Indonesia Plans Contracts Shakeup
Indonesia plans to change future production sharing contracts in its upstream oil and gas sector so that contractors shoulder the cost of exploration and production, rather than be reimbursed by the government.
Energy Minister Ignasius Jonan said the government plans to issue a new regulation in January so that such costs would be reflected by a more flexible split in revenue from production.
Such a system, instead of the existing cost-recovery system, would be fairer and more efficient, and likely to increase proven reserves, he said.
Big global resource firms such as Chevron, Exxon Mobil and Total operate in Indonesia, but the country has struggled to attract fresh investment and to develop new fields.
Indonesia's chamber of commerce said it was waiting for more clarity on the plans and the Indonesian Petroleum Association said it was still in discussions with the government.
"It will be applied for future PSCs (production sharing contracts), and it will not disturb existing PSCs," Jonan told a conference.
Arcandra Tahar, the deputy energy minister, said Indonesia would determine a base split in revenue between the government and contractors, but this could be tweaked to act as an incentive for companies.
The split could vary according to criteria such as whether a field being exploited was offshore or lay in deep water making work on it more difficult and expensive.
In addition, it could change depending on the amount of local content used by a contractor in a project.
Indonesia's crude oil output peaked at around 1.7 million barrels per day in the mid-1990s. But with few significant oil discoveries in Western Indonesia in the past 10 years, production has fallen to roughly half that as old fields have matured and died.
The industry is a vital part of the Indonesian economy, but its contribution to state revenue has dropped from around 25 percent in 2006 to an expected 3.4 percent this year, according to data compiled by consulting firm PricewaterhouseCoopers.
8--Iraq Gets New World Bank Loan
The World Bank has approved a new loan of $1.485 billion to help Iraq lessen the impact of low oil prices on its economy and shoulder the cost of the war on Daesh, the international lender said in a statement.
The new loan brings the World Bank’s engagement in Iraq to nearly $3.4 billion, it said.
The Bank provided $1.2 billion and $350 million in support to Iraq in 2015, a year after Daesh seized about a third of the country's territory.
The lightning advance of Daesh happened as oil prices collapsed, drastically reducing the government's income, which comes almost exclusively from crude sales.
Iraq is OPEC's second-largest oil producer after Saudi Arabia.
The new loan aims to support government efforts to rationalize spending, improve energy efficiency and enhance governance at state-owned companies, the World Bank said.
In Iraq, "we are looking at a unique case, frankly," said World Bank Director for the Middle East Ferid Belhaj.
The country is "engaging in structural, deep, far-reaching reforms at the same time as fighting a brutal war against a destructive force," he told Reuters in a telephone interview.
The International Monetary Fund in July approved a new three-year, $5.34 billion standby arrangement to support Baghdad's efforts to deal with lower oil prices and ensure debt sustainability.
The country's oil and gas wealth constitute a solid loan repayment guarantee, said Belhaj.
"Iraq is one of the richest countries on the face of the earth. Iraq has huge potential and Iraq has the capacity to repay its debt," he said.
"It has the capacity to leverage its resources to engage in a total new era of diversification" away from the oil industry, he said.
Russia Expects 10bcm Gas Export Growth
Russia's gas exports are expected to grow by 10 billion cubic meters to reach 202.3 billion cubic meters this year, Russian Energy Minister Alexander Novak said.
"Exports will increase by 10 billion cubic meters of gas to 202.3 billion cubic meters," Novak told reporters.
"Oil export [in 2016] will reach 253.5 million tonnes which constitutes a 4.8-percent increase."
"Oil production is expected at 547.5 million tonnes, the growth is 2.5 percent," Novak said of the anticipated 2016 results.
Russia is offering to hold an OPEC and non-OPEC committee meeting to monitor oil production cuts sometime between January 20-29, Novak said.
"Work, an exchange of views is underway. We believe that we need to convene sometime after January 20, but we do not yet know the position of other countries," Novak told reporters.
He noted that Russia's monitoring group has met national producers and plans to meet once before this year, with an anticipated biweekly schedule.
The monitoring group includes 12 of Russia's largest oil producers.
----Norway Oil Output 5% Higher Than Expected
Total production of crude oil, natural gas and other similar products increased about 37,000 barrels per day from October, the Norwegian government said.
Norway is among the leading oil and natural gas suppliers to the European economy apart from Russia. The Norwegian Petroleum Directorate reported preliminary data for November show an average production of 2.15 million barrels of oil, natural gas liquid and an ultra-light product called condensate, which is about 2 percent higher than figures from October.
Average daily production of oil from Norway was 1.74 million barrels, about 9 percent higher than the NPD reported last year and 11 percent higher than expected.
"The oil production is about 5 percent above the prognosis so far this year," the NPD said
Norwegian energy company Statoil, which is part owned by the government, reported this week that its Troll field in the North Sea reached its 1 billionth barrel. The company said Troll production has been relatively flat over the past few years, but another eight to 10 years of production is left in the field.
