Total Production to Increase 3% PA to 2015

PARIS - French oil major Total SA's chairman and chief executive, Christophe de Margerie, Friday confirmed the group's medium-term production targets. 

Speaking during the group's annual shareholders meeting, Mr. de Margerie said Total still expects its hydrocarbon output will increase an average 3% a year between 2011 and 2015. 

Over the past two years the company has focused its strategy on an aggressive search for additional oil and gas reserves, as demand from emerging markets, notably Asia, keeps increasing. 

"Clearly in terms of exploration we decided to shift gears," Mr. de Margerie said, noting that the group recently acquired many blocks in Brazil's deep offshore fields as part of its new policy for riskier exploration locations. 

"Now we need to make discoveries," he added. 

He said he remains confident the group would be able to produce as much as 3 million barrels of oil equivalent per day by the end of 2017.

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Total Production to Increase 3% PA to 2015

PARIS - French oil major Total SA's chairman and chief executive, Christophe de Margerie, Friday confirmed the group's medium-term production targets. 

Speaking during the group's annual shareholders meeting, Mr. de Margerie said Total still expects its hydrocarbon output will increase an average 3% a year between 2011 and 2015. 

Over the past two years the company has focused its strategy on an aggressive search for additional oil and gas reserves, as demand from emerging markets, notably Asia, keeps increasing. 

"Clearly in terms of exploration we decided to shift gears," Mr. de Margerie said, noting that the group recently acquired many blocks in Brazil's deep offshore fields as part of its new policy for riskier exploration locations. 

"Now we need to make discoveries," he added. 

He said he remains confident the group would be able to produce as much as 3 million barrels of oil equivalent per day by the end of 2017.

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Pacific Rubiales Sees 55% Increase in Prospective Resources

Pacific Rubiales Energy Corp. announced Monday the results of an independent resource assessment for certain of the Company's exploration blocks in Colombia, Peru, Brazil, Guyana, Guatemala and Papua New Guinea (PNG). The 2012 resource assessment was prepared by Petrotech Engineering Ltd. with an effective date of September 30, 2012.

The 2012 Resource Report shows that the best case estimate of total gross Prospective Resources attributed to the Company has grown to 4.3 billion barrels of oil equivalent (Bboe) from 2.8 Bboe in 2011, and the best case estimate of total gross Contingent Resources has grown to 168 MMboe from just 4 MMboe booked in 2011.

"We look at the 2012 Resource Report as a clear demonstration of the Company's strategy to increase its resources using strategic acquisitions of exploration opportunities in selected countries where we see a balance of above- and below-ground risk.  Resources drive future reserves which in turn represent the future production of the Company," Jose Francisco Arata, president of the Company, commented.

Highlights on the best case estimates of total gross Prospective Resources and total best case Contingent Resources (see the heading below entitled "Resources" for further information) from the 2012 Resource Report include:

4,291 MMboe of total gross Prospective Resources (prospects plus leads), an increase of 55 percent from 2,774 MMboe in 2011.The total gross Prospective Resources are contained in 123 opportunities (74 prospects and 49 leads) on 40 assessed blocks in six countries.The total gross Prospective Resources are estimated to include 3,520 MMbbl of oil and natural gas liquids (82%), and 4.5 Tcf (772 MMboe) of natural gas (18%).1,302 MMboe of the total gross Prospective Resources are in prospects (30%), an increase of 226 percent from 399 MMboe in 2011, largely reflecting new exploration blocks acquired in 2012 and successful exploration drilling.2,989 MMboe of the total gross Prospective Resources are in leads (70%), a 26 percent increase from 2,375 MMboe in 2011, largely reflecting new exploration blocks acquired in 2012 and new leads defined on seismic surveys.46 percent of the total gross Prospective Resources are in Colombia, 41% in Peru, 9% in Brazil, 3% in Guyana, and the remainder are in Guatemala and Papua New Guinea .168 MMboe of total gross Contingent Resources, up substantially from 4 MMboe in 2011, mainly due to acquisitions and advancement from Prospective Resources through successful exploration drilling.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.

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Otto Reports Reserves Increase at Galoc Field

Otto Energy Ltd. provided an update on remaining oil reserve balances at the Galoc oil field in the Philippines as at Jan. 1, 2013.

