Europa Achieves Farm-In Deal for Irish Licenses

UK and Ireland-focused Europa Oil & Gas reported Thursday that it has agreed a farm-in deal with a subsidiary of independent oil firm Kosmos Energy for its two licensing options in the South Porcupine Basin offshore Ireland.

The deal will see Kosmos acquire an 85-percent interest, and operatorship, of both the LO 11/7 and LO 11/8 licensing options in return for which Kosmos will fully fund the costs of a 3D seismic program on each license and pay 85 percent of the costs incurred by Europa to date.

In addition, if the companies agree to begin an exploration drilling phase on one or both of the blocks, Kosmos will also incur 100-percent of the costs of the first exploration well on each block. The first exploration wells on LO 11/7 and LO 11/8 have investment caps of $90 million and $110 million respectively. Europa said that costs in excess of this investment cap would see Kosmos fund just 85 percent of the additional amount, with Europa funding 15 percent.

Europa CEO Hugh Mackay commented in a statement:

"We are very pleased to have secured a respected leading independent such as Kosmos as a farm-in partner and operator for our Irish Licences. Kosmos are a highly experienced operator in frontier basins and pioneered the Cretaceous stratigraphic play that has resulted in significant exploration success in the Atlantic margin basins. We look forward to working with Kosmos and their involvement is a highly significant first step towards realising the potential value of our exciting prospects in a new hydrocarbon play located in an essentially undrilled basin offshore Ireland."

Mackay also noted that, with the Eirik Raude rig now in Irish waters and ready to drill Exxon's Dunquin well, "an exciting new chapter in the exploration of Ireland is starting and we are delighted to be part of it".

Oil sector analysts responded positively to the Europa/Kosmos deal. London-based finnCap commented that it was "a major milestone" for Europa. "Importantly, the deal not only provides funding, it also brings in a technically credible and experienced operator that helps validate the plays identified," a finnCap research noted stated Thursday.

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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Shale Boom Could Happen in Russia, China but Not Europe

LAUSANNE, Switzerland - Russia and China will lead the way in the production of resources from shale after the U.S., according to executives, but Europe will likely lag behind.

Torbjorn Tornqvist, chief executive of trading house Gunvor, said Wednesday it was clear that shale production on a scale similar to that in the U.S. is possible in several of the world's biggest current energy producers and consumers -- but that Europe is unlikely to be transformed by it.

Surging production of oil and gas from unconventional sources has seen the U.S. outstrip predictions to become one of the world's most energy-secure regions.

"Is it possible to adapt that elsewhere? And the answer is yes, but not everywhere," Mr. Tornqvist said. "I think in Russia, you will see the first major change. You have the political climate there to drive through large-scale shale operations both in gas and oil."

He also said that China, Australia and South America were promising as a shale-exploiting countries.

Mr. Tornqvist sounded a much less positive note for Europe, which has so far been divided on its approach to the relatively new technology of hydraulic fracturing, the method of extracting shale resources known as fracking. France has voiced strong opposition to the idea, while the U.K. government has insisted that shale gas production "will happen."

Mr. Tornqvist said: "Europe? You all know the problems there: political problems, no-one really wants to see rigs on the landscape -- and problems and fears about groundwater and so forth will prevent Europe from exploiting its resources, which aren't that big anyway," Mr. Tornqvist said.

The Gunvor CEO was addressing the Financial Times Global Commodities Summit in Lausanne, Switzerland.

Bob H. Takai, general manager in energy for Sumitomo Corp., speaking in a panel discussion that followed Tornqvist's talk, said that China could rival Russia as the biggest shale producer.

"As far as the reserve is concerned I think China has got the largest potential reserves of shale oil and shale gas, even bigger than the U.S.," Mr. Takai said. He added that before those reserves could be accessed China would struggle with problems ranging from infrastructure to the availability of water.

The discussion led Tornqvist to reiterate: "It will take a long time. And if I was to put the first nation to do that in the scale, I would guess today Russia.

