China 'keen to cooperate with US in region'

China is keen to cooperate with the United States in the Asian region, assistant foreign minister Liu Zhenmin said Saturday in positive comments after a week of wrangles.

"We are looking forward to cooperating with the US in the region and at the EAS," Liu told reporters on the sidelines of the East Asia Summit, when asked about Washington's new focus on Asia, which has irked Beijing in recent days.

Earlier Saturday, US President Barack Obama prodded China's Premier Wen Jiabao on maritime territorial rows and economic wrangles amid signs of Chinese scorn for his Pacific diplomacy push.

Among other issues, Obama mentioned the South China Sea territorial disputes at the two-way talks, US National Security Advisor Tom Donilon said.

The United States wanted to discuss the disputes in general terms in the summit, but China says the issue should be confined to talks between the individual regional nations concerned.

"The United States has an interest in the freedom of navigation, the free flow of commerce, a peaceful resolution of disputes (but) we don't have a claim, we don't take sides in the claims," Donilon said.

Liu defended Beijing's position. "China has continued to allow that freedom of navigation in the region," he said, adding that his country was willing to start discussing with ASEAN countries a legally binding code of conduct for the area.

China claims all of the South China Sea, as does Taiwan, while four Southeast Asian countries declare ownership of parts of it, with Vietnam and the Philippines accusing Chinese forces of increasing aggression there.

The region is a conduit for more than one-third of the world's seaborne trade and half its traffic in oil and gas, and major petroleum deposits are believed to lie below the seabed.

By AFP - Saturday, 19 November, 2011

Woodside, East Timor ‘Aligned’ in Wanting Sunrise LNG to Proceed

Woodside Petroleum Ltd., its partners and the governments of Australia and East Timor are “aligned in their desire” to see the Sunrise liquefied natural gas project developed, the energy company said.

Australia’s second-biggest oil producer, led by Chief Executive Officer Peter Coleman, is looking forward to further dialogue with the Southeast Asian nation to try to resolve a dispute that has stalled the proposed LNG venture in the Timor Sea, the Perth-based company said in a statement yesterday.

“Woodside strongly believes it is not beyond all of us to find a solution to the current impasse,” the company said.

East Timor, which became a sovereign state in 2002 and depends heavily on oil and gas revenue, aims to reach an agreement over how to develop Sunrise by next year, President Jose Ramos-Horta said in an interview in September. The country has been opposed to plans by Woodside and its partners, including Royal Dutch Shell Plc, to use a floating LNG plant.

East Timor wants the natural gas from the Greater Sunrise field, which straddles a boundary between Australian waters and an area jointly managed by the two countries, to be converted to liquid fuel at an onshore plant on its soil.

Renewed Talks

Woodside, developer of the A$14.9 billion ($14.9 billion) Pluto LNG venture in Western Australia, has said that floating LNG technology for Sunrise would be the best commercial option and deliver the most revenue to both countries.

“We are not underestimating the difficulty of working through this process, but we do believe that with the support of the leaders of both governments and the joint venturers it is possible,” Woodside said in the statement yesterday.

Coleman, who has visited the East Timor capital of Dili to speak with government officials since replacing Don Voelte as Woodside’s CEO earlier this year, said last month that the oil and gas producer had renewed talks with the country.

By James Paton - Saturday, 19 November, 2011

Chevron’s Brazil Leak Is Bigger Than Estimated, ANP Says

The amount of oil that has leaked into the ocean from a sea-floor fissure near a Chevron Corp. well in Brazil may be four times as large as previously estimated, the country’s oil regulator said.

As much as 2,640 barrels have gushed into the sea during an eight-day period, and oil continues to leak, the agency, known as the ANP, said in an e-mailed statement today.

Chevron, based in San Ramon, California, said Nov. 15 that the oil slick caused by the spill was as much as 650 barrels. At that time, the company said flows from the well appeared to have ceased.

Chevron has “substantially reduced” oil leaking from a fissure after it began plugging an exploration well Nov. 15th at the Frade offshore project, ANP said. The agency is investigating the causes of the spill and is auditing safety conditions at the project’s platform.

Brazil may tighten environmental regulations as the country plans to double oil output over the next decade, tapping fields in the so-called pre-salt region of the Atlantic Ocean, Adriano Pires, head of the Brazilian Center for Infrastructure, said today in a telephone interview from Rio de Janeiro.

