Russian mid-sized oil producer Russneft, majority owned by businessman Mikhail Gutseriyev, plans to sell new shares on the Moscow stock exchange in the fourth quarter, a company spokesman said on Monday.

Russneft, which produced 7.4 million tonnes (150,000 barrels per day) of oil last year, plans to sell a stake of 25 to 49 percent, comprising new shares, in an initial public offering (IPO), depending on demand, the spokesman said.

RBC newspaper on Monday quoted Russneft co-owner Mikhail Shishkhanov as saying Gutseriyev's family and trader Glencore will remain its major shareholders after the IPO.

It also quoted a banking source as saying the company wanted to raise $2 billion through the share sale.

Russneft, in which Gutseriyev's family currently controls 54 percent of shares and Glencore owns 46 percent, declined to comment on the valuation.

According to Moody's Investors Service, Russneft's total debt stood at around $2.5 billion as of 31 December 2015, including a $2 billion loan from VTB.

http://www.reuters.com/article/russneft-ipo-idUSL8N18Y1B0

Saudi Arabia is scaling back renewable power targets as the world’s biggest oil exporter plans to use more natural gas, backing away from goals set when crude prices were triple their current level, according to Energy Minister Khalid Al-Falih.

The kingdom aims to have power generation from renewable resources like the sun make up 10 percent of the energy mix, a reduction from an earlier target of 50 percent, Al-Falih said in Jeddah, Saudi Arabia. Al-Falih provided new details of the country’s revived solar power program as he joined other ministers to announce parts of a plan adopted by the cabinet on Monday to overhaul the country’s economy.

“Our energy mix has shifted more toward gas, so the need for high targets from renewable sources isn’t there any more,” Al-Falih said. “The previous target of 50 percent from renewable sources was an initial target and it was built on high oil prices” near $150 a barrel, he said.

Saudi Arabia, which holds the world’s second-largest crude reserves, will double natural gas production under the plan, and the government will expand the gas distribution network to the western part of the nation. Generating more power from gas and renewables should make available for export more crude, which would otherwise be burned for electricity for domestic use.

Solar-power should be the main renewable energy option for the nation, Ibrahim Babelli, the country’s deputy minister for economy and planning, said in Dubai last month. Babelli directed strategy at the government agency previously responsible for renewable energy policy. The cost of building solar power plants is declining globally as Chinese panel makers boost manufacturing capacity and slash costs.

http://www.bloomberg.com/news/articles/2016-06-07/saudi-arabia-scales-back-renewable-energy-target-to-favor-gas

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Iranian oil minister Bijan Zanganeh accused its regional neighbors of trying to take away its customers by offering cheaper oil, but said despite not offering much of a price discount itself, Iran had managed to retake 1 million b/d.

Iran's crude is similar to Iraq and Saudi Arabia's and these producers fight for a share of the same market -- being competitive has proved a huge marketing challenge.

Zanganeh's remarks come in an interview with S&P Global Platts in Vienna Friday, the day after OPEC's meeting in the Austrian capital. It follows Saudi Arabia's new oil minister Khalid al-Falih's comment Thursday that there is "no reason to expect that Saudi Arabia is going to go on a flooding campaign," suggesting gentle moves in crude supply so as not to shock the market. OPEC's largest producer has kept output fairly steady since January at above 10 million b/d and OPEC made no change in output policy.

Iran has looked to reclaim market share since nuclear sanctions were lifted in mid-January, with Zanganeh stating that output is currently 3.82 million b/d. He predicts Iran will have around 5-6% spare production capacity after reaching 4 million b/d by the end of the year.

Zanganeh said India, China, South Korea, Europe (including Turkey) and South Africa were primary markets but that Iran "should look more in Europe and Africa."

This is especially the case for plans to invest in refineries in other countries, with 1.3-1.4 million b/d to be exported as feedstock to overseas refineries, but cautioned that finance could be an issue.

"We have this proposal but the National Iranian Oil Company doesn't have the money to do it. So we proposed that the National Development Fund comes and does the investment, either directly itself or giving loans to non-state sectors and buys [shares] in those refineries in the chosen destinations, under the condition that they take all their feedstock from Iran, or a main part of the feedstock," Zanganeh said.

OPEC QUOTAS NEED TO RETURN

Iran's oil minister wants to see a return to individual country quotas at OPEC, which were abandoned in 2011 for a notional overall ceiling which was also abandoned in December 2015.

"I am not against the ceiling but what's the point of a ceiling without a country quota. OPEC says it will produce 30 million b/d. How much for each country? When we set the 30 million b/d ceiling, and somebody produced more, you should be able to hold them responsible. You should be able to control and monitor and question them why they exceeded the production. And everybody should comply with it," Zanganeh said.

