Refining Direction ASIA OIL & GAS MONITOR

12 December 2012 Week 49 AsianOil Issue 355  News  Analysis ASIA OIL & GAS  Intelligence Published by MONITOR  NewsBase

COMMENTARY 2 NEWS THIS WEEK…  Japanese refineries look overseas for investment opportunities 2  MTQ plans to expand its subsea Refining direction service capabilities 4 Japan’s refiners are looking at developing capacity

INVESTMENT 6 overseas while shutting down domestic plants.  Australian gas exporters face possible price squeeze 6 Japan’s downstream sector has been struggling in  Chevron remains committed to the face of falling domestic demand and ageing Australian LNG projects 6  ONGC receives Eni nod for Kashagan plants. acquisition 7  The country could see a 20% reduction in capacity  Medco Energi completes acquisition of Yemen block 8 in the next few years. (Page 2) PERFORMANCE 8  Pertamina’s investment programme to help transform performance 8 Subsea surge POLICY 9 Singapore’s MTQ Corp. is positioning itself to  China, Vietnam lock horns over South capitalise on rising demand from the offshore China Sea 9 energy sector for subsea services, the group’s CEO,  Indonesian upstream industry warns over law change 10 Kuah Boon Wee, has told AsianOil. PROJECTS & COMPANIES 10  The company is looking to buy a 100% of  BP drills first well in KG Basin 10  JX Nippon plans Mizushima plant Australia’s Neptune Marine Services in a bid to maintenance 11 expand its range of niche subsea services. (Page 3)  Malaysia’s MHB wins new ExxonMobil contract 11  Petrofac starts gas production at Investment ambition Berantai field 12 The Indonesian government expects Pertamina’s  South Korean refiners plan 2013 CDU more than US$15 billion investment programme to maintenance 12  Bangchak Petroleum looks to relocate transform the company into a world-class energy refinery 13 player. NEWS IN BRIEF 13 STATISTICS 23  The investment will fund a mixture of domestic CONFERENCES 26 projects and foreign asset acquisitions. (Page 6)

For analysis and commentary on these and other stories, plus the latest oil and gas developments, see inside… Copyright © 2012 NewsBase Ltd. www.newsbase.com Edited by Andrew Kemp All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents AsianOil 12 December 2012, Week 49 page 2 COMMENTARY Japanese refineries look overseas for investment opportunities The country’s refiners are looking for ways to become more efficient and are shutting down unused domestic capacity while looking at overseas projects By Mark Buckton  JX Nippon plans to close its Muroran refinery by March 2014  Japan could see its refining capacity dip by as much as 20% in the next few years  Idemitsu is looking to expand into Vietnam’s downstream segment

With the eyes of most in Japan on the refineries up and down Japan. to imitate the electronics and motor December 16 general elections and the Cuts in petrol demand are, ironically industries by moving offshore in an nuclear policies being put forth by the enough, largely a result of motor industry effort to return to profitability. leading candidates, few, beyond those in giants’ efforts to meet public demand for To this end, Idemitsu – already a 35% the industry, have paid much attention to more and more hybrid and fuel-efficient owner in what would be Vietnam’s a recent JX Nippon Oil and Energy Corp. engines. largest-ever refinery complex – is said to decision to close down one of its main Throw in lower taxes on smaller be putting the finishing touches to a deal domestic refineries located in Muroran, engines, people reluctant to drive as that would help keep the fuel supply lines Hokkaido. much as a result of expensive tolls on open whilst enabling the company to As part of industry-wide cuts that may domestic highways, and some of the shore up operations at home. see refining capacity nosedive by up to most efficient, relatively cheap public The complex itself is set to be run by 20% in the next few years, Muroran, in transportation networks in the world, and state-owned PetroVietnam and, while many ways, looks like being the tip of the decline in demand is unlikely to exact numbers have not been released on the iceberg in terms of Japanese refining change anytime soon. just how much and of what type of fuel cutbacks. However, as hard as the Muroran will eventually make its way to Japanese JX Nippon announced in November closure will be felt locally on Hokkaido, shores, will at least enable Idemitsu to that the facility in northern Japan would when coupled with a host of smaller write off unprofitable machinery and close by March 2014. This is, partly, a refineries also announcing upcoming assets in Japan. result of the country’s falling demand for closures, Japanese companies are looking Domestic labour costs will remain an fuel as well as Japanese refineries that increasingly to overseas refineries to issue for the foreseeable future, though, operate at less than 80% of capacity. supply the country with cheaper oil and may well see Idemitsu and the Indeed, when outdated equipment from products. industry at large prefer to stay with the 1950s and 1960s and plants that overseas refineries in the future. operate at half the rate of their foreign Unsurprising turn of events However, with increasing calls from counterparts are added to the equation It is thus no real surprise that the Japan’s government for more fuel self- the outlook only become worse. country’s second largest refiner, Idemitsu sufficiency and increased investment into Kosan, is looking to expand into Vietnam renewable energy, the oil industry may Compound problem rather than at home. Japanese refineries well find itself boxed into a corner. These problems are further compounded looking for long-term survival are aiming by the ongoing economic lull, as millions Taxing times of Japanese opt to stay nearer to home The introduction of a tax on imports of this Christmas rather than making long Japanese companies are oil products and LNG on October 1 is road trips, and as government-backed already starting to pinch, with domestic energy-saving policies kick in with the looking increasingly to power fees in the next fiscal year likely winter months approaching. overseas refineries to to increase between 8.51 and 12% in Also, the domestic motor industry some places. For businesses in the same dominated by Toyota, Nissan and Honda supply the country with areas this figure could rise to around is only adding to the pressure felt by cheaper oil products 14%.

Yet, while this is an issue largely off Higher taxes on overseas fuel and eliminate Japan’s reliance on nuclear and the public radar at present, and mainly reduced taxes for domestically refined oil fossil fuels to play a part in just how ignored by the media, increased products would not be unexpected as a much JX, Idemitsu and their fellow household bills and ongoing strife over long-term job creation scheme. refiners are prepared to invest overseas in the use of nuclear power will see Tokyo As unlikely as any significant moves in the years ahead. looking for ways to bring the oil this direction are in the immediate future, companies back into line. however, look for the populist calls to

MTQ plans to expand its subsea service capabilities The Singapore-based company is positioning itself to meet the rising demand from the offshore energy sector for subsea services By Amrit Sidhu  The company aims to expand its presence in Asia, Australia and the Middle East  MTQ wants to increase its stake in Australia’s Neptune Marine Services to 100%  The company is striving to deal with labour challenges in Singapore and Bahrain

Singapore-based oil and gas service it is an opportunity to have more subsea market outlook is strong,” he said, provider MTQ Corp. aims to expand its niche services, underwater maintenance, adding: “We are ramping up our footprint in the subsea segment and has surveys, diving [and] pipeline activities at the 40,000-square metre pointed to the strong growth potential of installations. We feel there is an facility in Bahrain.” markets in Asia, Australia and the increasing amount of work.” Kuah sees the Bahrain facility Middle East. He added: “Overall, there is a lot of becoming a significant component of In a recent interview with AsianOil, the market potential in South-East Asia, MTQ’s business, but noted that it was group’s CEO, Kuah Boon Wee, spoke of Australia and the Middle East. Billions of still “early days” when considering the company’s takeover bid for Perth- dollars of investment are pouring into growth targets. He noted: “The Bahrain based Neptune Marine Services as Asian markets, mostly for offshore facility is near water with good complementing MTQ’s existing portfolio projects involving subsea [components].” infrastructure. It will focus on Saudi of subsea services. The executive wants to position MTQ Arabia [at] the start,” he said. MTQ, which already owns about 20% so that it benefits from the rising demand stake in Neptune, launched its bid in late for subsea services in all three regions. In Labour pains October for the shares in the Australian the Middle East, the company has While the Iranian market is off-limits for service provider, which specialises in already started servicing pressure control now, owing to the geopolitical backlash niche subsea services, including diving, components, such as Blowout Preventers of doing business there, there are plenty surveying and pipeline installations. (BOPs) and other related platform and of opportunities in Iraq and Kuwait. Kuah said MTQ planned to use its subsea based equipment, through its Moreover, the Bahrain facility also three decades of experience to help 100% owned Bahrain subsidiary. covers the Egyptian sector. expand Neptune’s presence in Asia’s oil “The Middle East offshore project However, while the outlook is and gas sectors. promising, MTQ, as with other service In 2010, meanwhile, the group set up companies, faces manpower challenges. MTQ Oilfield Services in Bahrain in “Billions of dollars of Kuah said having sufficient levels of order to participate in oil and gas projects investment is pouring into skilled labour was vital for his company, in the Gulf, East Africa and India. which relies on machinists, welders and Asian markets, mostly for engineering expertise. Diversifying offshore projects involving Kuah noted that selecting and Pointing to the Neptune acquisition, deploying manpower remained a Kuah said: “There is a lot more emphasis subsea [components]” challenge for the oil and gas industry in on subsea development and we feel that general and MTQ in particular.

