OPEC’s mission to implement last week’s historic deal to curb production for the first time in eight years just got a little bit harder after three of its African members increased output in November.

Crude production from the Organization of Petroleum Exporting Countries rose to a record 34.16 million barrels a day in November with gains led by Angola, according to a Bloomberg News survey of analysts, oil companies and ship-tracking data. That’s up from a revised 33.96 million barrels a day in October.

Nigeria and Libya -- which aren’t bound by the OPEC cuts because their output has suffered from sanctions and oil infrastructure sabotage -- also boosted production by a combined 140,000 barrels a day last month.

Although OPEC uses independent estimates known as secondary sources that differ from the estimates of the Bloomberg survey, the resurgence in production from these two exempt African countries shows the other members will have to make deeper cuts to reach the group’s goal of 32.5 million barrels a day.

OPEC will implement those cuts from Jan. 1 with the help of Russia, which has vowed to slash its own output by 300,000 barrels a day, the same as the combined reduction proposed for other non-OPEC nations. OPEC is holding talks with non-OPEC nations on Dec. 10 in Vienna to ink a deal.

Angola’s output increased by 170,000 barrels a day, with volumes rebounding following field maintenance in October. Iran’s output stayed relatively steady at 3.67 million barrels a day while Saudi Arabia’s, OPEC’s de-facto leader, lowered its daily production by 50,000 barrels to 10.53 million.

OECD oil stocks at historic highs, 380mln bbls above 5 yr avg ADIA's Ruhl tells SPGlobalPlatts

‏@sean_evers

Invited to non-OPEC meeting: Mexico, Oman, Kazakhstan, Bahrain, Colombio, Congo, Egypt, Russia, Azerbaijan, Bolivia, Uzbekistan, Brunei, Turkmenisatan, Trinidad & Tobago.

‏@staunovo  

A long-awaited auction of Mexico's untapped deep water oil fields on Monday has been fueled by a nearly $3 billion boom in geological data mapping almost inaccessible deposits to open up what the industry sees as the world's "last great proven frontier."

The data rush of the past two years by many top geophysical companies has sparked some of the biggest imaging projects ever for technology also used to hunt for the ruins of ancient civilizations and explain the fate of the dinosaurs.

"What they're doing is literally rewriting the geological model of the Gulf of Mexico," Juan Carlos Zepeda, head of the national hydrocarbons commission (CNH), Mexico's oil regulator, said ahead of Monday's deep water auctions where the likes of Chevron and BP are expected to participate.

Aside from more than $2 billion invested since 2015, the companies have already raked in data sales of $520 million, Zepeda said.

The data bonanza has been an early success of a 2013 energy reform that ended the 75-year old monopoly of Mexican state oil company Pemex in a bid to reverse a 1.2 million barrel per day (bpd) slide in crude production over the past dozen years.

Crude output on the U.S. side of the Gulf of Mexico is forecast to hit a record 1.79 million bpd next year. Mexico has yet to sell a single deep water barrel.

The auction of a total of 11 projects could attract investment in the tens of billions of dollars over the lifetime of the contracts, although the first new streams of oil output, expected from Pemex's deep water Trion project, is not expected until 2022 at the earliest.

The latest geological surveys come from shooting electronic and sound waves deep into the sea floor, which bounce back and are collected by sensors. The data is then processed and re-processed by some of the world's most powerful supercomputers.

They yield detailed models of rock layers dating back millions of years that help oil majors avoid dry wells, a vital step at a time of depressed crude prices given that a single deep water well in the Gulf can cost $200 million.

"The competition has been fierce," said Karim Lassel, country manager for French geophysical firm CGG, which obtained five seismic permits from the CNH over the past couple years.

CGG has been mapping Mexican rock formations for 30 years, mostly as a Pemex contractor, having acquired all of the company's data for its Perdido Fold Belt acreage, where five potentially lucrative projects are up for grabs on Monday.

"I think the deep water Mexico opportunity is one of the greatest opportunities at the moment globally," said Lassel.

SALT AND DINOSAURS

In the past two years, fleets of boats pulling miles-long floating cables dotted with sensors have crisscrossed Mexico's Gulf waters numerous times, teasing out secrets far below.

