Monday, March 14, 2011

Japan's Deal with Saudi Aramco to Store Crude Oil

Japan has signed a deal with Saudi Aramco allowing the country to increase the utilisation of its oil storage facilities, and will give the Saudi Arabian company increased access to oil storage in the lucrative Asian market.

A deal between Japan and Saudi Aramco will allow the state-run Saudi Arabian company to store crude oil on the southern archipelago-province of Okinawa. The deal follows a similar agreement with Abu Dhabi in mid-2009. Faced with declining oil demand, Japan has a rising surplus of storage capacity, allowing it to use storage deals to increase utilisation while improving energy security.

The deal between Saudi Aramco and Japan will start in 2011 when the first vessel, which will have a capacity of 1.9mn barrels (bbl), is scheduled to arrive at Okinawa. On the deal, Saudi Aramco will be allowed to store about 600mn litres in Okinawa, equivalent to 3.8mn bbl. The deal will run for three years, in order to allow Japan to restock its crude oil reserves.

Aim of Aramco is to establish storage bases in or near major Asian consuming markets in order to be able to meet spikes in demand quickly. Japan's proximity to China, the engine of global oil demand growth, is crucial in this respect. A storage-sharing deal will also benefit Japan. Its oil demand is declining, with the trend exacerbated by the impact of the global economic crisis, leaving it with surplus storage capacity. Not only will crude stocks from Saudi Arabia raise its storage utilisation rate, but Japan will also have priority access to the stocks in emergencies. Allowing Aramco to stockpile crude at Okinawa will therefore contribute to Japanese energy supply security, a major concern for the government.

The partnership with Saudi Arabia follows a similar agreement with UAE in June 2009, when Japan and the UAE signed a deal to allow the Abu Dhabi National Oil Company (ADNOC) to store crude oil in the Kiire oil terminal operated by Nippon Oil. Also, Japan has first rights to the stocks in emergency situations. As long as Japan maintains its priority access to tap the crude and products stored by third parties in the country in the event of a supply shock, joint storage deals with Middle Eastern producers can be of strong mutual benefit.

The enactment of the Oil Stock Law (1975) established that Japan had to be prepared for disruptions to oil supply. In 1978 the government authorised Japan Oil, Gas and Metals Corporation (JOGMEC) to regulate national oil storage levels. The government maintains a Strategic Petroleum Reserve (SPR), which includes 10 state-controlled storage facilities managed by JOGMEC. Furthermore, the state leases tanks from the private sector to boost its strategic reserves capacity. As well as government-managed reserves, Japanese law obliges private companies to stockpile oil products to cover a mandatory 70 days of their consumption, equivalent to around 308mn bbl in 2009.

Tuesday, February 22, 2011

Petronas See More Oil And Gas In Water Resources

With the increasing oil prices, Malaysia through the sale of oil revenues will also be increase. And recently, Petronas has found 2 more blocks that have the potential to produce oil in Block SK316 and SK306.

These discoveries support Petronas’ strategy to intensify exploration activities in Malaysia and is expected to further enhance exploration potential offshore Sarawak.

In Malaysia there are the National Depletion Policy of limiting production at the 600-700k barrels / day. The aim is that the point of production can be maintained in time for 15-20 years. The United States also is a major oil producer and a major importer as well. In 2009, an average of U.S. issued a 5.268M barrels / day and net imports of not less at 10.5M barrels / day.

Which means, from the reasons given Malaysia has been using more oil than the amount of oil released. Just as "budget deficit" we are now, used by more than ability.

But in terms of history, exploration Petronas is never broken. Always keep doing exploration work throughout the world through multinational companies.

The following are some of the exploration activity of Petronas:
  • In Kelantan, 1 oil block has been successfully explored together with Thailand (Carigali - PTTPI Operating Company).
  • In Kerteh, exploration by Petronas in Block West Ladder Platform has just sail out of the Pasir Gudang & Moss.
  • The first platform in Kerteh Filter A is still the most expensive product & priced in the world than in the 70s until now.
  • While the first Paltform Petronas West Lutong in Miri still have more production from the Petronas was established.
  • This is new in the waters of Malaysia has yet to venture outside, such as Petronas Sudan, Vietnam, Qatar, UAE, Myanmar is known for the high cost of petroleum.
  • If the oil fields in Malaysia will be depleted Petronas will not renew the contract with ExxonMobil for the purpose of exploring for the past 50 years. Petronas will not dare to take over TCOT (Trengganu Crude Oil Terminal) from ExxonMobil, LCOT (Labuan) from Shell, Bayan, D-18, D-35, Block PM-9 (Pulai & Tinggi).
  • Murphy Sarawak Oil has already been explored for more than 10 blocks to be developed.
The issue here can manage treasury "black gold" that held all this time with the best?

