A tanker arrived at Libya's Ras Lanuf oil terminal on Thursday to load more than 600,000 barrels of crude, the first to dock at the terminal since at least 2014, a port official said.

Separately, an oil official said production had restarted at the Nafoura field, which was closed in November 2015 due to force majeure at Zueitina port.

Libya's National Oil Corporation said on Thursday it was lifting force majeure at three ports seized days earlier by forces loyal to eastern commander Khalifa Haftar, including Ras Lanuf and Zueitina.

http://www.reuters.com/article/libya-security-oil-ports-idUSL8N1BR1TS

Lithuanian natural gas trading companies Litgas and Lietuvos Dujų Tiekimas, both part of Lietuvos Energija, on Thursday signed an agreement with Norway’s Statoil to boost the development of the small-scale LNG market in the Baltic region.

The deal enables “reliable and flexible wholesale LNG supplies” at Lithuania’s first LNG import terminal in Klaipeda thus contributing to the development of the small-scale LNG market in the Baltic region, Litgas said in a statement.

Lithuania, the largest of the three Baltic nations, started importing the chilled fuel via Höegh LNG’s FSRU independence in December 2014 in order to reduce its dependence on Russian pipeline gas supplies.

The LNG is being imported under a revised deal Litgas has with Statoil.

“We are very glad that we have strengthened our strategic partnership with Statoil. It is a major step for Lietuvos Energija, Klaipėda’s LNG terminal and for our country. We are entering into emerging Baltic small scale LNG market and the cooperation agreement not only allows to develop a successful business, but creates a potential for Klaipėda’s LNG terminal to become a regionalsmall scale LNG supply center as well,” said Dalius Misiūnas, chairman and CEO of Lietuvos Energija.

“Important to note that this new activity would increase the usage of the terminal which, in turn, allows to lower its operational costs,” he added.

According to the statement, the three companies believe that this segment will continue to grow in the coming years as LNG represents the best technology for marine users to comply with Sulphur Emission Control Area (SECA) requirements and competitive supply solutions are becoming more and more available.

“Based on the latest trends in the Baltic Sea small-scale LNG market, there is a need for a wholesale supply point of LNG for the small scale LNG market to develop here. Klaipėda’s LNG terminal is conveniently located for LNG bunkering: it is based in the center of the Baltic Sea and can be reached in a day from the central part of sea and within three days from its farthest points,” the statement said.

The chosen business model includes LNG modulation services at the Klaipeda terminal and the natural gas grid from Litgas and LDT and wholesale supply from the LNG terminal by Statoil to clients for further redistribution to the small and medium scale segments in the Baltic region.

http://www.lngworldnews.com/statoil-inks-small-scale-lng-cooperation-deal-with-lithuanian-duo/

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At least three leading chemical companies are set to vie for BP's stake in Chinese petrochemicals joint venture SECCO which could fetch more than $2 billion, sources close to the process said.

Offers for the 50 percent stake, the British oil and gas company's largest investment in China, will be submitted in the coming days, the sources said.

SK Chemicals Co Ltd, a pharmaceutical unit of South Korea's SK Group; Austrian plastics group Borealis, owned by Abu Dhabi's sovereign wealth fund IPIC and oil and gas company OMV; and privately-owned Switzerland-based chemicals company Ineos [INGRP.UL] are set to bid for the asset, the sources said, speaking on condition of anonymity as the information isn't public.

At least one other company is considering entering the bidding round.

BP's partner in the joint venture, state-owned China Petroleum & Chemical Corp (Sinopec), has a right of first refusal. It has said it is discussing the conditions put forward by BP, but has made no decision.

BP and the three potential bidders declined to comment or were not immediately available to comment.

SECCO, a venture formed in 2001, produces ethylene and propylene, which are used to make resins, plastics and synthetic rubbers.

BP, like other of the world's top oil companies, is in the midst of a divestment drive in order to focus its business and boost cash flow in the wake of the halving of oil prices since mid-2014. It is planning sales worth $3-$5 billion this year.

The company has sold more than $50 billion of assets since a deadly explosion on an oil rig in the Gulf of Mexico in 2010.

BP has sold several assets to Ineos in recent years, including the Grangemouth refinery in Scotland as part of a $9 billion sale of the olefins and refining business Innovene in 2005.

http://www.reuters.com/article/us-bp-china-chemicals-idUSKCN11L128

Oil major Shell said it has reached an $80million deal with Dansk Olieselskab for the sale of its assets in Denmark.