In October, the NPD said Statoil uncovered oil near an existing field in the southern waters of the Norwegian Sea while drilling a wildcat well, a well tapping into an area not previously known to contain hydrocarbons.
The Norwegian energy major recently submitted a plan for development to Petroleum Minister Tord Lien for the Trestakk discovery, which holds about 76 million barrels of recoverable oil equivalent, and most of that exists as oil.
The figures add to a lingering market scenario of oversupply. Members of the Organization of Petroleum Exporting Countries agreed to a production ceiling of around 32.5 million bpd in an effort to pull the market back into balance. That level would amount to a cut in OPEC production and the arrangement hinges on non-member states to be effective.
-Total production of crude oil, natural gas and other similar products increased about 37,000 barrels per day from October, the Norwegian government said.
Norway is among the leading oil and natural gas suppliers to the European economy apart from Russia. The Norwegian Petroleum Directorate reported preliminary data for November show an average production of 2.15 million barrels of oil, natural gas liquid and an ultra-light product called condensate, which is about 2 percent higher than figures from October.
Average daily production of oil from Norway was 1.74 million barrels, about 9 percent higher than the NPD reported last year and 11 percent higher than expected.
"The oil production is about 5 percent above the prognosis so far this year," the NPD said
Norwegian energy company Statoil, which is part owned by the government, reported this week that its Troll field in the North Sea reached its 1 billionth barrel. The company said Troll production has been relatively flat over the past few years, but another eight to 10 years of production is left in the field.
In October, the NPD said Statoil uncovered oil near an existing field in the southern waters of the Norwegian Sea while drilling a wildcat well, a well tapping into an area not previously known to contain hydrocarbons.
The Norwegian energy major recently submitted a plan for development to Petroleum Minister Tord Lien for the Trestakk discovery, which holds about 76 million barrels of recoverable oil equivalent, and most of that exists as oil.
The figures add to a lingering market scenario of oversupply. Members of the Organization of Petroleum Exporting Countries agreed to a production ceiling of around 32.5 million bpd in an effort to pull the market back into balance. That level would amount to a cut in OPEC production and the arrangement hinges on non-member states to be effective.
Average daily production of oil from Norway was 1.74 million barrels,
Petrofac has secured a contract worth $75 million from South Oil Co. (SOC) for its Iraq Crude Oil Export Expansion Project (ICOEEP).
The one-year contract with a one-year option was awarded following a competitive tender. As the incumbent, Petrofac says it plans to build on its four-year track record of safe and successful delivery on behalf of SOC.
Under the new agreement, Petrofac will continue to facilitate a substantial proportion of Iraq’s oil export which is generated from the facility located 60 km (37 mi) offshore the Al Fao Peninsula in southern Iraq. The company’s principal role is to provide operations and maintenance services for the export facilities, comprising the central metering and maintenance platform and four single point moorings, and the loading of the tankers for onward transportation.
Mani Rajapathy, managing director, Engineering & Production Services East, said: “Over the last four years we’ve achieved some significant milestones on this project, including the export of more than 1.5 Bbbl of oil.
“We have remained focused on adding value for our client through the deployment of innovative and differentiated solutions and on working safely in a complex operating environment. Earlier this year the teams celebrated achieving five million man-hours worked without a lost time incident which is testament to the safety culture that has been created on the project.”
Hayan A. Abdulzahra, director general, South Oil Co., added: “From the beginning of our relationship, Petrofac has been aligned to our goals to significantly increase production from the ICOEEP facility. This has been realized through the team’s continued focus on operational excellence and safe and innovative project execution. I look forward to continuing to meet our safety and export milestones with Petrofac as our partner
Bahrain Authorizes First Offshore LNG Scheme
Bahrain LNG WLL has completed limited recourse financing for an LNG receiving and regasification terminal.
The facility, due to be completed in early 2019, will have a capacity of 800 MMcf/d.
It will comprise a floating storage unit (FSU), an offshore LNG receiving jetty and breakwater, an adjacent regasification platform, subsea gas pipelines from the platform to shore, an onshore gas receiving facility, and an onshore nitrogen production facility.
Bahrain LNG WLL is jointly owned by the Oil and Gas Holding Co. (nogaholding) and a consortium of Teekay LNG Partners, Gulf Investment Corp., and Samsung C&T.
Bahrain’s National Oil & Gas Authority awarded the project to Teekay LNG-GIC-Samsung consortium last December following an international competitive tendering process.
The project is designed to supplement local gas production in Bahrain and ensure capacity to meet peak seasonal gas demand and industrial growth. It will also enable Bahrain to procure internationally-traded LNG on a competitive basis.
GS Engineering & Construction has the engineering and construction contract. Teekay LNG will supply the FSU which will be modified for this project to fulfil a 20-year time-charter agreement.
Nine international and regional banks are participating in the $741-million loan for the project, with Korea Trade Insurance Corp. providing commercial and political risk cover for around 80% of the financing.