Shell postpones Alaskan exploration program to 2012 but Repsol steps in with $768 million kit to explore Alaskan leases!!!

Repsol agreed to acquire 70% interest in the leasehold held by 70 & 148 LLC and GMT Exploration LLC on the North Slope of Alaska. The blocks are located close to large producing fields and cover an area of 2,000 sq km. Repsol has agreed to carry out the investment necessary to explore and evaluate the economic viability of the resources contained in these blocks. The estimated minimum exposure of this investment for Repsol, including amount to be paid to its partners and the cost of exploration to be carried out over several years, amounts to $768 million. The start of exploratory work is scheduled for next winter.

Hurdles in exploring Alaskan leases:

A lengthy US regulatory process has forced Shell to postpone offshore drilling plans in Alaska to 2012 from 2011, although the company expects it will eventually obtain the permits it needs to proceed, a company executive said in February. Shell has invested $3.5 billion in exploration programs in Beaufort and Chukchi Seas of Alaska, but the company's plans have been held up amid legal challenges by environmental groups and native villagers concerned that oil exploration could hurt wildlife and habitat without adequate safeguards.

In addition, last week the US Interior Department had cancelled leasing offshore tracts in Alaska's Cook Inlet that was tentatively scheduled for later this year. So-called lease sale 219 was called off because of lack of sufficient interest by energy companies to search for oil or natural gas in the area. Read more: http://mergersandacquisitionreviewcom.blogspot.com/2011/03/companies-showed-less-interest-in.html

Alaska North Slope - has rooms to grow:

The North Slope of Alaska, holding North America’s largest oil field Prudhoe Bay, is an especially promising area for Repsol as it has already shown to be oil-rich and carries low exploratory risk. This acreage also helps increase the company’s presence in OECD countries.

In the last decade, the smaller oil companies leased hundreds of thousands of acres across the North Slope and drilled dozens of exploratory wells, leading to the first independently operated oil production in the history of the North Slope. If that trend continues, Alaska will become home to many smaller oil companies this decade.

"When we can produce a barrel, and prove to everybody else that we can produce a barrel, I think there's going to be a flood of independents coming to the North Slope," said Jim Winegarner, vice president of land for Brooks Range Petroleum Corp., an independent operator leading a joint venture of small companies on the North Slope. Repsol believes so!!

BP backs off from Algeria Asset sale - What makes BP stay back "Government intervention or Algerian gas potential"???

BP has backed off from plans to sell assets in Algeria, The surprise announcement also comes after Russian joint venture TNK-BP Ltd., which is half-owned by BP, said Tuesday it was still interested in buying the assets owned by the British company--the largest foreign oil and gas investor in the North African nation.

Earlier this year, BP agreed to sell its stake in the two fields, which each have production of up to nine billion cubic metres, for $3 billion, but the government's decision to withhold the data has led to speculation that it is interested in snapping up the assets for itself.

It is not the first time the Algerian government has intervened - in 2000, it blocked BP's proposed sale of a 40% share in the Rhourde El-Baguel field to energy giant Elf, opting to exercise its pre-emptive right of purchase.

A major blow to the potential Russian buyer TNK BP

While confirming its interest in the BP Algerian assets, TNK-BP had cautioned it didn't expect a breakthrough in negotiations soon. Algeria's state energy firm, Sonatrach, had signaled an interest in exercising a right of first refusal to the BP assets. Separately, TNK-BP's Russian shareholders are in a dispute with BP over the possible participation in an Arctic deal signed by the U.K. company with Russian oil company OAO Rosneft. It is unclear if the spat affected the Algerian considerations.

Asset portfolio in Algeria

In Algeria, BP has two large natural-gas projects, In Salah, which covers seven fields in the southern Sahara desert, and In Amenas. BP also participates in the Rhourde El Baguel oil project, and is exploring for oil in the Bourarhet block next to In Amenas. 

For more on BP Algeria: visit: http://docsearch.derrickpetroleum.com/research/q/BP%20+%20Algeria.html

Apache reported 2010 annual results; Production up 13% over 2009; Projected annual growth rate of 13%-15% in 2011

Apache reported annual average production of nearly 658,000 boepd, up 13% from the last year. Liquids production increased 18%, and this, combined with higher oil prices, drove Apache to record earnings of $3.0 billion for 2010. The company added 827 MMboe or 344% of production, through discoveries, extensions and acquisitions. Approximately 245 MMboe, or 102% of 2010 production, in reserve additions came through drilling.

2010 Highlights:

-- 125% reserve growth, replacing 344% of production; 102% through drilling; Record annual production for North America and international

-- Van Gogh and Pyrenees, two oil fields offshore Western Australia, commenced production in February 2010, reaching payout by October and December, respectively

-- Established new regions in the deepwater Gulf of Mexico, Gulf Onshore and Permian Basin, and expanded in Egypt, Canada, and the Gulf of Mexico Shelf.

