Latest News

    Ex-Petrobras Director Arrested (Friday, 3 July 2015)

    1 Jan 1970, 12:00 am
    Brazilian police arrested Jorge Zelada, former director of Petrobras' international division, as part of an ongoing investigation into bribery and corruption at the state-run oil producer, prosecutors said on Thursday.Zelada is suspected of money-laundering, appropriating public funds, corruption, tax evasion and contract fraud. He was taken into custody early Thursday as part of the graft probe that has already ensnared dozens of Brazil's top executives.Prosecutor Carlos Fernando dos Santos Lima said Zelada, who led the international division from 2008 to 2012, appeared to have received bribes on a contract for the Titanium Explorer drillship operated by Vantage Drilling Co and another rig operated by Pride International, a company acquired by Ensco Plc in 2011.Lima told Reuters last week the sprawling investigation had turned up evidence of corruption by more than a dozen foreign firms that had contracts with Petrobras, but Vantage is thought to be the first U.S. company mentioned.Paul Bragg, chairman and chief executive officer of Vantage, said in a statement the company has found no evidence that would substantiate any allegation of improper activity in connection with the awarding of the Titanium Explorer contract.Efforts to reach press representatives at Ensco were unsuccessful.According to a police statement, the 15th phase of the Petrobras investigation, dubbed "The Monaco Connection," led to search and seize warrants for three other suspects.Zelada is suspected of hiding some 11 million euros ($12.19 million) received through bribes in Monaco, prosecutors said in a statement.His lawyer Eduardo Moraes said the arrest was unnecessary and illegal and that he would ask for a higher court to release his client. Zelada has not been formally charged and federal Judge Sergio Moro justified his preventive detention by pointing to a risk of additional money laundering involving overseas accounts.Zelada is the fifth ex-Petrobras executive implicated in the 16-month-old investigation and the fourth to be arrested. Another former head of the international division, Nestor Cervero, was sentenced May 26 to five years in prison for money laundering.Lima said he expects to end the year with about 1 billion reais ($321.5 million) in funds returned to Petrobras, which prosecutors say was a victim of the corruption scheme.Source: www.reuters.comPlease leave comments and feedback below

    Oil Traders Speculate on Anticipated Price Slump (Thursday, 2 July 2015)

    1 Jan 1970, 12:00 am
    Speculators are piling into complex crude options this week, in a bet the market is going to tumble later this year on an expected slowdown in refinery demand and robust oil inventory levels.Some 8,200 lots of bearish calendar-spread options were executed on Tuesday over the remainder of the third quarter, the fourth quarter and into the first quarter of 2016 in the over the counter market, according to CME Group's daily bulletin on Wednesday. The contracts can go days without a single trade, so the rush was unusual.Those trades included puts, put spreads and fences, dealers say, with strike prices at negative 50 and negative 75 cents. Five hundred puts also traded at a negative $3.00 strike price for the August/September and September/October contracts.Since the end of April, the front to second month spread has strengthened by nearly 80 percent. On Wednesday, the spread between the two underlying futures contracts settled at negative 41 cents.The move highlights tension between New York and Houston where funds and speculators have traded the price of U.S. NYMEX crude oil up and sideways for months while physical traders in the oil capital say there is too much crude globally, exacerbated by U.S. refinery shutdowns for maintenance and growing exports from the Middle East."The physical market isn't trading in tune with the futures market. One of those will have to correct - either futures have to come down or physical gets better," said Tariq Zahir of Tyche Capital Advisors, adding that an Iranian deal on nuclear talks could swell the existing glut."People are now starting to price in that for the fourth quarter, so that would make calendar spreads weaker."A calendar-spread option (CSO) is a financial contract based on the price of two calendar months in the futures market. The contracts are riskier because the market is less liquid than for a basic vanilla option. Traders and analysts say unexpected price swings have put counterparties on the hook for millions of dollars if the market moves against expectations.The large number of deep out-of-the-month contracts traded reflects the first signs that a second leg of the price tumble that slashed global benchmarks by nearly 60 percent last year may be imminent.Traders add that the buying of puts in the options market through the first quarter of 2016 has been robust and increasing.DIFFERENT VIEWPOINTSDivergence between the physical and futures markets is not necessarily surprising: futures traders focus on macroeconomic and geopolitical risks, while cash traders focus on pipeline outages and supply-demand balances.But the two markets have traded very closely over the last year, as rising stockpiles at the U.S. hub of Cushing, Oklahoma, caused major sell offs in the U.S. crude futures market.For cash traders in Houston and Calgary, the overhang of crude in the North Sea, expected imports in the fourth quarter and refinery turnaround season in the fall point to an expected and long-anticipated slump.Those pressures pushed cash benchmark Light Louisiana Sweet to a five-month low last week near $2.00 a barrel over U.S. crude. A month prior, it traded at more than double that.Meanwhile, financial markets have seemed more resilient, at least for now."We are not seeing longs liquidating yet. However we are seeing protective hedging by funds that are long, which is a sign that they are concerned about the recent price action," said Matthew Perry, a partner at energy-focused hedge fund Kronenberg Capital Advisors. "We are short at our fund and believe crude will go lower from here."Source: www.reuters.comPlease leave comments and feedback below