Thursday, January 13, 2011

China Hunts Energy Fields

China continues to pursue the fields in different parts of the world's energy sources to meet domestic fuel demand over the high rate of economic growth.

Chinese national oil producers increasingly keen to buy shares of oil companies of the world. Not just an asset, even to spend enough in order to obtain the technology to extract resources that are difficult to reach. Chinese oil companies also continue to comb the emerging markets to continue to bid in 2011, and probably until near the United States (U.S.).

Diesel, petrol and gas demand in China increased by about 8 percent each year. Chinese oil demand will peak in 2025. To meet these needs China's energy companies seem to be racing to buy the world's oil reserves. The year 2010 was the record high oil and gas acquisitions made by Chinese who reached an agreement worth U.S. $ 24.3 billion, larger than in 2009 was only U.S. $ 17.1 billion.

Largest China's deal is undertaken by the Chinese Government-owned oil company Petrocemical acquire 40 percent stake in Repsol Brazilian assets worth U.S. $ 7.1 billion. This suggests China to expand to South America. This purchase is the largest purchase compared with other countries over the past year. This also indicates that China is willing to pay more than the market expected.

Chinese oil companies continue to diversify its source - the source of hydrocarbon. And they have excess jurisdiction where U.S. and European oil companies have been politically difficult to reach agreement in Sudan, Myanmar, Iran and Syria.

They also can extend the hunt until the Gulf of Mexico, where independent companies tend to release their assets there because of increased insurance costs and increasingly stringent regulations after an explosion at BP's refinery Macondo in April last year which resulted in the largest offshore oil spill in U.S. history. China's giant energy company, CNOOC also has purchased a small share of offshore oil projects in the Gulf owned by Norway's Statoil.

Given that three-quarters of world exploration company headquartered in the U.S., the Chinese tend to bid for U.S. firms. All the objectives of the acquisitions would lead China to North America within the next two years.

CNOOC in 2005 never to bid against California Unocoal, which then failed after some U.S. lawmakers oppose the deal on the grounds of national security. However, in 2010 CNOOC successfully acquire oil and gas assets in the project Eagle Ford Shale in South Texas for U.S. $ 1.1 billion.

One - an attraction for Chinese energy companies are buying these projects using new technology that could extract energy from unconventional sources like oil sands or gas trapped in coal. The project is attractive to Chinese buyers because they provide an opportunity not only to collect hydrocarbons only, but also to learn new technologies to develop the potential of China's large gas reserves.

Chinese state-owned enterprises, Sochem Group is buying 40 percent stake in Peregrino, offshore Brazil from Statoil worth U.S. $ 3.07 billion in May 2010. Although there may be no oil to be sent to China after a successful production next year. But they traded with the local product state energy company that operates outside the country.

Chinese enterprises are also increasingly competing among one another and not the state that determines the winner. So the likelihood of success in the auction of a property abroad is determined by their own.

Monday, December 27, 2010

2 Japanese Rigs Ready to Enter Indonesia

Two units of the ship supporting activities offshore, type jack-up rig from Japan will go to Indonesia and changed the flag to be Indonesian flag. Ships that fall into category C, this could undoubtedly be able to be provided by the national employers so that the operational restrictions on foreign vessels associated with certain types of cabotage principle extended to May 7, 2011 from earlier on January 1, 2011.

The company is Japan Drilling Company which currently operates at least six units, including jack-up rig, are ready to work in Indonesia. Both of rig will go to Indonesia to follow the rule that requires all marine transport fleet in the country must use ships in Indonesian flag.

Owner and President Director of PT Pelayaran Tamarin Samudera-that explains the company is currently finalizing the plan by looking at the implementation of Law no. 17/2008 on Shipping.

The Japan Drilling Company (JDC) is known to the company that provides specialized services to companies drilling for oil and gas in the sea around the world. JDC currently operates the ship offshore jack-up rig types as much as three units, two units of semi-submersible rigs and one drilling ship. The company has worked more than 40 years in drilling.

