Russian gas giant Gazprom has exported 41.4 billion cubic metres of gas to Europe and Turkey in the third quarter, up 23 percent from the year-earlier period, the company's head Alexei Miller said on Friday.

In September, gas exports stood at 13.3 bcm, an increase of 24 percent.

European buyers of Russian gas have increased purchases before the cold season and as the price of the commodity, pegged to prices of oil with a lag of six to nine months, fell.

Miller said that Germany, the largest buyer of Russian gas, increased purchases by 19 percent to 11.2 bcm in third quarter. Italy boosted intake by 69 percent to 7 bcm.

http://www.reuters.com/article/2015/10/02/russia-gazprom-exports-idUSL5N12213F20151002

Russian oil output rose to a post-Soviet record last month as producers take advantage of the weak ruble to push ahead with drilling.

The nation’s production of crude and condensate advanced to 10.74 million barrels a day, 1 percent more than a year earlier and topping a record set in June, according to data from the Energy Ministry’s CDU-TEK unit.

The increase comes at a time when Organization of Petroleum Exporting Countries are defending market share rather than cutting production amid a global output glut. Russia, which gets about half of its budget income from oil and gas revenues, is maintaining its own supplies in the face of Brent crude prices that fell 50 percent in the past year.

Oil producers, which earn in dollars, pay for services using the ruble, which has weakened to 65.65 to the dollar from 39.56 to the dollar a year earlier.

Crude exports rose 3.4 percent from the previous year to 5.27 million barrels a day, according the data. Exports rose 5 percent from the previous month.

http://www.mineweb.com/news-fast-news/russian-oil-output-reaches-post-soviet-record-in-september/

China's apparent oil demand* rose 10.2% in August from a year earlier to 11.19 million barrels per day (b/d), according to a just-released Platts analysis of Chinese government data.

Barring gasoil and naphtha, China's apparent demand for all other key products--gasoline, liquefied petroleum gas (LPG), jet/kerosene, and fuel oil--saw double digit year-on-year growth in August.

China's refinery throughput in August averaged 10.49 million b/d, up 6.5% from a year earlier, data from the country's National Bureau of Statistics (NBS) on September 12 showed.

Meanwhile, China's net imports of oil products surged 131% year on year to 700,000 b/d in August, driven by strong inflows of LPG, fuel oil and naphtha, according to data released September 21 by the General Administration of Customs.

During the first eight months of this year, China's total apparent oil demand averaged 11.14 million b/d, an increase of 8.2% from the same period of 2014.

China's actual oil demand growth could be higher since stocks of key products have fallen, Platts estimates show. "Inventories of gasoil, gasoline and jet/kerosene fell by between 2.5% and 9.7% at the end of August, from end July," said Platts Associate Editorial Director for Asia Oil News Mriganka Jaipuriyar.

China's apparent oil demand is expected to remain steady at 11.1 million b/d for the rest of the year, according to data from Platts China Oil Analytics, an on-line platform for supply/demand, refining margins, volume forecasts, trade flows and the like. However, it indicates that overall growth for 2015 could moderate to just over 5%, given the high base in the fourth quarter of last year.

Gasoil
Gasoil is the most widely consumed oil product in China and the nation's declining economic growth over the last three years has hit gasoil demand.

Apparent demand in August rose 3.4% year over year to 3.50 million b/d, but actual demand could be higher given the stock draw down, Platts China Oil Analytics indicate.

Stocks of gasoil fell 7.6%, or near 7.5 million barrels, in August from July to an estimated 90.38 million barrels, Platts calculates, based on Xinhua's China Petroleum Stockpile Statistics.

"Some of the government's stimulus measures implemented in prior months are likely filtering down through the economy," said Song Yen Ling, Platts senior analyst for Asia Pacific oil markets. "Industrial production growth improved marginally in August, while other indicators such as highway freight traffic also showed positive growth."

Up to 70% of the fuel is used in the transport sector while the remainder is used by various sectors - including construction, farming and fishing, and industrial heating - to power machinery.

Apparent demand for gasoil rose 3.7% over January to August to 3.58 million b/d.

LPG
Demand for LPG surged 27.3% year on year to 1.27 million b/d in August. Growth was supported by import demand from new propane dehydrogenation plants. Net imports of LPG rose 168.5% year over year to an average 376,000 b/d for the month.

Year to date, apparent demand for LPG is up approximately 21.4% versus a year ago to 1.21 million b/d.

Gasoline
Apparent demand for gasoline rose 21.6% year over year to 2.75 million b/d, with January-August demand rising 11.4% to 2.69 million b/d.

According to Xinhua's China Petroleum Stockpile Statistics, gasoline stocks fell 9.7% year over year at the end of August, suggesting actual demand could be higher than Platts estimates.

Even though overall auto sales contracted in August, China's sales of gasoline-guzzling MPVs and SUVs, which have been the key demand drivers, rose 10% and 44.5% respectively, year on year, according to data from the China Association of Automobile Manufacturers.

Fuel Oil
Apparent demand for fuel oil in August rose 27.20% year over year to 695,000 b/d. Demand for the January to August period rose 14.3% year over year to 952,000 b/d.

Net imports of fuel oil rose 58.5% in August on a year-over-year basis to 549,000 b/d, led in large part by a jump in imports of petroleum bitumen blend.

http://www.platts.com/pressreleases/2015/100115b?hootpostid=8b0961afc522effec218590adf3e9866

Titanium Corporation Inc. shares gained the most in more than 16 years after reaching an agreement that gave the company access to heavy minerals at Syncrude Canada Ltd.’s oil sands sites.

The stock price rose 78 percent to the intraday high of C$1.39 at 3 p.m. Thursday in Toronto, the biggest increase since April 1999.

Titanium will have “first right” to recover heavy minerals from waste generated at Syncrude oil sites using a patented technology it owns, the company said in a release. Syncrude was given a 50 percent interest in the patented technology, which will also extract bitumen from the waste deposited in tailing ponds.

The company spent 10 years negotiating with oil-sands producers including Syncrude, Suncor and Canadian Natural Resources Ltd. to apply its technology, Scott Rattee, former senior analyst at Edgecrest Capital Corp., said in a phone interview.

The stock is “surging today because people are amazed it finally happened,” he said.

The technology could give Titanium access to “several hundred million” dollars a year worth of minerals including zircon and titanium dioxide that are now dumped, Rattee said. The technology also raises bitumen extraction by 2 percent to 3 percent and makes the resulting tailing ponds much cleaner as a result, he said.

Scott Nelson, Titanium’s chief executive officer, didn’t return a phone call seeking comment.

Oil-sands companies, which emit more carbon than traditional oil producers and leave vast swaths of wasteland from their mining operations, have sought to reduce their environmental impact in recent years.

http://www.bloomberg.com/news/articles/2015-10-01/titanium-surges-most-since-1999-after-agreement-with-syncrude

Penn West Petroleum Ltd. is trying to avoid parting with its best assets as the oil market crash brings its debt into focus. The company appears to be running out of other options.

Penn West has exceeded a target set with its debt holders of selling C$650 million ($489 million) of assets outside its areas of focus, with a deal announced Thursday to dispose of its 9.5 percent stake in the Weyburn oil field in southeast Saskatchewan for C$205 million. That brings the total sold this year to C$810 million, not enough to keep debt in check, according to Desjardins Capital Markets and Dundee Capital Markets Inc. estimates.

“Frankly, I think they have to sell one of their jewels if they want to survive, the jewel being the Viking, most likely,” Brian Kristjansen, an analyst at Dundee in Calgary, said in a phone interview. The Viking tight oil asset in Saskatchewan produces light crude, generates high returns and is probably worth at least C$800 million, he said, which would bring Penn West’s total asset sales to at least C$1.61 billion.

“The resulting company won’t be as attractive because it’s their highest net-back asset.”

An oil market slump that began last year is keeping prices below $50 a barrel for the U.S. benchmark, curbing cash flow for producers. Calgary-based Penn West will probably violate a covenant on its debt in the first three months of 2016 if it doesn’t sell a key property, Kristjansen said.

The producer’s debt remains “a significant headwind,” at more than six times its cash flow, according to a note by Kristopher Zack at Desjardins in Calgary.

In a statement Thursday announcing the Weyburn sale, Penn West said it would stick to its strategy of selling “non-core” assets to further lower debt and will continue to focus on primary operations. A company spokesman declined to comment further.

http://www.bloomberg.com/news/articles/2015-10-01/penn-west-seen-selling-most-prized-oil-assets-as-debt-weighs

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The speed at which oil producers shut down wells spitting out their final drops of unprofitable crude may hold the key to an eventual rebound if prices fall further.

Crude prices tumbling to $30 a barrel would threaten the profitability of about 206,000 barrels per day of production from older wells that produce minimal amounts of oil, according to areport Thursday from Bloomberg Intelligence.

Output from older U.S. wells less profitable as oil prices fall



The wells, which are most prevalent in Texas’ Permian Basin, are about 25 years old on average and produce no more than 15 barrels a day. They require regular maintenance to help pump even that much after years of sagging pressure.

"These wells dance on the edge of profitability," Peter Pulikkan and William Foiles, analysts at Bloomberg Intelligence, wrote in the report. "The reaction of smaller mom-and-pop operators to sustained low oil prices will dictate how quickly uneconomic supply is removed from the market."

Stripper wells represent more than 80 percent of total wells in the U.S. and 12 percent of total production, according to the report. In total, they generate about 1.1 million barrels of oil a day, nearly as much as Algeria, the third-largest African crude producer.

The key decision will be whether operators continue to let the wells produce at losses to hold the lease in hopes that oil prices soon recover, or shut in production and potentially surrender the well, the analysts wrote. While most of the little wells are operated by tiny producers, the two companies with the greatest production from stripper wells are Chevron Corp. and Occidental Petroleum Corp.

http://www.bloomberg.com/news/articles/2015-10-01/stripper-wells-burning-cash-at-30-oil-to-speed-u-s-output-drop

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Chesapeake Energy Corp. bonds plunged Thursday after the energy producer announced an amendment to its credit line that would allow the company to incur as much as $2 billion in junior debt.

The oil and gas producer’s $1.3 billion of 6.625 percent unsecured notes due in August 2020 dropped 8.1 cents to 65.6 cents on the dollar at 8:34 a.m. in New York, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.

