Saudia Arabia is spending generously now on Asian refiners to lock in its position as the region’s biggest supplier of oil for decades to come.

The Saudi national oil company is part of a group that’s building a processing plant in China and it teamed with Asia’s biggest refiner on another in Fujian province. Oil Minister Ali al-Naimi traveled to Beijing last month, highlighting the importance of the world’s second-biggest crude consumer to his country’s future. He also visited a South Korean refinery in which his country has a majority interest.

Pressure is rising on Saudi Arabia to hold on to market share in Asia as competitors including Iraq, Mexico and Russia make inroads. The kingdom, the world’s largest crude exporter, has cut price differentials on its crude to Asia 10 times in the past 18 months, while rivals followed with their own reductions.

“Saudi Arabia has been on the lookout for a lot more joint venture projects,” Suresh Sivanandam, a refining and chemical analyst at Wood Mackenzie Ltd. in Singapore, said by phone. “They want to secure demand for their crude and that’s one way of increasing market share.”

Daily consumption of 31.2 million barrels in Asia this year will take the region’s demand above that in the Americas at 31.1 million barrels, according to the Paris-based International Energy Agency. Asia will account for two-thirds of the growth in global oil demand in 2015, the IEA says.

The flexibility of Saudi Arabian Oil Co., the state company known as Aramco, to raise or cut output on short notice along with stakes in refineries run by its customers gives it an advantage over rivals, according to Julian Lee, an oil strategist with Bloomberg. The company has capacity to produce 12 million barrels of oil daily.

A joint venture between PetroChina Co., Aramco and Yunnan Yuntianhua Co. is currently building a 260,000 barrel-a-day refinery in the southwest of the Asian nation. Aramco already manages a 280,000 barrel-a-day refinery and petrochemical complex in China’s Fujian province along with China Petroleum & Chemical Corp., known as Sinopec, and Exxon Mobil Corp.

Aramco is pursuing a “long-term growth strategy” and is seeking to invest more in China to help the Asian nation meet its energy needs, Khalid Al-Falih, then the company’s chief executive officer, said in a speech in Beijing in March. The country is the largest oil consumer after the U.S.

http://www.bloomberg.com/news/articles/2015-05-07/saudis-splurging-in-asia-to-win-loyal-oil-customers-for-decades

LONDON (Reuters) - While oil futures prices rebound with vigor as analysts cite strong demand, the physical crude market tells a much more cautionary tale.

Tens of millions of barrels are struggling to find buyers in Europe with traders of West African, Azeri and North Sea crude blaming poor demand.

The deep disconnect between the oil futures and physical markets looks similar to the events of June 2014 when the physical market weakness became a precursor for a futures price crash.

LPG Houston

LNG Tokyo

Gazprom is considering offering Europe new concessions, including on pricing, to settle its antitrust case and avoid a long legal battle which could result in billions of dollars in fines for the Russian gas producer.

The European Commission has accused Gazprom, which meets a third of EU gas needs and generates more than half its revenues there, of using its dominant position in eastern Europe to overcharge by up to 40 percent.

State-run Gazprom, which contributes about 8 percent of Russian GDP, denies the charges and says it has already made significant concessions. But it would rather avoid a costly court case that could further complicate relations between Moscow and Brussels, already strained by the crisis in Ukraine.

If it can settle the case by offering concessions, it will not be fined or get a finding of wrongdoing from EU regulators.

The EU wants Gazprom to calculate more of its contracts using European spot gas prices, rather than a formula it has historically used for most of its contracts based on the price of oil. Only around 16 percent of its contracts were based on spot gas as of the end of 2014.

European spot gas prices are based on major trading hubs in western Europe so using those prices for all contracts, including for eastern Europe would align prices across the EU. Also, spot gas prices have often been lower than oil and while the gap has narrowed as the oil price has fallen, it could widen again.

A Gazprom official said the company was considering including spot gas prices in more contracts, in what would be a major concession on the main sticking point between the two sides.

"We are working on it," the official, who did not want to be named, told Reuters.

The Commission has given Gazprom 12 weeks to respond to the charges made last month by the EU's new antitrust chief, Margrethe Vestager. The official said it was pouring over hundreds of pages of documents from the EU.

"We will work with the documents and the Commission," Gazprom spokesman Sergei Kupriyanov said.

Another set of charges relates to pressure the EU says Gazprom put on Poland and Bulgaria, which is entirely dependent on Russian gas, to invest in pipelines according to priorities dictated by Gazprom.

Gazprom may ask for an extension before explaining why it does not consider itself to be guilty of the charges. The source said Gazprom will also argue that it does not deserve to be fined as it has already changed its behaviour by introducing more competitive pricing, selling assets to comply with EU regulations and allowing its gas to be resold by consumers.

