What is happening to Noble - IN CYPRUS / CYPRUS WEEKLY

August 12, 2017
Charles Ellinas

The news last week was that Noble Energy decided to move two of its senior staff from Cyprus to Israel. Some ‘political sources’ interpreted this to be the result of dissatisfaction with the way government is handling commercialisation of Aphrodite and in particular the inordinate delays and lack of progress.

Not unexpectedly, both the government and Noble denied this. However, there is no denying that commercial development of Aphrodite is now long overdue.

The development plan was originally submitted by Noble mid-2015. Following acquisition of 35% of Block 12 by BG, which in turn was acquired by Shell early 2016, the development plan was subsequently revised and resubmitted. Since then there has been no real progress and astonishingly approval of the plan has not yet been concluded.

Egyptian Company in Talks to Import Israeli Natural Gas Again - BICOM

August.11.17 10:35 am

Bloomberg reported Thursday that natural gas could be shipped from Israel to Egypt, via Jordan, in a deal being negotiated between Egyptian energy giant Dolphinius Holdings, Israel’s Delek, and US company Noble Energy.

Alla Arafa, co-founder of Dolpinius Holdings, told Bloomberg, “There is great potential for the Mediterranean to be a gas hub for the region and we want to be partners with Israel in this.”

The report follows significant developments this week in the natural gas industry in Egypt and Israel.

The Egyptian Government took a major step to end the state’s monopoly in the natural gas sector. President Abdel-Fattah al-Sisi signed a new law, called Resolution No. 196 of 2017 to establish a natural gas regulatory authority to open the gas market to competition from the private sector and license new providers. The law would allow the private sector to directly ship, transport, store, market and trade natural gas using the pipeline and network infrastructure, and will go into effect later this year. Egypt is one of two regional markets that could buy large quantities of gas from Israel’s Tamar and Leviathan gas fields.

Results from Block 11 will determine ENI’s next targets - CYPRUS MAIL

AUGUST 10TH, 2017

Italian energy giant ENI expects the results of exploratory drilling in Cyprus’ offshore Block 11, to determine its next drilling target within the island’s exclusive economic zone (EEZ).

Sources told Cyprus News Agency that ENI was preparing for two drillings, which should be completed by the first quarter of 2018, but the targets had not yet been determined. The company wants first to evaluate the results of drilling by Total /ENI Consortium in Block 11.

The company has applied to secure all permits for drilling for three blocks, 8, 6 and 3 which include an environmental study, the offshore protocol and a licence from the department of labour for the safety of the drilling.

Egypt lays gas-hub foundations - PETROLEUM ECONOMIST

10 August 2017
Gerald Butt

President Sisi has signed into law new gas-sector regulations expanding the role of the private sector

A casual reader of Egypt's Official Gazette mightn't find much in the way of excitement in Law 196 of 2017. But for anyone interested in the country's burgeoning natural gas sector it's hugely important.

In effect, Egypt is taking a giant step towards becoming the region's natural gas hub and putting itself beyond the reach of potential competitors like Cyprus and Turkey. The new law allows private-sector firms to use the state import and distribution infrastructure to trade in natural gas.

Leviathan Partners in Talks to Pipe Israeli Gas to Egypt Via Jordan - BLOOMBERG

August 10, 2017, 7:41 AM GMT+3
Yaacov Benmeleh, David Wainer, and Mohammad Tayseer

• Jordanian route would be more costly than going through Sinai
• Alternative path could circumvent Israel-Egypt dispute on fine

Egypt could be on its way to becoming a major market for Israeli gas. Companies developing Israel's biggest natural gas reservoir are said to be in talks to get around a dispute between the two governments by piping the gas through Jordan. Bloomberg's Yaacov Benmeleh reports on 'Bloomberg Markets: Middle East.' (VIDEO HERE)

Companies developing Israel’s largest natural gas reservoir are negotiating an alternative delivery route to key target market Egypt to skirt financial disputes that have held up an export deal, according to people in Egypt and Israel familiar with the matter.

Israel’s Delek Group Ltd. and Houston-based Noble Energy Inc., the major stakeholders in the Leviathan gas field, are in talks to sell about 3 billion cubic meters a year to Egypt’s Dolphinus Holdings Ltd., according to Dolphinus’s co-founder, Alaa Arafa.

ENI set to start hydrocarbon exploration in November - IN CYPRUS / CYPRUS WEEKLY

August 10, 2017

Italian energy giant ENI is expected to start three hydrocarbon exploratory wells in blocks three, six and eight in Cyprus’ Exclusive Economic Zone (EEZ) on November 1.

