Saturday, March 30, 2013

OMV 'On Track' to Meet Production Goals

VIENNA - Austrian oil and gas company OMV AG is on track to meet its long term production goals, the company's chief executive officer said Thursday.

"We are [on] the way," Gerhard Roiss said at a press conference.

OMV aims to be producing 350,000 barrels of oil equivalent by 2016. In 2012, the company produced 303,000 barrels of oil equivalent.

OMV's board member responsible for exploration and production, Jaap Huijskes, said that he expects the company's production to continue to grow after 2016 and that he is confident that the company will meet its 2016 production goal.

The company is hoping to succeed in its goal to expand into sub-Sahara Africa this year, Mr. Huijskes added.

Mr. Huijskes also said that security remains a worry in Libya and Yemen, where OMV suffered production stops due to political unrest. Currently there are no expatriate workers in Libya, he said.

Mr. Huijskes and Mr. Roiss were speaking at OMV's 2012 earnings press conference.

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

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Swiber Performs First Floatover Operation in India

Swiber Holdings disclosed late Wednesday the successful completion of its first floatover operation with the B-193 Field Development project in India for the country's national oil company, Oil and Natural Gas Corporation. 

The extensive scope of work for this project involved floatover installation of a 13,000 metric tonnes process platform and an 8,000 metric tonnes living quarter platform, as well as installation of bridges and flares. Fabrication of the topsides, jackets and other structures was undertaken by a consortium partner at their yard in Malaysia.

With topside weights increasingly exceeding floating crane lifting capacities, floatover installation has emerged as a reliable and cost-effective alternative. Swiber utilized its derrick pipelay barge, Swiber PJW3000, along with two of its floatover barges, Holmen Atlantic and Holmen Pacific, supported by several other support vessels for this project, located at offshore Mumbai in India.

"The successful execution and completion of B-193, which marks the first time that any company has used floatover methods for offshore field development in India, is a testament to Swiber's excellent engineering capabilities and asset strength. It is noteworthy that for a project of this size and complexity, we have been able to use most of our in-house assets fully. We remain committed to delivering quality services that epitomises world-class excellence, safety, innovation and value for our global customers," Swiber's Executive Chairman Raymond Goh, said in a statement. 

"ONGC joins Swiber in celebrating the success of the first-of-its-kind floatover installation in offshore Indian waters for the B-193 Field Development Project. This is a noteworthy milestone for offshore exploration and development, as it is the first time that floatover installation methods have been used in India," ONGC's Chairman and Managing Director Shri Sudhir Vasudeva, noted in a statement. 

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Nymex Crude Falls to One-Month Low, Under $95/Bbl

U.S. crude futures dropped 2.3% Wednesday on a sharp bout of midmorning selling that also pulled down gasoline prices as some investors grow concerned that high prices at the pump could crimp demand.

Oil fell to the lowest level in over a month, dropping below $95 a barrel after trading volume surged in March and April futures just after 11:00 a.m. EST.

After trading below 2,000 contracts per minute through most of the session, nearly 10,000 lots of April crude-oil futures changed hands at 11:01 a.m. EST.

The move spooked many investors and traders who have grown concerned about rising bullish bets on oil and gasoline.

"The volume spike, and the front-month going off the board hit the market," said Tariq Zahir, managing member and oil trader at Tyche Capital Advisors.

Light, sweet crude for March delivery settled $94.46 a barrel on the New York Mercantile Exchange, down $2.20. The March futures contract expired at settlement Wednesday, and the more-actively traded April futures settled $1.88 lower at $95.22 a barrel.

Brent crude for April delivery was 1.9% lower at $115.30 a barrel.

Crude-oil futures have been stuck in a tight trading range between $95 and $98 a barrel for over a month. While investors have grown optimistic about the U.S. economic recovery, many are increasingly concerned that high gasoline prices could result in lower demand from drivers wary of high prices.

U.S. retail gasoline prices stood at $3.766 a gallon Wednesday, according to the AAA FuelGauge report, up from $3.305 a gallon a month ago.

After hitting a four-month high above $3.12 a gallon last week, gasoline futures have slumped. Front-month March reformulated gasoline blendstock, or RBOB, settled 6.17 cents, or 2%, lower at $3.0595 a gallon Wednesday.