Jack-up rigs are operated by company is iu kuryu-10 made in 2008, Sagadril-1 (1984) and Sagadril 2 (1984). The two units are semi submerible rig Naga-1 (1974) and Hakuryu-5 (1977), while the drilling ship named Chikyu (2005).

Previously, jack up rigs operator in Indonesia, PT Apexindo Pratama Duta Tbk known to make the turn flag rig his ship as many as three units of six fleet currently operated. The company has completed three units to replace the flag of rigs operating in Indonesia, while the other three are still in the process.

Disclosure of information will facilitate the national entrepreneurs to provide the ships needed as soon as possible. Shipping Law Revision coercion which was not yet 3 years old can be a bad precedent.

Plan a number of national shipping companies to expand the fleet of offshore supply sector, large-scale FSO type allegedly hampered because the procurement of oil and gas operators that are not transparent.

Wednesday, December 15, 2010

Pertamina Toward A World Class Oil & Gas Company

Pertamina effort to manifest itself toward the world-class oil and gas company is not just a dream following the company's performance in the upstream and downstream sectors continues to increase. These state enterprises face many challenges as well as hope.

The challenge is how to Pertamina's efforts in realizing the vision of the company's world-class oil and gas as well as to improve its performance as a company a competitive state. Pertamina was born by Government Regulation No 27/1968 as a result of the merger of three oil companies, namely Pertamin, Permigan and Permina.

Ibnu Sutowo was appointed as its first director. Through Law No. 8/1971, Pertamina defined as a state-owned oil and gas company which means all the companies running their business in Indonesia must cooperate with Pertamina, both as the regulator and through cooperation contracts in the working area of Pertamina. Pertamina also acts as an operator because it managed its own working areas.

Driven surge in world oil prices, Pertamina had a golden period in the mid-1970s in which the company posted profits of Rp382, 2 billion. The amount is equivalent to 39% of total state revenues in the budget in the same year. One thing that never happened throughout history, one capable of economic sectors accounted for more than a third of total state revenue. Indonesia was transformed into one of the oil-producing country a respected world.

However, that era has passed. Pertamina is now facing various challenges. In terms of reputation, Pertamina left behind from Petronas, which formerly learned to Pertamina. Meanwhile, Pertamina still trying to get up, Petronas has entered the ranks of giant world oil and gas version of Platt and Fortune magazine.

In terms of economic performance, Pertamina also lagged. Based on the survey of Energy Intelligence, 2008, Pertamina was ranked the 30th as oil and gas company that has a net profit and total assets of the world's largest, while Petronas is ranked 18th world. Petronas even have opened outlets in Indonesia.

Pertamina effort to realize the vision of world-class companies actually been initiated since 2008 and, even in 2006 when the transformation of Pertamina triggered. Pertamina target in 2018, the company became the number one oil company in Southeast Asia. Pertamina intention to manifest itself as a world class company is not kidding. Pertamina is now different, stretching the country's current business is very promising and increasingly aggressive and expansive.

Pertamina will remain the largest oil and gas producer in Indonesia, given Pertamina performance so far does show fantastic results. In the downstream sector, until September 2010 Pertamina's oil production has reached 191,000 barrels per day (bpd) and is targeted to break the 200,000 bpd in 2011.

This figure is much higher when compared with oil production in 2009 is an average of 150,000 bpd. The key to success exceeded the production target because Pertamina has successfully acquired a number of oil and gas companies operating in Indonesia. Pertamina managed to acquire BP's Offshore West Java, including working with the NOC such as BP. Pertamina also acquired assets of Inpex West Java in September 2010.

Not only expansive in the country, the company also started to spread to other countries. Through Pertamina Upstream Energy (PHE), since 2007, Pertamina has been exploring Block SK-305 drilling off the coast of Sarawak, Malaysia, in collaboration with Petronas and Petro Vietnam. This block is predicted to have oil reserves of 541 million barrels and natural gas as much as 1.91 billion cubic feet. On the field, the PHE holds 30% stake.

In addition to SK-305, PHE also has several other blocks such as Block 17-3 and Block 123-3 in the whole Libyan-owned by the PHE. Block 17-3 is estimated to have reserves of 3.5 trillion cubic feet of gas and block 123-3 has 427 million barrels of oil reserves. PHE also pocketed a 10% stocks in Block 10 and 11.1 in Vietnam. In the block, PHE works with Petronas, Petro Vietnam and Quad Energy.

