LNG

UK major BP and state-owned Abu Dhabi National Oil Company (ADNOC) in the United Arab Emirates plan to form a joint venture in Egypt that will initially focus on natural gas and will incorporate Egyptian concession stakes held by BP.

The joint venture is expected to be formed in the second half of 2024 and will be 51 percent owned by BP and 49 percent by ADNOC.

The BP-ADNOC Egyptian joint venture was originally planned to be the second phase of cooperation between the two companies in the Eastern Mediterranean gas and LNG province after the planned acquisition of a 50 percent stake in Israeli gas producer NewMed Energy.

Negotiations on the proposed NewMed agreement for BP and ADNOC started in March 2023, though have been stalled since the start of Israel’s war against Hamas terrorists started in October.

Egyptian interests

“As part of the agreement, BP will contribute its interests in three development concessions, as well as exploration agreements in Egypt to the new joint venture,” said a statement.

“ADNOC will make a proportionate cash contribution which can be used for future growth opportunities,” they added.

This is the first major natural gas deal for BP under new Chief Executive Murray Auchincloss.

“The announcement with BP represents a significant step forward as ADNOC builds its international natural gas portfolio,” said Musabbeh Al Kaabi, ADNOC executive director for low carbon solutions and international growth.

“This progressive joint venture partnership will enhance Egyptian energy security and the economic potential of the region’s most populous Arab country,” Al-Kaabi explained.

Strategic partners

“Building on our long-standing strategic partnership with BP, ADNOC looks forward to continue exploring other opportunities,” he added.

William Lin, BP’s executive vice president of regions, corporates and solutions, said that the “dynamic joint venture” offered a platform for international growth.

“Together, we will build on the 60 years of safe and efficient operations of BP and its partners in Egypt,” Lin stated.

The natural gas concession to be included in the joint venture include BP’s 10 percent in the Shorouk block containing Egypt’s huge Zohr gas field.

BP’s 100-percent owned North Damietta interests are also included along with BP’s 50-percent stake in the North El Burg concession with the undeveloped Satis field.

Three other exploration concession included are North El Tabya, Bellatrix-Seti East and the North El Fayrouz block.

Occidental Petroleum, the Houston-based company with US oil and gas assets and Warren Buffett as a main shareholder as well as owning oil and natural gas stakes in Algeria, Oman and the United Arab Emirates, has agreed to buy US Permian Basin-focused energy producer CrownRock in a cash and stock deal valued at $12 billion including debt.

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.

Long-term contract prices of liquefied natural gas linked to crude oil are set to increase in the weeks ahead as the Organisation of Petroleum Exporting Countries led by Saudi Arabia and other Non-OPEC oil-producing countries opted at a summit in Vienna to extend cuts in oil production through 2024 and with the Saudis making an additional reduction in their own output.

March 3 (LNGJ) - Abu Dhabi National Oil Co (ADNOC) has set the final price for its over-subscribed initial public offering of 5 percent of its spun-off natural gas and LNG unit, ADNOC Gas. The main energy company of the United Arab Emirates set up the ADNOC Gas subsidiary on January 1 to group its world-scale gas processing operations and gas marketing company.

   The new subsidiary at the centre of the IPO combines the operations, maintenance and marketing of the ADNOC Gas Processing and ADNOC LNG units into one consolidated business. The ADNOC Gas share price was set on March 3 at 2.37 dirhams ($0.645) per share, near the top end of the price range that was set at 2.25 to 2.43 dirhams a share. Proceeds from the IPO came to around $2.5 billion. ADNOC Gas shares are expected to begin trading on March 13.

Abu Dhabi National Oil Company (ADNOC), the oil and gas company and LNG producer in the United Arab Emirates, has awarded three framework agreements valued at 14.68 billion UAE dinars ($4 billion) for integrated drilling services to support the ongoing expansion of its oil and natural gas production activities.

Mubadala Energy, the international exploration and production company based in Abu Dhabi in the United Arab Emirates and with natural gas assets in the Eastern Mediterranean and LNG feed-gas resources in Malaysia, has reported another gas discovery in Malaysian waters offshore Sarawak.

Germany said Chancellor Olaf Scholz would discuss energy supplies, including possible LNG shipments, when he begins a tour on September 25 of the Arabian Gulf states.

A statement said that Scholz was scheduled to visit three countries Saudi Arabia, Qatar and the United Arab Emirates.

“The gas offering is slowly broadening,” said German Economics Minister Robert Habeck while visiting the Baltic Coast town of Lubmin.

Lubmin is in the German state of Mecklenburg-Vorpommern and came to prominence in the gas business by being a landfall for the cancelled Nord Stream II natural gas pipeline under the Baltic from Russia.

Nord Stream II would have doubled German pipeline imports from Gazprom, though the completed project was blocked by the European Commission and also by Chancellor Scholz’s new coalition government that won the elections in September 2021.

Lubmin will now become one of four coastal hubs for LNG imports from the US, other European countries and possibly Qatar and the UAE.

“We must show that in times like these, we can plan, authorize and build faster than is usually the case in Germany,” said Habeck on the plan to site a floating storage and regasification unit at Lubmin.

Habeck is also Vice Chancellor and a member of the Green Party.

Start-ups

The operators of the Lubmin FSRU to be chartered by the German Government is aiming for an operational start-up by the end of 2023.

Germany’s opposition parties that won power before the events in Ukraine have mostly been against using natural gas.

The country was also one of the few leading European Union economies without LNG infrastructure, though one terminal was planned on the Elbe River but constantly opposed and demonstrated against as recently as last year by Habeck's Green Party and its supporters.

They quickly changed their minds on LNG after the gas crisis erupted and it was deemed to be a “transition” fuel by the panicked European Commission late in the day in 2022.

Other German LNG import terminal plans include a mixture of FSRUs and onshore facilities, though a final project list has yet to be published.

Among those advancing is an FSRU venture and a possible onshore facility at the port of Stade on the Elbe River backed by state government of Lower Saxony and by a development company, Hanseatic Energy Hub GmbH.

German is acquiring at least five FSRUs to move away as fast as possible from dependence on Russian pipeline natural gas from Gazprom.

The Stade seaport is situated on the Elbe sea-lane between Hamburg and the Elbe estuary at Cuxhaven and is close to the North Sea.

Chancellor Scholz said in a speech on September 13 that a series of planned new LNG import facilities would be ready for imports by the end of 2023.

He expected facilities to be developed quickly at the North Sea port of Wilhelmshaven and at Brunsbüttel, located south of Hamburg on the Elbe River and near the entrance to the Kiel Canal.

According to the German government, Wilhelmshaven will become the first LNG hub. Brunsbüttel will be the second to be completed and is backed by the Government, German utilities and the Dutch utility Gasunie.

Saudi Arabian Oil Company (Aramco), the world’s largest seller of crude oil, reported that annual net income more than doubled to $110 billion and confirmed plans to boost natural gas output by 50 percent.

An attack on the LNG and oil and gas-producing United Arab Emirates has led a UK-based shipping security firm to raise a commercial shipping warning in the region to “substantial” and for Saudi Arabian and UAE-flagged ships to “severe”.