"We deserve not to be penalised but to be commended because Gazprom, together with its partner BASF, created competition on the European market," Alexander Medvedev, Gazprom's deputy head told a conference call last week.

After Gazprom's response, there may then be some legal back and forth between the two sides before Gazprom is expected to outline the concessions it is prepared to offer.

http://www.reuters.com/article/2015/05/07/russia-gazprom-eu-idUSL5N0XY2B420150507

Indonesia's energy minister said on Thursday he would seek President Joko Widodo's approval for the country to rejoin OPEC, seven years after leaving the oil exporters' group.

If it returned, Indonesia would be the fourth-smallest producer in the Organization of the Petroleum Exporting Countries ahead of Libya, Ecuador and Qatar, and bring the number of participants to 13 countries.

Indonesia was the only Asian OPEC member for nearly 50 years before leaving the group in 2008 as oil prices hit a record high, and rising domestic demand and falling production turned it into a net oil importer.

"I will ask the president to consider rejoining as a member of OPEC, so we are close to the market," Energy Minister Sudirman Said told reporters. "We have been offered (an opportunity) to rejoin."

OPEC termed Indonesia's departure a "suspension" and Ecuador, which rejoined in 2007, set a precedent for a return from suspension. An OPEC source said the door was always open.

"If a country fulfils the criteria for membership, of course there is the possibility to join the organization," the source said.

OPEC's statute stipulates, however, that any "country with a substantial net export of crude petroleum, which has fundamentally similar interests to those of Member Countries, may become a Full Member of the Organization, if accepted by a majority of three-fourths of Full Members, including the concurring votes of all Founder Members."

http://www.reuters.com/article/2015/05/07/indonesia-opec-idUSL4N0XY1TJ20150507

Low energy prices, stalling production in Libya, currency adjustments in Brazil and higher exploration costs more than offset the positive impact of rising refining margins in Spain and encouraged investors to take profits after months when Repsol has outperformed the sector.

Repsol is hoping to open a new chapter in 2015 after several years marked by boardroom battles and a corporate transformation which culminated in the purchase of Talisman Energy and the transfer last month of executive powers from Antonio Brufau to Josu Jon Imaz.

While the integration of Talisman was a long-term strategic move for Repsol to grow in exploration and production, it had a first immediate impact on results as the dollar-denominated cash earmarked for the deal appreciated on the quarter and boosted core profits by 462 million euros ($525 million).

With the currency effect stripped out, average recurring net profit, adjusted for inventory effects, came in at 466 million euros, below a market consensus of around 500 million euros and a 532 million euros reading last year.

Shares in Repsol were down 3.7 percent to 17.75 euros at 0905 GMT, underperforming both Spain's blue-chip index Ibex and the pan-European sector index.

"Our initial reaction is to look beyond the large corporate and other beat and focus more on the core Repsol operating units results, which we would consider a little weak in the context of high expectations," said Jefferies analysts in a note.

The main reason for the miss was the exploration and production arm's 190 million euros loss in the quarter compared with a 255 million profit in the first three months of 2014.

This was only partly offset by an 84 percent jump, to 534 million euros, of the domestic refining unit's profit as refining margins hit a record high of 8.7 dollars per barrel.

The contribution of the Gas Natural stake to the results was stable to 122 million euros.

http://af.reuters.com/article/commoditiesNews/idAFL5N0XY1H720150507?pageNumber=2&virtualBrandChannel=0&sp=true

'Talisman delivered solid operational and financial results in the first quarter of 2015 against a backdrop of significantly lower commodity prices and our strategic decision to cut capital investment,' said Hal Kvisle, President and CEO. 'Production from ongoing operations averaged 360,000 boe/d in the quarter, up slightly from the first quarter of 2014, and cash flow(1) was $605 million for the quarter, supported in large part by hedging settlements.'

First Quarter Highlights:

Production from ongoing operations averaged 360,000 boe/d in the first quarter of 2015, down 1% from the previous quarter, but up 2% from the first quarter of 2014. Liquids production was 137,000 bbl/d, down 2% from the previous quarter.
Cash flow for the quarter was $605 million, up 19% from the previous quarter due in large part to hedging settlements in the first quarter, but down 2% from the first quarter of 2014 due to lower commodity prices year-over-year.
Capital spending for the quarter was $436 million, down 48% from last quarter and 43% from the first quarter of 2014 due to the company's strategic decision to reduce capital investment during this time of lower commodity prices.
Net G&A for the quarter was $86 million, down 18% from the first quarter of 2014. The full impact of recent headcount reductions will be seen from the second quarter onwards.
Operating cost was $439 million, down 17% from the previous quarter and 15% from the first quarter of 2014.

