Smaller companies to dominate Shale, Pemex unit Director says

Smaller companies will probably dominate development of Mexico’s shale gas deposits as Pemex focuses on shallow water and onshore projects, according to the independent director of one of the state owned company’s units.

Pemex, will probably focus on businesses with higher margins to maximize profits, leaving room for smaller companies in shale, Mario Gabriel Budebo, a director of Pemex Gas and Basic Petrochemicals, said to Bloomberg Mexico Economic summit.

“It’s not the large companies that have the agility and the cost structure to exploit shale gas,” said Budebo,a former deputy energy minister. “It’s an area for new players.”

Emilio Lozoya, Pemex’s CEO, on March 3 invited the world to explore for shale deposits in its recently opened energy sector.The crude production monopoly the company has held since 1938 ended on December 20,2013.Pemex aims to attract as much as $1 trillion in energy investment during the next decade to exploit the biggest proven oil reserves in Latin America after Venezuela and Brazil,he said.

A “big chunk” of investment in the sector may come from Asia, said Kent F. Moors, executive chair of the Global Energy Symposium.Finance Minister Luis Videgaray said in an interview that Mexico’s government is working with China to have the world’s second largest economy increase its investment across industries.

Videgaray helped shepherd the laws last year that opened the nation’s state-controlled oil industry to private drillers.

Victor Herrera, Latin American managing director at Standard & Poor’s, said in a December 20,2013 interview that pipeline and shale gas investment could come “very quickly.” Shale and natural gas are the “low-hanging fruit” of the energy reform and may be explored as soon as the second half of this year by foreign companies, according to Herrera.

Providing useful resources, articles and writings on crude oil, other petroleum products, energy and gas. By O'Niel Petroserve Nigeria Ltd, online.

CGG, TAQA strengthen cooperation across the Middle East

CGG and Industrialization & Energy Services Company (TAQA) have signed a Framework Agreement which strengthens and extends their historical and long-term partnership in the Middle East. The new agreement provides a simplified, more focused structure to better address the growing industry demand for high-end seismic solutions throughout the region.

CGG and TAQA are currently shareholders of two Joint Ventures in the Middle East: ARGAS, a Saudi company established in 1966, covering geophysical activities in the Kingdom of Saudi Arabia (KSA), of which TAQA owns 51% and CGG owns 49%; ARDISEIS, a company established in 2006 in Dubai, covering land & shallow water data acquisition activities in the rest of the Middle East, of which CGG owns 51% and TAQA 49%. Through the Framework Agreement, ARGAS will become the sole shareholder of ARDISEIS, with ARGAS and ARDISEIS pooling all their resources to create a more efficient and powerful combined ARGAS Group. The new ARGAS group will have a stronger capital base, will cover a larger business scope, and will be 51% owned by TAQA and 49% owned by CGG.

Under the terms of the Framework Agreement, CGG and TAQA also extend their partnership to Seabed Geosolutions (SBGS), the Joint Venture addressing the seabed data acquisition market, which is owned 60% by FUGRO and 40% by CGG. In the same way as CGG will support the new ARGAS Group on all technological, industrial and commercial matters relating to land data acquisition, SBGS will provide similar support on all such matters relating to seabed data acquisition.

In addition, the Framework Agreement formalizes a strategic supplier agreement between SERCEL, CGG’s seismic equipment division, and the new ARGAS Group, aimed at mutually reinforcing the competitiveness of SERCEL and ARGAS and their respective positions in Middle East markets, which are set to see major growth notably driven by the mega-crews trend.

Jean-Georges Malcor, CEO, CGG said: “The Middle East will be at the heart of a technology revolution with ultra-high-channel-count crews and broadband technologies delivering previously unseen image definition to help our clients delineate and better utilize reservoirs in an optimum and sustainable manner. CGG and SERCEL technologies, from Equipment to Data Acquisition and Subsurface Imaging, are at the forefront of this revolution and we envision the new ARGAS Group, backed by its two shareholders, playing a leading role in this new paradigm.”

Mahmoud Abdulbaqi, Chairman, ARGAS, said: “The combination of ARGAS and ARDISEIS will provide the new ARGAS Group with a leadership position on the high-end land and seabed data acquisition markets across the Middle East. With its strong and experienced team, ARGAS will be able to fully benefit from the operational expertise of CGG and Seabed Geosolutions, as well as TAQA’s financial support and SERCEL’s latest technological innovations, to offer our customers in the region the best geophysical solutions.”

Providing useful resources, articles and writings on crude oil, other petroleum products, energy and gas. By O'Niel Petroserve Nigeria Ltd, online.

Sound oil awarded Casa Tiberi gas field concession

Sound Oil reported that approval of the San Lorenzo Production Concession has now been received from the Italian Ministry of Economic Development. This concession permits the Company to commence commissioning operations at the Casa Tiberi gas field.

The Casa Tiberi gas field, located in the Marche Region, onshore Italy, was discovered in 2011 and the discovery well was completed with the perforation of a single zone at a depth of  571-581 m. The well tested dry gas at 1.3 MMscf per day on a 5/16" choke and is expected to achieve first commercial gas during the first half of 2014.

James Parsons, Sound oil' s CEO, commented:

"We are pleased to report continued operational progress in Italy.Whilst Casa Tiberi is one of our smaller assets it will add to Sound Oil' s near term production and revenue.  Operations on site are expected to commence in April, once construction of the production skid is complete."

Providing useful resources, articles and writings on crude oil, other petroleum products, energy and gas. By O'Niel Petroserve Nigeria Ltd, online.

EU environmental impact assessment rules to trigger more competitiveness, growth

A recent European Parliament vote on new environmental impact assessment rules is a step forward in making Europe more competitive without compromising on the environment, according to the International Association of Oil & Gas Producers (OGP).

“While not imposing unnecessary requirements on the upstream oil and gas industry, the new rules will guarantee that any development, including exploration for shale gas, will be subject to strict environmental standards,” said Roland Festor, OGP’s director for EU affairs.

The new rules confirmed the existing differentiation between exploration and production of hydrocarbons. It will ensure that the requirements for environmental protection become more stringent as a project progresses. This way, time and resources will be applied where they matter: on full environmental studies, once a project’s economic potential is confirmed and its development is going ahead.

Too many detailed requirements during the early phase of exploration - when commercial viability of a project is totally uncertain and operations limited - would have undermined key investments, without bringing any additional benefit to the environment.

“The vote is a positive first step in enabling the assessment of domestic energy resources. Opportunities, such as natural gas from shale, must be explored and, if promising, will be crucial to encourage future economic growth and create new jobs,” said Festor.

“Shale gas exploration is even more crucial now that the EU is devising its 2030 climate and energy policy. Gas is the best resource Europe has - cleaner-burning, reliable and immediately available - to help meet EU emissions reduction targets quickly and at a competitive cost versus alternatives,” he explained.

Shale gas development could have other significant benefits for Europe. According to a recent study from consulting and engineering firm Poyry, domestic EU development could create as many as 1.1 million jobs by 2050, while reducing the region’s dependence on energy imports and relatively lowering prices.

Providing useful resources, articles and writings on crude oil, other petroleum products, energy and gas. By O'Niel Petroserve Nigeria Ltd, online.