Natural Gas Suppliers Consider Suspending Egypt Contracts - THE WALL STREET JOURNAL

The headquarters of state-run Egyptian Natural Gas Holding Company in
Cairo, Egypt, as photographed in 2012. PHOTO: KHALED ELFIQI/
EUROPEAN PRESS PHOTO AGENCY

By MIRIAM MALEK, Updated Jan. 22, 2016
All companies with active Egas supply positions affected by payment delays, two suppliers say

LONDON—Egyptian state-owned natural gas company Egas has missed payment deadlines for liquefied natural gas, as the country struggles to build up foreign reserves after blows to its tourism industry over the past year.

Two suppliers to Egas have confirmed to The Wall Street Journal that all companies with active supply positions in Egypt have been affected by payment delays.

Iran agrees to supply oil to Greek refiner Hellenic | Hydrocarbon Processing

Amir Hossein Zamaninia, Iran (left) & Panos Skourletis, Greece (right)

01.22.2016 - The agreement was announced after Iran’s Deputy Oil Minister Amir Hossein Zamaninia had discussed potential energy co-operation with Greek Energy Minister Panos Skourletis earlier on Friday.

Iran signed an agreement to supply crude oil with Greece-based refiner Hellenic Petroleum, reports said on Friday.

The deal would be Iran’s first such deal with a European company since the removal of international sanctions this month.

Deliveries will begin immediately, Hellenic Petroleum said in an e-mailed statement on Friday. The agreement also includes an adjustment for a financial backlog owed to Iran’s state oil company after sanctions imposed four years ago.

Weekly Overview on Eastern Mediterranean Natural Gas Matters | Natural Gas Europe

January 22nd, 2016

Israel

Israeli waters may hold more natural gas than previously expected. On January 17, an Israeli gas exploration group led by Isramco Negev and Modiin Energy announced it had encountered indications of a possible natural gas field off the country’s coast. The Daniel East and Daniel West licenses may contain up to 8.9 trillion ft³, according to a report by the companies.

Israel’s largest discoveries to date are the Tamar field, estimated at 10 trillion ft³, and the Leviathan, estimated at 22 trillion ft³. The country has not yet been able to develop the giant Leviathan delayed by domestic regulatory disputes.

Closing of the sale of 12.5% of Saipem share capital to Fondo Strategico Italiano - ENI

22/01/2016, CET 17:00Price Sensitive

The Shareholders Agreement between Eni and FSI has taken full effect

San Donato Milanese (Milan), 22 January 2016 – With reference to the sale and purchase agreement between Eni S.p.A. ("Eni") and Fondo Strategico Italiano S.p.A. ("FSI"), the object of which is the sale, from Eni to FSI, of a stake in Saipem S.p.A. ("Saipem") share capital, consisting of n. 55,176,364 ordinary shares, equal to 12.5% of the share capital plus one share, as announced to the market on 28 October 2015, Eni announces the closing of the transaction has taken place following occurrence of all the conditions precedent under the agreement.
Eni has collected an EUR 463,238,681.60 consideration for the sale.

Oil trader who predicted the decline says price has bottomed - WORLD OIL / BLOOMBERG

By SIMONE FOXMAN on 1/22/2016

LONDON (Bloomberg) -- Pierre Andurand, the founder of the $615 million Andurand Capital Management who correctly predicted the slump in oil prices, said the commodity has probably hit bottom and will end the year higher.

The price of oil will probably rise to $50/bbl this year and $70/bbl in 2017, though investors should expect heightened volatility along the way, he said Friday in an interview on Bloomberg TV.

"We are in a world where we see very low prices followed by very high prices," Andurand said in the interview. "I actually think it has bottomed."

Egypt negotiates with Kuwait to renew contract to supply 3m barrels per month | Daily News Egypt

Crude oil imported from Kuwait Petroleum Corporation helps save fuel in local market, says official

Mohamed Adel, January 21, 2016

The Egyptian General Petroleum Corporation (EGPC) is negotiating with the Kuwait Petroleum Corporation (KPC) to renew a contract to supply 3m barrels of crude oil to Egypt per month with payment facilitations for the value of the shipments.

The contract is expected to be finalised by the conclusion of next September.