He called the removal of quotas OPEC's biggest historic mistake and said that it was just a matter of time before a consensus is reached in reactivating them. "It is inevitable, but I don't know when."

Zanganeh said attempts to freeze production at the meeting between OPEC and other producers in Doha in mid-April didn't make sense for Iran.

"If others wanted to freeze or make any other move for the market, we expressed support for it and we will still support any move. But we said that the primary thing for Iran that everyone agrees with it too regaining its historic share," Zanganeh said.

POSITIVE OPEC MEETING

Iran echoed the sentiment that the outcome in Vienna was the best possible result. The cartel on Thursday kept its output policy unchanged, declining to set a production ceiling or target at its ministerial meeting and confirming a course set by core members who have refused to intervene to prop up prices.

Zanganeh hoped the trend of higher prices seen since crude hit a low of under $30/b in late January continues, especially "as the gap between supply and demand is shrinking." He also said it was a particularly good meeting for Iran. "I think all [OPEC members] accepted [that] they cannot put pressure on others to change their ideas. And they accepted this reality in the market and accepted the return of Iran to the market."

Zanganeh said that OPEC members should be more conservative about the level of production as so not to destabilize the market. "I believe all member countries are going to be more realistic," he added. "It means everything to all producers to stabilize the situation."

IRAN INVESTMENT

Zanganeh stressed it was very lucrative for international energy companies such as Total, Lukoil and Eni to invest in Iran. "Oil [production] in our region is very low. In Iran, it costs a maximum of $10/b."

He said that there are contractual risks, but that was unlikely to act as a deterrent, without elaborating.

He did think that US companies were afraid but hoped that this will change. "The way is open for them on our side."

Zanganeh said the whole investment plan will require a total of $70 billion in the coming years and that Iran's Petroleum Contract will be part of that.

Iran plans fewer than 20 projects as part of the first tenders for the IPC. It has said that it will have its IPC ready and approved in June to soon put out the tenders.

"First we announce the fields and ask companies to come forward and [declare] their interests in any of those fields. We evaluate the companies regarding their technological and financial capabilities and then we put the tender documents at their disposal," he added.

http://www.platts.com/latest-news/oil/vienna/interview-irans-zanganeh-says-opec-friends-dumping-26459875

New South Wales and Victoria may have to consider importing liquefied natural gas due to the looming gas shortage in the two states, according to Andrew Smith, Chairman of Shell Australia.

Speaking at the APPEA conference in Brisbane on Monday, Smith said the time has come to think “creatively about how we best serve our domestic customers, and ensure we have adequate and reliable gas supply“.

According to Smith, importing LNG to Sydney could be an option if governments in Victoria and New South Wales persist with “moratoriums that stifle the development of additional reserves“.

“I for one have mused about importing LNG to our nation’s largest city. If we choose not to act on declining gas fields, the idea of constructing a re-gas terminal in Port Botany may fast become a viable alternative for the industry,” he said.

Smith said that, in the short term, imports of the chilled fuel would introduce new supply and competition into the New South Wales gas market.

“In the current climate, I could see the rationale for such a suggestion – as LNG prices are historically low and pricing structures for pipeline capacity limit gas flow. However, the overall benefits are unlikely to outweigh the costs and there are impacts for the effective operation of the east coast gas market.”

“Of course importing gas from Curtis Island or PNG LNG would come at a cost to customers – particularly if LNG prices recovered to anywhere near 2013 levels,” Smtih said.

http://www.lngworldnews.com/australia-to-start-importing-lng/

Royal Dutch Shell Plc cut spending plans further and promised increased savings following its record purchase of BG Group Plc, as Europe’s largest oil company continues to adjust to the slump in energy prices.

Shell will spend $29 billion this year, it said Tuesday. That compares with a May forecast for capital expenditure “trending toward” $30 billion, which was itself down from an earlier projection of $33 billion. Synergies from the BG acquisition will provide $4.5 billion in savings in 2018, up from an earlier estimate of $3.5 billion.

“If we see oil price levels at a level where we have to go further, we will go further,” Van Beurden said in an interview with Bloomberg TV. “We still have more in our tank in terms of taking cost out. We have more in our tank in terms of deferring or canceling investment programs.”

Shell’s capital investment will be in the range of $25 billion to $30 billion a year to 2020. The company can reduce that further if required by low oil prices, even though it needs to spend about $25 billion a year to ensure future growth, Van Beurden said.

While Shell is banking on BG’s assets to boost production and cash flow, the acquisition of BG is driving up Shell’s debt gearing, which has risen above 26 percent from 14 percent at the end of last year. Debt concerns resulted in a credit-rating cut by Fitch Ratings in February.

