Shell’s Divestment Push Reaches Thailand in $900 Million Sale

January 31, 2017, 12:41 PM GMT+8
  • Kuwait Petroleum unit to buy 22.2% stake in Bongkot gas field
  • Sale is part of Shell’s $30 billion divestment program

Royal Dutch Shell Plc will sell its stake in an offshore Thai gas field to a unit of Kuwait Petroleum Corp. for $900 million as the international energy giant continues hawking assets for cash in the midst of a years-long energy slump.

Shell reached an agreement to sell two subsidiaries that own a combined 22.2 percent interest in the Bongkot field and adjoining offshore acreage to a subsidiary of Kuwait Foreign Petroleum Exploration Co., the unit known as Kufpec, Shell said in a statement Tuesday. A spokesperson for Kufpec, the international arm of Kuwait’s state-owned energy company, wasn’t immediately available to comment.

The Bongkot field started production in 1993 and came to Shell when it acquired BG Group Plc for $70 billion in 2015. To win shareholder support for that deal, Shell has promised cost savings of $2.5 billion, asset disposals of at least $30 billion within four years and a share buyback of $25 billion from 2017 to 2020.

“This transaction shows the clear momentum behind Shell’s global, value-driven $30 billion divestment programme, and is consistent with the company’s strategy to high-grade and simplify its portfolio following the acquisition of BG,” Shell said in the release.

The field’s other owners are Total SA, with a 33.3 percent stake, and PTT Exploration & Production PCL, which has 44.4 percent share and operates the field. The deal should be completed this quarter, Shell said in the release.


Posted in E&P, Global, Thailand, Upstream | Tagged , , , , | Leave a comment

Hess engages Wood Group for brownfield, maintenance work offshore Malaysia


Offshore staff

KUALA LUMPUR, Malaysia – Hess Exploration & Production Malaysia has awarded Wood Group a five-year operations and maintenance contract to support new fixed and floating offshore facilities in the North Malay Basin development area.

The location is around 150 km (93 mi) northeast of Peninsular Malaysia: the contract carries a one-year extension option.

Wood Group’s Kuala Lumpur office will employ up to 130 new full-time personnel to support operations at the field which is due to start up later this year.

The contractor will provide a wide range of services that will include brownfield engineering, risk-based inspection, integrity management, and computerized maintenance management system support.



Posted in E&P, Malaysia, Upstream | Tagged , , | Leave a comment

Australia’s Ichthys LNG dealt blow as major contractor pulls plug

* CIMIC pulls out of building power station to supply Ichthys LNG

* Ichthys operator Inpex says power station 89 pct complete

* Ichthys LNG Jul-Sept 2017 start-up likely to be delayed

By Henning Gloystein

SINGAPORE, Jan 25 Australia’s over $35 billion Ichthys liquefied natural gas (LNG) export project has been dealt a blow as engineering firm CIMIC, involved in building the facility’s power station, announced on Wednesday it was pulling the plug.

“CIMIC Group advises that the … consortium (building the power station) … has terminated its contract with JKC Australia LNG Pty Ltd for the design, construction and commissioning of the Ichthys Combined Cycle Power Plant (CCPP) project,” CIMIC said in a statement to the Australian Securities Exchange Ltd (ASX) on Wednesday.

CIMIC spokeswoman Fiona Tyndall said “we are not going beyond what we have said in that ASX statement.”

The power station is designed to supply the Ichthys LNG export facility with electricity.

A spokesman for Japan’s Inpex, the majority owner of Ichthys LNG, said the power station was 89 percent complete.

And while the spokesman said Inpex did not see this cancellation as “critical” to Ichthys and that it would have “no fatal influence” on its launch, the cancellation will almost certainly add further costs and delay the project’s production ramp-up, which was scheduled for July to September this year.

Australia’s $200 billion LNG production ramp-up is one of the biggest increases in supply the industry has ever seen, and will lift Australia over Qatar as the world’s biggest LNG exporter.

