LNG

Mubadala Energy, the international company headquartered in Abu Dhabi in the United Arab Emirates, has made a second large natural gas discovery with LNG potential in the Andaman Sea offshore Indonesia.

Valeura Energy Inc., the upstream oil and natural gas company with assets in the Gulf of Thailand and planned appraisal activities for tight natural gas in the Thrace Basin of Turkey, has reported improved third-quarter results.

Valeura, which is listed on the Toronto Stock Exchange and the over-the-counter market in the US, released earnings for the three months to the end of September.

In the third quarter, Valeura sold 1.701 million barrels of crude oil and the company recorded oil revenues of US$149.4 million, versus nil in the same quarter of 2022, which was prior to the company having active production operations.

Valeura said operating expenses increased in the quarter largely due to a planned increase in the amount of well workovers and the volume of maintenance and inspection work performed across the portfolio.

Valeura reported operating expenses of US$55.3 million in the quarter. The expenses included production operations at its Jasmine, Nong Yao, and Manora fields, as well as expenses relating to maintaining the Wassana asset during the precautionary suspension of production operations.

Jasmine field

The Jasmine offshore oilfield is located within block B5/27, at a water depth of about 60 metres. The block covers an area of around 1,931 square kilometres in the Gulf of Thailand.

The Nong Yao field is a producing conventional set of wells located in shallow water offshore Thailand while the Manora field lies in 44 metres water and about 80km from the coast of Thailand.

Valeura’s average realised price for crude oil sales was US$87.8 a barrels in the quarter, reflecting an average premium to the Brent crude oil benchmark of around US$1.3 per barrel.

Valeura, which is based in Calgary, Alberta is carrying out appraisals in the Thrace Basin of northwest Turkey.

The company said this is a potential natural gas area which has under-explored and under-exploited conventional and tight gas plays with the opportunity to deploy technology such as 3D seismic, horizontal drilling and multi-stage fracking.

Thrace activities

“The company had no active operations in Turkey during the third quarter as it continued its search for a farm-in partner to pursue the next phase of work on its tight gas appraisal play in the Thrace Basin, where it holds interests ranging from 63 percent to 100 percent,” Valeura explained.

Oil production amounted to 19,961 barrels a day in the third quarter and adjusted cashflow from operations was US$33.9m.

“I am pleased to announce another stable quarter of production operations, which underscores the long-term, resilient asset base we have assembled in Thailand,” said Sean Guest, President and Chief Executive of Valeura.

“Ongoing infill drilling is replenishing produced volumes and offsetting natural declines, resulting in oil production rates staying in the 20,000 barrels per day range. As a result, we are today re-affirming our 2023 guidance estimates, unchanged,” Guest added.

“Cash flow generation remains strong, and has provided us the ability to pay down debt, cover tax payments, fund the cost of ongoing operations, and still record an increase in our net cash position, which at the end of the quarter stood at US$104 million,” stated the CEO.

Valeura said that the mergers and acquisitions market for additional field assets continued to present “appealing opportunities”.

“We feel it is prudent to ensure our balance sheet is robust, such that we can transact quickly once opportunities arise,” Guest said.

ADNOC Gas, the stand-alone spin-off from Abu Dhabi National Oil Company in the United Arab Emirates, has signed a natural gas supply agreement with Chinese major PetroChina International.

Cosmo Energy Group of Japan has received government backing for its latest exploration and production venture offshore Abu Dhabi in the United Arab Emirates as the Japanese continue to underwrite projects related to oil and gas and LNG as well as other commodities.

Inpex Corp., the Japanese operator of the Ichthys LNG export plant in northern Australia and a shareholder in a liquefaction project in Indonesia, said it had discovered multiple conventional oil, condensate and natural gas columns at onshore Block 4 in Abu Dhabi in the United Arab Emirates.

Abu Dhabi National Oil Company (ADNOC), the longest-standing LNG producer in the Middle East for the United Arab Emirates, which is the third-largest oil producer in OPEC, is expected to proceed with an initial public offering of a stake in the ADNOC Drilling company with operations on land and sea.

Intercontinental Exchange, the leading operator of global energy derivative exchanges and clearing houses, reported an increase in first-quarter revenues as it continued to launch new products to meet customer demand, including most recently LNG freight futures and a range of Abu Dhabi oil futures and options.

ICE said in the quarter ended March 31, 2021, consolidated net revenues were $1.8 billion, up 15 percent year-over-year including exchange net revenues of $974M, fixed income and data services revenues of $468M and mortgage technology revenues of $355M.

Revenue from energy trading products dropped by 12 percent overall in the quarter after the winter peak to $310M from $353M in the same three months of $2020.

Exchanges operating income for the first quarter came to $653M and operating margin was 67 percent.

ICE, based in Atlanta, Georgia, launched its LNG freight futures contracts on March 23 based on price assessments from Spark Commodities with 30 lots traded on the first day.

