Tag Archives: oil

Italy’s Saipem wins $1.5b Azerbaijan’s Shah Deniz contract

MAY 3 2016 (The Conway Bulletin) – A consortium led by Italian oil and gas service company Saipem won a $1.5b contract to transport and install a deepwater subsea production system for the second phase development of the Shah Deniz offshore gas field in Azerbaijan.

Shah Deniz, operated by BP, is central to Azerbaijan’s gas production. Once its second phase comes online, it will be the cornerstone of the so-called Southern Gas Corridor, a network of pipelines that will feed gas to Europe from the Caspian Sea.

Saipem’s management said the company will receive a fee of $1.3b from the overall deal.

“This award further strengthens Saipem’s key role in the construction of the Southern Gas Corridor where the company has a total of four contracts, in the upstream segment and in gas transportation infrastructure both onshore and offshore,” Stefano Cao, Saipem CEO, said in a statement.

Saipem, 30% owned by Eni, owns stakes in the other two companies in the consortium that won the contract – BOS Shelf and Star Gulf.

SOCAR, the Azerbaijani state energy company, owns 96% of BOS Shelf. Star Gulf owns the remaining 4%. Saipem owns 100% of Star Gulf.

ENDS

(News report from Issue No. 279, published on May 6 2016)

Kazakhstan-based Olisol makes Tethys deal

APRIL 29 2016 (The Conway Bulletin) – Kazakhstan-based Olisol will inject 9.8m Canadian dollars ($7.6m) into Tethys Petroleum, a Guernsey based oil and gas company, triggering a new share issue. The long-negotiated agreement will bring Olisol’s ownership in Tethys to 42%. Shareholders will vote on the deal at the annual meeting at the end of May. Tethys operates in Kazakhstan, Tajikistan and Georgia.

ENDS

(News report from Issue No. 279, published on May 6 2016)

Kazakhstan’s KMG EP and CEFC finalise JV

APRIL 30 2016 (The Conway Bulletin) – State-owned KMG EP and China’s CEFC energy company finalised their earlier agreement to form a joint venture that will take over the business of KMG International, formerly Rompetrol. In December, CEFC bought a 51% stake in KMG International for $680m, KMG EP revealed this week.

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(News report from Issue No. 279, published on May 6 2016)

Azerbaijan’s oil exports drop

APRIL 26 2016 (The Conway Bulletin) – Oil exports from Azerbaijan’s state- owned energy company SOCAR shrank by 10% in 2015 compared to 2014. In 2015, SOCAR exported 22.1m tonnes of oil, out of total country exports of 35.2m tonnes. Its share of Azerbaijan’s oil exports also fell from 70% in 2014 to 63% last year.

ENDS

(News report from Issue No. 278, published on April 29 2016)

Wood wins Azerbaijan contract

APRIL 28 2016 (The Conway Bulletin) – Aberdeen-based oil and gas services company Wood Group said it had won a $500m contract to provide engineering, procurement and construction management services to eight BP offshore oil and gas facilities in Azerbaijan. The contract will last for five years, with the option to renew it for another four. Wood Group will service the Azeri-Chirag-Guneshli and the Shah Deniz Stage 1 projects, the largest oil and gas projects in the country.

ENDS

(News report from Issue No. 278, published on April 29 2016)

Kazakhstan based Nostrum announces Q1

APRIL 27 2016 (The Conway Bulletin) – Kazakhstan-focused energy company Nostrum Oil & Gas posted a 30% drop in revenues for the first quarter of 2016 compared to last year because of sustained low oil prices. In Jan.-March 2016, Nostrum said revenues were $70m, down from $100m in 2015. Production was also down by 15% to 38,754 barrels of oil equivalent per day.

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(News report from Issue No. 278, published on April 29 2016)

Kazakhstan’s KMG EP revenues drop

APRIL 28 2016 (The Conway Bulletin) – Kazakhstan’s state-owned energy company KMG EP said its revenues for Q1 2016 were nearly 50% lower in US dollar terms than in Q1 2015, highlighting the impact of the depreciation of the tenge on Kazakh businesses. KMG EP data is a good indicator of the overall health of Kazakhstan’s state owned energy company Kazmunaigas, a main driver of the Kazakh economy.

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(News report from Issue No. 278, published on April 29 2016)

Stock market: Nostrum Oil & Gas

APRIL 29 2016 (The Conway Bulletin) – Nostrum Oil & Gas shares jumped 6% on Wednesday to 295.25p after the company announced quarterly results, its highest price for over three months.

Investors were happy with the company’s performance although Nostrum said a scheduled maintenance and low oil prices had hindered its performance in Q1 2016.

“It has been a steady start to the first quarter with production broadly in line with expectations taking into account the first part of the annual maintenance,” Kai-Uwe Kessel, Nostrum’s CEO said.

Investors also appreciated Nostrum’s position that cost-cutting remained a top priority.

“We continue to focus on reducing our operating costs internally and I am pleased with the progress we are making,” Mr Kessel said.

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(News report from Issue No. 278, published on April 29 2016)

Business comment: BTC fails to live up to hype

APRIL 29 2016 (The Conway Bulletin) – In the early 2000s, the Baku-Tbilisi- Ceyhan (BTC) oil pipeline was hailed as a key component of the New Silk Road, designed by the West for the West. The dream might now be over.

Western oil producers wanted a pipeline that would pump Caspian oil to world markets without having to pass through Russia.

Everyone in Washington DC was excited. “Happiness is multiple pipelines” was the slogan that could be heard espoused by US diplomats and oil companies. It was even seen on bumper stickers around the US capital.

The 1b barrels/day dream pipeline was inaugurated in 2005 and relied on Azerbaijan’s largest oil fields as well as on Kazakh and Turkmen trans-Caspian shipments.

The decade-long excitement, however, seems to have hit a wall as Kazakh oil shipments have now faded away.

Experts don’t believe shipments will resume anytime soon. Tengizchevroil appears to have let its contract with BTC lapse. Kazakhstan’s Aktau port management has said it doesn’t foresee oil shipments from Tengiz resuming.

At a time of low oil prices and rising extraction prices, cutting expenditure on shipments of oil across the Caspian Sea was the obvious move for Kazakh producers.

Tengiz, and Kashagan whenever it comes online, will use the expanded Caspian Pipeline Consortium for future exports.

This choice will isolate Azerbaijan at a time when it is under the spotlight to become Europe’s new gas provider. The take-home from this story is that corporate interest, in the long run, overrides diplomatic objectives.

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(News report from Issue No. 278, published on April 29 2016)

Kashagan to resume production, says Kazakh energy minister

APRIL 22 2016 (The Conway Bulletin) – Kazakhstan’s energy minister Kanat Bozumbayev said he expects production at the Kashagan offshore field to resume by the end of 2016. Mr Buzumbayev’s statement sounded like a rebuttal to an earlier comment by CNPC, which said it saw Kashagan production resuming in mid-2017.

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(News report from Issue No. 278, published on April 29 2016)