"Because they, through their political system, they have decided to do it," he said. "They have the infrastructure, they have the tradition of drilling gas, it isn't so densely populated, they have the water, they have the ingredients.

"And they're already doing it," he said. "I know from my talks with Gazprom … they have advanced plans to get into shale gas and shale oil."

Copyright (c) 2013 Dow Jones & Company, Inc.

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Noble, PXP Shake Hands on UDW Drillships for Gulf of Mexico

Noble Corp. and Plains Exploration & Production Company (PXP) have entered into two three-year term drilling contracts for the Noble Sam Croft (UDW drillship) and the Noble Tom Madden (UDW drillship), two new ultra-deepwater drillships under construction at the Hyundai Heavy Industries Co. Ltd. shipyard in Ulsan, South Korea.

In the second quarter of 2014, the Noble Sam Croft is expected for delivery followed by the Noble Tom Madden, which is expected for delivery in the second half of 2014.

"With the addition of these units to our U.S. Gulf of Mexico fleet, Noble will have one of the most modern and capable fleets in the region, a fact that demonstrates the fundamental change going on across the company," noted David W. Williams, chairman, president and Chief Executive Officer, in a released statement. "At the same time, these contracts provide us with significant additional backlog, while expanding and diversifying our customer base as we grow our relationship with an important new customer."

Noble expects for the contracts to commence following mobilization of the drillships to the Gulf of Mexico and customer acceptance. Revenues generated over the three-year terms are expected to total about $693 million per rig, including mobilization fees, stated Noble in a press release.

"In the U.S. Gulf of Mexico, which accounted for 31 percent of contract drilling services revenues in the first quarter, four of the region's seven active rigs experienced improved operating performance," stated Williams, in the company's first quarter 2013 earnings report. "Contract opportunities remain strong, especially for rigs addressing customer needs in deepwater."

In September 2012, Plains Exploration acquired more than $6 billion of oil and gas properties in the deepwater Gulf of Mexico.

"Since its acquisition of strategic deepwater oil and gas properties in the Gulf of Mexico, analysts and investors are bullish that Plains can significantly increase its revenues," stated Joe Thomas, an analyst at Wall Street Source, in a press release. "The company's fourth quarter and full-year 2012 financial and operating results highlighted the success of its one-month benefit from its Gulf of Mexico assets."

The company plans to grow its offshore oil and gas production to 275,000 barrels of oil equivalent per day by 2020.

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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GE O&G to Host Careers Event this Weekend

GE Oil & Gas' Subsea Systems will host a careers showcase event at its Nailsea subsea controls business in Bristol, UK, this Saturday. The event comes as the company is looking to fill 100 new positions and is expanding its UK subsea production facilities to meet strong demand for offshore oil and gas equipment.

The showcase event is part of a major recruitment drive that GE is currently embarked on. In late January Rod Christie, CEO of GE Oil & Gas' Subsea Systems business, told Rigzone that he plans to recruit more than 2,000 people within the next three years.

GE said Saturday's event is aimed at filling 60 new positions at its Nailsea Centre of Excellence for Subsea Controls, while the firm has 40 additional jobs at its new Bristol subsea equipment hub in the nearby Aztec West business park.

Disciplines that GE is recruiting for include engineering, electrical, software, systems, project management and planning, along with supporting roles in the company's quality and commercial contract professional teams.

The invitation-only event this Saturday will see GE receive an expected 50-plus applicants who will tour the Nailsea site. Also, the firm said GE hiring managers will be on hand to answer questions and interview potential candidates.

"There is an abundance of talent of manufacturing and engineering people in Bristol and with the lack of oil and gas competition in the local area, we are finding that there are many industries with people who have transferrable skills, which we consider to be a strong fit in the subsea industry," Dean Arnison, subsea controls business leader at GE Oil & Gas, said in a statement.

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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Noble, PXP Shake Hands on UDW Drillships for Gulf of Mexico

Noble Corp. and Plains Exploration & Production Company (PXP) have entered into two three-year term drilling contracts for the Noble Sam Croft (UDW drillship) and the Noble Tom Madden (UDW drillship), two new ultra-deepwater drillships under construction at the Hyundai Heavy Industries Co. Ltd. shipyard in Ulsan, South Korea.

