Petrofac Completes Sale Of 49% Interest In Mexican Operations

(Petrofac Limited, 19.Oct.2018) — Petrofac Limited announces that it has completed the sale of 49% of the company’s operations in Mexico to Perenco (Oil & Gas) International Limited, following approval from the Federal Competition Commission of Mexico (COFECE).

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Petrofac Introduces Partner In Mexico

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Maurel & Prom Confirms Discussions With Shell Over Urdaneta West Field In Venezuela

(Maurel & Prom, 12.Oct.2018) — Etablissements Maurel & Prom notes recent press articles and confirms it is working on the acquisition of Shell Exploration and Production Investments B.V.’s 40% interest as “Shareholder B” in Petroregional del Lago Mixed Company, which operates the Urdaneta West field in Lake Maracaibo, Venezuela.

Maurel & Prom Venezuela, subsidiary of Maurel & Prom, has signed a Share Sale and Purchase Agreement (the “SSPA”) with Shell. Under the SSPA terms, the consideration for the acquisition of Shell’s shares in the mixed company is c.€70 million, funded from Maurel & Prom’s existing cash resources.

Petróleos de Venezuela S.A. (PDVSA), wholly owned subsidiaries Corporación Venezolana del Petróleo (CVP) and PDVSA Social (PDVSAS) collectively referred to as “Shareholder A”, jointly own the remaining 60% stake of the mixed company.

The field is currently producing around 16,000 barrels of oil per day on a 100% basis (6,400 barrels of oil per day net to Shareholder B’s 40% interest). The asset offers significant optionality through the development of additional reserves, and the possible extension of the licence duration beyond 2026 (the current licence limit).

The closing of this acquisition remains subject to a number of conditions, amongst others the obtaining of the required governmental approvals, and the finalisation of the negotiations with PDVSA and its subsidiaries (CVP and PDVSAS) on the implementation and the funding of a redevelopment plan to increase the production of the Field, which should be partly funded by operating cash flow, and partly with Maurel & Prom Venezuela’s funds up to an amount of c.€350 million over the period 2018-2023. Maurel & Prom Venezuela’s commitment to provide the project funding is subject to the fulfilment of several conditions, including the progressive reimbursement to Maurel & Prom Venezuela of the portions of project funding attributable to Shareholder A.

Maurel & Prom takes all the necessary steps and actively works on meeting all condition precedents in order to close the acquisition. A further announcement will be made in due course.

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Energy Analytics Institute (EAI): #LatAmNRG

IEA Urges Opec to Open Taps as Oil Markets Enter ‘Red Zone’

(Bloomberg, Javier Blas, Grant Smith & Francine Lacqua, 9.Oct.2018) — Oil prices have rallied to a four-year-high due to US sanctions on Iran and the Venezuelan crisis, even as Saudi Arabia moved slow on filling any shortfall.

The International Energy Agency (IEA) made a direct appeal to Organization of the Petroleum Exporting Countries (Opec) and other major oil producers to boost output, warning that high prices are inflicting damage on the global economy.

“We should all see the risky situation, the oil markets are entering the red zone,” IEA executive director Fatih Birol said in an interview on Tuesday. “Expensive energy is back at a bad time, when the global economy is losing momentum. We really need more oil.”

Oil prices rallied to a four-year high above $85 a barrel in London earlier this month on concern that US sanctions on Iranian crude, along with chronic supply losses in Venezuela, could lead to a shortage. Traders are also worried that Saudi Arabia, the biggest member of the Opec, isn’t acting quickly enough—or may lack the capacity—to fill any shortfall.

Prices were boosted further on Tuesday by storm Michael, which shut some oil fields in the Gulf of Mexico and threatened to hit the Florida panhandle as a major hurricane. West Texas Intermediate futures advanced 0.6% to $74.71 a barrel on the New York Mercantile exchange at 8:34am local time.

Hurting demand

Emerging economies, most notably India, are bearing the brunt of the increase in energy prices, which comes when they’re already contending with currency depreciation and the fall-out from trade disputes, Birol said. With the drop in the rupee, Indian consumers are effectively paying as if oil were $100 a barrel.

“If there are no major moves from the key producers, the fourth quarter of this year is very, very challenging,” Birol said. “Demand is still very strong and we’ve been losing oil from Venezuela in big amounts, and also Iran is going down.”

Venezuela’s oil production is in “free-fall” as an economic crisis takes its toll on infrastructure and workers, and could slump below 1 million barrels a day “very soon,” Birol said. The Paris-based IEA advises most major economies on energy policy.

Iran’s exports have dropped faster than most in the industry expected, with many major buyers halting purchases even before US sanctions are enforced in November. To fill that gap and cool the price rally, Saudi Arabia has bolstered production to near record levels, pumping 10.7 million barrels of crude a day.

While the kingdom has repeatedly said it will do whatever is necessary to avert a shortage, at an Opec meeting last month it signalled it would only open the taps once it’s clear more crude is needed. As Saudi output nears unprecedented levels, it’s uncertain how much more supply the country can deliver.

The Saudis are able to increase further and reach 11 million a day, Birol said, adding that he’s fully confident the kingdom will act responsibly. The IEA isn’t currently considering the use of its emergency oil reserves, he added.

“We should try to comfort the markets all together,” Birol said. “It may be bad news for the consumers, importers today, but I believe it may well be bad news for the producers tomorrow.”

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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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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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Tullow Oil to Drill First Guyana Well in 3Q:19

(Reuters, 5.Sep.2018) — Tullow Oil plans to drill its first well in the much-watched Guyana offshore basin in the third quarter of next year in its Orinduik licence bordering discoveries by Exxon, a spokesman said on Wednesday.

Exxon and U.S. partner Hess Corp have said that more than 4 billion barrels of oil equivalent could be recovered from the Stabroek block off Guyana, which is part of one of the world’s biggest oil discoveries in the past decade.

Tullow owns 60 percent and Eco Atlantic Oil and Gas 40 percent in Orinduik. Total has an option to buy 25 percent from Eco.

“Hammerhead-1 is located approximately 7 km from the Orinduik licence boundary … Hammerhead-1 found material oil in turbidite channel systems,” the Tullow spokesman said of a recent Exxon discovery in the Stabroek block.

“Our 3D seismic (data), which includes Hammerhead, shows that these channel systems extend up-dip (?) into the Orinduik licence. We will now pick the well location for our first well on this licence and remain on track for drilling that well in the third quarter of 2019.”

Tullow also has a 37.5 percent stake in the Kanuku licence offshore Guyana alongside Repsol and Total. It also owns stakes in two blocks off Guyana’s neighbour Suriname, where its partners are Ratio, Equinor and Noble.

(Reporting by Shadia Nasralla; Editing by David Goodman and Mark Potter)

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Panama, US To Sign Pact To Expand Access To LNG

(Reuters, David Lawder, 17.Aug.2018) – Panama on Friday will sign an agreement with the U.S. Treasury and Energy departments aimed at paving the way for more private investment to expand the importation and distribution of U.S. liquefied natural gas in Latin America.

