Company sees oil and gas output lifted by more than 50 per cent as new facility comes online.
Author: Chemist
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.
OPEC Oil Production Figures Jan 2014
• The OPEC Reference Basket in November fell below $105/b for the first time since July. A key factor behind the decline in the crude oil prices was reduced refinery crude intake due to scheduled turnarounds, as well as dismal margins. All Basket component values saw losses in November, but at varying levels. Crude futures prices also declined in November for the second month in a row. High crude inventories and rising supply in the US weighed heavily on Nymex WTI. The positive outcome at the Iran-P5+1 talks in Geneva also impacted the market. The Basket began to improve at the end of the month and into December to stand at $107.72/b on 9 December.
• World economic growth for 2013 and 2014 remains unchanged at 2.9% and 3.5% respectively.
The forecast for the major OECD economies assumes a continued recovery, leading to higher growth in 2014 at 1.9%, compared to 1.2% in the current year, both unchanged from the previous report. China’s recent stimulus efforts and rising exports confirm this year’s forecast of 7.8%; growth is expected to continue at this level in 2014. While recent indicators point at some improvement, the forecast for India remains at 4.7% for 2013 and at 5.6% in 2014. Most recent advances in the OECD and China confirm the on-going recovery in the global economy.
• World oil demand growth in 2013 has been left broadly unchanged at 0.9 mb/d, while the forecast for 2014 remains at 1.0 mb/d. The bulk of next year’s growth is expected to come from the non-OECD, which is seen increasing by 1.2 mb/d, while OECD demand is projected to contract by 0.2 mb/d, which represents an improvement from the current year. China’s demand growth in 2014 is expected at 0.3 mb/d, in line with growth in 2013. Demand growth in OECD Americas is expected at 0.1 mb/d, while OECD Asia Pacific consumption is projected to contract by 0.1 mb/d.
• Non-OPEC oil supply is expected to increase by 1.2 mb/d in 2013, up slightly from the last report. In 2014, non-OPEC oil supply is forecast to grow by 1.2 mb/d. Output growth is expected to come mainly from the US, Canada, the Sudans, Kazakhstan, Russia, and Colombia, while oil supply from Norway, Syria, the UK, and Mexico is seen declining. In 2014, OPEC NGLs and non-conventional oils are forecast to grow by 0.15 mb/d over the current year to average 5.95 mb/d. OPEC crude oil production averaged 29.63 mb/d in November, a decrease of 193 tb/d from the previous month, according to secondary sources.
• Oil product markets remained relatively weak worldwide in November. The top of the barrel continued to show a poor performance, despite some positive signs of increasing seasonal demand for naphtha. However, tightening market sentiment fuelled by some refinery outages and run cuts helped to limit potential declines in margins in Asia and Europe. Meanwhile, falling US middle distillate inventories, amid increasing seasonal requirements and lower US crude prices, allowed US margins to show a healthy recovery.
• In the tanker market, spot freight rates for dirty vessels saw gains across various classes with VLCC rates encountering the strongest growth. VLCC, Suezmax and Aframax spot freight rates increased by 40%, 18%, and 5%, respectively, over the previous month. The improvements were driven by winter demand, higher Asian requirements, and increased delays in the Turkish straits. Clean tanker freight rates were mixed in November, with West of Suez freight rates increasing by 10%, while East of Suez freight rates remained weak, dropping by 9% from a month earlier.
• Preliminary data showed total OECD commercial oil stocks declined by 2.5 mb in October, indicating a deficit of around 10.1 mb compared to the five-year average. Crude inventories reached 26.4 mb above the seasonal norm, while products fell to 36.5 mb below the five-year average. In terms of days of forward cover, OECD commercial stocks stood at 58.5 days, 0.7 days more than the five-year average. Preliminary data for November shows that US total commercial oil stocks fell by 26.4 mb, but still indicated a surplus of 9.2 mb above the five-year average. Crude inventories indicated a surplus of 40.8 mb, while products showed deficit of 31.6 mb.
• Demand for OPEC crude in 2013 is estimated to average 29.9 mb/d, unchanged from the previous report and 0.6 mb/d lower than the 2012 level. Demand for OPEC crude in 2014 is also unchanged from the previous report at 29.6 mb/d, representing a decline of 0.3 mb/d compared to 2013.
