State-owned Saudi Aramco is becoming more sensitive to movements in international oil prices, with sharp effects on spending, analysts at Jadwa Investment said.

In May, the government's Council for Economic and Development Affairs approved Aramco's restructure, with a clear separation of the company from the Ministry of Petroleum and Mineral Resources to which it was previously closely aligned.

"We view Saudi Aramco's restructuring as a step towards making it a more commercially-driven organization with increased independence in financial matters," Jadwa said in a research.

Whereas Aramco had previously taken orders from the petroleum ministry, it will now be overseen by a 10-member Supreme Council for Saudi Aramco, headed by Mohammed bin Salman, the son of king Salman. Some analysts see the move as likely to result in better governance of Aramco, as its management seeks to trim costs and improve operational efficiency.

But the restructure also means Aramco will become more sensitive to movements in oil prices, with forecast prolonged periods of lower prices affecting spending more sharply, "much like other international oil companies," it said.

The state-owned oil giant has spent the last five years spending heavily on infrastructure, in particular in downstream, with investments in three new refineries.

Aramco said in its 2014 annual review, published in May, that it will continue to invest significant sums over the next decade, but with a greater emphasis on upstream as it seeks to maintain a crude oil production capacity of 12 million b/d -- to reinforce its position as the world's "pre-eminent" producer and supplier -- along with developing 5 Bcf/d of new non-associated gas processing capacity for domestic consumption.

Aramco's 2014 crude exports totalled 2.5 billion barrels (6.85 million b/d).

http://www.platts.com/latest-news/oil/dubai/saudi-aramco-spending-becoming-more-sensitive-26133273

Petrobras is giving up a dream of becoming one of the world’s biggest oil producers by cutting spending and output targets under the strain of the industry’s heaviest debt load, development bottlenecks and a slump in crude prices.

Capital expenditures through 2019 will be $130 billion, down 37 percent, while domestic oil production will average 2.8 million barrels a day in 2020, compared with a prior target of 4.2 million, the Rio de Janeiro-based company said in a statement Monday. The average spending estimate of three analysts surveyed by Bloomberg was $136 billion.

Petroleo Brasileiro SA, as Brazil’s state-controlled producer is known formally, is focusing on exploration and production, scaling back investment in refineries that have become the subject of Brazil’s biggest corruption scandal. Investors have been waiting for clarity on how the company will fund development of giant fields in the South Atlantic without having to return to equity markets to raise cash. In 2010, it held a $70 billion share sale, the world’s largest, and failed to deliver on promised output growth.

“No one can celebrate an almost 40% cut in investment and a slash in production, but for the first time in many years we see a business plan that fits the company’s reality and international scenario,’’ Adriano Pires, the head of Rio de Janeiro-based infrastructure consulting firm CBIE, said by telephone. ‘‘It shows this management has a mandate.’’

‘‘The plan’s investment portfolio prioritizes oil exploration and production projects in Brazil, mainly in pre-salt,” Petrobras said in the statement. The production targets “were updated, reflecting the postponement of projects of lower maturity and the delays in the delivery of production units.”

Petrobras, whose total debt stands at $125 billion, joins other oil companies in cutting spending after Brent prices dropped by more than half in the past year.

The plan is based on the company not losing money from selling imported fuel in Brazil, Petrobras said, after it lost about $40 billion between 2011 and 2014 because of rules requiring it to subsidize gasoline prices.

The company expects Brent prices of $60 a barrel in 2015 and $70 a barrel from 2016 to 2019, it said in Monday’s filing.

Petrobras is planning $42.6 billion in divestments and restructuring in 2017-2018 and boosted expected asset sales to $15.1 billion for this year and next.

http://www.bloomberg.com/news/articles/2015-06-29/petrobras-slashes-5-year-spending-plan-to-130-3-billion

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Offshore drilling firm Sevan Marine has engaged the law firm Selmer to conduct an investigation into allegations of its involvement in the Petrobras graft scandal which has rocked the Brazilian oil and gas giant.

The company said it is responding to a number of articles in the Brazilian press which refer to a former manager and agent of Sevan Marine being named in connection to the scandal. In a statement, Sevan Marine said that it has offered full co-operation and has been in contact with the relevant authorities on this matter.

Among the well-known corporate names suspected of illegal payments are South Korea’s Samsung Heavy Industries Co Ltd, Swedish builder Skanska AB, Danish oil and shipping group Maersk and British engineer Rolls-Royce Holdings.