David Malpass, Treasury undersecretary for international affairs, said he hopes the “framework agreement” is the first of several with countries in the region to encourage investment to increase access to cheaper, cleaner energy.

The agreement is part of a Treasury-led initiative called America Crece, incorporating the Spanish word for growth, aimed at boosting U.S. LNG exports, developing Latin American energy resources and downstream demand.

Malpass is in Panama for the signing and the inauguration of a major new LNG terminal and 381-megawatt gas-fired power plant in Colon, Panama, run by U.S. power company AES Corp.

He said in an interview that new investments encouraged by the agreement will help turn the AES Colon project into an LNG distribution hub, with cargoes imported from the United States sent to other countries in the region, including Guatemala, Honduras, Nicaragua.

These countries and many Caribbean islands now rely largely on oil to generate electricity, with Venezuela a major supplier.

In 2017, French utility Engie and AES established a joint venture to market and sell LNG to third parties in Central America using the Panama terminal as a distribution hub.

The $1.15 billion AES facility on Panama’s Caribbean coast, which is expected to begin commercial generating operations on Sept 1, and LNG tank distribution operations in 2019, took in its first U.S. LNG cargo in June.

The Panama agreement allows for the U.S. agencies to help address regulatory and other barriers to investment, Malpass said, which can create opportunities for downstream demand and distribution.

“The framework agreement itself squarely addresses the obstacles that the private sector may be finding in that country,” Malpass said. In the case of Panama, he added, the framework agreement with the United States is a signal from Panama to the world that it welcomes investment, in particular private sector funding of projects.

The agreement also aims to encourage increased electrical grid access in rural areas of Panama and Central America and adoption of new technologies such as battery storage to improve reliability and foster economic development, he said.

(Reporting by David Lawder; Editing by Steve Orlofsky)

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Jusepin Oil Region in Venezuela: 45 Seconds of Fame

(Energy Analytics Institute, Piero Stewart, 17.Aug.2018) – Venezuelan opposition leader Maria Corina Machado tours the Jusepin petroleum region in Venezuela.

Jusepin is just one of many petroleum-rich areas in Venezuela, the country with the world’s largest oil reserves.

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PdV, Joint Ventures Miss Oil Targets

(Argus, 9.Aug.2018) – Venezuela’s state-owned PdV and its joint ventures fell short of officially targeted crude production by more than 125,000 b/d in July, according to an internal PdV upstream report obtained by Argus.

The steepest shortfalls were registered in the Orinoco heavy oil belt — long touted by the Opec country as the driver of ambitious growth plans — and PdV’s western division around Lake Maracaibo.

The monthly report indicates that July production averaged 1,526,600 b/d, compared with a target of 1,651,700 b/d, with operations by PdV and its joint ventures both explicitly missing their targets.

The report data does not include annual or monthly comparisons. Venezuela’s official June production, according to Opec’s latest Monthly Oil Market Report, was 1.531mn b/d. The average of secondary sources, including Argus, was 1.340mn b/d.

PdV officials tell Argus that the production data in the monthly internal report are systematically inflated, mainly by the company’s eastern and western divisions. “They play with the storage tanks and what they report is not reality,” one senior executive says. Actual July national production was around 1.25mn b/d, the officials say.

Despite its shortcomings, the report sheds light on field-by-field and divisional performance trends, acknowledging that neither PdV nor its joint ventures with foreign companies has been able to check Venezuela’s precipitous decline in output. Among the factors fueling the trend are scant maintenance, reservoir mismanagement, skilled labor flight and a lack of critical naphtha and light crude for transport and blending.

The Orinoco oil belt produced 843,200 b/d of crude in July, compared with a targeted 908,200 b/d, the report indicates. Of the belt’s four producing blocks, Carabobo accounted for 375,000 b/d, 23,500 b/d short of its target. PetroMonagas, a PdV joint venture with Russia’s state-controlled Rosneft, accounted for 119,700 b/d or 32pc of the block’s total reported output. That’s followed by Sinovensa, a PdV joint venture with China’s state-owned CNPC, with 91,800 b/d or 24pc.

In the Orinoco’s Junin block, July output averaged 191,800 b/d, off target by 16,500 b/d. The top producer with 71,600 b/d was PetroCedeno, in which France´s Total and Norway´s Equinor are PdV´s minority partners. The joint venture´s production missed its target by 12,200 b/d, well in excess of any other project in the block, the report indicates. PetroCedeno has an official capacity in excess of 200,000 b/d.

Other Junin block projects, including PetroMiranda with Rosneft and PetroJunin with Italy´s Eni, also missed their July goals. PetroUrica and PetroMacareo, PdV nominal joint ventures with CNPC and PetroVietnam, respectively, showed zero real and targeted output.

In the Ayacucho block, PdV´s PetroPiar joint venture with Chevron produced 123,300 b/d, off target by 12,400 b/d, the report says. The project has official capacity of 190,000 b/d.

In PdV´s eastern division, which hosts the legacy Furrial complex, July production averaged 326,300 b/d, just 9,500 b/d short of its target.

The western division, in contrast, produced 319,200 b/d, missing its target by 44,600 b/d. The shortfall came mainly from shallow-water operations in Lake Maracaibo and on its eastern coast.

The report indicates that 1,191 wells stopped producing in July, accounting for 333,200 b/d of lost output. The western division accounted for more than two-thirds of the number of deactivated wells, but the Orinoco accounted for some 80pc of the lost output, reflecting its higher well productivity.

The western division also accounted for 70pc of 1,114 well reactivations in July. These added a total of 183,300 b/d of production, mostly from the Orinoco.

PdV is reactivating the western division wells on its own and with small contractors, unrelated to the company’s vaunted plan to reactivate more than 23,000 wells nationwide, a PdV official says.

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Petrofac Introduces Partner In Mexico

(Petrofac Limited, 30.Jul.2018) — Petrofac Limited signed an agreement to sell 49% of the Company’s operations in Mexico(1)(2), including Santuario, Magallanes and Arenque, to Perenco (Oil & Gas) International Limited (“Perenco”). The transaction is subject to approval by the Federal Competition Commission of Mexico (COFECE), which is expected in Q4 2018.

Under the terms of the agreement, Perenco will pay an initial cash consideration of US$200 million, with US$30 million payable upon signing and US$170 million payable upon completion. The total consideration comprises a fixed amount and contingent consideration depending upon a number of future milestones, including future field development and migration terms of Petrofac’s Magallanes and Arenque Production Enhancement Contracts. This final amount is subject to adjustment based on achievement of the milestones above and will be capped at US$274 million. Petrofac currently estimates that an impairment charge of approximately US$100 million will be recognised on completion against its 100% equity interest in its Mexican subsidiaries(3). Proceeds from the sale will be used to reduce gross debt.