ENI Terminates The Ocean Rig Olympia Early Due To Dramatic Fall In Oil Prices | Seeking Alpha

Jan. 21, 2016

Summary

• Today, ENI announced that it has terminated the Ocean Rig Olympia due to "a dramatic fall" in the price of oil. 
• Assuming an 85% termination fee, and based on 160 days remaining, ORIG should be entitled to receive a lump sum of approximately $90 million. 
• ORIG is going to struggle in 2016, but should weather the storm. I believe the stock is oversold, however, as the risks are high as today's news shows. 

This article is an update of my previous article on Ocean Rig UDW (NASDAQ:ORIG) published on Dec. 8, 2015. ORIG is a fairly new offshore drilling company that provides oilfield services for offshore oil and gas exploration, development and production drilling. The company is based in Nicosia, Cyprus. Ocean Rig was a subsidiary of DryShips, Inc. (NASDAQ:DRYS).

Egypt Skips Gas Bill, Loses LNG Shipment | The Maritime Executive

British Sapphire, image courtesy ATSB

By Reuters 2016-01-21

BP's diversion of a tanker of liquefied natural gas (LNG) away from Egypt due to payment issues is the first sign that the country's currency crisis could be jeopardizing its energy supplies, traders said.

Earlier this month the tanker British Sapphire was diverted to Brazil rather than discharging in Egypt, with the delivery of the LNG cargo for Egypt delayed up until October, traders said.

New gas estimates leave Israelis hoping | Interfax

Written by Rachel Williamson
21 January 2016

New resource estimates for two offshore gas licences have created a stir in Israel, but their development will partly depend on progress on the giant Leviathan field.

United States-based Isramco Negev and Israel-listed Modiin Energy last week released a report – based on seismic data taken before 2001 – indicating there could be up to 251.9 billion cubic metres of gas in the Daniel East and Daniel West offshore licences.

By comparison, the already producing Tamar field contains reserves of 311.3 bcm.

EC Energy Union Supremo Sefcovic Visits Cyprus | Natural Gas Europe

EU EEZ (except Croatia)

January 21st, 2016

The European Commission’s vice-president for energy union Maros Sefcovic visited Cyprus January 11-12. He said “My energy union tour in Cyprus will provide an excellent opportunity to present and discuss EU funding possibilities and its contribution to the economic recovery of Cyprus and to achieve the Europe 2020 strategy targets for growth and jobs, in particular as regards renewable energy and energy efficiency. Cyprus might be an island, but it doesn’t have to be an energy island”.

Sefcovic met the president, Nicos Anastasiades; energy minister Yiorgos Lakkotrypis; foreign minister Ioannis Kasoulides; president of the house of representatives; and the chairman and members of the standing Committee on energy, and stakeholders from the energy sector such as the Cyprus Oil & Gas Association, energy producers, network operators, academics and think-tanks. He also held a citizens’ dialogue on Energy Union at the University of Cyprus.

Zohr’s Recoverable Reserves are Half Original Estimates | Daily News Egypt

Thursday, 21st January 2016

Eni’s mega gas discovery in Egypt’s Mediterranean area, Zohr, contains only 16 tcf of recoverable reserves, as opposed to the originally announced reserves of 30 tcf, an official at EGPC told Egypt Oil & Gas.

In November of 2015, Mohamed Al Masry, Chairman of EGPC has stated that between 22 and 26 tcf of gas are expected to be extracted from the field, noting that drilling will start at the beginning of 2017.

According to Amwal Al Ghad, Eni started drilling 20 wells in December of 2016, at an investment cost of $12b.

Egypt’s Natural Gas Crisis | Carnegie Endowment for International Peace

BY BRENDAN MEIGHAN 

Egypt’s temporary relief from its ongoing gas crisis is the result of a lull in demand, not an improvement in industry outlook. Thursday, January 21, 2016

One of the most pressing crises facing the Egyptian economy has been the severe shortage of natural gas. The crisis itself—which involves supply cuts to factories and frequent electrical outages—has received copious coverage in the domestic and international press and has tested the patience of the Egyptian people and the business community. However, during the first week of November, officials at the Egyptian Natural Gas Holding Company (EGAS) announced that Egyptian heavy industry was now being supplied with all of its needed natural gas and other fuels. Officials from a number of companies and trade organizations confirmed this on December 2. There has also been an absence of reports of power cuts in major residential areas. Unfortunately for Egypt, this may simply be the result of a lull in demand due to moderate weather and slower production from heavy industry, not a permanent end to the shortages.

