Saturday, January 31, 2015

Is Eni's Egyptian Bet Paying Off? | Forbes

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Is Eni's Egyptian Bet Paying Off?

After a tremendously tough four years for Egypt’s energy sector, complete with widespread shortages and a collapse of domestic production and export market, foreign firms were finding it harder and harder to justify the risks of operating and investing there. In addition to mounting debt to foreign producers, Egypt was also struggling with security and political stability issues. And while political progress is debatable, the country’s energy sector does appear to be turning a corner of sorts, allowing some success for a handful of international firms.
Earlier this month, Italy’s Eni announced a newdiscovery in Egypt’s Western Desert, according to a company statement. The well is located in the West Melehia deep exploration prospect and began with an initial daily flow of 2,100 barrels. Seventy-six percent of the license is held by Eni through a local subsidiary.
“The discovery will be rapidly followed by the drilling of other delineation and development wells which should result in an estimated production of about 8,000 barrels per day by the end of 2015,” Eni said, according to Reuters.
The wells are the result of a successful bidding process from September of last year, when Eni won the rights to three exploration licenses. According to a Rigzone report, the licenses cover about 794 square miles. The Italian firm will also become the operator of offshore blocks, which run up against the Cypriot maritime border. The licenses expand the company’s presence in Egypt, making it one of the largest foreign operators in the country.
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On the same day as Eni’s well announcement, Egypt announced another new exploration effort with a European firm. According to the country’s oil ministry, Egypt signed a gas exploration contract with France’s Total for efforts in the Nile Delta, alongside the state-backed EGAS.
Worth $20 million, the agreement will help Cairo seek out possible new gas developments to help reduce dependence on costly imports, which recently helped drive up the country’s energy sector debt to over $6 billion. As recently as 2011, Egypt was producing enough gas to provide exports to Jordan and Israel, but saw that ability collapse under the weight of security and financial challenges, not to mention a burgeoning gas production effort in Israel. Despite efforts of successive governments, violence and instability have plagued the country’s eastern Sinai, making investment and pipeline protection increasingly difficult to ensure.
For now, any oil progress will be weighed down by the uncertainty of the current global price collapse and the question of how much it will – or can- rebound. After all, new oil exploration always looks a lot more attractive with the sure bet of a June 2014 $100+ a barrel than this weekend’s levels, hovering around $50 depending on your market.
To help prepare for further new investment, Cairo has been working to provide the necessary infrastructure. In September of 2014, the country announced plans to dedicate $14.5 billion in petrochemical and refinery investment as a part of an expansive campaign to increase the country’s ability to meet increasing demand.


Source: http://www.forbes.com/sites/christophercoats/2015/01/31/is-enis-egyptian-bet-paying-off/

Noble Energy : Government in discussions with Noble on developing Aphrodite prospect | 4-traders.com

Noble Energy : Government in discussions with Noble on developing Aphrodite prospect

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01/28/2015 | 01:26pm US/Eastern

By Elias Hazou

The government has begun discussing with Noble Energy how the company plans to develop their offshore Aphrodite prospect, energy minister Giorgos Lakkotrypis said on Wednesday.

The minister confirmed that talks with the US outfit are now ongoing and that a meeting with Noble reps would be taking place on Wednesday.

"It is the second such meeting on a technocratic level, many more will follow, the objective being to agree a development plan for Aphrodite for its commercial exploitation," Lakkotrypis told reporters.

Should the two sides reach an agreement, next the government would issue an exploitation licence for Aphrodite, the minister explained.

Under Cyprus' production-sharing model, the government is part-owner of the hydrocarbons, and has a say in development and monetisation.

It's understood the talks with Noble are set to last until around March, at which time the Texas-based company will present its final development plan for their offshore play in Block 12. The government will then review the plan and sign off (or not) on it.

Noble announced the Aphrodite discovery in late 2011. The reservoir holds a mean of 5 trillion cubic feet of gas.

Cyprus issues three types of licences: prospecting, exploration and exploitation. The term of the exploitation licence is a maximum of 25 years, and it may be renewed for a maximum of 10 years, subject to the provisions of the contract.

Noble as well as the government are eyeing regional markets for monetising their Block 12 gas finds, with Egypt and Jordan earmarked as potential buyers.

The Jordanian press has this week been reporting that Jordanian officials are due on the island soon for gas-related talks.

Asked about this, Lakkotrypis neither confirmed nor denied the reports on the pending visits, saying only that an announcement would be made when there was something tangible.

"Jordan does interest us a great deal, and Jordan is interested as well," he offered.

"There are technical matters which will be discussed [with the Jordanians], for example, the direction of a potential pipeline to Jordan, where the pipeline will start and end, the infrastructure to be used, and other such matters which we are looking at with potential buyers."

For a deal to export gas to Egypt, the most likely technical solution for would be a floating production, storage and offloading (FPSO) unit combined with a pipeline.

The start of negotiations between the government and Noble over a development plan are a positive sign, hydrocarbons expert Charles Ellinas told the Mail.

"It underscores that Noble are serious about Cyprus…discussing the development plan means we're now going into the home stretch," he said.

At the same time, Noble's move suggests the company won't be shelving their eastern Med operations, which for a while had appeared a possibility due to their run-in with Israel's anti-trust authority.

"The fact they're pressing ahead in Cyprus implies to me that Noble is close to a solution in Israel, and that's good for the whole region," said Ellinas.

Assuming Noble and the government reach a deal over the next few months, a final investment decision (FID) by the company should be expected sometime in 2016. It would then take approximately three years to implement the development plan (infrastructure), meaning Cyprusmight be able to export its first gas by 2019.