Traders have piled into bullish bets on oil in recent months. Last week, the net-long position of hedge funds and other money managers stood at 209,565 contracts, according to the Commodity Futures Trading Commission, the highest level since March.

"There have been a lot of speculators in this market, so it could be time for it to correct," said Andy Lebow, a broker at Jefferies Bache.

March heating oil settled 2.43 cents lower at $3.1563 a gallon.

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

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Otto Sees Successive Full Year Loss amid Contract Cancellations

Otto Marine – an offshore marine group specializing in the building of offshore support vessels, ship chartering and offshore services operation – posted Friday a full year loss, ended Dec. 31, 2012, of $73.7 million, citing termination of three contracts and fewer number of vessels deployed by its geophysical segment as factors responsible for the company’s dismal results.

Throughout 2012, Otto was grappling with a drop of orders in its shipyard and lower utilization rate of its seismic vessel. The company was also plagued by rising administrative and selling expenses. 

Otto also suffered a net full year loss of $52.2 million in 2011. 

Otto noted that the rest of this year will remain difficult for the company.

"Global economic conditions as well as the general environment of the shipbuilding industry remain challenging. Additionally, the shipyard is under-utilized due to lower order intake," Otto said in its earnings statement Friday.

Otto also revealed Friday that its subsidiary, Reflect Geophysical, applied for an order Thursday with the Singapore High Court for it to be placed under judicial management as creditors seek money. Reflect is unsuccessful in obtaining the order for a short to medium term standstill of claims from its creditors, and the company is at present seeking legal advice for its next course of action. 

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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Novatek Saw 32% Increase in Reserves during 2012

Russian independent gas producer Novatek reported Thursday strong growth in its proved reserves. Independent petroleum engineers DeGolyer & MacNaughton estimated that Novatek's proved reserves increased by 32 percent last year to 12.4 million barrels of oil equivalent.

Novatek added 3.4 billion barrels of oil equivalent of proved reserves, inclusive of 2012 production, and recorded a more than eightfold (842 percent) reserve replacement rate, it said. Total proved reserves of natural gas increased to 62.1 trillion cubic feet.

The company said that the increase in its reserves was due to successful exploration at its fields, production drilling, the inclusion of the Salmanovskoye and Geofizicheskoye fields that it acquired in 2011 into the reserve appraisal and the acquisition of a 49-percent stake in Nortgas (the holder of the license for the North Urengoyskoye field).

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OMV 'On Track' to Meet Production Goals

VIENNA - Austrian oil and gas company OMV AG is on track to meet its long term production goals, the company's chief executive officer said Thursday.

"We are [on] the way," Gerhard Roiss said at a press conference.

OMV aims to be producing 350,000 barrels of oil equivalent by 2016. In 2012, the company produced 303,000 barrels of oil equivalent.

OMV's board member responsible for exploration and production, Jaap Huijskes, said that he expects the company's production to continue to grow after 2016 and that he is confident that the company will meet its 2016 production goal.

The company is hoping to succeed in its goal to expand into sub-Sahara Africa this year, Mr. Huijskes added.

Mr. Huijskes also said that security remains a worry in Libya and Yemen, where OMV suffered production stops due to political unrest. Currently there are no expatriate workers in Libya, he said.

Mr. Huijskes and Mr. Roiss were speaking at OMV's 2012 earnings press conference.

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

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PD&MS Bags Engineering Contract with BP

Oil and gas engineering consultancy PD&MS Energy announced Wednesday that it has won a major engineering services contract for platform-based drilling rigs with BP plc.

The three-year contract will see PD&MS deliver engineering, procurement and offshore construction services for upgrades on all BP platform-based drilling assets in the North Sea, said the Aberdeen-based company.

The scope of the contract includes blowout preventer/well control upgrades, five-yearly re-certifications and general drilling rig repair works.

PD&MS Managing Director Simon Rio commented in a statement:

"We are clearly delighted to be awarded this formal contract with BP. This signifies a milestone in the development of the company, and puts us at the top end of our niche market. With similar prestigious long-term contracts already in place with other leading industry giants, we are extremely proud of what we have achieved here at PD&MS."

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State Rep. Broxson Withdraws Blackwater River Park Oil, Gas Bill

State Rep. Broxson Withdraws Blackwater River Park Oil, Gas Bill

State Rep. Doug Broxson withdrew his bill that would have allowed drilling for oil and gas in the Blackwater River State Forest in Holt, Florida.