Cyprus: an island in a sea of opportunities | Maroš Šefčovič, EU Commission / Energy Union

Lakkotrypis, Cyprus (left) with Maroš Šefčovič, EU (right)

Jan 20, 2016, Maroš Šefčovič, VP of the European Commission, in charge of Energy Union

It's been two decades that I've been visiting Cyprus, meeting with its people and decision-makers, appreciating its rich culture and multi-layered history, seeing it evolve and change over the years.

But the atmosphere of my recent visit was significantly different: there was clear prospect for a final settlement agreement which could reunite the island and open a new range of opportunities.

What could this mean to the island's energy sector? Quite a lot.

Turkey's Gas Hub: Power or the Market | Natural Gas Europe

January 20, 2016

Turkey’s ambition to establish an energy hub has been a staple of the political, academic and media discourse of recent years.

But despite the literature and debates that it has ignited, the concept has not been properly defined, or expanded into an official strategy that could be rolled out within a given timeframe.

To those familiar with Europe’s northwestern energy setups, hubs are indistinguishable from markets: they are centres of trade and transport, where relevant regulations, services and infrastructure coincide to facilitate their smooth operation.

Shell profit plunges at least 42% as oil slump deepens | World Oil / Bloomberg

By RAKTEEM KATAKEY on 1/20/2016

THE HAGUE (Bloomberg) -- Royal Dutch Shell Plc, which is buying BG Group Plc in the industry’s largest deal in a decade, expects fourth-quarter profit to drop at least 42% after the rout in crude prices deepened.

Profit adjusted for one-time items and inventory changes probably shrank to $1.6 billion to $1.9 billion, Shell said Wednesday in a preliminary earnings statement. That compares with the $1.8 billion average estimate of nine analysts surveyed by Bloomberg, and profit of $3.3 billion a year earlier.

BG also published a provisional results statement that showed its 2015 oil and natural-gas production will probably beat forecasts. It expects full-year adjusted profit to be about 58% lower.

Netanyahu to meet Greek, Cypriot leaders in Nicosia | The Times of Israel

BY TIMES OF ISRAEL STAFF January 20, 2016

Talks between leaders of non-Muslim regional countries are last in series of three diplomatic meetings

Prime Minister Benjamin Netanyahu will next week head to Cyprus, where he will attend a trilateral meeting with Greek and Cypriot counterparts Alexis Tsipras and Nicos Anastasiades, respectively.

Netanyahu is expected to land in Nicosia on Thursday morning and meet Anastasiades briefly, before they are joined by Tsipras.

BG sees profit of at least $2.3billion after oil-price slump | Energy Voice / Bloomberg

Written by Bloomberg - 20/01/2016 7:53 am

BG Group Plc, which agreed to be acquired by Royal Dutch Shell Plc last April, expects to report full-year profit of at least $2.3 billion after crude oil prices extended their decline.

That profit for 2015 included a post-tax gain of at least $600 million, the Reading, England-based company said on Wednesday. BG reported preliminary numbers before a shareholder vote on the merger takes place next week.

Oil’s collapse to a 12-year low has driven down profit and revenue at energy companies around the world and forced them to cut spending, write down the value of assets, defer and cancel projects and fire employees. BG, the U.K.’s third-biggest oil and gas producer, is one of the few companies where output is increasing, a boon for Shell.

RETHINKING SECURITY OF GAS SUPPLY IN THE EU | Bruegel

January 20, 2016, BRUEGEL

How can Europe ensure a secure supply of natural gas, so vital for its citizens' wellbeing and prosperity? As they launch a new paper on the topic, our scholars discuss the issue with high-level experts.

Eni partners for Egypt’s Zohr gas development known this year | The National (UAE)

LeAnne Graves, Updated: January 20, 2016

New development partners for Egypt’s mega gas find will be announced this year, according to Italy’s Eni.

The company said that it had received interest from “several companies” to help develop the Zohr discovery, which is one of the largest gas finds in the Mediterranean.

