October 2016, Vol. 243, No. 10

In The News

World News

Petrobras Sells Gas Pipeline Unit to Canadian-Led Group

Brazil’s state-run oil company Petroleo Brasileiro SA agreed to sell 90% of its natural gas pipeline unit to a group of investors led by Canada’s Brookfield Asset Management Inc. for $5.2 billion. The investor group includes British Columbia’s pension fund and Chinese and Singaporean sovereign wealth funds CIC and GIC.

The deal will be the largest divestment so far in the heavily indebted oil company’s $15 billion asset sale plan. Reuters reported earlier that Brookfield had entered exclusive talks to acquire Nova Transportadora do Sudeste SA, or NTS as the Petrobras subsidiary is informally known. The exclusivity period expired on Aug. 12. During those talks, the investor group led by Brookfield raised the stake it was offering to acquire in NTS to 90% from 82%.

The sale should give a boost to downsizing efforts at Petrobras, which hinge on divestments to cut the largest debt burden of any global oil firm, at around $130 billion. So far this year, Petrobras had sold $3.9 billion in assets, of a total $15.1 billion target for divestments expected by the end of this year.

Cyprus Signs Deal with Egypt for Gas Transfer

Cyprus signed a deal for the transfer of natural gas via pipeline to Egypt, once extraction starts of discoveries made off the Mediterranean island, Reuters reported. U.S. energy firm Noble found an estimated 4.5 Tcf of natural gas in one prospect off Cyprus in late 2011. A consortium of Italy’s ENI and Korea’s KoGas have a contract with Cyprus for exploration over three offshore blocks. French oil major Total has exploration rights over one block.

The deal will allow a direct subsea pipeline from Cyprus’s exclusive economic zone (EEZ) to either Egypt’s EEZ or onshore Egypt, for domestic consumption or re-export. An EEZ is a maritime area over which states have commercial rights. Cyprus received expressions of interest from ENI, Total, Statoil, Exxon Mobil, Qatar Petroleum, and Cairn in a licensing round for another three offshore hydrocarbon blocks in a licensing round in late July.

Qatar Plans $10 billion Gas Project for Domestic Market

To meet growing domestic energy demand, Qatar next month will start operations at its $10 billion Barzan natural gas project, designed to increase output by up to 2 Bcf/d after capacity is reached in 2017, Reuters reported. The project is a joint venture between Qatar Petroleum and ExxonMobil, which committed to developing the Barzan offshore platform in the North Field in 2011. Plans call for much of the production to go to the power and water sector. While Qatar seeks to increase domestic gas supply, it is still the world’s largest exporter of LNG.

Emerson Named to Service Shell’s Prelude FLNG

Shell Australia has hired Emerson to provide automation maintenance and reliability services for Shell’s Prelude Floating Liquefied Natural Gas (FLNG) facility. The size of six aircraft carriers, Prelude is the world’s largest floating production facility. It will process natural gas collected from subsea wells 475 km (almost 300 miles) offshore from Broome, Western Australia.

Emerson and its local business partner, Western Process Controls, will provide equipment monitoring, diagnostic services, spares support, and maintenance for the facility’s control and safety systems, as well as thousands of instruments and valves.

Prelude is under construction in Geoje, South Korea, before moving to Australia to begin operations. The facility is expected to remain on station at least 25 years as Shell and its partners develop gas reserves in the Browse Basin’s Prelude and Concerto fields.

Significant Potential Found in West Orphan Basin

Newfoundland and Labrador, Nalcor Energy and Beicip-Franlab announced that the in place oil and gas resource potential is 25.5 billion barrels of oil and 20.6 Tcf of gas in the West Orphan Basin located within the area of the Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB).

“We recognize that exploration is down globally due to current challenges in the oil and gas industry, said Dwight Ball, Premier of Newfoundland and Labrador. Still, we are cautiously optimistic about positive results of the licensing round in November 2016. We are fully expecting more exploration work by the leading oil and gas companies in the world.”

Nalcor, with its partners TGS and PGS, have been acquiring extensive 2D seismic data (110,000 line km to date) in the underexplored slope and deepwater areas of the province’s offshore.

To further delineate the West Orphan Basin, a 3-D seismic survey was acquired over a portion of the area in 2015 and the data from the new 3-D images has provided further insight into the area’s resource potential. This is the first time a 3-D survey has been conducted offshore Newfoundland and Labrador in advance of a scheduled license round.

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