Royal Dutch Shell plc ("Shell" )has announces the successful completion of the acquisition of Repsol S.A.'s ("Repsol") liquefied natural gas (LNG) portfolio outside North America for a headline cash consideration of $4.1 billion. As part of the transaction, Shell will also assume $1.6 billion of balance sheet liabilities relating to existing leases for LNG ship charters, substantially increasing the shipping capacity available to Shell's world-class LNG marketing business.

The deal gives Shell an additional 7.2 million tonnes per annum (mtpa) of directly managed LNG volumes. The company's already diverse and flexible portfolio will be boosted with LNG supply in the Atlantic from Trinidad & Tobago, and in the Pacific from Peru. In addition, it immediately contributes additional cash flow, while requiring limited on-going capital expenditure.
Since the announcement of the transaction in February 2013, certain value adjustments have been made in accordance with the terms of the sales and purchase agreement. These are expected to lead to a net cash purchase price of $3.8 billion (subject to post closing adjustments), compared to purchase price of $4.4 billion announced in February 2013, and balance sheet liabilities of $1.6 billion, compared to $1.8 billion at the initial announcement. This includes the exercise of pre-emption rights of the BBE power plant in Spain by an existing partner as well as other adjustments such as the financial performance of the portfolio and working capital movements since the effective date of 1st October 2012.
The deal closed in 2014. Shell's capital investment in Q4 2013 will reflect $3.4 billion for this transaction with the remainder of $2.0 billion booked in 2014 of which $1.6 billion is a non cash item relating to finance ship leases.

The transaction will add:
a) Net 4.2 mtpa equity LNG plant capacity, increasing the company's equity LNG capacity by around 20%, from 22 to 26 mtpa.
• Atlantic LNG trains 1-4; 14.8 mtpa capacity on a 100% basis (20-25% equity per train); operated by Atlantic LNG Company of Trinidad and Tobago.
• Peru LNG 4.45 mtpa capacity, on a 100% basis (acquisition: 20% equity: 100% offtake); operated by Peru LNG Company.
• A fleet of LNG carriers, comprising both long term and short term time charters.
b) 7.2 mtpa of LNG volumes through long term off-take agreements.
c) As part of this agreement, as previously disclosed, Shell has committed to supply around 0.1 mtpa of LNG to Repsol's Canaport LNG terminal in Canada over a period of 10 years.

Forum Energy Technologies, Inc. (NYSE: FET) is pleased to announce the appointment of Prady Iyyanki to the position of Chief Operating Officer. In this newly created role, he will be responsible for leading Forum's global operations and driving growth and operational excellence across the organization. Prady will be based in Houston, Texas.

Cris Gaut, Forum's Chairman and Chief Executive Officer, commented, "Prady brings years of international business, process improvement and manufacturing industry experience to Forum. His leadership and depth of experience will be of great value to Forum as we continue to enhance our manufacturing excellence, supply chain efficiency, product quality, and innovation management processes."

Prior to joining Forum, Prady spent over sixteen years with General Electric (GE) in various senior management roles. Most recently Prady was President and CEO of the GE Oil and Gas Turbomachinery Equipment business segment, headquartered in Italy. He has a Bachelor of Science in Engineering from Jawaharlal Nehru Technology University, India and a Master of Science in Engineering from South Dakota State University.

Statoil and co-venturer ExxonMobil announce its fifth discovery in Block 2 offshore Tanzania.

The discovery of an additional 2-3 trillion cubic feet (Tcf)* of natural gas in place in the Mronge-1 well brings the total of in-place volumes up to 17-20 Tcf in Block 2.

Mronge-1 is drilled by the drillship Discoverer Americas, and the site is located 20 kilometers north of the Zafarani discovery, and at 2,500-meter water depth.

"We have initiated a new and ambitious drilling campaign offshore Tanzania following four successful discoveries during the first drilling phase. The Mronge-1 well discovered additional gas volumes and furthers the potential for a natural gas development in Tanzania. The new drilling program also allows us to fully explore the remaining exploration potential in Block 2," says Nick Maden, senior vice president for Statoil's exploration activities in the Western hemisphere.