Update on Repsol Transaction

On December 15, 2014, Talisman announced that it had entered into an arrangement agreement with Repsol S.A. under which Repsol will acquire all of the outstanding common shares of Talisman for US $8.00 per share in cash. On February 18, 2015, holders of Talisman's common shares and preferred shares approved the proposed arrangement at the special meeting of shareholders. Of the votes cast, over 99% of the shares of each class of shares were voted in favour of the arrangement.

On April 30, 2015, Talisman announced that the completion of the acquisition of Talisman by Repsol S.A. is scheduled to occur on May 8, 2015.

http://www.oilvoice.com/n/Talisman-Energy-provides-first-quarter-results-and-update-on-Repsol-transaction/38690c405fa8.aspx

Argentina's state energy company YPF posted better than expected first-quarter profit on Thursday but earnings were still down 24.3 percent on the year due to the global slide in oil prices.

YPF posted profit of 2.109 billion pesos ($239 million) in the January to March period, beating the consensus forecast in a Reuters poll of economists that was for profit of 1.5 billion pesos. However, this was significantly below the 2.787 billion pesos achieved in the same period last year.

"During this period, the price in international crude halved, a situation that directly impacted the results of the major companies in the sector," YPF said in a statement.

Oil output at YPF, which was nationalized in 2012, rose 2.3 percent in the quarter, while natural gas production climbed 18 percent, the company said in its earnings statement.

Shale oil and gas output from 332 wells in the vast but barely tapped Vaca Muerta formation was 41,700 barrels per day equivalent, YPF said.

Argentina nationalized YPF in 2012 after accusing its former parent, Spain's Repsol SA, of under-investing and thereby generating a costly energy deficit for Latin America's No. 3 economy.

The country hopes that by hiking investments in Vaca Muerta, viewed as one of the biggest shale reserves in the Western Hemisphere, it will be able to reduce energy imports that are draining its low foreign reserves.

YPF raised $1.5 billion in a bond sale last month.

"Investments in the first quarter of 2015 reached 12.351 billion pesos, a level that has enabled us to maintain activity and growth in production in a global context that is unfavorable for this industry," YPF said.

http://www.reuters.com/article/2015/05/07/argentina-ypf-idUSL1N0XY3OZ20150507

The U.S. Energy Department said on Thursday it has issued final authorization for Dominion Resources to export liquefied natural gas (LNG) from its Cove Point, Maryland plant.

The plant hopes to ship LNG starting in late 2017 to countries with which the United States does not have free trade agreements.

http://www.upstreamonline.com/live/1399414/cove-point-gets-approval?utm_source=dlvr.it&utm_medium=twitter

Apache Corp. swung to a first-quarter loss on impacts from low crude prices that contributed to a sharp decline in revenue and a big write-down.

The company also has been divesting itself of international assets as part of its effort to refocus on U.S. shale drilling. Last month, Apache agreed to sell its Australian unit for $2.1 billion to a group of private-equity investors. The sale marked Apache's exit from its Australian exploration and production business.


The company also recently completed the sale of its stakes in two liquefied natural gas projects in Canada and Australia to Woodside Petroleum Ltd. for $2.75 billion.

Like many other U.S. energy companies, Apache has cut back on drilling rigs and has been delaying well completions.

Chief Executive John J. Christmann IV said in prepared remarks Thursday that Apache's drilling and completion costs across its key plays in North America onshore are down between 20% and 40% from November.

The company's North American onshore production exceeded Apache's guidance despite the decrease in well completions and adverse impacts of severe winter weather in the Permian and Anadarko basins, Mr. Christmann said. In its international operations, production in both Egypt and the North Sea is tracking ahead of initial expectations, he added.

Overall, Apache reported a loss of $4.65 billion, or $12.34 a share, compared with a year-earlier profit of $236 million, or 60 cents a share, a year earlier. The latest period included a ceiling-test write-down of $4.7 billion related to low commodities prices. Excluding such items, the per-share loss was 37 cents. Revenue slid 50% to $1.82 billion.

Analysts polled by Thomson Reuters expected per-share loss of 57 cents and revenue of $1.81 billion.

For the latest period, Apache noted average selling prices for oil skidded 53% globally.

Apache also affirmed its 2015 onshore North American production and capital-spending forecasts.



Read more: http://www.nasdaq.com/article/apache-swings-to-loss-on-revenue-drop-big-writedown-20150507-00749#ixzz3ZSpWbeS3

Sanchez Energy Corporation, today announced operating and financial results for the first quarter 2015. Highlights from the report include:

Current production of approximately 50,000 BOE/D driven by strong production from recent development and exploration wells brought online at Catarina.

The company recently drilled two extended lateral tests at Western Caterina of 8,250 feet, on average, which are yielding exceptional results that are tracking estimated ultimate recoveries of approximately 1.5 MMBOE per well.

Based on recent operating results, the Company is increasing its full year 2015 production guidance range to 42,000 to 46,000 BOE/D.

