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    Breaking - 19 Reported Dead as Helicopter Carrying Oil Workers Crashes (Saturday, 22 October 2016)

    22 Oct 2016, 11:00 pm

    Russia's aviation agency says 19 people have died after a helicopter carrying oil workers crashed.

    The Federal Air Transport Agency says in its statement Saturday that 16 of the 19 passengers on board and all three crew members died in Friday's crash in northern Russia.

    The Mi-8 helicopter was traveling from Vankor to Staryi Urengoi in the Yamalo-Nenets region when it crashed about 45 kilometers (28 miles) northeast of Staryi Urengoi.

    Rescuers found the helicopter lying on its side in the tundra. The agency said poor visibility and strong winds could have been factors.

    The Mi-8 has been a mainstay of Soviet and Russian aviation since the late 1960s and is widely used worldwide.


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    China Oil Majors Continue Record-setting Output Cuts in September (Saturday, 22 October 2016)

    22 Oct 2016, 3:00 am

    China's crude oil output fell 9.8 percent in September from a year earlier in the second-biggest year-on-year decline on record, government data showed, with major producers continuing to shut high-cost wells to rein in spending.

    Domestic crude output dropped to 15.98 million tonnes, or 3.89 million barrels per day (bpd), near the lowest in six years on a daily basis, National Bureau of Statistics data showed on Wednesday, reflecting both spending cuts at oil fields and the closure of old wells.

    The sharp decline, following a record 9.9-percent drop in August, is the latest sign that a prolonged efficiency drive by drillers in one of the world's top five producers may help to rebalance the oversupplied global market.


    "Overall, low oil (prices) offer a good excuse or reason for Chinese firms to finally shut down those high-cost fields, which were previously operating with little concern over cost," said Tee Sengyick of consultancy SIA Energy.

    Daqing, China's largest oilfield by output and one of its oldest, as well as Shengli in the eastern province of Shandong, are considered some of the nation's most inefficient fields and have drawn the most scrutiny among producers in their output cuts.

    Those curbs have come as international oil prices have stabilized amid hopes that OPEC members will agree output cuts. Prices are hovering around $52 a barrel after recovering strongly so far this year, but are still down more than 50 percent since mid-2014 and upstream companies are still struggling to make a profit.

    China National Petroleum Corp's (CNPC) president Wang Yilin earlier this month promised to adjust the company's crude output plan to reduce "inefficient output" in the fourth quarter, the company's official newspaper reported.

    Sinopec Oilfield Services Corp, a listed unit of CNPC's upstream business, has forecast a nine-month net loss of 8.9 billion yuan ($1.3 billion) due to low prices and weakness in the sector.

    This low production partly contributed to record high imports in September, with the robust intake seen extending to year-end as domestic output falls and strategic reserve storage capacity is expanded at newly opened sites.

    China processed 43.8 million tonnes of crude, or 10.658 million (bpd), in September, up 2.4 pct on a year earlier, the government data showed on Wednesday. In the first nine months, crude oil throughput rose 2.1 percent from a year ago to 399.93 million tonnes, or 10.655 million bpd

    China's natural gas production for September rose 0.1 percent from a year earlier to 10.2 billion cubic meters.

    ($1 = 6.7372 Chinese yuan)


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    Saudi Arabia Looks to Russia to Boost non-OPEC Cooperation (Saturday, 22 October 2016)

    22 Oct 2016, 12:00 am

    Saudi Arabia's Energy Minister Khalid al-Falih said on Sunday he had invited his Russian counterpart Alexander Novak to meet Gulf Arab energy ministers in Riyadh as part of efforts to cooperate with non-OPEC members to stabilize the oil market.

    "Russia is one of the world's biggest oil producers ... and is one of the influential parties in the stability of the oil market," Falih said at the opening session of the six-member Gulf Cooperation Council (GCC).

    Falih said Novak had welcomed the invitation, "as a clear indication of sincere desire to continue cooperation and coordination with the oil producing and exporting countries for more stability in the market."


    Novak had said on Friday he would take "some" proposals to the meeting in Riyadh.

    Last month in Algiers, the Organization of the Petroleum Exporting Countries agreed modest oil output cuts. The goal is to cut production to a range of 32.50-33.0 million barrels per day (bpd).

    "The Algeria meeting last month was successful in pushing the path of cooperation between oil producing and consuming countries and included important talks between experts from OPEC countries and outside of OPEC about oil markets," Falih said calling on his Gulf energy counterparts to work together as a bloc.

    Falih also said that the low oil price environment had led to a decrease in investments which could lead to a shortage in supply in the future and have a negative effect on the global economy.


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    CGX Energy Cuts Ties with Rig Yard Project Partner (Friday, 21 October 2016)

    21 Oct 2016, 11:00 pm

    Canadian-based oil and gas exploration company focused on the exploration of oil in the Guyana-Suriname Basin, CGX Energy, has canceled a partnership deal for the company’s proposed wharf and logistics yard in Berbice, Guyana.