Singaporean manufacturers must deal the highest international standard and our business is BOPs that need with foreign worker employment quotas, API grades. recertification.” which dictate the number of foreign “Our customers are international MTQ has a 250-strong workforce in employees in proportion to the number of drilling contractors and we have also Singapore, while it employs 110 at its Singaporean employees. In Bahrain, been working with original equipment Australian subsidiary MTQ Engine meanwhile, the challenge lies in manufacturers.” Systems and around another 80 in managing manpower in a region Such large-scale manufacturing Bahrain. MTQ’s Australian unit charaterised by labour supply shortages demands skill and precision engineering specialises in diesel fuel injection and but high demand. work, with heavy-duty items including turbocharger sales and services, with wellheads and tree blocks. The scope of nine branches across Australia. Brand power the work also includes retrofitting and The company plans to expand its The company is also increasing its role as strengthening the lifespan of BOPs, workforce in the years to come as it a contractor to leading drilling equipment which last for around 20-30 years, Quah strives to meet the growing service manufacturers, delivering components of pointed out. He said: “The big chunk of demand from the oil and gas industry. INVESTMENT Australian gas exporters face possible price squeeze BP’s recent gas supply deal with Japan’s billion (US$11.59 billion) worth of the country’s nuclear power plants (NPPs) Kansai Electric Power, pegging costs to fuel in the previous financial year. So, being shut down. The consequent cheaper US domestic gas prices rather having already struck a deal at the US massive financial losses incurred by than oil prices, could set a precedent for Henry Hub prices, it is likely to press for Japanese power firms have resulted in a Australia’s LNG exporters. the adoption of a similar pricing regime call to adopt the US gas price as As the first contract of its kind in Japan throughout the Asian marketplace. standard, which is being driven down by – which Kansai expects to result in a With Australian LNG suppliers already the shale gas boom. 30% saving when compared to an dependent on profits made from selling The newspaper report quoted a Tokyo- equivalent deal linked to oil prices – a gas to Japan under the oil-linked pricing based analyst as saying Japanese utilities leading resource lawyer has warned that system, as well as being threatened by companies could hope to benefit from Japanese buyers of Australian LNG are the global boom in shale gas production increasing “the number of long-term likely to try to renegotiate more and mounting cost pressures, analysts contracts based on the Henry Hub price favourably priced supply contracts, have noted that pricier Australian LNG as soon as possible.” according to a December 10 report by projects are becoming increasingly Japan is trying to secure permission The Australian. vulnerable. from the US to become eligible for gas Japan is the world’s biggest importer Japan’s demand for gas has soared export shipments – a privilege generally of LNG and Australia’s largest LNG following the tsunami-induced reserved for countries with which it has export customer, buying more than A$11 Fukushima crisis that led to all of the free trade agreements.

Chevron remains committed to Australian LNG projects Chevron has confirmed its commitment investment programme for 2013. companies that is not reliant on funding to developing its LNG projects in The US$36.7 billion budget includes from the US super-major. Australia as part of its planned capital US$3.3 billion of expenditure by affiliate

Announcing details on December 6, Australian LNG developments,” he said. higher project costs, but said it remained Chevron’s chairman and CEO, John The budgeting statement confirmed an appealing proposition. Watson, said the company was that Chevron’s Australian natural gas- “Gorgon project economics are maintaining its long-term strategy to related interests were earmarked for attractive,” said the company’s vice invest in a portfolio of very attractive oil notable major capital investment next chairman, George Kirkland. “While and gas projects that would deliver year and that spending would also be investment requirements have grown, oil volume growth. directed towards improving hydrocarbon prices, which directly impact the overall “Our exploration programme continues recovery and reducing natural field revenue stream, have increased by to discover additional gas resources that declines for existing producing assets around 80% over the same time period. could support future expansions of our worldwide. In addition, the LNG nameplate capacity Commenting on its has [risen] by 4% to 15.6 million tonnes three-train Gorgon LNG per year.” project on Barrow Island, Chevron leads on Gorgon, which is which is approximately Australia’s largest single-resource project 55% complete after three targeting development of the Gorgon and years, Chevron said the Jansz-Io gas fields that lie around 130 km total cost estimate had off the northwest coast of Western risen from US$37 billion Australia. Start-up is planned for late to US$52 billion. It cited 2014, with the first LNG cargo expected increased labour costs, site to ship during the first quarter of 2015. infrastructure issues, The statement also said the Wheatstone logistical challenges, LNG project, which Chevron operates, weather delays and the was 7% complete, on budget and on impact of currency schedule. changes – including a Chevron also participates in strengthened Australian Australia’s North West Shelf Venture dollar – as reasons for the and the Browse LNG Development.

ONGC receives Eni nod for Kashagan acquisition ONGC Videsh Ltd (OVL), the overseas which contractually has 180 days to clear arm of India’s state-owned Oil and it ... [On] the previous two occasions Natural Gas Corporation (ONGC) has when companies sold out of Kashagan, won project operator Eni’s approval for the other partners pre-empted,” the PTI its US$5 billion acquisition of US super- report said. major ConocoPhillips 8.4% stake in Reactions to OVL’s Kashagan move Kazakhstan’s giant Kashagan oil field. have been mixed. The Moody’s ratings Last week, the PTI news agency agency said recently that the acquisition quoted industry sources as saying the would be “credit negative,” as OVL Italian company “has publicly stated that would take on US$5 billion of new debt it will not pre-empt or block the sale.” to buy into Kashagan, which is slated to Current members of the North Caspian begin production in the second quarter of Operating Company (NCOC), the ExxonMobil, Royal Dutch Shell, Total 2013. consortium set up to develop Kashagan, and Kazakhstan’s state oil and gas “The acquisition exposes ONGC to the have the right of first refusal. That is, company KazMunaiGaz (KMG), with project’s execution risk: There have been they may pre-empt OVL’s bid, which 16.81% each, and Inpex, with the multiple delays and cost overruns over was announced last month, within a remaining 7.56%. the past decade. First production from the period of 60 days. “Once all the other five companies field next year somewhat mitigates the ConocoPhillips holds 8.4% of NCOC. waive their pre-emption rights, the deal execution risk. The other shareholders are Eni, will go before [the Kazakh] government,

“Nonetheless, subsequent phases of the its exposure to Iran – and to avoid US external affairs, stressed this point while project could face similar delays or cost and EU sanctions – by diversifying its addressing Kazakh businessmen in overruns,” Moody’s said. sources of oil supplies imports to other Astana, saying: “Every year, we spend countries. To this end, Sri Lankan about US$ 6 billion on oil imports, with Sri Lankan interest President Mahinda Rajapaksa recently crude accounting for one third of the In related news, another South Asian met with his Kazakhstan counterpart country’s imports, so we would like to country, Sri Lanka, has expressed interest President Nursultan Nazarbayev in ask you to share your experience in oil- in Central Asian crude oil and natural Astana. Oil and gas figured prominently field development with us.” gas. in discussions between the two leaders. Like India, Sri Lanka is seeking to cut G L Peiris, Sri Lanka’s minister of

Medco Energi completes acquisition of Yemen block Medco Energi Internasional, Indonesia’s Petroleum (Cyprus), which has a 42.50% In November, Medco’s chief financial largest publicly traded oil and gas firm, stake. US-based Hood Oil and Yemen officer, Syamsurizal Munaf, said the has completed the acquisition of a Oil and Gas Company (YOGC) also own company had set aside up to US$400 21.25% stake in a Yemen block through stakes of 21.25% and 15% respectively. million to finance its acquisitions of a wholly owned local subsidiary. The 20-year contract for the block assets both at home and abroad next year. Medco Yemen Malik acquired the development will end in 2025 with an He did not disclose the acquisition stake in Block 9 from Dubai-based option for a five-year extension. targets, but said such purchases were Reliance Exploration & Production According to Medco, the block holds an expected to boost Medco’s oil DMCC for US$90 million, Medco said in estimated 58.6 million barrels of oil and production, perhaps by as much as 5,000 a filing to the Indonesia Stock Exchange production is likely to reach 14,500 bpd in 2013. last week. barrels per day. At least four oilfields Medco’s president director, Lukman Block 9 is located in Hadramaut have been discovered in the block. Mahfoedz, also said earlier this year that Province, about 350 km northeast of Medco is accelerating its drive to the company was eager to acquire several Yemen’s capital city, Sana’a. The block achieve a target of boosting oil and gas oil and gas assets in the Middle East and covers an area of 2,234 square km within production to 120,000 barrels of oil North Africa as well as in Indonesia. the Sayun-Masila Basin. equivalent per day by 2015 from 80,000 The operator of the block is Calvalley boepd at present. PERFORMANCE Pertamina’s investment programme to help transform performance Indonesia’s state-owned Pertamina has in the Gulf of Thailand. production by 80,000 barrels per day by begun a US$15.8 billion investment Yudhoyono last week signed off on a 2025, and three natural gas processing programme, which Indonesian President number of projects which Pertamina will plants. Susilo Bambang Yudhoyono said would undertake over the next few years, Some of the investment fund will also help make it a world-class business. although they are mostly in the domestic be used to try to expand Pertamina’s The company has suffered setbacks in sector. assets overseas as it attempts to catch up recent weeks, in particular abandoning a They include an enhanced oil recovery with neighbouring state rivals PTT bid to buy the US’ Coastal Energy for its (EOR) programme, which is looking to Exploration and Production (PTTEP) of oil assets in Thai and Malaysian waters boost Pertamina’s domestic crude oil Thailand and Malaysia’s Petronas.