The crux of the scandal involves construction and engineering firms paying hundreds of millions of dollars to win inflated contracts from Petrobras. Substantial swathes of money found their way into the coffers of the governing Workers Party and the pockets of other politicians.

http://splash247.com/sevan-marine-appoints-law-firm-to-investigate-petrobras-corruption-claims/

Iraq's semi-autonomous Kurdistan region has ramped up independent oil sales since mid-June while cutting allocations to Iraq's state oil firm SOMO in an escalating dispute over export rights and budget payments.

Kurdistan has sold at least 9 million barrels of oil in 11 tankers from the Turkish port of Ceyhan so far in June, according to shipping data and traders, compared to 5 million it allocated to SOMO in early June after which transfers largely stopped.

June became the first month of large independent sales since December last year, when Kurdistan agreed a deal with Baghdad to transfer up to 550,000 barrels per day to SOMO in exchange for Baghdad allocating Arbil 17 percent of budget payments.

The deal has faced troubles ever since with Baghdad accusing Arbil of allocating smaller-than-agreed amount of oil and Arbil saying Baghdad is paying less than a half of what is due. Neither side has yet called the deal dead but the blame game has continued for weeks.

"Unfortunately the (Kurdistan) region has not complied with it until now," Iraqi Prime Minister Haider al-Abadi said in his weekly address on Sunday.

That followed a statement from the government of Kurdistan (KRG) earlier in June in which is said it remained committed to oil transfers to SOMO but accused Baghdad of reneging on the deal.

"If Iraq's federal government does not commit to the federal budget law, the KRG is obliged to consider other solutions to provide for the livelihoods of the Kurdistan region's people and to solve the financial and economic crisis," it said.

The KRG said its need for money was especially acute given the fight against Islamic State militants and the sheltering of a large number of refugees from Syria and Iraq.

Kurdistan's independent shipments have created havoc at Ceyhan where tankers - which were previous meant to be loading oil from SOMO - have been queuing for weeks.

Last week, BP and Cepsa cancelled loadings due to a lack of oil in SOMO's tanks and this week Total, Kogas and Gazprom Neft cancelled their loadings.

Meanwhile, Kurdish independent exports have returned to the patterns seen in 2014, when oil sailed in tankers of shipping company United mainly to the Israeli port of Ashkelon from where oil was resold back to the Mediterranean market.

"The buyers are mainly those who don't have ties with SOMO," a trading source involved in the process said.

http://www.reuters.com/article/2015/06/29/iraq-kurdistan-oil-idUSL5N0ZF2YO20150629

Prime Minister Benjamin Netanyahu on Monday faced his first major coalition crisis since his re-election, with ministers withholding support for government plans for developing Israel's natural gas fields.

At least three cabinet members cited conflicts of interest - personal or business-related - in seeking to be recused from a parliament vote later in the day meant to pave the way for a gas deal that would circumvent anti-trust regulation.

Netanyahu, who has a one-seat majority in the 120-member parliament, held emergency meetings to try and resolve the impasse.

Under the proposed deal, Texas-based Noble Energy and Israel's Delek Group would keep ownership of the massive offshore Leviathan field while stakes in smaller projects are put up for sale, industry officials said.

The agreement has become the focus of national debate with critics saying Netanyahu was putting big oil profits above what could be a windfall for the state and citizens hoping to lower energy prices.

Netanyahu says the more pressing issue is to get the gas out of the ground and fast-track the development of Israel's natural resources.

Development of Leviathan, which could supply billions of dollars worth of gas to Egypt and Jordan, has been held up for a few years by regulatory issues. Israel's anti-trust authority objects to the monopoly arrangement.

Facing possible defeat in parliament, Netanyahu could declare the vote a ballot of confidence in his government, political analysts said. That could effectively force recalcitrant ministers to back the measure.

Netanyahu's original plan to push the deal through swiftly last week, was derailed by his economy minister, Aryeh Deri of the ultra-Orthodox Shas party, who declined to sign off on the agreement. He cited monopoly concerns.

That in turn forced Netanyahu to go to parliament in order to give the government the required authorization to finalise the deal with Noble and Delek, which currently control a number of gas fields off Israel's shore.

http://www.reuters.com/article/2015/06/29/israel-politics-gas-idUSL5N0ZF1WS20150629

The United States exported between 120,000 and 140,000 barrels per day (bpd) of condensate last month, according to  traders and ClipperData, which tracks ships and terminal loadings, up from about 60,000 bpd at the start of the year.