First day trading included 15 lots of Spark30S Atlantic and 15 lots of Spark25S Pacific LNG freight futures contracts for the June 2021 contract expiry.

These first trades involved some of the LNG industry’s leading market participants including Total, Gunvor, Vitol, and Glencore, and were brokered by Clarksons, showing strong support for the new contracts.

ICE introduced the new LNG freight futures based on price assessments from Spark Commodities, a provider of technology-based solutions for promoting market liquidity.

Singapore-based Spark is backed by French data firm Kpler and EEX, part of the Deutsche Börse Group.

LNG and gas products

The ICE freight contracts form part of ICE's global natural gas complex alongside existing benchmark natural gas and LNG derivatives such as the Dutch TTF, the UK National Balancing Point, US Henry Hub, JKM LNG (Platts) and the West India Marker (WIM LNG) contracts.

“We are pleased to report strong first-quarter results that extend our track-record of growth. As we emerge from the Covid-19 pandemic, never have our digital networks proven more needed and resilient,” said Jeffrey C. Sprecher, ICE Chairman and Chief Executive.

“We are grateful to our customers that continue to rely on our technology, data and market infrastructure, and we remain focused on innovating across asset classes to drive greater efficiency and transparency,” declared Sprecher.

Adjusted net income attributable to ICE increased by 9 percent to $758M compared with $695M in the 2020 first quarter.

Free cash flow amounted to $702M versus $434M in the prior-year period.

At the end of the quarter on March 31, ICE launched its oil futures contract for LNG exporter Abu Dhabi and a total of 8,854 cleared lots were traded on the first day.

The start of trading of the ICE Murban Crude Oil Futures (IFAN) had been delayed from 2020 by the market oil market slump and Covid-19.

ICE Murban Crude Oil Futures opened for trading alongside 18 Murban-related cash settled derivatives and inter-commodity spreads, offering the market the broadest range of ways to trade and hedge Murban crude.

Market activity on ICE Futures Abu Dhabi on the first day of trading included 6,344 ICE Murban Crude Oil futures contracts and 2,510 Murban related cash settled derivative contracts.

A total of 27 firms traded on day one of the launch.

Israeli energy company Delek Drilling is advancing with the US$1.1-billion sale of its 22 percent stake in Israel’s second-biggest natural gas resource, the Tamar field, to Mubadala Petroleum of the United Arab Emirates by the end of May.

The ruler of Sharjah, the third-largest emirate in the United Arab Emirates, has met with Claudio Descalzi, Chief Executive of the leading oil and gas exploration and production and LNG project company Eni, to take stock of progress after Eni's acquisition of the exploration rights on three onshore blocks.

Sharjah's ruler, Dr. Sultan bin Muhammad Al Qasimi who is a member of the Supreme Council of the UAE, and Descalzi discussed gas as well as other future opportunities relating to the energy transition.

Eni and Sharjah National Oil Corp. (SNOC), the state company of the emirate, recently started production from the Mahani gas and condensate field, located in Sharjah's onshore Concession Area B.

This was achieved in less than two years from the signing of the oil contract and in less than a year from the declaration of the discovery.

Eni, a shareholder in projects such as the Damietta LNG plant in Egypt set to soon come back on stream and in two Mozambique LNG projects, is also carrying out exploration activities in areas A and C of the emirate, of which Area C is largely under-explored.

“The milestones we have achieved so far with an incredible time-to-market is the result of the support of Dr. Sultan III bin Muhammad al-Qasimi and the harmonious partnership between SNOC and Eni,” said Descalzi.

“These are great achievements, particularly considering the exceptional challenges incurred during the year due to the Covid-19 pandemic,” added the Eni CEO.

The UAE is aiming to increase its natural gas resources by investing more in exploration and production in the next few years.

In the Sharjah gas field, Eni holds a 50 percent stake in the Concession Area B along with partner SNOC with the Sharjah firm acting as operator. Eni acquired Area B in a competitive bid round in January 2019.

Production from the Mahani field is sent through a new multiphase trunk line to SNOC’s Sajaa Gas Plant where it is processed utilizing the existing facilities and infrastructure.

Eni said that field production is expected to increase progressively with the connection of further wells planned to be drilled during 2021-2022.

In addition to Sharjah, Eni is also present in two other emirates, Abu Dhabi and Ras Al Khaimah, the fourth-largest of the seven emirates that make up the UAE.

Abu Dhabi is the capital of the UAE and the second-most populous city after Dubai.

Abu Dhabi holds the most oil and gas resources of all the emirates and currently produces around 5.8 million tonnes per annum of LNG at the Das Island liquefaction plant off Abu Dhabi.

The UAE also imports diminishing quantities of LNG as its domestic gas position improves.

Italian energy company Eni, with an excellent success record with major gas discoveries offshore Egypt and Mozambique, has teamed up with Thailand’s national energy company PTTEP to sign a concession agreement for the acquisition of exploration Block 3 offshore LNG producer Abu Dhabi in the United Arab Emirates.