Petrobras Sees No Fuel Supply Shortage After Replan Fire

(Reuters, 20.Aug.2018) – A director at Brazilian state-run oil company Petroleo Brasileiro SA said on Monday a fire at the company’s largest refinery Replan, in the state of São Paulo, is not expected to compromise fuel supplies in the short run.

Jorge Celestino Ramos, the company’s refining and natural gas director, said fuel supplies are guaranteed for 15 days as other refineries may compensate any shortfall at Replan, where production remains halted since the early hours of the day.

(Reporting by Rodrigo Viga Gaier Writing by Ana Mano Editing by Chizu Nomiyama)

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New Fortress to Build $184 Mln LNG Terminal in BCS

(MexicoNow, 20.Aug.2018) – U.S. energy infrastructure developer New Fortress Energy (NFE) announced that it was awarded a long-term contract for the development, construction and operation of a terminal dedicated to the import of liquefied natural gas (LNG) in the port of Pichilingue, Baja California Sur.

This contract was the result of offering the best proposal in the public tender carried out by the Port Authority of Baja California Sur (APIBCS), which awarded the project to NFE on July 19. The project will represent private investment of $184 million could start up in 2020.

The terminal will introduce a natural gas supply to Baja California Sur for the first time, allowing power plants to lower the energy cost by up to 30%, which will greatly benefit the hotel sector, one of the main industries of the state.

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Major Petroleum Cos. Pay T&T $114.7 Bln during 2010-2016

(Energy Analytics Institute, Aaron Simonsky, 20.Aug.2018) – Payments by major oil and gas companies to the government of the twin-island nation of Trinidad and Tobago totaled $114.7 billion during 2010-2016.

That’s according to figures posted by Strategic Energy Advisor Kevin Ramnarine, who is also the Former Energy Minster of Trinidad and Tobago.

Ramnarine provided the data in a post on LinkedIn.

The payment amounts by major companies to the Trinidad and Tobago government by company follow:

1) BP, $37.1 bln

2) NGC, $32.3 bln

3) Petrotrin, $20.3 bln

4) EOG Resources, $10.6 bln

5) Shell, $8.9 bln

6) BHP, $5.5 bln

TOTAL $114.7 bln

Sources: Various @TTEITI Secretariat, Anthony Wilson and Trinidad Express Newspapers

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Venezuela Agrees to Pay $2 Bln Over Seizure of Oil Projects

(The New York Times, Clifford Krauss, 20.Aug.2018) – More than a decade ago, Venezuela seized several oil projects from the American oil company ConocoPhillips without compensation. Now, under pressure after ConocoPhillips carried out its own seizures, the Venezuelans are going to make amends.

ConocoPhillips announced on Monday that the state oil company, Petróleos de Venezuela, or Pdvsa, had agreed to a $2 billion judgment handed down by an International Chamber of Commerce tribunal that arbitrated the dispute. Pdvsa will be allowed to pay over nearly five years, but as it is nearly bankrupt, even those terms may be hard to meet.

After winning the arbitration ruling in April, ConocoPhillips seized Pdvsa oil inventories, cargoes and terminals on several Dutch Caribbean islands. The move seriously hampered Venezuela’s efforts to export oil to the United States and Asia, and emboldened other creditors to seek financial retribution.

“What they did was choke the exports and made it clear to Pdvsa that the cost of not coming to an agreement would be higher than actually settling on a payment schedule,” said Francisco J. Monaldi, a Venezuelan oil expert at Rice University.

As its oil production has plummeted to the lowest levels in decades, Venezuela has fallen behind on more than $6 billion in bond payments. Pdvsa has already defaulted on more than $2 billion in bonds after failing to make interest payments over the last year, and owes billions of dollars more to service companies.

Adding to Venezuela’s woes, the Trump administration has imposed sanctions that prohibit the purchase and sale of Venezuelan government debt, including bonds issued by the state oil company.

Mr. Monaldi said Pdvsa would be forced to pay ConocoPhillips with money it would have paid other creditors and would probably delay some oil shipments to China it owes in separate loan agreements. He added that “there is not a negligible probability” that at some point it will discontinue payments for lack of money.

Hyperinflation, corruption and growing starvation have crippled the Venezuelan economy, as the socialist government is forced to choose between buying food and medicine and satisfying the demands of creditors. Over the last few days, the government has scrambled to deal with its economic crisis by sharply devaluing its currency, raising wages and promising to shave energy subsidies.

Venezuela has the largest oil reserves in the world. Its crisis has tightened global oil markets at a time when threatened United States oil sanctions against Iran could drive up prices.

The settlement with ConocoPhillips over the 2007 seizure resolves a drawn-out legal struggle, at least for the time being.

“As a result of the settlement, ConocoPhillips has agreed to suspend its legal enforcement actions of the I.C.C. award, including in the Dutch Caribbean,” ConocoPhillips said in a statement.

Pdvsa, which did not comment on the agreement, is to pay the first $500 million within 90 days.

ConocoPhillips is pursuing a separate arbitration case over the same seizure against the government of Venezuela before the World Bank’s International Center for Settlement of Investment Disputes, which could result in another large settlement award, perhaps as high as $6 billion.