Global Oil and Gas News Update Jan 2014
• Statoil buys into new Greenland block – Statoil, along with partners ConocoPhillips and Nunaoil, has been awarded a block offshore Greenland’s northeast coast where the Norwegian oil company will be the operator.
• Cairn abandons offshore Morocco well – Oil and gas explorer Cairn has decided to plug and abandon its FD-1 wildcat exploration well offshore Morocco as it had not encountered its target reservoir.
• Southern gas corridor to Europe to go ahead: BP – The Shah Deniz consortium announced the final investment decision (FID) for the Stage 2 development of the Shah Deniz gas field in the Caspian Sea, offshore Azerbaijan, according to consortium operator BP. Iran buys 100,000 tonnes sugar from India in rare deal.
• RWE completes 3D seismic in promising Suriname block – German energy company RWE has announced the completion of its 3D seismic survey off the coast of Suriname in South America.
• Eni makes new oil and gas discovery in Barents Sea – Eni has made a new offshore oil and gas discovery in the Norwegian Barents Sea, approximately 240 km from Hammerfest in the north of the country.
• Dabbagh Group is planning to sell a 19 per cent stake in its lubricant business.
• RevOmax Lubricants Announces a Technology Breakthrough in Custom-Blended Lubrication Extenders at The PRI Show 2013.
Japan Oil and Gas News Update Jan 2014
• INPEX inaugurates new LNG receiving terminal – Japan’s INPEX Corporation has completed the Naoetsu LNG Terminal located in Joetsu City, in the Niigata Prefecture, Japan.
• India and Japan are stepping up the pressure for cheaper liquefied natural gas (LNG) with potential joint tenders as two of the world’s biggest gas buyers try to ease the pain of high prices and rising demand.
• South Texas-based Magnum Oil Tools International, Ltd. (“Magnum”) is proud to announce an exclusive distributorship agreement with Kureha Corporation from Tokyo, Japan.
Russian Oil and Gas News Update Jan 2014
• Gazprom considers Latin America for LNG exports – Russia’s fourth-largest energy firm Gazprom is considering supplying liquefied natural gas (LNG) from its Baltic LNG project to Latin America via its expanding European network.
• ExxonMobil & Chemlube INT Inc, help to reconstruct Turkmenistan’s largest oil refinery to produce hydro-synthetic oils
• Sugar Output Still Lagging Last Year’s Crop.
• Morgan Stanley (MS.N) has sold the majority of its global physical oil trading operations to Russian state-run oil major Rosneft (ROSN.MM), becoming the latest Wall Street firm to dispose of a major part of its commodity business. The deal represents a bold move into the U.S. market by Russia’s top oil producer, which is headed by Igor Sechin, a powerful ally of Russian President Vladimir Putin. The Russian state owns almost 70 percent of Rosneft. The deal includes more than 100 traders and shipping schedulers in London, New York and Singapore, over $1 billion worth of oil, and the bank’s 49 percent stake in tanker company Heidmar.
Africa Oil and Gas News Update Jan 2014
• Hayaat Group invests in E. Africa exploration firm – The Hayaat Group, a private investment company headquartered in Abu Dhabi with a diverse business portfolio, has acquired a 10 per cent share of East Africa-focused explorer Swala Energy for US$3 million.
• OMV buys into offshore Gabon fields – OMV has signed binding farm-in agreements with London-listed independent exploration firm Ophir Energy offshore Gabon in West Africa.
• Petrofac signs local capacity-building MoU in Nigeria.
• BRAZIL: US$2.2 million fund establish for ethanol production
• BG Group brings cheer to Tanzania gas future – Tanzania moves a step closer to realising its liquefied natural gas export potential following the conclusion of a successful drilling campaign by one of the biggest oil and gas operators in the country
• Brazil: Sugar exports fall in November due to fire in Santos port.
• Kenya: Kenya grappling with a sugar deficit.
• Diesel price spike to hurt Brazilian ethanol, says Unica.
Australia Oil and Gas News Update Jan 2014
• Deep Down receives orders totaling $4.2 million.
• ISS Australia expands services with acquisition of marine survey specialists Christy & Griffin.
• DOF Subsea Group awarded contracts – Total value USD 800 million
• ITF launches JIP in Australia to tackle subsea pipeline operational challenges.