Mubadala enters Zohr - acquires 10% from Eni

Mubadala has agreed to acquire a 10% interest in Zohr from USD934 million. Mubadala will acquire an interest in the Shorouk concession which contains the Zohr field. The super giant field came onstream in December 2017, 28 months after its discovery. The field is currently producing 400mmcfpd and planned to reach plateau by the end of 2019.

For Mubadala, this adds a world class asset with long term cash flows into its investment portfolio. Musabbeh Al Kaabi, Chief Executive Officer of Petroleum & Petrochemicals, Mubadala Investment Company, and Chairman of Mubadala Petroleum said: “This is an important and attractive investment for Mubadala, adding a world-class asset to our portfolio with long-term cash flows. We are joining a strong partnership with Eni as operator, who have delivered the project in record time and with the full support of the Egyptian authorities.”

For Eni, the deal is consistent with its strategy of monetising development and producing assets to recycle cash flows for exploration. It also reduces Eni’s portfolio weighting more towards OECD, a long term shift that the company continues to pursue. Claudio Descalzi, Chief Executive Office of Eni, said: “We are pleased to be working with Mubadala and welcome them into the partnership for the Shorouk concession. This represents a further signal about the strength and quality of this world class asset developed by Eni”.

The deal follows Eni’s farm-out of Zohr to BP and Rosneft in November and December 2016 prior to development spending. At the time, BP acquired 10% for USD525 million and 30% to Rosneft for USD1.125 billion. This compares with Mubadala’s current buy-in price of USD934 million for 10%.

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Tamar Petroleum to raise bonds to finance acquisition of Tamar from Noble

As reported previously, Tamar Petroleum is acquiring a 7.5% stake in the Tamar field from Noble Energy for USD800 million. The consideration will be paid USD560 million in cash with the remainder in Tamar Petroleum shares.

To help finance the transaction, Tamar Petroleum is planning to raise USD 625million (ILS 2.178bn) through the sale of bonds, Ha'aretz. reported. The net proceeds are expected to be c.USD605 million, the excess would be put in a special fund for a potential bond buyback, or early repayment.

Tamar Petroleum's holding in the field will increase to 16.75% following the deal, whereas Noble will be left with a 25% stake. This deal builds on Tamar's acqusition of 9.25% in the field from Delek Group for USD980 million in 2017.

Tamar Petroleum was a wholly owned subsidiary of Delek Drilling that was established to acquire the initial 9.25% stake in Tamar from Delek. The subsidiary was listed on the Tel Aviv Stock Exchange in 2017, raising USD330 million as part of the IPO. At the same time, it also raised USD650 million on the bond markets to fund the acquisition.

The move by Delek Drilling was the first in a series of steps to sell its entire 31.25% stake in the Tamar field by 2021 as mandated by the government due to competition concerns.

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Venture Global doubles LNG supply contract with Shell on Calcasieu Pass

On 6^th March, Venture Global announced that it had agreed to double its gas sales with Shell North America LNG from 1mtpa to 2mtpa under an amendment to the earlier gas sales agreement for LNG from Calcasieu Pass.

This brings the total committed capacity to 3mtpa with Edison having agreed 1mtpa in September 2017. The sale contracts are for 20 years and under FOB terms. The counterparties to date provide validation of the attractiveness of the project being one of the lower cost, mid-scale liquefaction projects and shows confidence in it going ahead and being able to deliver LNG in a reasonable timescale.

The Calcasieu Pass project is for 10mtpa with easy access to the sea and more than a mile of deep water frontage. It is waiting for non-FTA export approval later in 2018 following which it will look to take FID dependent on securing of further gas sales contracts. Venture Global sees first commercial operations at the end of 2021.

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Chevron shuts in Alba platform as Mitsui and Statoil try to sell the field

Chevron the operator of the Alba field in the UK North Sea has announced at the end of last week that it had been forced to shut down production at the field. This follows a power outage at the platform. Emergency back-up power is in place and the crew continues to try and restore power. The mature heavy oil field which was brought onstream in 1994 is exploited from a fixed platform tied to a floating storage unit.

Endeavour had tried to sell its interest in the field in the past without success and is currently going through bankruptcy proceedings and could lose its stake with the other partners picking up pro rata. Statoil and Mitsui are trying to sell their stakes, but the prospect of unintentionally picking up additional interests from an Endeavour bankruptcy has scared off some potential buyers as this comes with an increased exposure to near-term decommissioning costs which are high for a development of this kind.

The partners in Alba are Chevron (23.37% operator), Endeavour (25.68%), Statoil (17%), Mitsui (13%), Spirit Energy née Centrica (12.65%), EnQuest (8%).

Further issues raised by parties considering the Alba stakes from Statoil and Mitsui include the non-operated interest, limited upside and decommissioning and is detailed in an earlier article compiled from interviews with various potential buyers who looked in the data room: Endeavour endangers Alba sale for Statoil and Mitsui.

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Nova development could face delays with Gjøa tie-back challenges

Nova (formerly Skarfjell) is planning to submit the field development plan to the Norwegian authorities in H1 2018. The selected development concept is four production wells and three injection wells from two subsea templates tied back to the Gjøa platform. Neptune which operates Gjøa has raised concerns about the potential tie-back which it has now raised with the Ministry of Petroleum.