    CGX had entered into a term sheet agreement with an undisclosed potential partner regarding its Berbice Port Project back in April.

    The company said it had provided the partner and its advisors a seventy-five day period to conduct further due diligence and allow the parties time to negotiate definitive documentation.


    Following the expiry of the agreement, the deal was then amended, moving the deadline until August 20, 2016. After the amended deadline passed CGX decided not to enter into a definitive partnership agreement.

    CGX said it had lost confidence in the partner due to the inability to confirm the financial capacity to complete the transaction proposed by the deal. As a result of the term sheet agreement, CGX received $50,000 as a non-refundable deposit from the partner.

    Serafino Iacono, Co-Chairman of CGX, said: “Unfortunately, we abandoned the proposed transaction for a number of reasons, including as a result of the partner not being able to demonstrate the financial wherewithal to complete the purchase of the assets and fund the requisite capital expenditures required under our proposed partnership.

    “Ultimately, the company could not risk entering into a definitive agreement with a partner that could not demonstrate a baseline ability to meet their financial commitments under the proposed terms of the transaction.”

    The company said it is now actively seeking a new partner to help in the development of its Berbice Port Project.

    In 2010, CGX secured a 50-year land lease from the Government of Guyana for a 15.6 acres plot containing an existing logistics yard with 600 meters of frontage property at the mouth of the Berbice River. The project entails building a deep sea port to service the offshore oil and gas exploration industry in the Guyana-Suriname Basin.

    CGX added that it in light of the recent drilling success of ExxonMobil, offshore exploration and production industry in the Guyana-Suriname Basin is ‘expected to expand dramatically.’

    Since the Port of Georgetown lacks the ability to expand and cannot accommodate large ships due to low maximum draft, the Berbice Port Project is an opportunity to develop a main deepwater port facility in Northeast South America, CGX said.


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    Halliburton, U.S. Silica Break Record for Moving Largest Sand Unit Train in North America (Friday, 21 October 2016)

    21 Oct 2016, 10:00 pm

    Halliburton and U.S. Silica Holdings moved a record breaking unit train carrying nearly 19,000 tons of U.S. Silica White frac sand from Ottawa, Ill., to Elmendorf, Texas.

    The train, the largest frac sand unit of its kind shipped to date in North America, arrived last week via the BNSF railroad. Unit trains reduce transit time from mine to transload facility.

    “Utilizing sand unit trains enables Halliburton to respond to customers’ needs on a shorter timeline and deliver cost efficient sand on location to drive the lowest cost per BOE,” said Richard Gonzalez, V.P., Production Enhancement, Halliburton.


    “Unit train delivery, leveraging our combined logistical assets, is the most efficient and cost effective way to deliver high volumes of sand in the time constraints required,” said Don Weinheimer, senior V.P. and president, Oil and Gas, U.S. Silica. “Unit train capability is increasingly critical to our customers success as sand demand per well continues to ramp up.”

    The unit train, which originated at U.S. Silica's largest plant in Ottawa, Ill., took five days to build and was loaded with 30/50 and 40/70 U.S. Silica White frac sand. It was received at the Halliburton Elmendorf South Texas Sand Plant, which can handle two 115 car unit trains simultaneously and can hold 40,000 tons in its eight silos. The facility is located within the Alamo Junction Rail Park in Elmendorf, about seven miles from the company’s South Texas Operations Center in southern Bexar County.


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    Ex-Venezuela PDVSA Boss Denies $11 Billion Corruption Allegations (Friday, 21 October 2016)

    21 Oct 2016, 8:00 pm

    Former PDVSA President Rafael Ramirez denied as "irresponsible lies" a Venezuelan congressional investigation accusing the state oil company of corruption to the tune of $11 billion during his decade-long tenure.

    The National Assembly's comptroller commission on Wednesday accused PDVSA of failing to account for the money, lost it says between 2004 and 2014 when Ramirez was at the helm.

    "I want to totally DENY the lies, declarations and infamies of those lawmakers and the 'supposed report,'" said Ramirez in a statement published on the website of the Venezuelan mission to the United Nations, which he now leads.


    "(They) act with absolute irresponsibility and brazenly lie in order to push forward a campaign to discredit and morally lynch the leaders of the revolution," he added in the 1,000-word response.

    PDVSA has been the linchpin of Hugo Chavez's revolution for 17 years, currently providing 94 percent of export revenue.

    Low oil prices, however, have unveiled weaknesses in the model and the country is undergoing a major economic and social crisis.

    The government blames these problems on an "economic war" waged by the opposition.

    PDVSA has said in the past it is victim of a right-wing campaign, led by the United States and international media, to sabotage socialism.

    The report was presented on Wednesday by commission president Freddy Guevara, a member of one of Venezuela's most hardline opposition parties.

    PDVSA itself has not responded to the allegations made by Guevara's team and did not respond to a request for comment by Reuters.

    The congressional investigation focused on 11 cases, ranging from scandals in an Andorran bank and PDVSA pension funds to alleged overpricing in purchases of oil equipment.