Petrofac’s Group Chief Executive, Ayman Asfari said: “We are delighted to welcome an experienced partner in Perenco to our Mexican operations. They bring strong technical capability that will complement our existing brownfield operations experience to strengthen our offering. We look forward to working with them and the other stakeholders to further develop our mature field interests in Mexico. Today’s agreement also marks further progress in delivering on our strategy to reduce capital intensity.”

Perenco’s CEO, Benoit de la Fouchardiere, said: “Following a previous successful collaboration with Petrofac we have been delighted to explore further opportunities to work together. Mexico is a land of opportunities, a new play, a new country and an exciting new challenge for Perenco. Partnering with Petrofac in Mexico will give us a fantastic opportunity to reach our goals in a timely manner and, by our results, demonstrate to the State company Pemex that we can also be a partner of choice for the future.

“Perenco remains proud of its independence which allows us to work differently and make our own success. However, by being pragmatic and opportunistic we are always looking to learn from others and try to improve ourselves thereby targeting a win-win relationship with Petrofac. Congratulations to the Perenco and Petrofac teams for having achieved our joint venture agreement, and I am looking forward to seeing immediate results from this promising new Mexican partnership.”

NOTES

1) This transaction will be effected by the sale of 49% of Petrofac Netherlands Holding B.V., which holds the Santuario Production Sharing Contract, the Magallanes Production Enhancement Contract (a tariff-per-barrel-based service contract) and the Arenque Production Enhancement Contract.

2) The gross assets being disposed of (49% of the consolidated Petrofac Netherlands Holding B.V. group) had a carrying amount of US$357 million at 31 December 2017. The net assets being disposed of (49% of the consolidated Petrofac Netherlands Holding B.V. group) had a carrying amount of US$293 million at 31 December 2017. Petrofac Netherlands Holding B.V. group made a business performance net loss of US$29 million for the year ended 31 December 2017 (49% share equals approximately US$14 million).

3) This is subject to change and the actual charge will take into account, inter alia, the net assets at the date of completion, as well as management’s assessment of the fair value of contingent consideration, which includes future Production Enhancement Contract migration terms.

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Total Advances Renewable Projects in Brazil

(UPI, Daniel J. Graeber, 18.Jul.2018) – A renewable energy division of French supermajor Total said Wednesday it was moving forward with new solar power developments in Brazil.

Total in September paid about $275 million to acquire a 23 percent stake in renewable energy company Eren, naming the new entity Total Eren. The renewable energy division announced Wednesday it was financing and building a combined 140 megawatts of nominal power in Brazil, roughly enough power for at least 100,000 homes.

Of the three projects either in the finance or construction phase, a project dubbed BJL 11 is the company’s first ever in Brazil. With close to 78,000 panels, the French company said it could generate enough power for 23,000 homes.

The move into Brazilian renewables follows the formation of a strategic partnership between Total and Petróleo Brasileiro, known commonly as Petrobras. The 2016 partnership reinforced operations at oil fields off the Brazilian coast, thermal plants and infrastructure associated with liquefied natural gas.

Last week, Petrobras signed a memorandum of understanding to examine solar and wind energy segments in the Brazilian market with Total Eren.

“The recently announced agreement with Petrobras and Total, two major players in the energy sector, makes me very much enthusiastic about future growth prospects in renewables in the country,” Fabienne Demol, the global head of business development of Total Eren, said in a statement.

Petrobas has 104 MW of wind power and 1.1 MW of solar power already in its portfolio in the Brazilian market.

Brazil generates about three quarters of its electricity from renewable energy resources. According to the U.S. Commerce Department, it’s the best renewable energy market in Latin America.

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Echo Says Completes Drilling CSo-2001(d) Well

(Echo Energy plc, 9.Jul.2018) – Echo Energy plc successfully completed drilling of the CSo-2001(d) well in which a notable gas column has been interpreted from the wireline logging suite.

The CSo-2001(d) well, located in the Fracción D licence operated by Compañia General de Combustibles S.A. (CGC), reached a total depth of 1511m in the Upper Jurassic Tobifera formation across which extensive gas and light hydrocarbon shows were recorded.

The well encountered over 60m of gas shows through the Upper Tobífera with gas peaks of over 168,000ppm and a full distribution of C1 to C5 hydrocarbons, measured with reference to background gas levels of less than 2,500ppm outside of the zone of interest.

Preliminary wireline log evaluation has now been completed from which the initial interpretations indicate around 30m of potential net pay within the section between 1272m and 1304m. This is towards the upper end of the range used in both contingent and prospective resource estimations and the interpretations are indicative of a gas with a high condensate gas ratio (wet gas).

The CSo-2001(d) well is targeting 19.0 bcf (gross best case) contingent resources assigned to the prospect in addition to a further 18.7 bcf (gross best case) of prospective resources in the recent Competent Person’s Report (CPR) produced by Gaffney Cline & Associates.

A final production casing is now being run prior to completion and testing which will now take place within the testing programme with the Quintana 01 rig, mobilising to the joint operations area during the week commencing 8 July 2018, as previously advised.

The CSo-2001(d) well is the last well in the current joint drilling campaign, and the Petreven H-205 rig will now demobilise to other areas where CGC have sole drilling operations ongoing.

The company will update shareholders with progress on both the testing and workover activities as the programme advances.

Fiona MacAulay, Chief Executive Officer of Echo, commented: “I am delighted that the our fourth well in the current drilling campaign has again successfully interpreted a notable gas column in the Tobifera. With the Quintana 01 completion and testing rig mobilising to the area this week we will be able to test this interval within the forthcoming testing sequence, enabling an early decision to be made on monetisation options in Fracción D. We are now looking forward to commencement of testing on the ELM 1004 well which will be the first well to be tested in this programme.”

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Jusepín Oil Spill Demonstrates PDVSA Safety Failures

(Maritime Herald, 9.Jul.2018) – The oil spill that occurred this Friday, July 6 in two tanks of the secondary recovery plant of the Jusepín Operational Complex of Pdvsa, demonstrates the safety failures of the Venezuelan state industry.

This is what the biologist, Alejandro Álvarez Iragorry, considers that what happened for the second time in this Pdvsa facility, located in the northwest area of Maturín, is another sign that “PDVSA seems to be operating at the operational minimums “.

Neither the company itself, the Ministry of Petroleum or the Government of Monagas report, 72 hours after the fact, the amount of oil that fell to the Guarapiche River, but also speak of the fact with different terms.

For PDVSA, ” oily waters to the river ” fell ; According to the minister, they were ” oil fluids ” and the regional executive defined it as ” a spill of oil “, which led the authorities to suspend for an indefinite period the pumping of water to 80% of the population of Maturin, since seven of the 10 parishes in the capital of Monaco are supplied by the Guarapiche River .

Álvarez Iragorry, who is also a doctor in Ecology and coordinator of the Clima 21 Coalition, points out that the lack of information is a norm, not only in this accident but in others that have occurred since the one that occurred on February 4, 2012, also in the Operational Complex of Jusepín, considered one of the most serious in the Venezuelan oil industry.

