Ophir Energy strikes contract with Myanmar government
Ophir Energy has signed a production sharing contract with the Myanmar Ministry of Energy. The move finalises the award of Block AD-03 offshore Myanmar, which the company has a 95% interest in.
oil
Halliburton to assemble integration team ahead of merger
Halliburton has appointed its chief financial officer (CFO) as chief integration officer to lead its merger with Baker Hughes. Mark McCollum will serve as head of the joint integration team the two companies are assembling. It comes after they revealed plans to merge last month in a $34.6billion deal.
Opinion: Driving investment and creating a platform for reform
As a result of lower prices and rising cost the oil and gas industry has been lobbying hard for improvements to the oil and gas fiscal regime and will have been watching the Autumn Statement closely for positive reforms. Whilst some announcements were made, further consultation will take place before the package is agreed. It is not clear whether this will happen ahead of next year’s general election. Further details were announced by the Rt Hon Danny Alexander MP in Aberdeen on Thursday.
Brent drops from four year low as Saudi discounts deepen price war
Brent extended losses from a four-year low as Saudi Arabia offered customers in Asia record discounts on its crude, bolstering speculation it’s defending market share. West Texas Intermediate dropped in New York. Futures fell as much as 0.8% in London and are headed for a second weekly decline. State-run Saudi Arabian Oil Co. cut its differential for Arab Light sales to Asia next month to $2 a barrel below a regional benchmark, according to a company statement.
Shetland gas plant held up
French oil company Total has finally admitted its new £800million Shetland gas plant will not be completed this year. A company spokesman said it was likely to be ready during the first three months of the 2015, about nine months behind schedule. Following months of denial and a profit warning from main contractor Petrofac last month, Total issued a short statement yesterday.
‘Speed up tax plans to spur exploration’
Offshore industry chiefs have urged the UK Government to speed up measures to support the sector after coalition ministers unveiled radical plans to reward North Sea investment. Tax regime changes aimed at making sure as much oil and gas as possible is extracted have been welcomed by operators. But they want them implemented sooner rather than later because of the challenges posed by low crude prices and high exploration costs. Highland MP and Chief Secretary to the Treasury Danny Alexander, and Exchequer Secretary to the Treasury Priti Patel, were both in Aberdeen yesterday to present their department’s financial review of the sector.
Oil drop gives US drillers argument to end export ban
Collapsing crude prices have given oil producers a new argument for ending a 39-year-old US ban on exports. With US output at a 31-year high and imports at the lowest level since 1995, producers seeking the best possible price for crude are straining at having to keep sales at home. Removing the ban could erase an imbalance between US and foreign crude prices by expanding the market for shale oil.
Opinion: Revamping the UK oil taxation regime
In the Autumn Statement, the UK Government announced a number of measures aimed at increasing the competitiveness of the UK Continental Shelf. This included a 2% reduction in the Supplementary Charge to Corporation Tax, new tax allowances to encourage development of complex fields as well as enhanced tax measures for the exploration phase. But this was the curtain raiser to the main event in Aberdeen, where the Chief Secretary to the Treasury, Danny Alexander MP, presented a more detailed roadmap for the future fiscal approach to the UK oil and gas tax regime.
Opinion: Reforms only go a short way
The reforms to the oil and gas tax regime announced by the Chancellor and Danny Alexander this week are, of course, welcome. Particularly in light of the Chancellor’s admission that it has been 21 years since the oil and gas industry last received a tax reduction. However, this announcement only goes a short way towards reversing the unexpected and damaging 12% increase in Supplementary Charge tax introduced by Danny Alexander at the 2011 Budget.
Opinion: Another false dawn or a kick start for collaboration
The Treasury’s plan to reform the oil and gas fiscal regime is an interesting and encouraging document, which recognises the importance of the industry, while at the same time acknowledging the need to be more competitive in attracting and promoting capital investment in the UKCS. It has the hallmarks of collaboration, with the Treasury accepting that they must adjust their thinking as to tax receipts from the UKCS, and it is the first time in recent memory, committed to black and white, that ‘we are all in this together’. The Treasury does not publish a document of this importance without it having being very carefully vetted.
Opinion: Danny Alexander’s North Sea lifebelt
It looks as if the UK Treasury has a fiscal plan that might work for the UK Continental Shelf and the industry appears broadly receptive. But there were multiple warnings issued to Treasury chief secretary Danny Alexander in Aberdeen that time is running out and that he must deliver concrete measures by the Government’s Spring Budget. Indeed, this urgency is made all the more acute by the revelations that Opec swing producer Saudi Arabia is now apparently content to let the oil price drop to around $60 a barrel and that it be a long, rough ride for everyone. The gathering of industry leaders and media at Oil & Gas UK’s offices to listen to Alexander and Tory colleague Priti Patel (exchequer secretary) was large.
Dejour Energy expands Woodrush complex
North American oil and gas firm Dejour Energy has contracted Ensign Drilling Partnership to drill wells at its Woodrush complex. The two wells will target the Halfway oil and Gething gas pools known to be productive at Woodrush at depths between 3500-4000. The objectives of the project are to expand current field production and company reserve values.
Autumn Statement: Alex Salmond argues Westminster got it wrong
There are three things wrong with the UK Parliament's approach to the oil industry. Firstly, there is no gratitude whatsoever. Over the last 40 years more than £330,000million has poured into the Westminster Exchequer, around £60,000 per head for every Scot. Scotland's resources have bankrolled successive Tory and Labour Chancellors. They present any crumb of a concession as if it were a gift.