Nova is an oil and gas field operated by Wintershall and this would make it the company’s second development in Norway after Maria. The field is estimated to contain c.100mmboe of resources with c.70% oil. In December, the Ministry ruled that field that tie-back to existing infrastructure only need to cover the direct incremental costs of the host platform and not any of the existing operational costs. This was intended to boost activity in Norway. However, Neptune claims that the tie-back could increase overall costs for Neptune as well as impact its ability to tie-back its own discoveries including Cara and 35/9-3 in the vicinity.

A response from the Ministry is now pending and the ruling could determine how the Nova development plan filing will proceed.

The Nova partners are Wintershall/DEA (35% operator/10%), Cairn (20%), Spirit Energy (20%) and Edison (15%).

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Petronas makes offshore discovery in Gabon

PETRONAS has made the Boudji-1 discovery in deepwater Gabon. The discovery is located in Block F14 or Likuale in which PETRONAS holds 50% as an operator, Woodside holds 30% and the government holds 20%. The block lies in deepwater between depths of 2,500-3,200m.

Exploration activity in the deepwater has been slow with the country previously focussing in the onshore and coastal areas. Gabon has held ad-hoc licensing rounds for the offshore with PETRONAS’ block awarded in 2014. The 11th round held in 2015 is the most recent – the deadline for bids was extended, however in the end no awards were made with the timing coinciding with the collapse in the oil price.

PETRONAS is building ups its international presence again after a series of failed investments such as in Canadian and Egyptian LNG. Last week saw the company farm-in to 40% of FAR Energy’s blocks in The Gambia.

Full announcement of the Gabon discovery below.

PETRONAS ANNOUNCES DEEPWATER OIL AND GAS DISCOVERY OFFSHORE GABON

PETRONAS’ subsidiary, PC Gabon Upstream S.A. (PCGUSA) today announced new oil and gas discovery from its Boudji-1 exploration well in Block F14 (Likuale), located in South Gabon.  

The ultra-deepwater exploration well, drilled in water depths of 2,800 metres, encountered 90 metres of gross high quality hydrocarbon-bearing pre-salt sands.

The discovery marks a significant milestone for PETRONAS as it expands upstream growth in West Africa, demonstrating its frontier exploration and deepwater operational capabilities.

“The discovery in Gabon is an encouraging development for PETRONAS, as we continue to pursue growth activities beyond Malaysia, in line with the strategy to expand our core oil and gas business by growing our resource base,” said PETRONAS Executive Vice President & Upstream CEO, Datuk Mohd Anuar Taib.

“Aside from boosting Gabon’s oil and gas industry, this discovery will also spur further growth activities in the region, and complements our achievements towards building a significant deepwater portfolio globally,” he added.

PETRONAS, together with the Ministry of Petroleum & Hydrocarbons, Gabon, will conduct an assessment to further determine the commerciality of the resource volume.

PCGUSA is the operator for Block F14 (Likuale), with Australia’s Woodside holding a 30 per cent participating interest.

To-date, PETRONAS’ deepwater portfolio includes partnerships in the Gumusut-Kakap, Malikai and Kikeh deepwater fields located offshore Sabah. Additionally, there are two new upcoming deepwater development projects in the portfolio – the Limbayong field in Sabah and the Kelidang Cluster in Brunei.

PETRONAS’ global upstream reach continues to expand to Mexico with the winning of six deepwater blocks in bidding round 2.4, positioning PETRONAS as the second largest gross acreage holder in offshore Mexico with a total of nine blocks.

Further strengthening the company’s presence in West Africa, PETRONAS has recently signed a farm-out agreement (FOA) with Australia’ FAR Ltd for a 40 percent interest in the offshore petroleum licenses of Blocks A2 and A5 located offshore Gambia.

Source: http://www.petronas.com.my/media-relations/media-releases/Pages/article/PETRONAS-ANNOUNCES-DEEPWATER-OIL-AND-GAS-DISCOVERY-OFFSHORE-GABON.aspx

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SOCO terminates merger talks with Kuwait Energy

Soco has formally terminated merger talks with Kuwait Energy over valuation differences. Full press release from Soco below.

On 8 January 2018, SOCO International plc (“SOCO”) announced that it was in preliminary discussions with the newly-constituted Board of Directors of Kuwait Energy plc (“Kuwait Energy”) regarding a potential transaction.

SOCO confirms that it has terminated these discussions because it could not reach agreement with Kuwait Energy on the basis for an acceptable transaction.

SOCO’s Board remains committed to its strategy of shareholder value creation through sustainable cash returns to shareholders and growth of the business. The SOCO team, which has a track record of delivering shareholder value through asset acquisition and monetisation, delivering large scale developments, and returning capital to shareholders, evaluates M&A opportunities with reference to strict strategic, financial and operational criteria and only pursues transactions if they are determined by SOCO’s Board to be in the best interest of shareholders. SOCO’s Board continues to evaluate opportunities in accordance with these criteria.

Source: https://www.socointernational.com/statement-on-discussions-with-kuwait-energy-plc

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