    Offshore Helicopter Forced to Return to Base Due to Oil Leak (Thursday, 2 July 2015)

    1 Jan 1970, 12:00 am
    Norwegian oil company Statoil has experienced a helicopter problem during a flight to an offshore installation in Canada, forcing the pilot to return the aircraft to base, Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB) has informed.According to C-NLOPB, Statoil reported the problem saying that a helicopter en route to the West Hercules semi-submersible drilling rig returned to base due to a low oil pressure indication in one of its two engines.C-NLOPB said that the incident occurred on Tuesday, June 30 when the helicopter was 20 km outside St. John’s peninsula. The helicopter returned to St. John’s without incident and the seven passengers on board were briefed by the pilots.Statoil said that a wrong sized O-ring installed during maintenance may have caused the oil leak. CHC, the owner of the helicopter, is investigating further, it has been said in C-NLOPB press release.Source: www.offshoreenergytoday.comPlease leave comments and feedback below

    BP to Pay Record $18.7 Billion Settle in Claims for Gulf Oil Spill (Thursday, 2 July 2015)

    1 Jan 1970, 12:00 am
    BP Plc will pay a record $18.7 billion to resolve claims by the U.S. and five states along the Gulf of Mexico related to the 2010 oil spill.The payments will be spaced out over as long as 18 years. A record $5.5 billion will cover federal penalties under the Clean Water Act, topping the previous high of $1 billion. Louisiana, Mississippi, Alabama, Florida and Texas will also receive payouts for harm done in the worst offshore spill in U.S. history.“This agreement will resolve the largest liabilities remaining from the tragic accident,” BP Chief Executive Officer Bob Dudley said in a statement today. “For the United States and the Gulf in particular, this agreement will deliver a significant income stream over many years for further restoration of natural resources and for losses related to the spill.”A federal judge ruled that the spill was the result of "gross negligence" on the part of BP last September — a few months after BP won new oil contracts to explore the Gulf of Mexico. On Monday, the Supreme Court rejected BP's bid to avoid federal pollution law penalties.Source: www.theverge.comPlease leave comments and feedback below

    Det Norske Delineates Ivar Aasen field (Thursday, 2 July 2015)