“I am very concerned because, from the safety point of view, there is a greater chance of a major accident. Since the spill that occurred in the Guarapiche River six years ago, there have been about four more spills, that although they were not originated by PDVSA, some of them like Trinidad and Tobago, when entering Venezuelan marine waters are their responsibility and not they have responded as it should be, “the expert mentions.

For the biologist, without accurate information, you can not alert or recommend the citizens with enough details to take the forecasts as to what happens in these types of cases.

In addition, the contingency plans of PDVSA in each of the spill cases have questioned the capacity to respond. Several photos are remembered of how in 2012, those who were manually blocking the passage of oil in the Guarapiche River did not have uniforms or safety equipment.

Álvarez Iragorry emphasizes this to emphasize that if you add the lack of information, “when everything becomes opaque, you have no idea what is happening.”

Damage and environmental impact

Although it is early to evaluate the environmental impact in the Guarapiche River, which already suffered the effects of the first spill in 2012 when it is estimated that for 21 hours 100 thousand barrels of oil were poured into its bed, a new spill of course that causes a immediate damage in the flow.

The first is the one that affects citizens who are left without water supply indefinitely. The biologist believes that the Maturineses are the ones who must demand an answer from the rulers and authorities. “A healthy river will give healthy water if it is not healthy it will not give healthy water”.

The damage it causes in the river is also direct because it affects the vegetation, the soil and the species that inhabit one of the longest rivers that Monagas has and that crosses the municipalities Cedeño, Maturín and Bolívar.

The Guarapiche has mangroves that were severely contaminated six years ago. The amount of oil that fell in its waters was so great that it travelled 75 kilometres until reaching the French, Cuatro Bocas and Colorad pipes, which are the connection of the Guarapiche with the San Juan River and from there to the Caribbean Sea.

Just to take into account an effect of what happened six years ago, the journalist David González in a work published by the newspaper El Nacional made a tour of the river and this was part of what he said:

The tour lasts almost two hours after which the visitor will feel that he accessed a disaster area. At the foot of the mangroves a black strip protruding half a meter from the water: it looks like a large skirting board at the base of a very long plant wall. As the tide drops, more stems and more roots are exposed and you can see how deep the oil adhered. A fact can illustrate that only a part of the mangroves is visible: if a rod of two and a half meters is put into the water, the riverbed will not be touched yet. A similar landscape can be observed while navigating an approximate distance of 20 kilometres through the pipes adjacent to the San Juan River.

After the spill, this July 6 little is what is known, because as happened in 2012 the secrecy of Pdvsa remains.

For Álvarez Iragorry, the authorities speak of up to three terms to define the spill, which accounts for the lack of seriousness with which things are carried out, which could try to minimize the impact of those events.

“In case of being some type of residual hydrocarbon, here, in this case, we do not have information about it, it is an even more toxic material. In any case, there is an impact because it does not matter if it is any other waste or water contaminated with hydrocarbon because there is an impact, “he said.

Source: Efecto Cocuyo

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Gazprom Reiterates Interest in Bolivia

Luis Poma and Vitaly Markelov at signing ceremony. Source: Gazprom

(Energy Analytics Institute, Jared Yamin, 16.Jun.2018) – Russian oil giant Gazprom remains attracted to the hydrocarbon opportunity set in Bolivia in South America.

A working meeting between Gazprom Management Committee Chairman Alexey Miller and Bolivia’s President Evo Morales was held at Gazprom’s office in Moscow where various agreements were signed with the aim to expand cooperation between Gazprom and Bolivia in the petroleum sector.

Land-locked Bolivia is the third-largest hydrocarbon producer in South America, extracting over 20 billion cubic meters of natural gas per year. Bolivia’s gas production is initially destined for the domestic market, while excess gas supply is exported primarily to Argentina and Brazil.

Miller expressed appreciation for the ongoing implementation of joint projects in Bolivia and discussed the opportunities to increase output at Bolivia’s Incahuasi natural gas field. The Russian official placed emphasis on joint plans for geological exploration in the promising Vitiacua oil and gas block, reported Gazprom in an official statement on its website.

A summary of the signed agreements follows:

Gazprom Management Committee Deputy Chairman Vitaly Markelov and Yacimientos Petroliferos Fiscales Bolivianos (YPFB) Vice President for Contract Management and Supervision Luis Poma signed a strategic cooperation agreement that envisions joint efforts in a wide range of areas including but not limited to the following: geological exploration, gas production and hydrocarbon transportation across Bolivia, development of the national gas and oil transportation infrastructure and NGV market, exchange of experience and personnel training, and sci-tech collaboration.

Gazprom EP International B.V. Managing Director Andrey Fick and Luis Poma also signed a term sheet related to the contract for exploration and production in the Vitiacua oil and gas block that will allow the companies to start drafting the main design documentation.

Finally, Bolivia’s Hydrocarbons and Energy Minister Luis Alberto Sanchez and Alexey Tyupanov, the CEO of EXIAR — the Russian Agency for Export Credit and Investment Insurance, which was established in late 2011, becoming Russia’s first export credit agency — signed an agreement to secure financing for supplies of gas-fueled machinery and equipment produced by Russian manufacturers.

GAZPROM IN BOLIVIA

In Bolivia, Gazprom International B.V., a company that participates in hydrocarbon prospecting, exploration and development projects outside Russia, represents Gazprom’s interests in projects in the country.

Gazprom in partnership with France’s Total S.A. (operator, WI 50%), Tecpetrol S.A. (WI 20%), and YPFB (WI 10%) develops the promising Ipati and Aquio oil- and gas-bearing blocks, within which the Incahuasi field is located. Gazprom (WI 50%) and Total (WI 50%) also implement a hydrocarbon exploration project in the Azero block.

In 2016, Gazprom, Bolivia’s Ministry of Hydrocarbons and Energy, and YPFB established the means for implementing Bolivia-based projects for hydrocarbon exploration, production, and transportation, and updated the general scheme for development of the country’s gas industry through 2040. Gazprom and YPFB also cooperate in personnel training and retraining.

Finally, in 2016, Gazprom and YPFB signed an agreement to explore the promising La Ceiba, Vitiacua and Madidi blocks. The La Ceiba and Vitiacua blocks are situated in the Chaco oil- and gas-bearing basin in the southern part of Bolivia (Tarija and Chuquisaca departments).

