China's crude oil runs fell 0.1 percent in May from a year earlier to 44.23 million tonnes, the statistics agency said on Monday.

http://www.reuters.com/article/china-economy-output-oil-idUSB9N18N05F

Forces aligned with Libya's unity government said on Friday they had taken control of the port of Sirte, making further gains in Islamic State's North African stronghold.

Brigades largely composed of fighters from Misrata advanced this week to the perimeter of Sirte's city center, after launching a counter attack against Islamic State last month and driving the militant group back along the coastal road between the two cities.

The brigades are part of an operation backed by Libya's U.N.-backed Government of National Accord (GNA), which arrived in Tripoli in March and has been gradually working to establish its authority.

Western powers see it as the best bet for trying to unite Libya's political and armed factions against Islamic State and for restoring some stability to the oil-rich North African country.

A source from the operations room in Misrata said fighters from the front line in the south of Sirte had looped round to the seafront to capture the port, which lies about 5 km (3 miles) east of the city center.

The brigades have advanced more swiftly than many expected, though their progress has been hampered by suicide bombers, mines and snipers.

Clashes in Sirte on Friday left 11 brigade members dead and 35 wounded, the operations room source said. More than 100 fighters from the GNA-backed brigades have been killed and more than 500 wounded since the campaign to recapture Sirte began in early May.

Islamic State started expanding into Libya in 2014 as the political turmoil and conflict in the country worsened. It took full control of Sirte last year, but has struggled to retain territory or win support elsewhere in Libya.

As the brigades based in Misrata have advanced on Sirte from the west, a separate force that controls some of Libya's key oil terminals and is also aligned with the GNA has pushed Islamic State back from the east. They reached Harawa, a town about 70 km from Sirte, on Thursday.

http://www.reuters.com/article/us-libya-security-idUSKCN0YW2GS

The leader of a Russian liquefied natural gas project targeting the Asia-Pacific market said it received its first tranche of a loan from national lenders.

Two Russian lenders delivered $1.13 billion for the Yamal LNG project. Novatek, the largest private natural gas company in Russia, leads the project aimed at sourcing the markets in the Asian-Pacific. The funding is part of a broader finance effort steered from the Russian National Wealth Fund with help from Chinese banks.

Yamal LNG CEO Evgeny Kot was quoted by Russian news agency Itar-TASS as saying some tankers were already tested for LNG deliveries and the funding should help spur further developments.

"Readiness of the first stage of the LNG plant is over 70 percent," he said.

Russia's economy is hobbled by dual strains of economic sanctions related to crises in Ukraine and the low price of crude oil. Liquefied natural gas, meanwhile, offers for maneuverability outside the geopolitical constraints associated with conventional pipeline arteries, like those running to Europe through Ukraine.

In a market characterized by tight spending trends, Novatek said the costs of development are low enough to compensate for higher maritime shipping costs to the Asian-Pacific markets.

Novatek controls 60 percent of the Yamal LNG project in the arctic north of Russia, alongside French energy company Total and the China National Petroleum Corp.

The Yamal LNG project has the capacity to produce about 16.5 million tons of natural gas and exports could target consumers in the Far East. As many as 16 ice-class carriers will be designated to ship LNG year-round to global consumers.

Yamal could start full operations as early as next year.

http://www.upi.com/Russian-LNG-gets-financial-support/2451465552762/

Commercial operations at France’s fourth LNG import terminal in the port of Dunkirk will begin in September, with the first cargo for commissioning purposes expected on July 8.

The first commissioning cargo of about 135,000 cbm of LNG will be brought by France’s energy giant EDF, who owns a 65 percent stake in Dunkirk LNG (Dunkerque LNG). A second ship will follow in August to complete testing of the import facility, according to Dunkirk LNG.

To remind, LNG World News reported last week that the first commissioning cargo was expected between 04th and 08th July.

The first ship will “call at the LNG terminal wharf for seven days (rather than the normal 24 hours). As the equipment will still be at ambient temperature, the LNG (at -160°) will need to be unloaded much more slowly than normal so the process gradually enters its ‘cool state’,” Christophe Liaud,Commercial Director of Dunkerque LNG said in a statement.

