South Korea has secured 2027 term contracts for 23.5 million mt or 62.3% of the 37.7 million mt it expects to need that year, state-run Korea Gas Corp. said Thursday.

The country has secured 34 million mt for 2015, above the 33.9 million it needs for the year, according to a Kogas report submitted to the National Assembly.

Kogas, which has a monopoly on domestic natural gas sales, expects South Korea's 2015 LNG consumption to be 34 million mt, down from an earlier outlook of 39.8 million due to weak power demand on relatively higher prices of LNG and rising nuclear power output.

Kogas said its revised forecast was made on the basis on sluggish January-July domestic sales, which fell 8.8% year on year.

Kogas planned to import 33.84 million mt in 2015, down 7.4% from 36.33 million mt imported in 2014, given weaker demand.

"Short-term LNG shortage will be made up by short-term contracts to cover winter demand and spot purchasing if necessary, while long-term shortage would be partly filled by volumes from overseas projects in which Kogas is involved," the report said.

Kogas imported 18.35 million mt of LNG over January-July, including 13.08 million mt or 71.3% from the Middle East and South Asia.

It bought 7.32 million mt or 39.9% of its January-July imports from Qatar and 2.45 million mt or 13.4% from Oman, the report said.

It imported 1.87 million mt from Malaysia, 1.44 million mt from Indonesia, 1.15 million mt from Russia and 790,000 mt from Australia in January-July. The other 3.33 million mt came from 10 minor suppliers, including Nigeria, Equatorial Guinea and Brunei.

Of Kogas' total January-July imports, 15.11 million mt or 82.3% came under long- and mid-term contracts, 2.16 million mt or 11.8% was imported under short-term contracts, and 1.08 million mt or 5.9% came from spot buying.

"Under its plans for long- and mid-term contracts, Kogas is seeking more volumes from Australia and North America so as to ease the dependence on Middle East and South Asian nations," the report said.

"In particular, Kogas is pushing to bring in more volumes from projects in which Kogas holds stakes, such as LNG Canada."

Kogas and its partners launched LNG Canada, a project to produce 12 million mt/year of LNG from two trains at Kitimat in the western province of British Columbia in May 2013.

Kogas currently holds a 15% interest in Shell-led LNG Canada after selling a 5% stake to Shell in May last year as part of efforts to reduce its debt.

"Kogas is still pushing to sell additional 5%, which will reduce its stake to 10%," a company official said.

Kogas pushed for sell the 5% stake by the end of 2014 but failed amid the slump in energy prices in the second half of last year.

Kogas, which imported 0.93 million mt from projects in which it holds stakes in 2014, aims to increase the volume to 2.42 million mt in 2017.

The company currently has 15 contracts covering 24.12 million-31.44 million mt/year in imports for 2015-2019.

The deals include 4.92 million mt/year from Qatari RasGas, 2.1 million mt/year from RasGas II and 1.5 million-2 million mt/year from RasGas III, 4.06 million mt/year from Oman's OLNG, and 2 million mt/year from Yemen's YLNG, among others.

Kogas plans to import 2.8 million mt/year from the Sabine Pass terminal in Louisiana from 2017. It originally planned to buy 3.5 million mt/year from Sabine Pass, but Kogas signed a deal with Total in January 2014 to resell 700,000 mt/year in a bid to reduce import volumes to South Korea.

Under the deal, Kogas will take 2.8 million mt/year while Total will get the remaining 700,000 mt/year. Kogas also has three mid-term contracts in which Kogas imports 2.73 million-3.88 million mt/year for 2015-2016, the report said.

Besides Kogas, two more South Korean firms are importing LNG directly from overseas sources. Posco, the country's top steelmaker, has been importing 550,000 mt/year from the BP-led Tangguh LNG consortium in Indonesia since July 2005 under a 20-year contract. SK E&S, the country's top city gas provider and an affiliate of the country's top oil refiner SK Innovation, also has been importing 600,000 mt/year of LNG directly from Tangguh since 2005 under a 20-year contract.

http://www.platts.com/latest-news/natural-gas/seoul/s-korea-secures-235-mil-mt-in-2027-lng-term-deals-27868046

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China has nearly tripled the size of proven reserves at its Fuling project, by far the country's largest shale gas find, according to an official from investor Sinopec Corp and an industry report.