“This could slow the expansion process if the government implements more strict environmental regulations,” Pires said. “This tells Brazilian society that the story about transforming the pre-salt region isn’t that simple.”

Chevron didn’t immediately respond to an e-mail and phone call today seeking comment.

Production hasn’t been halted at Frade, located in deep waters of the Campos Basin, according to Chevron. Oil was leaking from fissures on the ocean floor near a well the company was drilling and then plugged.

By Peter Millard - Saturday, 19 November, 2011

Supply ship attacked at Chevron offshore oil field near Nigeria’s coast; 3 abducted

LAGOS, Nigeria — Gunmen stormed a ship supplying a Chevron Corp. offshore oil field, kidnapping three workers in an attack raising concerns over a possible unraveling amnesty deal in the crude-rich nation, authorities said Friday.

The attack happened Thursday night near Chevron’s massive Agbami oil field, operated by its Nigerian subsidiary about 70 nautical miles offshore from Bayelsa state in Nigeria’s oil-rich southern delta, officials said.

Eight gunmen boarded the MV C-Endeavour, attacking the crew and taking the three sailors hostage, Chevron spokesman Kurt Glaubitz said.

A private security official, who spoke to The Associated Press on condition of anonymity as details about the kidnapping remained closely held, said those abducted were foreigners. Glaubitz declined to identify those kidnapped, citing the San Ramon, California-based company’s security rules.

“The safety of our employees and contractors is our first priority,” Glaubitz said. “Chevron Nigerian Ltd. is the assisting the service company to ensure the safe release of the kidnapped crew members.”

Glaubitz said the ship belonged to contractor Edison Chouest Offshore, based in Galliano, Louisiana.

The Chouest family is in communication with the family members of the kidnapped employees, company spokesman Lonnie Thibodeaux said. But he said he didn’t have information on the names or nationalities of the three captured crew members. The ship is a 240-foot supply vessel built in 1999.

“We’re continuing to monitor the situation,” Thibodeaux said. “We have individuals both inside and outside of the company who have expertise in dealing with these types of situations who are hard at work gathering information.

A Nigerian navy spokesman didn’t immediately respond to a request for comment.

Foreign firms have pumped oil out of Nigeria’s Niger Delta for more than 50 years. Despite the billions flowing into the nation’s government, many in the delta remain desperately poor, living in polluted waters without access to proper medical care, education or work.

In 2006, militants started a wave of attacks targeting foreign oil companies, including bombing their pipelines, kidnapping their workers and fighting with security forces. That violence waned in 2009 with a government-sponsored amnesty program promising ex-fighters monthly payments and job training. However, few in the delta have seen the promised benefits.

The kidnapping comes after Exxon Mobil Corp. has seen other contract workers kidnapped in recent weeks. Analysts warn the attacks may signify a fraying of the amnesty deal.

Meanwhile, attacks on crude oil tankers continue to rise around Nigeria, as pirates take over vessels to steal the crude oil from their holds.

The Agbami field is Nigeria’s biggest offshore oil producer, with a production capacity of as many as 250,000 barrels a day, Chevron has said. The attack on the field, so far offshore, indicates even the deepest-water oil finds remain susceptible to attacks from Nigeria.

Nigeria, an OPEC member nation producing about 2.4 million barrels of crude oil a day, is a top supplier to the U.S.

By Associated Press - Saturday, 19 November, 2011

Oil price ends the week below $98 a barrel

NEW YORK – Oil prices dropped below $98 per barrel Friday to the end a volatile week that mixed jitters about Europe's debt with the prospect of tighter oil supplies and improving economic conditions in the U.S.

The price of oil ended the week lower than it began, despite a surge of trading that temporarily pushed crude above $100 at midweek for the first time since July. On Friday benchmark crude fell $1.41 to finish at $97.41 per barrel in New York, in light trading ahead of the Thanksgiving holiday week.

The sharp price fluctuations in oil will ripple through energy markets, but analysts say the ups and downs this week probably won't have much effect on retail gasoline prices. Pump prices fell nearly a penny on Friday to a national average of $3.38 per gallon, according to AAA, Wright Express and Oil Price Information Service. A gallon of regular has lost 44 cents since hitting its 2011 peak near $4 per gallon in May. Analysts say prices could fall by another 13 cents by the end of the year.

For most of October and November, oil prices have soared on encouraging economic news in the U.S. and reports that crude supplies were dropping.