"We think the public needs to know much more about what would happen," Broxson told the News Journal Wednesday. "The timing is not perfect for pursuing this."

The bill, filed in January 2013, proposed to allow private companies to drill for oil and gas in the 190,000-acre park.

The bill would have allowed the governor's Board of Trustees of the Internal Improvement Trust Fund the ability to enter into a contract with oil development companies. The bill also stated that drilling and contracts would bring in royalties and other revenue for the state.

Broxson said he did not anticipate that opposition to the idea would be so fierce. Florida Fish and Wildlife Conservation Commission granted approval for exploration in the state park – as long as the area's "natural assets" were not disturbed, he said.

David Guest, the Florida managing attorney for the environmental group Earthjustice, said the idea of drilling in a state park that holds one of the nation's purest sand-bottom rivers was ludicrous.

"It's really a symbolic statement that says screw the environment," Guest said to Rigzone in an interview. "Operators can get to these resources that are held underneath the forest through directional drilling - there's really no need to do this at all."

Many opponents drew comparisons between the idea of drilling in the forest to the 2010 BP oil spill.

"Having that experience of Deepwater Horizon only two years ago, it defies logic," Guest said.

The comparison baffled Broxson.

"We certainly miscalculated that. There's no separation in their thinking of the two of what might happen on land – which is almost impossible – with what happened in the Gulf a mile deep," Broxson told News Journal.

Broxson is moving forward with the Feb. 25 town hall meeting he has set for the issue in Jay, Florida – a town in Santa Rosa County. Broxson wants to ensure that the community, estimated at 151,372 by in 2010 by the U.S. Census Bureau, is aware of the issue and answer any questions residents may have.

“I look forward to continuing this discussion on Monday and in the future as a means to safeguard our quality of life and achieve maximum economic benefit for every citizen in Northwest Florida,” he said.

The bill, which was under review in the state House's Energy & Utilities Subcommittee before being withdrew, is similar to a bill first introduced by state Rep. Clay Ford, R-Pensacola. That bill died before being passed. A similar bill in the state Senate, also granting the governor's office the same abilities in state lands across the state was never passed.

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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Israel Gives Go-Ahead to Drilling on Golan Heights

JERUSALEM - Israel said Thursday that it has awarded the first license to drill for oil in the disputed Golan Heights to a local subsidiary of U.S.-listed explorer Genie Energy Ltd.

Genie Israel Oil and Gas Ltd. has been granted exclusive rights to drill in an area of about 397 square kilometers, or about one-third of the Golan Heights total area, the Energy Ministry said.

In recent months, there have been several incidents of artillery fire from the civil war in Syria spilling into the Golan region, which has been an internationally patrolled demilitarized zone since the end of the 1973 Yom Kippur War. Israel first occupied Golan during the 1967 six-day war, and annexed it in 1981. The U.S. government has previously called on Israel to rescind the latter move, saying it has "no validity" and is "a stumbling block in the way of achieving a just, comprehensive, and lasting peace in the region."

A spokesman for Israeli Energy Minister Uzi Landau declined to comment on how the political situation in Syria, or what many consider the occupied nature of the Golan Heights, could affect the project. The U.S. State Department didn't immediately offer comment.

"I can tell you that the process [for granting the license] was all professional and was made by the oil and gas council in the office," the Israeli spokesman told Dow Jones Newswires.

Genie said in a statement that preliminary tests show that the newly-licensed area likely contains "significant quantities of conventional oil and gas in relatively tight formations, the development of which would entail significantly different technical approaches and project time lines than other projects."

Significant quantities of natural gas have been found in recent years off Israel's coast, including at the giant Leviathan field, potentially setting up Israel as an exporter of energy.

The news wasn't enough to lift the Tel Aviv Stock Exchange, which was trading negatively Thursday.

Newark, N.J.-based Genie is also working on developing two oil shale projects, one in California and one in Israel, near Jerusalem.

Former U.S. vice president Dick Cheney sits on the advisory board of Genie Oil and Gas, as does Rupert Murdoch, chairman and chief executive of News Corp., parent company of Dow Jones Newswires and The Wall Street Journal.

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

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