The company’s operations in the region consists of the 70 thousand barrels of oil per day producing Fredericia refinery as well as local trading and supply activities.

The transaction also includes long-term agreements for the supply of crude oil and feedstocks to the refinery.

Shell currently employs 240 people in Denmark.

In a statement Shell said it would remai employed by the company as it transfers to new ownership.

The sale is expected to complete in 2017, subject to regulatory approval.

The move is part of wider plans by Shell to concentrate its downstream operations on areas where it can be “most competitive” and follows the sale of Shell’s marketing business to Couche-tard earlier this year.

https://www.energyvoice.com/marketinfo/119402/shell-strikes-deal-80m-sale-downstream-danish-assets/

Oil and natural gas producer Ophir Energy Plc cut its 2016 capital budget for the second time this year to weather a crude price slump and said it had short-listed four potential partners for the Fortuna project in Equatorial Guinea.

Ophir, which has producing assets mainly in Asia, said it planned to spend $140 million to $170 million on projects this year, down from its previous estimate of $150 million to $200 million.

Ophir initially forecast capital spending of $175 million to $225 million for the year in January.  

A steep fall in crude prices from mid-2014 highs has forced oil producers to rein in costs and develop low-cost projects.

Ophir said it was ready to recommence its drilling programme and expected to drill three to five operated wells in 2017-18.

The company, which has been seeking partners to help fund the Fortuna Floating Liquefied Natural Gas (FLNG) project since oilfield services company Schlumberger walked away from a deal in June, said it had short-listed potential partners for the downstream portion of the project.

Ophir said the upstream part of the project was "technically ready" for a final investment decision and two consortia were still bidding for an engineering contract.

Ophir said it pretax loss from continuing operations narrowed to $69.6 million for the six months ended June 30, from $123.3 million a year earlier, helped by cost cuts. Revenue fell 39.8 percent to $52.1 million

http://www.reuters.com/article/ophir-results-idUSL3N1BR22M

Offshore oil-rig operators, grappling with the biggest industry downturn in a generation, say they finally have the bottom in sight. The problem is, they could be stuck there for a long time.

Transocean Ltd., which owns the biggest offshore-rig fleet in the world, believes utilization for floating units will reach bottom toward the middle of next year, Chief Financial Officer Mark Mey said at a conference organized by Pareto Securities ASA in Oslo. Seadrill Ltd., which owns the third-largest fleet, said utilization could stabilize as soon as the beginning of next year, and that rental rates had already bottomed out.

Still, it’s impossible to say when those rates, which have dropped to about $200,000 a day from highs of $650,000 in 2013 for the most sophisticated units, will recover, said Seadrill Chief Executive Officer Per Wullf and Tom Kellock, a senior consultant at IHS Markit Ltd.

“We don’t know where demand is going, and that’s a reflection of the oil price,” Kellock said in an interview. “Rates are going to come back more slowly than oil prices because of the overhang and the degree of competition and the oversupply of rigs, which is not at this stage being tackled.”

Offshore drillers have been pounded by the collapse in crude prices in the past two years as oil companies slashed spending to protect their cash flow and shareholder payouts. Their predicament has been exacerbated by a wave of new rigs coming into the market that were ordered when demand was strong. Rig operators have reduced costs dramatically, but still have had to cut dividends, defer delivery of vessels and suspend or scrap existing ones.

Bottoming Out

The number of floating rigs on contract and working is expected to fall to about 120 in the middle of 2017 from about 160 currently, Transocean’s Mey said in an interview on the sidelines of the conference. It could take as long as a year before utilization bottoms out, IHS Markit’s Kellock said. As many as 60 more floaters need to be permanently scrapped, according to both Seadrill and IHS Markit.

While Seadrill said utilization rates will need to reach 70 percent across the industry before rates start improving, Transocean and IHS Markit estimated 85 percent. Regardless, a recovery depends on higher, more stable oil prices, Ensco Plc Chief Financial Officer Jon Baksht, said during a presentation at the conference Wednesday.

“You’ll have flat utilization” from the beginning of next year with operators “hunting” for work, Wullf said in an interview. “Then it’s a matter of the oil price.”

Longer Glut

While oil has recovered from the 12-year lows it reached in January, the International Energy Agency said this week that a global glut will last longer than previously expected, persisting into late 2017 as demand growth slows and supply keeps up, driven by record output from OPEC.

For costly ultra-deepwater rigs, utilization rates of 70 percent won’t be reached until 2018 at the earliest, said Andrew Cosgrove, an analyst at Bloomberg Intelligence. “I agree rates are definitely at or near bottom, but we’re going to be walking along the ‘bottom of the bathtub’ for a while.”