“Pertamina has shown a high Indonesia in the global economy through Control of Coastal would have boosted commitment to meeting its aim of business expansion.” Pertamina’s output by 25,000 bpd, rising becoming a world-class energy company Pertamina’s crude output for 2012 is to 50,000 bpd in the medium term. and of being able to stand equal with expected to rise by just 1% to around Pertamina has also been embroiled in a other global companies,” the firm’s 200,000 bpd, the firm’s upstream domestic administration crisis after president director, Karen Agustiawan, director, Mohamad Husen, told state Indonesia’s constitutional court ordered said at an investment programme launch news agency Antara. the country’s oil and gas sector regulator, ceremony with Susilo. The investment programme launch BPMigas, to be disbanded for being “We are ready to become a locomotive follows some negative publicity unconstitutional. A number of politicians for the drive towards Indonesia surrounding the firm’s image, including wanted Pertamina to take over the role, Incorporated, working in synergy with giving up the Coastal bid after only a few but Agustiawan said it would undermine other state companies to carve a name for weeks without any clear reason. the firm’s credibility. POLICY China, Vietnam lock horns over South China Sea China warned Vietnam last week to stop atmosphere for bilateral negotiations,” New Chinese passports have been unilateral oil exploration in contested Hong said. issued containing maps that label areas of the South China Sea. The He said the Chinese fishing boats were contested waters as Chinese, while a new comments followed a spat between in an area of the South China Sea where law introduced by Beijing also allows Chinese fishing boats and a Vietnamese Vietnam’s claim overlaps with waters Chinese police to board vessels that enter ship in the disputed waters. belonging to Hainan Province. China and waters close to the island of Hainan. Vietnam should not harass Chinese Vietnam are currently in negotiations China also said early last week that it fishing boats, Chinese Foreign Ministry over the waters, he added. was aiming to produce 15 billion cubic spokesman Hong Lei told a news His comments helped spark a rare metres per year of natural gas by 2015 conference on December 6. He said public protest just days later in Vietnam, from the South China Sea, virtually all of Vietnam had already expelled the where tensions have already been which it claims as its own. Chinese boats from waters close to running high over a string of perceived Beijing is embroiled in a string of China’s southern Hainan Province. insults by Beijing. territorial rows with neighbours A different account of the incident, including the Philippines, Taiwan, however, was given by Vietnam, which Vietnam, Brunei and Malaysia, each of said that two Chinese fishing boats had which have claims over parts of the cut a seismic cable the Vietnamese vessel South China Sea. was using to explore the area for oil. China also has a separate dispute with “We hope the Vietnam side will not Japan over islands in the East China Sea. engage in unilateral oil and gas The US State Department said last exploration activities in the relevant week it had expressed concerns to waters, [will] cease interfering with Beijing about its new regulations Chinese fishing vessels’ normal allowing police to board foreign vessels operations and [will] create a friendly in waters it considers its own.

Copyright © 2012 NewsBase Ltd. www.newsbase.com Edited by Andrew Kemp All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents AsianOil 12 December 2012, Week 49 page 8 POLICY Indonesian upstream industry warns over law change The Indonesian Petroleum Association industry have created more challenges to He added that IPA expected existing (IPA) has warned that any drastic the development of the industry, Proust, contracts to be honoured despite the changes to the current 2001 Oil and Gas who is also the president director of Total revision. “There are three principals that Law would deter investors in an already EP Indonesia, was quoted as saying by need to be upheld should the government difficult investment environment. The Jakarta Globe. want to attract more investors: clarity, IPA is a powerful organisation of oil The oil and gas industry has generated certainty and consistency,” he said. and gas companies operating in substantial revenue for the country and Earlier this year, Proust urged the Indonesia. IPA’s 52 member companies the Indonesian government’s share in oil Indonesian government to give oil and account for about 90% of the country’s and gas revenue is among the highest in gas contractors a greater say in the total production. the world, she said last week. policymaking process to prevent any new In November, the Constitutional Court Lukman Mahfoedz, who will replace regulations from creating uncertainty ruled that several parts of the law were Proust as IPA’s head in 2013, also over the country’s investment climate. unconstitutional, effectively disbanding unveiled a plan to establish a task force At the 36th IPA Convention and upstream oil and gas regulator BPMigas. within IPA focusing on the 2001 Oil and Exhibition in May, she said IPA believed Following the ruling, Indonesia’s Gas Law. the current 2001 Oil and Gas Law was parliament is expected to revise the law According to Mahfoedz, who is also sufficient. “It has been successful in in 2013. the president director of Medco Energi [allowing us to] produce oil and gas and IPA’s outgoing chairwoman, Elisabeth Internasional, Indonesia’s largest listed in generating revenue,” she said. Proust, said the current tough investment oil and gas company, the task force will Any changes to the law would cause climate had been created by a need to consist of experts, industry executives uncertainty for existing contracts and venture offshore to find new reserves, a and lawyers to provide input in the potential investors, she said. But if the decline in exploration activities and a ongoing revision process. government decides to amend it, the significant gap between domestic and “We are just preparing so that we will industry should be involved in the international pricing. be ready to provide inputs when the amendment process, she said. Public misconceptions that foreign government asks us,” The Jakarta Globe firms dominate the country’s oil and gas quoted him as saying. PROJECTS & COMPANIES BP drills first well in KG Basin The UK’s BP has drilled its first well in main fields. following several weeks of improving India 16 months after investing US$7.2 In July 2011, New Delhi approved relations. billion in oil and gas blocks owned by BP’s acquisition of a 30% stake in 21 Reports earlier this month said the Reliance Industries Ltd (RIL). acreages owned by RIL, including KG- ministry had approved RIL’s investment Drilling has begun at a satellite D6 and the Mahanadi Basin. The Indian plans for KG-D6, which could reverse discovery on the edge of RIL’s flagship Ministry of Petroleum and Natural Gas, the output decline by developing new KG-D6 offshore block. This forms part however, has delayed approving drilling fields. of a US$1.5 billion plan to develop four at the fields. BP has also reportedly written to the satellite fields around the main producing Over the last few months, the ministry ministry to say it, along with RIL, could D1 and D3 fields in KG-D6, with output and BP and RIL have repeatedly differed add 15 trillion cubic feet (424.8 billion expected in mid-2016. over gas pricing, independent audits of cubic metres) to India’s gas reserves in Peak production of the satellite finds is the energy blocks and cost recovery the long run, saving the country US$150- estimated at 10.30 million cubic metres issues, especially for output from KG- 225 billion in import bills. per day and will augment output from the D6. Permission for BP to drill has

In a note on RIL, brokerage Edelweiss According to BP, the first step was to be to build reserves via exploration. said BP considered the Indian manage the decline of producing fields in Production from D1 and D3 has shrunk government’s decision-making process to KG-D6 via compression, workovers and below 20 mcm per day from 67 mcm per be picking up pace. Last week, BP said it infrastructure projects. The second step day in 2009-10, never reaching its had prepared a three-point programme to would aim to push mid-term projects to forecasted peak flow of more than 88 revive output from the KG Basin from develop discovered resources of up to 3 mcm per day. 2017. tcf (84.96 bcm) and the third step would

JX Nippon plans Mizushima plant maintenance JX Nippon Oil and Energy Corp. will 550,000 tonne per year plant in Kashima which has an ethylene production close for maintenance a unit at one of its and a 440,000 tonne per year plant in capacity of 443,000 tonnes per year, until paraxylene plants in early 2013, it Oita. 2016, a company source told Reuters. It revealed last week. The company said late last month that last conducted a maintenance turnaround Line No. 3 at the refiner’s Mizushima it would build a new paraxylene plant as at the plant from August to October. plant will undergo maintenance part of a joint venture with South Korea’s Already Japan’s biggest refiner by turnaround in the last week of January SK Global Chemicals. capacity, JX is increasing its output at the 2013, an unnamed company official told The plant will be located in Ulsan, moment, planning to process 14% more Fibre2fashion. The line, which has a South Korea, and will have a production crude oil this month than a year earlier. It production capacity of 350,000 metric capacity of 1 million tonnes per year. will process 6.35 million kilolitres, or tonnes per year, will restart operations in Construction is likely to be completed in 1.29 million barrels per day, of crude oil the first week of March 2013. May 2014, with commercial production in December. Lines No. 1 and No. 2 at the slated to start in August 2014, a JX The planned increase in throughput Mizushima plant each have a production Nippon official told fibre2fashion. comes as demand for middle distillate capacity of 230,000 tonnes per year. JX Nippon also said last week that it recovers and as JX brings three crude The company operates four other would skip a planned maintenance distillation units (CDUs) back on line paraxylene plants in Japan. These include shutdown of a naphtha cracker at its following maintenance, senior vice plants in Chita and Kawasaki, which Kawasaki plant near Tokyo in 2013. president Tsutomu Sugimori said. each have a production capacity of The company will probably delay 350,000 tonnes per year. It also has a maintenance shutdown at the plant,

Malaysia’s MHB wins new ExxonMobil contract Service provider Malaysia Marine and It is an engineering, procurement, rising energy needs,” said J Hunter Heavy Engineering Holdings Bhd construction and commissioning (EPCC) Farris, ExxonMobil Exploration and (MHB) has won a 165 million Malaysian contract for the topsides and platform Production Malaysia’s chairman. ringgit (US$53.98 million) contract from jacket for the Damar project, which is “Damar will help provide additional ExxonMobil. located about 200 km off the east coast gas supplies for Malaysia’s power and The contract for the US energy giant’s of Peninsular Malaysia in 55 metres of industrial needs and will promote the Damar gas development project offshore water. overall growth of the country’s natural Peninsula Malaysia was awarded to “The development of Damar signifies gas sector,” he was quoted as saying by Malaysia Marine and Heavy Engineering another important step in our partnership Malaysia’s state-run Bernama news (MMHE), a wholly owned subsidiary of with Petronas and Petronas Carigali to agency. MHB, by ExxonMobil Exploration and develop Malaysia’s oil and gas resources Petronas Carigali is the upstream arm Production Malaysia. economically and efficiently to meet of state-owned Petronas.

