Eni to look for hydrocarbons in Caspian Sea block
Italian oil company Eni and Kazakh´s KazMunayGas signed on June 22, 2017, an agreement which renews the conditions for the transfer to Eni of 50% of the subsoil use rights in the Isatay block, in the Caspian Sea off Kazakhstan, for exploration and production of hydrocarbons.
To recall, almost 2 years ago, in June 2015, KazMunayGas and Eni made an agreement defining the commercial terms of the transfer to Eni of 50% of the subsoil use rights in the Isatay.
The new agreement which renews the conditions was signed on Thursday by KMG CEO, Sauat Mynbayev, and Eni’s CEO, Claudio Descalzi, in Astana, Kazakhstan.
The block, which is estimated to have significant potential for hydrocarbon resources, will be operated by a Joint Operating Company (JOC) formed by Eni and KMG.
The JOC will begin working as soon as the transfer of 50% interest in the license is completed, subject to the approval of the transaction by the country’s government.
Furthermore, on Wednesday, Eni had signed a cooperation agreement with General Electric and the Minister of Energy of Kazakhstan, Kanat Bozumbayev, to promote the development of renewable energy projects in the country.
Along with the Ministry of Energy of Kazakhstan, together with KMG and the Kazakh Committee of geology and subsoil use, Eni signed a Memorandum of Understanding to evaluate future cooperation terms in the Kazakh-Russian Pre-Caspian Basin where numerous discoveries of oil fields of considerable size have been carried out.
The signing of this MoU is part of the Eurasia project promoted by the Ministry of Energy in order to study the depth exploration potential of the basin.
In Kazakhstan, Eni is joint operator of the Karachaganak field as well as being an equity partner in various projects in the Northern Caspian Sea, including the giant Kashagan field.
Iran launches gas exports to Iraq
Iran has begun piped exports of natural gas to Iraq, a key step forward after years of efforts to launch a new gas corridor between the two countries.
Amir Hossein Zamaninia, Iran’s deputy oil minister for trade and international affairs, told state news agency IRNA on Wednesday that gas volumes of 7 mcm (247 mcf) per day had been launched.
Flows in the pipeline, destined to feed power stations in Iraq, are expected to rise to 35 mcm (1.24 bcf) per day.
A gas export deal between the neighbouring countries was struck in 2013, but the project has faced years of delays, with officials citing the security situation in Iraq as a factor.
Expanding gas exports has been a top priority for Iran as the country grows its production. Five phases of the super-giant South Pars gasfield have been brought on line in 2017, adding 150 mcm (5.3 bcf) to daily output.
Qatar talks ‘co-operation’ with ExxonMobil
Qatar’s Emir Tamim bin Hamad Al Thani met with ExxonMobil CEO Darren Woods on Saturday as pressure on the tiny Gulf emirate mounted following a partial blockade imposed earlier this month by powerful neighbours.
“During the meeting, they discussed bilateral cooperation relations and means to develop them in addition to the latest developments in the energy sector,” Reuters quoted the state agency QNA as reporting. QNA’s website was not accessible on Monday.
ExxonMobil, in partnership with Qatar Petroleum, has invested in 10 LNG projects including 12 of the emirate’s 14 LNG trains, and has played a major role in Qatar’s ascendance as a leading LNG exporter.
While Qatar has vowed to continue both LNG shipments and overland supplies to the UAE, worries about the disruption of supplies have sparked speculation that the crisis could speed up the liberalisation of Asian LNG markets.
The news of the ExxonMobil talks came as Saudi Arabia, the UAE, Egypt and several other countries issued an ultimatum to Qatar on Friday, demanding that it cease support for extremists, scale back its ties with Iran, shut down Al Jazeera and shutter a Turkish military base in the emirate, among a list of 13 conditions for the restoration of ties and the reopening of borders. The group cut its relations with Qatar on June 5, accusing it of sponsoring terrorism.
Experts say the standoff is likely to last for some time.
“The demands are so aggressive that it makes it close to impossible to currently see a resolution of that conflict,” Olivier Jakob of oil consultancy Petromatrix told Reuters.
On Monday, Bahrain, one of the countries boycotting Qatar, accused it of fomenting “a military escalation,” as Turkish troops continued to arrive in the country.
Qatar has dismissed the possibility of negotiating under boycott and both it and Turkey have slammed the demand that Turkish troops withdraw as an interference in their relations.
KBR wins FEED, project management contract from Oman LNG
American EPC major KBR has announced that it has been awarded a Front-End Engineering Design (FEED) and project management services contract by Oman Liquefied Natural Gas LLC (Oman LNG) in Qalhat, Oman.
Oman LNG operates three liquefaction trains with a total nameplate capacity of 10.4mn tonnes per annum (mtpa).