The Mronge-1 well discovered gas at two separate levels. The main accumulation is at the same stratigraphic level as proven in the Zafarani-1 well in Block 2. The Zafarani-1 discovery was made in 2012 and was a play opener for the block.

The secondary accumulation was encountered in a separate, younger gas bearing reservoir, in a play which previously has not been tested in Block 2.

The Mronge-1 discovery is the venture's fifth discovery in Block 2. It was preceded by three successful high-impact gas discoveries during the first drilling phase with Tangawizi-1, Zafarani-1 and Lavani-1, and a deeper discovery in a separate reservoir in Lavani-2.

"These are high value resources. The attractiveness is also demonstrated by a recent asset transaction in the neighboring block. The discoveries also demonstrate how Statoil's strategy of focusing on high-impact opportunities is paying off and supports the company's ambition for international growth," Maden says.

"The Tanzania government is pleased to learn about additional gas resources discovered in Block 2," says Hon. Prof. Sospeter Muhongo, Minister for Energy and Minerals in Tanzania.

The Statoil-operated partnership started its new drilling campaign in Block 2 in September 2013. In addition to Mronge-1, the campaign includes drilling of several new prospects and appraisal of previous discoveries. Following Mronge-1, the partnership is scheduled to appraise the 2012 Zafarani discovery.

Statoil operates the license on Block 2 on behalf of Tanzania Petroleum Development

NYC-based PIRA Energy Group reports that the midcontinent fundamentals weakened in November. The U.S. is in a much tighter stock position than last year. In Japan, Japanese low crude imports draw stocks. Specifically, PIRA’s analysis of the oil market fundamentals has revealed the following:

Midcontinent Fundamentals Weaken in November

High crude stocks on the Gulf Coast led to a further disconnect between U.S. and foreign markets in November, with the Brent-LLS differential rising to a record $10/Bbl. Meanwhile, continuing surplus stocks in the western Canada corridor further depressed Canadian differentials. And with West Texas now pipeline-connected to the Gulf Coast, the weak LLS-WTI spread allowed Midland differentials to slip lower. However, by late November and early December fundamentals were improving and all differentials had strengthened, with LLS and Mars moving from contango into backwardation.

U.S. in Much Tighter Stock Position than Last Year

For the first time this year U.S. commercial oil inventories have fallen below last year. Crude stocks are 14 million barrels above last year, although from a commercially available stock position crude inventories are really comparable to last year because of new infrastructure. Overall product stocks are 16 million barrels below last year. The inventory deficit to last year should further widen next week. While there is a small stock deficit to last year, adjusted petroleum product demand (four week average) is running a huge 1.57 MMB/D, or 8.5%, higher than last year.

Japanese Low Crude Imports Draw Stocks

Runs continued rising post-turnaround, but crude imports moved lower resulting in a strong crude stock draw. Both gasoline and gasoil demand eased back with minor stock changes for both. Kerosene stocks posted strong build rate, but the kerosene yield relative to jet yield does not fall within expected norms, suggesting a data revision down the road.

Increased Saudi Formula Crude Prices for January Directionally Discourage Liftings

Saudi Arabia's formula prices for January were recently released. Many of the differentials against the key pricing benchmarks were raised for movements to the U.S, Europe, and Asia, though Asian premiums on Arab Heavy and Medium were lowered slightly. For the U.S. market, the higher January differentials for Arab Light/Medium/Heavy are the strongest ever seen since the adoption of ASCI as a marker in 2010. The overall changes to formula pricing for January will directionally discourage liftings.

Refinery Outages and Atlantic Basin Products

While growing product exports from high runs in the United States have received much of the attention recently, there has also been an ongoing need for more light product imports into Latin America and Africa. That import requirement is driven by growing demand but stagnant refinery capacity. It has been compounded by refinery outages at times. Last year disastrous fires in Venezuelan refineries cut refinery output. More recently there was a fire in the Brazilian 190 MB/D REPAR refinery on November 28. Although it was originally thought to come back on line by mid-December, reports are now suggesting that it will take longer, perhaps by end-month.