According to the Bernama report, the commence in the third quarter of 2013 nine-month period of 2011. Damar project consists of one four- and start-up is targeted for later in the MHB’s net profit in the January- legged gas satellite platform. A total of year. September period amounted to 141 16 development wells are planned for the MHB reported recently that its revenue million ringgit (US$46.13 million), down platform, and field peak capacity is in the first three quarters of this year 50.9% from 287 million ringgit forecasted to be 200 million cubic feet totalled 2.47 billion ringgit (US$808.77 (US$93.90 million) a year earlier. (5.66 million cubic metres) per day of million), up 5.5% from 2.34 billion gas. Installation of facilities is planned to ringgit (US$766.89 million) in the same

Petrofac starts gas production at Berantai field The offshore Berantai field in Malaysia Malaysia is the second largest oil and second RSC to a consortium of three has started gas production, according to gas producer in South-East Asia after players – two Malaysian and one the field’s operator, UK-based oil and Indonesia. But while Malaysia is still a Australian – for the development of the gas service provider Petrofac. net oil and gas exporter, its output is marginal oil and gas fields in the Balai Petrofac is developing the marginal flagging. The International Energy Cluster, located offshore Sarawak. The field jointly with Malaysian oil and gas Agency (IEA) predicted earlier this year consortium is led by Australia’s Roc Oil service giant SapuraKencana Petroleum that Malaysia would become a net Co. (ROC) and includes Dialog Group under a risk service contract (RSC) with importer of oil and gas in 2017 owing to and Petronas Carigali. state-owned Petronas. growing domestic demand. In July, Petronas awarded a new RSC The Berantai field is located Under such circumstances, Petronas to US-based Coastal Energy Co. for the approximately 150 km offshore has awarded RSCs for the development development and production of Peninsular Malaysia, 10 km south of the of marginal fields in the country since petroleum at a cluster of small fields Tapis field and 30 km northeast of the early 2011. offshore Peninsular Malaysia. Angsi field, Petrofac said last week. In January 2011, Petronas awarded the In a statement last week, the head of The development comprises a first RSC to a consortium of three players Petrofac’s Integrated Energy Services wellhead platform connected to the – two Malaysian and one from the UK – division, Andy Inglis, said: “The floating production, storage and for the development of the Berantai Berantai project, delivered through the offloading (FPSO) vessel Berantai. Gas marginal field, located offshore first RSC to be awarded in Malaysia, is exported by a 30-km subsea pipeline to Terengganu. The three players are meets Petronas’ twin goals of growing the Petronas Carigali-operated Angsi Kencana Petroleum, SapuraCrest domestic production and building local field and onwards into the Peninsular Petroleum and Petrofac. Kencana and capability. It has required a tremendous Malaysian gas grid, Petrofac said. Sapuracrest merged earlier this year, effort from all the stakeholders and we Petronas Carigali is the upstream arm of creating SapuraKencana Petroleum. are delighted this important milestone Petronas. In August 2011, Petronas awarded the has been achieved.”

South Korean refiners plan 2013 CDU maintenance South Korean refiners will close for month, company and trading sources told month, however, that it had tripled its maintenance a number of crude Reuters last month. The company will benzene, toluene and paraxylene distillation units (CDUs) in the coming also keep its 60,000 bpd hydrocracker production capacity with the completion months, starting with a 330,000 barrel offline during the month, they added. of a 600 billion Korean won (US$550.49 per day unit operated by GS Caltex. Hyundai Oilbank will close for million) plant. The No. 4 CDU will close in March maintenance a 280,000 bpd CDU in 2013 and remain offline for around a April 2013. The company said last

Built jointly with Japan’s Cosmo Oil, SK Energy intends to close two CDUs The company was offering either the plant will start production in January with a combined capacity of around 300,000 barrels or 600,000 barrels per 2013 and will lift Hyundai Oilbank’s 288,000 bpd in the first half of 2013. month of diesel with 10 parts per million annual paraxylene production to 1.5 S-Oil, meanwhile, will close for sulphur and 300,000 barrels per month of million tonnes from 500,000 tonnes, it maintenance two CDUs with combined either 350 ppm or 500 ppm sulphur said in a statement. production capacity of 330,000 bpd in gasoil, industry sources told Reuters. Construction of the new facility, which 2013, sources told Reuters. The first of It was also offering 300,000 to 700,000 is located in Daesan, around 200 km the two plants will shut in April, barrels per month of jet fuel, with all southwest of Seoul, began in June 2010. followed by the second in July. cargoes to be delivered into Onsan, South It will produce feedstock for The company was in the news last Korea, between January and December petrochemical products such as petrol month when it offered up to 19.2 million 2013. additives, synthetic textiles and various barrels of gasoil and jet fuel for 2013 plastics. through a term tender.

Bangchak Petroleum looks to relocate refinery One of Thailand’s oldest refineries, capacity is to expand the firm’s growth refinery are all in the greater Bangkok Bangchak Petroleum, is carrying out a niche in green fuels, especially biodiesel. region. However, in the meantime the feasibility study into relocating away Bangchak is Thailand’s biggest producer firm will spend US$160 million from the centre of Bangkok to a new of biodiesel and a major producer of upgrading the existing refinery for the plant with more than double the capacity. ethanol for other biofuels. It also operates 2013-16 period, said Anusorn, and Bangchak’s current refining capacity is a fuel retail chain. The firm’s petrol and US$130 million on expanding the 120,000 barrels per day but the hope is to diesel comply with Euro 4 emission company’s retail chain, including expand this to 300,000 bpd, the standards. opening service stations overseas in company’s president, Anusorn A new refinery with a 300,000 bpd Myanmar, Laos and Cambodia. Sangnimnuan, said in a statement last capacity would cost approximately Bangchak is also expanding into week. US$3.65 billion, Anusorn said. renewable energy through wind and solar The present inner city location on the Bangchak is one of seven refineries in power plants. It will have 95 MW of edge of a commercial district in Thailand and is majority-owned by state- solar power generating capacity by Bangchak makes it impossible to expand, owned oil and gas group PTT and the February 2013, rising later to 170 MW. he said. Thai Ministry of Finance. This would make it one of Thailand’s One of the objectives of a bigger Possible new locations for the new biggest renewable energy developers. NEWS IN BRIEF

The following news items are sourced international companies to explore would be awarded to eligible firms by the from local and international news offshore oil and gas reserves, an official end of next June, with submission sources. NewsBase is not responsible for said, as the fast-growing economy seeks deadline in mid-March. the contents of the stories and gives no to meet its soaring energy demands. State AFP, December 10, 2012 warranty for their factual accuracy. energy group Petrobangla director Muhammad Imaduddin told AFP that Oil India finds new OIL nine shallow-water and three deep-water reserves blocks in the Bay of Bengal were open Public sector oil company Oil India for production-sharing contracts with Bangladesh invites Limited has discovered oil reserves in an companies. “We are going to post details oil well in the Nachna area at a depth of bids from foreign of the international tenders on our 1,229 meters. Two months ago also the firms website by tomorrow (Monday),” firm had found oil reserves in a well. Bangladesh on Sunday invited bids from Imaduddin said adding that the blocks

Oil found in both these wells comes in implemented a Government to Business acquired the participating interests of the category of heavy oil but India still (G to B) system, but the cooperation is Anadarko Offshore Holding Company does not have the technique to exploit still made based on a business contract,” LLC in three oil and gas blocks in East heavy oil. Thus, Oil India has invited he said. Rakhmanto noted that the G to B Kalimantan. PHE President Director, tenders from international consultants for will be effective if it is implemented in Salis Aprilian, said here on Monday the the technique to exploit this type of oil. powerful and developing countries. three blocks acquired are the Bukat, During exploration works, oil and gas “Indonesia still depends on the Ambalat and Nunukan in the East was found in many areas like Barmer, companies,” he pointed out. Kalimantan offshore. The PHE signed Jaisalmer and the Bikaner basin of Thar ANTARA, December 10, 2012 the agreement to buy 100% shares of Desert. Anadarko Ambalat Ltd., Anadarko Bukat TNN, December 6, 2012 Cepu Oil Block to Ltd., and Anadarko Indonesia Nunukan produce 22,000 bpd Company on Monday. After the Marsh launches India until 2014 acquisition PHE would control 33.75% services of the participating interest in the The Cepu Oil Block which shares Ambalat Block, 33.75% in Bukat and 35 Marsh, the Indian subsidiary of NYSE- borders in East and Central Java, is pecent in Nunuka formerly the sister listed Marsh & McLennan Companies, predicted to maximally produce 22,000 companies of Anadarko Offshore, on Monday launched its insurance barrels (of oil) per day (bpd) until it Anardarko Petroleum Corporation which broking and risk management services comes to full operations in 2014, an is listed in New York. The composition for India’s energy sector. The company official said. Spokesman of the Upstream of the participating interest in Nunukan deals in insurance broking and risk oil and Gas Interim Task Force (SKSP after the acquisition is 35% for PHE as management. Marsh is eyeing the Migas) Hadi Prasetyo said here on the operator, 40% PT Medco E&P increasing risk and insurance needs of Sunday that the task force was most Nunuka, 12.5% BPRL Ventures Ind BV the oil and gas sector in India. “Marsh unlikely to increase the block’s and 12.5% for Videocon Ind Nunuka Inc. today announced the launch of 12th production capacity from the present In Bukat, ENI as the operator has 66.25% global energy hub in Mumbai,’’ the level of 22,000 bpd. “Its production will participating interest while PHE 33.75%. company said in a statement. remain 22,000 barrel per day until 2014,” In Ambalat, ENI has 66.25% and acts as BUSINESSLINE, December 10, he said. According to Prasetyo, the high the operator while PHE has 33.75%. 2012 investment cost is not proportional with a ANTARA, December 10, 2012 production increase which will be New SOE needed to reached two years. In fact, technically the Pertamina to acquire manage oil and gas initial production of Cepu block could Venezuelan oil contract reach 37,000 bpd. It was initially planned to increase the block’s production by company The Indonesian government needs to 5,000 bpd to 27,000 bpd, but it was Minister for State Enterprises Dahlan establish a new state-owned enterprise cancelled due high invest cost, he said. Iskan said state oil and gas company PT (SOE) to manage cooperation contracts The Cepu block is now operating under a Pertamina is expected to a sign a deal to in the oil and gas sector, according to an limited production capacity based on its acquire 32% stake in Petrodelta S.A, a expert. “Consequently, contracts will not early production facilities (EPF). The Venezuelan oil company before the end be signed by Pertamina,” an oil expert limited production capacity would take of this year. “If negotiations on all from the Research Institute Mining and place until the end of 2014. The oil aspects have been wrapped up a deal Energy Economics, Pri Agung field’s full scale production facilities are could be signed before the end of this Rakhmanto, said here during a seminar under construction and are targeted to be year,” Dahlan said on the sidelines of a entitled “Energy Outlook 2013” on completed at the end of 2014 when it is National Conference on Corruption Monday. He said Pertamina`s roles as expected to operate under a production Eradication here on Wednesday. He said business and public service obligation capacity of 165,000 barrels of oil per Pertamina had conducted comprehensive entities must be differentiated. “The day. preparation for the acquisition plan. “If it establishment of the new SOE is also in ANTARA, December 9, 2012 is only approval that is left to be secured accordance with the mandate of Article then I make a decision by the end of this 33 of the 1945 Constitution,” he said. He Pertamina Hulu year,” he said. In June, 2012, Pertamina stated that the new SOE would serve as signed a sales purchase agreement with an alternative solution to facilitate Energi acquires three Harvest Natural Resources Inc, an oil and Business to Business (B to B) Anadarko oil blocks gas company listed on New York Stock cooperation. “The government has so far PT Pertamina Hulu Energi (PHE) has Exchange.