Reforms planned to boost oil sector
The UK Government has unveiled a radical plan aimed at rewarding investment in the North Sea in a bid to see as much oil and gas extracted as possible. A review of the fiscal regime for the oil and gas sector was announced in this year’s Budget, with a new Treasury report saying “significant change” was needed in order to continue to attract investment. Chief Secretary to the Treasury Danny Alexander launched the new report as he met key industry figures during a visit to Aberdeen. There is still “significant hydrocarbon reserve” in the UK Continental Shelf (UKCS), the Government said, which could “generate significant benefits for the UK” if it can be recovered.
Government has taken a “crucial step” towards helping oil and gas industry
The head of oil and gas for professional services firm EY said the government has taken a "crucial step" towards protecting the longevity of the UK's oil and gas industry. Derek Leith said the recommendations were also in line with what had been set out in the Wood Review. The Chief Secretary to the Treasury, Danny Alexander, was in Aberdeen to outline three principles which will underline the future of oil and gas fiscal policy, as well as a new set of proposals. Mr Leith's comments come after he spoke to Energy Voice yesterday to give his initial reaction to the Chancellor's Autumn Statement.
Opinion: When global competitors think smart, the UK must react smartly
Smart thinking oil and gas professionals in the Organisation of the Petroleum Exporting Countries (OPEC) are continuing to pump their easy to reach hydrocarbons for their own long term gain. It is their prerogative in a competitive world marketplace. This and the vast quantities of shale gas flooding the North American market have combined to shatter the certainty that existed in oil prices. World renowned entrepreneur and founder of Microsoft Corporation, Bill Gates once said: “Success is a lousy teacher. It seduces smart people into thinking they can't lose.”
There are 300,000 Iraqi barrels signaling oil glut will deepen
Not only is OPEC refraining from cutting oil output to stem the five-month plunge in prices, it’s adding to the supply glut. Just five days after the Organization of Petroleum Exporting Countries decided to maintain production levels, Iraq, the group’s second-biggest member, inked an export deal with the Kurds that may add about 300,000 barrels a day to world supplies. In a global market that neighboring Kuwait estimates is facing a daily oversupply of 1.8 million barrels, the accord stands to deepen crude’s 39% plunge since late June.
Sub-$50 oil surfaces in US amid regional discounts
Oil market analysts are debating if oil will fall to $50. In North Dakota, prices are already there. Crude sold at the wellhead in the Bakken shale region in North Dakota fell to $49.69 a barrel on November 28, according to the marketing arm of Plains All American (PAA) Pipeline LP. That’s down 47% from this year’s peak in June, and 29% less than the $70.15 paid for Brent, the global benchmark.
Autumn Statement: Danny Alexander to reveal tax break plans
Offshore firms will be offered new tax breaks today to trigger a fresh wave of North Sea exploration, it can be revealed. Energy Voice has learned that Chief Treasury Secretary Danny Alexander will reveal plans to try to end the UK's exploration crisis through a system of tax credits for seismic surveys. The move is expected to be welcomed by industry leaders who have repeatedly called for extra incentives to stimulate flagging exploration rates.
Video: Oil and gas tax expert from EY reacts to Autumn Statement
The head of oil and gas for professional services firm EY said the Chancellor's announcement could prove to be a "turning point" for exploration and production in the North Sea. In an interview with Energy Voice, Derek Leith said the initial steps taken may receive a mixed review from the industry. Further announcements are expected tomorrow, in Aberdeen, by the Chief Secretary to the Treasury, Danny Alexander.
Work starts on Statoil’s new Aberdeen HQ
Work is under way on UK North Sea headquarters for Norwegian oil firm Statoil at the Prime Four business park in Kingswells, Aberdeen.
Opinion: Will the 2014 Autumn Statement help re-energise the UK oil and gas industry?
Chancellor George Osborne took the floor yesterday for what is the last Autumn Statement before the next general election, and probably the current Government’s final opportunity to impact the economy. But given the fiscal position the Government finds itself in with the budget deficit remaining high and with tax revenues lower than expected, was the Chancellor able to deliver any December cheer for the oil & gas industry? Well, we definitely saw a number of positive items. The Government restated its support for both the onshore and offshore oil & gas industries, with a mixture of tax and other incentives such as the allocation of £31m to fund the creation of a world class sub-surface research test centre through the National Environmental Research Council.
Opinion: Fuelling the future of North Sea oil and gas extraction
We welcome the financial incentives named in yesterday’s Autumn Statement, which demonstrate that the Government has not only recognised the increased volatility of the North Sea oil sector stemming from falling global prices and diminishing reserves, but is taking action. We are pleased to see that, in line with GE Oil & Gas, this Government regards investment, innovation, collaboration and investment in future talent as the keys to unlocking the North Sea’s remaining potential. Oil & Gas exploration and extraction in the North Sea has been faced with increased complexity resulting in cost escalations causing delays and even cancellation of some projects; the supplementary charge reduction and ring fence expenditure announcements should have significant impact on freeing some investment.
Opinion: UKCS is open for business
We watched yesterday's Autumn Statement from the Chancellor George Osborne, with feelings of hope and trepidation. We understand the economic constraints under which today’s Autumn Statement is delivered and there’s consensus in our offices this afternoon that the immediate reduction of two percentage points in its tax rate is an important first step towards improving the fiscal competitiveness of the UK North Sea – but, without question, more needs to be done.
FTSE points lower as oil price volatility continues
The FTSE 100 Index finished 25.5 points lower at 6716.6 as continued volatility in oil prices - with Brent crude trading at just below 71 US dollars a barrel - pegged back the performance of commodity stocks. Royal Dutch Shell was in focus after spiking yesterday on the back of speculation linking it to a merger with BP. Shares fell back 33p to 2259p but BP rose another 3p to 436.85p.