Atlantic Basin Surplus Crude

The growth in crude production in the Atlantic Basin will have a profound impact on regional crude supply/ demand balances. Crude production growth is being driven by the shale “revolution” in the United States and increased oil sands development in Canada. The Atlantic Basin is broadly defined as including the Americas, Europe, and Africa. Refinery runs in these countries have declined somewhat in recent years after peaking in 2005-2007, but they are expected to slowly resume growth with increases in the U.S. and Latin America more than offsetting declines in Europe. However, the projected growth in crude production is much greater than the increase in refinery runs. As a result a sizeable crude surplus will develop within the region and crude will be forced to seek markets elsewhere, primarily in the rapidly growing countries in Asia. 

The information above is part of PIRA Energy Group's weekly Energy Market Recap, which alerts readers to PIRA’s current analysis of energy markets around the world as well as the key economic and political factors driving those markets. 

Commentary from Bentek Energy Director of Energy Analysis Jack Weixel:
Platts oil and gas analytics unit, Bentek Energy, said that natural gas demand hit yet another milestone on Tuesday as the U.S. endured another day of subzero weather. Gas delivered to consumers across the U.S. on Tuesday hit 134.3 Bcf/d – supplanting Monday's short lived record demand mark of 130.4 Bcf/d. The increase in demand was most notable in the Northeast where residential and commercial demand jumped 30% from the prior day. Bentek Director of Energy Analysis, Jack Weixel, said that natural gas use for consumers is up across the board, regardless of weather, and that big temperature swings in the future will cause the same result. "You've got this massive supply source in the Marcellus, about 300 miles west of major New York and Mid-Atlantic market places, and prices of natural gas nationally have moderated considerably over the past five years, so utilities are leaning on the fuel as a go-to fuel source," said Mr. Weixel. "When cold strikes and more people are connected to the system, you have more systemic gas demand, so it becomes a pipeline capacity issue." The lack of pipeline capacity into New York could be responsible for the massive spot price increases seen in day ahead trading for Tuesday. Platts price data indicates that day ahead prices for gas delivered on Wednesday have decreased dramatically as demand is forecast to ease. Mr. Weixel concluded by saying that 'this is not the last time we'll see these big daily spikes in price, probably not the last time this winter, or at least until more capacity is built to serve an increasing customer base."

Platts Natural Gas Alert article which ran on Monday 1/7/14:
NE US SPOT NATURAL GAS PRICES FALL NEARLY $37/MMBTU ON WARMER WEATHER
Houston (Platts)--7Jan2014/1019 am EST/1519 GMT
Some spot natural gas prices in the US Northeast fell nearly $37/MMBtu
Tuesday, with forecasts calling for warmer temperatures Wednesday following a
bout of extremely cold weather.
Transcontinental Gas Pipeline Zone 6 non-New York sank $36.80 to average
in the lower $35.00s/MMBtu on IntercontinentalExchange, after hitting a new
all-time high Monday.
Transco Zone 6 New York dropped $20.79 to average in the lower
$32.10s/MMBtu, narrowing its discount to non-New York to $2.90 from $18.91
Monday.
Texas Eastern M3 dropped $25.26 to average in the lower $15.00s/MMBtu.
Algonquin Gas Transmission dropped $7 to average in the lower
$26.50s/MMBtu, with Tennessee Gas Pipe Line Zone 6-200 leg down $6.35 to
average in the upper $27.60s/MMBtu.
Iroquois Gas Transmission, receipts dropped $17.62 to average in the
mid-$19.00s/MMBtu, with Iroquois Zone 2 down $14.63 to average in the lower
$23.10s/MMbtu.
Other Northeast prices were mixed, with production region points up as
much as $1.30 as multiple pipeline companies posted notices restricting
secondary nominations amid the record demand seen Monday.
A mass of cold air swept into the northern US Monday, bringing wind
chills down to the minus 40s Fahrenheit from western New York to Wisconsin,
boosting spot natural gas prices to record highs in Monday trading.
By Wednesday, high temperatures below zero will be virtually gone from
the lower 48 states, said a report from The Weather Channel. By Thursday,
highs in the teens, 20s, or 30s will come to the Great Lakes and northeast
areas, the report said.
Washington was forecast to have a high of 27 F Wednesday following a high
of 14 F Tuesday. New York will see a high of 27 F, following a high of 13 F
Tuesday.
Platts unit Bentek Energy projected total northeast load to drop to 34.4
Bcf Wednesday, from 38.9 Bcf Tuesday.