An extended period at the bottom looks especially threatening for Seadrill, which has the industry’s heaviest debt load, with about $9 billion at the end of the second quarter. The company, controlled by billionaire John Fredriksen, is currently negotiating with its 42 banks before it can be able to include bondholders, Wullf said at the conference. The company aims to have a solution in place by early December, he said.

http://www.bloomberg.com/news/articles/2016-09-15/offshore-drillers-brace-for-more-pain-even-with-bottom-in-sight

Europe could reduce its dependence on Russian natural gas by as much as 30% if it used more of Portugal and Spain’s LNG import capacity, a Portuguese government official told a Washington audience.

It would not even require more pipelines because the two countries’ terminals could store LNG and ship it by tanker to eastern Europe and other customers, Portugal’s Minister of the Sea Ana Paula Vitorino said at the Atlantic Council on Sept. 14.

The Sines LNG terminal in southern Portugal has a deepwater port that could be a storage and reexport hub if pipelines aren’t available, she said. “This would reinforce the role of the North Atlantic as a global LNG leader.”

Noting that Portugal and the US are long-time maritime allies, she said the southern European nation also is interested in developing its deepwater oil and gas potential, more offshore wind and wave energy, and offshore methane hydrates.

“There’s still a great deal of research and development needed before methane hydrates can be considered economically viable, although the Japanese have been very active in this,” Vitorino said. “It’s not an exaggeration to say that methane hydrates are seen as the kind of future resource today that shale gas was 15 years ago.”

Developing more offshore energy—whether from traditional or renewable sources—will require dealing candidly with affected stakeholders, particularly municipalities, she said. “Many believe this kind of exploration and production can conflict with tourism and other businesses. We’re trying to explain these activities’ real impacts.”

She said, “We’re also trying to improve our legal framework to make it more demanding. It’s the only way to assure our population that we’re doing this in the right way. We don’t have the kind of opposition you might see in other European countries because we’re moving slowly and cautiously.”

http://www.ogj.com/articles/2016/09/portugal-ready-to-take-bigger-lng-transportation-role-official-says.html

There is gas under virtually every Australian state and territory. It is one of the country's massive natural comparative advantages. Yet a collective madness seems to have overtaken state governments whereby much of the gas under the continent cannot be exploited amid environmental scaremongering that has conflated coal seam gas extraction through fracking with normal conventional gas drilling.

The explosion in the development of natural gas over the past few years has put Australia on track to become the world's biggest liquefied natural gas exporter by 2017. Much of the gas has been developed offshore, but the massive increase in volume has meant that for the first time Australia is a big exporter.

This has put strains on the local market. Domestic Australian consumers are used to gas being priced for domestic consumption only, and so are now struggling with the increased price as domestic consumption competes with demand from abroad. Overall, this is still beneficial for Australia: the increase in price will be offset by the cheaper imports we will be able to buy from the rest of the world.

Yet this increase in price is not entirely the result of export markets or the gas-hungry Japanese energy sector after the Fukushima nuclear incident in March 2011 supercharged the demand for gas.

Instead, it is state governments that are driving up the price for Australians, following either effective or complete bans on fracking for coal seam gas in NSW, Victoria and now the Northern Territory. It is a simple supply and demand equation: there is no new available supply to meet a massive increase in demand.

In Victoria a permanent ban has been placed on both the extraction of coal seam gas, and extraordinarily,  conventional gas, which comes with none of the safety concerns that accompany fracking.

Risks are manageable

In addition, NSW has an effective ban on CSG, but as The Australian Financial Review said in August, at least NSW asked its chief scientist to assess the risks -- and found they were both manageable and likely to decrease over time. Victoria and the Northern Territory have opted for simple populism and banned exploration because a populist coalition of the environmental left and the farming right has mounted loud campaigns.

Now Australian Competition and Consumer Commission chairman Rod Sims has raised the stakes in the debate. What Mr Sims calls a "triple whammy", has hit the gas market in eastern Australia: the introduction of LNG, the fall in oil prices and "regulatory uncertainty and exploration moratoria are significantly limiting the potential for new gas supply".

In a speech in Darwin, Mr Sims has reinforced the fact that overall the problem with gas is a fundamental lack of supply, which, up until now, consumers in the south-east had been counting on being ameliorated by a supply of conventional gas coming from the Northern Territory.