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Total, Siemens Hope to Sign Cuban LNG Deal Soon

(Reuters, Marc Frank, 30.Apr.2018) — French energy firm Total SA and German industrial giant Siemens AG hope to sign a deal soon with Cuba to build a 600 megawatt gas-fired power plant on the island, according to diplomats and businessmen with knowledge of the talks.
The two are leading a consortium that has been in negotiations with Communist-run Cuba since last year when they won a tender for the project, said the sources, who did not identify the other members
“Total, with some international partners, is looking at a LNG power project in Cuba, one of several countries where Total is exploring similar LNG potentials,” the company said in a statement to Reuters.
A Siemens spokesman in Germany was not immediately available for comment.
The sources cautioned that many details of the project were under negotiation and that the combination of U.S. sanctions and Cuban bureaucracy meant there was no guarantee the agreement would be finalized, though they were hopeful.
The potential deal is the latest example of companies from the European Union moving to take advantage of Cuba opening to foreign investment.
“The EU has become Cuba’s first trade partner and was already the first in investment and development cooperation,” the European Union’s top diplomat Federica Mogherini said in January while visiting the country.
Siemens signed a letter of intent with the Cuban power authority in 2016 to help modernize the grid.
“With this important agreement … we will assist and support Cuba on the development of a sustainable and modern electricity system,” Willi Meixner, head of Siemens Power and Gas division, said at the time.
In the Matanzas Bay project, 124 kilometers (77 miles) east of Havana, Total would obtain the liquid gas from abroad, and then store, process and supply it to the plant, which would be built by Siemens, the sources said.
The project would mean less dependence on oil and less pollution, Jorge Pinon, a Cuban energy expert at the University of Texas in Austin, said.
“It could be the best decision that the Cuban government has made toward an energy policy able to react to changes in price, geopolitical events and or supply-demand disruptions,” he said.
Cuba was left in the lurch when its sole oil supplier, the Soviet Union, collapsed in 1991. More recently it has been scrambling to find alternative oil supplies as ally Venezuela’s economy and oil production implode.
Cuba’s total generating capacity is around 6,000 megawatts and demand is increasing due to growing tourism, digitalization and a new private sector.
Around 95 percent of electricity in Cuba is generated by fossil fuels. The government has begun a program to generate 24 percent with renewable sources by 2030.
Total and Siemens have engaged in commerce with the Caribbean island nation for decades.
Total was the first foreign company to drill for oil just off shore in the 1990s after the Soviet Union collapsed. The company failed to find a commercially viable field.
It also has a joint venture with Cuban state oil monopoly Cubapetroleo (CUPET), Elf Gas Cuba, which for 20 years has packed a liquid propane and butane gas mix into cylinders and distributes them for use by households and businesses in eastern Cuba.
The Cuban state power authority, Union Electrica, and CUPET did not respond to a request for comment. (Reporting by Marc Frank Editing by Daniel Flynn and Susan Thomas)
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EPM Installs Colombia’s ‘First’ Floating PV Project

(PV-Tech, Tom Kenning, 18.Apr.2018) – Colombian utility EPM has installed what it claims to be the country’s first floating solar plant, standing at 100kW at the El Peñol reservoir.

The pilot project will test the technology and its fundamentals in comparison to ground-mount and rooftop systems. For this purpose, traditional solar panels will be installed on a roof at the Guatapé Central camp, under the same irradiation conditions.

EPM general manager Jorge Londoño De la Cuesta said: “With this pilot project we seek to verify if the floating systems of solar panels have an energy performance of more than 10% or 15% compared to traditional systems on land or in the roof, thanks to its proximity to water, which allows them to be more refrigerated and take advantage of the greater radiation from reflection in the water.”

The pilot solar park has 368 panels and is located near the collection tower, so as not to interfere with the dam in its role as a tourist attraction. The plant has been set up across two 50kW modules and is expected to generate approximately 145MWh of electricity per year.

Last September, Innova Capital Partners and French floating PV specialist Ciel & Terre (C&T) also agreed to jointly develop floating solar plants in Colombia. C&T has already completed Brazil’s first floating solar project.
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Total President Says Output At One Venezuela Field Down 33%

(Energy Analytics Institute, Piero Stewart, 22.Apr.2018) – Patrick Pouyanne, the Chief Executive Officer of French major Total, announced production at one of its oil fields in Venezuela was down to 80,000 barrels per day (b/d) from 120,000 b/d.

Pouyanne made the comments during an oil summit in Paris, reported Oil Price. He added that production in Venezuela was down due to a lack of capital and staff contributions from its partner PDVSA.
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Mexico Awards Blocks In Final Oil Auction Before Election

(Reuters, David Alire Garcia & Marianna Parraga, 27.Mar.2018) — Mexico awarded just under half of the 35 shallow-water blocks it tendered on Tuesday, in an auction muddied by the promises of the presidential frontrunner to review contracts awarded under a historic energy opening if he wins the July 1 election.

The country’s oil regulator awarded 16 blocks in the Gulf of Mexico to firms including Spain’s Repsol, France’s Total, Italy’s Eni, Britain’s Premier Oil and Mexico’s state-run Pemex, which was the biggest winner overall.

A final, competitive round of bidding in the Southeast Basins improved what started as a patchy showing, with little interest in fields believed to contain high amounts of natural gas.

About $8.6 billion in investment is expected from the projects to be developed in the awarded blocks, Mexico’s Energy Minister Pedro Joaquin Coldwell said, with early production starting in 2022 and a production potential of 280,000 barrels per day (bpd).

Andres Manuel Lopez Obrador, who has a comfortable lead in most polls, said that if he wins the July vote, he would review more than 90 contracts signed since Mexico passed legislation in 2013 ending Pemex’s 75-year monopoly, looking for signs of corruption.

Running for office for a third time, Lopez Obrador has also said he would hold a referendum on the future of the reform, and ask President Enrique Pena Nieto to cancel two auctions planned for the second half of the year.

Mexico’s next president takes office in December.

Despite the political uncertainty, Tim Davis, the group exploration manager for Premier Oil, said he was bullish about the future of the oil and gas opening.

“I think you could see a slowdown (if Lopez Obrador wins). But … I think they will see the benefits,” of the investment that’s coming in and the invigoration of new ideas and new companies arriving.

Repsol and Premier Oil individually claimed two areas each in the shallow-water fields offered in the Burgos basin, where less than a third of blocks were awarded. Premier won another block in a consortium with DEA Deutsche Erdoel and Sapura Energy.

Consortia made up of state-run Pemex, Mexico’s Citla Energy, Spain’s Cepsa, Britain’s Capricorn Energy and Germany’s DEA Deutsche Erdoel posted winning bids for four blocks in the Tampico-Misantla-Veracruz basin further south along the Gulf. There, around a third of blocks were awarded.

In the final Southeast Basins tender, competition was higher, and the oil regulator awarded all eight of the shallow-water blocks it tendered to consortia including Total, Eni, Royal Dutch Shell and Pemex.

“This is very high percentage (of awarded blocks),” said Coldwell.

Mexico’s government collected $124 million in cash payments from the auction, below the $525 million collected in a January deepwater auction.

The Southeast Basins areas are located in a portion of the Gulf where many of the companies that won blocks on Tuesday had already secured areas in earlier shallow and deepwater bidding rounds.

By securing neighboring blocks in the Gulf, companies are able to build clusters in order to reduce infrastructure costs.