Monday's Platts-Bentek's Gas Daily Market Fundamentals:
Demand surges to new record high of 134 Bcf/d

Demand continues to surge to 134.3 Bcf/d, breaking the record of 130.4 Bcf/d
set Monday, as frigid temperatures expand eastward.
The day-on-day gain can be attributed primarily to an 10.3-Bcf/d strengthening in Northeast
residential/commercial demand, which rose to 28.8 Bcf/d from 18.5 Bcf/d.
Total Midwest demand remains strong, falling only 2 Bcf/d to 31.3 Bcf/d, which
still ranks as the fourth-highest level since 2005.
The cold snap will start to taper off starting Wednesday, providing relief to the Midwest and Northeast
and likely pushing total demand below 100 Bcf/d by Friday. Production is up
roughly 0.3 Bcf/d, with a rebound of nearly 0.5 Bcf/d in the Fayetteville
basin, after its production was revised 0.7 Bcf/d lower in Monday's I2 cycle,
indicating possible freeze-offs.

Wood Group Mustang announces John Etherington as general manager Malaysia, leading operations and strategic development in the Asia Pacific region. Kuala Lumpur is the hub of Wood Group Mustang's Malaysia operations, where Etherington will focus on an expanding presence in the offshore, onshore, chemicals, oil sands, process plants, industrial, and automation and control markets.

A native of the U.K., Etherington delivers 26 years of upstream and downstream oil and gas expertise, holding positions within engineering, project management, general management and operations. His scope of past projects include Qatar, United Arab Emirates, Iran, Saudi Arabia, India, Thailand, Indonesia, China, Australia, North Sea and Malaysia.

Etherington joins Wood Group Mustang after serving 19 years with WorleyParsons, most recently as chief operations officer for their joint venture in Kuala Lumpur, where he has resided for the past 16 years. He holds a Bachelor of Science in instrumentation and control engineering from the University of Teesside in the U.K. and is a chartered engineer with the Institute of Electrical Engineers in the U.K.

"John's proven track record and passion for the Asia Pacific region will allow Wood Group Mustang to build and deliver a project management and engineering capability recognized on a global scale serving our local and regional clients," shared Wood Group Mustang Executive Vice President John W. Dalton, Sr.

Wood Group Mustang's Kuala Lumpur office was established in late 2010 as the regional execution center for the upstream, automation, process plant and industrial sectors. The objective of the business is to serve and develop local industries by bringing Wood Group Mustang's technical excellence in project execution and delivery to the region. The office is located at The ICON Jalan Tun Razak, W-07-01, Level 7, West Wing, No.1 Jalan 1/68F off Jalan Tun Razak, 50400 Kuala Lumpur, Malaysia.

A group comprised of 17 oil and gas companies has established a project for joint seismic acquisition in the southeastern Barents Sea. Statoil is the operator of the project.

Seismic vessel Ramford Vanguard. (Photo: Ole Jørgen Bratland)

At the request of the Norwegian Ministry of Petroleum and Energy (MPE), the industry, via the Norwegian Oil and Gas Association, has taken the initiative to jointly acquire seismic 3D data from the blocks in the southeastern Barents Sea that will be announced in the 23rd licensing round for the Norwegian continental shelf (NCS) in 2014.

This is the first new area on the NCS to be opened since 1994. Thirty companies showed interest in participating in such a collaboration.

17 of these companies signed an agreement to establish a joint project for planning and implementing the acquisition. As the largest operator on the Norwegian shelf Statoil has taken on the operator role.