The Jiaoshiba block of the project, in the municipality of Chongqing in southwest China, has 273.8 billion cubic metres (bcm) of newly proven reserves, said the report carried onnews.cnpc.com.cn, an industry portal run by top energy group CNPC.

That would take total proven preserve certified by the Ministry of Land and Resources (MLR) at Fuling to 380.6 bcm, giving it the potential to have an annual production capacity of 10 bcm by the end of 2017, it said.

China hopes to replicate the shale gas boom that has turned the United States into a net exporter, but more complex geology and small scale of development by only a handful state energy firms have resulted in only a few commercial discoveries.

The latest reserve appraisal was conducted on the Jiaoye-4 and Jiaoye-5 wells, southwest of the previously evaluated Jiaoye-1 and Jiaoye-3 wells.

By the end of August, a total of 142 wells at the Jiaoshiba block had tested high-yield industrial gas flows, the report said.

A media official with Sinopec Corp, the investor in Fuling, confirmed the contents of the report.

Sinopec told Reuters last month that the company was sticking by its investment pledge on shale gas despite it being more costly and technically more challenging than its conventional fields such as Puguang.

http://www.reuters.com/article/2015/10/08/china-shale-fuling-idUSL3N1281VB20151008

Eurasia Drilling Co., the Russian oil driller whose planned acquisition by Schlumberger Ltd. collapsed last month, said it received a buyout offer from management and shareholders.

The investors, whom Eurasia didn’t identify, offered $10 a share and proposed to delist the stock from London, according to a regulatory filing on Thursday. The company’s board has formed a panel of non-executive independent directors to negotiate a deal.

Schlumberger decided two weeks ago not to pursue its $1.7 billion proposal to buy a minority stake in Eurasia after Russian authorities delayed approval of the deal for almost eight months.

“Following the failure of the proposed transaction with Schlumberger, certain management and core shareholders seek to undertake significant rationalization of the business that would best be achieved by taking the company private, so it can sustain itself through the expected prolonged and difficult market conditions,” Eurasia said in the statement.

A buyout at $10 a share “would be a pretty good deal for the management and core shareholders,” Artem Konchin, an oil analyst at Otkritie Financial Corp., said by e-mail. Otkritie has a target price of $17 a share for Eurasia, compared with an average estimate of $15.85 from eight analysts surveyed by Bloomberg.

Eurasia has formed a committee comprising independent directors Alexander Shokhin, Igor Belikov and the Earl of Clanwilliam to negotiate terms on behalf of the board with the assistance of adviser Renaissance Capital, according to the statement. RenCap’s research unit has a $17 target price on the company, Bloomberg data show. Xenon Capital Partners will advise the buyout group.

The investors want to take Eurasia private because the company requires “maximum flexibility” as lower crude prices and “continued geopolitical risks” put pressure on its operations, according to the filing. Nicosia, Cyprus-based Eurasia has idled 20 percent of its drilling fleet, most of which was deployed at West Siberian fields, and reduced its workforce by 9.4 percent amid a slowdown in exploration.

http://www.bloomberg.com/news/articles/2015-10-08/eurasia-drilling-gets-merger-proposal-to-take-company-private-ifhvxovz

The chief executive of French oil major Total, Patrick Pouyanne, said executives of eight global oil companies would meet in Paris next week to discuss involvement in the climate change debate and proposals about carbon pricing.

He did not name the companies.

Earlier this year BG Group, BP, Eni, Royal Dutch Shell, Statoil and Total wrote to U.N. climate chief Christiana Figueres, urging governments around the world to introduce a pricing system for carbon emissions.

Setting a price for each tonne of carbon that emitters produce is meant to encourage companies to adopt cleaner technologies and shift away from using fossil fuels, primarily coal.

In a joint statement, the companies acknowledged the current trend in greenhouse gas emissions was too high to meet the United Nation's target of limiting global warming by no more than 2 degrees.

The Oct. 16 meeting will be followed by a press conference, where the company heads are also expected to renew their call for a global carbon pricing mechanism, the chief executive of French oil major Total, Patrick Pouyanne, said on Wednesday at a conference in London.