Otto announces updated attributable Galoc oil field 1P Reserves of 3.4 MMstb and 2P Reserves of 4.3 MMstb.Galoc has Reserves Replacement Ratio of 115 percent on the Proved basis and 98 percent on the Proved & Probable basis.Galoc oil field Reserves are expected to maintain production beyond 2020.Otto expects increased production volume from Galoc Phase II in 2H 2013.Galoc is one of three exploration events planned by Otto in CY2013 along with the Duhat-2 well and SC-55 prospect in the Philippines.

The operator of the Galoc oil field, Galoc Production Company WLL, is a wholly owned subsidiary of Otto. It has commissioned an annual review of remaining oil reserves from RISK, an independent consulting firm.

RISC has reviewed the Galoc oil field reserves in accordance with the SPE, WPC, AAPG and SPEE Petroleum Resource Management System definitions, guidelines and auditing standards.

The reported increases in reserves are attributable to better than expected reservoir performance to date and an extension of field life due to higher prevailing oil prices. The Galoc oil field is expected to remain in production beyond 2020 based on the Galoc Phase I and Phase II well configuration.

"Galoc continues to be a key asset for Otto, delivering valuable cashflow to fund future growth opportunities. I look forward to the delivery of continued reliable production from existing operations and increased production volume from Galoc Phase II in 2H 2013. I am proud of Otto's continued growth as an integrated exploration, development and production company focused on South East Asia and East Africa," Otto's Chief Executive Officer Gregor McNab sai.

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Otto Reports Reserves Increase at Galoc Field

Otto Energy Ltd. provided an update on remaining oil reserve balances at the Galoc oil field in the Philippines as at Jan. 1, 2013.

Otto announces updated attributable Galoc oil field 1P Reserves of 3.4 MMstb and 2P Reserves of 4.3 MMstb.Galoc has Reserves Replacement Ratio of 115 percent on the Proved basis and 98 percent on the Proved & Probable basis.Galoc oil field Reserves are expected to maintain production beyond 2020.Otto expects increased production volume from Galoc Phase II in 2H 2013.Galoc is one of three exploration events planned by Otto in CY2013 along with the Duhat-2 well and SC-55 prospect in the Philippines.

The operator of the Galoc oil field, Galoc Production Company WLL, is a wholly owned subsidiary of Otto. It has commissioned an annual review of remaining oil reserves from RISK, an independent consulting firm.

RISC has reviewed the Galoc oil field reserves in accordance with the SPE, WPC, AAPG and SPEE Petroleum Resource Management System definitions, guidelines and auditing standards.

The reported increases in reserves are attributable to better than expected reservoir performance to date and an extension of field life due to higher prevailing oil prices. The Galoc oil field is expected to remain in production beyond 2020 based on the Galoc Phase I and Phase II well configuration.

"Galoc continues to be a key asset for Otto, delivering valuable cashflow to fund future growth opportunities. I look forward to the delivery of continued reliable production from existing operations and increased production volume from Galoc Phase II in 2H 2013. I am proud of Otto's continued growth as an integrated exploration, development and production company focused on South East Asia and East Africa," Otto's Chief Executive Officer Gregor McNab sai.

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YPF Expects to Increase Oil, Gas Production in 2013

BUENOS AIRES - Argentina's largest oil company, state-run YPF SA, expects to increase crude and natural-gas production this year as it ramps up spending on exploration and production, YPF Chief Executive Miguel Galuccio said Tuesday.

Argentine President Cristina Kirchner tapped Mr. Galuccio to run YPF shortly after she nationalized the company last year and charged him with reversing years of declining production. YPF managed to increase oil output 2.2% in 2012, while the decline in natural gas production eased to 2.3%.

Mr. Galuccio expects oil production to rise 4% this year, and gas production to increase about 1%.

"For 2013, the challenge is to move to a growth mode, but not growth at any cost. I intend to preserve the profitability of this company and I will have all the [authority] to delay or eliminate projects if needed," he said in a conference call with analysts.

YPF invested 16.48 billion pesos ($3.25 billion) in its operations last year, an increase of nearly 26% from 2011.

YPF has budgeted about $5 billion in capital expenditures this year, and will need to raise about $500 million in additional financing for its investment plan, Chief Financial Officer Daniel Gonzalez said.

