Wednesday, May 1, 2013

Technip Buys Ingenium

French oilfield services firm Technip announced Wednesday that it has bought Norwegian offshore engineering company Ingenium.

Ingenium designs and develops mechanical and electro-hydraulic tools and equipment for the offshore oil and gas sector, as well as providing engineering services for marine operations, such as the installation of pipes and cables.

With more than 20 engineers employed within its subsea business, Ingenium last year completed the umbilical lay spread on the North Sea Giant for the Goliat project.

Technip Norway Managing Director Odd Strømsnes commented in a company statement:

"Ingenium brings a team with solid experience and engineering capabilities that reinforces Technip's presence in one of the group's key markets. Technip has a long history of working on projects with Ingenium, we are thrilled that they will be joining the group and complementing our competencies to accompany us in taking it further."

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Brazil's OGX Declares Three Offshore Oil Fields Commercial

Brazil's OGX Declares Three Offshore Oil Fields Commercial

RIO DE JANEIRO - Brazilian independent oil producer OGX Petroleo e Gas Participacoes SA, part of billionaire businessman Eike Batista's industrial empire, said late Wednesday that it had declared three offshore oil fields commercially viable for development.

The commercial declarations mean that OGX will move forward with development of the fields, which could add a much-needed boost to the company's crude-oil production after disappointing results at the Tubarao Azul field. Investors have punished OGX's shares recently amid concerns that the company will be unable to generate sufficient returns.

OGX said two fields in the previously named Pipeline accumulation will be renamed Tubarao Tigre and Tubarao Gato, while the Fuji-Illimani discover will be renamed Tubarao Areia. Evaluation plans were also submitted to local regulators to further explore the Tulum, Viedma and Vesuvio discoveries in the Campos Basin and the Curitiba Belem and Natal discoveries in the Santos Basin.

The submissions were required after exploration periods for OGX's concessions expired on Tuesday.

While commercial declarations are generally seen as positive developments for oil companies in Brazil, OGX's decision to report "in place" oil volumes for the three fields of between 521 million barrels of oil equivalent, or BOE, and 1.34 billion BOE is raising questions.

In-place oil volumes aren't the same as recoverable volumes, or the amount of oil that a company can be expected to recover from a reservoir, noted Credit Suisse in a research report. "We ask ourselves why announce 'in situ' ['in place'] when industry practice is to announce recoverable volumes, something which OGX itself did for its other two fields," Credit Suisse said.

OGX didn't provide the market with the "certainty" about the company that it needs, Credit Suisse said. A month-on-month decline in crude oil output in February caused market analysts to issue a series of downgrades on the company's shares this week, many of them equivalent to a sell rating with price targets at about $1.

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

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Eni Confirms 20% Sale of Mozambique Area 4 for $4.2B

Eni Confirms 20% Sale of Mozambique Area 4 for $4.2B

Italian major Eni confirmed Thursday that it has sold a 20-percent share of its Area 4 license block in Mozambique to China National Petroleum Corporation (CNPC), as rumored in a news report last Friday. The company also announced that it has reached an agreement with CNPC for cooperation on the development of the Rongchang shale gas block in the Sichuan Basin, onshore China.

Eni said that Petrochina CEO Zhou Jiping and Eni CEO Paulo Scaroni met in Beijing to sign the Area 4 deal. (Petrochina is controlled by CNPC.)

The agreed price for CNPC's stake in Area 4 was $4.2 billion. Eni will retain a 50-percent interest in the license.

Eni pointed out that CNPC's entrance into the license is "strategically important for the project thanks to the worldwide relevance of the new partner in the upstream and downstream sectors".

ENI and CNPC also signed a joint study agreement to work together on the development of the Rongchang shale gas block, which covers around 760 square miles in the Sichuan Basin. The area, which is closely located to the important consumer markets in China, has already been de-risked by research activities and production tests carried out in nearby blocks, said Eni.

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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Novatek Wins Auction for East-Tazovskoye License

OAO Novatek announced Thursday that its subsidiary OOO Novatek-Tarkosaleneftegas won an auction for exploration and production license for the East-Tazovskoye field. Payment for the license was set at RR 3.19 billion.