The well in block 6 is a joint venture with French energy concern TOTAL and is in an area hotly contested by Turkey.

In July, Turkey sent its exploratory vessel Barbaros to block six to conduct seismic tests.

Turkey claims half of block six and continues to deny that it (block 6) is under the sovereignty of the Cyprus Republic, arguing that Cyprus does not have its own EEZ.

Greece’s Energean secures gas sales contracts - IN CYPRUS / CYPRUS WEEKLY / REUTERS

August 9, 2017

Greek oil producer Energean has exceeded its target for gas sales contracts needed before it goes ahead with plans to tap two gas fields off Israel’s coast, market sources said on Wednesday.

Energean bought the Karish and Tanin fields, located in deep waters around 100 kilometres off Israel’s coast, last August for $148 million from U.S.-Israeli partners Delek Group and Noble Energy.

It plans to lease its own floating production, storage and offloading vessel and build a separate pipeline to Israel at a cost of up to $1.5 billion.

Energean had targeted gas sales contracts of 3 billion cubic metres annually before making a final investment decision and has so far secured 4.6 bcm a year, market sources said.

Egypt enacts law to allow private gas imports - GLOBES

9 Aug, 2017 12:33
Sonia Gorodeisky

Private Egyptian concerns can now negotiate directly with Israeli natural gas suppliers.

Another milestone has been reached on the road to exports of natural gas from Israel to Egypt. Egyptian President el-Sisi has signed a law allowing private concerns to import natural gas directly, rather than through the Egyptian Natural Gas Holding Company (EGAS), a government company, while using EGAS's existing infrastructure. The law, which has been discussed in Egypt since 2012, means that private players will be able to negotiate directly, making it possible to expedite natural gas deals with Egypt. Up until now, EGAS has been the sole importer of gas to Egypt, and has been marketing it to private concerns.

Market sources say that the law removes one of the barriers preventing implementation of a contract for exporting gas from Israel to Egypt.

WoodMac podcast (7:24): Egypt’s upstream renaissance - OFFSHORE ENERGY TODAY

August 9, 2017

Over the last few years there has been a resurgence in Egypt’s upstream sector boosted by several offshore gas discoveries, most notably the Zohr.

The Zohr, made by Eni in August 2015, is the largest gas discovery ever in the Mediterranean, and the first phase of production there is set to begin late in 2017, and by the time the full development is online, it will make the country a net energy exporter.

With all the gas from discoveries made by the likes of BP and Eni, Wood Mackenzie expects the country’s gas production to rise 80-90% from the lows seen in 2016.

Foreign oil firms' Egypt investments $8.1 bln in 2016-2017 -minister - REUTERS

AUGUST 9, 2017 / 10:02 AM

CAIRO, Aug 9 (Reuters) - Investment by foreign oil firms in Egypt rose to $8.1 billion in 2016-2017 from $6.6 billion a year earlier, Petroleum Minister Tarek El-Molla told Reuters on Wednesday.

"The foreign partners spent $8.1 billion in exploration and development operations in Egypt during 2016-2017, compared to $6.6 billion in 2015-2016," El-Molla said in a phone call.

The oil ministry said in June that Egypt had reduced arrears owed to foreign oil companies to $2.3 billion. Egypt's fiscal year runs from July to June.

Cairo has pledged to eliminate the arrears by June 2019 and not accumulate more, part of its drive to draw new foreign investment to an energy sector that is attracting interest after several major gas discoveries.

Platts: OPEC July hits 2017 high of 32.8mn bpd on Libya recovery - OIL REVIEW AFRICA

Wednesday, 09 August 2017 06:01

Libya's continued dramatic recovery from civil strife pushed OPEC's July output to yet another 2017 high, with the bloc producing 32.82mn bpd, according to the latest S&P Global Platts OPEC survey

Libya, exempted from OPEC production cuts that began January 1, averaged 990,000 bpd in July, up 180,000 bpd from June. Fellow exempt member Nigeria averaged 1.81mn bpd, a 30,000 bpd increase on the month, according to the survey. Not including Libya and Nigeria, compliance among OPEC's 12 members with quotas under the production cut agreement remains robust at 114 per cent, down slightly from 116 percent in June, based on an average of January through July output. That illustrates the challenge OPEC faces in rebalancing the market through its output deal, which also involves 10 non-OPEC producers, as the two exempt countries' recoveries, tenuous though they may be, threaten to undo a large portion of the group's collective cuts.

EGP float drives fuel subsidy spending up 135.3% y-o-y - ENTERPRISE

Wednesday, 9 August 2017

The EGP float has driven fuel subsidy costs up by 135.3% y-o-y, Oil Minister Tarek El Molla tells Reuters. 