YPF's ambitious investment program is starting to bump up against physical constraints.

The company will likely have to bring in drilling rigs from abroad as it runs out of suitable rigs in Argentina, Mr. Galuccio said.

YPF is staking its future on developing Argentina's vast shale-gas and-shale oil deposits.

The South American nation is thought to be home to the world's third-largest shale-gas reserves after the U.S. and China, with some 774 trillion cubic feet of recoverable gas, according to U.S. Energy Information Administration estimates. Argentina is also thought to have significant quantities of shale oil.

But getting those hydrocarbons out of the ground and to consumers and businesses will require billions of dollars that neither YPF nor Mrs. Kirchner's government have on their own.

Last December, YPF signed a deal with a company linked to Argentina's Bulgheroni family to invest $1.5 billion together over the following two years to develop shale-gas and oil resources.

YPF also announced a preliminary agreement that same month with Chevron Corp. that could see the California-based company and YPF spend about $1 billion to drill 100 wells for unconventional energy in Neuquen Province. Chevron has four months to negotiate the final terms and conditions of that agreement.

However, a court-ordered embargo on the assets of Chevron's local subsidiary, stemming from a decades-old case involving environmental-damage claims in Ecuador, has raised questions about Chevron's ability to invest in Argentina. Chevron has said it will use all legal means available to fight the embargo.

"The Chevron deal is moving ahead as expected," Mr. Galuccio said, adding that there will probably be some changes to last year's agreement.

A Chevron spokesman didn't immediately respond to an email and phone calls seeking comment.

Mrs. Kirchner is seeking outside investment and technical expertise to make Argentina energy self-sufficient once again after years of declining production and reserves turned the country into a net energy importer in 2011.

Last May, she formally expropriated a 51% stake in YPF from Spain's Repsol SA in a dispute over investment. Mrs. Kirchner accused the Spanish company of siphoning capital out of YPF and failing to invest enough in its operations.

Repsol has denied those accusations and is seeking about $10 billion in compensation for its YPF shares.

Critics of the government's energy policies say that price caps and export taxes have discouraged investment in the oil and gas sector.

Last November, the Kirchner administration more than tripled the price that YPF can charge for new natural gas production to $7.50 per million British thermal units.

YPF's shares traded in New York were recently 3.5% higher at $15.29, giving the company a market capitalization of about $6.0 billion.

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UK Oilfield Services Firms Plan Workforce Increase of 10%

UK oilfield services companies plan to increase their workforces by an average of 10 percent over the next two years, according to a new report from corporate accountants Ernst & Young.

Ernst & Young said that more than 75 percent of businesses surveyed in conjunction with Oil & Gas UK expect to expand their staff, with 90-percent expecting an increasing in revenues. But 53 percent of respondents identified sourcing suitably-qualified personnel as the main factor limiting growth in their organizations.

Nearly two-thirds of firms stated that any surprise changes to the fiscal terms for the oil and gas sector would negatively affect their plans.

"The oilfield services segment continues to outperform most other UK industrial sectors, despite the recession. The UK, particularly the north east of Scotland, is recognized as a global leader and has the potential to deliver even more skilled jobs and greater export opportunities," commented Ernst & Young partner Ally Rule, the report's author, in a statement.

"There is evidence of record order books and rising revenues, but this is dependent on a stable fiscal environment. Changes made to the tax regime following the increase in the supplementary charge in 2011, alongside the introduction of an agreed framework for assurances on decommissioning tax relief, are redressing the balance and increasing confidence in the sector."

Ernst & Young's report follows a report by Lloyds Banking Group earlier this week that stated that the UK oil and gas sector could create more than 34,000 new jobs within the next two years. Lloyds also said that a skills shortage remains the sector's biggest challenge.

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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UK Oilfield Services Firms Plan Workforce Increase of 10%

UK oilfield services companies plan to increase their workforces by an average of 10 percent over the next two years, according to a new report from corporate accountants Ernst & Young.

Ernst & Young said that more than 75 percent of businesses surveyed in conjunction with Oil & Gas UK expect to expand their staff, with 90-percent expecting an increasing in revenues. But 53 percent of respondents identified sourcing suitably-qualified personnel as the main factor limiting growth in their organizations.