Reducing debt is Shell’s “first priority” for cash, Van Beurden said in the interview.

Shell pledged to raise free cash flow to $20 billion to $25 billion and boost the return on capital employed to 10 percent by 2020 at an oil price of $60 a barrel. That compares with an average $12 billion free cash flow and 8 percent return on capital at $90 oil from 2013 to 2015.

Low oil prices make it more difficult for Shell to sell its assets. The company expects to “make significant progress” on as much as $8 billion of its sale program this year. It has earmarked up to 10 percent of production for divestment, including exiting five to 10 countries.

Shell has deepened job cuts this year as it continues to adjust to the slump in oil prices. It announced last month 2,200 more jobs will be eliminated, taking the tally of losses to 12,500 from 2015 to 2016.

http://www.bloomberg.com/news/articles/2016-06-07/shell-deepens-spending-cuts-promises-higher-savings-from-bg

Attacks late last week in the Niger Delta have put an additional 65,000 barrels per day of oil offline from Italian Eni’s Agip Oil company, according to Nigerian media reports.

Last week’s militant attacks were the third targeting Agip since 18 May, and the 15th targeting oil installations in the Niger Delta since early February.

Eni lost 5,200 barrels per day of its share in Agip oil output in May.

Aiteo Oil, which operates the Nembe Creek trunkline feeding crude oil to the Shell-owed Bonny export terminal has also been shut down since a 28 May attack, with the company telling Nigerian media that it has lost 75,000 barrels per day of production. Shell has claimed force majeure on the Bonny terminal.

Shell has also confirmed the reported attack late last week on its Forcados export pipeline, saying it had been forced to shut down crude exports here indefinitely, according to Nigeria’s Premium Times.

“The Shell Petroleum Development Company of Nigeria Limited, operator of the SPDC JV, has confirmed signs of a leak on the 48 inch Forcados export pipeline at a location between shoreline and the Forcados terminal in the western Niger Delta”, media quoted a Nigerian Shell spokesman as saying

“We are currently focused on securing the pipeline to protect the environment. Given this latest incident and the wider security situation in the Niger Delta, we are unable to determine probable timing of resumption of exports from the Forcados terminal,” the spokesman said.

http://oilprice.com/Latest-Energy-News/World-News/Eni-Said-to-Lose-Another-65000-Bpd-in-Latest-Niger-Delta-Attack.html?utm_source=twitterfeed&utm_medium=twitter&utm_campaign=Feed%3A+oilpricecom+%28Oil+Price.com+Daily+News+Update%29

Angola's recently refurbished liquefied natural gas (LNG) export plant has launched a tender to sell its first cargo since it was unexpectedly shut down in April 2014.

According to tender document details relayed by traders, the cargo was loaded between June 3 and 5 on board the Sonangol Sambizanga tanker and bid submissions are due on the morning of June 13, trade sources said.

Angola LNG confirmed the first cargo since the shutdown had been loaded and was being sold via an international tender but did not give further details of the process.

The tender is valid until June 15, one source said, while a second trader said that up to six more cargoes could be loaded before the facility goes offline for a final phase of testing.

In the current tender, the delivery date of the first cargo varies according to the location of terminals dotted around the world.

For example, the Chevron-led project lists a six-week delivery window for Argentina's Bahia Blanca terminal - between June 28 and August 14, one trader said.

The cargo may be priced based on levels at Britain's gas trading hub, the National Balancing Point, or as a percentage of Brent crude oil, he said.

http://www.reuters.com/article/angola-lng-idUSL8N18Y1OU

Argentina's state oil company YPF said on Monday it has named Ricardo Darre chief executive officer, as the company makes leadership changes under the new pro-business government.

Darre, an engineer, previously worked for French oil company Total in the United States. He will take up his post on July 1.

"With the hiring of Ricardo Darre we reaffirm our commitment to the absolutely professional management of YPF that will strengthen the development of our production and our strategic positioning in the market," the country's largest company said in a statement.

YPF controls the Vaca Muerta formation, which may contain the world's largest shale reserves.

"The company has good geological areas and a solid industrial base that is highly competitive in all production stages, from the well to our clients," Darre said in the statement. "This is essential to maximize our investment and the key role the company plays in the search to self-supply the country's energy."

Businessman Miguel Gutierrez was named as president of YPF in April, during the most recent shareholder assembly.

http://www.reuters.com/article/us-argentina-ypf-idUSKCN0YS2G1

Genscape sees Cushing inventory draw of more than 1 mln bbl to June 3 - Traders

http://uk.reuters.com/article/oil-prices-extend-gains-slightly-after-g-idUKL3N163661

Suncor Energy Inc., Canada’s largest energy company, lowered its crude output forecast for the year by about 6.2 percent because of facility outages caused by wildfires raging across northern Alberta.

