Falklands : Hydrocarbons Daily Record (03 October 2007)
Submitted by Falkland Islands News Network (Juanita Brock) 04.10.2007 (Article Archived on 18.10.2007)
The Argentine Government plans to protest to the UK Government about an exploration licence issued in the Falkland Islands.
HYDROCARBONS DAILY RECORD: WEDNESDAY, 03 OCTOBER 2007
By J. Brock (FINN)
TODAY’S BIG NEWS:
(Falkland Islands)
ARGENTINES PLAN TO PROTEST FOGL/BHP FARM-IN DEAL
By J. Brock (FINN)
The Argentine government plans a protest to HMG because they mistakenly believe it is that government and not the Falkland Islands Government that has the final authority to issue exploration licences around the Falkland Islands. The scenario is not unusual as the Argentine government does not recognise the Falkland Islands Government as the legitimate authority in the Islands. Indeed, letters of discomfort were issued in 1997/98 during the last exploration drilling round in the Falklands.
Aimed at the very recent partnership between Falkland Oil and Gas (FOGL) and BHP Billiton, the protest is expected to denounce the Falkland Islands Government’s issuing an exploration licence to BHP Billiton in partnership with FOGL to do exploratory drilling in the South and East Falklands Basins.
Under normal circumstances letters of discomfort are issued to companies from governments with a view to stop progress and intimidate a company or companies from signing or honouring a contract. Governments can also issue letters of comfort in response to discomfort letters.
CRUDE PRICES:
At 1830hrs LMT on Wednesday, 03 October 2007 Light Sweet Crude was trading at $79.94 down 11 Cents on the New York Mercantile Exchange. Brent Crude was trading at $77.48 up 10 Cents on London’s ICE Futures Market.
ANALYSIS:
The US Department of Energy Administration inventory report has showed a rise in crude stocks. This helped the price of Light Sweet Crude decline today.
BRIEF INVENTORY REPORTFOR WEEK ENDING 28 SEPTEMBER 2007:
Crude: up 1.2 million barrels to 321.8 million barrels
Gasoline: down 100,000 barrels to 191.3 million barrels
Distillates: down 1.2 million barrels to 135.9 million barrels
Refinery Capacity: up 0.6% to 87.5%
THE MARKETS: 03 OCTOBER 2007:
FTSE100: 6,535.20 up 34.80, FTSE250: 11,360.20 up 128.82, SmallCap: 3,805.00 up16.59
DJI: 13,968.05 down 79.26, NASDAQ: 2,729.43 down 17.68 S&P500: 1,539.59 down 7.04
INTERNATIONAL DEVELOPMENTS:
GUJARAT, an Indian State Petroleum Corporation, has reported a new 6.3 trillion cubic feet gas discovery in its eastern offshore Krishna Godavari basin discovery block KG-OSN-2001/3, home to the Deen Dayal gas field discovering multiple hydrocarbon zones in well KG-16. Data has been analyzed and we would like to confirm that the discovery in KG-16 is of potential commercial interest and merits appraisal,” the company wrote to DGH. GSPC has 80 per cent interest in the block. GSPC could submit the final development plan for its KG basin by December 2007 and begin gas production in 2009-10. Eight foreign companies, BP, BG Group, Chevron, ExxonMobil, Repsol YPF, Total, Husky Energy and Statoil, have expressed initial interest in picking up the stake. These companies will be invited to a pre-bid conference in London from October 10 to 12.
(From a Press Release)
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:
(South America General)
The South American press are reporting from several major oil companies are divesting themselves of Latin American assets. Reports of a refinery and gas stations in Argentina being divested from ESSO, as well as ESSO doing the same in Uruguay appear in most papers. In Uruguay, it was announced that Venezuela’s PDVSA was interested in purchasing the over one hundred service stations owned by Esso, information confirmed by government authorities. Just a few months ago Uruguay’s government-owned oil corporation Ancap took over Texaco service stations for an estimated $22 million, definitively closing the American firm's representation in the country. Exxon Mobil are also unloading assets in Brazil, Uruguay, Paraguay, and Chile. It is thought that some of these companies are worried about dictatorships – left and right wing – emerging in South America.
RELEVANT SHARE PRICES 03 OCTOBER 2007:
TLW: 598.00 down 3.50, DES: 29.25 down 1.25, FOGL: 153.50 down 19.50, RKH: 50.50 up 0.50, BOR: 36.00 down 2.50, PRE: 13.50 unchanged, GBP: 9.25 down 0.50, GPK: 420.00 unchanged, BLT 1747.00 up 12.00
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