The Oklahoma City-based company’s $4 billion revolving credit line will now be secured. In exchange, Chesapeake was able to extract some concessions from its lenders, such as the ability to incur new debt and the removal of the total leveraged ratio covenant, according to the statement.

http://www.bloomberg.com/news/articles/2015-10-01/chesapeake-bonds-crater-on-new-debt-leeway-in-amended-revolver

Oil prices jumped as much as 4 percent on Thursday, boosted by a rally in U.S. gasoline on worries about potential damage to oil installations from a hurricane headed for the U.S. East Coast, traders said.

Heightened geopolitical risk from the worsening war in Syria also boosted crude futures in earlier trade.

Weather forecasters said Hurricane Joaquin could hit the New York metropolitan area as a tropical storm on Tuesday, potentially following the destructive course of Hurricane Sandy in 2012.

Traders watch Atlantic hurricanes because they can lead to precautionary shutdowns of Gulf of Mexico oil and gas platforms, and in exceptional cases damage energy infrastructure.

http://www.reuters.com/article/2015/10/01/markets-oil-idUSL5N1210X020151001

Taking another step towards easing its energy demand challenges, Egypt welcomed the arrival of a second liquefied natural gas import terminal this week, opening another avenue for needed natural gas imports.

According to media reports, Cairo took in the floating LNG terminal with plans to begin operations later in October, complete with storage and regasification capacity.

The unit was sent by Singapore-based Norwegian group BW Gas, has a capacity of 600 to 700 million cubic feet per day, according to Reuters.

The arrival comes at a time when Egypt continues to struggle to meet its domestic demand, as well as draw down significant debts to international producers.  Egypt has a long history of energy challenges, though they grew significantly more daunting over the last four years. With the collapse of the long-standing government of Hosni Mubarak, the country of over 80 million found itself economically isolated, which served to reduce its foreign reserves and with it, the ability to keep up payments to oil and gas importers.

At the same time, the country’s domestic production has continued to slow, a situation made worse by a series of attacks on eastbound gas pipelines to buyers in Israel and Jordan, further reducing needed energy sector revenue.

Despite such set-backs, Egypt is now flush with confidence thanks to the recent discovery of a “super giant” natural gas discovery off its Mediterranean coastline. According to a Bloomberg report on the discovery, Italy’s Eni outlined a potential “super giant” field that could potentially be home to 30 trillion cubic feet of gas, making it the biggest find in the Mediterranean.

However, even in the best case scenario, access to that gas is a long way down the road, making short-term solutions like LNG terminals all the more important.

http://www.forbes.com/sites/christophercoats/2015/09/30/egypt-expands-energy-import-options-with-second-lng-terminal/

When considering the likely production of crude oil in the U.S. in the coming months, and the affect that production will have on prices, one of the large variables is the rate of completions, particularly in the Willison Basin in North Dakota.  That is because there are more than 900 drilled but uncompleted wells in the state.  However, NDIC regulations require that, unless extended, an operator must complete a well within one year of the issuance of the drilling permit.

The tension created by this rule in the era of depressed prices is obvious.  As Ron Ness, the president of the North Dakota Petroleum Council (NDPC) recently stated:  “Why would we want companies to be forced to spend money or complete the wells when the economics don’t warrant it?  In today’s economic of an over-supplied oil market, it makes no sense.”

As a result, the NDIC has “indicated they are leaning towards leniency in their treatment of operators that have drilled but not completed wells within the one-year time frame permitted. Instead of assuming such wells are abandoned, which would otherwise mean an expired drilling permit and about $200,000 in plugging costs, the State plans to give operators more time.”   The NDIC has stated that they are “leaning toward” issuing a greater number of temporary abandonment permits which in general give operators a one-year grace period, with potential extensions by the NDIC.

The NDPC favors such extensions from the NDIC.  As Mr. Ness succinctly put it – “Just defer completions.  So they sit on them two years.  What’s the difference.”

http://energylawtoday.foxrothschild.com/2015/09/articles/ndic/ndic-considering-extending-completions-deadlines/?utm_source=Mondaq&utm_medium=syndication&utm_campaign=View-Original

As a shot in the arm for Cairn India, its partner Oil and Natural Gas Corp has asked the government to extend the tenure of prolific Rajasthan oil block by 10 years without any changes in terms and conditions.

Cairn, which holds 30% interest in the Rajasthan block, wants to retain the Rajasthan block beyond the contractual deadline of 2020. And for such an extension the nod of the state-owned firm, which is a licence of the block holding 30% interest, was necessary.

A top official said that ONGC has agreed to the Cairn proposal and written to the Oil Ministry saying the licence term should be extended by 10 years on the existing terms and conditions.

Unlike in 2011, when it had given conditional approval for Cairn being acquired by Vedanta Group to resolve the royalty dispute, ONGC has not put any pre-condition this time.

He said that after ONGC nod, the ministry has now sought a view from the upstream regulator, the DGH for extension of the license term.

Cairn's contractual term for exploring and producing oil and gas from the Rajasthan Block RJ-ON-90/2 expires in 2020 and the area is to return to the block licensee, ONGC.

http://steelguru.com/gas-oil/ongc-supports-cairn-india-plea-for-rajasthan-block-s-term-extension/435869#tag

Iran is inviting foreign investors to actively develop the OPEC member's energy industry after implementation of a historic nuclear deal reached between Iran and six global powers, deputy Oil Minister Rokneddin Javadi told Reuters on Thursday.

"We welcome all oil companies, including the Americans, that meet Islamic Republic's requirements to invest in Iran," Javadi said by telephone from Tehran.

Iran plans to increase crude output by 2 million barrels a day from about 50 energy projects slated for investors at a conference in Tehran next month, National Iranian Oil Co. Managing DirectorRoknoddin Javadi said.

The package will also aim to boost natural gas production by 7 billion standard cubic feet, Javadi said at a conference in Berlin Thursday. Oil production is now about 2.8 million barrels a day,data compiled by Bloomberg show. Iran has the world’s largest gas reserves and the fourth largest oil reserves, according to BP Plc figures.

Iran will need $30 billion of investment over five years to boost oil production, starting with about 350,000 barrels of new output next year, Goldman Sachs Group Inc. said in a report Thursday. The supplies could keep pressure on oil prices and delay the market’s return to balance, Henry Tarr, a Goldman analyst, said in the report.

“The global oil market will stay bearish in the short to medium term,” Javadi told the conference.

The July deal agreed by the U.S., France, China, Russia, U.K. and Germany to remove sanctions on Iran in exchange for curbs on its nuclear program point to an early 2016 start if all conditions are met, Goldman’s Tarr said in the report.

Potential investors will be asked to consider contracts over 20 to 25 years, Javadi said. Iran’s council of ministers endorsed a new model contract for the projects in a meeting chaired by PresidentHassan Rouhani in Tehran, the state-run Mehr news agency reported Wednesday. The conference is set for Nov. 16 to Nov. 20 in Tehran. Another seminar about the projects is scheduled Oct. 19 to Oct. 21 in Tehran, with Iran’s Oil Minister Bijan Zanganeh set to attend. There is another conference set for London in February.

Iran needs 210 million cubic meters a year of natural gas, with production seen reaching about 300 million cubic meters by the end of next year, Javadi said. That would leave up to 90 million cubic meters a year available for export. Talks have been renewed with European Union countries to supply them with natural gas via pipeline and liquefied natural gas, with plans to bring its first LNG plant into operation within 2 1/2 years with capacity of 10 million tons a year, he said.


http://www.reuters.com/article/2015/10/01/iran-usa-oil-idUSL5N11X0PJ20151001
http://www.bloomberg.com/news/articles/2015-10-01/iran-aims-to-boost-oil-output-by-2-million-barrels-from-projects

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First Nations elected and Hereditary Chiefs from across Northern British Columbia have joined together to sign a letter that declares their support for the development of a multibillion-dollar energy pipeline corridor through their traditional territories by Eagle Spirit Energy.

First Nations leaders support the government of B.C.’s position that the shipment of LNG is the priority. The proposed energy corridor is not only the solution for shipping B.C. LNG but also Alberta oil, reads a joint statement by the First Nations.

Eagle Spirit Energy was formed as a First Nations-led initiative to develop an energy corridor from Alberta to B.C. tidewater. An energy corridor means that pipelines can be built to efficiently and safely transport liquefied natural gas, and later on oil, to a proposed tanker loading export facility located on tidewater in northern B.C.

This letter to Prime Minister Harper, and Premiers Clark, Notley and Wall states, “our support is for moving forward with Eagle Spirit to continue to meet with all communities, to continue the necessary due diligence in terms of the environmental protection, to assess the viability of the project, and to clearly establish the benefits to our communities.”

This is the first time that First Nations have come together with such a resolution. It is a responsive model developed to provide appropriate consultation, enhanced land and marine environmental protections, and fair compensation for the Province of British Columbia, First Nations, and northern communities.

Exclusivity and benefits agreements, and non-disclosure agreements have been signed by those First Nations through whose traditional territories the pipelines would cross. The initial and ongoing participation of impacted First Nations will be incorporated into the project through the formation of a Chiefs’ Council.

The parties are presently working together to determine the final route and towards the completion of final binding agreements

http://www.lngworldnews.com/first-nations-join-in-support-of-lng-corridor/

 A bill to lift the 40-year-old ban on U.S. oil exports passed the Senate Banking Committee on Thursday, but the future of the measure is uncertain in the full chamber, after a controversial amendment was added to it.



Senator Pat Toomey, a Republican of Pennsylvania, added an amendment to the bill that would make Iran compensate U.S. victims of Iranian backed terrorism, language that senators said would doom the bill's future.

"The bill is dead," because of the addition of the Toomey amendment that the White House likely opposes, said Senator Jon Tester, a Democrat of Montana.


A similar bill to lift the ban passed earlier in the year in the Senate Energy Committee. This bill too was only supported by one Democrat, Senator Lisa Murkowski of oil-producing Alaska, the head of the panel. Backers of the bill need six Democrats to pass the bill if all 54 Republicans vote for it.

If all 54 Senate Republicans vote for the bill, supporters will need six Democrats to reach the 60 votes needed for approval.

Heitkamp and other supporters of lifting the ban sought to gain Democratic votes by including a provision that would allow the president to halt exports if he deemed they were not in the interest of national security. Heitcamp said that mechanism was put into the legislation to respond to concerns about runaway gasoline prices.

The White House said on Wednesday it does not support Senate efforts to reverse the ban even though Heitkamp's bill contains the provision.

However, Heitkamp said she and others were talking with senior White House officials on a regular basis. She said she was confident President Barack Obama could support a balanced bill doing away with the ban if it included measures such as backing renewable energy like solar and wind power.

Pulling that off could be difficult. Adding a measure to make tax breaks for renewables permanent could cause other senators in states heavily reliant on coal sales to back away from the bill.

