Falklands : Hydrocarbons Daily Record (02 October 2007)
Submitted by Falkland Islands News Network (Juanita Brock) 03.10.2007 (Article Archived on 17.10.2007)
BHP Billiton will do exploratory drilling in the South Falklands Basin for FOGL.
HYDROCARBONS DAILY RECORD: TUESDAY, 02 OCTOBER 2007
By J. Brock (FINN)
TODAY’S BIG NEWS:
(Falkland Islands)
BHP BILLITON TO DO EXPLORATORY DRILLING IN THE SOUTH FALKLANDS BASIN
By J. Brock (FINN)
BHP Billiton, a joint Anglo-Australian resources group, has struck a deal with Falkland Oil and Gas (FOGL) to do exploration drilling in the South Falkland Basin. The investment for two exploration wells in the next three years and is reported to be for $100 Million – a 40% share with an option to acquire 65% which will reimburse initial costs incurred by Falklands Oil and Gas.
According to FOGL’s Chief Executive, Tim Bushell, “The introduction of a major company as a farm-in partner has been a key strategic objective over the last 18 months.” Mr Bushell has told FINN in the past that the company had identified large prospects, but needed financial backing to drill in water 3,000ft deep.
BHP will take over the operation of the exploration programme as it has access to rigs - key in a tight rig market. It is expected that the first well is likely to be drilled in a year’s time.
CRUDE PRICES:
At 1830hrs LMT on Tuesday, 02 October 2007 Light Sweet Crude was trading at $80.05 down 19 Cents on the New York Mercantile Exchange. Brent Crude was trading at $77.38 down 27 Cents on London’s ICE Futures Market.
ANALYSIS:
Crude prices are lower today on the strengthening dollar against other currencies as well as profit taking after record highs.
THE MARKETS: 02 OCTOBER 2007:
FTSE100: 6,500.40 down 5.85, FTSE250: 11,231.40 up 149.92, SmallCap: 3,788.40 up 16.43
DJI: 14,047.41 down 40.24, NASDAQ: 2,747.11 up 6.12 S&P500: 1,546.63 down 0.41
INTERNATIONAL DEVELOPMENTS:
(Indonesia)
From a Company Press Release
Lundin Petroleum Completes Testing of The Tengis-1 WELL in Indonesia
Lundin Petroleum AB announces that the exploration well Tengis-1, located in the Blora Licence onshore Central Java in Indonesia has been completed.
The well was drilled to a total depth of 2,500m to test the hydrocarbon potential of the Oligocene CD-sandstone. While drilling, hydrocarbon shows were encountered at multiple levels and the CD-sandstone was successfully reached. A detailed log acquisition and interpretation was completed and two potential hydrocarbon zones, including the main CD-sandstone target, were identified for testing operations.
The first test was over the CD-sandstone interval which failed to recover hydrocarbons due to the low permeability of the reservoir. A second test in the Oligocene "Kranji" reservoir flowed gas to surface with high CO2 content. Following the test results the Tengis-1 well was plugged and abandoned.
The partners in the Blora Licence are Lundin Petroleum, operator, with 43.30 percent, Kufpec (Kuwait Foreign Petroleum Exploration Company) with 40 percent and CNOOC (Chinese National Offshore Oil Company) with 16.70 percent.
REGIONAL DEVELOPMENTS:
(Russia and Venezuela)
It has been widely reported that Lukoil expects to close a deal this month to organize a joint venture with Venezuela’s state oil holding PDVSA, Representatives from Lukoil are visiting Venezuela this month to talk with PDVSA about setting up a joint venture with Lukoil, having a 40 percent share in the future corporation, with the remaining 60 percent would be owned by PDVSA.
(Argentina)
Following a Latin-American-wide trend, Exxon Mobil Corporation has extended the time period for interested parties to submit offers to buy its ESSO unit in Argentina. Exxon Mobil is looking to exit Argentina as part of a plan to divest its interests Latin America. Argentine media reports have suggested President Nestor Kirchner's administration wants the buyer to include the nation's new state owned energy company, ENARSA. ENARSA and PDVSA currently rent and operate two service stations together in Argentina. ESSO’s assets in Argentina include a refinery and 540 directly owned service stations.
(Brazil and Venezuela)
Petrobras is assessing Exxon Mobil Corp's assets in Latin America. However, Brazil’s state owned Energy Company has not yet offered to buy them. Press speculation has been ripe lately about Petrobras buying up EXXon’s assets in Latin America.
Exxon left Venezuela this year when President Hugo Chavez put the pressure on for nationalisation. Venezuela's state oil company PDVSA has said it could be interested in Exxon's assets in Argentina but hasn’t made any decisions yet.
RELEVANT SHARE PRICES 02 OCTOBER 2007:
TLW: 601.50 up 2.50, DES: 31.00 up 2.75, FOGL: 173.00 up 8.50, RKH: 50.00 down 0.50, BOR: 38.50 up 1.50, PRE: 13.50 unchanged, GBP: 9.75 up 1.13, GPK: 420.00 unchanged.
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