Sete Brasil Remains in Talks with OSX to Build Two Drilling Rigs

RIO DE JANEIRO--Sete Brasil said late Friday that shipbuilder OSX Brasil S/A (OSXB3.BR), part of billionaire entrepreneur Eike Batista's industrial empire, remains in the hunt to build two drilling rigs for the company.

Sete Brasil, a holding company that is building 28 high-tech drill rigs for state-run energy giant Petroleo Brasileiro (PBR, PETR4.BR), said it still wants to add two more rigs to its portfolio. Sete Brasil was created in 2011 by several Brazilian pension funds and banks, with Petrobras also holding a 10% stake.

"The priority in this negotiation continues to be OSX," Sete Brasil said.

Earlier Friday, a local press report indicated that Sete Brasil had dropped out of talks with OSX. OSX, which is building a shipyard at the Acu port in northeastern Rio de Janeiro state, has been in talks with Sete Brasil since mid-2012. The two rigs Sete Brasil wants to add to its fleet would be rented out on the spot market, a spokeswoman for the company said.

OSX declined to comment about talks with Sete Brasil.

"The company is attentive to new business opportunities with an outlook toward expanding its client list and portfolio of deliveries," OSX said. OSX currently has contracts to build vessels for sister-company OGX (OGXP3.BR), Petrobras, Sapura and Kingfish.

OSX shares closed down 5.8% at BRL2.76 in trading on the Sao Paulo Stock Exchange.

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Sudan, South Sudan Start Talks Over Former National Oil Company Assets

KAMPALA, Uganda - Oil producing Sudan and newly independent South Sudan started talks on Monday aimed at resolving a dispute over the sharing of assets belonging to former national oil company Sudapet, said officials.

A South Sudanese delegation from the oil and mining ministry has arrived in Khartoum for talks with their Sudanese counterparts, said Sudanese government spokesman Rabie Abdelaty, as the two former civil war foes continue to disentangle their oil assets.

"Both sides are keen to ensure that the issue of Sudapet is resolved quickly," said Mr. Abdelaty.

The talks are part of the African Union-mediated framework on the implementation of cooperation agreements signed in September last year.

Sudan is demanding up to $2 billion from South Sudan as compensation for assets including buildings, storage tanks, processing facilities and pipelines located in the south. Juba has in the past dismissed Khartoum's claim, arguing that it is the rightful owner of the assets within its territory following its independence in July 2011.

Sudan is also demanding compensation for damage to its oil facilities in the oil hub of Heglig that was briefly occupied by South Sudanese forces in April last year.

According to Barnaba Benjamin, South Sudan's information minister, the talks are expected to yield positive results.

"We have just restarted our oil, things are improving, we are hoping for the best," Mr. Benjamin said.

Land locked South Sudan broke away from Sudan taking control of as much as 75% of the oil fields but has to rely on ports and pipelines, which pass through the north, to ship its crude for export.

The two countries have since been embroiled in a number of disputes over the sharing of oil revenues, which led to the shutdown of the south's 350,000 barrels-a-day of crude last year plunging both economies into turmoil.

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Shell, India's ONGC Hold Talks on Opportunities in India

LONDON - Royal Dutch Shell PLC said Thursday it has been in discussions with India's state-run Oil & Natural Gas Corp. about potential opportunities as it seeks to expand its presence in India, one of the world's fastest growing economies and where energy demand is expected to more than double over the next 25 years.

Executives at ONGC said they were in the process of agreeing a long-term alliance to jointly explore oil and gas production and were looking at both existing and new projects, but added that it was too early to say what form a potential tie-up will take.

If talks between Shell and ONGC are successful, it would mark Shell's return to exploration in India some 16 years after it sold its 50% stake in Rajasthan assets to Cairn for $7.5 million. The Rajasthan fields last year reached 175,000 barrels a day of crude oil production and Cairn aims to increase that to 300,000 b/d.

Talks between Shell and ONGC also mark increased interest on the part of big international oil companies in the country's oil and gas always sector and come as falling output from India's largest gas deposit in the Krishna-Godavari basin in the Bay of Bengal has hit supplies to the power and fertilizer sector.

The government of the energy-hungry nation is seeking to reduce dependence on oil and gas imports and is currently proposing to allow gas prices in India to be benchmarked to global rates, which would lead to an increase in prices and would benefit the companies involved in extraction.

In February, BP PLC and Reliance Industries Ltd. said they planned to jointly invest more than $5 billion over the next three to five years to boost declining gas output in the KG D6 block in the Krishna-Godavari field off India's east coast.

In 2011, BP spent $7.2 billion buying a 30% stake in 23 oil and gas production sharing contracts that Reliance operates in India, including the producing KG D6 block. The two companies also formed a joint venture to source and market gas in India.

In India, Shell currently has a small retail presence and is involved in developing a liquefied natural gas import and regasification terminal at Kakinada in Andhra Pradesh.

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Shell, India's ONGC Hold Talks on Opportunities in India

LONDON - Royal Dutch Shell PLC said Thursday it has been in discussions with India's state-run Oil & Natural Gas Corp. about potential opportunities as it seeks to expand its presence in India, one of the world's fastest growing economies and where energy demand is expected to more than double over the next 25 years.

Executives at ONGC said they were in the process of agreeing a long-term alliance to jointly explore oil and gas production and were looking at both existing and new projects, but added that it was too early to say what form a potential tie-up will take.