Revenue associated with this contract was undisclosed and will be booked into backlog of unfilled orders for KBR's Engineering & Construction business segment in the second quarter of 2017.
This project represents KBR's re-entry into the Oman market and supports the contractor’s strategic focus on gas monetisation in the Middle East region.
"This contract confirms KBR's strong reputation as one of the world's preeminent leaders in LNG facilities and demonstrates the trust that Oman LNG has placed in KBR following the successful development of the original Front-End Engineering Design (FEED) of this world-class LNG facility," Jay Ibrahim, KBR President – Europe, Middle East & Africa, was quoted as saying in a press release.
"We are committed to expanding our footprint in the Middle East and are delighted at this opportunity to re-establish KBR in Oman and contribute to Oman's In-Country Value (ICV) initiatives."
KBR was ranked no. 15 in Oil & Gas Middle East magazine’s recently published annual list of the Top 30 EPC Contractors 2017.
Greece also impacted by Nord Stream II developments
A series of developments last week concerning the construction of the Russian Nord Steam II gas pipeline project could impact the southeast European region, including Greece, in various ways.
Maros Sefcovic, the European Commission vice president responsible for Energy Union, announced a timeline for talks with EU member states, at which authority will be sought by Brussels ahead of negotiations with Gazprom for the Nord Steam II, which would expand deliveries of Russian natural gas to Germany.
These talks with EU member states are expected to take place in late August, enabling negotiations with Russian officials immediately afterwards. Russia has not embraced the prospect of the European Commission’s step-by-step process, requiring bilateral agreements.
Europe is currently divided into two camps over Nord Steam II. On the one side, a number of countries have grouped together as the project’s development would deprive them of Russian gas transit fees. At the other end, Germany and various European companies involved in the pipeline’s prospective construction are pressuring the European Commission to endorse its development. Brussels will need to balance these opposing sides while also keeping in mind energy supply security in the EU.
Germany’s pressure has softened the European Commission’s view of the Russian pipeline plan, as indicated by a number of recent legal revisions.
Adding to the complexity, the US Senate recently voted in favor of sanctions against Russia, including in the energy sector, a development that would prevent Russian and foreign enterprises from engaging in oil and natural gas deals. These proposed sanctions still need to be signed by President Donald Trump to take effect. EU member states, especially Germany and Austria, both traditional Gazprom business partners, strongly object to the US Senate proposal.
As for Greece’s neighbors, Bulgaria has kept a close watch on the Nord Steam II developments. Following the cancellation of South Stream, Sofia proposed to Russia and other suppliers a plan entailing the establishment of a natural gas hub in Varna, on the Bulgarian Black Sea coast.
Russia’s reception to the idea has been lukewarm until now but the proposal is gaining some momentum. The development of Nord Steam II is expected to also provide impetus to the Bulgarian proposal, a submarine crossing through the Black Sea to Varna, its intention being to supply the wider region, including other parts of Europe. This is an alternative plan to Turkish Stream, also supported by Sofia, as a second priority.
Bulgaria’s stance runs contrary to the Greek position. Athens would prefer the Russian gas route to run through Greek territory, within the framework of the Poseidon plan. The two sides will need to strike a balance as both are seeking to work together to develop the IGB interconnector, which would offer a Greek-Bulgarian gas link.
Aker Solutions signs onto Eni project
Aker Solutions will provide umbilicals and other equipment for the Coral South project off Mozambique, the Norwegian services provider said on Monday.
Under its contract with operator Eni, Aker Solutions will provide three steel tube umbilicals, each measuring more than 19 kilometres in length. The sections will connect the project’s FLNG unit to the subsea production system.
“It is a privilege to be involved in the first offshore development in Mozambique and to play a part in developing the country’s energy industry,” CEO Araujo said of the award. The umbilicals are expected to be delivered around year-end 2019.
On June 1, 2017, Eni kicked off the project’s implementation phase with a signing ceremony for the drilling, construction and installation contracts for works associated with the venture.
HPCL to join compatriots in Russia deal
On Monday, Indian media suggested that Hindustan Petroleum Corporation had expressed interest in joining the Indian consortium negotiating to acquire a 49% interest in the Vankor Cluster oilfields in Russia.
If accurate, the report would mean HPCL will join ONGC Videsh, Indian Oil Corporation, Oil India and Bharat PetroResources in their bid to formally obtain the mentioned stake in the asset in the Russian Arctic.
ONGC Videsh acquired a 26% stake in Rosneft’s Vankor field through two separate transactions in 2016. In June of that year, Oil India, along with Indian Oil Corporation and Bharat PetroResources, reached an agreement for a 23.9% stake in the same oilfield.