In the second quarter of 2014, the Noble Sam Croft is expected for delivery followed by the Noble Tom Madden, which is expected for delivery in the second half of 2014.

"With the addition of these units to our U.S. Gulf of Mexico fleet, Noble will have one of the most modern and capable fleets in the region, a fact that demonstrates the fundamental change going on across the company," noted David W. Williams, chairman, president and Chief Executive Officer, in a released statement. "At the same time, these contracts provide us with significant additional backlog, while expanding and diversifying our customer base as we grow our relationship with an important new customer."

Noble expects for the contracts to commence following mobilization of the drillships to the Gulf of Mexico and customer acceptance. Revenues generated over the three-year terms are expected to total about $693 million per rig, including mobilization fees, stated Noble in a press release.

"In the U.S. Gulf of Mexico, which accounted for 31 percent of contract drilling services revenues in the first quarter, four of the region's seven active rigs experienced improved operating performance," stated Williams, in the company's first quarter 2013 earnings report. "Contract opportunities remain strong, especially for rigs addressing customer needs in deepwater."

In September 2012, Plains Exploration acquired more than $6 billion of oil and gas properties in the deepwater Gulf of Mexico.

"Since its acquisition of strategic deepwater oil and gas properties in the Gulf of Mexico, analysts and investors are bullish that Plains can significantly increase its revenues," stated Joe Thomas, an analyst at Wall Street Source, in a press release. "The company's fourth quarter and full-year 2012 financial and operating results highlighted the success of its one-month benefit from its Gulf of Mexico assets."

The company plans to grow its offshore oil and gas production to 275,000 barrels of oil equivalent per day by 2020.

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.

Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
For More Information on the Offshore Rig Fleet:
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Rosneft, Marubeni Sign LNG Deal

MOSCOW - Russian state oil giant OAO Rosneft and Japan's Marubeni Corp. signed a memorandum Wednesday on implementing a joint liquefied natural gas project and exploring and developing oil and gas fields, Rosneft said in a statement. 

The companies will consider cooperating on the construction of an LNG plant in Russia's Far East, the statement said. 

Rosneft has in recent months pressed for permission from the Russian government to export gas. By law, only state firm OAO Gazprom is allowed to sell supplies abroad. It is considering building a liquefaction plant with Exxon Mobil Corp. on Russia's Pacific Coast. 

Rosneft is also partnering with a number of foreign firms, including Exxon, to explore the Arctic shelf and onshore shale oil.

Copyright (c) 2013 Dow Jones & Company, Inc.

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Woodside Halts Pluto Expansion Plans

Woodside Petroleum Ltd. has revealed there are longer discussions with other major oil and gas companies regarding an expansion of the Pluto liquefied natural gas (LNG) project in Western Australia.

Pluto, a $15 billion project that was launched about a year ago, has contributed significantly to Woodside's production profile in recent months.

The operation was a key factor behind Woodside reporting Thursday in its quarterly update a 55 percent jump in production compared to a year earlier for the three months to end-March.

Woodside had previously said it was looking to work with partners on the expansion of Pluto; however, those intentions were also dismissed in the update.

"At present, there are no discussions with other resource owners with regard to Pluto expansion," the Perth-based company said.

"Woodside is continuing its efforts in the pursuit of expansion gas and has exploration activities scheduled in the region over the coming years."

Only a week ago Woodside shelved its development plans for the Browse LNG project, in which the company is majority owner and operator. Woodside said that decision was due to commercial factors.

Despite expansion at Pluto and the development of Browse being currently off the agenda for Woodside, the company recorded several improvements for first quarter 2013 against the corresponding period a year ago.

The increase in production saw Woodside report first quarter output of 21.9 million barrels, which was in line with the company's guidance for 2013. Sales revenue increased by 21 percent to $1.445 billion.