If talks between Shell and ONGC are successful, it would mark Shell's return to exploration in India some 16 years after it sold its 50% stake in Rajasthan assets to Cairn for $7.5 million. The Rajasthan fields last year reached 175,000 barrels a day of crude oil production and Cairn aims to increase that to 300,000 b/d.

Talks between Shell and ONGC also mark increased interest on the part of big international oil companies in the country's oil and gas always sector and come as falling output from India's largest gas deposit in the Krishna-Godavari basin in the Bay of Bengal has hit supplies to the power and fertilizer sector.

The government of the energy-hungry nation is seeking to reduce dependence on oil and gas imports and is currently proposing to allow gas prices in India to be benchmarked to global rates, which would lead to an increase in prices and would benefit the companies involved in extraction.

In February, BP PLC and Reliance Industries Ltd. said they planned to jointly invest more than $5 billion over the next three to five years to boost declining gas output in the KG D6 block in the Krishna-Godavari field off India's east coast.

In 2011, BP spent $7.2 billion buying a 30% stake in 23 oil and gas production sharing contracts that Reliance operates in India, including the producing KG D6 block. The two companies also formed a joint venture to source and market gas in India.

In India, Shell currently has a small retail presence and is involved in developing a liquefied natural gas import and regasification terminal at Kakinada in Andhra Pradesh.

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Lukoil in Talks to Buy 40% of Brazil's OGX

RIO DE JANEIRO - Billionaire Brazilian businessman Eike Batista is in talks to sell a 40% stake in oil producer OGX Petroleo e Gas Participacoes SA to Russia's Lukoil, the Folha de S. Paulo newspaper reported Sunday. 

The deal would beef up finances at the entrepreneur's troubled flagship company ahead of an important auction of oil and natural-gas concessions next month. The Russian firm is conducting due diligence of the company, and the deal could be announced in early May, the newspaper reported. 

OGX is also in talks to sell a 40% stake in the company's Tubarao Martelo field to Malaysian state-run oil and gas firm Petroliam Nasional Bhd., or Petronas, the newspaper said. Tubarao Martelo is expected to start producing crude oil by the end of 2013. OGX could also operate fields for Brazilian state-run energy giant Petroleo Brasileiro, or Petrobras, the newspaper reported. 

OGX denied the report. "The information is not true," an OGX spokeswoman said Monday. 

Despite the denial, investors reacted positively to the report. OGX shares led broad gains for companies in Mr. Batista's EBX Group of companies, climbing 19% to 1.62 Brazilian reais ($0.80) in early Sao Paulo trading on Monday. Port operator LLX Logistica rose 3.6% to BRL2.02, shipbuilder OSX Brasil added 3.8% to BRL3.58 and miner MMX advanced 3.5% to BRL2.08. 

Shares in the companies have tumbled so far in 2013 amid questions about the ability of the firms to generate concrete results for investors. Many of Mr. Batista's interests are in the startup or pre-operational phase. 

OGX has fallen far short of its crude-oil production goals since the Tubarao Azul field first started output in early 2012. The field was expected to reach output of 40,000 barrels per day by end-2012, but those expectations were slashed by nearly half last year. 

In March, technical issues at Tubarao Azul caused production to plummet. The company is carrying out repairs on two of the field's three production wells, with full output not expected to return before June. The field produced 8,300 barrels of oil equivalent per day in March.

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Petrobras in Talks to Sell Argentine Assets

RIO DE JANEIRO - Brazilian state-run energy giant Petroleo Brasileiro, or Petrobras, is in talks to sell off its Argentine unit as part of a $9.9 billion divestment plan, Chief Executive Maria das Gracas Foster said Tuesday.

Speaking to reporters, Ms. Foster declined to provide any additional details about the talks because of their sensitive nature. Petrobras officials also declined to comment about other assets that the company may have up for sale.

Petrobras, however, has taken its Pasadena Refining System, a refinery located in Pasadena, Texas, off the market, Ms. Foster said. "Pasadena is no longer part of the divestment plan," Ms. Foster said.

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Rosneft in Japan for Arctic Shelf Talks

MOSCOW - The head of Russia's state-controlled oil giant OAO Rosneft is traveling to Japan Tuesday to discuss partnerships on offshore projects, as the company tries to attract foreign firms to help tap the potentially vast but difficult-to-recover reserves on Russia's Arctic shelf.

The trip comes after Rosneft Chief Executive Igor Sechin spent two days in China for talks, including discussions on potential offshore projects with CNPC, Sinopec and CNOOC. Rosneft already has offshore partnerships with Exxon Mobil Corp., Eni SpA and Statoil ASA.

A spokeswoman for Rosneft declined to name the Japanese firms Mr. Sechin would meet with.

Russia is looking to the Arctic to maintain output in the long term as production at Soviet-era fields in western Siberia wanes.

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Rosneft in Japan for Arctic Shelf Talks

MOSCOW - The head of Russia's state-controlled oil giant OAO Rosneft is traveling to Japan Tuesday to discuss partnerships on offshore projects, as the company tries to attract foreign firms to help tap the potentially vast but difficult-to-recover reserves on Russia's Arctic shelf.

The trip comes after Rosneft Chief Executive Igor Sechin spent two days in China for talks, including discussions on potential offshore projects with CNPC, Sinopec and CNOOC. Rosneft already has offshore partnerships with Exxon Mobil Corp., Eni SpA and Statoil ASA.

A spokeswoman for Rosneft declined to name the Japanese firms Mr. Sechin would meet with.

Russia is looking to the Arctic to maintain output in the long term as production at Soviet-era fields in western Siberia wanes.

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