Richfield Begins Completion Ops at Wyoming Well

Richfield Oil & Gas Company announced it has begun completion of the Wasatch National Forest #16-15 Well in Uinta County, Wyoming. The well and the acreage were acquired by the Company in December of 2012. Development work on the well site and Mechanical Integrity Testing of the well was completed in October of 2012 prior to the closing of the acquisition. The well is expected to be put into production in April 2013. The Company owns an 80 percent working interest and a 62.4 percent net revenue interest in the well and a 100 percent working interest and a 78 percent net revenue interest in the surrounding acreage.

"We are excited to begin the first phase of our Rocky Mountain activities. These operations add to the Company's cash flow which will help Richfield to continue to develop our Kansas properties and ramp up our Central Utah plans," Chairman and CEO of Richfield Douglas C. Hewitt, Sr. said.

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

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

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

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

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

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

A former engineer, Jon is an award-winning editor who has covered the technology, engineering and energy sectors since the mid-1990s. Email Jon at jmainwaring@rigzone.com.

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Anadarko Has Talked With Exxon, Shell about Mozambique Gas Stake

Anadarko Petroleum Corp. has held early-stage talks with energy companies Exxon Mobil Corp. and Royal Dutch Shell PLC about selling a share of the U.S. oil firm's massive natural gas discoveries off the coast of Mozambique, a senior government official in the country said Thursday.

The discovery of trillions of cubic feet of natural gas offshore Mozambique by Anadarko and Italy's Eni SpA has piqued the interest of some of the world's leading energy companies, which are keen to get a foothold in an area well placed to serve energy-hungry Asian export markets.

Anadarko, an oil and gas exploration company based outside Houston, has said it wants to sell up to 10% of its share of the energy trove.

"We know of Shell speaking to Anadarko, and of talks with ExxonMobil," said the Mozambique official, who spoke on condition of anonymity. He said, however, that Anadarko's talks with the companies so far hadn't brought firm offers as this would have been communicated to the government.

Anadarko spokesman John Christiansen declined to say which potential buyers Anadarko was talking to.

"We've had a lot of interest from a lot of players--a lot of the majors are very interested," he added.

Exxon spokesman Alan Jeffers said: "We don't comment on potential business opportunities."

Shell declined to comment.

"They don't have to tell us which type of discussions; only when it is at a very, very advanced stage do they come to the government and see if we agree," said the Mozambique official. "We have always said a deal will be acceptable if the buyer satisfies the technical and financial requirements, that is all. It is up to the seller to decide."

While Anadarko and Eni have said they want to retain a share in the finds, both firms have sought out investors to allow them to bank some early profits and defray some of the costs of developing a giant liquefied natural gas plant to cool and ship the gas to Asia.

Eni Thursday announced a deal worth $4.21 billion to sell a 20% stake in its field to Chinese state-owned oil company China National Petroleum Corp.

Although Anadarko and Eni agreed in December to jointly develop an LNG plant, neither has extensive experience with building and operating LNG plants, which can cost up to 10s of billions of dollars. By contrast, Exxon and Shell are two of the world's leading LNG investors and shippers.

"Anadarko wants someone with LNG expertise," said the official.

For Shell, buying into Anadarko's license area would be its second attempt at getting a position in Mozambique. Last year, the Anglo-Dutch energy company was outbid by Thailand's PTT Exploration & Production, which snapped up Anadarko's junior partner in the field, London-listed Cove Energy, for $1.9 billion.

Ben Lefebvre in Houston contributed to this report.

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Federal Court Upholds Greenpeace Injunction for Shell Operations

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

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

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

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

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

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

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

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

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

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

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

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

Karen Boman has more than 10 years of experience covering the upstream oil and gas sector. Email Karen at kboman@rigzone.com.

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Brazil's QGEP: Oil Royalties Dispute Unlikely to Delay Concession Auctions

RIO DE JANEIRO - Brazilian oil-and-natural gas company QGEP Participacoes said Thursday that an ongoing dispute over the distribution of oil royalties was unlikely to delay a much-anticipated auction of oil and natural-gas-exploration concessions.

The threat of lawsuits by major oil-producing states Rio de Janeiro, Espirito Santo and Sao Paulo to fight the equal distribution of royalties from existing and future oil production between Brazil's 27 states does "raise the risk" of a delay, QGEP Chief Executive Lincoln Guardado said Thursday during a conference call with analysts. The risk, however, has been diminished by recent signs that nonproducing states are willing to negotiate a deal to avoid a protracted fight in the courts.

The deal would reverse changes implemented last week when Brazil's Congress voted to overturn a presidential veto of key portions of new oil-royalties legislation, equally distributing royalties from existing and future oil production between the country's 27 states. Rio, Espirito Santo and Sao Paulo, however, plan to fight the changes by filing lawsuits with Brazil's Supreme Court.

Oil companies are eagerly awaiting Brazil's 11th-round auction of oil and natural-gas-exploration concessions, which is set for May 14-15. The last auction in Brazil was held in December 2008, and oil companies have said they are running out of areas to explore. Given the government's desire to promote the bidding round, even if there is a delay because of a legal tussle the auction, "should still be held in the first half of 2013," Mr. Guardado said.

