Kuwait Oil Co. will soon offer contracts for offshore rigs and support services to drill its first undersea wells as the Persian Gulf nation tries to boost crude output to the highest level in more than four decades.

Kuwait is targeting production of 3.165 million barrels a day later this year or in 2017, up from a current 3 million barrels a day, Chief Executive Officer Jamal Jaafar said Monday at a conference in Kuwait City. He made his comments a day after fellow OPEC member Iraq reported a record level of production and less than a week before some of the biggest oil-producing nations are to discuss freezing output to reduce a glut and shore up prices.

“We are trying to make use of the low cost of production in Kuwait,” said Jaafar, whose company is the exploration and production arm of national energy group Kuwait Petroleum Corp.

Kuwait and Iraq are among members of the Organization of Petroleum Exporting Countries that plan to meet with other major producers on April 17 in Doha for talks about a freeze. Saudi Arabia, Russia, Venezuela and Qatar agreed in February on a proposal to cap output at January levels, though Iran has refused to participate until it restores production to pre-sanctions levels. Crude prices have tumbled more than 60 percent over the last two years.

Re-Balancing Markets

Oil markets will be oversupplied throughout the first half of this year but will start to re-balance in the third quarter, Jaafar said.

Kuwait Oil is looking at six offshore areas to drill its first undersea wells and plans soon to offer contracts for the work, he said, without specifying dates. Kuwait, OPEC’s fourth-largest member, hasn’t pumped an annual average of more than 3 million barrels a day since 1973, data compiled by Bloomberg show.

Kuwait will also start a project this year with Royal Dutch Shell Plc to capture carbon dioxide at oil fields and re-inject it underground to produce more crude, he said. Kuwait Oil is tackling more difficult crude formations to increase production capacity, and it’s testing the injection of chemicals and polymers at fields in the northern part of the country to enhance recovery.

Crude output in Iraq, OPEC’s second-biggest producer, reached a record 4.55 million barrels a day last month from 4.46 million barrels in February, the country’s state-run Oil Marketing Co. said Sunday in an e-mailed statement.

Production in southern Iraq, where most of the country’s biggest fields lie, will remain unchanged this year amid cuts in investment, Ali Haddad al-Fares, head of the energy committee of the Basra regional council, said Monday in an interview in Kuwait City. Iraq is targeting total output to reach 6 million barrels a day by 2020, with most of the increase to come from the Basra region, he said.

http://www.bloomberg.com/news/articles/2016-04-11/kuwait-targets-oil-output-at-43-year-high-as-freeze-talks-loom

Thousands of workers at state-owned oil, gas and petrochemical companies in Kuwait will stage a strike from Sunday in protest at a government plan to cut some of their benefits and wages, the president of the oil and gas union said on Monday.

"The union finds itself obliged to take the difficult decision to escalate with this announcement of a general strike in all sectors (of oil and gas) starting on Sunday, April 17 at 7 a.m. (0400 GMT)," Saif al-Qahtani, head of the Oil and Petrochemical Industries Workers Confederation, told a news conference.

The union did not say how long the strike would last.

Production and exports would not be affected by the strike, a spokesman for Kuwait's national oil company Kuwait Petroleum Corp (KNPC), one of five state-owned companies that will be affected by the strike, said.

"If the strike happens we do have a strategy in place to deal with this kind of action where extra staff will be used to run operations" Khaled Al-Asousi, KNPC's Deputy CEO for Support Services said, adding that some oil facilities might be shut down temporarily.

Workers fear reduced salaries, benefits and layoffs will be part of a planned government overhaul of the payroll system in the public sector.

Strikes are fairly common among public sector workers in Kuwait - one of the world's richest countries per capita - unlike in other Gulf states like the United Arab Emirates, where unions are banned.

The other companies where workers plan to join the strike are Kuwait Oil Company, Kuwait Oil Tanker company, Equate Petrochemical Industries Company and Kuwait Gulf Oil Company.

OPEC-member Kuwait pumps 3 million barrels of crude per day and has three refineries with a combined capacity of 930,000 bpd.

http://www.reuters.com/article/energy-kuwait-employment-idUSL5N17E47I

Rosneft OJSC became Russia’s most valuable company as its market capitalization exceeded that of natural gas exporter Gazprom PJSC for the first time since its shares began trading in 2006.

Rosneft shares rose 4.8 percent in London by 12:02 p.m., boosting the value of Russia’s largest oil producer to $52 billion. Gazprom gained 0.3 percent, raising its market capitalization to $51 billion. In Moscow, Rosneft advanced 3.4 percent, while the gas producer was little changed.

The state-controlled oil company has narrowed Gazprom’s lead from more than $250 billion in 2008, as it expanded through the acquisitions of assets from Yukos Oil Co., which the government sold at forced auctions over tax claims, and BP Plc’s joint venture in Russia. Gazprom has faced rising competition in the domestic gas market, including from Rosneft, and the lowest prices in more than a decade in Europe.