With the acquisition, Pertamina hopes to house its first R&D center in Korea,’’ the Singapore dollars 120 million, the cooperate with Petr’leos de Venezuela, official said. The Malaysian oil company warehouse has capacity to handle SA (PDVSA), an oil company owned by also has a plan to open the second R&D 240,000 tonnes year of chemicals and the Venezuelan government, to speed up center at Korea Maritime University in 180,000 tonnes a year of oil and gas development of oil and gas reserves of Busan for technology development products, including drill pipes and heavy Petrodelta. Pertamina is seeking support projects in its offshore business. duty machinery. “Our warehouse is from the Indonesian government to step Petronas, ranked 68th in Fortune’s 500 designed to managed logistics of multi- in by opening goverment to goverment largest companies in the world by billion dollar Singapore industries,” said (G to G)forum on the plan. Dahlan said revenue this year, has looked to Korea as Ken Koh, deputy managing director of political aspect in Venezuela had been its future business partner in a bid to Yang Kee Group. In total, Yang Kee has taken into account in planning the decrease its technology dependency on 1.5 million sq ft storage space in acquisition before the presidential the U.S. and EU. warehouse across Singapore handling election in that KOREA HERALD, December 12, general cargo and dry and liquid ANTARA, December 5, 2012 2012 chemicals, said Koh. The warehouse also handles chemicals in pellet and resin Woodside seals PPL to buy Tullow form for export to Japan, Europe and the second Myanmar assets United States for global groups like Shell and Chevron, Koh told a press deal Amid financial crunch due to circular conference held 12 Dec 2012. debt, Pakistan Petroleum Limited (PPL) Woodside Petroleum has sealed a-second NEWSBASE, December 12, 2012 oil and gas exploration deal in Myanmar – the country’s second largest oil and gas as it rapidly moves to broaden its explorer – has decided to buy out assets No need for 90-day of Ireland-based private group Tullow business beyond a set of expensive oil reserve: former liquefied natural gas projects in Oil located in Pakistan and Bangladesh. Australia. The Perth-based energy Tullow adopted a two-stage process for Thai energy minister producer concluded a deal with divestiture. In the first stage, PPL was The government’s plan to increase the Myanmar-based MPRL covering a 50 per selected as a preferred buyer and allowed statutory oil reserve from the present 36 cent interest in block A-6 in deep waters to carry out further due diligence before days of consumption to 90 days to deal off the coast of Myanmar. The contract submitting the firm a binding offer by with a possible energy crisis could covers a 3D seismic survey and an option mid-December. According to PPL unnecessarily burden the public, for future drilling. The two companies officials, the company had appointed according to former energy minister will also consider jointly bidding in consultants to evaluate Tullow Oil’s Piyasvasti Amaranand. He recently future deepwater bid rounds. Woodside assets in Pakistan and Bangladesh, posted the comment on his Facebook sealed a deal last month to buy into an determine hydrocarbon potential and page. He said the public should keep a exploration venture also in the Rakhine possible upside in each block. Based on close watch on the plan, because of the Basin with South Korea’s Daewoo the diligence reports, the advisers will expected high cost of storing oil and the International. recommend binding values to bid for cost of constructing depots. He is AFR, December 11, 2012 purchase of entire share the subsidiaries. concerned that this cost might be passed TRIBUNE, December 8, 2012 to consumers. Currently the government Malaysian oil giant to allows retailers to maintain the oil open R&D centers in Yang Kee opens reserve, of which half is crude oil and Korea warehouse for oil, half is finished oil products, to ensure gas and chemical national energy security. Therefore, in a Petronas, the state-run oil and gas industries possible worst-case scenario in which the company in Malaysia, will open two country cannot procure any oil, it can be research and development centers in Singapore’s Yang Kee Group has opened assured that it will have adequate oil Korea early next year, an official from its largest warehouse facility to support reserves to be used for 36 days. If a crisis the Korea Trade-Investment Promotion storage and transportation of chemicals, prompts a 10-per-cent drop in the oil the Agency said on Tuesday. “Petronas has oil and gas products to the Asia Pacific country could procure, the supply would an interest in creating partnerships with markets. The 820,000 sq ft warehouse on be sufficient for a year, taking into Korean companies and academies in 4-ha land provides material handling account the amount the country could offshore-related business and its support to the city state’s oil, gas and still procure, plus the 36-day reserve delegation visited Korea today to see petrochemical producers based on the amount. local governments to decide where to Jurong Island industrial hub. Costing

Piyasvasti said, however, that the worst the region, according to its chief we can cut down imports,” he said. He oil crisis on record saw a decline of executive officer Pailin Chuchottaworn. said that a comprehensive holistic road global production of only 7 per cent, He added that the company is ready to map in making country self-sufficient in which lasted for three months, so he partner with them, especially Malaysia’s producing oil and gas is being prepared questioned why the country needs to Petronas and Indonesia’s Pertamina, in and added that refinery capacity in the extend the reserve period to 90 days. He expanding upstream petroleum country needs to be increased. doubted the plan to extend the reserve exploration and production, refining and DH, December 7, 2012 period would benefit anybody. petrochemical operations, all of which THE NATION, December 11, 2012 require massive investment. The ConocoPhillips to tap partnership plan is part of its risk- Indian shale PTTEP diversification strategy. The company is US independent ConocoPhillips is studying the possibility of expanding its “overwhelmed” by nearing a deal with India’s state backed petrochemical business in Malaysia, demand for equity Oil and Natural Gas Corporation to Indonesia, Vietnam and Myanmar, Pailin explore and develop shale gas resources PTT Exploration and Production will said. PTT’s image is well recognised by in the Asian nation. ConocoPhillips is set raise Bt92.3 billion from the nation’s energy conglomerates in Asean, he said. to visit ONGC this month to discuss biggest equity offering of up to 650 While PTT and Petronas are both collaboration in shale gas development million shares after being two times competitors and partners, they will after analyzing ONGC’s acreage data in oversubscribed. The company also plans collaborate more in the future after the India, the company’s managing director, to propose a five-year investment plan to inception of the Asean Economic Sudhir Vasudeva said. When the pair its board by year-end. The preferential Community in 2015. “Our investment in have an idea of the resource potential public offering of new ordinary shares of Asean will be focused on partnering with they will finalize a joint exploration plan, PTTEP received overwhelming response national energy firms in Asean,” he said. India’s Economic Times reported from eligible existing shareholders “In Myanmar, the government puts a lot Vasudeva saying. during the subscription period from of trust in us as our drill surveys often PE, December 7, 2012 December 3-6 and attracted considerable find petroleum sources. Therefore, it has demand from institutional investors who granted us concessions to invest in many participated in the book-building process. fields. “Like the insurance business, Essar Oil interest in Eligible existing shareholders (excluding companies in the petroleum business more CBM projects PTT) as well as institutional investors don’t like to assume risks alone because Essar Oil has shown interest in setting up who participated in the book-building of the high costs. The cost of drilling its third coal-bed methane (CBM) project process together indicated a demand for each oilfield ranges from US$10 million in the Asansol-Ranigunj belt in West twice the number of new ordinary shares to $100 million [Bt307 million to Bt3.07 Bengal, state’s Industry Minister Partha offered. This does not include the billion]. If you drill and find nothing, it’s Chatterjee said on Monday. The number of shares to which PTT was a waste of money. Therefore, we should company would invest Rs.52billion for entitled pro rata to its shareholding. The join with the other national energy firms the project, Chatterjee told reporters here. remaining shares have been allocated to or strong energy firms in Asean in doing He asked company representatives who institutional investors from book- business. met him to furnish a proposal and submit building. PTT, as the largest shareholder, THE NATION, December 6, 2012 it to the government. Chatterjee said supported PTTEP’s capital increase by Saroj Poddar of Texmaco had also called subscribing to a total of 424,359,789 new GAS on him during the day for a food ordinary shares, amounting to about processing unit at Sankrail in Howrah. Bt60.25 billion, to maintain its stake in India shale ZN, December 5, 2012 PTTEP at about 65.29 per cent. The public offering will raise Bt92.3 billion, exploration policy Meghalaya wants to the largest amount ever raised in a public soon: Moily develop shale gas offering in Thailand. A roadmap is being prepared to reduce The Meghalaya government today said it THE NATION, December 12, 2012 India’s import of crude oil by 2016-17, wants to tie up with private power said Union Minister of Petroleum and producers for the development of its PTT eyes partnership Natural Gas M Veerappa Moily. He said, shale gas assets in the state. “Meghalaya with national oil “We are now coming out with an has a lot of shale gas potentiality, but exploration policy on shale gas and oil. firms lacks the technical know-how for its The US and Australia has explored this PTT is ready to team up with national oil development,” Power Principal Secretary sector in a big way. Shale gas and oil is firms in Asean to expand its presence in J P Prakash said. available in plenty in India and with this