The benchmark price jumped as high as $103.37 on Wednesday, following an announcement by two Canadian pipeline companies that they would bring oil from a key delivery point in Cushing, Okla., to the Gulf Coast. That will reduce a glut of crude in the Midwest that has weighed on benchmark prices this year.

Prices plunged Thursday as borrowing rates jumped in Europe and investors worried that slowing eurozone economies would reduce demand for oil.

Analysts say the dust is still settling from the rapid swings in oil prices this week.

"The market is just wobbly right now," independent analyst and trader Stephen Schork said.

On Friday the headlines about the world economy were mostly positive. Greek leaders predicted that the country's massive budget deficit will fall sharply next year, with the help of bailouts and other debt relief. In the U.S. a gauge of economic indicators showed solid growth in October, and a stronger economy means rising demand for oil.

In other energy trading, heating oil fell 5.07 cents to finish at $3.0325 per gallon, while gasoline futures fell 2.87 cents to end at $2.4784 per gallon. Natural gas dropped 9.4 cents to finish at $3.3160 per 1,000 cubic feet.

Brent crude gave up 69 cents to end the week at $107.40 per barrel in London.

By CHRIS KAHN - Saturday, 19 November, 2011

Canadian Overseas Petroleum to sell stake in oilfield to ExxonMobil for US$55M

CALGARY - Canadian Overseas Petroleum Ltd. (TSXV:XOP) says it has agreed to sell a 70 per cent interest in a Liberian oil play to a subsidiary of ExxonMobil for US$55 million and other considerations.

The company said Wednesday that its subsidiary had signed an agreement under which ExxonMobil Exploration and Production Liberia Ltd. will acquire the stake once COPL completes the purchase from its current owner.

The deal is for an interest in an offshore Liberian oil asset.

ExxonMobil will pay COPL US$55 million plus a portion of the first well to be drilled up to a maximum of US$36 million.

ExxonMobil will also pay COPL's share of joint venture costs, estimated to be about US$6 million, up to the completion of the first well.

ExxonMobil will be the designated operator.

COPL has agreed to pay the current owner $85 million, but it has not yet closed the deal.

The sale is subject to approval by the Liberian government.

By The Canadian Press - Friday, 18 November, 2011

Origin Needs at Least One More Customer to Expand Conoco LNG Venture

Origin Energy Ltd. (ORG), ConocoPhillips (COP)’s partner in a $20 billion Australian liquefied natural gas venture, said it aims to sell more than half the fuel from the project’s second phase before committing to an expansion.

The project in Queensland state will likely need to sell 50 percent to 75 percent of the LNG from the second stage before the partners make an investment decision, Karen Moses, executive director of finance and strategy at Sydney-based Origin, said today in a telephone interview, adding that no final decision had been made.

Origin and Conoco, the third-largest U.S. oil company, are among energy companies in Australia planning more than A$200 billion ($200 billion) of LNG projects to tap rising Asian demand for the cleaner-burning alternative to coal. The venture yesterday agreed to supply Japan’s Kansai Electric Power Co. with 1 million metric tons of LNG a year, or almost 25 percent of the capacity from the second unit, or train.

Origin and Conoco are pursuing “at least one more” buyer for the coal seam gas-to-LNG venture, with customer interest increasing since the nuclear crisis in Japan caused by the March 11 earthquake and tsunami, she said.

The partners approved the first stage of their Australia Pacific LNG development in July, targeting first exports in mid-2015.

“We’ve seen stronger engagement in the last three to six months than we had before,” Moses said. “Japan does have a considerable task to work through what their future fuel mix is going to look like. They need gas for 2016 and to be part of a project that’s going to deliver that gas in 2016.”

Customers ‘Well-Informed’

Asian customers are aware of the opposition among some farmers, environmentalists and politicians on the east coast of Australia to expanding coal-seam gas exploration, she said. The concerns haven’t discouraged buyers, she said.

“The conversation might be different if we weren’t a permitted project,” Moses said. “But we are a permitted project, and the customers we are having conservations with are getting themselves deeply informed about the project. They know the quality of the resource, the acreage, the regulatory environment and the fiscal environment.”

Origin, whose shares fell 1.2 percent in Sydney today to A$14.35, plans to raise A$500 million selling hybrid notes to help fund its share of the project, the company said Nov. 15. Hybrid notes blend debt and equity characteristics.