Mexico’s Deputy Secretary for Hydrocarbons Aldo Flores blamed the weaker early interest on the quantity of natural gas areas in the auction, saying companies were more interested in finding crude.

“This will continue to be a challenge for us given the abundance of natural gas in Texas at very low prices,” Flores told Reuters on the sidelines of the auction in Mexico City.

Mexico is also competing for private companies’ interest with Brazil, which is holding its own auction this week, with another scheduled in June.

Brazil holds its own election in October, with the most likely leftist contender in the presidential race, Ciro Ferreira Gomes, warning he would expropriate energy assets bought by investors if he wins.

(Reporting by David Alire Garcia, Adriana Barrera and Marianna Parraga; Writing by Gabriel Stargardter Editing by Frank Jack Daniel, Susan Thomas and Diane Craft)
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Argentina Imports Natural Gas From Chile Under Two Contracts

(Energy Analytics Institute, Jared Yamin, 17.May.2017) – Argentina started importing natural gas from Chile, and will continue over an estimated three month period in order to cover increased demand during the winter period.

On May 11, 2016 Argentina initiated import of an estimated 5 million cubic meters per day of gas from Chile under two contracts: the first with France’s GDF Suez and the second with Chile’s Enap, reported the daily newspaper La Razón.

The contract with GDF Suez is for an estimated $73.4 million with a price of $7.20/MMBtu, while the contract with Enap is for $22 million with a price of $6.90/MMBtu.

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Petrobras Clarification on Alliance News

(Petrobras, 10.Mar.2017) – Petrobras understands that the content disclosed to the market on the Strategic Alliance with Total on 10/24/2016, 12/21/2016 and 3/1/2017, includes the relevant information about this partnership, informing the values that refer to the purchase and sale contracts that were signed between the two companies and to the credit line negotiated. It should be noted that the contracts signed were based on internal and external economic-financial assessments, as well as fairness opinion issued by independent institutions.

In relation to the internal memo disclosed exclusively to the workforce, Petrobras considered that its content is not a matter of relevant information that could impact an investor’s decision in respect to the Company’s securities, since the main partnership elements were already included in the releases disclosed to the market.

It is important to note that the potential additional gains mentioned in the internal memo depends on synergy gains from the technological cooperation in the future, involving research components, exchange of knowledge and expertise, which may or may not materialize, so that they did not present sufficient certainty to be disclosed to the market, due to the preliminary level of discussions in progress and the low maturity of their estimates.

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Strategic Alliance Between Petrobras, Total

(Petrobras, 7.Mar.2017) – Petrobras clarified that the R$ 500 million amount mentioned in the article published by the newspaper O Estado de S. Paulo and mentioned by President Pedro Parente in an internal communication to the company’s work force, represents a preliminary estimate of potential gains that may result from the Strategic Alliance signed between Petrobras and Total.

The synergy between the companies, where Petrobras brings in technical knowledge from the operation of pre-salt layer fields in Brazil, and Total brings in its experience in the operation of deep water fields in the Western African coast and in carbonate reservoirs, might facilitate production optimization in the future as a consequence of an increase in the recovery factor in carbonate reservoirs and resulting increase in volume produced.

As such, the aforementioned amount has not been recorded in the global value of the Strategic Alliance announced to the market on 10/24/2016, 12/21/2016, and 03/01/2017, in the amount of $2.2 billion, since materialization of the foreseen synergies will depend on the progress of technical discussions and development plans to be jointly prepared.

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Petrobras, Total Finalize Strategic Alliance

(Petrobras, 1.Mar.2017) – Petrobras and Total signed the sales contracts for the assets in the Strategic Alliance, as set out in the Master Agreement signed on the 21st of December, 2016.

The contracts signed yesterday form a Strategic Alliance between both companies creating new partnerships in the Upstream and Downstream segments, and they reinforce technical cooperation in operations, research and technology. This alliance should allow both companies to bring together their internationally recognized expertise in all segments of the oil and gas value chain in Brazil and abroad.

Through these contracts:

– Petrobras will transfer 22.5% of the rights to Total in the concession area called Iara (comprising Sururu, Berbigão and Oeste de Atapu fields, which are subject to unitization agreements with the area called Entorno de Iara, a transfer of rights area in which Petrobras holds a 100% stake), in the Block BM-S-11. Petrobras will continue as operator and hold the largest stake, with 42.5%. The partnership with Total will allow Petrobras to reduce its investment and will benefit from technological solutions for its development that will be jointly studied by Petrobras and Total, maximizing profitability and the volume of oil to be recovered. BG E&P Brasil, a subsidiary of Royal Dutch Shell plc, with 25%, and Petrogal Brasil, with 10%, are also part of the consortium.

– Petrobras will transfer 35% of the rights to Total, along with its operation, in the Lapa field concession area, in Block BM-S-9. Petrobras will keep 10%. The Lapa field is in the production phase and came onstream in December 2016. Total, as the new operator of this field, will benefit the Consortium by incorporating valuable experience in deepwater projects for the next phases of the challenging Lapa project, which has distinct characteristics from other operating pre-salt fields. BG E&P Brasil, a subsidiary of Royal Dutch Shell plc, with 30%, and Repsol-Sinopec Brasil, with 25%, are also part of this consortium.

– Sale of Petrobras’ 50% stake to Total in Termobahia, which includes two cogeneration plants, Rômulo de Almeida and Celso Furtado, located in Bahia. Both plants are connected to the regasification terminal located in São Francisco do Conde, Bahia, where Total will take the regasification capacity to supply gas to the thermoelectric plants. This initiative constitutes an innovative partnership in the Brazilian thermal market.

The above contracts are in addition to other agreements already entered into on the 21st of December, namely: (i) Letter granting Petrobras the option to purchase a 20% stake in block 2 of the Perdido Foldbelt area, in the Mexican sector of the Gulf of Mexico, only taking on future obligations in proportion to its stake (ii) Letter of intent for joint exploration studies in the exploratory areas of the Equatorial Margin and the Santos Basin; and (iii) Technological partnership agreement in digital petrophysics, geological processing and subsea production systems.

The deal includes Total paying $2,225 million to Petrobras, made up of $1,675 million in cash for assets and services, a $400 million line of credit that could be triggered by Petrobras for part of their investment in the Iara development fields and $150 million for contingent payments.

After signing the contracts, Pedro Parente, CEO of Petrobras and Patrick Pouyanné, Chairman and CEO of Total, have declared: “We are delighted today to see our Strategic Alliance becoming reality. These new partnerships together with a reinforced technological cooperation should create significant synergies and values, mutualizing our operational excellence and further reducing costs on our joint projects for the benefit of both companies”

The deal is subject to the approval of the relevant regulatory entities, the potential exercise of preemptive rights by current Iara partners in addition to other preceding conditions.

For Petrobras, this Strategic Alliance is an important part of the Petrobras 2017-2021 Business and Management Plan. It increases information, experience, and technology sharing, which strengthens corporate governance, and improves the company’s financeability through mitigation of risks, cash inflows, and the release of investments.