    1 Jan 1970, 12:00 am
    Det norske oljeselskap AS, operator of the Ivar Aasen field in the North Sea, has completed the drilling of three appraisal wells, 16/1-22 S, 16/1-22 A and 16/1-22 B.The field is located in the central part of the North Sea and was proven in 2008.According to the Norwegian Petroleum Directorate (NPD), the size of the field prior to drilling the appraisal wells was 24 million standard cubic metres (Sm3) of recoverable oil, 1 million Sm3 of recoverable condensate and 4.5 billion Sm3 of recoverable gas.The objective of well 16/1-22 S was to investigate reservoir rocks and reservoir quality, as well as secure depth control along the west flank of the field in Middle Jurassic to Upper Triassic reservoir rocks (the Hugin, Sleipner and Skagerrak formations) in order to optimise well sites with a view to the drainage strategy. Sidetracks 16/1-22 A and 16/1-22 B were drilled 1000 metres northeast and 1350 metres north, respectively, of 16/1-22 S in order to investigate reservoir rocks and perform additional data acquisition. 16/1-22 A also aimed to investigate an underlying seismic anomaly.16/1-22 S encountered a 3-metre oil column in sandstone of good to very good reservoir quality in the Skagerrak formation. The oil is saturated with a gas/oil ratio of about 160 Sm3/Sm3, as is the case otherwise in the western part of the field (16/1-11, 16/1-11 A and 16/1-9). The oil/water contact was not encountered, but was calculated at about 2435 metres, which is deeper than the previously calculated oil/water contact for the Skagerrak formation (16/1-11 A).Sidetracks16/1-22 A encountered a total oil column of about 55 metres in the Skagerrak formation, 30 metres of which was in sandstone of varying reservoir quality, from moderate to very good. The oil/water contact was not encountered. The seismic anomaly is linked to the top of a total oil column of about 25 metres in underlying sandstone (alluvial fan), 15 metres of which had moderate reservoir properties. The oily part of the alluvial fan is not included in the field’s previously reported reserves.16/1-22 B encountered a total oil column of about 45 metres in the Skagerrak formation, 25 metres of which was in sandstone of good to very good reservoir quality. The oil/water contact was not encountered.The NPD noted that none of the wells were formation-tested, but comprehensive data collection and sampling was conducted.The NPD added that the results have yielded valuable information as regards the final location of production and water injection wells. Gas was not encountered in the wells.PDO & drilling rigThe Plan for Development and Operation (PDO) of the Ivar Aasen field was submitted to the Ministry of Petroleum and Energy on December 21, 2012.Wells 16/1-22 S, 16/1-22 A 16/1-22 B were drilled to measured depths of 2640, 2896 and 3215 metres, respectively, and vertical depths of 2562, 2468 and 2501 metres below the sea surface. They were all terminated in the Skagerrak formation in the Upper Triassic. The wells have been permanently plugged and abandoned. Water depth at the site is 113 metres.The wells were drilled by the Maersk Interceptor jack-up drilling rig, which will now continue production drilling on the Ivar Aasen field once the platform’s jacket has been installed.Source: www.npd.noPlease leave comments and feedback below

    Tullow+apos;s TEN Installation to Begin This Month (Thursday, 2 July 2015)

    1 Jan 1970, 12:00 am
    Tullow Oil's TEN project offshore Ghana is ramping up towards offshore installation activities this month and is on budget and on track for first oil mid-2016, the firm said today.The TEN project, named after the Tweneboa, Enyenra and Ntomme fields it will develop, is a floating production, storage and offloading (FPSO) vessel development in the Deepwater Tano contract area. Consent for the project was granted by Ghana's government in June 2013, based on plateau production via 24 wells 1500m water depth. In 2Q 2015, the firm ran the first two of 10 well completions on the project, the TEN floating production, storage and offloading vessel turret was installed, and the first in-country fabrication works were made ready for the start of the offshore installation campaign in mid-July.In addition, specialist subsea manifolds and umbilicals from the US have been made ready for transport to Ghana.The project sits close to the border with Ivory Coast, an area subject to a border dispute. Tullow says that following a 25 April ruling from the Special Chamber of the International Tribunal of the Law of the Sea (ITLOS) on Provisional Measures, discussions are ongoing with the Government of Ghana on their implementation and no impact is expected on project activity to first oil.Tullow also says work is ongoing to incorporate the Mahogany, Teak and Alaska finds into its Greater Jubilee Full Field Development Plan, which the partnership on the Jubilee field plans to submit to the Ghanian government by year-end. Jubilee, another FPSO development, which came on stream in 2010. Source: www.oedigital.comPlease leave comments and feedback below

    Offshore Firm Saved Administration (Thursday, 2 July 2015)