One survey by U.S. oil services firm Schlumberger covered an area nearly the size of Ireland in just one year with its largest-ever 3D wide-azimuth mapping project.

It explored the Salina, or salt, basin in the Gulf's southern waters, where six blocks are up for auction.

Salt structures are especially promising for oil explorers because they often seal off oil deposits.

Another survey, by Norway's TGS, recently finished the largest-ever 2D survey done at one time, an 18-month project that mapped all of Mexico's Gulf waters using five ships pulling 7-mile-long (12 km) sensor-studded cables.

"Geology does not stop at the border," said TGS executive Will Ashby.

The TGS survey can be merged with well-known deep water trends on the U.S. side of the Gulf, a first for the industry.

The same type of data-gathering has also been applied for a less commercial end: confirming the asteroid strike 65 million years ago just off Mexico's Yucatan peninsula that killed off the dinosaurs and most life on earth.

The first evidence of the 110-mile (176-km) wide crater the asteroid left behind was produced in the 1970s when Pemex engineers extracted drill cores from an unusual circular structure they found in rock dating back to the final dinosaur era.

Since then, nearby discoveries in shallow waters have been the mainstay of Pemex's crude production, contributing nearly 80 percent of the company's 2.1 million bpd of current output.

While oil companies continue to rely on better data to make increasingly expensive decisions, there is still no guarantee a well will produce.

"No matter how far technology has reached," said the CNH's Zepeda, "you cannot be sure what is down there until you drill."

http://www.reuters.com/article/us-mexico-oil-data-idUSKBN13U0Q9

For five months the natural gas market has had to live without the U.K.’s biggest storage site off England’s east coast. When it returns from emergency maintenance by Friday, traders are facing a whole new challenge.

Rough’s halt has left the Centrica Plc facility with less than half the gas it typically holds going into the peak heating season. That means less pressure than normal in the rock underground that holds the fuel. So when the gas is extracted from 20 of its wells to meet demand from homes to hospitals, it will flow at a pace closer to a walk than a run.

Coupled with a dearth of liquefied natural gas supplies to northwest Europe, that’s increasing the risk of price jumps during freezing weather, according to Ira Joseph, head of global gas and power at Pira Energy Group in New York, an industry consultant. Volatility reached a 5-year high in September after Centrica extended works at the facility.

“In case of peak demand, the picture looks really tight and with lower Rough flows than expected the situation will be even more challenging,” said Pierluigi Frison, a gas trader at Green Network UK Plc in London. “I believe it will be a problem later in the winter.”

Rough, which accounts for about 70 percent of the country’s overall gas storage capacity, will open for withdrawals next week after being closed for urgent maintenance since June. The low pressure “isn’t the optimum point” for cycling gas in and out of the facility, Ross Davidson, a company spokesman in Aberdeen, Scotland said by e-mail. A third of Rough’s 30 wells will still be offline for more works.

Under current conditions, Centrica can withdraw about 33 million cubic meters of gas a day, about 77 percent of what it can normally extract this time of year, according to withdrawal curves provided by Centrica. Continuous depletion of the facility, and thus even lower pressure, means that by the end of the winter that will fall to less than 20 million cubic meters a day.

“This is an event that very few people in the industry have seen, if any,” said Guillermo Baena Gomez, a senior energy trader and market analyst at Advantage Utilities Ltd. in London. “The current stock level is considerably lower than historical levels for this time of year. Actually we are at a level equivalent to the second half of February.”

Traders may get tested on the new market dynamics already this month, with the U.K.’s Met Office predicting temperatures below average in December.

“If I was a trader, I’m in trouble, because I can’t do much about it at all,” said David Aron, the London-based founder of Petroleum Development Consultants, referring to the physical restraints at Rough. And for Centrica, “the consequences could be quite great,” because it’s pumping less gas.

The company took an impairment charge of 176 million pounds ($222 million) related to Rough in the six months through June 30. Davidson declined to provide further details.