That amount would probably be unpayable, experts say, but it could put ConocoPhillips in a strong position to obtain access to Venezuelan oil fields in the future if the current government eventually falls.

Pdvsa’s problems with creditors are far-reaching, putting its American Citgo assets, including three large refineries and a pipeline network, in jeopardy. A federal judge in Delaware recently ruled that Crystallex, a Canadian gold mining company, could seize over $1 billion in shares of Citgo as compensation for a 2008 nationalization of a mining operation in Venezuela.

Citgo is appealing. If it loses, that may open the way for more claims on Citgo assets by companies whose investments have been expropriated in Venezuela, including Exxon Mobil.

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Oceaneering Subsidiary Secures Contract with Petrobras

(Oceaneering International, Inc., 20.Aug.2018) – Marine Production Systems do Brasil Ltda., one of Oceaneering International, Inc.’s wholly owned subsidiaries, has secured a four-year contract with a one-year optional extension period from Petróleo Brasileiro S.A. (Petrobras) in Brazil.

“We are excited by this Petrobras award and the opportunity to expand our portfolio of service and product offerings in the growing Brazilian market,” announced Oceaneering President and Chief Executive Officer Roderick A. Larson in an official statement released by the company.

The contract will support intervention and completion operations in Brazil, announced Oceaneering in an official statement.

Under the terms of the contract, Oceaneering will supply and operate three drill pipe riser (DPR) systems with installation workover control systems, or IWOCS, along with project management, engineering and support services. The company plans to manufacture the associated umbilicals for the DPR systems at its facility in Niteroi, Brazil. Oceaneering will start constructing and building the assets in the third quarter of 2018, and expects work under the contract to commence in the third quarter of 2019. The contract value is expected to exceed $50 million in revenue during the initial four-year period.

“We look forward to supporting Petrobras in connection with this and future projects,” said Larson.

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GeoPark Announces New Jauke Gas Field Discovery in Chile

(GeoPark, 20.Aug.2018) — GeoPark Limited announced the successful drilling and testing of the Jauke 1 exploration well in the Fell block (GeoPark operated, 100% WI) in Chile.

“This discovery illustrates the hydrocarbon-generating capacity of GeoPark’s unique Latin American multi-country platform,” said GeoPark Chief Executive Officer James F. Park.

GeoPark drilled and completed the Jauke 1 exploration well to a total depth of 9,592 feet. A production test through different chokes in the Springhill formation resulted in an average production rate of 5.8 mil lion standard cubic feet per day of gas (or 970 boepd) with a wellhead pressure of 2,738 pounds per square inch.

Additional production history is required to determine stabilized flow rates of the well and the extent of the reservoir. Surface facilities are in place, the well is in production, and the gas is being sold to Methanex through a long term gas contract. Drilling and completion costs are estimated at $3.4 million, and at current gas prices and testing rates, this well is expected to have a payback period of 6-7 months.

The Jauke gas field is part of the large Dicky geological structure in the Fell block – and has the potential for multiple development drilling opportunities. Petrophysical analysis also indicates hydrocarbon potential in the shallower El Salto formation which will be tested i n the future. The Jauke exploration effort is part of GeoPark’s 2018 overall 40-45 well drilling program in Colombia, Argentina, Brazil, and Chile – with five drilling rigs currently in operation.

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Pemex Advances Digital Changes to Boost Competition

(Pemex, 20.Aug.2018) – Pemex commenced its Digital Week, so personnel could be trained with the new technological tools developed by the Corporate Department of Informational Technology (DCTI) to improve work strategies, as they are integrated through all the areas to become more efficient in the state-owned petroleum company.

At the event in the Administrative Center, the CEO Carlos Treviño Medina stated that the company initiated a complex plan to modernize the digital project as the most ambitious transformation in all Latin America, in comparison to other petroleum companies worldwide.

He affirmed that Internet, Big Data, and Advanced Analytics are resources that can be utilized in the firm to compete successfully in the open hydrocarbons market. The complex project, he declared, will allow predictive analysis of failures to be obtained to prevent power shortages and to predict the performance of the well during exploration.

Mr. Treviño Medina disclosed the ongoing plan of migrating 10 data stations all into a cloud and that in the last recent months, Office 365 has been made available to 60,000 employees for the adoption of a digital office in addition to amplifying the broadband connection.

¨Beyond personal ambition, the digital technologies are also of great importance in our business and we should take advantage of them to become more competitive in the global market. Pemex Digital is an effort of the entire company where the participation of everyone makes a difference¨, he commented.

He emphasized the work developed by the DCTI to improve the digital strategy and reinforce cyber security that has stopped online cyberattacks that intentionally weakened the company´s systems.

For its part, the head of the DCTI, Rodrigo Becerra Mizuno, assured that every company should introduce a digital transformation to be ahead of its competitors. Pemex, he stated, has entered a new digital era to become more profitable, increase production, reduce costs, and add security.

In the framework of the event, the general secretary of the Petroleum Union, Carlos Romero Deschamps, stated that Pemex has been, throughout history, a great pillar of economic stability, therefore the company is obligated to integrate all policies and resources towards enhancing its efficiency and competitiveness.

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