In addition, PHE also has Block 13 in Sudan and Block 3 in Qatar. On the domestic upstream sector, Pertamina, through its subsidiary Pertamina EP, also recorded remarkable achievements. As of January 2010, Pertamina EP managed to produce 130,000 bpd of oil, an increase compared to January previous year (year on year), which amounted to 125,000 bpd. Although the increment is not too fast (about 2.5%), but that achievement should be appreciated in light of the decline in the capacity of oil fields are naturally quite high which is an average of 18% per year.

Field of the central well of Pertamina EP is Java Region with a range of production 25,000 bpd, 19,000 bpd of Sumatra, 32,000 bpd Sukowati field, and Business Unit Limau with 12,000 bpd. Other fields varies between 2,000 to 10,000 bpd. Pertamina EP is the second largest oil producer after Chevron with total profit in 2009 more than Rp20 trillion (not taxed) or equivalent to 80% of the total income of the parent company.

Since established in 2003, the company that was born as a consequence of changes in the status of Pertamina into this company did show satisfactory performance from year to year. In 2003, Pertamina EP's production amounted to 95,000 bpd and jumped to around 102,000 bpd in 2006. This production continues to increase to 110,300 bpdbpd (2008). By the end of 2009, Pertamina EP has exceeded the production target of 125,500 bpd.

For natural gas sector, the average production of Pertamina EP in November 2009 amounted to 1,050 million cubic feet per day. Of these, 28% supplied to the National Gas Company (PGN), 22% to meet the needs of industry, 18% for the fertilizer industry, 18% for power supply, and 14% more to the needs of Pertamina refineries. According to data from the Ministry of Energy and Mineral Resources, Pertamina EP is the largest domestic gas supplier in Indonesia after Total Indonesia.

In the downstream sector, Pertamina also do not want to be whiz at home. Since 2006, Pertamina lubricant has been exporting products to several countries including China, Pakistan, Japan, Singapore, Australia, Malaysia and Cambodia with an average volume of 80,000 kl per year with an average export value of USD240 million per year. In addition to maintaining its market share above, the company also co-branded with local companies, including in Pakistan, Belgium, Qatar, Singapore, and Thailand.

Aviation fuel production of Pertamina has also been recognized internationally. Pertamina is working with airports has been supplying aviation fuel to Singapore, Jeddah, Dubai, Bangkok, Hong Kong and Kuala Lumpur. Not only that, the General Fuel Filling Station owned by Pertamina plans to expand into neighboring countries. In the near future, Pertamina will soon open the first retail outlets in Australia. As a result, various efforts to expand upstream and downstream sectors in the above led to bigger profits.

In 2006 the profits from state enterprises ranging from Rp19 trillion, then rose in 2007 to Rp24,5 billion and rise again in 2008 to Rp30,2 trillion. Based on data from Forbes Global 2009 and LKPP RI 2008, Pertamina is the state with the largest profit of Rp30,2 trillion, followed in second place with earnings of PT Telkom Indonesia Rp14 trillion. The increase in corporate profits in line with the increase in dividends paid to the state.

Performance as indicated Pertamina upstream and downstream sectors in the above shows that what Pertamina aspired to achieve world-class oil and gas company is not just a dream. Since the change of status of Pertamina into a company as stipulated in Law No. 22/2001 on Oil and Gas and followed by Government Regulation No. 31/2003 concerning Amendment to Form a company Pertamina, Pertamina is better. However, behind the various successes, Pertamina still has some homework to be completed.

Pertamina must minimize the cost recovery oil and gas production and more keen anticipation of external factors, especially international oil prices. Both of these affect to Pertamina business and profitability in the upstream sector. As is known, cost recovery resulting from Pertamina's production process is still relatively high. Pertamina's cost recovery during the period 2004-2006 an average of USD27 per barrel.

It is not particularly felt when the international oil price is constant in the range of USD100 per barrel, but it would be very detrimental if oil prices slumped. No less important, as a profit-oriented company Pertamina also have to maintain the quality in every product and services to suit customer satisfaction. For example, applying the standard dose at all filling stations, LPG cylinders to prevent the circulation of counterfeit, fake or lubricants on the market. All the above services must be considered because it deals directly with the daily life of people so of course directly affects the image of Pertamina.

