and in some habitats is as much as 70% lower.

Coral reefs form some of the planet's most biologically diverse ecosystems, and provide valuable services to humans and wildlife. However, their ability to maintain their structures and continue to grow depends on the balance between the addition of new carbonate, which is mostly produced by corals themselves, set against the loss of carbonate through various erosional processes. Scientists have long known that reef ecosystems are in decline and that the amount of live coral on reefs is dwindling. But the paper, published on DATE TBC in Nature Communications, is the first evidence that these ecological changes are now also impacting on the growth potential of reefs themselves. Read more


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AusGroup Snags Extension Work with Apache Energy

Singapore-listed AusGroup disclosed late Wednesday that through its subsidiary AGC Industries, it has been awarded an extension of its existing contract with Apache Energy for ongoing works on Varanus Island and associated offshore facilities.

Valued around $16 million, scope of works involves mechanical services, sheet metal fabrication, scaffolding and rigging and instrumentation and electrical services.

AGC will also provide minor capital works services including the fabrication and installation of pipe and structural work, roofing and wall cladding, painting and protective coatings, piping and, electrical upgrades.

AGC's involvement on site will extend to shutdown works.

Commenting on AusGroup's expected performance moving into the rest of 2013, OSK Research's analyst Lee Yue Jer said: "We continue to expect a good order win momentum."

Located off the northwest coast of Western Australia's Pilbara region, the Varanus Island Processing Hub consists of oil terminal facilities, gas processing trains, low temperature separation and stabilization as well as gas compression, water treatment and reinjection.

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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Norway Considers Sharing Risk Intelligence with Businesses

OSLO - Norway will consider sharing national risk assessments with businesses operating in politically unstable regions after five Statoil ASA employees were killed in a terrorist attack in Algeria, the Minister of Trade and Industry said Thursday.

Trond Giske was meeting with business associations and unions to discuss security one day after the caskets of four deceased Statoil employees arrived in Norway, following the Jan. 16 terrorist attack and the kidnapping of hostages at the In Amenas gas plant in Algeria, operated by Statoil ASA, BP PLC and Algerian energy company Sonatrach.

"Of course, when such a dramatic incident occurs, it's a reminder of how important security is," said Mr. Giske. "Our international activity is growing, and this development will continue" he said, adding that "it's no alternative not to engage abroad."

The business associations wanted to combine the risk assessments of Norwegian government ministries and agencies, embassies and big companies, and to make them easily accessible to each other as well as to smaller companies.

"Unfortunately, sometimes it takes a serious incident to increase the focus on security," said Kristine Breitland, leader of NSR, a council set up by business associations in sectors like shipping, oil and gas and telecom to give security advice to companies.

Among the bigger Norwegian companies with global operations are telecom provider Telenor ASA, aluminum producer Norsk Hydro ASA and fertilizer producer Yara International ASA.

Even companies with solid emergency organizations had been reviewing their preparedness after the attack, Ms. Breitland said. But most Norwegian companies are small and medium-sized, and will need help from the government and big companies to gather intelligence, Ms. Breitland said.

"They need good tools and to know what risks they are facing," she said. "Statoil has been in front and said it will share what it finds in its investigation process [after the Algeria attack]. That's positive."

If Statoil couldn't guarantee the safety of its workers in any of its facilities abroad, Chief Executive Helge Lund said Wednesday, "we can't have employees in those areas."

Statoil has said it operates in politically, economically and socially unstable areas of the world, and has identified a range of potential threats such as wars, guerilla activity, nationalization of assets, political unrest, strikes and insurrections.

"The span of topics is so huge," said Petter Haas Brubakk, executive director of the Confederation of Norwegian Enterprise, who joined the calls for the government to improve information sharing. "Some countries you avoid because they are too dangerous. It may be health-related risk, traffic risk, abduction, crime, corruption--you have to analyze each country to be prepared."

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

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Argentina Appeals Court Upholds Embargo on Chevron Assets

BUENOS AIRES - An Argentine appeals court has upheld an embargo on the assets of Chevron Corp.'s local subsidiary, a legal setback for the company, which had said the embargo compromised its operations in the country.

A lower court judge issued the embargo last year as part of a decades-old legal dispute involving claims that Chevron is responsible for environmental contamination in Ecuador.