Record production of 4,070 MBOE during the first quarter 2015 for average production of 45,217 BOE/D, exceeding the high end of the Company's initial 2015 guidance of 40,000 to 44,000 BOE/D.

Revenues of $110.6 million ($139.9 million inclusive of hedge settlements) and Adjusted EBITDA (a non-GAAP financial measure) of $83.7 million, which represent decreases of 18% and 13%, respectively, over the same period a year ago due to recent declines in commodity prices.

Executed and closed the sale of escalating working interests in 59 producing wellbores in the non-operated Palmetto Field in the Eagle Ford for aggregate consideration of approximately $85 million, subject to normal and customary closing and post-closing adjustments.

The Company's revised guidance of 42,000 to 46,000 BOE/D includes an adjustment for the expected loss of 1,000 BOE/D of production in 2015 resulting from sale.
At Catarina, the Company has already exceeded its July 2014 to June 2015 drilling requirement by drilling 54 wells towards its 50 well annual commitment. As the company executes its 2015 capital plan, it will bank wells in excess of the 50 towards its next annual commitment.

Operational efficiencies continue to drive sustainable cost savings across Sanchez Energy's asset base, with average well costs in all areas approximately 30 to 40% less than fourth quarter 2014.

Liquidity of $645 million as of March 31, 2015, which consisted of $345 million in cash and cash equivalents and an undrawn bank credit facility, which has a $550 million borrowing base and an elected commitment of $300 million.

http://www.oilvoice.com/n/Sanchez-Energy-announces-first-quarter-results/af7700aa1e8a.aspx

Rice Energy has more than doubled its natural gas production from the Marcellus and Utica shales during the first three months of the year compared with the same period last year, the Canonsburg company reported today.

Rice reported production of 39.6 million cubic feet equivalent during the first quarter. A year ago, the company reported 16.4 MMcfe, which includes natural gas, natural gas liquids and oil.

The company, which went public last year, posted a profit during the first quarter, but a lower one compared to the first quarter of 2014. Rice earned $152,000 in the first quarter, down from $129.4 million last year.

"We are off to a strong start in 2015, building off our successful year in 2014,” said CEO Daniel Rice IV. “We remain committed to diligently executing our plan and delivering top-tier results."

Rice is increasing its 2015 annual production guidance to a range of 470 MMcfe/d to 490 MMcfe/d, “due to accelerated well timing from increased operational efficiencies.” Meanwhile, it’s reaffirming a 2015 capital budget of $890 million, which includes both its drilling and midstream investments.

http://powersource.post-gazette.com/powersource/companies-powersource/2015/05/07/Rice-Energy-more-than-doubles-natural-gas-production-pittsburgh/stories/201505070179

Canadian Natural Resources Ltd., one of the country’s largest oil and natural gas producers, posted its first quarterly net loss in four years on Thursday as a drop in energy prices more than offset record production.

The Calgary-based company lost 252 million Canadian dollars ($209 million), or 23 Canadian cents a share, in the first quarter compared with earnings of C$622 million, or 57 Canadian cents, a year earlier. The latest result was its first dip into the red since the fourth quarter of 2010.

The company said quarterly output was a record 898,053 barrels of oil equivalent a day, up from 684,647 barrels a year earlier. However, cash flow fell 36% to C$1.37 billion because of lower commodity prices.

“Canadian Natural is not immune to the impact falling prices have had on our cash flow and earnings,” President Steve Laut told analysts on a conference call.

On an adjusted basis, Canadian Natural earned 2 Canadian cents a share, down sharply from 85 Canadian cents a year earlier, but better than the 5 Canadian-cent loss analysts expected, according to a Thomson Reuters poll.

Mr. Laut said political uncertainty was “at the top of mind for everyone” after aleft-leaning party won control of Alberta’s government in provincial elections on Tuesday. Noting the victorious Alberta New Democratic Party pledged to raise corporate taxes and institute a regular review of oil and gas royalties, he said: “Clearly, this is not good for the industry.”

But the executive said he was encouraged that incoming Alberta PremierRachel Notley said she wants to forge a constructive relationship with the energy industry. “As one of the leading oil and natural gas companies in Alberta, we are committed to working with the new government,” he said.

Operationally, Canadian Natural said crude-oil production rose 23% and natural-gas production increased 51% amid lower operating costs.

The company announced yet another reduction in its 2015 capital program, and now targets spending of about C$5.7 billion this year. It announced spending cuts in January and March.

Canadian Natural said it continues to review its royalty lands and royalty revenue portfolio with a view to maximizing shareholder value. Options for its royalty lands and royalty revenue portfolio include a sale or spinoff, it said.

http://www.wsj.com/articles/canadian-natural-resources-swings-to-first-quarter-loss-1431003741