Algeria puts Hassi Messaoud construction contract on hold

A Reuters report this week confirmed what we have already reported, namely that Algeria has put on hold the large Hassi Messaoud construction contract it had earmarked for Canada's SNC-Lavalin as part of a major overhaul of Sonatrach’s dealings with contractors.

SNC-Lavalin , Canada's biggest engineering company, had been named as preferred bidder for a contract to rebuild Hassi Messaoud, the hub of Algeria's oil industry.

"We were waiting to sign the contract," Leslie Quinton, SNC-Lavalin's Vice-President for Global Corporate Communications, said in an email to Reuters. "A few weeks ago, it was announced that the process was suspended, pending further studies and additional evaluation."

According to a report in El Khabar on 30th June, a total of 160 contracts which Sonatrach had agreed with suppliers and contractors had been put on hold pending a review.

Oil and gas permits awarded to foreign energy firms are reportedly not affected. However, new rules will apply to all international energy services firms operating in Algeria, which include companies such as Schlumberger, Baker Hughes and Halliburton.

For more news and expert analysis please Sahara Focus and Algeria Politics & Security.

© 2010 Menas Associates

Shell to award contract for new oil wells in Majnoon

The head of Iraq's, state owned, South Oil Co, Dhiaa Jaafar, has announced that Shell and its partner, Petronas, are in the process of awarding a deal to drill new oil wells in one of Iraq's largest oil fields, Majnoon. The field located in Basra's governance is estimated to hold up to 12.6 billion barrels of proven oil reserves.

The two groups, who partnered up to develop the field, are believed to be in talks about awarding other tenders, including engineering and construction contracts. According to several industry sources, the two groups have invited a number of well established oil companies including Halliburton, Weatherford International and Petrofac to submit bids.

The former two have an established presence in Southern Iraq, while Petrofac said that it is currently in the process of making an entry in to the country's oil industry. Shell and Petronas, who were awarded the Majoon contract, back in December, own 45 per cent and 30 per cent of the stake respectively, with the other 25 per cent belonging to Iraq's state-run Missan Oil Co.

Source: Wall Street Journal

For more news and expert analysis about Iraq, please see Iraq Focus.

LUKOIL wins tender for two blocks in the Black Sea

LUKOIL's subsidiary, LUKOIL Overseas, and Vanco International have won tender for exploration and development of two blocks located in the Black Sea. The stake in the two blocks, devided between LUKOIL Overseas and Vanco, are 80 per cent and 20 per cent respectively.

The two blocks, Rapsodia and Trident, are located in the Romania region of the Black Sea, at water depths ranging from 90 to 1,000mt. The total area of the two blocks is estimated at 2,000 square km, located within a 60-100 km distance from the coastline.

According to the terms of the bidding LUKOIL Overseas is to sign a concession agreement with the National Agency for Mineral Resources of Romania within the next six months. Once the deal is completed, LUKOIL Overseas is expected to set up offices in Romania to oversee operations.

LUKOIL's continual success and focus on strategy, with intention to generate more cash per barrel of oil produced, means the company is set for further growth. LUKOIL already has a large presence in the Caspian region, and a move in to the Black Sea area is the next logical step for Russia's largest oil producer.

To find out more about LUKOIL please visit LUKOIL's web site, which you can find here.

For more news and expert analysis about the Caspian region, please see Caspian Focus.

Lupatech signs anchoring ropes contract with Petrobras

Lupatech, the Novo Mercado based manufacturer of industrial equipment for the oil and gas industry, has signed an 18 month contract with Petrobras, worth around R$140 million. According to the terms of the contract, Lupatech will be responsible for supplying polyester anchoring ropes for all new Petrobras platforms, until December 2011.

A Lupatech spokesperson said that the company expects to see revenues resulting from the Petrobras contract in the latter part of 2010, and early part of 2011. Current orders for Lupatech's equipment are estimated at R$2.5 billion, with R$466 million to be converted into revenues in the next 12 months, and the remainder, R$2.1 billion, thereafter.

Talking about the new contract, Lupatech's chief financial officer, Thiago Alonso de Oliveira, said that the company has seen a steady increase in demand for their products and services.

“We are facing a moment when the things we supply are in a period of growing demand. It's a period when several discoveries are in the beginning development phase,” said Oliveira. The new Petrobras contract is expected to help boost Lupatech's sales in Brazil.