Pouyanne said the company leaders would present proposals to combat global warming ahead of the December Paris climate talks, where governments will set new goals for combating climate change.

"We need to be on the offensive ... We need to be serious to bring answers and solutions to the table and not leave policy makers raising their fingers that they (oil companies) are the devils," Pouyanne said at the Oil and Money conference.

"We are looking at areas of cooperation, for example in research and development, in CCS (carbon capture and storage) ... We all have some experience individually but it's one area where we could join efforts," Pouyanne added.

The meeting will be part of the Oil and Gas Climate Initiative, a U.N.-backed scheme involving a number of major oil and gas companies.


- See more at: http://www.rigzone.com/news/oil_gas/a/140980/Total_CEO_Says_Oil_Chiefs_to_Meet_Next_Week_on_Climate_Carbon_Pricing?rss=true#sthash.l1tLUOLG.dpuf

Petroleo Brasileiro SA sat out an oil licensing round in Brazil for the first time ever as the beleaguered state-run oil giant struggles to reduce the industry’s biggest debt load.

The country’s National Petroleum Agency sold only 37 of the 266 onshore and offshore blocks it offered Wednesday in the worst turnout in more than a decade. International majors operating in Brazil, including Statoil ASA, Royal Dutch Shell Plc and Total SA, didn’t submit any bids.

The 17 companies that won licenses were mostly Brazilian oil startups and mid-sized explorers that bid for onshore tracts, including QGEP Participacoes SA and Parnaiba Gas Natural, both based in Rio de Janeiro. The six foreign winners include Santiago-based Geopark Ltd. and French utility Engie, formerly known asGDF Suez, which partnered with Parnaiba Gas Natural. QGEP was the only bidder for offshore areas, winning two blocks in the Sergipe-Alagoas basin.

The auction took place amid a slump in crude prices and a national political crisis as Petrobras, the country’s dominant producer, grapples with cash constraints. While producers have traditionally preferred to join Petrobras as minority partners to limit risk, the company is balking at new financial commitments, according to Jotavio Gomes, an oil consultant and former  geophysicist at the state-run firm.

http://www.bloomberg.com/news/articles/2015-10-07/brazil-starts-first-oil-exploration-auction-in-two-years

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U.S. crude oil refinery inputs averaged about 15.6 million barrels per day during the week ending October 2, 2015, 403,000 barrels per day less than the previous week’s average. Refineries operated at 87.5% of their operable capacity last week. Gasoline production decreased last week, averaging 9.3 million barrels per day. Distillate fuel production increased last week, averaging about 5.1 million barrels per day. 

U.S. crude oil imports averaged about 7.1 million barrels per day last week, down by 486,000 barrels per day from the previous week. Over the last four weeks, crude oil imports averaged over 7.2 million barrels per day, 3.3% below the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 543,000 barrels per day. Distillate fuel imports averaged 111,000 barrels per day last week. 

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 3.1 million barrels from the previous week. At 461.0 million barrels, U.S. crude oil inventories remain near levels not seen for this time of year in at least the last 80 years. Total motor gasoline inventories increased by 1.9 million barrels last week, and are above the upper limit of the average range. Finished gasoline inventories decreased while blending components inventories increased last week. Distillate fuel inventories decreased by 2.5 million barrels last week but are in the middle of the average range for this time of year. Propane/propylene inventories rose 1.6 million barrels last week and are well above the upper limit of the average range. 

Total commercial petroleum inventories increased by 2.3 million barrels last week. Total products supplied over the last four-week period averaged 19.3 million barrels per day, down by 0.3% from the same period last year. Over the last four weeks, motor gasoline product supplied averaged 9.0 million barrels per day, up by 4.0% from the same period last year. Distillate fuel product supplied averaged over 3.9 million barrels per day over the last four weeks, up by 3.7% from the same period last year.  Jet fuel product supplied is up 6.9% compared to the same four-week period last year.

 Jet fuel product supplied is up 6.9% compared to the same four-week period last year.

Cheniere Energy has started the months long process of preparing its $18 billion Sabine Pass liquefied natural gas export terminal to crank out its first batch of super chilled gas for shipment overseas.