Nearly two-thirds of firms stated that any surprise changes to the fiscal terms for the oil and gas sector would negatively affect their plans.

"The oilfield services segment continues to outperform most other UK industrial sectors, despite the recession. The UK, particularly the north east of Scotland, is recognized as a global leader and has the potential to deliver even more skilled jobs and greater export opportunities," commented Ernst & Young partner Ally Rule, the report's author, in a statement.

"There is evidence of record order books and rising revenues, but this is dependent on a stable fiscal environment. Changes made to the tax regime following the increase in the supplementary charge in 2011, alongside the introduction of an agreed framework for assurances on decommissioning tax relief, are redressing the balance and increasing confidence in the sector."

Ernst & Young's report follows a report by Lloyds Banking Group earlier this week that stated that the UK oil and gas sector could create more than 34,000 new jobs within the next two years. Lloyds also said that a skills shortage remains the sector's biggest challenge.

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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NPD Reports 2.8B Barrel Increase in Norwegian Resources

The Norwegian Petroleum Directorate announced Friday that its 'petroleum resource account' for Dec. 31 2012 stood at 85.5 billion barrels of oil equivalent of total recoverable resources – an increase of 2.8 billion barrels compared with a year earlier.

The NPD said that the increase in recoverable resources was mainly due to an increase in field reserves, increased resource estimates for discoveries, resource growth from new discoveries and an increase in the volume estimates of yet-to-be-discovered resources.

Growth in reserves during 2012 was 2.16 billion barrels. This increase was due to discovered resources being approved for development and because there had been an increase in reserves for fields in production. Ekofisk, Troll and Gullfaks Sør saw the largest increase in oil reserves. Ormen Lange had the largest increase in gas reserves. 

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NPD Reports 2.8B Barrel Increase in Norwegian Resources

The Norwegian Petroleum Directorate announced Friday that its 'petroleum resource account' for Dec. 31 2012 stood at 85.5 billion barrels of oil equivalent of total recoverable resources – an increase of 2.8 billion barrels compared with a year earlier.

The NPD said that the increase in recoverable resources was mainly due to an increase in field reserves, increased resource estimates for discoveries, resource growth from new discoveries and an increase in the volume estimates of yet-to-be-discovered resources.

Growth in reserves during 2012 was 2.16 billion barrels. This increase was due to discovered resources being approved for development and because there had been an increase in reserves for fields in production. Ekofisk, Troll and Gullfaks Sør saw the largest increase in oil reserves. Ormen Lange had the largest increase in gas reserves. 

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Bridge Saw 22% Increase in Reserves in 2012

Anglo-Norwegian junior explorer Bridge Energy reported Tuesday that it its 2P (proved plus probable) developed reserves increased to 3.26 million barrels of oil equivalent (MMboe) last year from 2.67 MMboe at the end of 2011, representing a reserve replacement ratio of 224 percent.

Bridge said that the net best estimate of contingent resource (2C) more than doubled to 66 MMboe at Dec. 31 2012 from 29 MMboe a year earlier. The firm said that 22 MMboe of its net 2C resources was added as a result of three successful discoveries out of four exploration wells drilled last year.

Bridge confirmed that its current portfolio includes 11 discoveries in the UK and four in Norway, and that it has interests in 12 licenses in the UK sector of the North Sea as well as 16 licenses in the Norwegian sector. These licenses contain 32 main prospects.

The reserves and resource report, prepared by independent consultancy AGR TRACS International, reflected an increase in contingent resources connected to the award of the Vulcan South license in 2012. The increased gas resources (some 12.3 MMboe) enables wider regional development options to be considered for the whole of the Vulcan Satellite area, said Bridge.

Bridge CEO Tom Reynolds commented in a statement:

"The recently completed reserves and resources report underlines the significant steps made by Bridge, through acquisition, development of our existing asset base and exploration success in 2012. The step change in the commercial resource base, coupled with progressing our development portfolio, provides for a very exciting growth phase for Bridge to build upon during 2013."

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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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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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Technip Saw Strong Increase in Orders in 2012

French oilfield services firm Technip announced Thursday a strong increase in its order intake during 2012 as its revenue increased by more than 20 percent.