Even so, most of Australia’s LNG projects currently under construction, including Chevron’s huge Gorgon facility and Royal Dutch Shell’s floating Prelude production vessel, are having trouble keeping within budget and sticking to schedules, and more delays are expected.

“All projects currently being built or expanded in Australia are having trouble with time and cost control. They will almost certainly see further delays,” a source advising LNG producers said on condition of anonymity.

Once completed, Ichthys will produce 8.9 million tonnes of LNG per year.

Inpex holds 62.245 percent of Ichthys, France’s Total 30 percent, with the rest spread amongst Taiwan’s CPC Corp and Japanese utilities Tokyo Gas, Osaka Gas, Kansai Electric, JERA Corp and Toho Gas .

CIMIC gained the power station and infrastructure contracts for Ichthys after taking over Australian engineering firm UGL last year.

UGL said in its last annual report that “unfortunately, the projects continued to be impacted by significant client delays and disruption resulting in additional costs incurred.”

CIMIC said the termination of the contract will not have any “material impact” on its 2016 and 2017 financial results.

(Reporting by Henning Gloystein; Additional reporting by Osamu Tsukimori in TOKYO and Tom Westbrook in SYDNEY; Editing by Tom Hogue and Christian Schmollinger)


Posted in Australia, E&P, EPC, Production, Upstream | Tagged , , , , , | Leave a comment

Indonesian government freezes PTTEP licenses

4 December 2016 03:31


Indonesian government freezes PTTEP licenses

The digital map cases of pollution in the Timor Sea PTTEP Australasia project which was not resolved since 2009

Kupang, East Nusa Tenggara (ANTARA News) – The Indonesian government has finally decided to freeze the licenses and assets of PTT Exploration and Production (PTTEP) operations in Indonesia.

“This is an extraordinary step that we had never predicted before. The decision was taken during a coordination meeting on maritime affairs led by the coordinating minister for maritime affairs Luhut Binsar Panjaitan in Jakarta,” the chairman of West Timor Care Foundation, Ferdi Tanoni, told ANTARA News here on Saturday (Dec. 3).

The Indonesian government was forced to take legal action, as Montara PTTEP Australasia oil operator failed to take up the responsibility of an oil spill incident that had affected almost 90 percent of Timor Sea waters in August 21, 2009.

“This is a humanitarian tragedy, which is difficult to explain, because people living in the coastal areas of East Nusa Tenggara had to live for more than seven years in misery due to the Montara oil spill,” he said.

The coordination meeting was attended by officials of maritime affairs, including the attorney generals office, the East Nusa Tenggara province, 13 representatives from districts and cities in the province, and fishermen affected by the incident represented by the West Timor Care group.

Tanoni stated that the decision to freeze the licenses and assets of PTTEP by the government would be immediately consolidated by the National Team for the Settlement of the Dispute over the Montara Oil Spill Incident in 2009 in Timor Sea, led by Havaz Oegroseno, the first deputy of maritime defense, with the office of the coordinating minister for maritime affairs.

As a representative of the people of East Nusa Tenggara, who had fought for justice for more than seven years, Tanoni lauded the decision of Panjaitan, who had directly ordered his staff to take firm action against PTTEP immediately, for taking the responsibility to prevent pollution in the Timor Sea.

“We have waited for the firm action of the government of President Joko Widodo for more than seven years, and it is only now that we realize the governments support in our fight for justice,” he added.

The writer of a book titled “Timor Sea Scandal, An Economic-Political Barter between Canberra and Jakarta,” said Panjaitan has expressed regret over the protracted settlement of the case.

“It is the responsibility of the Indonesian government to protect the people of East Nusa Tenggara who are affected,” he said.

He said the National Team for the Settlement of the Dispute over the Montara Oil Spill Incident in 2009 would immediately coordinate with the prosecutors office to submit an application to the Central Jakarta district court to freeze the licenses and assets of PTTEP.