Heitkamp said it was premature to discuss what kinds of deals could be made to eventually pass the bill, but that some of the issues on the table could be "surprising."

Oil producers say the domestic drilling boom will eventually be choked if the trade restriction, which Congress passed in 1975 after the Arab oil embargo, is not lifted.

Opponents to lifting the ban say it could hurt employment in oil refining and shipbuilding and damage the environment.

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Concho Resources Inc. today announced that it has priced an upsized public offering of 7,700,000 shares of its common stock for total gross proceeds (before underwriters’ fees and estimated expenses) of approximately $712 million.

The underwriters have an option for 30 days to purchase up to an additional 1,155,000 shares of common stock from the Company. Proceeds from the offering are expected to be used to repay all outstanding borrowings under the Company’s credit facility, which were used in part to finance recent acquisitions, and for general corporate purposes, including funding potential future acquisitions.

http://finance.yahoo.com/news/concho-resources-inc-announces-upsizing-001600760.html

Canadian regulators approved the hydrotest results of Enbridge Inc's Line 9 crude oil pipeline on Wednesday, clearing the way for the delayed 300,000 barrel-per-day route to the east of the country to start operating.

The newly reversed Line 9 will ship mainly light inland crude from Sarnia, Ontario, to Montreal, Quebec. It previously flowed in the opposite direction, taking imported crude to Ontario.

The line, originally expected to start up in late 2014, was held up after the National Energy Board ordered hydrostatic tests at three locations along the line in June.

Prior to that, regulators had asked for additional data on shut-off valve placements at major water crossings. {ID:nL1N0VG160]

The NEB said on Wednesday there were no further pre-operation requirements on Line 9.

"The successful hydrotests confirm the NEB's confidence in the integrity of the pipeline and its confidence that the line can safely be returned to operation," the regulator said in a statement.

The Line 9 approval is a rare bright spot for backers of Canadian pipeline projects, which include TransCanada Corp's Keystone XL and Enbridge's Northern Gateway.

These projects have run into fierce environmental opposition, and last week Democratic U.S. presidential candidate Hillary Clinton said she opposed Keystone XL.

The approval was welcomed by the Canadian Association of Petroleum Producers and Suncor Energy, which owns a refinery in Quebec and is one of Line 9's biggest customers.

"We have long said the pipeline is critical in terms of improving access to inland crude and providing supply options to the Montreal refinery, which in turn enhances its competitiveness," said Suncor spokeswoman Sneh Seetal.

Valero Energy Corp also has a refinery in Quebec and will likely benefit from being able to replace imported crude with cheaper inland barrels.

Once the pipeline becomes operational the NEB has imposed conditions including biweekly patrols, quarterly integrity testing and an in-line inspection within the first year of operation.

Enbridge is also required to limit the pressure of the pipeline for its first year of operation. It was not immediately clear whether pressure restrictions would affect the capacity of the pipeline and the company does not yet have an expected in-service date for the pipeline.

"There are still some technical preparations that are required and line-fill is not an exactly timed process, so we will not speculate at this time on a specific date for return to full service," White said.

http://www.reuters.com/article/2015/09/30/enbridge-inc-regulator-idUSL1N1203IH20150930

PBF Energy Inc said it would buy Exxon Mobil Corp's refinery in Torrance, California and restore it to full working order before the deal closes in the second quarter of 2016.

The $537.5 million purchase of the refinery and related logistics assets will help PBF Energy increase its throughput capacity to about 900,000 barrels per day, the refiner said in a statement.

The 149,500 barrels-per-day refinery has been shut since a Feb. 18 explosion that destroyed equipment critical to controlling emissions from a gasoline-making fluid catalytic cracking unit.

http://www.reuters.com/article/2015/09/30/exxon-mobil-divestiture-pbf-energy-idUSL3N1205UP20150930

More on Mexico's second attempt to lure the world's energy companies to its oil fields.

After a flop the first time round, when only two of the 14 blocks on offer were awarded, Mexico bounced back in its second oil auction, awarding three of the five blocks and netting juicy terms for the state.

ENI of Italy won the first block; Argentina's Pan American Energy in consortium with E&P Hidrocarburos took the second; Fieldwood of the US in partnership with Petrobal of Mexico took the fourth. Two blocks failed to attract bids, writes Jude Webber in Mexico City.

The five blocks, containing a total of nine fields, are located in the shallow waters of the Gulf of Mexico and reserves have already been discovered, reducing risk.

The only block containing heavy oil attracted no bidders; the remainder have reserves of light oil and two fields in the first block also lie over salt structures which could be explored.

Bids came in well above the minimum threshold set by the government.

Norwegian major Statoil lost its bids. CNOOC of China bid on two fields and Lukoil of Russia had one offer, but all were outgunned.

The consortium containing companies which swept the board in the first tender also missed out this time around.

http://www.ft.com/fastft/400221/post-400221

Spanish oil major Repsol on Wednesday said it had sold part of its piped gas business to Gas Natural Distribution and Redexis Gas for 652 million euros ($728 million), helping it reach its asset disposal target.

The company said it had now surpassed its goal to sell $1 billion in non-strategic assets, a target it set itself after acquiring Canada's Talisman. It also sold its stake in fuel logistics firm CLH earlier this month.

Redexis Gas is owned by Goldman Sachs' infrastructure fund.

http://www.upstreamonline.com/live/1412673/repsol-inks-usd-728m-gas-asset-sale-deals?utm_source=twitterfeed&utm_medium=twitter

                                  Last Week        Week Before     Year Ago

Domestic Production...... 9,096               9,136              8,837

http://ir.eia.gov/wpsr/overview.pdf

U.S. crude oil refinery inputs averaged 16.0 million barrels per day during the week ending September 25, 2015, 241,000 barrels per day less than the previous week’s average. Refineries operated at 89.8% of their operable capacity last week. Gasoline production increased last week, averaging about 9.7 million barrels per day. Distillate fuel production decreased slightly last week, averaging 5.0 million barrels per day.

U.S. crude oil imports averaged about 7.6 million barrels per day last week, up by 378,000 barrels per day from the previous week. Over the last four weeks, crude oil imports averaged over 7.3 million barrels per day, 1.7% below the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 990,000 barrels per day. Distillate fuel imports averaged 56,000 barrels per day last week.

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 4.0 million barrels from the previous week. At 457.9 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 3.3 million barrels last week, and are near the upper limit of the average range. Both finished gasoline inventories and blending components inventories increased last week. Distillate fuel inventories decreased by 0.3 million barrels last week but are in the middle of the average range for this time of year. Propane/propylene inventories rose 1.7 million barrels last week and are well above the upper limit of the average range. Total commercial petroleum inventories increased by 3.7 million barrels last week.

Total products supplied over the last four-week period averaged over 19.5 million barrels per day, up by 1.5% from the same period last year. Over the last four weeks, motor gasoline product supplied averaged about 9.1 million barrels per day, up by 4.2% from the same period last year. Distillate fuel product supplied averaged 3.8 million barrels per day over the last four weeks, up by 0.2% from the same period last year. Jet fuel product supplied is up 11.8% compared to the same four-week period last year.

http://ir.eia.gov/wpsr/wpsrsummary.pdf

Parex Resources Inc., a company focused on oil exploration and production in Colombia is pleased to announce the execution of a formal binding agreement with Empresa Colombiana de Petroleos S.A. whereby Parex will farm-in to operate and earn a 50% working interest in the Aguas Blancas light oil field located in the Middle Magdalena Basin of Colombia.

Aguas Blancas Oil Field

The Aguas Blancas oil field is located in the Middle Magdalena Basin immediately south of the La Cira-Infantas oil field which has produced approximately 850 million barrels of oil to date. Aguas Blancas was discovered in 1962 and was initially appraised with five wells in the period between 1962 and 1964. No wells have since been drilled. Cumulative oil production from the field is approximately 1 million barrels of light oil (28-33 API). The main producing horizon is the Mugrosa 'C' Formation at depths of 4,000-7,000 feet. Gross reservoir interval thicknesses in the Mugrosa 'C' range from 300-500 feet with up to 150 feet of net oil pay.

In 2011 a 3D seismic survey was acquired in anticipation of the field's development, however, no wells were drilled on it. The 3D survey indicates that the existing Aguas Blancas field is approximately 4,300 acres in aerial extent. Further, Parex believes that a satellite structure to the south of the main oil accumulation that has been tested by one well could be up to an additional 1,500 acres in aerial extent.

Ecopetrol had previously stated that it intended to offer undeveloped oil fields to industry operators. Pursuant to this strategy, Ecopetrol offered companies the opportunity to acquire up to a 50% working interest in the Aguas Blancas field in a competitive bidding process. Parex' winning bid requires investment during the initial earning phase of approximately $61 million by undertaking delineation drilling and waterflood pilot programs at its sole cost to earn a 50% working interest in the field. Subsequently, all future capital investment will provide Ecopetrol a 10% carry whereby Parex will spend 60% and Ecopetrol 40%. Revenues and operating costs will be based on the parties' 50% working interest.

The initial earning phase has a term of 3 years commencing after the transfers of the existing applicable operating and environmental permits have occurred, which is expected to be in place within 1 year. Parex has agreed to provide a performance bond to Ecopetrol for the full amount of its initial phase earning commitment of $61 million. Including the initial earning phase, the farm-in agreement has a term of 25 years and the agreement has a royalty regime that is consistent with the applicable Agencia Nacional de Hidrocarburos ('ANH') contracts.

http://www.oilvoice.com/n/Parex-Resources-announces-agreement-to-develop-Aguas-Blancas-light-oil-field-Colombia/1152014b5839.aspx?utm_source=twitterfeed&utm_medium=twitter&utm_campaign=Feed%3A+OilvoiceHeadlines+%28OilVoice+Headlines%29

Saudi Aramco sets Oct propane, butane CPs at $360/mt, $365/mt respectively, up $45/mt, $20/mt on month, above market expectations

Platts Oil

San Leon Energy announced Wednesday that the Laayoune-4 well, located on the Tarfaya conventional license onshore Morocco, has discovered gas.

The well, which encountered gas shows within its reservoir section, was drilled on time, within budget and with no incidents. Laayoune-4 has now been suspended, pending further studies, and to allow future re-entry. San Leon Energy and Office National des Hydrocarbures et des Mines (ONHYM) intend to jointly apply for a new eight year exploration license in the area. During the first period of the new license San Leon plans to acquire a 3D seismic survey across the multiple channels of the Tertiary play, one channel of which was drilled by the Laayoune-4 well. Based upon the results of the seismic, San Leon stated that it would consider “the option of re-entering the Laayoune-4 well (including testing), drilling an additional well, or both”.