For Total, these new partnerships with Petrobras reinforce Total’s position in Brazil through the access to new fields in the Santos Basin while entering a promising gas value chain.

Total and Petrobras

Currently, Petrobras and Total jointly participate in 19 Exploration and Production consortiums worldwide. In Brazil, the companies are partners in the development of the giant Libra field, which is the first Production Sharing Contract in the Brazilian pre-salt Santos basin. Outside Brazil, Petrobras and Total are partners in the Chinook field in the US Gulf of Mexico, in the deep-water Akpo field in Nigeria and in the gas fields of San Alberto and San Antonio/Itau in Bolivia, as well as in the Bolivia-Brazil gas pipeline.

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Petrobras Sells Sugar, Ethanol, PetroChem Assets

(Petrobras, 28.Dec.2016) – These transactions are part of the company’s partnerships and divestments program. The target for the period 2017-2018 is $21 billion …

On December 28, 2016, Petrobras closed two asset sales for the total sum of $587 million. The subsidiary Petrobras Biocombustível (PBio) sold to Tereos Participations – a company in the French Tereos group – its entire stake in Guarani, representing 45.97% of the company’s equity capital, for $202 million. The Petrobras Board of Directors also approved the sale of Companhia Petroquímica de Pernambuco (PetroquímicaSuape) and Companhia Integrada Têxtil de Pernambuco (Citepe) to two subsidiaries of the Mexican company Alpek, for $385 million.

With these transactions, the Petrobras partnerships and divestments program has chalked up a total of $13.6 billion in the period 2015-2016, which is below the $15.1 billion target set for the two-year period. This failure to meet the target is explained by the company’s obligation to comply with the preliminary injunction of the Sergipe Court that blocked the completion of the negotiations for sale of the Tartaruga Verde and Baúna fields, located in the Campos Basin and the Santos Basin, respectively, which were already at an advanced stage. The target for the partnerships and divestments program in the period 2017-2018 will automatically be increased by the respective amounts, to the sum of $21 billion.

The assets sold do not have any Petrobras employees and the employment ties with the respective companies will not change as a result of the transactions.

The two agreements closed are among the five transactions that may see their contracts signed in accordance with a precautionary decision handed down by the Federal Audit Court (TCU).

All the transactions were conducted through a competitive process and the sale prices were appraised by several financial institutions, by means of independent opinions regarding the fair value (fairness opinion) and the valuation report.

More about the companies involved in the transactions:

Guarani

Guarani is one of the leading companies in the Brazilian sugar and ethanol market, ranked third among the largest sugar producers in Brazil. The company has eight industrial units: seven in Brazil, in the state of São Paulo (Andrade, Cruz Alta, São José, Severínia, Mandu, Tanabi and Vertente mills, the last in a joint venture with the Humus Group, which owns 50%) and one in Africa, in Mozambique (Sena mill).

Tereos

Tereos, which is a partner of PBio (Petrobras Biofuels) in Guarani, with a 54.03% equity stake, is the world’s third largest sugar producer. The group specializes in transforming raw materials into sugar, ethanol, alcohol and starch and has 24,000 employees at 42 industrial units across Europe, South America, the Indian Ocean, Africa and Asia.

PetroqímicaSuape and Citepe

PetroquímicaSuape and Citepe are fully-owned subsidiaries of Petrobras and form part of the company’s Chemical-Textile Industrial Complex in Ipojuca, in the state of Pernambuco. These companies bring together three integrated industrial units: PTA (purified terephthalic acid), polyester fibers and PET (polyethylene terephthalate) resin.

Alpek

Alpek is a listed Mexican company, owned by Alfa, S.A.B. de C.V., which operates in the petrochemical segment and is a world leader in the production of polyester (PTA, PET and fibers).

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Petrobras, Total Move Forward with Alliance

(Petrobras, 21.Dec.2016) – Petrobras signed a Master Agreement with the French company Total, in connection with the Strategic Alliance established in the Memorandum of Understanding signed on 10/24/2016, as previously announced to the market.

Entering into strategic partnerships is an important part of Petrobras’ 2017-2021 Business and Management Plan, as it contributes to mitigating risks, strengthening corporate governance and sharing information, experiences and technologies, in addition to improving the Company’s financial viability through cash inflows and the release of investments.

Petrobras and Total have strong similarities in the upstream segment, sharing a relevant common base of E&P assets and the search for technological development in similar themes.

The companies jointly participate in 19 consortiums worldwide in exploration and production in key projects such as the Libra area, which is the first production sharing contract in the Brazilian pre-salt in Santos Basin, besides exploration areas in Equatorial Margin, Espírito Santo Basin and Pelotas Basin. In addition, both companies are partners in the Brazil-Bolívia gas pipeline.

With this new agreement, both companies will strongly reinforce their technological cooperation in the areas of geoscience, subsea systems and joint studies in areas of mutual interest, aiming to reduce investment risks and increase the probability of exploratory success over the next years. The companies will also become partners in the Iara and Lapa fields, in the pre-salt Santos Basin, and in two thermal plants, sharing the use of the regasification terminal infrastructure in the state of Bahia.

The companies also undertake to expand their joint activities outside Brazil, with Petrobras having the option of taking a stake in the Perdido Foldbelt area in the Mexican portion of the Gulf of Mexico.

The transaction has a global estimated value of $2.2 billion including cash, contingent payments and the carry of investments in production development of common assets to both companies, to be paid by Total to Petrobras and its subsidiaries as appropriate.

The signing of the relevant Sale and Purchase Agreements (SPA) related to the assets from this Master Agreement is subject to internal and external control and regulatory approvals, including the Brazilian Federal Accounting Court (TCU), potential preemptive rights from the current partners of Iara, plus other precedent conditions. The companies have a mutual commitment to make all the necessary efforts to sign all contracts within 60 days.

The main terms and conditions of this Agreement are as follows:

– the sale of a 22.5% interest to Total, in the Iara area (Sururu, Berbigão and Oeste de Atapu fields) in Block BM-S-11. Petrobras will remain the operator and will keep the largest stake in that consortium, with a 42.5% interest.

– the sale of 35% interest to Total in Lapa field in Block BM-S-9, with transfer of the operation to Total. Petrobras will have a 10% interest in this concession.

– Petrobras’ option to take a 20% participation in block 2 of the Perdido Foldbelt area in the Mexican portion of the Gulf of Mexico, acquired by Total in partnership with Exxon in the round of bidding held by the Mexican government on 12/05/2016.

– shared use of the Bahia regasification terminal, with a capacity of 14 million m3/day.

– partnership, with Total holding a 50% stake, in the thermal plants Rômulo de Almeida and Celso Furtado, located in Bahia, with energy generation capacity of 322 MW.

– joint studies in the exploratory areas in the Equatorial Margin and in the southern area of Santos Basin, taking advantage of the existing synergy between the two companies, since each has outstanding geological knowledge of the oil basins located on both sides of the Atlantic.

