AnadarkoAnadarko Petroleum Corporation (NYSE: APC) has announced it has entered into a definitive agreement with ONGC Videsh Ltd. (OVL), a wholly owned subsidiary of Oil and Natural Gas Corporation Limited, to sell a 10-percent interest in Mozambique's Offshore Area 1 (Area 1) for $2.64 billion in cash. Anadarko will remain the operator of Area 1 with a working interest of 26.5 percent.

"This transaction demonstrates our continuing ability to create substantial value through exploration and to again accelerate the value of our longer-dated projects through attractive monetizations and third-party capital," Anadarko Chairman, President and CEO Al Walker said. "Mozambique LNG is a premier global energy project, and we look forward to working with our partners and the government to advance this world-class development.

"As the operator of Area 1, we are very pleased to have reached this agreement with OVL, which values our pre-transaction interest at more than $9.6 billion. We expect to use the net proceeds from this transaction to further accelerate the short- and intermediate-term oil and liquids opportunities we have in the Wattenberg field, Eagleford Shale, Permian and Powder River basins, as well as the Gulf of Mexico and other evolving plays in our portfolio. Our objective with this allocation of capital will be to further increase our cash-flow growth with attractive wellhead margins, while providing additional value to our shareholders as evidenced by our recent dividend increase and continued portfolio-management activities."

The transaction is expected to close around the end of 2013, and is subject to existing preferential rights, governmental approvals and other customary closing conditions.

Area 1 is operated by Anadarko Moçambique Area 1 Limitada (a wholly owned indirect subsidiary of Anadarko) and is located in Mozambique's deepwater Rovuma Basin. The block contains the Prosperidade and Golfinho/Atum natural gas complexes that combined hold an estimated 35 to 65-plus trillion cubic feet (Tcf) of recoverable natural gas resources. In cooperation with the Government of Mozambique, Anadarko, its partners, and Eni (as the operator of the adjacent Area 4 block) continue to advance the development of an LNG park with first LNG cargoes expected in 2018.

Anadarko's partners in Area 1 include Mitsui E&P Mozambique Area 1, Limited (20 percent), BPRL Ventures Mozambique B.V. (10 percent), Videocon Mozambique Rovuma 1 Limited (10 percent) and PTT Exploration & Production Plc (8.5 percent). Empresa Nacional de Hidrocarbonetos, E.P.'s (ENH) 15-percent interest is carried through the exploration phase.

.

PirlalogoNYC-based PIRA Energy Group reports that global Asian oil markets remain supported on a global basis. On the week, U.S. stocks fell, split about equally between crude and products.  In Japan, crude stocks drew on higher runs and contained imports. Specifically, PIRA’s analysis of the oil market fundamentals has revealed the following: 

Asian Oil Markets Remain Supported on a Global Basis

Oil prices remain at the top of their trading range with firmness being supported by tightened crude balances which are being fueled by supply losses from producers such as Libya and Iraq and ongoing outages from Syria and Nigeria. All told, the market is currently at its maximum point of physical strength, with high runs, supply losses and crude stock declines. 

Overall Commercial Inventories Decline

U.S. stocks fell for the week ending August 16, split about equally between crude and products and matching last year's inventory decline for the same week. This left the inventory excess 1.9% above year ago levels. The bulk of the excess inventory is in gasoline. Overall adjusted oil demand growth is now running just 0.9% above year ago levels. This is the second week in a row that demand growth was no higher than 1% after three earlier weeks of near 3% growth. Some of PIRA's other energy indicators of economic growth (e.g. electricity demand) have also been weakening, which is not a good sign for the economy. 

Two Weeks of Japanese S/D Data

Two weeks of data were reported this past week due to the mid-August hiatus. Crude stocks drew on higher runs and contained imports. Gasoline demand was expectedly strong. Conversely, gasoil demand eased sharply due to the typical mid-August vacation impacts and stocks built, even with higher exports. Kerosene stocks continued to build seasonally, with the average build rate over the last two weeks being relatively high. 

Slow U.S. Stock Building

U.S. propane storage is building rather slowly pushing its price higher going into the crop drying and heating seasons. Butane demand will gain for gasoline blending while ethane continues to be impacted by steam cracker outages. 

Ethanol Prices Advance

U.S. ethanol prices rose the week ending August 16 due to higher corn costs and a tighter market with lower inventories. Prices were also supported by concerns that output will decrease prior to the next harvest because of plant maintenance and corn shortages. RIN prices rebounded after falling to a three-month low in the previous week.

Ethanol Output Decreases

U.S. ethanol production declined to 844 MB/D the week ending August 16, the second lowest level since April, and down from 857 MB/D in the preceding week. Due to dwindling supplies, some ethanol producers have contracted to barge in corn from as far south as Louisiana, where the 2013/2014 harvest has already started. 

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.

.

Statoil ASA (OSE: STL, NYSE: STO) has signed an agreement to divest minority interests in the Gullfaks and Gudrun fields offshore Norway and exit the non-core, non-operated Schiehallion and Rosebank fields, West of Shetlands.

In addition to the cash consideration of USD 2.65 billion, the transaction with Austrian oil and gas company OMV includes a contingent payment and involves a partnership between the two companies. Statoil reduces its ownership share in Gullfaks from 70% to 51% and from 75% to 51% in Gudrun, and retains its operatorships on both fields. 