(Reported by Kornelis Kaha/Uu.H-YH/INE/KR-BSR/A014)


Posted in Australia, E&P, Indonesia | Tagged | Leave a comment

BP acquires Repsol’s stake in Tangguh LNG project

Mon Dec 5, 2016 | 2:57pm GMT


British oil company BP has acquired Spanish group Repsol’s 3.06 percent stake in the Tangguh liquefied natural gas (LNG) project in Indonesia for $313 million dollars, a BP spokesman said on Monday.

The purchase lifts operator BP’s stake in the plant to a little more than 40 percent. The Tangguh plant processes 7.6 million tonnes of LNG a year.

In June BP gave the go-ahead for the $8 billion expansion of Tangguh’s third LNG train, one of only a handful of major investment decisions in the sector this year as companies trim spending in response to a protracted slump in oil prices.

Repsol, which announced the deal on Friday evening, said the transaction will generate $26 million in pre-tax capital gains.

(Reporting by Ron Bousso; Editing by David Goodman)

Posted in E&P, Indonesia, Production, Upstream | Tagged , , , , , , , | Leave a comment

Successful production from Petronas’ first floating lng facility

December 10, 2016, Saturday

Petronas delivers a game changer in the global LNG business with the successful production of LNG from its first floating LNG facility, PFLNG SATU.

PETRONAS delivers a game changer in the global LNG business with the successful production of LNG from its first floating LNG facility, PFLNG SATU

KUCHING: Petroliam Nasional Bhd’s (Petronas) first floating liquefied natural gas (LNG) facility, PFLNG Satu has achieved an industry breakthrough with the successful production of its first drop of LNG from the Kanowit gas field, offshore Sarawak on 5 December 2016.

The operational milestone marks a decade long journey for Petronas since conceptualising a floating LNG facility to maximise the potential of remote and stranded gas reserves to deliver a game changer in the global LNG business.

Petronas’ acting vice president LNG assets, development and production Adnan Zainal Abidin said the first drop of LNG from PFLNG Satu has realized the technological aspirations of the company to tap hydrocarbons and produce LNG close to the source.

“At 365 metres long and with 22 modular systems, PFLNG Satu is an engineering marvel that brings together the liquefaction, production, storage and offloading processes of LNG to the offshore gas field.

“We have successfully stretched the limits of our abilities with floating LNG technology to maintain our technical edge as a key LNG supplier,” said Adnan.

PFLNG Satu reached its final stages of Commissioning and Startup with the introduction of gas from the KAKG-A central processing platform at the Kanowit gas field on 14 November 2016. The gas is treated and liquefied via its mitrogen-based Liquefaction Unit – the heart of PFLNG Satu, and processed into the first drop of LNG.

With a processing capacity of 1.2 million tonnes per annum (mtpa), operating at water depths between 70 metres to 200 metres deep, PFLNG Satu is expected to lift its first cargo and achieve commercial operations in the first quarter of 2017.

The floating LNG facility will grow Petronas’ global LNG portfolio as a leader in FLNG technology and enhance its reputation as a preferred and reliable LNG supplier.

Meanwhile, in a separate statement, Petronas has confirmed that it has been awarded deep water Block 4 and Block 5 in the Gulf of Mexico’s Salina Basin, following Mexico’s first ever auction of its deep water exploration areas.

Block 4 has been awarded to a 50:50 partnership between PC Carigali Mexico Operations, SA de CV (Petronas Mexico), a wholly owned subsidiary of Petronas, and Sierra Oil & Gas S de RL de CV (Sierra).

Block 5, on the other hand, was awarded to a consortium led by Murphy Sur, S de RL de CV (30 per cent), with partners Petronas Mexico (23.34 per cent), Ophir Energy (23.33 per cent) and Sierra Offshore Exploration (23.33 per cent).

Petronas Mexico will be the operator of Block 4, an area of about 2,600 square kilometres in water depths of between 800 metres and 1,600 metres.

The initial exploration period for the block is four years where Petronas Mexico and Sierra will concentrate on seismic data acquisition and processing.