– technological partnership agreement in geological processing and subsea engineering, in which the companies have complementary knowledge, which can boost the gains from the application of new technologies in the partnership areas.

The information below refers to the concessions established in the Agreement:

Concessions in Upstream

In the Iara concession, Petrobras holds a 65% interest and is the operator. Shell, with 25%, and Galp with 10%, are partners in this area, which is part of Block BMS-11. The reservoirs of this concession have higher complexity and are in the production development phase. The partnership with Total in this area will bring benefits such as the release of investments and new technological solutions for its development, maximizing profitability and the volume of oil to be recovered.

The limits of this consortium extend into the Entorno de Iara area, from the Transfer of Rights agreement, in which Petrobras holds a 100% interest. The fields Berbigão, Sururu and Oeste de Atapu must enter into Individualization Production Agreements (unitization) with this area of the Transfer of Rights.

In the Lapa field, Petrobras holds a 45% interest and is the operator. Shell, with 30%, and Repsol with 25%, are partners in this field, which is part of BM-S-9 block. The development of the Lapa field is at an advanced stage, with the recent start of production, as announced on 12/20/2016, and presents geological characteristics and oil quality different from other pre-salt fields. Total, as future operator of this field, will bring benefits to the consortium, by incorporating its experience and knowledge in the continuity of its development plan.

The technological partnerships in the Iara and Lapa areas will develop and apply certain subsea technologies in a pioneering manner in Brazil. The efforts to reduce risks and increase the probability and the success in exploration will rely on a 4D seismic application in the context of carbonate reservoirs, with specific studies on CO2 migration and geomechanical studies, in addition to the development of a methodology for the construction of models to support investment decisions.

Gas & Energy Concessions

In the case of the G&E area, Petrobras and Total are forming an innovative partnership in the Brazilian thermal market. The initiative is aligned with the strategies of Petrobras for the Gas and Energy segment in the 2017-2021 Business and Management Plan, which establishes the restructuring of the Energy Businesses and maximizes the value generated in the gas chain. This vision considers a regulatory evolution, that is already under discussion with Brazilian federal authorities, forecasting an improvement of the procurement rules, access to the pipeline network and LNG regasification terminals.

The partnership with Total includes two thermal plants (Rômulo Almeida and Celso Furtado), connected to the Regasification Terminal located in São Francisco do Conde, in Bahia.

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Executive Profile: YPF New CEO Ricardo Darré

(Energy Analytics Institute, Jared Yamin, 6.Jun.2016) – Ricardo Darré will assume the position of CEO at YPF on July 1, 2016, taking over the helm from the interim CEO.

Darré graduated from the Buenos Aires Technology Institute (ITBA by its Spanish acronym) with a specialization in mechanical and industrial engineering, reported the daily newspaper La Nacion.

After finishing university he worked for Schlumberger in Angola, Zaire in the Neuquén basin.

In 1987, he began work with Total, where he has worked until now. With Total he worked in Tierra del Fuego, France and Thailand in various roles related to offshore exploration.

From 1998, he started to assume roles related to operations in Norway, Russia, the United Kingdom, France and the United States.

Currently, he continues to work as managing director of Exploration and Production with Total in Houston, Texas.

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Total to Boost Output in Bolivia by 6.7 MMcm/d

(Energy Analytics Institute, Jared Yamin, 9.May.2016) – France’s Total plans to boost natural gas production by 6.7 million cubic meters per day at Aquio Incahuasi.

The French company also plans to take part in the second phase of activities at the field whereby it plans to boost output there by another 6.7 million cubic meters per day, reported the daily newspaper La Razón, citing Bolivia’s Hydrocarbon Minister Luis Alberto Sánchez.

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Petrobras Libra Consortium 2nd Extension Well

(Petrobras, 24.Mar.2015) – The Libra consortium has finished drilling extension well 3-BRSA-1267-RJS/3-BRSA-1267A-RJS (3-RJS-735/735A). The drilling results confirmed the presence of a hydrocarbon column approximately 200 meters deep in reservoirs with good permeability and porosity characteristics.

Informally known as C1, the well is located in the central part of the Libra block, in Santos Basin, around 220 km offshore from the city of Rio de Janeiro.

The final depth reached was 5,780 m, including a water depth of 2,160 m. This is the second well successfully drilled by the Libra consortium, and is 18 km from the first well, called 3-RJS-731.

The hydrocarbon and CO2 bearing intervals were calculated through electrical profiles and fluid samples, which are being characterized through laboratory analysis.

The consortium will continue with the exploration plan by drilling new wells in order to evaluate the Libra area, which covers around 1,550 km2.

The Libra consortium is composed of Petrobras (Operator, 40% WI), Shell (20% WI), Total (20% WI), CNPC (10% WI) and CNOOC (10% WI), as well as Brazilian state-owned company Pré-Sal Petróleo S.A. (PPSA), which is the contract manager.

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CGG Lands Anadarko Seismic Deal in Colombia

(CGG, 19.Mar.2015) – France’s CGG has been awarded a contract by a subsidiary of Anadarko Petroleum Corporation to acquire and process a 6,299-square mile (16,314square kilometers) 3D seismic survey on the Caribbean coast offshore Colombia.

The survey will be the largest marine seismic program ever acquired in Colombia and follows CGG’s successful completion of Anadarko’s 2,213square mile (5,500-square kilometer) 3D Fuerte survey offshore Colombia in 2013. The survey, covering portions of the Col-1 and Col-2 blocks, will be acquired by the Oceanic Sirius and Oceanic Vega. These environmentally certified vessels are the flagships of CGG’s seismic fleet. Each vessel will tow a 39 x 393 x 26,574 foot (12 x 120 x 8,100 meter) spread using Sercel’s Sentinel steerable solid streamers and CGG’s proprietary Dovetail efficient acquisition solution designed to achieve more regular sampling and reduce infill. The survey will start in the second quarter of 2015, subject to regulatory approval. The survey data will be processed in CGG’s Houston subsurface imaging center.

Jean-Georges Malcor, CEO, CGG, said: “We are very pleased to have been selected for this important contract, based on our advanced technology, the tight integration between our marine seismic acquisition and subsurface imaging groups and our deep in-country operational experience in Colombia. A project award of this magnitude underlines the confidence Anadarko has in our technology and expertise. We look forward to once again helping Anadarko reach its exploration goals in Colombia.”

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Perenco to Buy Petrobras Assets in Colombia

(Energy Analytics Institute, Ian Silverman, 29.Oct.2013) – Petrobras plans to sell its interest in onshore blocks and two pipelines to France’s Perenco for $380 million to focus more attention on projects in Brazil, reported the daily newspaper El Espectador

The deal includes interest in: 11 onshore blocks that are producing an average 6,530 boe/d, the Petrobras Colombia and Alto Magdalena pipelines which have capacity to transport 14,950 b/d and 9,180 b/d, respectively.

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