PetroTal Seeks Exploration Partner for the Osheki Prospect in Peru

(Energy Analytics Institute, Aaron Simonsky, 13.Sep.2018) — PetroTal Corp. is seeking joint venture partners to drill the first exploration well by the fourth quarter 2019 or early 2020.

“We are currently engaging potential joint venture partners to drill the exploration prospect and expect the full data room to be open as soon as September 15, 2018,” reported PetroTal in an official statement, citing its Vice President of Asset Development Chuck Fetzner.

The announcement from the company comes after it reported an independent evaluation of the prospective resources with respect to the Osheki prospect in Block 107, located in the Ucayali Basin of eastern Peru. Drilling permits for the prospect have already been approved.

Calgary-based PetroTal id focused on developing and exploiting the Bretaña oil field, as well as evaluating the Osheki prospect in Block 107, which could provide significant growth for the company.

Osheki Resource Upgrade

Based on an independent assessment completed by Netherland Sewell & Associates, Inc. (NSAI), with an effective date of June 30, the Osheki prospect is estimated to have 534 million barrels (MMbbls) of mean prospective recoverable resources. This estimate is based on a recovery factor of 30 percent of the estimated 1.78 billion barrels of mean prospective original oil in place (OOIP), using maps generated from seismic acquired in 2007 and 2014. The mean risked prospective resources figure for the Osheki prospect is 85 MMbbls.

“Today’s increase in prospective resources at Osheki is a milestone in the development of our asset portfolio in Peru. It firmly endorses the quality of the Osheki prospect, which also contains further potential material upside from additional leads in Block 107,” said PetroTal President and Chief Executive Officer Manolo Zuniga in the company statement.

 

He continued: “This important development follows the Bretaña oil field successfully coming online ahead of schedule in June, with the remaining long-term testing equipment installation on schedule to allow us to increase production from the current ~1,000 bopd to over 2,000 bopd by the end of October. Bretaña has a clear path to increasing production to above 10,000 barrels of oil per day by 2020.”

The prospect was de-risked with a new 3D geologic model supporting Cretaceous age reservoirs with high quality Permian source rocks. Block 107 has four additional leads that, with Osheki, could contain a total of 4.58 billion barrels of recoverable resource in the high estimate case.

“In a report commissioned prior to PetroTal taking on the assets, it was estimated there was 313 MMbbls of mean recoverable prospective resource for the Osheki prospect. In NSAI’s June 30, 2018 report, the estimate has increased by more than 60 percent. When we combined the two seismic programs we were able to see closure in as many as three different horizons. The Osheki prospect is a sub-thrust play similar to the Cusiana complex in the Llanos Foothills of Colombia,” concluded Fetzner.

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IEA Warns of Higher Oil Prices as Iran and Venezuela Losses Deepen

(Bloomberg, Grant Smith. 13.Sep.2018) — The International Energy Agency warned that oil prices could break out above $80 a barrel unless other producers act to offset deepening supply losses in Iran and Venezuela.

Iranian crude exports have fallen significantly before U.S. sanctions even take effect, the IEA said in a monthly report. The Middle Eastern nation will face further pressure in coming months and the economic crisis in Venezuela is pushing output there to the lowest in decades. It’s uncertain whether Saudi Arabia and other producers will fill any shortfall, or how far they’re able to, the agency said.

“Things are tightening up,” said the Paris-based IEA, which advises most major economies on energy policy. “If Venezuelan and Iranian exports do continue to fall, markets could tighten and oil prices could rise” unless there are offsetting production increases elsewhere, it said.

Oil climbed to a three-month high above $80 a barrel in London on Wednesday as fears of a supply crunch eclipsed concern about the risks to demand such as the U.S.-China trade dispute. While the Organization of Petroleum Exporting Countries and allies including Russia pledged to boost supply, the IEA said it remains to be seen how much will be delivered.

Saudi Arabia lifted output by 70,000 barrels a day to 10.42 million last month, but that remains “some distance from the 11 million barrels a day level that Saudi officials initially suggested was on the way,” the IEA said.

While the agency warned that “there is a risk to the 2019 outlook” for demand from challenges in emerging markets such as currency depreciation and trade disputes, it kept forecasts for consumption unchanged.

In the meantime, supply risks dominate. Oil inventories in developed economies are already below-average and will decline further in the fourth quarter, the IEA predicted.

Venezuela, which is pumping at just half the rate it managed in early 2016, could see its output slump another 19 percent to 1 million barrels a day this year as infrastructure deteriorates and workers flee, the agency predicted.