At a conference on ‘Empowering the lower than 18 cents that GAIL charges North East–overcoming challenges in CAG to restrict KG- for western offshore gas, said there was development of the power sector in the D6 audit no legal basis to regulate the levy. RIL NE India’ here, he said: “The state President and COO B Ganguly on The CAG has agreed to restrict its audit desires to tie up with private power November 29 wrote to Oil Secretary of Reliance Industries’ KG-D6 block to producers for developing shale gas in the debunking oil regulator PNGRB’s financial scrutiny of the spendings on the state. We urge Independent Power reported advice to the government to flagging gas fields and a performance Producers Association of India to induce stipulate a uniform marketing margin for audit, if any, would be done of the Oil private companies which are experts in sellers of domestic gas, while giving free Ministry, a senior government official the field to invest in the state.” hand to sellers of imported LNG and said on Tuesday. “CAG had a few days PTI, December 7, 2012 firms selling CNG to automobiles and back given to us in writing that the audit piped cooking gas to households. of Block KG-DWN-98/3 (KG-D6) will DGH rejects RIL’s PTI, December 9, 2012 be strictly as per Section 1.9 of the proposal on gas test Accounting Procedure to the Production Tangguh’s second The DGH has rejected Reliance Sharing Contract,” the official, who Industries’ proposal to do a single test to wished not to be identified, told LNG train resumes confirm three natural gas discoveries in reporters. operations the flagging KG-D6 block, saying PTI, December 11, 2012 British energy giant BP Plc said on separate tests are required as the three Monday that its second liquefied natural finds are distant and unconnected. The RIL seeks defense gas (LNG) train or Train 2 at the Directorate General of Hydrocarbons clearance Tangguh plant in West Papua had (DGH), the technical arm of the oil RIL has sought DGH’s intervention in resumed operations following weeks of ministry, has since February 2010 not securing defence clearance (MoD) for its being idle after the facility caught on fire recognised the D-29, 30 and 31 as Krishna-Godawari block KG-DWN- in early November. BP Asia-Pacific discoveries as RIL had not performed its 2003/1 (also known as KG-V-D3). The regional president William Lin said the prescribed tests to confirm the finds. operator RIL has finalized three tentative terminal was restarted on Wednesday last Sources said RIL and its partner BP Plc locations in the block where it wants to week following the completion of repairs on October 8 proposed to do a single carry out its exploration activities. The and its production was resumed on Drill-Stem Test (DST) on the three finds operator fears that the locations could fall Saturday at around 5 a.m. “[Train 2] is to establish them as commercially viable in the Air Force danger zone and naval now ramping up to its designed capacity. finds. exercise areas. The company is planning The incident investigation into root-cause ET, December 9, 2012 to drill two exploratory wells -- out of the of the fire was completed prior to restart, and follow-up actions are ongoing,” KG-D6 production three locations finalized -- which are part of the balance Minimum Work Lin said in an email sent to The Jakarta goes up Programme (MWP) of Phase-I. The Post on Monday. He added that the After the completion of the planned company wants to drill the two wells in progress had been consistent with the shutdown of the MA field in RIL’s the coming year, that is, 2013. firm’s commitment to revive Train 2 as showcase KG-D6 block, the production IP, December 10, 2012 fast as safely possible “to meet the needs from the block went up to 23.71 of our customers and stakeholders”. Fire MMSCMD for the week ending RIL opposes uniform struck Train 2, which has a designed November 25, 2012, from 20.32 marketing margin capacity of producing 3.8 metric tons per MMSCMD registered during the annum (mtpa) of LNG, on Nov. 6, when Reliance Industries has opposed a move previous week (ended November 18, the other facility, Train 1, was on to make marketing margin charged by it 2012). The production during the earlier scheduled maintenance. Train 1, which and other sellers of domestically week ended November 11 was 23.92 also has a similar designed capacity, produced natural gas uniform, while MMSCMD. According to the original resumed normal production in late giving gas importers a free hand, saying field development plan, the block was November. that it would be a gross discrimination. meant to produce 80 MMSCMD of gas at THE JAKARTA POST, December RIL, whose 13.5 cent per million British this point of time. 10, 2012 thermal unit as marketing margin on KG- INDIANPETRO, December 10, D6 gas is higher than 11 cents charged 2012 on gas produced by ONGC/OIL but

Oil and Gas Regulatory Authority natural gas in the Philippines as demand Petronas to triple (Ogra), which is sheer violation of the for power and fuel is expected to keep gas reserves after laid down guidelines,” said Ghayas growing in Asia in the coming years, takeover of Progress Paracha, leader of the CNG Association. company officials said Thursday. “We “The report of independent auditors are also looking at the Philippines as an Petroliam Nasional Bhd (Petronas) is appointed by Ogra on the directives of opportunity to import LNG. I think that expected to almost triple its international the Apex Court has calculated Rs20.95 is going to be an important aspect as we unconventional gas reserves to one per kg loss on the current retail price.” look forward at the opportunities Asia billion barrels of oil equivalent (boe) THE NEWS, December 8, 2012 provides,” Royal Dutch director of after the takeover of Canada’s Progress upstream international Andy Brown said Energy Resources Corp. A Petronas Malampaya group during a webcast interview. LNG is official said the successful takeover of drilling 2 gas wells natural gas that is converted into a liquid Progress, valued at C$5.2bil, would give state for easier storage and The consortium operating the Petronas control of the largest holder in transportation. Upon reaching its Malampaya natural gas project is set to the Montney shale gas area of British destination, LNG is regasified and drill two additional wells next year as Columbia and full ownership of three distributed through pipelines. “We see part of a $1-billion investment program. fields it bought a stake in last year. “The Asia will have significant increase in “We will drill [the wells] around takeover will bring Petronas LNG demand and will drive the February to April next year… when a unconventional gas reserves up opportunities that we have in our very large drill rig will come,” Shell significantly,” the official said at a media portfolio across Australia, across East Philippines Exploration BV managing workshop organised by the Malaysia Africa and North America,” Brown said. director Sebastian Quinones told Press Institute and Petronas in Bintulu He said LNG demand would come not reporters at the sidelines of a ceremony last week. Progress is an upstream gas only from Korea and Japan but also for the construction of a new production producer owning gasfields in the China. Shell signed a separate agreement platform here. Malampaya currently has Montney shale areas of British Columbia with the Energy Department in June over five wells producing natural gas off and Alberta. It has 1.9 trillion cu ft of a feasibility study to build an LNG northwest Palawan. Quinones said the proved and probable gas reserves in regasification terminal beside its refinery drilling and installation of two new sub- 820,000 acres of area in Montney. As at in Batangas that is estimated to cost $1 sea wells that would tap more natural gas end-January 2012, Petronas had 380 billion. The study is expected to be in service contract area 38 formed part of million boe in unconventional gas completed next year with a ‘first gas’ the second phase of Malampaya’s reserves, a relatively low figure target in 2016. The proposed electricity development estimated to cost $250 compared with other oil and gas giants. plant and LNG plant will be located near million. “While we are drilling new The deal marks Petronas’ largest ever Shell’s 110,000 barrels per day Tabangao wells, we will not shut down, operation overseas acquisition, eclipsing the refinery in Batangas. will continue so that we will not interrupt US$2bil it paid for a 40% stake in Santos MANILA STANDARD TODAY, power to Luzon,” Quinones said. The Ltd’s Gladstone liquefied natural gas December 7, 2012 (LNG) project in Australia in 2008. The consortium of Spex, Chevron Gladstone project is also one of Petronas’ Malampaya LLC and PNOC Exploration Pilipinas Shell seeks plans to tap drilling rig ENSCO 8504. unconventional gas plays, which involves tax incentives for the conversion of coal seam natural gas The third phase of Malampaya’s or coalbed methane, to LNG for export. development, meanwhile, includes the gas pipeline project THE STAR, December 11, 2012 fabrication and installation of a new Pilipinas Shell is seeking government depression compression platform that incentives for its $1 billion natural gas APCNGA demands will house powerful compressors that pipeline project, which is expected to audit of gas rates will help draw out more gas from the propel the total investments figure of the reservoirs and deliver it for power Board of Investments to P380 billion to a The All Pakistan CNG Association generation. total for 2012. Trade and Industry (APCNGA) has demanded immediate MANILA STANDARD TODAY, Undersecretary Cristino L. Panlilio told audit of gas prices claiming that the gas December 8, 2012 reporters at the UK Trade Mission that distribution companies are forcibly the British petroleum firm’s project is getting inflated gas prices from CNG Shell bullish on PH still under evaluation and is expected to operators since the last three years, gas industry be part of the total BOI registration for according to a statement. “CNG station 2012. Panlilio said that the entire Shell owners are made to pay Rs2.18 per kg in Global oil giant Royal Dutch Shell plc is project could hit $2 billion but it would addition to the prices determined by the bullish about the prospects of liquefied be registered in phases.