“Additionally, the LNG load must come from a liquefaction plant and have a sufficiently low pressure. The methane tanker must also be less than 15 years old to ensure it has the specific equipment required for the start-up of the terminal. Last but not least, the client must accept the risk of cancelling the call if the terminal is not in fact ready on the planned date.”

“It’s a lot of limitations,” said Liaud, adding that EDF has managed to find an LNG supplier who can “meet these limitations while guaranteeing a competitive price“.

The Dunkirk LNG terminal will have an annual regasification capacity of 13 billion cbm of gas, enough to cover about 20% of France and Belgium’s annual gas consumption.

EDF booked 8 bcm of the LNG terminal’s capacity, while Total reserved 2 bcm of gas. The remaining gas quantities will be sold on the market after the LNG terminal has been commissioned.

Besides EDF, Fluxys of Belgium has a 25% share in the LNG terminal. French gas and oil giant Total owns the remaining 10 percent.

http://www.lngworldnews.com/first-dunkirk-lng-cargo-to-arrive-on-july-8-commercial-ops-to-start-in-sep/

Chinese independent oil companies are luring traders, marketers and risk managers away from dominant state behemoths, offering better pay and perks in a hiring spree triggered by the freeing up of China's crude import trade.

Global oil firms and commodity houses have also been raiding state giants such as Sinochem and CNPC for staff to help handle up to $50 million a day in new crude flowing into China this year, and the cherry-picking of talent is likely just getting started.

China's independent "teapot" refiners, so called due to their small size, could be processing by the end of this year as much as a fifth of the crude imports of the world's No.2 oil consumer. Already, in the first five months of 2016 - the first full year of a dozen of them being granted crude import licences - they have captured about 10 percent of the inbound shipments.

Shandong Dongming Petrochemical Group, China's largest independent refiner, has built a Singapore-based trading team of 11 to handle this new business, including trading and shipping managers hired from CNPC Fuel Oil Company and the CNOOC group.

"A team of this size is far from enough for our scale of 10 million tonnes a year (200,000 bpd) crude demand," said Zhang Liu Cheng, vice president of Shandong Dongming.

"We'll need more to cover products, chemicals and market analysis," Zhang said.

Awarding crude import quotas of up to 1.2 million barrels per day (bpd) to China's teapots has started a tussle for talent as the refiners - and the oil majors and trading houses that aim to supply them - dive into an activity previously restricted to state-owned enterprises (SOEs).

This year, use of the quotas has made up most of a 16 percent or around 1 million bpd rise in China's crude imports, even with several underused and more awaiting approval.

Those angling for a slice of this market have already hired more than 40 traders and others, mostly from state companies, say colleagues and acquaintances of people who have moved jobs.

"We have a big but not totally motivated team," said a senior trader with a state oil company, noting that offers often beat SOE employment, particularly at smaller firms.

"Certainly we're going to see more talent outflows as the teapots have just begun hiring," the senior trader said.

Most of the hires are in their mid-thirties, having honed their craft at Chinese state companies such as Sinochem Corp, China National Offshore Oil Corp and China National Petroleum Corp, sources said.

"Our traders are very popular," said a source from one of the state oil trading companies. "Most of those who moved from our company are going to trading houses and majors because the perks are definitely better."

"We are looking for people who have systematic training, good relationship skills, and people who understand how China markets work," said a Beijing-based executive with a global trading house.

Also, with teapots concentrated mostly in the eastern province of Shandong, an ability on plant visits to withstand drinking bouts could also be critical as official at some refineries there are renowned for their large capacities for alcohol.

"Sometimes I'm scared to visit our refinery in Shandong as they drink too much," said a Chinese trader who buys crude on behalf of one of the teapots.

http://www.reuters.com/article/us-china-teapots-jobs-idUSKCN0YW0FN

The $1.3 billion deal to merge the Norwegian business of BP with Det Norske Oljeselskap was borne out of the hugely competitive nature of today’s industry and the UK supermajor’s unwillingness to letting its assets in Norway go, according to BP’s chief executive Bob Dudley.

http://www.upstreamonline.com/live/1435216/dudley-quitting-norway-was-not-an-option?utm_source=twitterfeed&utm_medium=twitter

Analysts expect prices to rebound slightly in coming years as a result of the government's policy to encourage cleaner energy

Asia's largest oil and gas producer, China National Petroleum Corp, is betting big on natural gas, aiming to boost both its supplies and transportation capacity in the next five years.