Woodside explained that Pluto, along with the ongoing success of the North West Shelf operation, were major reasons for a lift in production.

However, compared to the previous quarter, to end-December 2012, production was down 10 percent and sales revenue was 18 percent lower.

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A Balanced Approach to Drilling on Public Lands

**Cross-posted from The Huffington Post**

By Ellis Richard

As a life-long Westerner, and former National Park Service ranger, I’ve spent a lot of time in and around some of America’s most treasured places. I dedicated my career to protecting these parks.

The future of our national parks, and all of the great open spaces of the west is important to me. These powerful American landscapes helped shape our national character, and defined a way of life, and a life style so many of us value. In many ways, these places define America and give meaning and vision to our lives.

With those concerns in mind, this week I took our cause of balanced oil and gas leasing to the Hill and joined the National Parks Conservation Association to brief Congressional offices about our work and the threat fracking and drilling poses to America’s national parks.

I was heartened by what I saw. Staff from more than 30 offices attended to learn about the need to place oil and gas drilling on equal ground with the future of our parks. In fact, it was standing-room-only. This kind of dialogue and interest is progress.

I have been blessed with the opportunity to work and live in communities across the West, from the Grand Tetons in Wyoming, to the Grand Canyon in Arizona, to Dinosaur National Monument in Colorado. It was good to share some of those experiences and see folks paying attention to the need for smarter approach to energy development.

I told those in attendance that we can do this by allowing responsible drilling in the appropriate places, while protecting those treasured landscapes that are part of the American heritage, and an important driver in so many of our local economies.

Energy development and conservation on our public lands is not a zero sum game. There’s a right way and a wrong way to do things. We can achieve balance. For instance, past administrations have protected an acre of public lands for every land leased to oil and gas development. We can achieve that kind of balance if we put our minds to it.

The Obama administration should be planning ahead to allow for drilling in places where it won’t threaten our cultural and natural treasures. But instead, drilling is encroaching on national parks and monuments, including, near Mesa Verde National Park, Dinosaur National Monument, Chaco Canyon National Historic Park, and Pinnacles National Park. This past spring, federal officials in the Colorado office of the Bureau of Land Management wanted to allow drilling rigs right next the visitor center at Dinosaur National Monument.

Just this week, a new poll showed a bipartisan majority of Western voters are more interested in preserving land for recreation and the enjoyment of future generations than in using them for oil and gas drilling. It’s clear from this poll that people living in the west believe that oil and gas production can be done on public lands while also preserving the values of those iconic landscapes we’ve put aside as national parks.

What tourists want to see a drilling rig or take a whiff of gas in the air when they bring their families on vacation? National Parks drive local economies across the United States, especially in the West. National Parks generated $30.1 billion in economic activity each year. Visitors support local hotels, restaurants, stores and outfitters. Our great outdoors in the West also offer an unparalleled quality of life, which is why manufacturing and technological companies relocate there, providing job opportunities.

It’s a simple fact: our communities rely on national parks, and other open spaces to attract high-paying businesses, entrepreneurs and visitors to come to enjoy our world-class recreation resources just as much as we rely on energy development — done responsibly, in appropriate places. There are some places too special to drill.

Energy development on our public lands also provides economic benefits to our Western communities by creating jobs and providing American energy. I believe we can extract oil and gas responsibly from public lands and also provide the protection national parks need and deserve with a balanced approach to leasing.

My fellow rangers and I at Park Rangers for Our Lands believe we need to “look before we lease” our public lands to oil and gas development. If we take the time and do the work to plan ahead, we can stop problems before they start and protect the future of our parks.

We know some of these solutions will be hard to find, but that doesn’t mean we can just give up. We need the BLM and the National Park Service to work together to do the responsible planning needed to preserve the landscapes that can affect the values of the parks we have worked hard to set aside. If they will do the landscape level planning, we can safeguard those sensitive lands around the national park. It’s a balanced and reasonable alternative that extends protection to our parks while developing the energy resources our country needs.