The market’s first reaction when Rough’s new schedule was published on late Tuesday was bearish because the facility is initially adding to supplies, and gas for January has fallen 4.4 percent since the news. Warnings of fuel shortages are more relevant for later this winter, as other U.K. storage facilities operated by SSE Plc and Electricite de France SA will also get depleted.

Gas prices in the U.K. for delivery in the first quarter are trading at a premium to next summer that’s three times as large as the same measure this year, indicating that Britain will be more reliant on imports.

“I believe that U.K. is better prepared for a mild or even normal winter, but not for protracted colder-than-normal weather,” said Zach Allen, president of Pan Eurasian Enterprises, in an e-mail from Rhode Island. “Given that Rough is starting from a very low point, that gives limited comfort to the markets.”

https://www.bloomberg.com/news/articles/2016-12-05/centrica-s-200-million-problem-throws-traders-another-curveball

Monaco-based LNG shipper, GasLog on Monday said that Singapore’s Keppel shipyard begun ordering equipment required for the conversion of an LNG carrier to a floating storage and re-gasification unit.

GasLog aims to convert one of its LNG tankers or one from the company’s MLP, GasLog Partners to an FSRU.

The long lead items (LLI’s) Keppel ordered include pumps, vaporizers, heat exchangers and low duty compressors, which are vital equipment for the conversion process.

These items take approximately 12 months to deliver at a total cost of around $16 million, GasLog said in its statement.

According to the shipping company, ordering this equipment reduces the time necessary to convert an LNG carrier from between 18-20 months to 6-8 months once these items are delivered.

“Securing the LLI’s at this time, puts GasLog in a position to offer a fast track solution for FSRU projects in the future,” the company noted in the statement.

GasLog said it is working on a number of potential projects where the LLI’s could be used in a vessel conversion and has a number of well suited candidates for conversion in its fleet of LNG carriers.

To remind, GasLog announced in March this year it had named Bruno Larsen as head of FSRU development as the company is making its first steps in the FSRU market.

Many new markets are choosing FSRUs to use them as import terminals as it is the quickest and the cheapest way to get access to the worldwide LNG supplies.

http://www.lngworldnews.com/gaslog-moving-forward-with-fsru-conversion/

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China expects to increase its proved coalbed methane reserves by 420 billion cubic meters during the 13th Five Year Plan period (2016-2020), Xinhua reported, citing the National Energy Administration (NEA) as said.

The country seeks to extract 24 billion cubic meters of the clean energy and own three industrialization bases in 2020, according to a development plan released by the NEA on December 2.

The target would mean that coalbed methane accounted for 13% of the country's natural gas output by 2020. Tapping the resource will boost colliery safety, increase clean energy supply and cut greenhouse gas emissions, the NEA said.

Some 18 billion cubic meters were extracted last year, with 47% utilized, this rate will be lifted over 66%, the plan predicted.

By 2020, deaths in colliery gas accidents will be reduced by at least 15% compared with 2015, said the NEA. During last year, a total of 171 people were killed in 45 coal mine gas accidents.

To support the country's coalbed gas development and gas management in coal mines, China will exempt certain equipment and parts for coalbed gas exploration and development from import tariffs and VAT during the 2016-2020 period, the Ministry of Finance said on December 1.

China's coalbed gas reserves are estimated at 36.8 trillion cubic meters, ranking third in the world after Russia and Canada.

http://www.sxcoal.com/news/4549906/info/en

Saudi Arabia convened private talks with the world’s largest oil traders in Vienna before Opec’s crunch meeting on whether to cut oil output, seeking views about the likely market reaction should they fail to clinch a deal, it has emerged.


Mark Couling, head of crude oil at Vitol, the world’s biggest independent oil trading company, was invited to Vienna by the Saudi delegation, according to people with knowledge of the talks.

Pierre Andurand, who runs the $1.5bn Andurand Capital fund, one of the world’s biggest oil hedge funds, was also invited, alongside at least one trader from Russian independent oil company, Lukoil.

The meetings between Saudi Arabia and the traders came just a day before Opec’s official talks in Vienna last week, which saw the cartel reduce production by more than 1m barrels a day in an attempt to end a two-year price rout that has hit oil producers’ economies — the first such supply deal since 2008.