The Houston-based company received permission from federal regulators to pipe natural gas into the sprawling plant on a remote stretch of coastline along the border between Texas and Louisiana as it starts priming the first production facilities for start-up.

Last week, Sabine Pass LNG began bringing in small amounts of natural gas and burning some off, a process called flaring, providing early signs that the first phase of the project is nearing the finish line, according to energy research firm Genscape, which has been monitoring plant activity using a network of infrared monitors.

Three years after construction began, the flurry of commissioning activity at the Sabine Pass plant has attracted much attention, placing Cheniere on track to complete the nation’s first large-scale terminal to ship LNG from the continental U.S.

Thousands of welders, machinists and pipe fitters have been working for years to piece together the massive export terminal where natural gas will be piped in, chilled to minus 260 degrees to a liquid state, then shipped on specialized tankers to provide electricity to customers in India, England, Spain and Italy.

http://fuelfix.com/blog/2015/10/07/cheniere-energy-prepares-sabine-pass-plant-for-lng-production/#27079101=0

RSP Permian, Inc.  today announced that it has priced an underwritten public offering of 7,600,000 shares of its common stock at $25.50 per share.  The offering was upsized to 7,600,000 shares of common stock from the original offering size of 6,000,000 shares of common stock.  The Company has granted the underwriter a 30-day option to purchase up to 1,140,000 additional shares of the Company's common stock. Total gross proceeds (before the underwriter's discounts and commissions and estimated offering expenses) will be approximately $193.8 million to the Company.

As separately announced, the Company has recently signed a letter of intent to potentially acquire undeveloped acreage and oil and gas producing properties located in the Midland Basin for an aggregate purchase price of approximately $137 million, subject to certain customary purchase price adjustments. The Company intends to use the net proceeds from this offering first to fund a portion of the purchase price of this possible acquisition, if consummated, and the balance for general corporate purposes, which may include funding our drilling and development program.

RSP is an independent oil and natural gas company focused on the acquisition, exploration, development and production of unconventional oil and associated liquids-rich natural gas reserves in the Permian Basin of West Texas. The vast majority of RSP's acreage is located on large, contiguous acreage blocks in the core of the Midland Basin, a sub-basin of the Permian Basin, primarily in the adjacent counties of Midland, Martin, Andrews, Dawson, Ector and Glasscock. The Company's common stock is traded on the NYSE under the ticker symbol "RSPP."

http://finance.yahoo.com/news/rsp-permian-inc-prices-upsized-134400654.html

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TransCanada Corp. has launched an Open Season to obtain binding commitments from interested parties for transportation of crude oil on Cushing Marketlink from Cushing, Oklahoma to markets on the US Gulf Coast.

Interested parties may submit binding bids for transportation capacity during the Open Season that will close on 6 November 2015 at Noon MST. The anticipated commencement date for crude oil transportation service is early 1Q16.

http://www.energyglobal.com/downstream/refining/07102015/TransCanada-launches-binding-Open-Season-for-Cushing-Marketlink-1555/

Canadian Oil Sands calls Suncor's bid "opportunistic"and has adopted a poison pill defence.

On Monday Suncor commenced an unsolicited offer for struggling Canadian Oil Sands (TSE:COS) for $4.3 billion. Canadian Oil Sands has been labouring under low oil prices while Suncor has weathered the downturn through its higher margin retail and downstream refining operations.

Canadian Oil Sands adopted what it is calling ashareholder rights plan. Following the acquisition of 20 per cent or more of the outstanding shares by any person, each right held by a person other than the acquiring person would entitle the holder to purchase shares at a substantial discount.

The move by Canadian Oil Sands is buying the company time.

"The board will consider Suncor's unsolicited offer in both the current context and in light of the strong long-term potential of Canadian Oil Sands," says Donald Lowry, Chairman of the Board, in a news release.

"Shareholders do not need to take any action or make any decision about the Suncor offer until the Board has had an opportunity to fully review the offer and to provide a recommendation based on careful analysis."

http://www.mining.com/canadian-oil-sands-rejects-suncor-bid-adopts-poison-pill/