Fuad Krekshi, Eni executive vice president of the Middle East, said that the priority right now was to finalise the development plan to submit to the Egyptian government, but that operational partners would be announced this year. “Several companies have expressed interest, but we have not committed to anyone,” he said declining to discuss in more detail.

Two-year ENI-KOGAS extension signed | Cyprus Mail

January 19, 2016

The government on Tuesday signed a two-year extension with the ENI-KOGAS consortium for exploration of blocks 2, 3 and 9 within the island’s exclusive economic zone (EEZ), it announced.

“Within the next two years, the consortium will conclude studies aiming at better evaluating and recalibrating the geological model of the region, in order to identify prospects necessary to complete its drilling obligations,” an official statement said.

“This development is especially important, as it reaffirms and advances Cyprus’ energy prospects during a period in which the international oil and gas industry is experiencing challenging conditions.”

BP remains ambitious on gas in Egypt, despite weak oil prices | Euronews / Reuters

REUTERS, 19/01/2016, By Eric Knecht

CAIRO (Reuters) – Britain’s BP Plc <BP.L> aims to double natural gas production in Egypt in the next four years despite weak oil prices as Egypt’s burgeoning energy market offers hope for its battered economy.

Egypt is on a drive to ramp up oil and gas production – aggressively signing exploration contracts, renegotiating production prices, and lobbying companies to speed up projects even as firms worldwide scale back.

TAP likely to bring more Caspian gas to European markets, Managing Director says | Trend News Agency

19 JANUARY 2016, Baku, Azerbaijan

The onshore construction activities of the Trans Adriatic Pipeline (TAP) will begin in all countries mid-2016, with the offshore scope starting in the winter of 2017/2018, Ian Bradshaw, Managing Director at TAP AG said in an interview to AzerNews.

“TAP’s progress continues to be in line with the project schedule, which ensures we will be ready to transport Shah Deniz II gas to Europe early 2020,” Bradshaw said.

TAP effectively started construction in Albania in June 2015 with the rehabilitation of access roads and bridges, and marked the occasion with a ceremony attended by Albanian Prime Minister Edi Rama and Energy and Industry Minister Damian Gjiknuri.

Cyprus approves BG Group as partner in offshore Aphrodite gas field | Offshore Technology

19 January 2016

The Cypriot Government has approved British Gas Group (BG) as a partner in the offshore Aphrodite (block 12) gas field.

Noble Energy has sold a 35% stake in the field to BG for $165m after an agreement was signed in November 2015.

The company will retain an additional 35% stake in the offshore field and serve as its operator.

Remaining partners in the field are Delek Group energy exploration and production units Avner Oil and Gas and Delek Drilling, which will each own 15%.

Υπογράφηκε διετής παράταση με την κοινοπραξία Eni/Kogas για τα ερευνητικά Τεμάχια 2, 3 και 9 στην ΑΟΖ της Κύπρου | Cyprus PIO

19/01/2016

Το Υπουργείο Ενέργειας, Εμπορίου, Βιομηχανίας και Τουρισμού ανακοινώνει ότι έχει υπογραφεί, μεταξύ της Κυπριακής Δημοκρατίας και της κοινοπραξίας Eni/Kogas, διετής παράταση της αρχικής περιόδου έρευνας για τα ερευνητικά Τεμάχια 2, 3 και 9, της Αποκλειστικής Οικονομικής Ζώνης (ΑΟΖ) της Κυπριακής Δημοκρατίας.

Η κοινοπραξία, η οποία διανύει την αρχική περίοδο της τριετούς Άδειας Έρευνας Υδρογονανθράκων που λήγει στις 23 Ιανουαρίου 2016, αιτήθηκε και έλαβε κατόπιν έγκρισης του Υπουργικού Συμβουλίου τη διετή παράταση και για τα τρία ερευνητικά Τεμάχια, στα οποία κατέχει τις Άδειες Έρευνας. Εντός του χρονοδιαγράμματος των επόμενων δύο χρόνων, η κοινοπραξία θα ολοκληρώσει μελέτες για την καλύτερη κατανόηση και αναθεώρηση του γεωλογικού μοντέλου της περιοχής, με σκοπό τον εντοπισμό στόχων προς υλοποίηση των γεωτρητικών της υποχρεώσεων.