Yet Mr Sims said that with the NT's recent ban and the others in the south-east, "it is difficult to envisage where new gas supply will come from in the short to medium term to alleviate high gas prices looming for gas uses in the south". Mr Sims was succinct, saying the high gas prices are being driven by a lack of gas and maybe the absence of a better regulatory regimes for new pipelines

And this costliness is a broader issue than mere heartburn for retail and industrial gas users. It complicates an already fraught landscape in the national electricity market.

Gas-fired electricity is far cleaner than coal, yet with state-based mandated renewable energy targets (RETs) in Victoria and South Australia, the lack of new exploration means that gas cannot be part of a clean energy mix. Ironically this means that coal powered-energy may have to be maintained to provide baseload electricity when the wind does not blow in South Australia or Victoria. Alternatively, there is a very real chance the lights will go out.

Read more: http://www.afr.com/opinion/editorials/accc-chief-rod-sims-exposes-gas-ban-madness-20160915-grgr2k#ixzz4KKxUXCIt
Follow us: @FinancialReview on Twitter | financialreview on Facebook

With the traditional US E&P farm system (smaller start-up companies executing exploration work and then selling successful de-risked operations to larger E&Ps) falling out of favour in the current low-price environment, many private equity-backed buyers have redirected their interest to longer-life, mature assets. We've modelled six mature gas plays to see which assets can offer the most upside to investors.

This type of upstream investment opportunity is vast, with some estimates suggesting more than US$100 billion in private equity being raised specifically for energy, with nearly all of it concentrated in North America.

One of the largest private equity-backed deals this year involved Terra Energy Partners (backed by Kayne Anderson) acquiring mature Piceance Basin gas assets from WPX for US$910 million.

To better understand the opportunities offered by mature wells in producing plays, we benchmarked six US play datasets — aggregated from thousands of mature wells — by terminal decline rates for wells that had been online for more than 48 months. Our model also used common benchmarks fixed at 8% and 10% decline rates to show where the different plays fall.



Terminal decline rates vary widely, and some assets have returns more deeply tied to rising commodity prices and reduced costs than others. In multiple cases, better management of mature wells can offer superior opportunities to undrilled gas acreage.

Looking at remaining NPV for these mature assets, we recognize that any operator's goal is to produce greater volumes at a lower costs and possibly higher prices, so we compared the upside of our mature wells to that of wells yet to be drilled. The sensitivities we modelled included a concurrent 20% opex reduction and a price increase of 20%. In particular, ArkLaTex Basin assets showcase a lot of potential.

http://www.woodmac.com/lp/highest-returns/mature-us-plays/?utm_source=twitter&utm_medium=social&utm_campaign=sm-buyside-usmatureplays&utm_content=o

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Noble Energy Inc. and Marathon Oil Corp. are weighing bids for Silver Hill Energy Partners, a Permian Basin explorer that could fetch more than $2 billion in a sale, according to people familiar with the matter.

Occidental Petroleum Corp. is also considering an offer for the Dallas-based company, said the people, who asked not to be identified because the matter isn’t public. Silver Hill is working with Jefferies Group LLC to find a buyer, with bids due next week, one of the people said.

Representatives for Jefferies, Marathon and Occidental declined to comment, while representatives for Noble Energy and Silver Hill didn’t respond to requests for comment.

The Permian Basin -- by far the most active shale field in the U.S. by rig count -- has been a hotbed of takeover activity in recent months as explorers seek to expand in an area that is one of the few places in the U.S. where drilling remains profitable amid depressed oil prices.

Silver Hill was started in 2011, and has since raised more than $725 million from backers including Kayne Anderson Capital Advisors and Ridgemont Equity Partners, according to its website. It controls drilling rights on more than 42,000 net acres on the western shelf of the Permian in an area known as the Delaware Basin.

Noble Energy expanded into the Delaware last year via its $3.9 billion takeover of Rosetta Resources Inc., which controlled about 46,000 net acres in the region. Occidental is one of the largest landholders in the Permian, with 5.4 million gross acres, according to its website.

Marathon Oil Corp. has told investors it plans to sell off non-core assets to strengthen its finances and focus on drilling in highly profitable areas, after closing an $888 million acquisition in August of Oklahoma-focused producer Payrock Energy Holdings.

http://www.bloomberg.com/news/articles/2016-09-15/noble-marathon-said-to-weigh-bids-for-permian-s-silver-hill

Vantage Energy, an oil and gas E&P operating in the Marcellus and Barnett Shale, filed on Tuesday with the SEC to raise an estimated $600 million in an initial public offering.