QGEP has nearly one billion Brazilian reais ($510 million) in cash, giving the company "significant financial flexibility to participate in the auction," Mr. Guardado added.

Not only is QGEP looking toward the auction to improve its portfolio, but the company is also interested in seeing what assets state-run energy giant Petroleo Brasileiro, or Petrobras, makes available in its divestment plan. Petrobras previously said that it would sell off about $15 billion in assets, including some holdings in Brazil.

QGEP, the oil-and-natural-gas exploration arm of local industrial conglomerate Queiroz Galvao, also said it was interested in selling down its 100% stake in the BM-J-2 exploration block. While reducing the company's level of risk "makes business sense," Mr. Guardado said that the Brazilian market is "oversupplied" with opportunities to buy into offshore exploration blocks.

QGEP still doesn't have a timeline for when the company and its partners in the BM-S-8 block will release a volume estimate for the much-anticipated Carcara subsalt discovery, Mr. Guardado said. "We need more data to make an announcement on a range of volumes," he said. The executive, however, said that some estimates of recoverable reserves at about one billion barrels of crude oil and in-place oil volumes of about five billion barrels may be in the range of possibilities.

The estimates were "potential" numbers, but that other estimates also existed and needed to be further evaluated via a well-stem test that is set for the second half of 2013.

Carcara contains an oil column of more than 400 meters, one of the largest discovered in the subsalt region off Brazil's coast where billions of barrels of oil have been discovered under a layer of salt.

Late Wednesday, QGEP said that it recorded a net profit of BRL47.3 million in the fourth quarter of 2012, nearly doubling net profits in the same period the year before. Net profit jumped on higher natural-gas production from the company's Manati field and strong demand for the fuel in Brazil, QGEP said.

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Cairn Declares Oil Field No-Fly Zone

The safety of India's largest onland oil producing fields at Barmer in Rajasthan could be at stake following the recent air crash at Uttarlai near the oil producing fields.

Flagging the issue before the government, NRI billionaire Anil Agarwal and promoter of Cairn India - which, along with state-owned ONGC, is developing the Rajasthan oil fields - has asked the government to declare the oil fields area that is situated close to the Indian airforce base as a no fly zone.

In a letter to the oil ministry, Cairn wrote, "the air-crash near Uttarlai on 12 February, 2013 was at a distance of less than 4-5 kms from the Mangla oil processing terminal and is a matter of safety concern to Cairn and ONGC as the impact of any such accident has the potential for a serious health, safety and environmental hazard."

The Mangla oil processing terminal (MPT) and Mangala oil well heads are spread over 4,549 acres and are at an aerial distance of only 13 kms from the Uttarlai Air Force Station.

Cairn India and ONGC have so far invested over $4 billion in the project. Today, Mangala Processing Terminal (MPT) at Barmer, Rajasthan, processes oil from Mangala, Bhagyam and other satellite fields.

With the Aishwarya field likely to commence production soon, crude production is expected to increase further. Further expansion activities are also in progress at MPT and with recent exploration approvals accorded by the Centre, Cairn is due to substantially increase its oil processing capacity and cater to various refineries across India.

While stating that the Indian Air Force, Uttarlai, was ensuring that its jets do not fly over the MPT area, Cairn India however said that in view of potential repercussions of IAF and even other civilian aircrafts entering the air space above the MPT and the Mangala well heads, it would recommend that MPT and Mangala well pads enveloping an area of 4,549 acres be declared a "No Fly Zone" to the ministry of defence and the ministry of civil aviation.

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Cairn Declares Oil Field No-Fly Zone

The safety of India's largest onland oil producing fields at Barmer in Rajasthan could be at stake following the recent air crash at Uttarlai near the oil producing fields.

Flagging the issue before the government, NRI billionaire Anil Agarwal and promoter of Cairn India - which, along with state-owned ONGC, is developing the Rajasthan oil fields - has asked the government to declare the oil fields area that is situated close to the Indian airforce base as a no fly zone.

In a letter to the oil ministry, Cairn wrote, "the air-crash near Uttarlai on 12 February, 2013 was at a distance of less than 4-5 kms from the Mangla oil processing terminal and is a matter of safety concern to Cairn and ONGC as the impact of any such accident has the potential for a serious health, safety and environmental hazard."

The Mangla oil processing terminal (MPT) and Mangala oil well heads are spread over 4,549 acres and are at an aerial distance of only 13 kms from the Uttarlai Air Force Station.

Cairn India and ONGC have so far invested over $4 billion in the project. Today, Mangala Processing Terminal (MPT) at Barmer, Rajasthan, processes oil from Mangala, Bhagyam and other satellite fields.

With the Aishwarya field likely to commence production soon, crude production is expected to increase further. Further expansion activities are also in progress at MPT and with recent exploration approvals accorded by the Centre, Cairn is due to substantially increase its oil processing capacity and cater to various refineries across India.

While stating that the Indian Air Force, Uttarlai, was ensuring that its jets do not fly over the MPT area, Cairn India however said that in view of potential repercussions of IAF and even other civilian aircrafts entering the air space above the MPT and the Mangala well heads, it would recommend that MPT and Mangala well pads enveloping an area of 4,549 acres be declared a "No Fly Zone" to the ministry of defence and the ministry of civil aviation.

Copyright 2013 HT Media Ltd. All Rights Reserved

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