"Coordinated seismic acquisition has several advantages. It will ensure very good data quality, since the industry to a much greater extent will be able to utilise the companies' collective professional expertise within geological understanding and seismic acquisition and processing. The initiative lays the foundation for fewer, well-planned operations, thus reducing acquisition costs and potential disadvantages for the fishing industry," says Gro G. Haatvedt, Statoil's senior vice president for exploration on the NCS.

"Interest in the Barents Sea has increased considerably in recent years, due in part to the discoveries in the Johan Castberg area. High-quality 3D data will be important to the industry in order to increase understanding of the area's potential."

When the authorities circulate the 23rd round nominated blocks for public consultation, other oil companies will get a new opportunity to engage in the project. It is expected that several companies will make use of this offer.

The project will immediately initiate a tender process for the seismic acquisition. The plan is for the seismic surveys to start in April 2014 and conclude in the autumn of the same year.

The companies who will be taking part from the beginning are BP, Chevron, ConocoPhillips, Det norske oljeselskap, Eni, GDF Suez, Idemitsu, Lukoil, Lundin, Norske Shell, PGNiG, Repsol, Spike, Statoil, Suncor, VNG and Wintershall.

Apache Corporation announces that CEPSA Suriname S.L., a Spanish company, has farmed in to a 25-percent participating interest in Suriname's Block 53, a 867,117-acre (3,509 km2) area located in 1,640-5,900 feet (500-1,800 meters) of water about 80 miles (130 km) offshore.

Apache Suriname Corporation LDC, a subsidiary of Apache, signed a production sharing contract for Block 53 with Staatsolie Maatschappij Suriname NV — the Surinamese national oil company — in 2012 after a competitive bid round. The Block 53 work program includes a 3-D seismic program, currently in processing, and two exploration wells. Apache retains a 75-percent participating interest in the block. Staatsolie has an option to obtain a 20-percent participating interest in commercial fields discovered on the block.

New Orleans based Harvey Gulf International Marine, announces the launching of its completely remodeled corporate website.   www.HARVEYGULF.com. The website has been updated to reflect the growth and presence of Harvey Gulf as one of the leaders in the US oil and gas industry as well as being the leader in LNG powered offshore support vessels. Visitors to the website will be able to access detailed specification sheets for the fleet, information regarding the LNG vessels and LNG facility, Alaskan operations as well as information about Harvey’s continued commitment to safety and quality.

CEO Shane Guidry commented:

"I am pleased to present my company’s new website as an extension of our commitment to our customers and their needs to have a clear understanding of the Harvey Gulf fleet and corporation. In particular the Go Green webpage provides important information for our customers regarding the LNG vessels under construction and the first LNG refueling facility to be located in Port Fourchon, LA.”

Founded in 1955, Harvey Gulf International Marine is a marine transportation company that specializes in towing drilling rigs and providing offshore supply and multi-purpose support vessels for deepwater operations in the U.S. Gulf of Mexico. 

Eni has been present in Norway since 1965, with current production standing at approximately 110,000 boe per day through its subsidiary Eni Norge AS.

San Donato Milanese (Milan), 9 December, 2013 – Eni has made a new offshore oil and gas discovery in the Norwegian Barents Sea, approximately 240km from Hammerfest.
The well, which is located in the Skavl prospect in the PL532 license, has been drilled five kilometers south of the Johan Castberg area. It was drilled in approximately 349 meters of water and reached a target depth of 1,700 meters.

The well has confirmed good quality oil and gas in Jurassic and Triassic sandstone, with volumes of recoverable oil estimated at between 20 and 50 million barrels. The discovery is part of Eni's joint venture exploration activity to develop the Johan Castberg field.

Following completion of Skavl, the drilling rig will move 16 kilometers north where it will continue its exploration campaign in the execution of an additional exploration well on the prospect of Kramsnø. 
Statoil is the operator of production license PL532 with a 50% stake; the remaining shares are held by Eni Norge AS (30%) and Petoro AS (20%).