Fuel subsidy costs increased to EGP 120 bn in FY 2016-17 from the EGP 51 bn spent in FY 2015-16. 

The government is projecting that spending on fuel subsidies will record EGP 110 bn in FY 2017-18.

Egypt Moves to End State Monopoly of Natural Gas Market - BLOOMBERG

August 8, 2017, 11:03 AM GMT+3
Salma El Wardany, Mirette Magdy and Tamim Elyan

• New gas market regulator to be set up to govern sector
• Private sector can participate in transport, distribution

Egypt is opening the door to private participation in its natural gas sector, moving to end the state’s monopoly as it pushes ahead with reforms meant to encourage investment and revive the economy.

The new law signed by President Abdel-Fattah El-Sisi sets up a natural gas regulatory authority charged with licensing and devising a plan to open the gas market to competition. It also allows for the eventual import of natural gas by private companies -- a move that could help end supply shortages that have hampered businesses.
The most important market news of the day.

Ofer cos to buy Energean gas for $6b - GLOBES

Idan Ofer

8 Aug, 2017 19:12
Sonia Gorodeisky

Israel Chemicals, Oil Refineries, and OPC Energy signed a 15-year deal to buy gas from Tanin and Karish.

OPC Energy, Oil Refineries Ltd. (TASE:ORL), and Israel Chemicals(TASE: ICL: NYSE: ICL), companies controlled by Idan Ofer, today notified the Tel Aviv Stock Exchange (TASE) that they had signed an agreement in principle to buy natural gas from the Karin and Tanin reservoirs owned by Greek company Energean. The agreement amounts to $6 billion over 15 years.

The three companies negotiated jointly in an attempt to obtain better terms. According to the report, OPC Energy will buy 9 BMC, Oil Refineries 17 BCM, and Israel Chemicals 23 BCM.

Dana Gas said to see creditors turn debtors as showdown deepens - THE NATIONAL / BLOOMBERG

 A Dana Gas gas facility in Egypt. Wam

August 8, 2017 06:58 PM

Gas producer says sukuk litigation may last more than 10 years

The standoff between Dana Gas and its bondholders took a fresh twist after the Middle Eastern energy explorer that’s trying to void US$700 million of its own debt was said to believe investors may even have to pay the company.

The Sharjah-based gas producer says that in one scenario the court battle with holders of the Islamic securities, or sukuk, may see it having to return less than 10 per cent of the amount it borrowed, according to a person familiar with Dana Gas’s own analysis. In a second scenario, it believes creditors may have to pay it as much as $150m, the person said, adding that the case may last more than 10 years.

Two Israeli natural gas fields to start pumping in 2020 - TIMES OF ISRAEL / AFP

Part of a platform being taken from the coast of Israel toward
the Tamar gas field (courtesy Noble Energy)

August 8, 2017, 5:11 pm

Energy minister says development of Karish and Tanin deposits will lead to increased competition, lower gas prices

The Energy Ministry officially presented its plan Tuesday for developing the Karish and Tanin natural gas fields, which sit alongside the larger Tamar and Leviathan deposits in Israel’s economic waters in the Mediterranean.

The development plan “shows [Israel’s ability] to keep to the schedule” of development,” Energy Minister Yuval Steinitz said in a statement. Once the new fields are operational, “competition will increase and prices… will fall.”

The plan calls for Karish, or “shark,” to be developed first, followed by Tanin, or “crocodile,” if there is sufficient demand in the Israeli market.

The Natural Gas Act is now law of the land - ENTERPRISE

Tuesday, 8 August 2017

Even if there’s pullback on electricity, the state took a clear step forward yesterday to deregulate the natural gas industry. President Abdel Fattah El Sisi signed into law the long-awaited Natural Gas Act, the drafting of which wrapped back in October 2015. The Act, published in Monday’s issue of the Official Gazette, will see the state become the primary regulator of the industry, but allow the private sector to directly trade gas using the pipeline and network infrastructure. The law will establish a state regulator that would have a say in pricing gas, set up the rules of the system, encourage investment in the sector, and ensure equal access by private sector players to the national gas infrastructure. The regulator will also be tasked with drawing up the timeline for privatization. Five primary industry roles are now open to the private sector: Pipeline operator, distributor, storage provider, gas shipper, and importer. Pipeline operators and distributors can set their own pipeline utilization fees. You can tap here for a refresher on other key points of the legislation, including definitions of the various roles open to private-sector players.