To find out more about Lupatech, please visit Lupatech's web site which you can find here.

For more news and expert analysis about Brazil, please see Brazil Focus.

© 2010 Menas Associates

Minister says there's a possibility of more stringent offshore drilling regulations

Brazil's Mines and Energy Minister, Marcio Zimmermann, has made an official statement saying that the spill in the Gulf of Mexico, has been a misfortunate accident, but one that has prompted Brazilian government to contemplate the possibility of imposing more stringent regulations in the country's offshore drilling sector.

Speaking to reporters, after an event at the World Expo, Zimmermann said that Brazil will be able to export around 20 million barrels of oil per year by 2019, and confirmed that the country has received $6-$7 billion of oil-for-loan deal from China in 2009.

In that same year, Petrobras received a $10 billion credit deal from China Development Bank, in exchange for a 10-year oil supply agreement with China Petroleum and Chemical Corp.

Chemical Corp has received 150,000 barrels of crude oil a day in the first year; the quantities are set to rise to 200,000 b/d in the next nine years. Petrobras plans to invest $118.8 billion in exploration and production in the next four years, with $30.9 billion designated for offshore oil development.

Source: Wall Street Journal

For more news and exert analysis about Brazil, please see Brazil Focus.

Gazprom is set to start deepwater operations in Nigeria

Gazprom's chief executive, Alexander Dyukov, has announced that the company is currently in talks to conclude arrangements for a multi-billion oil exploration deal in Nigeria. He said that Gazprom would join Statoil’s deepwater exploration works, as it is looking to catch up with other international companies working in Africa.

Mohammed Bello, managing director of NiGaz Energy, a joint venture between Gazprom and Nigerian National Petroleum Corporation (NNPC), said that the two companies have a vested interest in the Nnwa Doro block, which holds as much as five trillion cubic feet of gas. The negotiations are set to commence sometime next month.

“We are just starting to talk, the board has to decide. We have a meeting next month,” said Bello. Gazprom's oil arm, Gazprom Neft, is also said to be working on joint foreign ventures and intends to begin several projects overseas in the near future. The company’s purpose-devised plan states that Gazprom Neft intends to produce around 100 million metric tonnes of oil by 2020, with about 10 million metric tonnes to be produced abroad.

“We are expanding our production business abroad and planning to join several large foreign projects,” said Dyuko.

According to the company's deputy CEO, Boris Zilbermints, Gazprom also has plans to join Libya's Elephant project.

“We are planning to join the Elephant in late summer but we don’t plan to invest much, except the entry fee because the project has already been launched. We are currently negotiating with several other asset owners in Libya,” he said Zilbermints.

Source: Nigeria Daily Independent

For more news and expert analysis about Nigeria, please see Nigeria Focus and Nigeria Politics & Security.

Vietnam and Japan in talks about oil refinery projects

JX Holdings Inc, one of Japan's largest oil companies, has announced that it will work together with Vietnam's national oil and gas group, PetroVietnam, on two large-scale oil refinery projects, estimated to be worth a combined sum of ¥800 billion.

The two companies intend to set up operations, once they are given the go-ahead from the Vietnamese government. JX Holdings Inc will take part in PetroVietnam's expansion plans for their refinery in Dung Quat, expected to be completed in 2016. The work is estimated to cost in the region of ¥100 billion, and will increase refining capacity to about 170,000 b/d.

JX Holdings Inc will also collaborate with PetroVietnam on construction of another refinery in the southern province of Ba Ria-Vung Tau for operations in 2020. The estimated cost of construction is in the region of ¥700 billion yen, expected capacity of about 200,000 b/d. Once fully operational, the two refineries will produce gasoline and related products for the domestic market, with a possibility of exporting to other parts of Asia.

Earlier this year, chairman of JX Holdings Inc, Shinji Nishio, confirmed company plans to invest in Vietnam, when PetroVietnam's, chairman Dinh La Thang, was on a visit to Tokyo. The two companies are expected to set up a think-tank to discuss bilateral cooperation. The Japanese firm will provide technologies for refining oil products from low-grade crude oil at low cost, and will also environmental technologies.

Source: Vietnam Business News

For more news and expert analysis about Vietnam, pleases see Vietnam Focus.