Eni has been present in Norway since 1965, with current production standing at approximately 110,000 boe per day through its subsidiary Eni Norge AS. Eni is operator of the ongoing development of the first oil field in the Barents Sea, the important Goliat discovery, and of the Marulk gas field in the Norwegian Sea. Furthermore, in Norway Eni has interests in the country in a number of exploration licenses and fields under development and in operation, including Ekofisk, Norne, Åsgard, Heidrun, Kristin, Mikkel and Urd.

Offshore blocks offered in Bangladesh's Bay of Bengal have attracted a disappointing level of interest from license-holders; however, anticipated improvements to the terms governing the country's oil and gas industry could entice investors, says research and consulting firm GlobalData.

According to the company's latest report*, only one extra bid is thought to have been received for the shallow-water blocks during the extension of Bangladesh's 2012 bidding round, adding to the three already received. As a result, more attractive fiscal terms are likely to be implemented in upcoming rounds, although the next one is unlikely to commence until 2015.
The fiscal terms for Bangladesh's deepwater blocks were amended significantly, with a number of new incentives, mid-round in 2013; however, no such improvements were applied to the terms for the shallow-water area, despite increasing demand for natural gas.

Jonathan Lacouture, GlobalData's Lead Analyst for the Asia-Pacific region, cites this lack of incentives as a reason for the low number of bids.

Bangladesh faces fierce competition from India and Myanmar for exploration investment in the Bay of Bengal,says the analyst. Incentives are needed to make the Bangladeshi blocks stand out, especially considering the substantial turnout which Myanmar recently experienced in its own licensing round."

Indeed, Bangladesh's upstream oil and gas sector is further clouded by ongoing uncertainty over the status of certain blocks in the shallow-water area. Following a clash with Myanmar over maritime boundaries, a similar dispute with India now remains unresolved, and arbitration on this dispute is not expected until June 2014.

Lacouture continues: If the ruling on this issue favors India, then it would threaten the integrity of the six offshore blocks on the western edge of the exclusive economic zone, which are currently claimed by Bangladesh. This arbitration means that the next bidding round will probably not happen until 2015 and the delay will only increase authorities urgency to attract investors."
Will Scargill, Fiscal Analyst for GlobalData, suggests that future incentives are most likely to be offered through either a higher-cost recovery limit, or an improved gas-pricing framework.
He says: "

Given the level of domestic demand, export provisions are unlikely to be offered. The 2008 model contract permitted exports, and it was precisely for this reason that there was a lot of political opposition to the contract."

Hoover Container Solutions (Hoover), a subsidiary of Hoover Group, Inc., has announced the grand opening of its new distribution and service center in Scott, La. The opening of this facility will provide an increased ease of operation for Hoover products and services to the Gulf of Mexico and the southeastern United States.

The new distribution and service center sits on nine acres and is comprised of 25,000 square feet of warehouse and 3,000 square feet of office. Overseen by Robbie Monlezun, Hoover's regional operations manager, the new facility currently employs 11 individuals and is expected to more than double within the next six months.

The site hosts the most robust, state-of-the-art tank cleaning equipment in the Gulf Coast and will handle operations such as tank wash, recertification, reconditioning and transportation of intermediate bulk containers (IBCs) including the capability to perform NAS 6 & 8 cleaning of chemical tanks. In addition to the variety of services offered at this location, Hoover's new Louisiana facility will sell and rent stainless and poly IBCs, offshore chemical tanks, ISO tank containers, offshore baskets, cutting boxes and related products.

"Our new location allows us to more than double the capacity of our previous tank cleaning capabilities and significantly increase the available inventory of our products," said Paul Lewis, Hoover's president and chief operating officer. "We value our customer base in Louisiana, and Hoover's expansion is a reflection of our desire to provide a convenient location to better meet their needs."