While Saudi Arabia routinely gives private briefings to energy analysts in the days leading up to an Opec meeting, it is rarer, but not untoward, for the kingdom to call together the traders responsible for shipping millions of barrels of oil or trading thousands of futures and options contracts.

Saudi delegates have previously done so on occasion when they were looking to get a better feel for the market, said one person who has been attending Opec meetings for more than a decade.

The talks highlight the deep concern within the Saudi camp right to the last minute, despite months of shuttle diplomacy between Opec members, with the world’s top oil exporter worried about further price falls if they failed to secure a cut.

Brent, the international oil benchmark, did fall 4 per cent on Tuesday as the market bet that a deal was slipping beyond Opec’s reach. Prices then rocketed more than 15 per cent between Wednesday and Friday after Opec members reached an output reduction deal.

Mr Couling and Mr Andurand attended a meeting with the Saudi delegation on Tuesday morning, before the kingdom’s oil minister Khalid al Falih arrived in Vienna, people familiar with the meeting said. A trader from Litasco, Lukoil’s trading arm, also attended, they said.

Lukoil did not respond to a request for comment. Vitol and Andurand declined to comment.

Mr Andurand declined to comment on the meetings, but said in an earlier interview that he had been betting on rising prices since January and had not changed his position.

https://www.ft.com/content/a7ac2fe6-b8bd-11e6-ba85-95d1533d9a62

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China's independent refineries are likely have to rely on state-owned trading companies to export oil products in 2017 as Beijing is likely to stop awarding them quotas to export directly, informed sources said Friday.

"It [stopping awarding quotas] is to restrict the growth of exports from independent refineries," said a source from a state-owned trading company, adding that the Ministry of Commerce had already held talks with the state-owned company about matter.

"The independent refineries are still allowed to export, but need to sell through the state-owned trading houses which have normal trade permission," he added.

The normal trade permissions were expected to be awarded only to the trading arms of Sinopec, CNPC, CNOOC and Sinochem, sources said.

The ministry was not available to comment on Friday.

But several factors support the suspension, the foremost of which is that the policy of allocating export quotas to independent refiners is temporary.

"We are not sure whether the government would still allow us to export after the end of this year," said Zhang Liucheng, VP of Dongming, the country's biggest independent refinery.

During the APPEC meeting in September, Zhang said oil product exports by independent refineries were expected to rise with more investment for better infrastructure if the government continued to issue them with export quotas.

The Ministry of Commerce in mid-November last year said it would allow independent refiners that had already won crude import quotas the right to export oil products, but the permission only ran until the end of 2016.

This year, 12 independent refineries hold a total 1.675 million mt of oil products export quotas.

Under the quotas, they are allowed to directly sell their oil products -- which must be processed from imported crude oil -- to overseas buyers.

Over January-November, exports from the sector were around 750,000 mt, data from S&P Global Platts' showed.

At the same time, China exported a total of 30.2 million mt of gasoline, gasoil and jet fuel, up 36% on the year.

"In addition, there is some scent of export policy changes next year as the quota application has been delayed for more than half a month," a policy observer said. "It is possible that the authorities need time to consider changes."

Normally, oil companies submit their export quota application to MOFCOM by mid-November, with the quota for the first quarter of the following year allocated by the end of December.

"We have been preparing for the quota application since late October, but don't know when the government will start to collect and process them," said a Shandong-based independent refiner.

But while independent refiners may be barred next year from direct exports of oil products, they will still be able to export indirectly by selling products via normal trade permission holders.

Beijing in early November resumed tax rebates on exports of gasoline, gasoil and jet fuel under normal trade, making them competitive.

CNPC's trading arm Chinaoil was said to export the first cargo of oil products under normal trade in December.

http://www.platts.com/latest-news/oil/singapore/beijing-expected-to-end-oil-product-export-quotas-27724035

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Mexico on Monday auctioned eight out of ten deep water oil and gas blocks up for grabs in the Gulf of Mexico, and scored a joint venture for a major crude field in the most hotly-anticipated round of the country's energy opening so far.

