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.

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.

View the original article here

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.

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:
RigLogix can provide the information that you need about the offshore rig fleet, whether you need utilization and industry trends or detailed reports on future rig contracts. Subscribing to RigLogix will allow you to access dozens of prebuilt reports and build your own custom reports using hundreds of available data columns. For more information about a RigLogix subscription, visit http://www.riglogix.com/.

View the original article here

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."

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.

View the original article here

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.

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.

View the original article here

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.

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.

View the original article here

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.

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.

View the original article here

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.

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.

View the original article here

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.

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.

View the original article here

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."

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.

View the original article here

Sound to Hear of Nervesa Go-Ahead Soon

Italy-focused Sound Oil announced Tuesday that it has successfully concluded the 'Conferenza Servizi' process for its Nervesa appraisal well, onshore northern Italy.

The process is the final step needed for the Ministry of Economic Development and various governmental bodies to approve the drilling of the well. Written authorization approving the appraisal well will now be issued and Sound expects to receive this before the end of January.

Sound also confirmed that preparation of the Nervesa well site has now begun.

Sound Oil CEO James Parsons commented in a statement:

"Nervesa is a 21 billion standard cubic feet gas discovery which was discovered by ENI in 1985 and was put into production for several years. The discovery has an independent assessed base case value of circa $60 million and is a flagship project for the company.

"I am pleased to report that preparatory operations on site have commenced which will accelerate spud of the well once the Autorizzazione is issued. We still expect to receive the written Autorizzazione during January."

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.

View the original article here