"We are very pleased with the resolution of the Court of Appeals, which is well founded," said Enrique Bruchou, lead attorney for the plaintiffs in Argentina.

An Ecuadorian court had previously awarded $19 billion to indigenous people who said they had been harmed by pollution. Chevron has denied the allegations and said the ruling is based on fraudulent evidence, which the plaintiffs deny.

"Chevron respectfully disagrees with the court's decision," the company said Wednesday in a statement from California. "Chevron Argentina intends to pursue all available legal remedies to reverse the interim measure."

The Argentine embargo applies to 100% of Chevron's capital in Argentina, 100% of dividends, all of Chevron's stake in pipeline operator Oleoductos del Valle SA, 40% of Chevron's oil sales to Argentine refineries and 40% of the money Chevron has or may eventually have in Argentine banks.

The court order says the embargo will remain in place until Chevron has paid off the Ecuador award in full.

Last year, Mr. Bruchou estimated that Chevron's assets in Argentina amounted to about $2 billion.

The proceeds from Chevron Argentina's oil production, valued at $600 million in 2010, are also subject to the embargo until the legal claim is settled, Mr. Bruchou said at the time.

Chevron doesn't have significant assets in Ecuador, so the plaintiffs have been trying to seize the company's assets in other countries to enforce settlement on the judgment.

The Argentine court's embargo ruling cited a treaty between Argentina and Ecuador that allows judges in one country to enforce court orders from the other.

In a full-page ad placed in Argentina's leading newspapers last November, Chevron Argentina said the claims against it have no legal foundation and that the embargo has broader consequences for the entire country.

"The judicial embargo compromises Chevron's capacity to operate and reinvest given that the order affects more than 90% of its income through crude sales," the company said.

The lawsuit in Argentina is the latest development in an almost 20-year legal dispute over claims that Texaco Inc., which Chevron bought in 2001, contaminated parts of Ecuador's Amazon region when it was operating in the country.

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

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McMoRan Preps Davy Jones Well for Fracking Ops

McMoRan Exploration Co. updated the status of the Davy Jones No. 1 well on South Marsh Island Block 230. As previously reported, McMoRan is developing plans at the Davy Jones No. 1 well to pump a hydraulic fracture treatment including proppant to facilitate hydrocarbon movement into the wellbore. Future plans will incorporate data gained to date at Davy Jones as well as potential core and log data from the in progress well at Lineham Creek, located onshore approximately 50 miles northwest of Davy Jones. The rig is being moved off location for several months while a large scale hydraulic fracture treatment is designed to penetrate the Wilcox reservoirs.

As previously reported, the Davy Jones No. 1 well logged 200 net feet of pay in multiple Wilcox sands, which were all full to base. The Davy Jones offset appraisal well (Davy Jones No. 2), which is located 2.5 miles southwest of Davy Jones No. 1, confirmed 120 net feet of pay in multiple Wilcox sands, indicating continuity across the major structural features of the Davy Jones prospect, and also encountered 192 net feet of potential hydrocarbons in the Tuscaloosa and Lower Cretaceous carbonate sections.

McMoRan is the operator and holds a 63.4 percent working interest and a 50.2 percent net revenue interest in Davy Jones. Other working interest owners in Davy Jones include: Energy XXI (15.8%), JX Nippon Oil Exploration (Gulf) Limited (12%) and Moncrief Offshore LLC (8.8%).

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BP Turns On Taps Offshore Angola

BP Turns On Taps Offshore Angola

BP reported Thursday that production has started from the PSVM development area in Block 31 offshore Angola.

BP Turns On Taps Offshore Angola

Initial production will come from three production wells in the Plutao field and this is expected to ramp up to around 70,000 barrels of oil per day (bopd). PSVM is expected to build towards plateau rates of 150,000 bopd over the coming year, with the additional production coming from the Saturno and Venus fields in 2013 and Marte in 2014.

The International Monetary Fund also reported Thursday that it expects Angola's oil production to grow more than four percent in 2013 to 1.8 million bopd. Angola, Africa's second-largest oil producer after Nigeria, produced 1.73 million bopd last year, according to OPEC.