China's Offshore Oil Corporation took two of the eight blocks, while Australia's BHP Billiton outbid Britain's BP in a bid to partner with Mexican state oil firm Pemex in the promising Trion light oil field in the Gulf of Mexico.

France's Total also made three winning bids, teaming up with U.S. major ExxonMobil in the Perdido Fold Belt close to the U.S.-Mexico maritime border for one and with Norway's Statoil and BP for two blocks in the Salina Basin further south.

U.S. oil major Chevron, Pemex and Japan's Inpex combined to win a block while Malaysia's Petronas Carigali and private equity backed start-up Sierra Offshore Exploration also featured in two winning consortia, one fronted by U.S. independent Murphy and Britain's Ophir.

"This underlines Mexico is very competitive in the oil and gas sector," said Energy Minister Pedro Joaquin Coldwell.

Before the current administration ends in two years, Mexico will likely hold three more oil auctions for shallow and deep waters, as well as onshore areas, probably including tenders for so-called non-conventional fields like shale, the minister said.

Over the next decade, the fields auctioned on Monday could add some 900,000 barrels per day (bpd) to Mexican output, said Juan Carlos Zepeda, head of the national oil regulator.

All told, fields containing an estimated 8.4 billion barrels of oil equivalent (boe) were awarded.

Almost 1.2 billion of those were areas rich in most-valuable light and super light crude secured by China Offshore, a unit of the Chinese giant CNOOC, in the Perdido Fold Belt, where output on the U.S. side of the formation has been booming for years.

Joaquin Coldwell extended a "warm welcome" to the Chinese oil firm, which easily won the two blocks they sought. China Offshore's entry into Mexico looks set to mark the biggest investment by a Chinese company in the country.

TRUMP TROUBLE

The Mexican unit of BHP Billiton secured the rights to tie-up with Pemex in Trion, less than 50 miles (80 km) from the U.S.-Mexico maritime border.

BHP outbid BP by some $18 million with a $624 million offer to complement its 4 percent additional royalty bid.

Pemex estimates Trion will require an $11 billion investment to successfully develop. The competition marks the first time the ailing Mexican oil giant will join forces with a private company to drill since losing its monopoly in 2013.

Pemex chief executive Jose Antonio Gonzalez Anaya said the Trion field would produce 120,000 barrels per day (bpd) by 2025, though the company has often missed output targets in the past.

The government had said it would be content if four of the 10 blocks went, so the auction was welcome news for Latin America's No. 2 economy, which has been roiled by fears of economic turmoil by Donald Trump's election as U.S. president.

The peso currency has slumped amid fears Trump will make good on threats to tear up a joint trade deal with Mexico or impose hefty tariffs on Mexican-made goods. It strengthened slightly during the auctions on Monday.

Trion is nearly 500 square miles (1,285 sq km) in size and is sandwiched between other blocks in border-straddling Perdido.

New investments in the project are expected to begin next year, almost entirely from BHP's commitment to spend $1.12 billion, while commercial production is not seen coming online until 2022 at the earliest.

http://www.reuters.com/article/us-mexico-oil-auction-first-idUSKBN13U2I2

Australia's top energy retailer Origin Energy Ltd plans to sell some oil and gas producing assets in a listing tipped to fetch A$1 billion ($750 million), cutting debt and joining its main rival in reducing exposure to upstream production.

The move by newly installed CEO Frank Calabria sets up Australia's biggest initial public offering since 2014 and underscores the desire of the country's energy companies to refocus on their more stable retail gas and power businesses.

It also gives a sense of the speed at which Calabria plans to put his stamp on the company he took over in October. A month before Calabria started, Origin Chairman Gordon Cairns told Reuters the company had no plans to demerge.

"The decision is my decision but ... it is also something we've done quite bit of work around," Calabria told journalists on a teleconference on Tuesday, noting that his predecessor, Grant King, planned to sell A$800 million of assets by 2017 to cut debt.

He denied the company was forced to abandon King's all-in-one energy strategy because of weak oil and gas prices, saying he decided on the IPO because "we needed to reduce debt and focus on the underlying performance of the business".