-- Plan to invest $7.5 billion for 2011 annual year

JSC КаzМunaiGas Exploration Production (KMG EP) reported 2010 annual results; Production up 16% over 2009; Plan to invest $709 million in 2011

KMG EP’s 2010 production was 270 kbopd of crude oil including the Company’s stakes in LLP Kazgermunai JV (KGM), JSC Karazhanbasmunai (CCEL) and PetroKazakhstan Inc. (PKI). The consolidated production for the year is 16% higher than for the same period of 2009 mainly due to the acquisition of a 33% stake in PKI in December 2009. In 2010 the Company produced 177kbopd of oil at Uzenmunaigas and Embamunaigas production facilities, which is 2% less than for the same period of last year.

KeyPoints:

-- Production (Including share in JV’s) – 270 kbopd, 16% higher YoY

-- KMG EP’s proved plus probable (2P) reserves excluding the stakes in JV’s were 1,707 mmboe. The reserves replacement ratio at Uzen and Emba fields in 2010 was 73%, while in 2009 this figure was 25%.

-- Plan to invest $709 millon in 2011, up 10% over 2010

Tullow acquires interest in Kenyan L8 block. East Africa- a hot spot and attracts big players like Apache and Anadarko!!

Pancontinental Oil & Gas signed an agreement with Tullow Oil plc for Tullow to farmin to a 10% interest in the licence over offshore Kenya Block L8 that contains the giant Mbawa Prospect. Tullow will earn a 10% interest in the Block L8 plus an option on a further 5% by paying US$1 million to Pancontinental for reimbursement of past costs, subject to audit, and also by funding the future work program on its own behalf and up to an expenditure “cap” of US$9 million attributable to Pancontinental’s retained 15%. The option to earn a further 5% interest from Pancontinental is subject to Tullow funding any second well to a second agreed “cap” of US$6 million in respect of Pancontinental’s share of well costs. If Tullow does not exercise the option, each of the two parties will fund its own direct share of the second well.

This Tullow farmin follows the recent farmout by the licence operator Origin Energy to Apache pertaining to the Block L8. After the first stage of Tullow’s farmin and subject to approvals and other conditions, the interests in L8 will be: Apache (50%), Origin Energy (25%), Pancontinental Oil & Gas (15%) and Tullow (10%).

Mbawa Prospect overview:

Block L8 holds several substantial exploration objectives. The largest of these is the Mbawa Prospect, a complex anticlinal structure verified by recent 3D seismic data, with potential for both oil and gas at inferred Tertiary/Cretaceous and Jurassic reservoir levels. Based on older 2D seismic data, the shallower Tertiary/Cretaceous reservoir level in Mbawa has potential to easily contain more than one billion barrels of recoverable oil, or several trillion cubic feet of natural gas, or some combination of these two. New 3D mapping will refine these volumetric estimates and these may increase or decrease depending on a number of factors. The potential at the deeper Jurassic level is still being calculated.

Mbawa coincides with interpreted natural oil slicks derived from sea floor “pockmarks” on the flank of the structure. Mbawa also shows “flat spots” or “DHI’s” on both 2D and 3D seismic data. Mr Barry Rushworth, CEO and Director of Pancontinental commented, “Initial planning has already commenced for Mbawa drilling, with the availability and timing of a suitable deep- water rig being a prime consideration”.

East Africa- a new industry hot spot:

The vast area offshore East Africa is a new industry “hot spot”, with a recent oil discovery and major new gas discoveries made by Anadarko and other operators offshore Tanzania and Mozambique. Additional drilling rigs are being brought to the region and drilling is steadily proving-up very large new reserves in these areas south of Kenya. Many geological characteristics are similar over the length of the East African margin.

Shell Australia to sell down its remaining 24.27% stake in Woodside Petroleum worth approximately $8 billion; Is Shell losing interest because it is unable to acquire Woodside completely???

SHELL Australia chairwoman Ann Pickard says “We hoped Woodside would be the vehicle (to develop projects in Australia)  but when it became clear Woodside couldn’t be the vehicle we decided to develop our own projects”.  

Woodside holds interests in oil and gas assets in Australia, the Gulf of Mexico, Korea, and Brazil. Woodside’s principal assets in Australia include: Pluto LNG, Browse LNG, Sunrise LNG, North Rankin Redevelopment and North West Shelf Oil FPSO Replacement Project. 

The key highlights of Woodside include:

-- Woodside’s share of production for the quarter ended 31 Dec 2010: 17.688 MMBOE (Oil 41%)
-- 2010 year end reserves: Proved - 1.308 MMBOE, Proved plus Probable (2P) - 1.680 MMBOE (Gas-84%) and contingent resources - 1.814 MMBOE
-- 99% of 2P Reserves are in Australia and remaining 1% in GoM and other international areas.

Independent companies that have made recent discoveries and that are beginning to increase their output,” are the “best targets” for Chinese/Asian NOC’s - Is Maurel and Prom the next prey?

Maurel & Prom, a French oil producer with a market value of about 1.65 billion euros ($2.28 billion), is weighing a sale. The company is working with banks including Citigroup Inc. to explore options and has drawn interest from potential bidders, including Chinese companies. While Maurel & Prom has discussed a sale process with its advisers, a deal isn’t imminent and a buyer for the company may not emerge.

Independent companies that have made recent discoveries and that are beginning to increase their output,” are the “best targets” for Chinese, Indian and South Korean oil companies.  As the national oil companies such as China Petrochemical Corp., Oil & Natural Gas Corp. and Korea National Oil Corp. are under pressure to raise output and reserves as quickly as possible.