“We are very pleased with the results of the Laayoune-4 well. Confirming the presence of gas shows and good reservoir quality is encouraging for the potential of the block and leads naturally to applying for a new eight year license in the area, which would allow for seismic acquisition to be performed over the full channel complex. It would also enable additional data to be acquired over the deeper Jurassic and Triassic prospects. We are grateful to the operational team and to the local workers who together ensured that the well was drilled efficiently and safely.”

The latest development follows an announcement by San Leon on August 24, 2015 that it had received a bid approach that could lead to an offer being made for the company. San Leon confirmed the approach in its half year results statement, also released Wednesday, but stated that it’s unknown what type of offer, if any, would be made:

“There can be no certainty that an offer will be made or as to the terms on which any offer might be made. As a result, the board has decided not to make any forward-looking statements.”

San Leon reported an operating loss of $4.89 million in the first half of 2015, compared to an operating loss of $7.04 million during the same period last year. The company announced on June 1, 2015 that it had conditionally agreed to raise $44.1 million from existing and new shareholders, which will be used to fund the firm’s development. This fundraising program was completed in July 2015. San Leon holds a 75 percent interest in the Tarfaya license with ONHYM holding 25 percent.

- See more at: http://www.rigzone.com/news/oil_gas/a/140861/San_Leon_Hits_Gas_in_Morocco_amid_Buyout_Speculation?rss=true#sthash.i1iuGnhJ.dpuf

OPEC's next meeting is just ten weeks away and, barring some unforeseen development, there's little sign of a policy change in the offing.

If anything, forecast declines in non-OPEC production may bolster Saudi Arabia's argument (assuming the kingdom doesn't have second thoughts) that the market share policy is working and must be allowed to continue to work.

A couple of weeks before OPEC's November 2014 meeting that launched the battle for market share, the International Energy Agency said US production growth was showing few signs of abating.

Falling prices might well trim investment in US light tight oil but any potential cuts would probably pale in comparison with gains in LTO productivity, it said at the time.

Back then, the agency forecast demand for OPEC's crude to average 29.2 million b/d this year.

Fast forward to the IEA's latest monthly report, released two weeks ago, and the picture is very different.

Demand for OPEC crude is now expected to average 29.7 million b/d -- 500,000 b/d higher than the figure forecast last November.

The increased forecast for the 2015 call on OPEC is due to the IEA's upwardly revised forecasts for world oil demand rather than to falling non-OPEC supply.

In fact, the agency has also increased its non-OPEC supply projection for 2015 to 58.1 million b/d.

But a clear trend showing a rising call on OPEC and a falling off in non-OPEC supply has begun to emerge in the forecasts for 2016, the first of which were published in July.

World oil demand continues to grow in 2016, forecast at 95.2 million b/d in July and now at 95.8 million b/d in September.

But non-OPEC supply, projected at 58 million b/d in June and revised down to 57.7 million b/d in September, is declining.

And demand for OPEC crude continues to climb. In June, the IEA forecast the 216 call on OPEC at 30.3 million b/d.


Two months on, the agency's revisions have taken the forecast up by 1 million b/d to 31.3 million b/d -- the volume Platts estimates OPEC to have pumped in August.

But it is in the second half of next year where the numbers look startling, with the IEA forecasting demand for OPEC crude at 31.8 million b/d in the third quarter and 32.2 million b/d in the fourth, some 1 million b/d higher than OPEC's current flows.

Good news for OPEC, it would seem, in terms of overall market share. But at what cost, especially to those members which, unlike Saudi Arabia and its Gulf allies, do not have the financial reserves to cushion the blow of low prices?

http://www.platts.com/news-feature/2015/oil/opec-guide/index?hootpostid=f279028d4a83a1b9d2b89695fdec9e6a

On August 14, a compressor failed at the Soraz oil refinery near Zinder, Niger, crippling one of the very few pieces of industrial infrastructure in one of the poorest countries in the world.

The thing is, there may never have been a compressor blowout.

According to multiple energy-industry sources who spoke with Business Insider, the shutdown of the Soraz refinery — which has driven up gas and cooking-oil prices throughout Niger and pushed parts of the country of 16 million to the edge of a serious fuel shortage — was a deliberate decision by the refinery’s state-owned Chinese operators and co-owners.

“The compressor is just to tell people something, but there are many problems,” an energy-industry expert told Business Insider. “The real problems are behind the compressor.”

The shutdown has been the subject of widespread speculation inside Niger. One headline on the news website TamTam Info framed the issue this way: “Halting Production at Soraz: The Chinese Want to Overthrow the Government.”

That may be hyperbole, but the refinery shutdown is still the likely result of a deliberate Chinese strategy, one that Niger is struggling to counter.

China conducts nearly $200 billion in annual trade with Africa. Its companies have dug over 200 oil wells in Niger since 2010, discovering a billion barrels of oil in the process. Chinese companies built the Soraz refinery and the domestic pipeline leading to it.

“China put in the investment that all the French and the US companies didn’t,” one Niamey-based energy expert told Business Insider. “They did what Exxon didn’t do in 30 years.”

But Chinese investment can have a price. The standoff over Soraz shows how unprepared even fairly stable and democratic African governments can be in dealing with China.

And it reveals the consequences of Chinese state-owned companies trying to import its domineering way of doing business to far different political, economic, and social contexts.

Soraz shut down amid tensions between Sonidep, the Nigerien state petroleum company, Soraz, and the China National Petroleum Corp. (CNPC).

The refinery, which opened in 2011, is about 350 miles from the oil fields in the Diffa region in eastern Niger. Soraz is connected to the oil fields through a domestic pipeline that ends at the refinery. For internal Nigerien political reasons, the refinery was constructed in an area that’s far from the nearest export pipeline, which begins in neighboring Chad.

The pipeline and refinery are set up in a way that makes it difficult to get Nigerien oil to the international market. The infrastructure, however, does at least ensure that Niger can achieve a degree of energy independence that most developing nations can only dream of.

But a toxic dynamic has recently taken hold. For reasons even insiders can’t quite explain, Sonidep owes Soraz some 40 billion West African Francs, or roughly $68 million. Meanwhile, Soraz is nursing its own gaudy debt owed to the CNPC, perhaps as much as $100 million.

The first debt is likely attributable to Nigerien government dysfunction. Niger experienced its latest military coup in 2010 and is in the midst of what has so far been a successful democratic transition, with open national elections scheduled for early next year. But government remains opaque and unaccountable, particularly on financial matters.

The second debt — the one that Soraz owes to CNPC — is the partial result of financing arrangements on the refinery, which were being renegotiated as of 2014 and are widely considered to be favorable to Beijing.

And it has exacerbated by a related problem: Under a 2012 agreement, Soraz must purchase oil at prices fixed in 2012 at about $70 a barrel. This means that in times of price spikes, Niger has some of the cheapest gas in West Africa.

But when oil plunged to under $50 a barrel in mid-2015, the refinery, and the country at large, was placed at a huge disadvantage.


http://uk.businessinsider.com/niger-oil-and-chinese-investment-in-africa-2015-9?r=US&IR=T

Petroleo Brasileiro SA raised fuel prices for the first time in almost a year in a move that will help Brazil’s state-controlled producer offset the impact of lower oil prices and the decline of the local currency. Its bonds and shares rallied.

Petrobras, as the Rio de Janeiro-based company is known, will raise the prices charged at its refineries by 6 percent for gasoline and 4 percent for diesel starting Wednesday, it said in a statement. The increase should add 6.9 billion reais ($1.7 billion) to annual earnings before interest, taxes, depreciation and amortization, or Ebitda, Bank of America analysts Frank McGann and Vicente Flanga said in a note to clients.

“It should help to limit concerns that the effect of a weak currency on Petrobras’s cash-flow generation could go unchecked and cause further deterioration in an already weak financial situation,” McGann and Flanga said.

The move comes after Chief Executive Officer Aldemir Bendine, who took over in February, vowed to limit government interference in company policies. The deep-water producer lost tens of billions of dollars from subsidizing fuel imports during the oil price boom from 2011 through 2014 as part of a wider effort by the government to control inflation. BBVA economist Enestor dos Santos raised his estimate for Brazil inflation in 2015 to 9.5 percent from 9.2 percent, citing the Petrobras fuel price increase.

The last time Petrobras raised fuel prices was in November.

http://www.bloomberg.com/news/articles/2015-09-30/petrobras-raises-gasoline-and-diesel-prices-amid-cash-crunch

Petronet LNG Ltd, India’s biggest importer of liquefied natural gas (LNG), is saving so much money buying the commodity from the spot market that it’s willing to risk penalties for breaking long-term contracts with Qatar.

The company is taking only 70% of the volumes it agreed to in 25-year contracts with the Persian Gulf state, potentially triggering a fine, finance director R.K. Garg said. It’s paying about $8 per million British thermal units of spot LNG, about 36% less than its fixed price with Qatar’s RasGas Co.

“The major issue has always been price, and since spot prices are down we continue to have the advantage of the spot prices over long-term,” Garg said by phone, declining to say how much Petronet is saving buying more spot cargoes. The company is “trying to see what can be done about the penalty.”

Petronet, which had agreed to take 7.5 million tonnes of LNG a year from RasGas, is among the first companies in Asia to break a long-term purchase deal as weaker demand, higher supply and oil’s slump push down spot prices. Elsewhere in the region, China is deferring Qatari cargoes, while Japanese and South Korean importers are renegotiating contracts.

Petronet is running a significant risk. Purchasing less than 90% of contracted volumes from Qatar could result in a penalty of as much as Rs.9,000 crore, according to brokerage KR Choksey Shares and Securities Ltd. That’s equivalent to 10 years’ profit for Petronet.

The New Delhi-based company is taking its chances as the battle for market share forces sellers to be more flexible. Should a fine be levied at the end of the year, Petronet may pass it on to its customers, potentially including its state-run owners that buy most of the fuel, Garg said.

http://www.livemint.com/Companies/Lk2NOm5DvuqeqxTCcKD19J/Petronet-LNG-breaks-Qatar-contract-to-gain-from-low-spot-pri.html

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Pipeline companies had a rough Monday on the stock markets, and things got worse on Tuesday.

The Alerian MLP Index fund, which tracks 50 of the largest midstream master limited partnerships, has lost 11 percent so far this week and now trades at its lowest level since 2010, eliminating nearly a half-decade of gains related to the shale production boom and wiping billions in value from some of nation’s largest energy companies.

The tax advantaged master limited partnership corporate structure has been popular among midstream companies and their investors, called unit-holders.