The Englewood, CA-based company was founded in 2006 and booked $90 million in sales for the 12 months ended June 30, 2016. It plans to list on the NYSE under the symbol VEI. Vantage Energy filed confidentially on May 14, 2014. Goldman Sachs, Barclays, Credit Suisse, Citi, J.P. Morgan and Wells Fargo Securities are the joint bookrunners on the deal. No pricing terms were disclosed.

The article Gas E&P Vantage Energy re-files for an estimated $600 million IPO originally appeared on IPO investment manager Renaissance Capital's web site renaissancecapital.com.


Read more: http://www.nasdaq.com/article/gas-eampp-vantage-energy-re-files-for-an-estimated-600-million-ipo-cm679108#ixzz4KKEF9VlL

A federal appeals court on Thursday rejected Chesapeake Energy Corp's effort to avoid having to pay $438.7 million, including interest, to investors in a bond dispute.

By a 3-0 vote, a panel of the 2nd U.S. Circuit Court of Appeals in Manhattan said the payout was justified after the natural gas company had waited too long to tell bondholders of its plan to redeem $1.3 billion of their debt six years early.

The court agreed with bond trustee Bank of New York Mellon Corp that hedge funds and other holders of Chesapeake's 6.775 percent notes maturing in 2019 were contractually entitled to a special "make-whole" price because of the early redemption.

"To hold otherwise would frustrate the noteholders' legitimate expectations regarding their rights," the court said.

The May 2013 redemption was intended to help Chesapeake reduce a debt burden that the Oklahoma City-based company had accumulated under Aubrey McClendon, then its chief executive, and offset natural gas prices that had sunk to a decade low.

"We are disappointed with the ruling and will continue to pursue our legal options," Chesapeake spokesman Gordon Pennoyer said. "We were prepared for this potential outcome and have reserved the liquidity to address it."

The payout comprised $379.7 million of contract-based damages, plus roughly $59 million of interest. That compared with the about $100 million that Chesapeake had hoped to distribute in "restitutionary" damages.

Bank of New York Mellon acted as trustee on behalf of investors such as Ares Management LLC, Aurelius Capital Management LP, P. Schoenfeld Asset Management LP and Taconic Capital Advisors LP.

The bank did not immediately respond to requests for comment.

Thursday's decision upheld a July 2015 ruling by U.S. District Judge Paul Engelmayer in Manhattan.

McClendon died on March 2 when his vehicle slammed into a concrete bridge abutment in Oklahoma. A medical examiner in June ruled the fiery crash an accident.

The case is Chesapeake Energy Corp v. Bank of New York Mellon Trust Co, 2nd U.S. Circuit Court of Appeals, No. 15-2366.

http://www.reuters.com/article/us-chesapeake-enrgy-bankofnewyorkmellon-idUSKCN11L1UI

Quest Integrity Group LLC said it’s looking into a claim that its finance chief impersonated Elon Musk in an e-mail to get inside information on Tesla Motors Inc., while calling “absurd” the electric car maker’s allegation of an oil industry conspiracy against alternative energy firms.

Tesla alleged in a lawsuit Wednesday that Quest executive Todd Katz used the e-mailElonTesla@yahoo.com to try last month to prompt Tesla’s chief financial officer to give him more detailed data than the the company released in announcing its second-quarter financial results.

The Seattle-based oil pipeline engineering and inspection firm said Thursday it had started an internal investigation in response to the complaint filed in California state court in San Jose.

“However, it is clear that unsubstantiated allegations of an alleged conspiracy among Quest Integrity, Team Industrial Services or our major oil company clients are absurd,” the company’s general counsel, Butch Bouchard, said in an e-mail.

Energy Efficient

Tesla said in its complaint that the e-mail was part of an oil industry effort to undermine the push for energy efficient transportation alternatives.

“In recent years, oil companies have spent billions of dollars on legislative efforts and campaigns aimed at blocking progress toward electric cars and other sustainable energy solutions in the United States and abroad," Tesla said.

Tesla declined to comment on Quest Integrity’s statement.

In its complaint, Tesla said the e-mail received Aug. 3 by its CFO, Jason Wheeler, was signed “em.” The e-mail read, “Why you so cautious w Q3/4 guidance on call. What is ur best guess as to where we actually come in on q3/4 deliverables. Honest best guess. no bs.”

http://www.bloomberg.com/news/articles/2016-09-15/oil-services-firm-linked-to-phony-elon-musk-e-mail-starts-probe