The state-owned company, which provides more than two-thirds of the country's natural gas, plans to sell in excess of 750 billion cubic meters of the fuel between now and 2020, a 40 percent increase on the past five years, says Zhao Zhongxun, deputy director of CNPC's planning department.

CNPC technicians check natural gas facilities in Yinchuan, capital of the Ningxia Hui autonomous region. Xinhua

"Our top priority is to boost domestic supplies of natural gas, then adjust imports based on demand, and at the same time expand our pipeline network and capacity of LNG terminals," he says, detailing the energy giant's new five-year plan for natural gas, during a "green development" forum held in Beijing.

That blueprint suggests that by 2020, the company's pipeline network is expected to exceed 60,000 kilometers with an annual transport capacity of 180 billion cubic meters.

Also planned are 12 more gas storage sites, with the receiving capacity of its three liquefied natural gas terminals expanding from 13 million to 19 million tons.

Oil majors have all cut their spending on future projects as plummeting crude oil prices have slashed their profits, but CNPC will secure the production of natural gas and maintain its exploration, a source told China Daily, without giving further details on the budget for natural gas.

CNPC spokesman Qu Guangxue says there will be greater promotion of gas-fired power plants and the use of natural-gas-powered vehicles.

CNPC imports a third of its natural gas from major countries in Central Asia such as Kazakhstan and Turkmenistan, and Zhao says it will begin imports from Russia in 2019 on completion of the Chinese section of Sino-Russia pipeline.

PetroChina, CNPC's listed unit, posted its first quarterly loss in April amid falling global crude prices and shrinking domestic demand.

Its profit on natural gas and pipelines slumped nearly 36 percent to 4.7 billion yuan ($714 million; 640 million euros) in the first four months of 2016.

Zhao says during the first three years of its 12th Five-Year Plan (2010-15), the company grew its natural gas supplies 13 percent.

But demand for the fuel shrunk last year from many industrial sectors including smelting, construction and glass production.

Analysts expect gas prices to rebound slightly over the coming years as a result of the government's policy to encourage cleaner energy to combat air pollution.

"Natural gas is a practical choice for China," says Gao Jian, a senior analyst at commodities consultancy Sublime China Information Co Ltd, "as the country increases its share of nonfossil fuel in its energy mix, and relies more on alternatives."

The share of natural gas in the country's total primary energy mix will be raised to above 10 percent by 2020, double the current level, he says.

http://en.chinamining.com.cn/Companies/2016-06-12/1465700095d76528.html

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Attached Files

For the first five months of 2016, Europe has seen a slow down in deliveries of Qatari LNG.

Surprisingly, this decline in imports was not lead by Europe's largest importer of Qatari gas, namely the UK.

Desmond Wong explains how arrivals of Qatari volumes into the UK have remained largely stable compared to the same period last year, with declines from Belgium, Turkey, Portugal, France and Italy, cumulatively forming the bulk of the decline, with increased volumes heading into the Middle East and South Asia.

http://www.platts.com/videos/2016/june/lngw-qatar-lng-europe-061016?hootpostid=bacd2cc3076f47bba11701271f3d62f8

Crude fell a third day after the number of rigs drilling for oil in the U.S. rose for a second week.

Futures fell as much as 1.8 percent in New York after dropping 4.2 percent in the previous two sessions. Rigs targeting crude in the U.S. rose by 3 to 328 last week, capping the longest run of weekly gains since August, Baker Hughes Inc. said Friday. Iran is seekingto boost output by 600,000 to 700,000 barrels a day over five years from fields in an area west of the Karoun River along the Iraqi border, Oil Minister Bijan Namdar Zanganeh said.