But lower stock prices threaten the future growth potential of energy infrastructure businesses, said Rob Desai, an energy analyst at financial services firm Edward Jones. Many companies sell units to fund new pipelines and processing infrastructure, and cheaper stock means they’ll have to sell more shares and ultimately pay more in dividends later on.

“It’s drastic,” Desai said. “It lowers return on the projects. The result is the shares are hit again.”

Midstream companies, which transport and process oil and gas, weren’t hit as hard as other energy sectors when prices first fell, because they operate under long-term contracts that insulate them from swings in commodity prices.

But traders who once viewed the oil glut that send prices down as a short-term problem now expect it to last years.

They’re starting to exit pipeline investments on fears that declining production will cut into the need for new pipes and processing plants.

http://fuelfix.com/blog/2015/09/29/midstream-stocks-slammed-again/

Origin Energy Ltd. will sell A$2.5 billion ($1.8 billion) in shares at a 34 percent discount as part of an effort to improve its balance sheet and maintain its investment-grade rating after a plunge in oil prices.

Origin, preparing to start its A$24.7 billion gas-export project with ConocoPhillips on Australia’s east coast, also plans to sell as much as A$800 million in assets, reduce its dividend and cut spending, the Sydney-based utility said Wednesday. Origin expects the measures to lower net debt to below A$9 billion.

“It’s important to take action to deal with what is the fundamental issue, which is a high level of debt in Origin that’s unsustainable in the current environment,” Managing Director Grant King told analysts on a conference call. “We must reduce debt now.”

The debt-reduction plan comes amid a tumble in commodity prices that has punished producers. Oil’s decline of about 50 percent over the past year is cutting revenue for liquefied natural gas projects whose contracts with Asian buyers are linked to the price of crude. Origin said last month that the price slide may significantly reduce the contribution from its LNG project.

Origin plans to reduce spending by A$1 billion across the financial years ending in June 2016 and June 2017 as part of a A$2.2 billion program to preserve cash, it said.

Assets potentially for sale include its interests in the Cooper and Perth basins of Australia, investments in wind power and infrastructure such as pipelines, Origin said.

The company plans to sell the shares to investors on a 4 for 7 basis at A$4 a piece, a 34 percent discount to its closing price of A$6.10 on Tuesday, the company said. The stock has fallen 59 percent in the past 12 months.

The Australia Pacific LNG project is expected to deliver its first cargo in November, according to the statement. The plant will follow two other export developments on the Queensland coast operated separately by BG Group Plc and Santos Ltd.

http://www.bloomberg.com/news/articles/2015-09-29/origin-energy-to-sell-a-2-5-billion-in-shares-to-boost-finances

The energy exploration company said on Tuesday that it plans to slash about 15% of its workforce, or 740 employees. Most of the job cuts will take place in Oklahoma City, where Chesapeake (CHK)is based.

Chesapeake specifically cited current oil and natural gas prices as the reason for the cuts.

"We must remain focused on building an enduring, resilient and profitable enterprise -- one that can flourish in any commodity price environment," said Doug Lawler, Chesapeake's CEO, in a memo to employees.

The cost-cutting moves will cause Chesapeake to take a one-time charge of about $55.5 million in the third quarter related to employer payroll taxes.

While it's been great for most American drivers on the road, the energy industry has been slammed by the crash in oil prices. Crude oil prices have fallen from over $100 a barrel in June 2014 to just $45 today. Chesapeake's shares have plunged 71% over the past year.

http://money.cnn.com/2015/09/29/investing/chesapeake-job-cuts-oil-prices/

Energy XXI  today announced fiscal fourth-quarter and full-year financial and operating results for the period ended June 30, 2015, and provided an operations update. Highlights include:

Production remaining stable into fiscal first quarter at 58,300 BOE/d
Current liquidity is $679 million

$124 million available on $500 million revolver

Proved reserves estimated at 183.5 MMBOE, 75 percent oil
Non-cash impairment causes ceiling test write-down due to commodity prices
Acquisitions and divestitures in fiscal fourth-quarter and to-date

Monetized Grand Isle Gathering System
Sold East Bay field
Acquired producing Gulf of Mexico assets from M21K, LLC

Cost control efforts driving per barrel equivalent costs lower

LOE down 30 percent from fiscal 4Q2014 to 4Q2015
G&A down 36 percent from fiscal 4Q2014 to 4Q2015

Principal and cash interest expense reduction through open market bond purchases

"As an organization, we responded aggressively to the challenging commodity price environment in fiscal 2015. We focused on our low risk assets, including horizontal drilling and recompletions, which allowed us to maintain production and arrest base declines," Energy XXI Chairman, President and Chief Executive Officer John Schiller said. "Our operations team is doing an excellent job of reducing costs in the field and delivering development opportunities that offer attractive yields in today's commodity price environment and we continue to practice capital discipline across our operations. We are actively managing our balance sheet and our liquidity. We continue to focus on reducing our debt and to date we have retired over $425 million in face value of debt lowering our projected annual interest expense by over $32 million."

For the 2015 fiscal fourth quarter, adjusted EBITDA was $121.8 million on revenues of $219.5 million, as volumes averaged 59,300 barrels of oil equivalent per day (BOE/d), 71 percent of which was oil. These results compare with 2014 fiscal fourth-quarter adjusted EBITDA of $184.1 million on revenues of $301.3 million and volumes of 46,100 BOE/d, 69 percent oil. Net loss attributable to common shareholders in the 2015 fiscal fourth quarter totaled ($1.7) billion, or ($17.92) per diluted share, compared with fiscal 2014 fourth-quarter net loss attributable to common shareholders of ($18.3) million, or ($0.24) per diluted share.

For the full fiscal year ended June 30, 2015, adjusted EBITDA was $760.5 million, compared with $729.7 million generated in fiscal 2014. Fiscal 2015 net loss attributable to common shareholders was ($2.4) billion, or ($25.97) per diluted share, on revenues of $1.4 billion and production of 58,900 BOE/d. These results compare with net income available for common shareholders for fiscal 2014 of $6.6 million, or $0.09 per diluted share, on revenues of $1.2 billion and production of 45,000 BOE/d.

Results for the fiscal fourth-quarter and fiscal year-end 2015 were significantly impacted by non-cash ceiling test write-downs of oil and gas properties, driven by lower commodity prices.

http://finance.yahoo.com/news/energy-xxi-reports-fiscal-end-213105309.html

Call it the Golden Triangle of natural gas. The region where southwestern Pennsylvania, southeastern Ohio and northern West Virginia mash up near the Ohio River is turning out to be the natural gas version of Fort Knox. Monster dry gas wells seem to be fulfilling the promise of geologists who claim Utica Shale production might end up being bigger than its Marcellus cousin.

That’s saying something, because the Marcellus already produces more than 17 billion cubic feet per day (Bcf/d) and is the largest producing gas field in the world.

As a result, traditional Appalachian pipeline flows are changing for the first time since the 1940s, with gas and NGLs now set to flow south to the Gulf Coast, east to New Jersey and Maryland LNG export points, and west via the reversed Rockies Express Pipeline to Midwest markets.

Bernstein Research forecasts that by 2018, the Marcellus and Utica combined will produce 23 Bcf/d or a third of all U.S. gas production. About 3.7 Bcf/d of new and expanded pipeline capacity comes on line this year and another 6 Bcf/d comes on line in 2016.


All you need to know: http://www.oilandgasinvestor.com/utica-shale-bulks-812591

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Russian oil production could fall by up to 10 percent if world prices stay consistently low for a long period, Russian Deputy Prime Minister Arkady Dvorkovich told the Reuters Russian Investment Summit on Tuesday.

But he said it was unlikely that prices would drop below their current level, of around $48 per barrel, for a sustained period because it was not in the interests of most oil producers to endure low prices for more than two years.

"We calculate the budget based on a price of $50 a barrel," Dvorkovich said at the summit, held in the Reuters office in Moscow.

"If prices remain at a low level for a very long time, then a reduction in production of 5-10 percent is entirely possible, that is if the prices stay at a low level for several years," he said.

He said the government would not take artificial steps to reduce output, but that a reduction would be the natural consequence of low prices for oil companies' investment plans.

Despite a sharp fall in prices, Russia has refused to cut production. It has instead maintained and even increased crude output, putting up with low prices in the hope it can increase its own share in the world oil market at the expense of others who cut back their output.

Asked about the prospect of a further fall in oil prices, Dvorkovich said: "Low prices for an extended time are not in the interests of the majority of producing countries, therefore that scenario is unlikely."

"We understand that some people can wait under low prices - some for one year, others for two, but we don't see countries that want to live with low prices for more than two years."

He said Saudi Arabia, the world's biggest oil producer, could technically afford to endure low prices for longer, but that even it would have to cut back investment in new production, threatening its position as market leader in the long term.

Even if Saudi Arabia held out, in the meantime other countries would be forced to cut production, Dvorkovich said, pushing prices back up again before Russia reached the point where it too would have to cut.

http://www.reuters.com/article/2015/09/29/russia-dvorkovich-oil-idUSL5N11Z1IC20150929

Iran's condensate exports in September hit the highest monthly total so far this year, after its top client China resumed buying of the ultra-light crude for the first time in six months, two sources familiar with the matter said on Tuesday.

The sales come as Chinese President Xi Jinping told his Iranian counterpart Hassan Rouhani on the sidelines of the United Nations this week that he wanted to prioritise its energy and financial cooperation with Tehran ahead of a potential lifting of sanctions.

Iran has had to store tens of millions of barrels of oil, mostly condensate from its South Pars gas fields, onboard ships due to a drop in China's demand over the summer and an outage at a major plant.

"Unlike crude oil that could be cut back, Iran has had to keep South Pars pumping to supply its local gas market," said one of the sources with direct knowledge of supplies to China.

The source said that China's Unipec, the trading arm of Asia's largest refiner, Sinopec , imported about one million barrels of Iranian condensate in September, with the same monthly amount due to be shipped through to March.

A Sinopec spokesman declined to comment, citing business confidentiality.

Iranian condensate exports in September were around 210,000 barrels per day (bpd), topping 200,000 bpd for the first time this year after China resumed imports, a second source with knowledge of the data said.

Other buyers included Japan, South Korea, the United Arab Emirates and Poland, said the source.

Iran has the capacity to export about 500,000 bpd of condensate, but buyers took about 180,000 bpd on average in the first nine months this year, according to the sources.