NYC-based PIRA Energy Group reports that Aramco formula crude prices for February cut for Asia and Europe, but U.S. raised. In the U.S., crude leads stocks lower. Specifically, PIRA’s analysis of the oil market fundamentals has revealed the following:

Aramco Formula Crude Prices for February Cut for Asia and Europe, but U.S. Raised

Saudi Arabia's formula prices for February were recently released. Pricing adjustments for the key markers were lowered for the Asian and European destinations. The reductions for Asia were greatest on the lighter grades, though there was also a reduction in the Arab Heavy differential. European pricing while also reduced, was generally less aggressive than for Asia while the largest reduction was on the heaviest grades.

Crude Leads Stocks Lower

Total U.S. commercial inventories fell this past week with the entire decline occurring in crude oil. Product inventories increased marginally as crude runs stayed at an extremely high rate while reported demand fell on the week in large part because of the Christmas Holiday. For the same week last year, stocks fell so the year-on-year stock deficit narrowed.

U.S. Refinery Turnarounds, January

The first six months of 2014 are expected to experience above average turnaround related refinery downtime. This compares survey results from previous years and does not take into account the high level of unplanned events which occurred over the past several years and are quite likely to be experienced in the new year as well. For example, PIRA's U.S. Refinery Turnarounds survey published on December 31, 2012 expected an average planned crude unit downtime for the first half of 2013 of about 1.6 MMB/D, also the highest level for the five year period from 2009 to 2013. Actual outages turned out to be closer to 2.3 MMB/D.

Tanker Markets Exited 2013 On a High Note

Tanker markets exited 2013 on a high note, with rates in most crude trades hitting new highs for the year in December while exceeding earlier expectations by a wide margin. The recent seasonal improvement in tanker rates is a reflection of higher global refinery runs, which rebounded strongly from autumn maintenance, increasing by 3.8 MMB/D from October to December, with 2.4 MMB/D of the increase in the Atlantic Basin. Tanker markets in the Atlantic Basin also benefited from weather, and strike-related delays in December.

Tight U.S. Propane Market and Looser Overseas Conditions

U.S. propane storage continues to fall to record low levels, with PADD II especially low.  The extremely cold weather is causing production and logistical bottlenecks as well, and, of course pulling demand higher.  The relatively warm weather overseas, especially in Europe, falling crude prices and the arrival of cargoes from the USGC and West Africa have been pulling international LPG prices lower.

U.S. Ethanol-Blended Gasoline Reaches a Record High

U.S. ethanol-blended gasoline production reached an all-time high during the week ending December 20. Ethanol prices were mostly higher in the holiday-shortened week ending December 27, and manufacturing margins rose for the first time in three weeks.

The information above is part of PIRA Energy Group's weekly Energy Market Recap, which alerts readers to PIRA’s current analysis of energy markets around the world as well as the key economic and political factors driving those markets.

Total announces the signature of a farm-in agreement with InterOil Corporation that gives it a 61.3% interest in Petroleum Retention License (PRL) 15 in Papua New Guinea. The Elk and Antelope gas fields, two of the biggest finds in the Asia-Pacific region in recent years, were discovered in the license in 2006 and 2009 respectively.

Total and InterOil Corporation retain the flexibility to farm-down an aggregate of up to a 19.3% interest (before any election by the government to exercise its option to join the project with a 22.5% interest) to a strategic partner.

The common objective of Total, who will operate the project, and InterOil, is to complete the delineation of the two discoveries and to continue to explore for new resources in the license area. Depending on the results, this could lead to a final investment decision by 2016 for the development of the fields and the construction of a liquefaction plant located onshore on the Gulf of Papua.

In addition, Total has an option to take an interest in Petroleum Prospecting Licenses PPL 236, PPL 237 and PPL 238 in the same area.

"Following Total's entry into exploration in Papua New Guinea in 2012, this new acquisition of an interest in significant discovered resources is an exciting opportunity for Total to develop a new gas production and liquefaction hub in the Asia-Pacific region, where gas demand is very dynamic", stated Yves-Louis Darricarrère, President Upstream at Total. "Total will leverage its technology and experience in major LNG projects to reinforce its long-term production post-2020."

Total will pay $470 million for a 42% interest (32.5% if the government executes its option to join the project) with a contingent payment estimated by Total at approximately $590 million. The transaction remains subject to the approval of the Papua New Guinea government.