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    OGA and EEEGR Looking to Rejuvenate Southern North Sea (Friday, 21 October 2016)

    21 Oct 2016, 6:00 pm

    UK’s Oil and Gas Authority (OGA) and the East of England Energy Group (EEEGR), have launched a new Southern North Sea Rejuvenation Special Interest Group (SIG) at a government reception to highlight the importance of the region in the economic recovery of the UK’s oil and gas reserves.

    OGA said on Wednesday that the reception held by the House of Commons, the lower house of the Parliament of the United Kingdom, hosted industry leaders, representatives from companies, organizations and colleges serving the oil and gas, offshore wind and nuclear industries.

    There they met with OGA representatives, Secretary of State for Business, Energy and Industrial Strategy (BEIS) Greg Clark and Minister of State for Energy and Intellectual Property Baroness Neville-Rolfe in the Members’ Dining Room.


    Eric Marston, OGA Southern North Sea Area Manager, said: “The Southern North Sea Rejuvenation SIG was established in recognition of the significant potential which remains in the basin. The area’s unique blend of energy sources, including offshore wind, means we can take advantage of the synergies between industries to explore how we can work together in future for mutual benefit.

    “We estimate another 3.7 trillion cubic feet (tcf) of gas remains from current assets and, potentially, another 5 tcf combined from further drilling in current fields and discovered undeveloped new fields.

    “It is essential we promote further exploration and appraisal activity, protect critical infrastructure and support marginal and small pool developments utilizing the experienced supply chain and latest technology.”

    Also, a new Late Life and Decommissioning Matrix, showing the capabilities of regional companies looking to capitalize on the £47 billion ($57.7 billion) offshore decommissioning sector, is being created by EEEGR in association with OGA, Decom North Sea, and Great Yarmouth Borough Council.

    OGA said that, when complete, it will enable operators to view services the East of England supply chain can provide. Businesses interested in decommissioning can also use it to discover where there may be gaps in services.

    Simon Gray, Chief Executive at EEEGR, said: “Our region is becoming a trail-blazer in this sector, generating new skills and innovative solutions which could become opportunities for worldwide adoption and expansion.”


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    Niko and Diamond Settle Dispute Over Two Rig Contracts (Friday, 21 October 2016)

    21 Oct 2016, 2:00 pm

    Oil and gas company Niko Resources has reached a settlement agreement with offshore drilling contractor Diamond Offshore over drilling contracts for the pair of semi-submersible rigs Ocean Lexington and Ocean Monarch.

    Niko hired Diamond’s semi-sub Ocean Monarch in 2011 for a four-year term with the option of one additional year. The contract started in 2012 and the rig was used for drilling operations offshore Indonesia. The Ocean Lexington was awarded a 477-day job in Trinidad in 2012.

    In December 2013, as part of its financial restructuring, Niko entered into an agreement with Diamond Offshore relating to the termination of the Ocean Monarch rig agreement including settlement of the company’s payment obligations and other commitments under drilling contracts for the semi-submersible drilling rigs Ocean Lexington and Ocean Monarch.


    The settlement agreement included a mutual release of claims in respect of Niko’s payment obligations to be released upon payment by the company of $80 million to Diamond Offshore. Diamond got $25 million in the fourth quarter of 2013 and received a cash payment of $20.3 million during 2014. Niko was further obligated to make periodic payments totaling an aggregate of $34.8 million, payable at various times through December 2016.

    Starting on June 30, 2015, Niko has not made scheduled payments under the terms of the Diamond settlement agreement, with unpaid amounts totaling $20 million as at March 31, 2016.

    In July 2015, Diamond filed a lawsuit in a court in Texas seeking to enforce certain obligations. In May 2016, the Texas court issued a summary judgment in the amount of $20 million plus interest and legal costs, and, in June 2016, Diamond filed a lawsuit in a court in Alberta seeking to enforce the summary judgment of the Texas court.

    Niko & Diamond make peace

    Following the three-year-long dispute, Niko Resources said on Tuesday it has executed an agreement with subsidiaries of Diamond Offshore relating to the settlement of outstanding claims under drilling contracts and the Diamond settlement agreement executed in December 2013, including related judgments granted by courts in Texas and Alberta, in compliance with the terms of the previously disclosed amended and restated facilities agreement.

    Under the 2016 settlement agreement, in exchange for full and final mutual releases of outstanding claims under the drilling contracts and the 2013 settlement agreement, including related judgements, Niko has: agreed to make future payments to Diamond equal to 20 percent of amounts to be retained by Niko pursuant to the waterfall distribution under the terms of the amended and restated facilities agreement, subject to a cap; paid to Diamond a cash settlement amount; and assigned to Diamond a portion of potential contingent payments under the previously announced sale agreement for Niko’s interest in five Indonesian production sharing contracts.

    Robert S. Ellsworth Jr., interim Chief Executive Officer of Niko, said: “The settlement agreement with Diamond represents another important step in advancing the company’s strategic plan to maintain its core assets for a period of time with the goal of enhancing value and ultimately monetizing these assets for the benefit of the company’s stakeholders.”


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