Iranian production has already fallen to the lowest since July 2016, at 3.63 million barrels a day, as buyers retreat ahead of U.S. sanctions that come into force on Nov. 4.

Although Russia, Saudi Arabia and other Gulf members of OPEC promised to bolster production by about 1 million barrels a day, the IEA remained cautious on whether the full amount would be delivered. It’s unclear how quickly OPEC’s spare capacity, which stands at about 2.7 million barrels a day, can be activated, it said.

“We are entering a very crucial period for the oil market,” which could push prices out of the $70-to-$80 a barrel range seen in the past few months, the IEA said.

To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net. To contact the editors responsible for this story: James Herron at jherron9@bloomberg.net Rachel Graham.

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U.S. Company Manager Pleads Guilty in PDVSA Bribery Scheme

(Reuters, 13.Sep.2018) — A former manager of a U.S.-based logistics company pleaded guilty on Thursday to paying bribes to secure contracts from Venezuela’s state oil company PDVSA, and the guilty plea of the official who was bribed was also unsealed, the U.S. Justice Department said.

Juan Carlos Castillo Rincon, 55, pleaded guilty in federal court in Houston to conspiring to violate the Foreign Corrupt Practices Act, the Justice Department said in a statement.

Judge Nancy K. Johnson also unsealed the guilty plea of Petróleos de Venezuela, S.A. (PDVSA) official Jose Orlando Camacho, 46, whom Castillo had bribed, it said.

Camacho had pleaded under seal to conspiracy to commit money laundering in July 2017, the statement said. It referred to Camacho as a “foreign official” but did not specify the position he held in the company, Petroleos de Venezuela.

Fourteen people have now pleaded guilty as part of an investigation by the Justice Department into bribery at PDVSA that became public with the arrest of two Venezuelan businessmen in December 2015.

Castillo, of Conroe, Texas, was arrested in Miami in April after he was indicted by a grand jury, the statement said.

A manager at a Houston-based logistics and freight forwarding company, Castillo admitted to conspiring with others to bribe Camacho from 2011 through at least 2013 in exchange for help in obtaining contracts and inside information about the company’s bidding process.

The Justice Department said that Camacho, of Miami, admitted as part of his plea deal to accepting bribes from Castillo and the company he worked for, as well as conspiring with him to launder proceeds of the scheme.

Castillo and Camacho have agreed to forfeit the proceeds from their criminal activity, and both are scheduled to be sentenced on Feb. 21, the Justice Department said.

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France’s Total Enters Orinduik Block Offshore Guyana

(OffshoreEnergyToday, 13.Sep.2018) — French oil major Total has exercised its option to acquire a 25 percent working interest in the Orinduik block offshore Guyana after a competent persons report identified potential for almost three billion barrels of oil equivalent.

Eco Atlantic, a partner in the Tullow-operated Orinduik block, said on Thursday that Total E&P Activités Pétrolières, a wholly-owned subsidiary of Total, exercised its option to acquire a 25% working interest in the block from Eco Atlantic.

Total decided to exercise the option following a competent persons report (CPR) announced on Tuesday. According to the CPR, the Orinduik block could potentially hold 2,9 billion barrels of oil equivalent of P50 (best estimate) reserves identified across a total of 10 leads.

Eco added that the option was exercised before delivery of the final 3D seismic data due to be delivered to Total, which would have triggered a 120-day exercise window for the option.

The option does not effect Tullow which will remain the operator and hold down its 60 percent of working interest. Following the option exercise and the receipt of all requisite regulatory approvals, Total will hold 25 percent while Eco’s interest will decrease from 40 to 15 percent.

In accordance with the terms of the option, Total will pay a fee of $12.5m to the company on receipt of all requisite approvals for the transfer of the 25 percent interest. Eco added that the payment would provide adequate funding to meet Eco’s share of the costs to drill at least two wells on the block as well as recover the costs of the completed 3D seismic survey.

Gil Holzman, CEO of Eco, said: “We are absolutely delighted that Total, one of the world’s largest oil companies, has so quickly chosen to exercise its option to acquire a 25 percent stake in our Orinduik Block to gain further exposure to offshore Guyana, currently one of the most exciting exploration areas globally.

“With Tullow as operator and the technical contribution that both Total and Eco now bring to the project, we look forward to working with these two world-class players in further progressing the exciting exploration of the Orinduik Block.”

Colin Kinley, COO of Eco, added: “Total entering the blocks four months earlier than anticipated is welcomed as they add significant technical horsepower to the interpretation and now bring them into the planning for drilling. Tullow announced last week drilling is anticipated early the third quarter of 2019.”

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