Libya's largest oil field "back to normal" after disruption - WORLD OIL / BLOOMBERG

AUG/7/2017

By SALMA EL WARDANY AND SALEH SARRAR 

CAIRO and DUBAI (Bloomberg) -- Libya’s biggest oil field Sharara is “back to normal” after a disruption caused by protests, the country’s National Oil Corp. said.

Pumping was interrupted for “hours” due to armed protesters shutting some facilities, the NOC said Monday in a statement. NOC didn’t give an updated figure on production at the field or explain what caused the protests or who they represent. The field in western Libya was producing 275,000 bpd as of July 12, a person with knowledge of the situation said at the time.

Sharara, operated by a joint venture between Libya’s state producer and Repsol SA, Total SA, OMV AG and Statoil ASA, has witnessed several brief shut downs caused by different groups. The field was closed for two days in June due to a protest by workers at the field.

Bahr Essalam, Zohr development phases nearing completion - OFFSHORE MAGAZINE

AUG/07/2017

TRIPOLI, Libya – Eni CEO Claudio Descalzi has held talks with two North African leaders concerning major ongoing offshore development projects.

In Tripoli, Descalzi met Fayez al-Sarraj, Head of the Presidential Council of the Libyan government of National Accord, and the president of the state oil company Mustafa Sanalla.

High on the agenda was the second phase of development of the Bahr Essalam field, one of Libya’s largest offshore reservoirs and a source of gas supply for the Greenstream trunkline in the Mediterranean Sea.

Nine of the 10 offshore wells have been drilled, and Eni anticipates first gas in 2018.

ENPPI Petroleum to launch IPO on EGX in 2018 - MUBASHER

07 August 2017 04:18 PM
Ahmed Alam / Translation: Mai Ezz El-Din

Cairo – Mubasher: ENPPI Petroleum will launch an initial public offering (IPO) on the Egyptian Exchange (EGX) during the first quarter of 2018, Egypt’s minister of investment and international cooperation Sahar Nasr said.

Nasr agreed with the new EGX’s board on establishing new programmes to innovate new mechanisms for the EGX to speed up the implementation process of the governmental IPOs, she added.

Vice chairman of the EGX Mohsen Adel expects seeing between three and five medium-sized and large initial public offerings (IPOs) before the end of the current year.

Greece launches new offshore oil and gas tenders - IN CYPRUS / CYPRUS WEEKLY / REUTERS

August 7, 2017

Greece launched two tenders on Monday for offshore oil and gas exploration and exploitation in the west and south of the country, the energy ministry said.

The move follows expressions of interest by a consortium of Total, Exxon Mobil and Hellenic Petroleum for exploration in two sites off the island of Crete, and by Greece’s Energean for a block in the Ionian Sea in western Greece.

Investors will have 90 days to submit offers to the Hellenic Hydrocarbons Resources Management (HHRM) from when the announcement is published in the European Union’s official gazette.

Greece has launched a program to discover more oil and gas, encouraged by recent large gas finds off Israel and Cyprus and spurred on by its protracted financial crisis.

Libya's Sharara oil field gradually shutting down: engineer - REUTERS

A general view of the El Sharara oilfield, Libya December 3, 2014.
Photo by Ismail Zitouny

AUGUST 7, 2017 / 4:37 AM

TRIPOLI (Reuters) - Libya's Sharara oilfield, which has been producing 270,000 barrels a day (bpd), is gradually shutting down after the closure of a control room in the northern city of Zawiya, an engineer at the field said late on Sunday.

The engineer did not give details of why the control room had closed but posts by oil workers on Facebook said it had been stormed by an armed group.

Libya has been exempted from an OPEC-led push to cut global production and bolster oil prices and the recovery of the North African country's output over the past year has complicated the bloc's efforts to curb global supply.

Power Plants Consume 26,000 tons of Mazut Daily - DAILY NEWS EGYPT / AMWAL AL GHAD

Shoubra El-Kheima power station

Sunday, 6th August 2017

Egypt’s electricity-generating power plants consume 26,000 tons of mazut per day in addition to natural gas, reports Amwal Al Ghad.

During the summer peak, mazut consumption can exceed 30,000 tons per day, Abed Ezz El Regal, Head of the Egyptian General Petroleum Corporation (EGPC), told Amwal Al Ghad, adding that Egyptian refineries possess the capacity to cover most of the local market’s demands for mazut.

Egypt will not need to import additional mazut due to the volume of natural gas that it has secured.

The oil and gas sector is committed to securing the plants’ needs for natural gas and mazut, especially during peak periods of consumption caused by high temperatures, noted Ezz El Regal.