The East-Tazovskoye field is located in the Yamal-Nenets Autonomous Region in close proximity to the North-Russkoye field, the license for which is also held by OOO Novatek- Tarkosaleneftegas.

As of Jan. 1, 2012, recoverable reserves of the field under Russian reserve classification "C1 + C2" amounted to 65.3 billion cubic meters of natural gas and 13.4 million tons of liquid hydrocarbons.

"The acquisition of a new license is fully consistent with our strategy and allows us to expand the resource base in our core region. We will benefit from significant synergies due to the proximity of the East-Tazovskoye field to our existing asset base," Chairman of Novatek's Management Board Leonid Mikhelson noted.

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Subsea 7 Says Tendering Levels Remain Strong

International oilfield services firm Subsea 7 said Thursday that levels of tendering remain strong across its markets and that it remains positive about medium and long-term market prospects.

Reporting its fourth quarter results for 2012, Subsea 7 said that despite the strong tender levels delays in project awards and supply chain bottlenecks will temper the firm's rate of progress in 2013. However, it expects both revenue and profit at the EBITDA level to show some progress during the year.

For 2012 Subsea 7 reported a 15-percent increase in its revenue to $6.3 billion, compared with 2011. Adjusted EBITDA for the year came in 13.6-percent greater at $1.1 billion. For 4Q 2012, the firm reported 13.7-percent increase in revenue to $1.6 billion, with EBITDA improving to $270 million (4Q 2011: $227 million).

Subsea 7 warned that its West Africa business will see a period of lower offshore activity in 2013 as operations on SURF (subsea umbilicals, risers and flowlines) contracts awarded in the second half of 2012 and early 2013 are projected to start in 2014.

However, Subsea 7 said that it sees increased tendering in the Gulf of Mexico and strong tendering in both the North Sea and the Norwegian Sea. The firm added that in Brazul demand from Petrobras for flexible pipelay vessels remains strong, while it also recently won its first contract in Mexico – which will require the deployment of its Seven Borealis vessel.

Subsea 7 CEO Jean Cahuzac commented in a statement:

"2012 was another year of significant achievement for Subsea 7. We have delivered strong financial results in line with our expectations. We have built a record backlog, exited non-core businesses and successfully completed the integration process following the Combination in January 2011. Our fleet enhancement program is also on track with the start-up of Seven Borealis in Angola, the ongoing construction of Seven Waves, and the recent order of a new-build diving support vessel for the North Sea.

"Tendering activity increased through the year, in particular in the North Sea, Africa and Brazil, reflecting our clients' ambitious investment plans. We remained disciplined in our bidding approach with a focus on project risk management and profitability, and I am pleased with the quality of our new awards and current level of order in-take."

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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Federal Court Upholds Greenpeace Injunction for Shell Operations

The U.S. Court of Appeals has upheld a lower court ruling that environmental group Greenpeace must stay away from Shell's offshore Alaska drilling operations.

The court upheld the ruling by the U.S. District Court for Alaska, concluding that Shell had shown "a likelihood of success on the merits of its claim that Greenpeace USA would commit tortuous or illegal acts against Shell's Arctic drilling operations in the absence of an injunction" and that the resulting harm would be irreparable.

Prior to the start of its Arctic Alaska drilling campaign, Shell initially filed in U.S. District Court in Alaska for a temporary restraining order, and then a preliminary injunction, to prevent Greenpeace USA from coming within a specified distance of vessels involved in Shell's Arctic Outer Continental Shelf (OCS) exploration and from committing various "unlawful and tortious acts" against those vessels.

Shell argued that Greenpeace activists used illegal direct action to interfere with legal oil drilling activities on a number of occasions, according to the court filing. These acts include boarding vessels to try and halt drilling activities. In May 2010, Greenpeace USA activists boarded the Harvey Explorer, a vessel Shell had contracted to use for Arctic OCS operations. The vessel was in the Gulf of Mexico at the time when activists boarded the vessel, painting slogans and unfurling banners.

The injunction expired Oct. 31, 2012, the last day of the 2012 Arctic Ocean open water season.