Australia's No. 2 energy retailer AGL Energy Ltd said in February it was quitting the coal-seam gas business because the plunging oil price had undermined the economics of its projects. It has also said it will exit coal-fired power stations by 2050.

Origin will keep a stake in Australia Pacific LNG, a 9 million-tonnes-a-year project co-owned by ConocoPhillips and China's Sinopec off Australia's east coast, which the company cannot spin off until it has met all of its project finance commitments, expected in mid-2017.

Origin and AGL, which together sell electricity to a third of Australia's 24 million population, have meanwhile ramped up plans to sell rooftop and industrial-grade solar power, as well as storage batteries from makers like Tesla Motors Inc.

Origin did not say how much it hopes to raise in the 2017 IPO, but its shares rose as much as 5 percent, hitting their highest intraday level in a year, as investors took a positive view of the simplified company structure. The broader market was up 0.8 percent.

"We think Origin's strategy is logical," Morgan Stanley analysts wrote in a note to clients.

Morgan Stanley estimated the assets being sold were worth A$1.3 billion, while Standard and Poor's estimated the spin-off to be worth at least A$1 billion and Royal Bank of Canada said the business would have an enterprise value, which includes debt, of between A$1.6 billion and A$1.8 billion.

The proposed IPO will not require shareholder approval, Origin said.

http://www.reuters.com/article/origin-energy-ipo-idUSL4N1E053X

Brazil's state-run oil company Petróleo Brasileiro SA (Petrobras) said on Monday it will raise prices for diesel and gasoline at its refineries in the country as of Dec. 6.

Petrobras said it will increase diesel prices by 9.5 percent and gasoline by 8.1 percent. The company said the adjustments were made after a spike on international oil prices and due to the recent weakening of Brazilian real.

http://www.reuters.com/article/petrobras-fuels-pricing-idUSE6N1CG035

Genscape Cushing inventory week ending Dec2: +3,347,961 bbl w/w

‏@Lee_Saks

U.S. shale oil companies are using the post-OPEC rally to hedge their oil price risk for next year and 2018 above $50 a barrel, bankers, merchants and brokers said, pushing the forward oil curve upside down.

The rush to hedge -- locking in future cash flows and sales prices -- could translate into higher U.S. oil production next year, offsetting the first output cut by the Organization of Petroleum Exporting Countries in eight years. As such, the producer group could end throwing a life-line to a sector it once tried to crush.

“Right after OPEC, U.S. producers were very active hedging," said Ben Freeman, founder of HudsonField LLC, a boutique oil merchant with offices in New York and Houston. "We are going to see a significant amount of producer hedging at this levels."

The hedging pressure triggered violent movements across the price curve. As shale firms sold oil for delivery next year and early 2018, the shape of the curve flattened. "The curve is screaming producer hedging," said Adam Ritchie, founder of consultant AR Oil Consulting and a former trading executive at Caltex Australia Ltd. and Royal Dutch Shell Plc.

West Texas Intermediate crude for delivery in December 2017 is now more expensive than in June 2018 -- a condition known as backwardation. A week ago, the forward curve was in the opposite shape, known as contango.

“The longer dated flattening in the futures curve does indeed reflect to a large extent increased producers activity, hedging on the back of the pop up in spot prices that followed the announcement of an output cut by OPEC,” said Harry Tchilinguirian, head of commodity strategy at BNP Paribas SA.

The latest surge in prices extends U.S. shale drillers’ pattern of adding hedges when crude rises into the mid-$50s. Pioneer Natural Resources Inc., for example, said in early November that it increased its hedges for next year to 75 percent of production from 50 percent. In the third quarter, Devon Energy Corp. more than quadrupled its 2017 positions from the prior three months.

WTI oil prices gained 12 percent last week -- the biggest weekly gain in almost six years -- after OPEC announced its cut and Russia promised to reduce output too. WTI ended Friday at a 17-month high of $51.68 a barrel.

U.S. shale companies and other independent exploration and production companies usually reveal their level of hedging with a quarter delay. Nonetheless, anecdotal pricing activity already suggests their presence in the market. U.S-based oil bankers and brokers also said they handled significant volumes after OPEC agreed to cut production on Thursday.