Friday, December 10, 2010

BP Migas Supports The Acceleration of Oil Exploration Program Pondok Makmur

Pertamina EP discovered new oil and gas reserves. Results of the fifth delineation well test (PDM-5) in the area of Pondok Makmur, Bekasi, managed to produce 3600 barrels of oil per day and 5.7 million cubic feet of gas. The result is a production test wells in the largest openings conducted from 1 January 2010.

This success complements previous success in the area of Pondok Makmur, which has been done put on production (POP), which takes oil production from exploration wells.

Pondok Makmur is a new exploration concept of Pertamina to produce oil from the most basic layer or basement. This concept is now to be evaluated and developed carefully, and be aggressive effort Pertamina EP to acquire new oil and gas reserves that is able to be produced quickly.

Acceleration of drilling program at Pondok Makmur not be separated from the support of BP Migas, which has approved work program and budget (WP & B) prior to fiscal year 2010 run, as well as the cooperation of local government of Bekasi who strongly supports the operation of Pertamina in the region.

PDM-5 wells to reach the final depth of 3450 meters that penetrate bedrock marble or similar to a depth of 2918 meters final. Until now the area of Pondok Makmur has produced three wells, the PDM-1, PDM-2 and PDM-3 through a pattern of POP over a total average oil production of 1900 barrels per day and 5.5 million cubic feet of gas. Production was deliberately maintained at a level not too high to maintain reservoir pressure given the wells are still in the status of exploration wells.

Pertamina EP will also be producing wells PDM-4 which is now in the evaluation stage to present a POP proposal to BP Migas.

In 2010, Pertamina EP aggressively carry out exploration drilling of 26 wells with the target of exploration in various regions and the implementation of the 1345 km2 of seismic surveys are three-dimensional (3 D) and 721 km survey of two-dimensional (2 D). During 2009, Pertamina EP, produced 46.4 million barrels of oil and found 60 million barrels of oil. That is, oil discovery of Pertamina EP exceeds the amount produced.

EP Pertamina's oil production target in 2010 of 128 thousand barrels per day and continue working hard to improve the growth of production in the next year. Although this step is not easy considering the majority of field conditions that have been classified as old and natural production decline rate on average is very large: by 18 percent.

Monday, December 6, 2010

OGDCL is Inviting Partners for Gas Development in Jhal Magsi

Oil and Gas Development Company Limited (OGDCL) is inviting tenders for building a gas processing plant in Jhal Magsi. The Jhal Magsi Field is located about 5 KM North East of Jhal Magsi Town, District Dera Murad Jamali, Baluchistan Province.

The initial production from the proposed gas processing plant will be around 15 million cubic feet per day (mmcfd). There are proven gas reserves from two wells while three others are being drilled. The field has high contents of H2S, requiring removal before gas is injected into the transmission network.

Experts predict the possibility of oil being found in the same lease block and the OGDCL may soon give the nation good news in this regard. Although there is little information about the Jhal Magsi gas field in the public domain, the reserves may be larger than a number of existing fields in Sindh, Balochistan and Khyber-Pakthunkhwa.

The company expects the Zin Block in Baluchistan to generate its first gas flows within two years. The Zin block is estimated to have about 9-10 trillion cubic feet (TCF) of gas reserves and we are moving in the area in a couple of weeks to start drilling.

The government is playing down the Jhal Magsi discovery for political reasons. Independent economists hope that Jhal Magsi reserves will help bridge the domestic demand and supply gap. The local industry, already reeling under the effects of excessive power outages, will also get some benefit.

There are also bright chances of finding oil and gas reserves in the Bolan block, particularly in a hilly track near Dhaddar. Foreign firms are engaged in exploring oil and gas in this part of Balochistan. The federal government is providing adequate security to firms exploring oil and gas in this block.

OGDCL and other companies are facing difficulties in carrying out oil and gas exploration in Marri and Bugti tribal territories for political reasons as local tribesmen are demanding full control over their resources.

The people of the area are not prepared to gave Pakistani or foreign companies to exploit there resources only for few jobs they want to be the master of their lands and they must decide on which conditions their natural resources should be exploited, are not prepared to abandon their opposition to Western exploration companies operating in the province, fearing that they will ultimately take over control of their lands.

Almost all companies exploring oil and gas in the Marri and Bugti regions had stopped working after attacks on their officials by Baloch militants.