Total in Papua New Guinea
In October 2012, Total acquired from Oil Search Limited a 40% stake in the PPL 234 and PPL 244 offshore permits, 50% in the PRL 10 offshore permit and an option for 35% in the PPL 338 and PPL 339 onshore permits (in the same area as the Elk and Antelope gas fields and PPLs 236, PPL 237 and PPL 238).

In April 2012, Total Marketing & Services created a new affiliate in Papua New Guinea, with offices in Port Moresby. Total Marketing & Services had been marketing lubricants in the country via a distributor arrangement for several years. The new affiliate will allow Total to more effectively support its mining and manufacturing customers in implementing their development projects in Papua New Guinea, which is enjoying strong economic growth.

VAALCO Energy, Inc. (NYSE: EGY) has announced that the Company has received written confirmation from The Ministry of Petroleum of Angola that the available 40% working interest in Block 5, offshore Angola, has been assigned to Sonangol E.P., the National Concessionaire. The Ministry of Petroleum also confirmed that Sonangol E.P. will assign the aforementioned participating interest to its exploration and production affiliate, Sonangol P&P.

With this confirmation, VAALCO has begun the process of contacting drilling rig companies to secure a semi-submersible rig to commence the exploration phase of the pre-salt / post-salt Kwanza Basin program.

Steve Guidry, CEO, commented, "We are excited to begin drilling offshore Angola, especially given the recent significant discoveries made elsewhere in the Kwanza basin in which Block 5 is located. Having Sonangol as our partner, with their extensive knowledge of the basin, reaffirms our confidence in the potential of discovering commercial quantities of hydrocarbons on our 1.4 million acre concession."

Following the assignment, Sonangol and its affiliates will hold a 60% working interest in Block 5, comprising a 20% carried working interest and the newly assigned 40% participatory working interest. VAALCO, as operator, continues to hold a 40% operating working interest in Block 5.

Flexible pipe specialist FlexTech has surpassed its first year turnover target of £500,000 just six months after start-up and anticipates reaching £1million by the end of the year.
Flexible pipe expert Craig Keyworth(photo) established the Aberdeen-based company in March of this year, after operating as a flexible pipe consultant for a number of years prior.

Mr Keyworth, who is also FlexTech's Engineering Director, said: "I'm very pleased with the company's initial progress. We are building a great track record of developing bespoke solutions to individual challenges, project managing complex design scopes, delivering on schedule and on budget."

FlexTech's core business is the successful delivery of flexible pipe and riser engineering projects, offloading systems and integrity management and inspection. It also has a range of innovative products designed to facilitate ease of installation, ensure operational integrity and prolong the life of the flexible in field.

The company moved to new premises in September 2013, representing a six-figure investment in a new office as well as specialist software and infrastructure. The company also has a half-acre research and development facility in Lincolnshire, with a further one acre to allow for future planned expansion.

Within its initial six months, FlexTech has completed work and supplied equipment globally for a range of companies from UK and international operators as well as installation contractors, with a number of high profile jobs scheduled for 2014.

Mr Keyworth continued: "The business has been a long-term plan and we have a wealth of internal practical experience and a team driven for success, both for the clients and for ourselves as an organisation. The ultimate aim is for a reputation as a company capable of delivering on all flexible pipe requirements. We are a highly skilled, dynamic company and pride ourselves on our solutions-based approach and ability to adapt quickly and professionally to our clients' needs whatever or wherever they may be."

FlexTech currently has a team of six subsea and marine specialists and aims to add a further eight employees within the next 12 months. It has recently recruited two new directors, who, along with Mr Keyworth, boast more than 50 years' experience in the oil and gas industry among them.

Mr Keyworth said: "The business isn't just about making money, it's about the team and how they work together and with our clients. We have recruited a team with an extensive knowledge and background in flexible pipes that is willing to go the extra mile to provide excellent service and results to our clients.

"Our experience in the industry and our innovative and practical approach which saves our clients time, effort and money, has been in high demand, and we are looking forward to a busy 2014 and beyond."