Company sees oil and gas output lifted by more than 50 per cent as new facility comes online.
Month: August 2014
Discovery of Crude Oil in Tunisia
Circle Oil Plc, the Middle East and Africa focused oil and gas exploration, development and production company, is pleased to announce the preliminary results of drilling of the well EMD-1 in the Mahdia Permit, offshore Tunisia.
The El Mediouni-1 well (EMD-1) is located within the north central area of the Mahdia Permit in a water depth of 240 metres, 120 km east of the port of Sousse. EMD-1 was spudded on 8 June 2014 and drilled to a TD of 1,200 metres MD in the Upper Ketatna carbonates. The stratigraphy encountered in the well was exactly as prognosed and very good light oil shows were encountered both in the Lower Birsa carbonate primary target and the Upper Ketatna carbonates secondary target over a combined interval of 133 metres.
The strong hydrocarbon indications encountered in the Birsa and Ketatna carbonates confirm the existence of a working petroleum system in the Mahdia Permit for this and other prospects. The robustness of the El Mediouni trap has also been proven. The losses incurred within the target formations, as described below, give further confirmation of high quality permeability. The gross oil zone interval in the Lower Birsa is 77 metres and the Upper Ketatna has a minimum interval of 48 metres, subject to confirmation by logs. Using known reservoir and fluid parameters from equivalent formations in the Gulf of Hammamet, the internally estimated most likely recoverable prospective resources discovered by the EMD-1 well are approximately 100 MMBO.
OPEC Reference Basket July 2014
The OPEC Reference Basket (ORB) extended its previous month’s gains by nearly
$2.50 in June to reach its highest value this year, uplifted by a surge in crude oil
outright prices. For most of June, global crude oil markets were rattled by supply
concerns due to the ongoing crises in Libya and Ukraine, while the geopolitical tension
in Iraq has fuelled fears of disruption in exports from the Middle East region. This is
despite the fact that crude oil markets were adequately supplied during the month. In
fact, some markets were over supplied amid poor refining economics, which caused
physical crude oil markets in many regions to weaken significantly. Physical crude
markets were under pressure with the differentials of physical crudes to their respective
benchmarks at their lowest in over a year in most markets.
On a monthly basis, the ORB improved to an average of $107.89/b in June, up $2.45,
or 2.33% over the previous month. On a year-to-date basis, the Basket was higher, the
first time since December 2012, compared to the same period last year. The Basket
year-to-date value stood at $105.30/b compared to the $105.09/b average of last year,
21¢ or 0.20% higher.
All Basket component values increased in June mainly due to the uplift in outright
prices of their respective benchmarks and pricing formula elements. Benchmark prices,
particularly Brent, surged in response to fresh geopolitical tension in Iraq in addition to
the ongoing conflicts in Libya and Ukraine that raised supply disruption concerns,
increasing the geopolitical risk premium.
Nevertheless, this support for the component values was countered by pressure from
lacklustre physical crude demand on the part of major buyers and weak refining
margins. A narrowing in refining margins has hit European demand for both sweet and
sour crudes, while large customers such as China have been buying less West African
crudes due to high product stocks, cheaper crude in other markets and higher freight
rates. West African oil has become relatively expensive for Asian importers due to a
high premium of Brent crude oil, against which it is benchmarked, to Dubai crude.
Asia’s crude demand has also been muted as weak demand for oil products coupled
with excess regional supply are expected to keep refinery operating rates lower
through the third quarter and into the end of the year.
A glance to Oil Market in 2015
Despite some weakness in the first half of the year, the world economy continues to recover. Global GDP
growth in 2014 is now forecast at 3.1%, slightly higher than the estimated 2.9% for 2013. The US
experienced a surprisingly large contraction in economic activity in the first quarter due to severe winter
weather, leading to a downward revision in US GDP growth to 1.6% from 2.4% previously. However, with the
US economy expected to rebound and continued large monetary stimulus in the Euro-zone and Japan, the
OECD is seen growing by 1.7% in 2014 and 2.0% in 2015.
China’s GDP is forecast to grow by 7.2% in 2015 from 7.4% in the current year. India and other major
emerging economies are forecast to recover. This, in combination with the expected improvement in OECD
economies, leads to a global GDP growth forecast of 3.4% in 2015 (Graph 1). However, a number of
uncertainties remain, ranging from the consequences of monetary policies in the developed economies to
the threat of deflation in the Euro-zone, as well as the risk of geopolitical tensions and potential spillovers.
Despite some weakness in the first half of the year, the world economy continues to recover. Global GDP
growth in 2014 is now forecast at 3.1%, slightly higher than the estimated 2.9% for 2013. The US
experienced a surprisingly large contraction in economic activity in the first quarter due to severe winter
weather, leading to a downward revision in US GDP growth to 1.6% from 2.4% previously. However, with the
US economy expected to rebound and continued large monetary stimulus in the Euro-zone and Japan, the
OECD is seen growing by 1.7% in 2014 and 2.0% in 2015.
China’s GDP is forecast to grow by 7.2% in 2015 from 7.4% in the current year. India and other major
emerging economies are forecast to recover. This, in combination with the expected improvement in OECD
economies, leads to a global GDP growth forecast of 3.4% in 2015 (Graph 1). However, a number of
uncertainties remain, ranging from the consequences of monetary policies in the developed economies to
the threat of deflation in the Euro-zone, as well as the risk of geopolitical tensions and potential spillovers.