Supply Deal

Conoco and Origin in April agreed to supply 4.3 million tons of LNG a year to China Petrochemical Corp. They also agreed to sell Sinopec Group, as the Chinese company is known, a 15 percent stake in the venture. Annual capacity from stages one and two of the project will be 9 million tons.

Selling a further “1 million tons is not enough” to approve an expansion, Moses said. “But the economics don’t need the full second train, or 100 percent, to be contracted. If we’re making sufficient progress with customers, there’s no reason why we wouldn’t expect it to be 100 percent either.”

The agreement with Kansai depends on Origin and Conoco committing to build the second stage, a decision that is expected early next year, Origin said yesterday.

By James Paton - Friday, 18 November, 2011

Petrobras Has ‘Many, Many’ Offers for $13.6 Billion of Assets, CEO Says

Petroleo Brasileiro SA (PETR4), the fifth- biggest oil company by value, has “many, many, many” offers for the $13.6 billion of assets it plans to sell, including fields in the Gulf of Mexico, its chief executive officer said.

While Brazil’s state oil producer is yet to decide which assets to sell, the company known as Petrobras has received dozens of proposals, Chief Executive Officer Jose Sergio Gabrielli, said in an interview at the Bloomberg headquarters in New York yesterday.

Petrobras is selling assets to help finance its $224.7 billion five-year investment plan that includes the development of deep-water projects in the so-called pre-salt area of the Santos Basin, the largest oil discovery in Brazil’s history. The company may farm out stakes in 186 exploratory blocks in the Gulf of Mexico, Gabrielli, 62, said.

“We are very well-positioned in the Lower Tertiary in the Gulf of Mexico,” he said. “In the ultra-deep waters, we have several exploratory activities going on right now. And some companies are interested in buying things from us.”

The company, based in Rio de Janeiro, won approval from the U.S. Bureau of Ocean Energy Management, Regulation and Enforcement to begin oil and natural-gas production at its Chinook-Cascade project in the Gulf of Mexico in March. The project has the capacity to produce 80,000 barrels of oil daily and 16 million cubic feet of gas a day.

Petrobras and its partners including BG Group Plc are planning to use as many as 13 floating production, storage and offloading vessels to pump oil and gas in deep water off the Brazilian coast.

Gulf of Mexico

“We are going to bring the first FPSO ever to the Gulf of Mexico I hope soon,” Gabrielli said. “It is taking more time than we thought. But this year or beginning of next year we are going to be increasing our production.”

Petrobras found oil in the Logan Well in deep waters in the Gulf of Mexico, the company said Nov. 3. The well was drilled at the WR 969 block, operated by Statoil ASA and located 250 miles (402 kilometers) Southwest of New Orleans and 7,750 feet (2,362 meters) deep, according to the Brazilian explorer.

The shares dropped 2.7 percent to 21.52 reais in Sao Paulo trading yesterday, matching the decline in the benchmark Bovespa Index. Petrobras has slumped 17 percent in the past year.

Increasing Production

Petrobras is going to end 2011 with daily production above its target, even as platform shutdowns and delays in drilling- rig deliveries constrain development of the Carioca and Lula fields in the Santos Basin, Gabrielli said.

Output may reach 2.2 million barrels a day by the end of the year, he said. On average domestic production may miss this year’s target of 2.1 million barrels a day, Gabrielli said. Petrobras is planning to boost production to 5.4 million barrels a day by 2020, mainly from output growth in Brazil.

Petrobras should get the flow-rate data for its pre-salt wells off the coast by the middle of next year, when it completes 18 months of pilot projects in the area, he said.

The company paid the government $42.5 billion in shares for the rights in September last year to produce 5 billion barrels of oil from Franco and six other fields including Lula, in the Santos Basin. The pre-salt fields in the basin, the largest crude discovery in the Americas since Mexico’s Cantarell field in 1976, lie four miles beneath the seabed.

“We began 2008 estimating 15,000 barrels a day” of output at the pre-salt fields, Gabrielli said. “Today, Lula is producing 36,900 barrels a day.”

The chief executive officer also said while 2012 will be a better year for the U.S. than Europe, developed nations will continue to have flat economic growth or may enter a recession.

“The main reason why the U.S. is going to be better is that the main street is alive,” Gabrielli said. “We are going to continue to see growth in China, India, South America and Africa.”