Sanctions on Iranian oil exports are expected to ease only next year as Tehran has to first comply with terms set out in a July agreement with world powers on its nuclear program, but the fight for market share in Asia among OPEC producers has already intensified.

http://www.reuters.com/article/2015/09/29/iran-oil-asia-idUSL3N11Z26J20150929

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Prices of spot liquefied natural gas for October delivery to Asia averaged $7.538 per million British thermal units, according to latest Platts Japan/Korea Marker data for month-ahead delivery.

The figure reflects the daily JKM assessed between August 17 and September 15, expressed as a monthly average.

The marker, which fell 5.9% month over month, started the assessment period at $7.95/MMBtu, but weakened over the course of the month to be assessed at $7.00/MMBtu on September 15, as supply concerns from the previous month eased following multiple sell tenders from projects in the Asia Pacific region.

Although the market was moving into the traditional peak winter season, demand among northeast Asian buyers remained weak owing to high inventories in tank and moderate temperatures. Demand among portfolio sellers and traders, who had previously provided some support to prices, was also lackluster, as most short positions had now been covered. Arbitrage opportunities between the two basins had also narrowed on tighter spreads between the Platts JKM and U.K. onshore National Balancing Point gas prices.

“High inventories continued to result in weak demand from South Korea, Japan, and Taiwan,” saidStephanie Wilson, managing editor of Asia LNG at Platts. “In Japan, Kyushu Electric was unable to take delivery of a cargo due to high inventories, while in Taiwan, CPC, the only North Asian buyer to have shown sustained demand for additional LNG in 2015, was recently heard to be looking to defer contractual volumes due to high stocks.”

Furthermore, Chinese downstream demand is also weak, with state-owned LNG buyer CNOOC issuing a supply tender, the first sell tender from a traditional northeast Asian LNG consumer, said Wilson.“Demand is looking uncharacteristically soft leading up to winter,” Wilson said.

On the supply side, there were numerous sell tenders from the majority of Asia Pacific projects, as sellers found it difficult to market extra volumes. Tenders from Australia, Indonesia, Papua New Guinea, and Russia were issued during the month.

This is the eighth consecutive month that Platts JKM prices have been range bound between $7-8/MMBtu since declining from the $9-10/MMBtu level seen over January and February delivery.

Meanwhile, the price of possible competing fuel thermal coal also decreased 21.1% year over year, while fuel oil was also down 60.0% from the same month in 2014.

http://www.lngworldnews.com/platts-october-spot-lng-prices-to-asia-drop/

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Toward the beginning of 2015, with crude oil prices in free fall, Morgan Stanley's equity strategy team made a bold call, upgrading the energy sector to overweight.

But there's been no reprieve for those stocks this year, with the S&P 500 energy sector index losing nearly one-quarter of its value year-to-date:

Now, in a display of candor that's rare on Wall Street, chief U.S. equity strategist Adam Parker is waving the white flag.

"We made a really bad call by going overweight energy at the beginning of this year," he wrote.

Morgan Stanley downgraded the sector to market weight, indicating the supply glut in oil may not improve for another year, at a minimum, and that investors will likely find a better entry point in six to nine months.

In rationalizing the downgrade, Parker adapted a phrase often attributed to John Maynard Kenyes: "When the facts change, I change my mind. What do you do, sir?"

There's been new information "… since the original upgrade and our judgment is, why hold a losing bet when we have new information?" wrote Parker, noting that the full effects of the shale revolution are now being crystallized. "Companies can make the same margins at $60 oil today as they could at $90 oil a couple of years ago."

The strategist recounted how his dream scenario in energy turned into a nightmare:

Our original thesis when we went overweight the energy sector at the beginning of the year was that they were cyclical stocks that were down a lot, you had to be anticipatory and the valuation was compelling. We thought the falling rig count would be a catalyst to spark a dream of higher oil. Well, we now think rig counts aren’t the way to think about it. It is production, and production isn’t down really at all in the US. While the sector rallied in February and March in anticipation of achievable estimates in April, the sector has lagged massively since because of stronger than expected supply. The valuation argument only works with a dream of a much higher oil price in the future, and that dream has been a bit of a nightmare.

A scary thought for the remaining oil bulls: Parker posits that oil is perhaps much more like natural gas than is currently acknowledged, implying that meaningful upside from current levels might not be on the horizon. The futures curve for West Texas Intermediate is sending a similar signal, with contracts through 2023 priced below $60 per barrel.

But in the same breath as he lowered his rating of the sector, Parker expressed concern that he's making this call at exactly the wrong moment.

http://www.bloomberg.com/news/articles/2015-09-28/morgan-stanley-has-given-up-on-energy-stocks

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Activist investor Carl Icahn raised his stake in liquefied natural gas company Cheniere Energy Inc to 11.43 percent, according to a regulatory filing on Monday.

Icahn raised his stake to 9.6 percent on Sept. 14.

The biggest investor in the company as of Sept. 14, Icahn now owns 27 million shares of the Houston-based company. 

Cheniere appointed Icahn Enterprises directors Jonathan Christodoro and Samuel Merksamer to its board last month, weeks after Icahn disclosed his stake in the company.

http://www.reuters.com/article/2015/09/28/cheniere-energy-icahn-idUSL3N11Y51O20150928

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A number of U.S. shale oil and gas companies are securing unchanged or even increased credit allotments during their semi-annual loan reviews, defying expectations that banks would slash small firms' credit lines in response to low crude prices.

According to a Reuters review of disclosures made by 19 independent U.S. shale oil and gas companies since Aug. 1, at least 11 have said their borrowing bases have been or will be maintained or increased. In contrast, just five talked about cuts.

It is too early to tell if the whole sector will emerge equally largely unscathed from the reviews. Many more companies from a batch of about 60 U.S. independents typically tracked by investment banks will probably make disclosures after the usual loan reset deadline of Oct. 1.

But outcomes so far suggest an expected pullback by banks may be far less severe than many in the industry have feared.

"I've seen some companies maintaining borrowing bases and some companies even increasing borrowing bases, though other companies are cutting," one energy lawyer in Houston said. "It really is on a case-by-case basis."

The Office of the Comptroller of the Currency has voiced concern about banks' exposure to oil's nearly 60 percent slide given crude prices serve to determine the value of borrowers' assets.

A survey of a broad range of 182 energy industry professionals this month by the law firm Haynes & Boone showed they expected borrowing bases linked to valuations of oil and gas reserves to fall on average by 39 percent.

However, a quarterly survey of 40 energy lenders by the advisory firm Macquarie Tristone showed the average oil price they use to size their loans has edged down only about 5 percent in the last six months, suggesting just a modest pullback in lending.

Bankers also expect crude prices to recover from six-year lows in the months ahead. They see the U.S. benchmark price averaging at $48 per barrel this year and $54 next year and climbing above $61 in 2018 from around $45 now.

A combination of bank lending and private equity financing has allowed many U.S. companies to keep producing crude and adding to a global glut even after funding in public capital markets began drying out in June.

"Many firms were able to hedge in June, so that allowed them to be better positioned coming into redeterminations," said an energy banker in Dallas. "Price decks have largely been maintained ... and most banks are fairly optimistic."

Banks, anticipating an oil market recovery, have also trimmed their price estimates used to size loans, so-called price decks, much less than the drop in crude would suggest.

Finally, by driving down costs companies have helped keep chunks of their reserves, used as collateral for credit, economically recoverable.

Some, such as Gulfport Energy Corp, which operates in Ohio and Louisiana, have also acquired new oil fields during the downturn. Back in February, Gulfport reported its proved reserves had tripled from the previous year and earlier this month the company said The Bank of Nova Scotia had increased its borrowing base to $700 million from $575 million.

Others, such Gastar Exploration Ltd., which operates in Oklahoma, West Virginia and East Texas, credited their hedging for keeping lending bases steady.

Even with cuts, many firms appear to have some financial leeway. Bank of America Merrill Lynch Global Research said this month only a fifth of the 59 oil companies it tracks have used more than half of their borrowing bases.

Private equity funds are also there to plug financing gaps, albeit at a steeper cost than typical loan rates of around 8.5 percent.

"There's a very robust private capital market," said J.P. Hanson, managing director at New York-based investment bank Houlihan Lokey. "For at least a few companies that need a lifeline, there is capital available."

http://www.reuters.com/article/2015/09/29/oil-usa-banking-idUSL1N11G19E20150929

Russia will weigh lowering oil-export duties at a slower rate than planned instead of raising an extraction tax as the government seeks to plug its budget deficit without hurting the prospects for the country’s biggest crude producers.

“The government is considering the variant where the export duty is reduced more slowly,” Natalya Timakova, a spokeswoman for Prime Minister Dmitry Medvedev, told reporters on Monday at his residence outside Moscow. Medvedev decided that Russia won’t make changes to an oil-extraction tax, she said.

Finance Ministry plans to raise more than 600 billion rubles ($9.1 billion) of additional tax revenue next year prompted concerns that a higher extraction levy would curb Russian oil production. The collapse in crude prices sees Russia facing its widest budget gap this year since 2010, forcing the government to choose between deeper austerity, tax increases and a freeze on pension-fund contributions as the nation experiences its first recession in six years.

The government had originally planned to lower the export duty on oil to 36 percent next year from 42 percent, Economy MinisterAlexei Ulyukayev told reporters. Each percentage point decrease is worth about 37 billion rubles to Russian producers, he said, citing the companies’ accounting.

“In essence, the proposal is not to do this decrease in full,” according to Ulyukayev, who said Russia is also considering other sources of budget revenue, including export duties on natural gas and central bank earnings. “We have sources that aren’t linked to actions in energy, including, for example, central bank profits.”

http://www.bloomberg.com/news/articles/2015-09-28/russia-may-slow-export-duty-cuts-to-soothe-oil-company-tax-fears

Sanchez Energy Corporation today announced that it has executed an agreement with Sanchez Production Partners LP pursuant to which the Company will divest, and SPP will acquire and operate, certain pipeline, gathering and compression assets located on the Western part of its Catarina asset in the Eagle Ford Shale in South Texas, for cash consideration of approximately $345 million, subject to normal and customary closing and post-closing adjustments. The transaction is expected to close in October 2015.