“Rosneft is growing its free cash flow and should do better in a stronger oil price environment,” Ildar Davletshin, an energy analyst at Renaissance Capital, said by e-mail. “Gazprom’s free cash flow is on the way down and unlikely to reverse soon.”

Gazprom still dwarfs Rosneft by output. Its oil and natural gas output are equivalent to about 8 million barrels a day, while Rosneft pumps roughly 5 million barrels a day.

http://www.bloomberg.com/news/articles/2016-04-11/rosneft-surpasses-gazprom-as-russia-s-most-valuable-company

Accenture on the global LNG market

There are six core implications of the demand shift for producers and marketers of LNG:

Protect market share in Japan, South Korea, China and India

Diversify to other markets and smaller customers

Prepare for a very different competitive landscape with non-traditional players exporting and trading U.S. LNG

Build flexibility in contract portfolios through trading and midstream

Invest in science, technology, and engineering for small scale LNG and new applications

Drive down the costs of delivered LNG

Get to full report; https://www.accenture.com/us-en/insight-gas-grows-up?c=res_acnenrgytwt_10000267&n=smc_0216

Among all non-financial A-share companies, the country's biggest oil and gas producer PetroChina Co tops the list with 1.05 trillion yuan ($162.8 billion) liability, reported Securities Daily citing statistics.

It recorded the liability despite bringing down its debt ratio to 43.8 percent from 45.2 percent a year ago after slashing total debts by 3.5 percent last year.

PetroChina obtained regulatory approval in December to issue no more than 40 billion yuan worth of corporate bonds, according to Xinhua.

The thirst for liquidity came as oil companies reported a weaker year due to nosediving oil price. Brent crude, the benchmark for more than half the world's oil, plunged 48 percent last year.

PetroChina reported a 67 percent slump in net profit to 35.5 billion yuan, marking its worst performance since 1999, according to the company's annual report. The other mainland-listed oil magnet Sinopec reported a 32.1 percent decrease in net profit to 32.2 billion yuan.

Cost management has gained increasing attention, with PetroChina planning a 23 percent, or 155.7 billion yuan, cut on capital expenditure, said the newspaper citing comment from the management.

Oil giants are also eyeing enhanced ownership reform to keep lean, said analysts. PetroChina sold remaining natural gas reserves under its Xinjiang, Southwest, Huabei, Dagang, Liaohe and Changqing subsidiaries to local petroleum administrations for 3.51 billion yuan, in a drive to clarify assets relationship and recover cash flow early, it said in a regulatory filing last November.

The company reported a 26.7 percent decrease in cash flow from operating activities to 261.31 billion yuan and a 25.8 percent slump in cash flow from investment activities.

http://en.chinamining.com.cn/Companies/2016-04-12/1460423334d76046.html

The most influential executives, investors and traders in the liquefied natural gas market will gather in Perth, Australia, this week for the industry’s biggest conference. While Brent oil has surged about 50 percent since hitting a 12-year low in January amid the worst energy crash in a generation, LNG continues its downward slide.

For crude, two years of spending cuts have throttled output and begun to ease an unprecedented period of oversupply. In the LNG markets, where projects cost billions of dollars and take years to build, a backlog of developments sanctioned when prices were higher are bringing supply online faster than demand can soak it up.

“It looks like we’re entering the down cycle for LNG rather than coming out the other side,” Jeff Brown, president of consulting firm FGE, said by phone from Singapore. “For the spot market in the next several years, it looks like there’s going to be a lot of LNG out there chasing buyers.”

Oil and LNG prices have historically been linked because traditional long-term contracts priced the gas in relation to crude. That correlation held through 2014 and 2015, as prices for both fuels tanked amid a global glut.

The two are now heading in opposite directions. Spot LNG in Singapore slipped to $4.029 per million British thermal units the week of April 4, the lowest since Singapore Exchange Ltd. began assessing it in September 2014 and extending its decline into a fifth month. Brent, meanwhile, recovered from its early-year crash to post its best first quarter in four years. The global oil benchmark fell 1 percent to $41.53 a barrel by 8:09 a.m. London time.

http://www.bloomberg.com/news/articles/2016-04-10/lng-backers-face-comatose-market-as-oil-shows-signs-of-revival

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Indonesia's state-owned energy company Pertamina has a budget of up to $2 billion for mergers and acquisitions this year amid efforts to supply Indonesia's growing domestic energy demand.

Pertamina is looking to buy into projects in countries including Iraq, Saudi Arabia and Russia and will also target expansion in border areas to strengthen Indonesia's sovereign claims, including in the South China Sea, its upstream director, Syamsu Alam, told Reuters.

Pertamina plans to increase output through mergers and acquisitions by 14,000 barrels of oil equivalent per day this year, and by 117,000 boepd in 2017, Alam told the news agency.

http://www.upstreamonline.com/live/1429260/pertamina-has-usd-2bn-manda-war-chest?utm_source=twitterfeed&utm_medium=twitter

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Mexican state oil company Pemex has told contractors to stop work on the offshore Lakach gas project in the Gulf of Mexico — potentially its first deep-water development — as it seeks to defer upstream spending.

http://www.upstreamonline.com/live/1429224/pemex-applies-brakes-at-lakach?utm_source=twitterfeed&utm_medium=twitter

Marathon Oil Corporation (NYSE:MRO) announced today it has signed agreements for the sale of certain non-core assets for $950 million, bringing the total to approximately $1.3 billion since last year.