He did not give other details of the Shell petrochemical hub. The projects would past three years in order to reach this project. He, however, said that the include capacity expansion at the Pulau point of prototyping the Timor-Leste project would be able to substantially Bukom ethylene cracker to ramp up pipeline.” The deep-sea pipeline and contribute to the sagging investments olefins and aromatics production by 20 LNG plant, together with an integrated generated by the BOI. He expects total per cent. The US$3 billion ethylene supply base and petrochemical refinery, investments to hit between P370 billion cracker started commercial production in is part of Timor-Leste’s critical Tasi to P380 billion by end of the year March 2010. Mane Project on the country’s southern because of the various projects in the NEWSBASE, December 6, 2012 coastline, which will form the backbone pipeline. This means the BOI projects of its oil and gas industry. approvals would only approximate last Petro-Mekong set to THE STAR, December 10, 2012 year’s total investments. This means the finalise tie-ups for BOI is going to miss its P400 billion Timor-Leste pipeline SERVICES investments target for 2012. “So far, we have P300 billion in total investments. Malaysian firm Petro-Mekong Corp Sdn Perisai to sell We are approaching a positive variance,” Bhd said it is set to finalise a technical Panlilio said. For 2013, Panlilio said the collaboration with its international remaining stake in BOI may be able to hit over P400 billion partners for the multi-billion ringgit deep SJR Marine worth of investments. “We just hope to sea gas pipeline project in Timor-Leste. Perisai Petroleum Teknologi Bhd has break the investments last year,” Panlilio, Petro-Mekong’s executive director Datuk entered into a supplemental agreement who is in charge of investments and Seri Dr Shafiq Sit Abdullah said in media with EOC Ltd to dispose of the international trade promotions group. release to StarBiz: “With the assistance remaining 50% shares in SJR Marine (L) Investments generated by the BOI for the of our local Timorese partner Nexus Ltd to EOC for RM271.8mil. Perisai past three quarters have remained behind Meridian LDA, Petro-Mekong and its Petroleum had on Nov 30 disposed 50% the comparative figure of 2011. The BOI, technical partners from China, Europe of its shares in SJR Marine to EOC at the however, has refused to release the data and the United States have now same price. In a filing with Bursa but sources said that investment frequently travelled to Timor-Leste over Malaysia yesterday, Perisai Petroleum registration as of September this year has the past year to conduct technical said EOC was expected to assume the remained within the 19% decline evaluations and studies and we are existing liabilities and contingent compared to the same period last year. satisfied with the findings.” StarBiz had liabilities of SJR Marine. The Perisai MANILA BULLETIN, December 6, reported in May that the Timor Leste group is expected to focus on its 2012 government had inked a memorandum of production and drilling segments which understanding (MoU) to partner with will be in line with the future business Shell to relocate gas Germany’s Europipe GmbH to supply a plans of the group. business to crucial gas pipeline from its offshore gas BERNAMA, December 6, 2012 field to the country’s planned liquefied Singapore natural gas (LNG) processing plant on its Scomi wins job in The Royal Dutch Shell Group said it will mainland. Petro-Mekong is co-managing relocate its integrated gas business based the project and is the sole representative Myanmar in The Hague to Singapore from next of Europipe GmbH of Germany for Scomi Group Bhd has been awarded a year, moving closer to the Asian markets. Malaysia and Timor-Leste. Shafiq added: drilling fluids and drilling waste “We have a new integrated gas business “Our relationship with Europipe goes management contract in Myanmar worth that will be going live next year. It will back over thirty years, when Europipe about RM93.6mil. Scomi’s oilfield be based in Singapore,” said Andy began supplying the pipeline from the services business under Scomi Oiltools Brown, Shell’s upstream international offshore B-11 gas field to Malaysia’s Bermuda Ltd will provide PTTEP director. Shell’s gas business covers first LNG plant, MLNG Satu, in Bintulu. International Ltd (PTTEPI) drilling fluids exploration to production, transportation So I have full confidence in our team’s and drilling waste management and downstream use from The Hague. technical capabilities in managing this equipment and related engineering “We still see potential in Europe with project, together with Europipe.” The services for three blocks in Myanmar. some growth, but the major growth will media release also stated that at the The company said in a statement the come from Asia,” he said in gas media launch of the prototype pipeline in May contract was commencing in the fourth briefing through a webcast to Asian 2012, the Secretary of State for Natural quarter of 2012. Since 2003, Scomi journalists. Shell is also planning a Resources Alfredo Pires had highlighted Oiltools has been servicing major clients number of projects in Singapore, in “the comprehensive and detailed analysis in Myanmar including PTTEPI and addition to its massive refining and conducted by the government over the Daewoo.

Scomi said Scomi Oiltools had embarked Energy (DOE), Josefina Patricia doctors and nurses to render immediate on various initiatives to strengthen its Magpale-Asirit, initiated the cutting of first aid and medical treatment. Some of support services in anticipation of the the first steel plate to be used in the the existing HSE personnel are also ex- growth prospects in the region, construction of the DCP at the event held SCDF employees who were paramedics establishing a drilling fluids laboratory at Keppel Subic Shipyard. The and fire fighters. The accident on with trained laboratory engineers in development of the DCP forms Phase 3 Monday saw 89 workers injured. Thailand. Additionally, Scomi Oiltools’ of the Malampaya Deep Water Gas-to- CHANNEL NEWS ASIA, Thai operations will act as the second Power project, which is led by the December 6, 2012 regional centre for its drilling waste Philippine Department of Energy and management services and provide supported by the consortium comprising REFINERIES training and workshop services to the Malampaya project operator, SPEX, support regional operations, with the and its joint venture partners, Chevron Barmer refinery other being in Dubai. “We are excited Malampaya LLC and the Philippine about the prospects of this contract. “Not National Oil Company-Exploration unviable without only will we be able to be a dynamic Corporation (PNOC-EC). Mr Tong Cairn crude partner to our client, but this gives us the Chong Heong, Chief Executive Officer Hindustan Petroleum Corp Ltd (HPCL) opportunity to give back to the of Keppel Offshore & Marine Ltd has told the Oil Ministry that its proposed communities through developing local (Keppel O&M), the parent company of Rs 240 billion refinery at Barmer in human talent and working with local Keppel Subic Shipyard, said, “We are Rajasthan will be unviable unless it is partners to develop the above facilities.” greatly honoured to have Energy given all of the crude oil that Cairn India said Scomi Oiltools president of market Undersecretary Josefina Patricia produces from oilfields in the state. units Wan Ruzlan Iskandar Wan Salaidin Magpale-Asirit mark the first HPCL last week asked the ministry to said.. The group’s focus for its oilfield construction milestone of this DCP give firm allocation of Rajasthan crude services business is in the Eastern project with us. Her presence at Keppel oil for at least 10 years for it to begin Hemisphere, which it sees as the growth Subic Shipyard is an encouragement to work on the 9 million tonne a year area for the region. all of us as we work together with our refinery, sources with direct knowledge THE STAR, December 8, 2012 stakeholders on this significant of the deliberations said. Cairn produces Philippine project. Keppel is very happy about 175,000 barrels a day or 8.75 Keppel starts to be entrusted with building the first million tonne a year of crude oil from its building DCP for such platform to be fully constructed in Mangala and other fields in the Rajasthan Shell the Philippines. block. Going fowards, the firm is NEWSBASE, December 7, 2012 projecting an output of 300,000 bpd (15 Keppel Subic Shipyard, Inc. in the million tonne). Philippines has the start of construction Sembcorp handles PTI, December 10, 2012 works on a Depletion Compression rig accident solo Platform (DCP) for its customer Shell IOC to invest in Philippines Exploration BV (SPEX) with Sembcorp Marine said it was able to a Strike Steel Ceremony held Dec 7, handle the rig accident at its yard and had pipeline 2012. When completed, the DCP will be not made a help call to the Singapore Indian Oil Corporation Limited (IOCL) deployed in the Malampaya gas field, Civil Defence Force (SCDF). When the will invest over 27 billion in its two near Palawan Island, in the Philippines. incident happened at 10.30am on ongoing multipurpose pipeline projects The DCP is being built at the shipyard, Monday (Dec 4), the evacuation took originating from Paradip. IOC will spend situated in Subic, Zambales, in Central about 20 minutes and another 25 minutes the 1065-km long Paradip-Raipur-Ranchi Luzon of the Philippines. The DCP for head count. All in, the entire product oil pipeline at an investment of comprises gas compression facilities evacuation took less than an hour Rs 17.93 billion. It will also spend Rs mounted on a barge deck, supported by including the search for men overboard, 9.13 billion on the 710-km Paradip- four tubular legs on base footings. said Sembcorp. Sembcorp Marine said its Haldia-Durgapur LPG pipeline. Besides, Keppel Subic Shipyard is responsible for Health, Safety and Environment the public sector unit (PSU) has already the fabrication of the entire DCP, Department (HSE) has trained personnel conducted survey work for laying of including the integration of the topside for emergency response such as fire- another multipurpose pipeline project modules and the fabrication of the link fighting, rescue operations at heights, from Paradip to Hyderabad to transport bridge connecting the DCP to the rescue from confined space, rescue using product oil, H.S. Pati, executive director, shallow water platform. The Philippine ropes, advanced fire-fighting and fire IOCL, Eastern Region-Pipelines, said on Undersecretary for the Department of safety management. They also have Thursday. trained paramedics and occupational PTI, December 7, 2012