Suncor, the producer most affected by the fires, reduced its production target to between 585,000 and 620,000 barrels a day in a statement on Monday. That compares with a forecast released in April of between 620,000 and 665,000 barrels a day.

Suncor is ramping up its facilities shut down by the fire and expects they will be producing at normal rates by the end of June, the company said in the statement. The company’s base plant mine is expected to return to pre-fire production rates within a week, while the drilling operations are expected to return to normal levels in the third week of June, the same time planned maintenance of the U2 upgrader is scheduled to be complete.

“As a result of working with government and the region, we safely returned thousands of people and restarted our operations in a safe manner,” Steve Williams, chief executive officer of the Calgary-based company, said in the statement.

Suncor was the producer with most production affected during the fire. As a result, its cash flow for 2016 is expected to fall by 20 percent or C$928 million ($724 million), Greg Pardy, an analyst at RBC Dominion Securities in Toronto, said in a May 26 research note.

Syncrude Canada Ltd., the oil-sands mining joint venture controlled by Suncor, expects to return to production in late June and will ramp up to full output after the completion of a scheduled turnaround by mid-July, Suncor said on Monday. Suncor’s Petro-Canada retail stations have faced shortages of gasoline and diesel due to outages and unplanned downtime at a unit of the company’s Edmonton refinery. That unit is expected to be back in service by the end of the week and Suncor continues to try to minimize supply disruptions, the company said.

Cash operating costs for Suncor are expected to stay within its guidance of C$27 to C$30 a barrel for the year, the company said, while Syncrude’s cash operating costs are expected to rise to between C$41 and C$44 a barrel due to the timing of restart and production ramp-up. The Syncrude cost estimate compares with an April outlook of C$35 to C$38 a barrel.

http://www.bloomberg.com/news/articles/2016-06-06/suncor-lowers-annual-production-guidance-6-2-percent-on-wildfire

Imperial today announced the safe return to normal operations at the Kearl oil sands site. The company will continue to closely monitor developments with the fires in the Regional Municipality of Wood Buffalo. The safety of our employees remains our top priority.

Kearl's physical plant was not damaged by the fires, and air quality monitoring remains in place.

http://www.oilvoice.com/n/Imperial-Oil-returns-to-normal-operations-at-Kearl/365c9583c2cd.aspx?utm_source=twitterfeed&utm_medium=twitter&utm_campaign=Feed%3A+OilvoiceHeadlines+%28OilVoice+Headlines%29

Devon Energy Corp., the energy producer that’s targeted $3 billion of asset sales to fund drilling and lower debt, agreed to sell fields in Texas and Oklahoma and a royalty interest in the northern Midland Basin for almost $1 billion to undisclosed buyers.

The largest transaction was for reserves in East Texas for $525 million, the Oklahoma City-based oil and natural gas producer said in a statement Monday. The company also agreed to sell its position in the Anadarko Basin’s Granite Wash area for $310 million. The transactions are expected to close in the third quarter.

A global oil-price crash has forced Devon and the rest of the industry to slash costs, lay off thousands of workers and cut dividends and exploration budgets. While prices have rebounded somewhat in 2016, Chief Executive Officer Dave Hager said last month it’s still not enough for Devon to grow production again.

“With oil prices having moved in our favor throughout the sales process, we are encouraged by the interest and progress in marketing our remaining non-core oil assets in the Midland Basin and Access Pipeline in Canada,” Hager said in the statement. “Proceeds for the entire divestiture program are well on their way to achieving our previously announced range of $2 billion to $3 billion in 2016.”

The East Texas properties produced the equivalent of 22,000 barrels of oil a day in the first quarter, 5 percent of which was crude. Proved reserves are about 87 million barrel equivalents. The Granite Wash assets produced the equivalent of 14,000 barrel of oil a day, 13 percent of it oil, and generated $6 million in cash during the quarter. Proved reserves are estimated at 31 million barrel-equivalents.

Devon is in “advanced negotiations” to sell its half stake in the Access Pipeline, according to the statement. The line transports Canadian heavy oil and Devon is seeking a 25-year transportation agreement in that deal, Hager said at a May 18 investor conference.

Devon intends to use a third of sale proceeds to bolster this year’s capital spending and pay down debt with the rest, Hager said last month.

Devon to Sell Oil and Gas Assets for Almost $1 Billion

http://www.bloomberg.com/news/articles/2016-06-06/devon-energy-to-sell-oil-and-gas-assets-for-almost-1-billion