“The increase in rigs means U.S. production may increase in the latter half of 2016, and that creates a bearish mentality in the market,” said Takayuki Nogami, chief economist at Japan Oil, Gas and Metals National Corp., a state-run company that helps secure energy supplies. “With oil over $50 a barrel, there is a deep-rooted view that American shale producers may return.”

While the number of active oil rigs in the U.S. rose for a second week the nation’s output is still well below last year’s peak, and explorers have idled more than 1,000 drilling machines since the start of last year. The $50-to-$60 a barrel area is the “sweet spot” as more U.S. producers are expected to return at $60, according to Mark Watkins, Utah-based regional investment manager for The Private Client Group of U.S. Bank.

http://www.bloomberg.com/news/articles/2016-06-12/oil-extends-losses-as-u-s-rigs-drilling-for-crude-rise-2nd-week

Southwestern Energy Company announced today that it has entered into a definitive agreement with Antero Resources Corporation to sell approximately 55,000 net acres in West Virginia for $450 million. The cash proceeds from the transaction are expected to be used to reduce the principal balance of the company's $750 million term loan due in November 2018.

The properties are located in Doddridge, Harrison, Marion, Monongalia, Pleasants, Ritchie, Tyler and Wetzel Counties and are currently producing from the Marcellus Shale. Net production from this acreage is approximately 14 MMcfe per day, primarily from non-operated wells, and proved reserves on this acreage were 11 Bcfe as of December 31, 2015. The Company has no current plans to drill on these properties before 2023.

'This transaction is one step on delivering on the commitment we made to strengthen our balance sheet in 2016,' remarked Bill Way, President and Chief Executive Officer of Southwestern Energy. 'We are bringing forward the value of acreage that is much longer dated in our development plans, enabling us to take action and proactively reduce outstanding debt. Together with the progress we are making on margin enhancement, this sale further strengthens both the Company's financial flexibility and our bridge to value-added growth for shareholders.'

The transaction is expected to close in the third quarter of 2016, subject to customary closing conditions and purchase price adjustments.

http://www.oilvoice.com/n/Southwestern-Energy-sells-portion-of-Southwest-Appalachia-acreage/995abf57c0dd.aspx

Teine Energy Ltd., the energy company backed by Canada Pension Plan Investment Board, has agreed to buy oil-producing properties from Penn West Petroleum Ltd. for C$975 million ($763 million) in cash.

The deal involves all of Penn West’s properties in the Canadian province of Saskatchewan, including its Dodsland Viking light-oil assets in the east and the medium and heavy crude assets in the west, Calgary-based Penn West said in a statement late on Friday. The agreement helps highly-leveraged Penn West stay in compliance with debt covenants it had forecast potentially breaching in the second quarter, which ends June 30. Penn West now expects to remain within those covenants through 2016, it said in Friday’s statement.

Penn West is fighting to stay afloat as the crude market rout approaches two years. The company, while selling other assets to reduce its debt, had long sought to avoid parting with the Viking properties that were important to its strategy. Analysts in recent weeks had forecast that Penn West would have to resort to selling the Viking properties, and Bloomberg reportedlast week that the company had hired hired Royal Bank of Canada to advise it on the sale of the assets.

“Saskatchewan is a coveted asset amongst many of our competitors and with this transaction we have capitalized on the demand for high-quality oil assets of scale,” David Dyck, chief financial officer of Penn West, said in the statement. “This is a pivotal transaction for the company.”

The sale of the Saskatchewan assets is expected to close in the second quarter, according to the statement. Penn West has also agreed to sell Alberta properties for proceeds of about C$140 million, the company said, without identifying any buyers. Penn West has agreed to sell assets fetching a total of C$1.3 billion in cash in 2016, the company said.

Penn West’s share price has fallen 90 percent since U.S. crude’s price peak in mid-2014, to close at C$1.16 in Toronto on Friday. The company had total debt of C$1.86 billion at the end of the first quarter, according to data compiled by Bloomberg.

http://www.bloomberg.com/news/articles/2016-06-11/teine-energy-agrees-to-buy-penn-west-oil-assets-for-763-million