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Shtokman Gas Field Decision 3 Years Away

MOSCOW - Formulating a new technical concept for developing the Shtokman natural gas field in Russia's Arctic will take at least three years, Russia's deputy energy minister said Thursday, according to the Interfax news agency. 

"For the technical concept, the project will need more than three years," Kirrill Molodtsov is quoted as saying. 

Last year, Russia's state-run gas company OAO Gazprom shelved attempts to develop the gas field, which is estimated to hold almost 4 trillion cubic meters of natural gas, as technical studies indicated the project wasn't financially viable. 

Gazprom teamed up with French oil company Total SA and Norwegian oil company Statoil ASA to develop the field, with Gazprom holding 51% of the partnership, Total 25% and Statoil 24%. 

Launched in the 1990s, Shtokman has been repeatedly delayed because of disagreements between the partners over investment terms and because of the extreme Arctic weather. The project has also become less attractive because the boom in the shale gas industry in the U.S. has disrupted the natural gas market, bringing prices down.

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Crude Oil Settles Higher on Bargain Buying after Recent Sharp Drop

Crude-oil futures prices settled higher Thursday amid bargain-hunting after a recent steep selloff, with North Sea Brent posting its first gain after six down days.

News of lower exports of Nigerian crude oil buoyed prices of European benchmark Brent crude, which had tumbled in the past six session to its lowest level since July 2. Royal Dutch Shell's (RDSA, RDSA.LN) Nigerian unit said it cut output of Bonny Light crude oil by 150,000 barrels a day and halted exports in order to resolve issues with a key oil pipeline.

Traders said an extended outage in shipments of the Brent lookalike would underpin prices of the European benchmark. But the overall supply-demand picture for oil remains weak, amid stuttering signs of economy recovery in the U.S., the world's biggest oil consumer.

"We are a slave to the economy right now and the picture's not particularly great," said Carl Larry, analyst at Oil Outlooks and Opinions.

June North Sea Brent crude oil futures on the InterContinental Exchange settled 1.5%, or $1.44, higher at $99.13 a barrel, after six days of declines. The June contract traded in a high-low range of near $10 a barrel since April 10, dropping 8%, or nearly $8.50 a barrel in the period.

May-delivery light, sweet crude oil futures on the New York Mercantile Exchange settled 1.2%, or $1.01 higher, at $88.20 a barrel, after settling Wednesday at a four-month low.

U.S. benchmark crude has dropped by more than $10 a barrel from highs in early April, as domestic crude oil and gasoline inventories have climbed, while demand for fuels remains sluggish. Front-month Brent, has fallen by about $12 a barrel this month, and the three-day string of prices below $100 a barrel is the longest since June 2012.

"We've lopped off $12 and it looks like we're wrapping up the selloff and starting to stabilize here," said Gene McGillian, broker and analyst at Tradition Energy. "But it's not that all of sudden we have confidence that the economy is improving."

The Labor Department said Thursday the number of U.S. workers applying for jobless benefits last week rose by more than economists had expected. Elsewhere, the Conference Board said its index of leading economic indicators posted an unexpected fall in March, as consumers turned gloomy on the economic outlook. The index declined 0.1% in March, its first fall since August, and counter to an expected 0.2% rise recorded in a survey of economists by Dow Jones Newswires.

U.S. gasoline demand dropped to a one-month low and was the lowest for the second week in April in 16 years, government data released on Thursday show. Demand of 8.383 million barrels a day last week was nearly 400,000 barrels a day below the year-earlier level.

The Energy Information Administration forecasted last week that gains in fuel-efficient vehicles will trim spring-summer driving season demand this year to a 12-year low of 8.877 million barrels a day.

Nymex May reformulated gasoline blendstock futures posted the first gain after falling 12%, or 37.25 cents in five of the previous six sessions to a three-month low. The contract settled up 2.65 cents, or 1%, Thursday, at $2.7555 a gallon.

Nymex May heating oil futures settled 4.45 cents, or 1.6%, higher, at $2.7791 a gallon. Prices fell 7.7% over the previous six days to the lowest level since July 2012.

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