But despite the good news, the expert stressed the fluidity of the situation with regard to Cypriot gas exports.
In the race to supply gas-starved EgyptIsrael has a leg over Cyprus, having already signed a letter of intent with Cairo.

The Leviathan partners have agreed to supply Britain's BG in Egypt with 8.5 million tonnes of natural gas. In addition, BG itself is producing around 2 million tonnes, for a total of 10.5 million tonnes.

That leaves little if any room for extra gas from other suppliers – such asCyprus – since the capacity of BG's facilities comes to 12 million tonnes.

For Noble in Cyprus, their priority is exports to Egypt. However if theEgypt option doesn't pan out, the US company will need to revise their plans and look at other markets, such as south-east Europe.

Moreover, Ellinas pointed out, for Cyprus the Jordan option has little merit, because of the enormous cost of building a pipeline to the Hashemite Kingdom. As far as the Jordanians are concerned, it would be cheaper for them to buy the gas from Israel.

And because of geography, a Cyprus to Jordan pipeline would also need the approval of Egypt and Israel.
Noble would presumably also build a small-diameter pipeline running from Aphrodite to Vasilikos, with the gas used for domestic power generation.

In this scenario Cypriot authorities might consider shelving or altogether scrapping a tender to import natural gas (the so-called "interim solution") and wait for the gas from Aphrodite to feed power stations here.

Meanwhile it appears the government and Total have come to terms, keeping live the oil major's Cyprus operations.

Quizzed by journalists, the energy minister said an arrangement has been found with Total.

"All that remains is for the legal documents to be signed, and if this comes to fruition then we shall have them here until at least February 2016," Lakkotrypis said.

Earlier, the minister said a legal loophole was found which allowed the extension of Total's surveying programme in offshore block 11 until Feb. 16, 2016. After that it will be decided whether exploratory drilling is warranted.

A draft agreement revising Total's contract is being formulated and is expected to be finalized either this or next week.

Last week the government revealed that the oil and gas giant had found no potential drilling targets in its two concessions and was likely to shutter its Cyprus operations.

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(c) 2014 Cyprus Mail Provided by SyndiGate Media Inc. (Syndigate.info).



Source: http://www.4-traders.com/NOBLE-ENERGY-INC-13688/news/Noble-Energy--Government-in-discussions-with-Noble-on-developing-Aphrodite-prospect-19776278/

Thursday, January 29, 2015

CYPRUS AND TOTAL: BREAK OR BREAK-UP? | Natural Gas Europe

CYPRUS AND TOTAL: BREAK OR BREAK-UP?

The news that France’s TOTAL may be pulling out from Cyprus for not having found potential drilling targets has not yet been fully confirmed. It remains unclear whether TOTAL is pulling out all together, reconsidering its participation or postponing its drilling activities until it finds signs of the existing reserves in the licensed areas of blocks 10 and 11. The plunging oil prices may have also played a role in TOTAL’s reluctance to drill in Cyprus in 2015 and invest large amounts of funds without the certitude of the commerciality of the endeavour. It is expected that the arrangement discussed between the Cypriot Government  and TOTAL will be finalised and announced soon, but it is not to be dismissed that instead of breaching its agreement with the Cypriot government and not getting involved in Cypriot waters, TOTAL has decided to commence its exploration activities in more favourable times.
TOTAL’s (perhaps momentary) withdrawal does not mean all hydrocarbon related activities have halted off the island’s coast. Noble energy is in fact in talks with the Cypriot government over the exploitation of the Aphrodite field discovered by the Texan company in 2011 in Block 12 of the island’s Exclusive Economic Zone and estimated at 4.54 trillion cubic feet (tcf). Despite the commercial size of the field, the island has not yet developed the adequate infrastructure to export its newly-found riches. An onshore LNG terminal project has been put on hold until further quantities are discovered.
In the meantime, Cyprus may be looking into the regional market as a destination for the natural gas discovered in its Aphrodite field. Neighbouring Jordan is struggling to meet its domestic demand as it undergoes a severe energy crisis triggered by the disruption in the flow of natural gas from Egypt to Jordan. Reliant on imports to satisfy 96% of its energy needs, Jordan is a potential customer for Cyprus and Israel. In 2014, Cyprus’ minister of energy Yiorgos Lakkotrypis met with senior officials in Jordan where he signed a memorandum of understanding to the effect of cooperating in the field of energy.
Despite the continued presence of a Turkish vessel in its waters, Cyprus also continues its offshore activities. The Italian and South Korean consortium ENI/KOGAS is pursuing its search for gas in Block 9 of Cyprus’ EEZ. Additional encounters would allow the island to invest in the necessary infrastructure to access far-reaching export markets.
Karen Ayat is an analyst and Associate Partner at Natural Gas Europe focused on energy geopolitics. She reads International Relations and Contemporary War at King's College London focusing on Natural Resources and Conflict. She holds an LLM in Commercial Law from City University London and a Bachelor of Laws from Université Saint Joseph in Beirut. Email Karen karen@minoils.com Follow her on Twitter: @karenayat




Source: http://www.naturalgaseurope.com/cyprus-and-total-break-or-break-up

Monday, January 26, 2015

ADCO Enhanced Oil Recovery

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The UAE is a signatory to the Kyoto Protocol which calls for commitment to reduce greenhouse gas (GHG) emissions and therefore mitigate their impact on climate change.

ADCO in its strive to be an active participant in implementing the National aspiration, has therefore created a specialized department named Carbon Management Department, within the Technical Support Division, to achieve this objective. Success of utilization of Carbon Dioxide (CO2) in ADCO reservoirs will achieve two major objectives: