October 2007

ONGC signs with Ocean Rig for deepwater rigs Posted Monday, October 29, 2007 - 11:21 by petromin
Oil & Natural Gas Corp. (ONGC) signed a memorandum of understanding with Ocean Rig ASA to contract two fifth-generation semisubmersible deepwater rigs for 5 years each for $2.07 billion total.
The Leiv Eiriksson was completed in 2001 while the Eirik Raude was completed in 2002, both built to the Bingo 9000 design. The Eirik Raude is under contract with ExxonMobil Corp. in Canada and would be available around August 2008. The Leiv Eriksson is under contract with Royal Dutch Shell PLC in the North Sea and would become available in October 2009.
"Except Ocean Rig, none of the other bidders were in a position to supply rigs within the stipulated time frame," said a senior ONGC official. "In fact, we are anxious to get all the formalities of the signing completed as soon as possible, in the face of the continuing shortage of deepwater drilling rigs."

Indonesia to sign $10 billion in oil, gas contracts Posted Monday, October 29, 2007 - 11:15 by petromin
Indonesia will sign $10 billion worth of contracts next week at the Asia Pacific Oil & Gas Conference & Exhibition 2007 (APOGCE), according to a senior official.
Energy and Mineral Resources Ministry Sec. Gen. Waryono Karno said the contracts, to be witnessed by President Susilo Bambang Yudhoyono, would cover the financing and development of oil and gas projects, along with electric power projects and gas sales.
Waryono also said the government would offer 26 oil and gas blocks for tender, following a delay brought by discussion of cost recovery arrangements in the country's oil and gas industry.
The highest value deal to be signed involves sales agreements for gas worth an estimated $5.5 billion, while $1.2 billion will go on development of the Oyong and Ujung Pangkah oil and gas fields in East Java.
The Oyong field, operated by Santos Ltd., is expected to produce 6,000 b/d of oil, while Ujung Pangkah, operated by Hess Corp., is to produce 6,000 b/d of oil and 10 MMcfd of gas.
"We will also see the signing of the second-stage loan agreement for the Tangguh project which is worth $884 million," Waryono said, adding that the loan will be provided by a consortium of lenders led by China's Fujian Bank.
Earlier this year Kardaya Warnika, chairman of Indonesia's upstream oil and gas executive agency BP Migas, said construction on the Tangguh LNG facility was 70% complete, and startup is expected by fourth quarter 2008, if operator BP Indonesia receives further financing for the project.
A few months later, Indonesian state-owned banks Bank Mandiri and Bank Negara Indonesia were said to be seeking to join a new syndicate of lenders that intend to fund the remaining construction costs for the plant.
Following that in June, Talisman Energy Inc. said it would challenge CNOOC Ltd. in a Texas court over the Chinese firm's 17% stake in the Tangguh project, which is expected to begin commercial LNG production in 2008-09.
Meanwhile, during APOGCE, state-owned electricity company PLN also expected to sign five power purchase agreements with independent electric power producers and agreements for the construction of five coal-powered plants.
The five new plants are in North Sumatra, 400 Mw, Lampung, 200

Papua New Guinea offers oil, gas investment incentives Posted Friday, October 19, 2007 - 10:36 by petromin
Papua New Guinea is ready to support foreign investment in its oil and gas industry, a senior official told executives from leading Japanese firms Oct. 16.
"The government stands to support foreign investment, including Japanese investment, by providing regulation, incentives, policy directions, and leadership to ensure [that] development goals, visions, and missions are achieved," said Commerce and Industry Minister Gabriel Kapris.
"We have a common ground to start business discussion," he said. "Just as you need our raw materials, we need your skills, knowledge, and capital to build downstream industries."
He said Papua New Guinea has been experiencing unprecedented growth in employment and business in the private sector, along with a budget surplus, low inflation, stable currency, and high export commodity prices, especially in its oil and gas sector.
The Japanese delegation included executives from Japan Bank of International Cooperation, Nippon Oil Exploration Co., Itochu Corp., JCG Corp., Cosmo Oil Corp., Mitsubishi Heavy Industries, Sumitomo Mitsui Banking Corp. and LNG Japan Corp.
PNG Ambassador to Japan Michael Maue said the visiting Japanese are seeking to establish contact with the country's political leadership and discuss issues on gas investment.
Earlier this month, the Japanese government agency Japan Oil, Gas, and Metals National (Jogmec) said it planned to spend �760 million buying a stake in Block PPL190, onshore Papua New Guinea. Jogmec plans to acquire a 30% share of Murray Oil�a joint venture of Inpex, Japan Petroleum Exploration, and Japan Energy�which owns 26.5% of the block. Murray's partners are Oil Search 62.6% and Cue Energy 10.9%.
Last month, Austral Pacific Energy Ltd., Wellington, NZ, said it would begin appraisal work later this year on Stanley gas field in Papua New Guinea after winning a 5-year extension to its Petroleum Retention License (PRL) 4. Austral Pacific, operator, holds a 28.92% interest in PRL 4. Its partners include InterOil Corp. 43.13% and Horizon Oil Ltd. 27.95%.

Migas grants NW Natuna group exploration license Posted Friday, October 19, 2007 - 10:34 by petromin
Migas, Indonesia's petroleum regulatory agency, has awarded a license to NW Natuna Joint Study group to carry out a geological and geophysical program over acreage in the northwest Natuna basin off Indonesia. The area spans 14,400 sq km and is described as highly prospective.
Enovation Resources Ltd, Carnarvon Petroleum Ltd., Natuna Ventures Pte. Ltd., and PT Gema Terra form Natuna Joint Study group.
The joint study area lies in the underexplored northwest Natuna basin northeast of the oil and gas provinces of the West Natuna and Malay basins and southwest of recent oil discoveries within the southern part of the Nam Con Son basin in Viet Nam.
Once work is completed, "the group will have a right of first refusal to conclude a direct award for a block within the joint study area under Indonesia's production-sharing contract (PSC) terms," Enovation said.
This is Enovation Resources' first exploration license in Indonesia, but it said it would continue to assess other opportunities.

Exploration proceeds off Myanmar as crisis boils Posted Friday, October 19, 2007 - 10:32 by petromin
Exploration work on Myanmar's Block M9 in the Gulf of Martaban is progressing "normally," according to Thailand's majority state-owned PTT Exploration & Production PLC, despite Myanmar's biggest street protests in 20 years. A major natural gas discovery was made on the block, which lies 300 km south of Yangon, just a week before the violent crackdown on demonstrations began.
Four exploration and four appraisal wells have already been drilled on Block M9, and plans are afoot to drill an additional four to five appraisal wells to confirm petroleum reserves. Drilling will take place between December and April 2008.
Exploration results have confirmed the commercial potential of Block M9, and PTTEP executives indicated earlier that 300 MMcfd could be brought on stream in 2011 or 2012. PTTEP has held a Block M9 production-sharing contract with Myanmar since 2003 and holds 100% interest in the block.
Meanwhile, Thai Energy Minister Piyasvasti Amranand has postponed talks with the current Myanmar regime for purchase of gas from the block. The crisis is complicating negotiations, which are not expected to begin any time soon.
However Piyasvasti reiterated Thailand's intention to secure more gas supplies from Myanmar when the kingdom can ensure that any deal will be secure.
Thai officials indicated the talks could wait until PTTEP fully completes its exploration program.

China to start second phase of West-East pipeline Posted Friday, October 19, 2007 - 10:29 by petromin
China is likely to start the second phase of the West-East natural gas pipeline project around yearend or early 2008, according to a senior government official.
Chen Deming, vice-chairman of the State Development and Reform Commission, said gas from Xinjiang, the Inner Mongolia Autonomous Region and Shaanxi Province will be transported to the Pearl River Delta through the country's pipeline network after completion of the West-East project.
Chen said more than 12 billion cu m of gas will be supplied to the Yangtze River Delta in 2 years' time, due to increased imports of gas and large-scale gas exploitation in Chongqing Municipality and Sichuan Province.
By then, he said, the urban gas and transportation systems in half the regions of China will gradually have access to clean gas.
Over the last 4 years, China has seen a 62% increase in the growth of its oil and gas pipeline networks, which now extend a total of 48,000 km, according to official figures

SPC Completes Increase of Participating Interest in Cambodia Block B Posted Sunday, October 14, 2007 - 12:31 by petromin
Singapore Petroleum Company Limited�s wholly-owned subsidiary, SPC Cambodia Ltd (SPC Cambodia), and its partners have completed their acquisition of a combined 10% interest in Block B exploration block in Cambodia, further to an announcement on 5 January 2007. This follows approvals by the Cambodian National Petroleum Authority.

The additional 10% interest was acquired from CE Cambodia B Ltd, a wholly-owned subsidiary of Cooper Energy Limited. With its completion, SPC Cambodia and its two partners, PTTEP International Limited and Resourceful Petroleum Limited, each have one-third share in Block B.

Block B is located 250km off the coast of Cambodia to the east of the Thai-Cambodian Overlapping Claims Area, in the Gulf of Thailand. Block B lies to the southeast of the Khmer basin where a number of oil and gas discoveries have been made.