By Fabiola Moura - Friday, 18 November, 2011

LUKOIL seeks to explore oil/gas with Petrovietnam

HANOI, Nov 18 (Reuters) - Russia's No.2 crude oil producer LUKOIL (MCX: LKOH.ME - news) said it would partner with Vietnam's Petrovietnam in exploring oil and gas at home and abroad, the fourth Russian firm to invest in the Southeast Asian nation's oil and gas industry.

The Russian firm signed a memorandum of understanding with Vietnam's state oil and gas group in Moscow on Thursday, according to a Russian-language statement sent to Reuters on Friday.

"The pact noted that LUKOIL and Petrovietnam are interested in cooperating in exploration, development and production of hydrocarbons in Vietnam, Russia and third countries," the statement said.

The Russian group and Petrovietnam would share information on potential exploration blocks and exchange results, the statement said.

LUKOIL has said it was seeking to bid for more offshore blocks in Vietnam after acquiring 50 percent of the Hanoi Trough 02 block offshore the northern city of Haiphong from Quad Energy (Other OTC: CDID.PK - news) in April.

Three Russian firms are already operating in Vietnam: Gazprom (MCX: GAZP.ME - news) , Zarubezhneft and LUKOIL, while TNK-BP was in the process of taking over assets newly acquired from its shareholder BP Plc.

TNK-BP has also said its subsidiary, TNK Vietnam, had been licensed to operate offshore gas block 06.1, part of the Nam Con Son Integrated Gas to Power Project, and would officially open its office in the country next week.

By Reuters - Friday, 18 November, 2011

Oil below $99 as trader eye weak Europe economy

SINGAPORE – Oil prices hovered below $99 a barrel Friday in Asia amid concern Europe's debt crisis will undermine the continent's economic growth and crude demand.

Benchmark crude for December delivery was down 15 cents at $98.67 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell $3.77 to settle at $98.82 in New York on Thursday.

Brent crude for January delivery was down 7 cents at $108.15 a barrel on the ICE Futures Exchange in London.

Crude jumped to above $103 on Thursday before pulling back as Spanish and French sovereign debt yields rose sharply higher. Investors are increasingly worried austerity measures to contain debt levels could trigger a recession in Europe.

"Crude values will remain subject to the vagaries of increasing debt problems across the euro zone," Ritterbusch and Associates said in a report. "Economic deterioration in southern Europe is capable of offsetting positive economic vibes within the U.S."

Oil has surged from $75 on Oct. 4 amid signs the U.S. economy is growing slowly and will avoid a recession this year. The government said Thursday the number of people seeking unemployment benefits fell last week to the lowest level since April, suggesting that layoffs are easing.

In other Nymex trading, heating oil rose 0.2 cent to $3.09 per gallon and gasoline futures slid 0.7 cents to $2.51 per gallon. Natural gas gained 2.4 cents at $3.43 per 1,000 cubic feet.

By ALEX KENNEDY, Associated Press - Friday, 18 November, 2011

Cheapest Petrobras Since 1999 Devaluation Luring Aberdeen After 41% Plunge

Petroleo Brasileiro SA (PETR4)’s tumble to the cheapest valuation since 1999 may be a signal to buy.

The Brazilian state-controlled oil producer’s ratio of price to net assets fell to 0.9 from 1.8 two years ago as the global economic slowdown deepened a sell-off spurred by concern President Dilma Rousseff’s government is putting national development goals ahead of shareholders’ interests. The ratio, which touched a 12-year low of 0.6 on Sept. 23, is the second lowest among 20 oil companies with a market value of at least $50 billion, surpassing only Russia’s Gazprom OAO (GAZP), according to data compiled by Bloomberg.

Aberdeen Asset Management, Henderson Global Investors Ltd. and Deutsche Bank AG say Petrobras’s two-year, 41 percent sell- off is excessive. The plunge is almost double the 21 percent slump in BP Plc (BP/), whose Gulf of Mexico well caused the worst oil spill in history, as investors dumped Petrobras after production gains slowed and the company diluted shareholders with a record $70 billion stock sale aimed at helping fund the oil industry’s largest investment plan.

“There are plenty of issues out there, but taking a long- term view it’s actually very cheap, especially when you compare it to other majors around the world,” said Nick Robinson, who manages $6 billion in Brazilian stocks at Aberdeen in Sao Paulo and said he bought Petrobras shares as recently as last month.