Technip said that its order intake increased from $10.6 billion to $15.5 billion during 2012, while its order backlog increased by 36.8 percent to $19 billion. The firm's revenue for 2012 amounted to $10.9 billion, compared with $9.1 billion in 2011, while its net income improved 6.4 percent to $718 million.

Technip reported that order intake within its Subsea business sector during the fourth quarter of 2012 was, at $1.2 billion, 24.9-percent lower that the equivalent quarter in 2011. Here, orders included several small and medium-sized contracts on a number of continents. Notable among these was is the second phase of the Total E&P Angola GirRI project.

The firm saw a doubling of orders in its Onshore/Offshore segment during 4Q 2012, which included the first tension leg platform project by Sabah Shell Petroleum Company for the Malikai project in Malaysia.

Technip CEO Thierry Pilenko commented in a statement:

"Technip's performance was in line with our objectives throughout 2012, including the fourth quarter…The projects we delivered and won in 2012 reflect our focus on offering our clients differentiating technologies and on securing involvement in projects early in their life cycle. To support our growth, we have invested in talent worldwide; Technip now employs 36,500 people compared to 31,000 a year ago."

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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PTTEP Posts Strong Increase in Net Profit, O&G Production Volume

PTT Exploration and Production (PTTEP) said late Thursday net profit for the full year 2012 surged 28 percent, on increased oil production and higher crude prices.

Net profit for 2012 was $1.9 billion, compared with $1.5 billion a year ago. Revenue rose 26 percent to $7 billion, as compared to $5.7 billion in 2011.

"Sales volume went up 275, 923 barrels of oil equivalent per day (boed) compared with 265,047 boed in 2011. Contributing to the increased sales were petroleum products from Bongkot South field, the Vietnam 16-1 project and the S1 project," PTTEP's CEO Tevin Vongvanich said in a statement Friday.

Vongvanich,also noted that PTTEP's average sale price of a barrel of oil (boe) for 2012 is $64.86, as compared to $55.49 boe in 2011.

PTTEP disclosed that one of the key progresses for 2012 was the S1 project's ability to increase the production to the highest rate at 35,176 barrels per day (bpd). The Bongkot project's production rate was around 596 million standard cubic feet per day (mmscfd), while the production of Bongkot South was 320 mmscfd.

This year, PTTEP is targeting a sales volume of 310,000 boe. Vongvanich revealed Jan.24 that the bulk of its increased oil sales will be derived from the start of commercial operations at its Montara oil field offshore Australia.

The Montara incident which occurred Aug. 21, 2009, saw 29,600 barrels of crude oil leak into the water over a 74-day period, after a jackup burst into flames. The well was subsequently killed Nov. 3, 2009. PTTEP is aiming to restart operations.

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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PTTEP Posts Strong Increase in Net Profit, O&G Production Volume

PTT Exploration and Production (PTTEP) said late Thursday net profit for the full year 2012 surged 28 percent, on increased oil production and higher crude prices.

Net profit for 2012 was $1.9 billion, compared with $1.5 billion a year ago. Revenue rose 26 percent to $7 billion, as compared to $5.7 billion in 2011.

"Sales volume went up 275, 923 barrels of oil equivalent per day (boed) compared with 265,047 boed in 2011. Contributing to the increased sales were petroleum products from Bongkot South field, the Vietnam 16-1 project and the S1 project," PTTEP's CEO Tevin Vongvanich said in a statement Friday.

Vongvanich,also noted that PTTEP's average sale price of a barrel of oil (boe) for 2012 is $64.86, as compared to $55.49 boe in 2011.

PTTEP disclosed that one of the key progresses for 2012 was the S1 project's ability to increase the production to the highest rate at 35,176 barrels per day (bpd). The Bongkot project's production rate was around 596 million standard cubic feet per day (mmscfd), while the production of Bongkot South was 320 mmscfd.

This year, PTTEP is targeting a sales volume of 310,000 boe. Vongvanich revealed Jan.24 that the bulk of its increased oil sales will be derived from the start of commercial operations at its Montara oil field offshore Australia.

The Montara incident which occurred Aug. 21, 2009, saw 29,600 barrels of crude oil leak into the water over a 74-day period, after a jackup burst into flames. The well was subsequently killed Nov. 3, 2009. PTTEP is aiming to restart operations.