The condensate is lightly processed through stabilizers due to rules banning crude exports in the United States, now the world's third-largest oil producer.

The rise comes as more companies look to take advantage of the ability to ship the oil overseas, including to places like the Netherlands, France, South Korea and Brazil.

"One of the main surprises is that the majority of the exports have been to Europe rather than anywhere else, when we thought the concentration would be to Asian markets," said Abudi Zein, chief operating officer at ClipperData, adding this was probably to do with the size of the cargoes and freight costs.
 
Enterprise Products Partners led the pack with 1.8 million barrels of exports per month, or 60,000 bpd. It sold a year's supply to Mitsubishi Corp and Vitol at the start of this year.
    
BHP Billiton has been selling a 700,000-barrel cargo every month, though has delayed a plan to double exports to two cargoes a month due to production issues, traders said.

Meanwhile, in the first condensate shipment to Latin America, some 636,000 barrels reached Petrobras' San Sebastiao dock in May, according to data from ClipperData and trading sources.        
    
The oil exported by Enterprise, BHP and BP is of a heavier grade with API gravity at 52-54 degrees, which goes to Europe, traders said. API gravity is an indicator of the crude's density and hence its quality.
    
Asian refiners prefer lighter grades of API with a gravity of 61 degrees containing more petrochemical feedstock. This grade is exported by Royal Dutch Shell, Plains All American LP and Trafigura.

http://www.reuters.com/article/2015/06/29/usa-crude-exports-idUSL3N0ZC4RN20150629

Q1 2015 saw a significant fall in oil and gas production across Alberta, with many companies recording large declines in core operating areas compared to the end of 2014.

Between Q3 2014 and Q1 2015, overall Alberta production - excluding oil sands - has fallen by 8% (56,880 boe/d) and between Q4 2014 and Q1 2015, overall production has fallen by 5% (34,165 boe/d). This is due to a number of factors; the fall in global commodity prices is perhaps the major reason for this decline, but companies have also suffered due to other external pressures such as pipeline difficulties or maintenance periods, for example. CanOils Assets is a powerful new tool that can identify both where production declined to the greatest degree and which companies recorded the biggest net decline.

In Which Regions has Production Declined the Most?

Alberta is divided into 7 regions by the Petroleum Services Association of Canada ('PSAC Regions' - see note 1) and the production from each for any given period can be quickly downloaded from the CanOils Webmap. The data shows that, excluding oil sands production, all PSAC regions in Alberta with the exception of the Foothills region have recorded declines in quarterly production since Q3 2014 when commodity prices began to fall.



Source: CanOils Assets

http://www.oilvoice.com/n/Alberta-Oil-Gas-Production-Falls-in-Q1-2015/fb68e3c784f8.aspx

Cheniere Energy Inc is moving ahead with a $550-million export terminal in Texas that will ship processed condensate to international markets, a top executive said on Monday. 

In addition, the terminal will be able to export any type of domestic oil if the decades-old US crude export ban is ever lifted, said Nelson Lee, director of crude trading and origination at Cheniere. "The reason why we're going ahead with that project is we think that we will have unfettered crude oil exports in US at some point, and there aren't the sort of logistics for the crude to exit the US," Lee said at an energy conference in Houston. 

Lee recently joined Cheniere from BHP Billiton, where he headed condensate exports. BHP was the first company to export condensate without waiting for approval from US regulators. Speaking at American Business Conferences' North American Crude Markets and Storage Summit, Lee said that the terminal, slated to start up in 2017, will have two-million barrels of oil storage and dock infrastructure that can accommodate Aframax-sized tankers. 

Cheniere also is building liquefied natural gas (LNG) export terminals in Corpus Christi, Texas, and Cameron, Louisiana. The oil terminal will have storage and stabilisation at a hub in San Patricio near Corpus Christi, which will be connected via pipeline to Cheniere's operations in Ingleside, Texas, on the Corpus Christi Bay. There, processed condensate will ship out. 

Cheniere axed plans to build a condensate splitter at the terminal, focusing instead on stabilisation capacity, he said. Splitters "split" condensate into various components including jet fuel, diesel and naphtha, a building block for gasoline. Stabilisers provide less sophisticated processing that removes natural gas liquids. In 2013, US regulators started telling companies that such minimal processing is enough to qualify super-light oil, prevalent in the nearby Eagle Ford shale in Texas, as an exportable refined product that does not violate the crude export ban.

http://www.miningweekly.com/article/cheniere-moving-ahead-with-condensate-export-terminal-in-texas-2015-06-30