authorities are showing strong support RIL to shut CDU towards Pertamina,” said Ms FUEL Reliance Industries is planning to shut a Agustiawan. “As Indonesia’s economy crude distillation unit and a secondary continues to grow strongly, so does Indian Oil Secretary unit for planned maintenance at its newer demand for petrochemicals. Stable and to monitor OMCs 580,000 barrels-per-day (bpd) Jamnagar cost-effective domestic supply is needed The oil secretary will directly monitor refining complex in January, industry to encourage companies to invest in new marketing operations of state firms every sources said on Thursday. The company manufacturing industries in Indonesia, week to ensure smooth transition to the is planning to shut a 13.5 metric tonnes creating jobs and spurring economic proposed cash transfer of fuel subsidies per annum (270,000 barrels-per-day) growth.” and assess cooking gas supply to crude distillation unit for about 40 days BANGKOK POST, December 8, customers who are complaining in January, the sources said. It will also 2012 harassment by dealers. Many customers shut a 6.5 mmtpa vacuum gasoil have complained that cooking gas dealers hydrotreater unit, one of the sources said. Credit Suisse buys are not providing them cylinders they are REUTERS, December 6, 2012 Petron shares entitled to, citing the ‘know your Credit Suisse Singapore has purchased PTTGC to invest in customers (KYC)’ requirement. Oil the 195 million shares of Petron secretary will meet top executives of US$5bn Java Corporation Employees’ Retirement Plan IOC, BPCL and HPCL every Tuesday to complex (PCERP), a stockholder in the Philippine iron out marketing issues, including leading oil firm. This was disclosed by The SET-listed PTT Global Chemical Plc mandatory blending of 5% ethanol with Petron to the Philippine Stock Exchange, (PTTGC) yesterday signed a petrol, officials in the ministry and noting that the deal was consummated memorandum of understanding with industry said. yesterday (December 5). It added the Indonesia’s national oil company, PT ET, December 11, 2012 total volume of shares sold represented Pertamina (Persero), to invest jointly in a 2.0-percent of the outstanding capital US$5-billion integrated oil refinery and Self-funded petrol stock of the oil company. It can be chemical complex on Java. “We’re gleaned that PCERP announced its plan pumps barred confident that a partnership between last January to sell some 695.3 million With petrol pumps mushrooming all over PTTGC and Pertamina in a shares at R11 each. The transaction was the country, the government has barred petrochemical complex will be mutually expected to fetch $174 million in oil PSUs from setting up new outlets at beneficial as it reflects the shared proceeds. Despite traversing a difficult their investment. The Petroleum Minister strategic intent of both companies,” said period this year, Petron is continually this week issued an order asking the Anon Sirisaengtaksin, chief executive of mapping its expansion path, not only in state-owned fuel retailers to set up petrol PTTGC, majority-owned by giant PTT the Philippines but also overseas. Its pumps only when the dealer is willing Plc. He said PTTGC plans to diversify its acquisition of the Malaysian assets of bear the Rs 10 million cost of a pump. business into downstream specialties and Esso Petroleum Company already started ET, December 6, 2012 green chemicals. More details are not yet contributing to Petron’s bottom-line, as available, but an official agreement is culled from the company’s financial More cheap LPG expected to be signed by the two in statement last quarter. Next year and April. Pertamina chief executive Karen cylinders in India 2014 are seen as exciting times for Agustiawan said the partnership will The government will raise the cap on Petron, with the anticipated commercial provide an opportunity to increase supply of subsidised cooking gas (LPG) commissioning of co-generation power Pertamina’s refinery economics and to to nine cylinders per household in a year facility to serve its electricity needs; plus lead the domestic petrochemicals market. from current restriction of six, Oil the completion of its $2.0-billion refinery The link-up between these two Southeast Minister M Veerappa Moily said today. upgrade the year after. According to the Asian national champions will also “I think it is likely to go up definitely oil firm, “the project will allow the include collaboration in areas such as from six (cylinders) to 9 (cylinders),” he ‘conversion’ of all negative margin fuel marketing, product research and told reporters. The government had in into higher value products such as development. “Petrochemicals are one of September capped supply of subsidised gasoline, diesel and various Pertamina’s core growth pillars to LPG to six cylinders per household in a petrochemicals.” achieve its 2025 vision as a World Class year. MANILA BULLETIN, December 5, Energy and Asian Energy Champion. PTI, December 11, 2012 2012 Pertamina is serious about this partnership and the Indonesian

Pertamina operates Petronas Dagangan PETROCHEMICALS first CNG filling expects good fourth station quarter results TPPI escapes from PT Pertamina has officially opened its Petronas Dagangan Bhd expects a good bankruptcy first company-owned, company-operated fourth-quarter financial results on the PT Trans Pacific Petrochemical compressed natural gas (CNG) filling back of encouraging sales, says its Indotama (TPPI), debt laden owner of a station in Jakarta. Pertamina president managing director/chief executive officer large petrochemical center escaped from director Karen Agustiawan said on Aminul Rashid Mohd Zamzam. He said bankruptcy demanded by one of its Tuesday that the filling station, which fuel oil prices normally increased a little creditors. The majority of creditors voted officially opened on Monday, was at the end of the year due to high energy in a commercial court session on Debt expected to meet the needs of both public consumption. “We are hoping. If the Repayment Obligation Postponement transportation vehicles and private cars. trend continues like in previous years favoring a debt restructuring proposed by “I hope the station can serve Transjakarta then it will be something that is TPPI`s new management. “With the buses, public minivans, cabs, bajaj favourable to us. So, we are looking restructuring proposal approved by the [three-wheeled taxis] and private forward for good results in the last majority of creditors, TPPI is saved from vehicles,” she said in an emailed quarter,” he told Bernama. Petronas bankruptcy, its vice president Basya G statement. The US$3.7 million-station, Dagangan posted a 11.74% higher profit Himawan said here on Tuesday. Earlier located in Daan Mogot, West Jakarta, of RM340.5mil for the third quarter state energy company PT Pertamina, one can distribute 1 million standard cubic ended Sept 30, 2012 from RM340.40mil of the creditors and the Asset feet per day (mmscfd) of CNG or 30,000 in the corresponding quarter last year. Management Company (PPA) took over LSP (Premium gasoline liter equivalent). The better performance was attributed to the management of TPPI as the old In Indonesia, CNG, used for public higher gross profits of RM45.4mil management failed to meet its debt transportation vehicles and locally arising from sales growth and an increase obligation. Later one of its creditors known as BBG, sells for about Rp 3,100 in Mean of Platts Singapore prices, demanded that TPPI was declared (32 US cents) per LSP, while liquefied which had resulted in average margins bankrupt, but before bankruptcy session gas for vehicles (LGV), used by private increasing by 7.1%.The Mean of Platts took place other creditor Nippon Catalyst cars, sells at Rp 3,600 per LSP. Karen Singapore prices is a measure of fuel oil proposed Postponement of Debt said the Daan Mogot station was pricing in Singapore. Revenue, during Repayment Obligation, which led to projected to become the pilot project of the quarter, rose RM185mil to RM7.5bil majority votes favoring the debt other CNG infrastructure in Indonesia, from RM7.3bil in the same period last restructuring proposal of TPPI. Basya which was struggling to break its year. Aminul Rashid remained positive Himawan said 56 creditors took part in dependency on fossil-based fuel to gas of oil prices for next year with some the session on Tuesday and only two of amid dwindling crude oil production. volatility expected. them against the proposal. THE JAKARTA POST, December BERNAMA, December 10, 2012 ANTARA, December 11, 2012 11, 2012

World oil production in 2011-12

30 Million barrels per day per barrels Million

0 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12

Africa FSU Lat in America Middle East Europe North America Asia Source: IEA

World oil demand in 2011-12

100

40 Million barrels per day 30

0 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12

Africa FSU Latin America Middle East Europe Nort h America Asia

Asia onshore rig count

180

160

140

120

Aus tralia 100 India Indonesia 80 Philippines Thailand 60 Other

0 Oct-11 No v-11 De c-11 Ja n-12 F e b-12 Ma r-12 Ap r-12 Ma y-12 Jun-12 Ju l-12 Au g-12 Se p-12 Oct-12

Source: Baker Hughes

Asia offshore rig count

120

100

80 Au s tr al i a Brunei India 60 Indonesia Ma la ys ia China offshore Thailand 40 Vi e tn am Other

0 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12

Source: Baker Hughes

Asia oil rig count

200

180

160

140

120 India Indonesia 100 Malaysia Offshor e China 80 Vietnam Other 60

0 Oct-11 Nov-11 De c-11 Ja n-12 Fe b-12 Ma r-12 Apr-12 Ma y-12 Jun-12 Jul-12 Aug-12 Se p-12 Oct-12

Source: Baker Hughes

Asia gas rig count

Australia India 30 Indonesia Thailand Other 20

0 Oct-11 Nov-11 De c-11 Ja n-12 Fe b-12 Ma r-12 Ap r-12 Ma y-12 Jun-12 Jul -12 Aug-12 Se p-12 Oct-12

Source: Baker Hughes

HEADLINES FROM A SELECTION OF NEWSBASE MONITORS THIS WEEK CUSTOMERS INCLUDE Oil and Gas Sector

AfrOil Saipem and Eni officials have resigned in connection with an Algeria-focused corruption probe.

ChinaOil CNOOC is planning to buy 14 small and medium-sized LNG tankers.

EurOil Mediterranean Oil & Gas (MOG) has been granted a one- year extension of its PSC for Malta Offshore Area 4.

FSU OGM Russia has made its first shipment of LNG to Japan via the Northern Sea Route.

GLNG Singapore is to launch a feasibility study on building a second LNG import terminal.

MEOG Petroleum Development Oman expects to post record production of 1.25 million boepd for 2012.

Downstream MEA Iraq is holding a road show in London on December 14 to seek investments for two export pipelines.

Unconventional OGM ExxonMobil and Talisman Energy are in talks to sell their Polish shale gas exploration licences to PKN Orlen.

For further details on the stories above and NewsBase’s entire product range: tel: +44 (0) 131 478 7000 e-mail: [email protected]