A record 580,000 crude options contracts traded on the New York Mercantile Exchange that day, while the number of puts -- used by producers to guarantee a minimum price -- hit the highest since 2012.

As the oil curve flipped, inter-month spreads, which move about 5 to 10 cents a day in normal times, swung eight times as much. The spread between December 2017 and December 2018 -- a popular trade known in the industry as “Dec-Red-Dec” -- jumped from minus $1.35 a barrel early on Wednesday before OPEC announced the deal, to plus 49 cents on Friday.

Another factor keeping pressure on forwards prices is doubt about whether OPEC and Russia will continue to curb supply when the deal ends in six months.

“Two things might be priced in this change -- the first one is that shale producers are hedging and the second one is that the deal is for six months and then no one knows what’s going to happen,” said Tamas Varga, analyst at brokerage PVM Oil Associates Ltd.

https://www.bloomberg.com/news/articles/2016-12-05/oil-market-turns-upside-down-as-shale-rushes-to-hedge-post-opec

Japanese Mitsui & Co., Ltd. has reached an agreement with Shell to acquire 20% working interest of Shell’s Kaikias and Circius 100% owned assets located in four blocks in the Mississippi Canyon in the Gulf of Mexico.

Mitsui will buy the interest in four blocks in the Gulf of Mexico, MC-767 block (Circius), MC-768 block, MC-811 block and  MC-812 block (together Kaikias) through its subsidiary Mitsui Oil Exploration Co., Ltd. (MOECO), in which Mitsui has 74.26% equity interest.

According to the company, the four blocks, encompassing 93 km2, are located approximately 100 kilometers south-southeast of New Orleans, offshore Louisiana.

Production of crude oil and gas would utilize the existing near field infrastructure, presenting opportunities for early commercialization at reduced development costs. The recoverable resources of the entire blocks are estimated to be over 100 million barrels of oil equivalent.

In addition, Mitsui said, there is further exploration potential within the blocks which may contribute to further build up the reserves and continue production over the long term.

To remind, Shell confirmed in November last year that the development potential of Kaikias could exceed 100 million barrels of oil equivalent recoverable.

http://www.offshoreenergytoday.com/shell-sells-interest-in-gulf-of-mexico-assets/?utm_content=bufferc7938&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

U.S. natural gas producer Chesapeake Energy Corp said it would sell a part of its acreage in the Haynesville Shale area for $450 million to a private company.

Chesapeake shares were up more than 5 percent in premarket trading on Monday.

The company said the asset, which is located in northern Louisiana, includes about 78,000 net acres, 40,000 of which is core acreage. The sale also includes 250 wells with a current net production of about 30 million cubic feet of gas per day.

Oklahoma City-based Chesapeake also said that including this transaction, it has reached about $2 billion in gross proceeds from divestitures either signed or closed in 2016, excluding certain volumetric production payment repurchase transactions.

The company, which has been trying to reduce its crippling debt load of nearly $9 billion, expects the transaction to close in the first quarter of 2017.

Chesapeake in November said it planned to sell more assets this year, including about 126,000 net acres in the Haynesville Shale field in Louisiana.

http://www.reuters.com/article/us-chesapeake-enrgy-divestiture-idUSKBN13U1JF

Recently MDN brought you an article from the Seeking Alphainvestors website, written by an analyst/investor pointing out the financial troubles at the world’s fourth largest oilfield services company, Weatherford . 

The investor writing the piece is “short” on Weatherford, meaning he’s invested money betting Weatherford’s stock price will go down–so there is a built-in conflict of interest in the article. But a few days after that article was published came the news that Weatherford’s CEO is suddenly gone , which seems to lend credibility to the Seeking Alpha writer’s thesis that the company is in trouble. 

Now comes word that Weatherford has suspended their U.S. “pressure pumping” (i.e. fracking) activities beginning next year. Oilfield services companies do more work than just fracking, but fracking is a a big part of what they do. According to the Upstream news service, a Weatherford official is saying the decision is a “temporary pull back”…

http://marcellusdrilling.com/2016/12/weatherford-shutting-down-us-fracking-operations-in-2017/