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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Rosneft Expects 2013 Output to Increase by 1%-2%

MOSCOW - OAO Rosneft expects to increase its output by between 1% and 2% in 2013 mainly due to production growth at its giant Vankor field in Siberia, the company said Friday as it reported its 2102 full year earnings.

In a conference call Dmitry Avdeev, the vice president for finance and economics, said he expects crude oil production from Vankor to reach between 430,000 barrels and 440,000 barrels per day, although he neither confirmed nor denied that oil production at the company's other main fields could decline.

Vankor was the main contributor to Rosneft's oil output growth of 2.5% to 2,43 million barrels a day in 2012 amid declining output at the company's other main fields.

Higher output and higher oil prices led to a 13% rise in revenue for the year to 3.08 trillion rubles ($102 billion) and a 7.2% rise in net profit to RUB342 billion.

However, the profit figure fell well below market expectations. "Reasons for such results are not exactly clear. There is an item called 'other expenditures' which unfortunately the company does not disclose," said Alexander Kornilov, an analyst with Alfa Bank, who called the results "disappointing".

The market is also worried by a sharp drop in free cash flow, which dropped to RUB45 billion for the full year from RUB99 billion a year before, partly due to increased investment and lower income from operations. Shares in the company closed down 2.1% RUB261.5 in Moscow, underperforming the wider index which was flat on the day.

Rosneft is buying competitor TNK-BP from BP PLC and its partners in a deal worth $50 billion that will create the world's largest traded oil producer. BP will increase its stake in Rosneft to 19.8% as part of the deal.

Mr. Avdeev said antitrust bodies in Russia and Ukraine have already approved the deal, and that the purchase, which is fully funded, is going ahead as planned.

To finance the purchase of the stake from BP, Rosneft has agreed to borrow $16.7 billion from international banks, the company said in its earnings report.

Mr. Avdeev added that the oil giant may also place a Eurobond later this year, as last year's debut issue showed "a very strong demand". He added that the company would hit the international bond market after considering the attraction of this instrument compared to domestic bonds, direct loans, or contracts with trading companies.

The company's net debt stood at RUB581 billion at the end of the fourth quarter compared to RUB542 billion at the end of the previous quarter, as Rosneft is yet to draw the agreed loans.

However, the acquisition of TNK-BP dented Rosneft's Earnings before interest, taxation, depreciation and amortization, or Ebitda, due to an increase in spending on audit and consulting services.

The company's Ebitda margin, the measure used to judge a company's profitability, dropped to 19.8% in 2012 from 24.4% in the previous year.

Mr. Avdeev said the company is aiming at paying dividend at 25% of its full-year profit, as announced before.

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

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PTTEP Posts Strong Increase in Net Profit, O&G Production Volume

PTT Exploration and Production (PTTEP) said late Thursday net profit for the full year 2012 surged 28 percent, on increased oil production and higher crude prices.

Net profit for 2012 was $1.9 billion, compared with $1.5 billion a year ago. Revenue rose 26 percent to $7 billion, as compared to $5.7 billion in 2011.

"Sales volume went up 275, 923 barrels of oil equivalent per day (boed) compared with 265,047 boed in 2011. Contributing to the increased sales were petroleum products from Bongkot South field, the Vietnam 16-1 project and the S1 project," PTTEP's CEO Tevin Vongvanich said in a statement Friday.

Vongvanich,also noted that PTTEP's average sale price of a barrel of oil (boe) for 2012 is $64.86, as compared to $55.49 boe in 2011.

PTTEP disclosed that one of the key progresses for 2012 was the S1 project's ability to increase the production to the highest rate at 35,176 barrels per day (bpd). The Bongkot project's production rate was around 596 million standard cubic feet per day (mmscfd), while the production of Bongkot South was 320 mmscfd.

This year, PTTEP is targeting a sales volume of 310,000 boe. Vongvanich revealed Jan.24 that the bulk of its increased oil sales will be derived from the start of commercial operations at its Montara oil field offshore Australia.

The Montara incident which occurred Aug. 21, 2009, saw 29,600 barrels of crude oil leak into the water over a 74-day period, after a jackup burst into flames. The well was subsequently killed Nov. 3, 2009. PTTEP is aiming to restart operations.