How Bibi’s Gas Plan’ Will Ruin Israel’s Air Quality | Haaretz

Steinitz, left, with Netanyahu

Eytan Avriel Jan 19, 2016

The economy should undergo a conversion from filthy fossil fuels to clean, cheap, healthier gas. But that’s not going to happen.

As last week rolled to a close, oil tumbled, together with the globe’s stock markets, as people quaked at the thought of a Chinese economic meltdown, and also because of the crude being stockpiled in every available nook and cranny of the world.

As far as Israel is concerned, this situation has its good sides, and its bad sides. A global economic slowdown would hurt us too by weakening our exports. But a decrease in energy prices could only be a good thing because the gasoline and heating oil that Israel must import would cost less. Almost every manufacturing plant will be saving money.

British Gas get green light from Cyprus for exploration | Famagusta Gazette

CYPRUS, Monday, 18 January, 2016

A proposal put forward by Energy Minister Yiorgos Lakkotrypis before the Council of Ministers for participation of British Gas Group for the purpose of hydrocarbons exploration in block 12 within Cyprus` Exclusive Economic Zone (EEZ) has been approved.

The proposal stipulates that American owned Noble will continue to be the main operator in the block with a share of 35% while BG will also hold 35% and Israeli group Delek 30% (Delek Drilling has 15% and Anver Oik 15%.)

In statements after the Cabinet`s meeting Lakkotrypis said that in the coming days certain conditions put before the ministerial body will have to be implemented in order to go ahead with the final signature of the deal.

Survey Offshore Israel Finds Difficult Reserves | Natural Gas Europe

January 18th, 2016

Israeli explorers Isramco Negev and Modiin Energy reported January 17 that a survey by Netherland, Sewell pointed to a potential discovery of 8.9 trillion ft³ of gas in the Daniel Maarav, Daniel Misrah and other geological structures offshore Israel. The data included in the new survey is based on a 3-D seismic survey that was concluded last year and it said the probability of finding gas is 25%-50%, depending on the location. The potential deposit quantity is almost as big as the Tamar field but more challenging, technically and so it will be more expensive to produce.

Both licenses are in deep water, 85-115 km offshore Israel and at a depth of 1,000-1,350 meters.

Partners are Isramco Negev (65%), Modiin Energy (15%), Israel National Oil Company - Hanal (10%), US ATP – which is now in liquidation (5%) – and AGR Petroleum Services Holdings, a Norwegian services company (5%). Isramco also holds a 29% stake in Tamar.

U.S. interests in the Eastern Mediterranean: Geopolitics trump control of energy resources | Turkish Weekly

Matthew Bryza, January 18, 2016

The United States has important national interests at stake in the Eastern Mediterranean. This is the region where the U.S.’ two most serious national security threats converge – ISIS and a revanchist Russia. It is also where two of Washington’s most important allies, Turkey and Israel, once enjoyed a strategic partnership, which may now be rising again after collapsing 5 years ago. Additionally, while four decades of political conflict in Cyprus have aggravated tensions between NATO members Greece and Turkey and obstructed military cooperation between NATO and the EU, Cyprus settlement talks may be approaching a breakthrough. Finally, two of the world’s largest natural gas discoveries in the past 15 years are located in the Eastern Mediterranean: the Leviathan field in Israel and the Zohr field in Egypt.

Shell boss says BG deal is “sensible risk to take” | Energy Voice

Written by Erikka Askeland - 18/01/2016

Shell boss Ben van Beurden is optimistic that shareholders will overwhelmingly back its mega-merger with rival BG Group as investors mull the final case put out by both oil giants later this week.

The deal, worth £34 billion, is set to create the western world’s largest oil and gas company.

He said: “This deal makes sense if over the next 20-30 years the oil price is above the low $60s. At that level it is value accretive. I think that’s an entirely reasonable, sensible risk to take.”

Both Shell and BG Group will publish full year trading updates on Wednesday ahead of final shareholder votes which are due on 26 January.

FinMins meet on gas partnership | in-cyprus.com (Cyprus Weekly)

Kasoulides (right), Cypriot Foreign Minister, with his 
Jordanian counterpart, Nasser Judeh (left)

incyprus — 18/01/2016

The first tripartite meeting at ministerial level between Jordan, Greece and Cyprus is taking place in Brussels Monday afternoon.