Greenpeace USA, which has undertaken a public campaign to halt Shell's Arctic drilling plans, challenged the injunction, arguing that the dispute did not present a justiciable case or controversy, that the district court lacked subject matter jurisdiction to issue its order, that Shell had sued the wrong Greenpeace entity, and that the court erred in its application of Winter v. Natural Resources Defense Council.

Greenpeace USA and the websites of virtually all Greenpeace organizations have featured a campaign to stop Shell, according to the court filing.

Shell also presented evidence to the lower court of Greenpeace activists illegally boarding and holding protests on Shell-operated vessels. In February 2012, activists boarded the Noble Discoverer (mid-water drillship), which had stopped offshore New Zealand on its way to the Arctic. The Noble Discoverer is one of two rigs that Shell has used for drilling offshore Alaska.

In March of that year, Greenpeace activists also boarded Shell's Nordica and Fennica ice break support vessels, which were in port in Finland at the time. Greenpeace members in May 2012 twice boarded and occupied the Nordica as it moved through Swedish and Danish waters. Activists chained themselves to the vessel, dropped weights and other objects in the water to block the vessel, and created a human blockade using divers.
Greenpeace activists have also sought to halt Arctic drilling operations in Greenland. In 2010 and 2011, activists boarded an oil rig offshore Greenland, trying to stop Cairn Energy from conducting OCS oil and gas exploration activities.

The court noted that Greenpeace USA does not dispute evidence that its own activists carried out the attack on Shell's Harvey Explorer.

"And, although the record does not make clear which Greenpeace entity was directly responsible for multiple attacks on Cairn Energy vessels in the Arctic Ocean."

The court noted that Greenpeace USA's executive director essentially took credit for the Cairn attacks, describing the perpetrators as "our activists" and boasting that Cairn didn't find oil in 2010 as a direct result of Greenpeace's direct action.

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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Technip Buys Ingenium

French oilfield services firm Technip announced Wednesday that it has bought Norwegian offshore engineering company Ingenium.

Ingenium designs and develops mechanical and electro-hydraulic tools and equipment for the offshore oil and gas sector, as well as providing engineering services for marine operations, such as the installation of pipes and cables.

With more than 20 engineers employed within its subsea business, Ingenium last year completed the umbilical lay spread on the North Sea Giant for the Goliat project.

Technip Norway Managing Director Odd Strømsnes commented in a company statement:

"Ingenium brings a team with solid experience and engineering capabilities that reinforces Technip's presence in one of the group's key markets. Technip has a long history of working on projects with Ingenium, we are thrilled that they will be joining the group and complementing our competencies to accompany us in taking it further."

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Eni JV Turns on Taps at Orinoco Junin Field

PetroJunin, joint venture formed by PDVSA (60%) and Eni (40%), has started production from the Junin-5 giant heavy oil field, located in the Faja del Orinoco, the area with the largest untapped hydrocarbon reserves in the world. The block is located around 342 miles (550 kilometers) south east of Caracas and covers an area of approximately 164 square miles (425 square kilometers).

The Junín-5 block, currently under development, holds 35 billion barrels of oil equivalent (boe) of certified oil in place and is jointly operated by two joint ventures (Empresa Mixta) formed by PDVSA (60%) and Eni (40%): PetroJunín for the development and production and PetroBicentenario for the construction and operation of a refinery in the Jose Industrial Complex, with a 350,000 barrels per day capacity.

Today, with the first well on stream, the production start-up was achieved nine months ahead of the approved development plan for Phase 1 (early production phase). PDVSA and Eni plan to increase production to approximately 15,000 barrels a day by the year end and subsequently to 75,000 barrels a day by early 2015, through the drilling of approximately 180 wells.

The development of Phase 2 (full field) will bring production to a level of 240,000 barrels a day by the end of 2018. Throughout the expected 40 years of the field life, the drilling of nearly 1500 wells is planned.

The diluted crude oil of Junín-5 will be transported to PetroBicentenario's Refinery in Jose where it will be processed and converted into oil products (diesel, naphtha and LPG) to be exported.

In Venezuela, Eni is also co-operator in Cardón IV, the operating company which manages the super-giant Perla gas field. The current estimated Perla gas in place is approximately 17 Trillion cubic feet (Tcf), or 3.1 billion barrels of oil equivalent. Perla shareholders, following the entry of PDVSA in the project, will be PDVSA (35%), Eni (32.5%) and Repsol (32.5%).