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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Rosneft Expects 2013 Output to Increase by 1%-2%

MOSCOW - OAO Rosneft expects to increase its output by between 1% and 2% in 2013 mainly due to production growth at its giant Vankor field in Siberia, the company said Friday as it reported its 2102 full year earnings.

In a conference call Dmitry Avdeev, the vice president for finance and economics, said he expects crude oil production from Vankor to reach between 430,000 barrels and 440,000 barrels per day, although he neither confirmed nor denied that oil production at the company's other main fields could decline.

Vankor was the main contributor to Rosneft's oil output growth of 2.5% to 2,43 million barrels a day in 2012 amid declining output at the company's other main fields.

Higher output and higher oil prices led to a 13% rise in revenue for the year to 3.08 trillion rubles ($102 billion) and a 7.2% rise in net profit to RUB342 billion.

However, the profit figure fell well below market expectations. "Reasons for such results are not exactly clear. There is an item called 'other expenditures' which unfortunately the company does not disclose," said Alexander Kornilov, an analyst with Alfa Bank, who called the results "disappointing".

The market is also worried by a sharp drop in free cash flow, which dropped to RUB45 billion for the full year from RUB99 billion a year before, partly due to increased investment and lower income from operations. Shares in the company closed down 2.1% RUB261.5 in Moscow, underperforming the wider index which was flat on the day.

Rosneft is buying competitor TNK-BP from BP PLC and its partners in a deal worth $50 billion that will create the world's largest traded oil producer. BP will increase its stake in Rosneft to 19.8% as part of the deal.

Mr. Avdeev said antitrust bodies in Russia and Ukraine have already approved the deal, and that the purchase, which is fully funded, is going ahead as planned.

To finance the purchase of the stake from BP, Rosneft has agreed to borrow $16.7 billion from international banks, the company said in its earnings report.

Mr. Avdeev added that the oil giant may also place a Eurobond later this year, as last year's debut issue showed "a very strong demand". He added that the company would hit the international bond market after considering the attraction of this instrument compared to domestic bonds, direct loans, or contracts with trading companies.

The company's net debt stood at RUB581 billion at the end of the fourth quarter compared to RUB542 billion at the end of the previous quarter, as Rosneft is yet to draw the agreed loans.

However, the acquisition of TNK-BP dented Rosneft's Earnings before interest, taxation, depreciation and amortization, or Ebitda, due to an increase in spending on audit and consulting services.

The company's Ebitda margin, the measure used to judge a company's profitability, dropped to 19.8% in 2012 from 24.4% in the previous year.

Mr. Avdeev said the company is aiming at paying dividend at 25% of its full-year profit, as announced before.

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

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AWE Sees Revenue Increase, HSE Measurement Improves

AWE posted Wednesday a rise in revenue and production volume, and an improvement in its health and safety (HSE) measurement for the quarter ended Dec. 31, 2012.

In its quarterly report, AWE noted that sales revenue for the three months to Dec. 31, 2012, was at $80.6 million, up 13 percent from the previous quarter. The company produced 1.3 million barrels of oil in the same period, up 33 percent from three months ago.

AWE attributed the rise in production mostly to the resumption of output from the BassGas project and a ramp up in drilling activity at the Sugarloaf asset. The BassGas project – located offshore southeast Australia – was shut-in for ten months last year for platform upgrading works. AWE was able to restart production at the BassGas project in mid-October last year. For its onshore Texas-based Sugarloaf project, AWE saw increased oil and gas production through an additional 12 wells which were brought online last year. At present, the Sugarloaf project houses 63 producing wells.

AWE also saw improvements on the HSE front. The company posted zero Lost Time Injuries (LTI) for the quarter ended Dec. 31, 2012.

"Given the nature of our industry, it is important that we remain committed to our goal of zero harm and strive to ensure that our employees are award of safety at all times," AWE's Managing Director Bruce Clement said in a statement.

During the financial year 2011/12 ended June 30, the company recorded six LTIs across its operations. AWE acknowledged that the outcome was unacceptable.

AWE stated in its 2012 report that its key HSE objectives for 2012/13 include: recruiting a corporate HSE manager, developing an integrated HSE management system, implementing a recognition program for business units delivering the best safety performance and establishing systems for sharing best practices.

AWE is maintaining its target of zero LTIs for the financial year 2012/13.

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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