Proceeds from the Western Catarina Midstream Divestiture further enhance Sanchez Energy's strong liquidity position, which is expected to enable the Company to pursue growth opportunities through opportunistic asset acquisitions, the acceleration of cost-efficient drilling and completion activities, and the strategic leasing of additional acreage in its core areas of operations. Sanchez Energy previously reported that it maintained liquidity of $572 million as of June 30, 2015, which included $300 million in available capacity on the Company's undrawn bank credit facility. As a result of the sale of midstream assets, pro forma liquidity will increase to approximately $918 million, inclusive of cash on hand and the $300 million elected commitment under its undrawn revolving credit facility.

http://finance.yahoo.com/news/sanchez-energy-enhances-liquidity-345-110000923.html

Freeport-McMoRan Inc. announced today positive drilling results from the Freeport-McMoRan Oil & Gas 100-percent-owned Horn Mountain Deep well in the Deepwater Gulf of Mexico . Initial production from this well, which will be tied back to existing facilities, is expected in first half 2017. This well, combined with two follow on development wells at Horn Mountain Deep, may be capable of producing an aggregate of 30,000 barrels of oil equivalents per day (BOE/d).

During September 2015, the Horn Mountain Deep well was drilled to a total depth of approximately 16,925 feet. Logging while drilling logs indicated that the well encountered a total of approximately 142 net feet of Middle Miocene oil pay with excellent reservoir characteristics. In addition, these results indicate the presence of sand sections deeper than known pay sections in the field. The 100-percent-owned Horn Mountain production facilities in FM O&G’s Mississippi Canyon area are capable of processing 75 MBbls of oil per day. The positive results at Horn Mountain Deep and our geophysical data support the existence of prolific Middle Miocene reservoir potential for several additional opportunities in the area, including the 100-percent-owned Sugar, Rose, Fiesta, Platinum and Peach prospects. FM O&G controls rights to over 55,000 acres associated with these prospects.

Since commencing development activities in 2014 at its three 100-percent-owned production platforms in the Deepwater GOM, FM O&G has drilled 12 wells, all with positive results. Three of these wells have been brought on production, and FM O&G plans to complete and place the remaining additional wells on production in late 2015, 2016 and 2017.

The success at Horn Mountain Deep follows the positive drilling results announced in July 2015 from three wells drilled in the Horn Mountain area, including the Quebec/Victory (QV), Kilo/Oscar (KO) and Horn Mountain Updip tieback prospects. In aggregate, these wells may be capable of producing over 27,000 BOE/d, with initial production expected in mid-year 2016.

http://www.marketwatch.com/story/freeport-mcmoran-announces-positive-drilling-results-at-the-horn-mountain-deep-project-updates-other-deepwater-gulf-of-mexico-activities-2015-09-28

Oil services provider Halliburton Co and Baker Hughes Inc will sell additionalbusinesses in connection with Halliburton's pending acquisition of its smaller rival, the companies said in a joint statement.

Halliburton's proposed acquisition of Baker Hughes ran into regulatory hurdles with the U.S. antitrust enforcers who believe the $35 billion merger will lead to higher prices and less innovation.

Halliburton said in April that it would sell three of its drilling businesses and on Monday said it had received proposals from multiple interested parties for each business.

Halliburton also said it would additionally divest its expandable liner hangers business, while Baker Hughes will divest three businesses.

Baker Hughes will divest its core completions business, its sand control business in the Gulf of Mexico and its offshore cementing businesses in Australia, Brazil, the Gulf of Mexico, Norway and the United Kingdom.

The companies also said they have agreed with the U.S. Department of Justice to further extend by three weeks the earliest closing date of the department's review.

Now, the review will, at the earliest, close on the later of Dec. 15 - from the current date of Nov. 25 - or 30 days after the date on which the two companies fully comply with the DOJ's second request.

http://www.reuters.com/article/2015/09/28/baker-hughes-ma-halliburton-idUSL3N11Y3AY20150928

Gunvor is close to buying its third refinery in Europe, reinvesting money from asset sales in Russia, in a major turnaround for the Swiss trading house since its deep links with Moscow nearly brought it to a collapse only 18 months ago.

Industry and banking sources told Reuters on Monday Gunvor had entered into exclusive talks with Kuwait Petroleum Corp (KPC) to buy its Dutch refinery in Rotterdam adding to its refining portfolio in Germany and Belgium.

The quick overhaul at Gunvor, led by Chief Executive Torbjorn Tornqvist, has surprised many rivals and market watchers many of whom had predicted tough times for the company after its co-founder, Russian businessman Gennady Timchenko, was put on a U.S. sanctions list.

In March 2014, the United States slapped sanctions on Timchenko and other allies of President Vladimir Putin following Russia's annexation of Crimea. The U.S. Treasury said it believed Putin had investments in Gunvor and may have access to its funds although it never elaborated.

The move plunged Gunvor into brief turmoil even though it said Timchenko had sold out his 50 percent stake in the firm a day before sanctions were imposed.

"It was a question of the firm's survival," one insider said, as some banks and peer trading houses had briefly stopped dealing with the firm.

Tornqvist, a Swedish oil trader who started his career at BP , said at the time it was the most challenging moment in Gunvor's history.

The situation improved after U.S. officials said they did not want sanctions on Timchenko to affect Gunvor. Most counterparties quickly resumed dealings with Gunvor which trades oil, refined products, gas and metals across 100 countries.

http://www.reuters.com/article/2015/09/28/gunvor-strategy-idUSL5N11Y1II20150928

 

A senior Saudi prince has launched an unprecedented call for change in the country’s leadership, as it faces its biggest challenge in years in the form of war, plummeting oil prices and criticism of its management of Mecca, scene of last week’s hajj tragedy.

The prince, one of the grandsons of the state’s founder, Abdulaziz Ibn Saud, has told the Guardian that there is disquiet among the royal family – and among the wider public – at the leadership of King Salman, who acceded the throne in January.

The prince, who is not named for security reasons, wrote two letters earlier this month calling for the king to be removed.

“The king is not in a stable condition and in reality the son of the king [Mohammed bin Salman] is ruling the kingdom,” the prince said. “So four or possibly five of my uncles will meet soon to discuss the letters. They are making a plan with a lot of nephews and that will open the door. A lot of the second generation is very anxious.”

“The public are also pushing this very hard, all kinds of people, tribal leaders,” the prince added. “They say you have to do this or the country will go to disaster.”

Saudi Arabia has withdrawn as much as $70 billion from global asset managers as low oil prices continue to put financial pressure on OPEC’s largest producer, according to financial services market intelligence company Insight Discovery. Saudi Arabia is likely to post a deficit of 19.5% of GDP this year amid low oil prices due to a global glut,according to information from the International Monetary Fund.

Critical Section of this letter:

'And how we like the massive bleeding of state funds, including more than double spending
In the past years?
The first Scottna is the one who allowed the accumulation of risk, and we have to move aggressively on this move have on the level of
Decision-making and finding a real solution impotent King Salman to the problem that exploits and his young teenager. We will not stop
The financial bleeding and adolescence political and military risks, but a mechanism to change the decision even if need be to change the King
Himself.
Then we have to recall that our people has become a high degree of awareness has available to him the tools that can be pursued
Where the situation, it is folly and audacity to behave as if in the judgment was absent ignorant people unable to follow up
Juvenile Affairs. Therefore we do not want to fool citizens have a responsibility to disregard them, and do not want to bear
The responsibility of political and media act without evoke developments and means of communication and information as well as activities
Opponents who monitor the efficiency of what we are trying to hide or mislead people about him.'

Named Saudi princes who have 'great competence':
https://en.wikipedia.org/wiki/Turki_II_bin_Abdulaziz_Al_Saud
https://en.wikipedia.org/wiki/Ahmed_bin_Abdulaziz_Al_Saud

https://en.wikipedia.org/wiki/Talal_bin_Abdulaziz_Al_Saud
/continues for several pages, and is signed:

Your son Savior
One of the descendants of the founder King Abdul Aziz bin Abdul Rahman Al-Faisal Al-Saud

---

Attached Files

Eni has found gas at a sidetrack well in its Guendalina gas field in the Adriatic Sea, offshore Italy.

A partner in the field with 20% working interest, Rockhopper Exploration plc announced on Monday that the sidetrack well reached its target depth (TD) at 3,276m measured depth on schedule and budget.

According to Rockhopper, wireline logging has confirmed that all the target levels are gas bearing and have been encountered slightly higher to prognosis in an up-dip position with good reservoir characteristics and with an additional deeper gas level. The well is now being completed as a producer with gas production expected to start in late October at which time a further announcement will be issued, the company said.

Sam Moody, Chief Executive Officer, commented: “This is positive news for Guendalina, and we look forward to increasing production from the field later in the year, which will enhance our already strong cash position.”

http://www.offshoreenergytoday.com/eni-finds-more-gas-in-guendalina-field/

The U.S. oil-rig count fell by four to 640 in the latest reporting week, extending a recent streak of declines, according to Baker HughesInc.

The number of U.S. oil-drilling rigs, which is viewed as a proxy for activity in the oil industry, has fallen sharply since oil prices started falling last year.

After a six-week streak of modest growth, the rig count has now declined for four consecutive weeks.

Crude oil prices rose 1% to $45.38.

There are now about 60% fewer rigs working since a peak of 1,609 last October.

According to Baker Hughes, the number of gas rigs fell by 1 to 197.

The U.S. offshore rig count was 33 in the latest week, up two from last week but down 29 from a year ago.

For all rigs, including natural gas, the week’s total was down four to 838.

http://www.wsj.com/articles/u-s-oil-rig-count-falls-to-640-1443202240

Oil giant BP Plc, which was said to be readying defenses for potential takeover offers, has a little-known ace in the hole: a disclaimer in its Macondo spill settlement that could tack $12.6 billion onto the price tag.

A potential buyer might be forced to accelerate the payment of up to two thirds of the $18.7 billion in penalties the company agreed to pay the U.S. and several states, according to company filings. As it stands, BP has more than 15 years.

An option that gives the federal government and some states the ability to demand faster payment in a takeover effectively hands them a veto power over any deal. Together with the company’s exposure to Russia amid sanctions and the worst oil crash in decades, it amounts to a powerful deterrent to suitors, said William Arnold, a former banker and executive at Royal Dutch Shell Plc.

“This would be an important factor for those looking at possible opportunities” in many of the deal-focused war rooms that form in oil and gas down cycles, said Arnold, who teaches at Rice University in Houston. “To have to make such substantial upfront payments at a time when cash flows are down so much would make an attempt a lot more difficult.”

- See more at: http://www.rigzone.com/news/oil_gas/a/140815/The_12_Billion_Reason_BP_Isnt_Worried_About_a_Hostile_Takeover?rss=true#sthash.AxOHASl4.dpuf

Royal Dutch Shell Plc will stop exploring for oil and gas offshore Alaska after abandoning a well, citing high costs and “challenging” regulation.

“This decision reflects both the Burger J well result, the high costs associated with the project, and the challenging and unpredictable federal regulatory environment in offshore Alaska,” the company said.