Commenting on the PSVM start up Thursday, BP Group Chief Executive Bob Dudley said:

"PSVM is one of the largest subsea developments in the world and was one of BP's key project start-ups for 2012 as we grow higher-margin production. Over the coming decade, we expect Angola, where we have extensive interests from exploration through to production, to be one of the main hubs delivering growth for BP."

BP Exploration Angola is the operator of the development with a 26.67-percent interest. Other holders in Block 31 include: Sonangol E.P. (25 percent); Songangol P&P (20 percent), Statoil Angola (13.33 percent), Marathon International Petroleum Angola (10 percent) and SSI 31 (5 percent).

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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Last Missing Statoil Employee Confirmed Dead

Statoil announced Thursday lunchtime (UK time) that Victor Sneberg, the last of its missing employees after the terror attack on the In Amenas gas facility in southeastern Algeria January 16, has been confirmed as dead.

The news comes a day after the bodies of four other Statoil employees who were victims of the In Amenas attack were flown back to Norway.

On Thursday, Statoil Chief Executive Helge Lund said in a statement:

"It is with deep sorrow that we have received the news today that Victor Sneberg, our country manager in Algeria, is among those who lost their lives in the terror attack at In Amenas.

"Five friends and colleagues who were going about their work for Statoil will never return to their loved ones. They represented the very best of our company. Our thoughts and deepest compassion go first and foremost to the families, friends and colleagues who have lost those dear to them. Everyone in Statoil shares their grief. In the time ahead those most affected will need our support."

Statoil added that a ceremony to mourn its dead employees will be held Feb. 4 in HÃ¥kon's Hall in Bergen, Norway.

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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Trap Oil Agrees Debt Deal to Fund North Sea Assets

North Sea-focused Trap Oil Group announced Wednesday that it has agreed a three-year debt deal to borrow up to $20 million with GE Energy Financial Services. The deal is designed to help the company fund production and development spending in relation to its Athena and Crazy Horse assets.

Trap also said that, in connected with the GE deal, it has also entered into oil price hedging arrangements for the duration of the facility with Britannic Trading – a subsidiary of BP International.

Trap CEO Mark Groves Gidney commented in a statement:

"I am delighted that we have secured this debt finance from an affiliate of GE Energy Financial Services supported by hedging arrangements with the BP group. The facility will assist with the further appraisal and development of the promising assets within our existing portfolio and the exploitation of good exploration opportunities alongside our partners where we earn carried interests. We look forward to building on our new relationships with GE and BP."

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Clough Aquires Leading Commissioning Contractor

Engineering and project services company Clough disclosed Thursday that it has acquired e2o, a leading provider of specialized commissioning, completions and hazardous area inspection services to the energy and resources sectors.

Clough will acquire e2o for approximately $15 million with $9 million in cash being paid on completion of the deal and an additional $5 million in cash and shares being paid over a three-year period, subject to meeting certain performance criteria.

The acquisition is expected to be Earnings Per Share (EPS) accretive in the first full year of ownership. For the financial year 2014, e2o should deliver in excess of $5 million EBIT from forecast revenue of approximately $42 million.

e2o is well positioned in the LNG sector, and is currently working on commissioning scopes for major LNG projects, including Chevron's Wheatstone LNG, Origin's Australia Pacific LNG, and Santos' Gladstone LNG projects. e2o will continue to operate under its existing strong management team and brand to provide an integrated and independent commissioning service to clients. This will increase Clough's project service capabilities and enhance the company's range of services to operators in the energy and resources industry.

The Australian commissioning market has an excellent outlook with significant growth predicted in this sector in the next four years, as major LNG projects move from construction to operations.

Clough CEO and Managing Director Kevin Gallagher said: "The acquisition of e2o aligns with our growth strategy, supporting our plan to strengthen expertise in our commissioning and asset support business and to become the pre-eminent commissioning contractor in Australia.

"e2o is one of Australia’s leading commissioning contractors that has achieved and continues to achieve rapid growth. The company provides access to a database of more than 2,000 highly qualified personnel, providing the ability to quickly mobilize professional teams to suit project requirements.

"Through our acquisition of e2o Clough aims to provide clients with a seamless transition from construction to operations resulting in a flawless start-up of facilities and increased productivity."

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