Block 5, which covers an area of about 2,600 square km in water depths of 700 metres to 1,100 metres, will be operated by Murphy Sur, with an initial exploration period of also four years including a work program commitment of one well.

Petronas’ Vice President of Exploration, Upstream, Emeliana Rice-Oxley conveyed appreciation towards Mexico’s authorities for the opportunity to participate in the bid and the tender process.

“Petronas’ entry into Mexico’s deep water arena provides a strategic fit for our business growth, focusing on upstream exploration opportunities and portfolio with potential for long-term value,” said Rice-Oxley.



Posted in E&P, Exploration, Malaysia, Production, Upstream | Tagged , , , , , | Leave a comment

Shell begins production from Malikai offshore platform in Malaysia

Image: Malikai TLP drills wells with the help of a ‘tender assisted drilling’ vessel seen on the right. Photo: courtesy of Shell

December 16, 2016

Shell has started oil production from the Malikai Tension-Leg Platform (TLP), which is located 100km off the coast of Sabah, Malaysia.

Malikai is located in waters up to 500m deep and is the company’s second deepwater project in Malaysia, after the start-up of the Gumusut-Kakap platform in 2014.

Designed and built in Malaysia, the platform is expected to have a peak production of 60,000bpd.

Shell upstream director Andy Brown said: “Malikai marks an important milestone for Shell, its partners, Sabah and Malaysia.

“The project has demonstrated our capability in delivering competitive deep-water projects utilising our global expertise.”

It features a new platform design and a set of risers, or pipes that connect it to the wells for oil production.

Shell operates the Malikai project with 35% interest. Other partners are ConocoPhillips Sabah (35%) and Petronas Carigali (30%).

Shell’s deepwater business currently produces 600,000boe/d, which is expected to increase to more than 900,000boe/d by 2020.

Other Shell-operated projects are Coulomb Phase II and Appomattox in the US Gulf of Mexico.

Malikai’s TLP is a vertically floating structure moored by groups of tethers at each corner and is coupled with a tender assisted drilling (TAD) rig.

It has a fit-for purpose riserless vessel to perform top hole operations.

The Malikai oil field is part of the Block G production sharing contract awarded by Petronas in 1995.


Also: from PETRONAS

Petronas Achieves First Oil Production From Malikai Field

Published on Thursday, 15 December 2016 08:57

KUALA LUMPUR: Petronas today announced that the Malikai field, Malaysia’s first Tension Leg Platform (TLP) for deep-water project, achieved its first oil production on Dec 11.

In a statement today, the national oil company said the field, located 100 kilometres offshore Sabah, was part of the Deep-water Block G area where oil was first discovered in 2004.

“Malikai is the fourth deep-water project successfully implemented in Malaysia after Kikeh, Siakap-North Petai and Gumusut Kakap fields,” it said.

Petronas Vice-President of Malaysia Petroleum Management Muhammad Zamri Jusoh said Malikai’s development was one of the key elements of the Sabah integrated oil and gas project initiated by Petronas.

“Thanks to the support from Shell and partners, ConocoPhilips and Petronas Carigali Sdn Bhd, Petronas was able to pursue the Malikai development as a tieback to the Kebabangan platform for oil processing, prior to further export to the Sabah-Sarawak Integrated Oil and Gas Project.

“We would like to congratulate them on this achievement and for their collaborative efforts in bringing this new resource to the nation.

“Development of these hubs have generated significant value to Petronas and the nation as we strive to exploit more deepwater opportunities in Malaysia, especially in Sabah waters,” he said.

The Malikai’s TLP was designed and fabricated in Malaysia and is capable of handling up to 60,000 barrels of oil equivalent per day.

The field is operated by Shell (35 per cent), ConocoPhilips Sabah (35 per cent) and Petronas Carigali Sdn Bhd (30 per cent).

-Astro Awani



Posted in E&P, Malaysia, Production, Upstream | Tagged , , , , , | Leave a comment