In the largest transaction, the Company will divest all of its Wyoming upstream and midstream assets for $870 million, excluding closing adjustments. The upstream properties, comprised primarily of waterflood developments in the Big Horn and Wind River basins, averaged 16,500 barrels of oil equivalent per day in first quarter 2016. The assets sold also include the Red Butte pipeline, a 570-mile pipeline that is the only export line in the area. The effective date of this transaction is Jan. 1, 2016, and closing is expected mid-year 2016.

In separate transactions, Marathon Oil has signed agreements for the sale of its 10 percent working interest in the outside-operated Shenandoah discovery in the Gulf of Mexico, operated natural gas assets in the Piceance basin in Colorado, and certain undeveloped acreage in West Texas for a combined total of approximately $80 million.

"Since August 2015, we have now announced or closed non-core asset sales of approximately $1.3 billion, surpassing our targeted range of $750 million to $1 billion," said Marathon Oil president and CEO Lee Tillman
. "Ongoing portfolio management continues to drive the simplification and concentration of our portfolio to lower risk, higher return U.S. resource plays and support our 2016 objective of balance sheet protection."



Read more: http://www.nasdaq.com/press-release/marathon-oil-to-divest-950-million-of-noncore-assets-20160411-00984#ixzz45aebzTYO

Police have reportedly been called in to investigate a fatal incident at a Baker Hughes facility in Norway last year after the country’s Labour Inspectorate ruled there was a breach of work environment regulations.

http://www.upstreamonline.com/live/1429173/baker-hughes-faces-police-probe?utm_source=twitterfeed&utm_medium=twitter

Chesapeake Energy Corp said its borrowing base was reaffirmed at $4 billion, but it had to pledge additional assets as collateral.

Every six months, energy companies negotiate their credit limits with banks, based on the value of their oil and gas reserves.

Chesapeake, the No.2 U.S. natural gas producer, said on Monday that the next review of its borrowing base had been postponed until June 2017.

The company's shares rose more than 6 percent in premarket trading.

Oil prices have dropped more than 60 percent from their peaks in June 2014, hitting the profits of most companies in the industry.

Chesapeake has managed to retain its borrowing limit at a time when most oil and gas producers are bracing for steep cuts to their credit lines.

Just a few weeks into the current round of talks, over a dozen companies have had their loan limits cut by a total of $3.5 billion, or a fifth of available credit, according to data compiled by Reuters. (tmsnrt.rs/1S9304F)

At that rate, $10 billion more of bank credit will disappear as the remaining credit lines of about $50 billion come under scrutiny in talks that stretch into May.

Banks are also relaxing covenants that could have allowed lower classes of lenders to throw borrowers into default and suddenly trigger repayment requirements.

Chesapeake said two of its covenants had been relaxed under the latest agreement.

The company's shares were trading at $4 before the bell.

Up to Friday's close, the stock had lost nearly three-quarters of its value since the beginning of June 2015.

http://www.reuters.com/article/us-chesapeake-enrgy-credit-line-idUSKCN0X81E1

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Oilfield services provider Carbo Ceramics Inc said its executives would take a 10-30 percent cut in their monthly cash compensation as the company looks to slash costs.

The company, which makes ceramic balls used to keep the cracks in fractured shale rock open, said on Monday the cut would be through voluntary participation by executives in furloughs, unpaid time off and leaves.

Carbo Ceramics, however, said it had not amended the employment contracts of its chief executive and other executives.

A Reuters analysis of filings through mid-March showed that a number of companies had changed their payout plans for executives amid the collapse in oil prices.

http://www.reuters.com/article/carbo-ceramics-compensation-idUSL3N17E3MX

National Oilwell Varco Inc, the largest U.S. oilfield equipment maker, said it would cut its quarterly dividend to 5 cents per share from 46 cents, as it struggles to cope with a prolonged slump in oil prices.

The company cut its quarterly dividend by 89 percent, saying that market conditions continued to deteriorate through the first quarter.

A prolonged oil price slump, of more than 60 percent since its peak in 2014, has forced many companies to slash or scrap dividends, lay off employees and cut executive pay.

The dividend cut was expected to improve future net cash flow by about $615 million per year, Chief Executive Clay Williams said in a statement on Monday.

The company forecast a 20 percent fall in first-quarter revenue from the fourth quarter. This would imply a first-quarter revenue of about $2.16 billion, based on fourth-quarter revenue of $2.70 billion.

National Oilwell, which laid off more than 21 percent of its employees in 2015, said in February that the oil price slump would weigh on its order book for the "foreseeable future" as customers clamp down on spending.

http://www.reuters.com/article/national-oilwell-dividends-idUSL3N17E3AY