Eni also holds a participating interest in Petrosucre, the operating company of the Corocoro offshore field (PDVSA 74%, Eni 26%), with a net production of approximately 10,000 barrels of oil per day.

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SandRidge Approves TPG-Axon Board Candidates

SandRidge Energy Inc. – which has faced criticism over its financial decisions and calls for CEO Tom Ward to resign and the board to be replaced – has approved the direct candidates proposed by investment firm TPG-Axon, the company reported Tuesday in a U.S. Securities and Exchange Commission filing.

The decision was made in response to Delaware Chancery Court Judge Leo E. Strine Jr.'s ruling that SandRidge's board of directors had violated its fiduciary duty to shareholders by refusing to approve TPG-Axon's slate of director nominees, and barred SandRidge from soliciting consent revocations until TPG-Axon's director nominees were approved.

"This is just the latest in a pattern of this board of putting their own interests ahead of the shareholders – this board simply has no shame," TGP-Axon Founder Dinakar Singh commented in a statement. "This is the second time during out solicitation that this Board has chosen to waste the Company's resources in a useless court battle in a desperate attempt to entrench themselves."

In early February, SandRidge's board decided it would hold off on approving TPG-Axon's director candidates, saying it believed that any change of control event under the Indentures, or legal document issued to lenders describing key terms of a bond offering, during current market conditions was not likely to have material consequences for SandRidge and its stockholders.

When SandRidge's board of directors initially reviewed the potential consequences of TPG-Axon's proposals to replace SandRidge's board of directors, certain potentially significant consequences were identified that could occur under SandRidge's indentures governing its senior notes, the company said in the filing. The company's board found that a change of control would require SandRidge to offer to repurchase its outstanding senior notes under the Indentures, in the absence of advance approval by the incumbent directors of the director candidates proposed by TPG-Axon group.

"The Board continues to oppose the election of the director candidates proposed by TPG-Axon group, believes their election is not in the best interest of the company's stockholders, and recommends that stockholders support the company's existing experienced board of directors," SandRidge said in the filing.

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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Eni JV Turns on Taps at Orinoco Junin Field

PetroJunin, joint venture formed by PDVSA (60%) and Eni (40%), has started production from the Junin-5 giant heavy oil field, located in the Faja del Orinoco, the area with the largest untapped hydrocarbon reserves in the world. The block is located around 342 miles (550 kilometers) south east of Caracas and covers an area of approximately 164 square miles (425 square kilometers).

The Junín-5 block, currently under development, holds 35 billion barrels of oil equivalent (boe) of certified oil in place and is jointly operated by two joint ventures (Empresa Mixta) formed by PDVSA (60%) and Eni (40%): PetroJunín for the development and production and PetroBicentenario for the construction and operation of a refinery in the Jose Industrial Complex, with a 350,000 barrels per day capacity.

Today, with the first well on stream, the production start-up was achieved nine months ahead of the approved development plan for Phase 1 (early production phase). PDVSA and Eni plan to increase production to approximately 15,000 barrels a day by the year end and subsequently to 75,000 barrels a day by early 2015, through the drilling of approximately 180 wells.

The development of Phase 2 (full field) will bring production to a level of 240,000 barrels a day by the end of 2018. Throughout the expected 40 years of the field life, the drilling of nearly 1500 wells is planned.

The diluted crude oil of Junín-5 will be transported to PetroBicentenario's Refinery in Jose where it will be processed and converted into oil products (diesel, naphtha and LPG) to be exported.

In Venezuela, Eni is also co-operator in Cardón IV, the operating company which manages the super-giant Perla gas field. The current estimated Perla gas in place is approximately 17 Trillion cubic feet (Tcf), or 3.1 billion barrels of oil equivalent. Perla shareholders, following the entry of PDVSA in the project, will be PDVSA (35%), Eni (32.5%) and Repsol (32.5%).

Eni also holds a participating interest in Petrosucre, the operating company of the Corocoro offshore field (PDVSA 74%, Eni 26%), with a net production of approximately 10,000 barrels of oil per day.

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