    1 Jan 1970, 12:00 am
    A Gorleston offshore firm that had been battling debts of about £5m went into administration after HM Revenue and Customs vetoed a proposed company voluntary arrangement (CVA).However, the shareholders of CLS Offshore, led by founder David James, have quickly struck a deal to acquire the business which will now trade as CLS Global Solutions.Mr James says in a statement: “Following the decision to veto the CVA agreement, negotiations were held with investors and a deal was agreed through a brief period of administration.”The statement adds that prior to the acquisition significant changes were made within the organisation to reduce overheads.“This included a reduction in personnel and the return of the major shareholders to manage the day to day operations of the business leading to the previous managing and financial directors exiting the business,” it says.The company has been asked to clarify the position of CLS Offshore’s 100-plus creditors but declined to expand on its statement.Had the CVA been accepted, creditors would have received about 50pc of money owed over a period of up to five years.The company, whose workforce had steadily declined during its troubles from a peak of more than 200, also declined to confirm the scale of redundancies.A creditors’ meeting was told last month that CLS, based in Malthouse Lane, had run into difficulties over two major contracts, putting “great pressure” on the company’s working capital and extending its resources.In his statement Mr James says: “The new management team including the major shareholders are confident that the business will return to its previously strong trading position.”Source: www.greatyarmouthmercury.co.ukPlease leave comments and feedback below

    Oil Prices Settle into New Equilibrium (Thursday, 2 July 2015)

    1 Jan 1970, 12:00 am
    Benchmark crude oil prices have barely moved for more than two months, implying the market has found a temporary equilibrium after the enormous price shock in the second half of 2014 and early 2015.Over the last 30 trading days, the range between the highest and lowest closing prices for front-month Brent futures has been just $4.50 per barrel.The highest close for the front-month futures contract was at $66.54 per barrel (May 21) and the lowest was $62.01 (June 29).The trading range is the smallest since the shock began in June 2014, and down from a peak of almost $40 per barrel in early January 2015.In dollars per barrel, the range has been narrow by the standard of the last decade (link.reuters.com/cew94w).Even in percentage terms, which allow for differences in outright prices, the market has been quiet (link.reuters.com/few94w).The trading range has been around 7 percent over the last 30 days, down from almost 40 percent at the start of 2015.The price stabilization implies the market believes $60-65 per barrel will gradually bring supply and demand back into balance, which seems sensible.The low variability in prices is also helping anchor short- and medium-term expectations for producers and consumers at around the current level.Expectations are not always correct but price convergence within a fairly narrow range makes it easier for producers and consumers to formulate budgets for the rest of 2015 and 2016.VOLATILITYVolatility is a subtle concept that has rather different meanings for different people in oil and other commodity markets.For traders, investors and hedgers, “volatility” has a precise definition as the standard deviation of price moves over a given number of days and expressed at an annualized rate.For commodity producers and consumers, however, volatility is not about daily price movements but ranges over a period of time.Markets can be volatile but range-bound if there are many big daily price movements that cancel one another out.Such “choppy” markets boost the cost of hedging but do not otherwise concern producers and consumers since the fluctuations average out and prices remain steady over time.Conversely, markets can exhibit big price ranges without much volatility if there are lots of small daily moves all in the same direction.Producers and consumers care very much about big price shifts, whether or not they are accompanied by volatility in the technical sense.Large shifts confound old assumptions about costs and revenues and make it hard to form new ones with confidence.The huge price shifts in the second half of 2014 and the first three months of 2015 made detailed planning almost impossible for oil producers (and, to a lesser extent, consumers). The only safe assumptions about oil and fuel prices were the most conservative ones.But the recent stabilization of prices at $60-65 per barrel makes it far easier to produce some planning assumptions with appropriate scenarios around that level.The market has discovered a new short- to medium-term trading range.Prices below $50 are unsustainably low because they cause too much production to be lost and strong growth in demand.Prices much above $70 or $75 would be likely to prompt widespread reactivation of shale drilling and possibly curb fuel demand.Producers and consumers will therefore probably end up employing a baseline forecast of around $60-65 for the rest of 2015 and into 2016, with a low-price scenario of $50 and a high one of $75, which is good enough for most planning purposes.Source: www.reuters.comPlease leave comments and feedback below

News Feeds

Oil and Gas Jobs Health and Safety Community