Statoil-Gullfaks Gudrun map 468

"Through this transaction, Statoil captures value created through asset development and unlocks capital for investment in high return projects in core areas. This includes our recent discoveries on the Norwegian continental shelf. We continue to deliver on our strategy to create value through active portfolio management and to further increase our financial flexibility," says Helge Lund, Statoil's president and chief executive officer.

Statoil expects to recognize a gain from the transaction estimated to be between USD 1.3-1.5 billion, to be adjusted for activity between the effective date 1 January 2013 and the closing date.

The transaction will enable Statoil to redeploy around USD 7 billion of capital expenditure, around USD 5.5 billion of which is pre-2020 (excluding potential investments in the recent Shetland/Lista discovery at Gullfaks).

Entering partnership

OMV is an established company on both the Norwegian (NCS) and the UK (UKCS) continental shelves. Statoil and OMV enter into a partnership including potential cooperation on exploration opportunities across Norway, the UK and the Faroese Islands as well as the development of enhanced oil recovery (EOR) technologies.

"Statoil is pleased to strengthen the partnership with OMV on the Norwegian continental shelf. OMV is already a valued partner in Edvard Grieg and Aasta Hansteen, and this agreement enables our companies to develop the cooperation further," says Lund.

"I believe this is a win-win deal for Statoil and OMV. Apart from the assets, I am especially proud that we can partner with a world-class leader in offshore and EOR technology," says Gerhard Roiss, chief executive officer of OMV.

Demonstrating value of Statoil's NCS and UKCS portfolio

The transaction builds on Statoil's offshore competence and experience, and track record of realising value through asset development and portfolio management.

As operator of the Gullfaks field, Statoil has added substantial value through successful efforts to maximise oil recovery and recently announced a new discovery in the Shetland/Lista formation. As part of the transaction, Statoil captures upside from this discovery through a contingent payment of 6 USD per barrel of oil equivalent of reserves developed.

Gudrun is on track for production start-up in the first quarter of 2014. As the operator, Statoil is executing the development on time and below original cost estimates. Today's transaction demonstrates the value of efficient project execution in an asset where Statoil increased its ownership in 2010.

Statoil remains committed to growing its business on the UKCS and is the operator of large field developments including the Mariner project and exploration licenses. By divesting non-core, non-operated developments in the West of Shetlands, Statoil further focuses its UK portfolio.

Statoil's production from the divested assets in the first half of 2013 was approximately 26,000 barrels of oil equivalent per day from Gullfaks. Production impact for Statoil from the transaction is estimated to around 40,000 barrels of equity oil equivalent per day in 2014 and 60,000 per day in 2016.

The effective date for the transaction is 1 January 2013. Closing is expected around year end 2013, pending government and partner approvals.

Total proceeds of around USD 15 billion have been realised through divestments by Statoil since 2010, enabling the company to redeploy resources to core, high-return upstream projects.

Bank of America Merrill Lynch and Lambert Energy Advisory Limited were financial advisors to Statoil on this transaction.

.

PirlalogoNYC-based PIRA Energy Group believes that the China GDP slowdown is underway. On the week, U.S. commercial stocks drew. Specifically, PIRA’s analysis of the oil market fundamentals has revealed the following:

 Difficult Transitions Underway

The China GDP slowdown is underway. It is still unclear whether the long-predicted transition to slower, domestic led growth will be successful and smooth. While this may represent a vulnerability to demand growth (for all fuels), the increasingly volatile political transition in MENA could prove to represent a far more important vulnerability to oil and gas supply growth. The shale revolution continues to spread from the natural gas supply to the demand side of the balance as new markets emerge to take advantage of the growth of low cost North American production. 

U.S. Stocks Drew Last Week

Total commercial stocks decreased for the week ending August 9, largely offsetting the modest builds seen in the prior two weeks. Products increased despite lower refinery runs and lower product imports due to weaker reported demand. Crude stocks drew, with Cushing crude stock draws accounting for half of the total draw. Cushing crude stocks are now down from the all-time high this year and at the lowest level since 1Q12. Despite this week’s decline, the stock excess to last year widened as there was a draw in this week last year. 

U.S. Sees Low Propane Stock Build

A surprisingly low stock build was indicated for the latest reporting week. The U.S. is experiencing a widening deficit to last year. The storage deficit relative to last season is expected to widen as the pace of exports picks up and with a likely favorable crop drying season ahead. 

EPA Finalizes 2013 Biofuel Standards and Will Reduce 2014 Mandates

U.S. ethanol prices and margins fell last week because of rising production, inventories and imports. Sharply lower RIN prices also put downside pressure on prices. The EPA finalized the renewable fuel standards for 2013 and stated that it will reduce the 2014 mandates in order for them to be achievable. 

Ethanol Stocks Draw; Production Higher

Ethanol stocks were drawn by 291 thousand barrels to 16.4 million barrels for the week ending August 9, erasing the build from the previous week. U.S. ethanol production rose for the second straight week, reaching 857 MB/D from 853 MB/D the prior week as several manufacturers maximized output prior to extended turnarounds planned for later this month and during September. 

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.

.
Offshore Source Logo

Offshore Source keeps you updated with relevant information concerning the Offshore Energy Sector.

Any views or opinions represented on this website belong solely to the author and do not represent those of the people, institutions or organizations that Offshore Source or collaborators may or may not have been associated with in a professional or personal capacity, unless explicitly stated.

Corporate Offices

Technology Systems Corporation
8502 SW Kansas Ave
Stuart, FL 34997

info@tscpublishing.com

 

Search