The meeting of the three Foreign Ministers will prepare the ground for the next tripartite meeting between the leaders of the three countries.

Speaking on CyBC on Sunday, government spokesman Nicos Christodoulides said that apart from energy issues, the Foreign Ministers will also discuss the refugee crisis and troubles in the Middle East.

Isramco CEO: We are still far from declaring discovery | Globes

An ATP Oil & Gas acreage map that shows 
the Daniel East & Daniel West Fields

17/01/2016, Hedy Cohen

Eran Saar tried to cool enthusiam for the Daniel license saying, "This is not a discovery; it is only a report of potential resources."

Commenting on the dramatic announcement by Isramco Negev 2 LP (TASE: ISRA.L) and Modi'in of the resources report for the Daniel license indicating a potential natural gas reserve of 8.9 TCF in two blocs in the drilling license, Isramco CEO Eran Saar sought to cool excess enthusiasm and put matters in their proper proportion. "The findings are encouraging, and bring new hope to the oil and gas exploration sector in Israel, but we should not go overboard," Saar said. "In my humble opinion, there is no drama here for the gas industry in Israel. This is not a discovery; it is only a report of potential resources, and there is no assurance at this stage that anything will come of it. I also emphasize that it involves 10 different blocs in the area of two Daniel licenses, each of which requires separate exploration drilling with different risks and chances. The road to a discovery, if any occurs, is still a long one."

Five year plan for Egypt’s oil sector revealed | Energy Egypt - Daily News Egypt

JANUARY 17, 2016 / ENERGY EGYPT

During the previous fiscal year (FY) 2014/2015, the oil and gas demand increased by 0.5m tonnes to a total of 73m tonnes. The share of demanded oil was 38m tonnes, of which 36% was fuel oil, 36% was gas oil, 16% gasoline, and 11% LPG.

The Egyptian government has been taking several steps to manage the fuel shortage and ameliorate the investment environment for international foreign partners. In previous announcements, Minister of Petroleum Tarek El-Molla said the ministry is aiming to secure the local demand with reasonable prices. He introduced several measures through which the government can follow through on its goals. Daily News Egypt exclusively illustrates the Petroleum Ministry’s plan for energy security and financial sustainability and reviews the ministry’s prediction for the demand of oil and gas for the next five years.

UPDATE 1-Egypt to hold international tender for 11 oil and gas blocks | Reuters

Egypt Concession Map May 2015

Sun Jan 17, 2016

CAIRO Jan 17 (Reuters) - Egypt will hold an international tender for 11 oil and natural gas exploration blocks in the Mediterranean sea and Nile Delta during the second half of fiscal year 2015-2016, Khaled Abdel Badie, head of state-owned EGAS said in a statement on Sunday.

Egypt, which used to be a net energy exporter, has turned into a net importer over the past few years due to increased consumption and falling production.

It has been on a drive to lure foreign investors back to its energy sector, many of whom left due to growing arrears. Egypt currently owes about $3 billion to international oil companies.

Modiin Energy Shares Soar on Announcement of New Offshore Gas Find | Haaretz

Eran Azran and Reuters Jan 17, 2016 12:40 PM

The potential find, about 100 kilometers off the Mediterranean coast, is in a license area knows as Daniel East and West, where Isramco Negev and Modiin Energy are the two primary investors.

An Israeli exploration group reported on Sunday that it has discovered another large natural gas field off Israel's Mediterranean coast. The group, led by Isramco Negev and Modiin Energy, said that a resource report showed there could be an estimated total of 8.9 trillion cubic feet of natural gas at the Daniel East and West fields.

UPDATE 1-Israeli group finds signs of large east Mediterranean gas field | Reuters

Sun Jan 17, 2016 - UPDATE

By Ari Rabinovitch

Jan 17 An Israeli exploration group has discovered signs of another large natural gas field off Israel's coast, it said on Sunday.

A number of the world's biggest gas deposits have been found offshore Israel, Egypt and Cyprus in recent years, and oil and gas companies have been spending money to find more.

A group lead by Isramco Negev and Modiin Energy said a resource report showed there could be an estimated total of 8.9 trillion cubic feet (tcf) of natural gas at the Daniel East and West fields.