Shell will abandon the Burger J well after indications of oil and gas weren’t sufficient to warrant further exploration, the company said in a statement on Monday.

http://www.bloomberg.com/news/articles/2015-09-28/shell-to-stop-exploring-offshore-alaska-on-regulations-costs

Ukraine will pay a price for Russian gas of around $230 per thousand cubic metres in the fourth quarter, including a discount, Russia's Energy Minister Alexander Novak said on Saturday, Russian news agencies reported.

Russia cut off its gas supplies to Ukraine in July when an existing contract expired. Ukraine had refused to keep paying the price of $247 per thousand cubic metres that it had paid in the second quarter.

The two countries have been haggling since then over the price that would be embodied in a new agreement to secure winter gas supplies.

"In the region of $230 dollars plus or minus," Novak said when asked about the price of gas for the fourth quarter, according to comments cited by RIA news agency.

Novak added that the exact price would depend on a formula that takes the caloric value of the gas into account.

He was speaking after the conclusion of gas talks between Russia, Ukraine and the European Commission which led to a tentative agreement that has not yet been signed.

A price of $230 per thousand cubic metres would be slightly more than the $220 that Ukraine has described as acceptable, but below the $235-$242 that Russia has said is the average for its long-term European customers in 2015.

European energy chief Maros Sefcovic said after the talks that the price would be "at a competitive level comparable to the prices offered to the neighbouring EU countries."

The provisional agreement also involves supplying 2 billion cubic metres of gas in October. Ukraine's Naftogaz will pay Russia's Gazprom $500 million for those supplies, with the money supplied by European and international financial institutions.

Commenting on the agreement on Saturday, Gazprom chief Alexei Miller said that there was no guarantee Ukraine would be able to pay for further supplies in November and December.

"Today we are establishing that Ukraine has received money - this $500 million, and will begin to take Russian gas from the start of October," Miller said, in remarks to Russia 24 television channel cited by RIA.

"But 2 billion cubic metres doesn't solve the problem... Therefore if this winter is unusually cold, one could still expect problems."

http://www.reuters.com/article/2015/09/26/russia-ukraine-gas-idUSL5N11W05A20150926

Oil exports from northern Iraq have restarted after "thieves" sabotaged the main pipeline to Turkey, the Kurdistan region's ministry of natural resources said in a statement on Saturday.

The flow of crude resumed on Friday following an outage of around 9 hours, the ministry said in the statement.

The pipeline, which pumps oil to the Mediterranean port of Ceyhan from fields in Iraq's autonomous Kurdistan region and Kirkuk, has been repeatedly targeted inside Turkey since a ceasefire between Ankara and Kurdish militants broke down in late July.

Exports from northern Iraq fell to an average of 472,832 barrels per day (bpd) in August from 516,745 the previous month as a result of damage to the pipeline, which is the region's main economic lifeline.

"Without such revenue, salaries of peshmerga forces, the security forces and other key government workers cannot get paid," the ministry said in a statement. "These treacherous acts of theft and sabotage harm the ability of Kurds across the region to fight Islamic State terrorism."

http://www.reuters.com/article/2015/09/26/iraq-oil-turkey-idUSL5N11W07Q20150926

On September 1, 2015, Stone shut-in its Mary field in Appalachia curtailing approximately 100-110 Mmcfe of production per day, leaving approximately 25 Mmcfe per day producing from the Heather and Buddy fields in Appalachia. Low commodity pricing, including negative differentials in the region, combined with fees for transportation, processing and gathering, reduced the operating margins to an unacceptable level.

As a result, despite being above production guidance for the first two months of the third quarter, production for the quarter is now expected to be below the previously stated guidance range of 39-41 Mboe per day, or 234-246 Mmcfe per day, and is being revised to 37.5-38.5 Mboe per day, or 225-231 Mmcfe per day.

If the Mary field remains shut-in, the annual guidance of 42-44 Mboe per day, or 252-264 Mmcfe per day, will need to be adjusted to account for these curtailed volumes. Given the low margins in Appalachia, the cash flow impact from the curtailed volumes is not expected to be material for the third quarter. Higher margin Gulf of Mexico volumes experienced minimal downtime in the third quarter.

http://www.oilvoice.com/n/Stone-Energy-Corporation-provides-production-and-operations-update/e00b9eac2231.aspx

Though they live only a few hundred miles from North America's largest and most productive shale gas field, New Englanders still pay the highest energy costs in the continental U.S.  

Any explanation for why this densely populated region is still waiting for access to the Marcellus gas play starts with a grass-roots anti-pipeline sentiment, though it's more complicated than that. What isn't hard to understand is that it's costing New Englanders lots of money.

For example, according to Intercontinental Exchange Group Inc., Boston's wholesale gas price averaged $24.09 per million BTUs in January and February, compared with just $10.79 per million BTUs in Chicago and $3.37 in Pennsylvania.

In the previous winter, customers saw their monthly electric bills, already double the national average, rise a whopping 37 percent over the year before.

The hike came as a particularly cruel blow to homeowners who, caught in an equally tight oil market at the time, had to pay as much as $500 to $700 per month to fill household oil tanks. Facing annual energy bills in the thousands of dollars, even the toughest New Englanders are expressing new concerns over the region's economic future.  

Compounding the problem is that the region's electric power providers are increasingly dependent on natural gas as a generation fuel now that aging coal, oil and nuclear plants are being retired.  

Fifteen years ago, about 15 percent of New England's electric energy production came from generators fueled by gas, notes Marcy Reed, president of National Grid of Massachusetts. Her utility serves all of Rhode Island and more than 1 million customers in Massachusetts.

"By 2014, that number had risen to nearly 50 percent." she said. "Meanwhile, pipeline capacity for gas transmission into New England has not kept pace. ... There is simply not enough gas coming into the region to reliably or affordably power these plants and meet the needs of millions of residential and commercial gas customers."

According to various analysts and regulators, the area would need 1 billion to 2 billion cubic feet of additional capacity to prevent price spikes during peak demand periods.

A recent report released by the New England Coalition for Affordable Energy - a newly formed organization of business and labor groups advocating for the expansion of all means of energy infrastructure throughout the region - quantified the economic consequences should the region remain in its current stasis.

The report estimates that ongoing energy constraints have already cost the region $71 billion, on top of the estimated $7.5 billion in higher energy costs seen over the past three winters.  

According to the authors' prognostications, failure to expand new energy infrastructure - including natural-gas pipelines - within the next five years will result in a train wreck of consequences that threaten to jeopardize the region's ability to compete economically, which would hurt job-creation.

http://www.energybiz.com/article/15/09/fighting-new-englands-natural-gas-pipeline-battle

Image Source: Operation WorldA senior energy official said that Iran sees its oil exports rising by 500,000 barrels per day by late November or early December much sooner than some in the West expect.

Mr Ali Kardor, director of investment at the National Iranian Oil Company, said Iran also expects to add 1 million barrels a day to its current exports by the spring of 2016.

In August, Minister of Petroleum Mr Bijan Zangeneh ordered directors of oilfield operating and terminals companies as well as NIOC international affairs to be prepared for raising production by 500,000 barrel per day.

Another official said at the time that a test operation of major oilfields for stepped-up recovery carried out last year would be repeated on all deposits.

Mr Kardor said on the sidelines of the second Iran-Europe Forum which opened in Geneva Thursday and continues on Friday that “We are ready.”

Iran, which currently exports about 1 million barrel per day to Asia as well as Turkey, plans to return to the pre-sanction sales levels in the shortest possible time when the restrictions are lifted.

Mr Kardor said that more exports to Asian countries like China and South Korea will begin sooner than some in the West expect, adding the two countries have announced readiness to increase imports.

Earlier this week, Mr Zangeneh said that Iran’s oil production will reach 4.2 million barrels per day by the end of 2016.

Mr Kardor said that Iran will ask other OPEC members to make room for the country’s return to normal production levels at the group’s next meeting in Vienna in December.

He said that “Some countries should reduce their production. They should reach a compromise.”

Record production by the US and Saudi Arabia has led to a glut in the market, pushing prices as low as USD 40 from last summer’s highs of above USD 100 per barrel.

Mr Kardor added that the return of the Iranian oil at pre-sanction levels will not lead to a price crash, adding the market will absorb it at a rate of USD 3 to USD 4 drop in prices.

http://steelguru.com/gas-oil/iran-is-all-set-to-surprise-west-on-oil-exports-official/435399#tag

Repsol has reached an agreement to sell the 10% stake it held in Compañía Logística de Hidrocarburos (CLH) to investment company Ardian for 325 million euros.

This sale is part of a program to optimise Repsol's portfolio through selective divestments of non-strategic assets launched after the acquisition of Talisman Energy, which significantly increased production and the quality and quantity of Repsol's asset base.

The sale of CLH will generate a capital gain for Repsol of 300 million euros. The company has carried out an extensive process involving almost 150 potential investors, generating significant interest and competition, before selecting the winning bid.

Following this agreement, in which BBVA has acted as Repsol's exclusive financial advisor, investment company Ardian holds a 25% stake in CLH.

http://www.oilvoice.com/n/Repsol-sells-10-stake-in-Compaa-Logstica-de-Hidrocarburos/91cad6705b8d.aspx

Highlands Natural Resources, the London listed oil and gas company, announces that it has signed indicative terms for a licence agreement with Schlumberger Technology Corporation, a 100% owned subsidiary of Schlumberger Limited, the world's leading supplier of technology, integrated project management and information solutions to customers working in the oil and gas industry, in relation to Diversion Technologies, LLC's proprietary 'DT Ultravert' re-fracking technology. Highlands owns a 75% stake in Diversion's current patent applications both in the US and globally.

The indicative agreement provides that Schlumberger will evaluate DT Ultravert by assessing the data gained from five field trials within one year.

Highlands CEO Robert B. Price said:

'Highlands will continue to work closely with Schlumberger and the engineers and geologists on our Advisory Board to perfect the DT Ultravert technology by designing fracs in several basins throughout the world. Trials will be undertaken to demonstrate its effectiveness, which will provide us with valuable data regarding its application.

'We believe that if successful, DT Ultravert could represent a major disruptive force in the market and generate significant future revenue for Highlands.'

http://www.oilvoice.com/n/Highlands-Natural-Resources-signs-indicative-terms-for-a-Licence-Agreement-with-Schlumberger-in-respect-to-DT-Ultravert/4a24d0e8f763.aspx

 We are preparing the group to face low oil prices for a long time,” Total Chief Financial Officer Patrick de la Chevardiere told reporters. “We don’t want to be the first group to cut the dividend.”