Aberdeen, which oversees about $300 billion globally, was the largest buyer of Petrobras American depositary receipts in the third quarter, boosting its holding by 13.1 million preferred ADRs to 85.6 million, or 3.1 percent of the total, according to data compiled by Bloomberg. Each ADR corresponds to two shares. The firm also bought 403,000 local preferred shares in the quarter, bringing the total to 4.8 million, the data show. Robinson declined to give further details.

Investment Plan

Petrobras, the world’s fifth-largest oil company by market value, aims to more than double production to 6.4 million barrels a day in 2020, in part by spending $224.7 billion over five years for investments including development of deep-water projects at the Lula field, the largest discovery in Brazil’s history.

The company sold $70 billion in stock in September 2010 to help finance that plan and gain control of 5 billion barrels of government-owned reserves. The share sale boosted the government’s stake to 48 percent from 40 percent while diluting minority investors.

Petrobras is down 19 percent this year, losing only to the 20 percent slide in India’s Reliance Industries Ltd. (RIL) among its major oil and gas rivals. Brazil’s benchmark Bovespa index has slumped 16 percent this year, while crude is up 12 percent in New York.

Local Purchases

Brazil requires Petrobras to buy as much as 70 percent of its equipment from local providers as part of an effort to strengthen its economic expansion and create jobs. As rising gasoline demand outpaces local refining capacity, the company also has increased spending on refineries.

Those efforts may be hurting production, said Ted Harper, who helps oversee $7.8 billion for Frost Financial Management in Houston.

“Those factors -- which are clearly, from a political standpoint, favorable for Brazil -- increase the cost associated with bringing reserves online and extend the time to development,” said Harper, whose firm sold the last of its Petrobras holding in April.

As recently as June 30, Petrobras was the seventh-biggest company in the world by market value. It was the 20th-largest as of yesterday, according to data compiled by Bloomberg, with a market capitalization of $171 billion.

Fuel Demand

The company, based in Rio de Janeiro, will benefit from stronger domestic demand for fuel because of Brazil’s economic growth, said Chris Palmer, who helps manage $2.5 billion in Latin American assets as Henderson’s London-based director of global emerging markets.

Henderson, which oversees about $121.5 billion worldwide, bought a net 3.7 million Petrobras common and preferred ADRs in the third quarter, for a total of 18.7 million held, according to data compiled by Bloomberg. The firm also added 1.3 million common shares in Brazil, bringing the total to 6 million, the data show. Palmer declined to comment on the data or whether Henderson has made additional purchases since then.

Domestic Prices

The government slashed taxes on fuels in October to allow Petrobras to raise gasoline prices 10 percent and diesel prices 2 percent without increasing costs at the pump. It was the first increase in more than three years. The move came after third- quarter profit fell 26 percent from a year earlier as rising domestic demand led it to boost imports of the fuels and a weaker local currency swelled debt costs, according to a Nov. 11 statement from the company. The result still beat analysts’ estimates, marking the seventh time in the past eight quarters earnings exceeded forecasts.

Petrobras trades at 6.3 times reported earnings, below its five-year average of 10.3 and near the lowest since March 2009. It’s the fourth-lowest ratio among the company’s global peers, whose average is 9.7, also below their five-year mean of 12.6, amid concern Europe’s debt crisis will push the global economy into recession.

The world’s 20 largest oil companies are trading at 1.8 times net assets, or book value, below the five-year mean of 2.4. Petrobras, which trails Exxon Mobil Corp. (XOM), PetroChina Co., Royal Dutch Shell Plc (RDSA) and Chevron Corp. (CVX) in market value, trades at less than half its five-year average book value of 1.9.

1999 Devaluation

The last time Petrobras was this cheap by that measure, Brazil’s economy was mired in recession and reeling from a currency devaluation. The company’s price-to-book ratio fell to a record-low of 0.4 in January 1999, when the country abandoned its currency peg after Russia’s debt default drove investors out of emerging-market assets. The real sank 41 percent that month.

“You have to follow the fundamentals,” said Palmer of Henderson. “Investors in Brazil are getting a bit overawed by what’s happening in Europe.”

Rousseff’s government forecasts growth of as much as 4 percent this year in Latin America’s largest economy, down from a 7.5 percent expansion last year, the fastest pace in more than two decades.

Rousseff was chairwoman of Petrobras from January 2003 until March 2010, when she resigned from her public posts to pursue the presidency. She was replaced by Finance Minister Guido Mantega, who remains her top economic adviser.

By Alexander Cuadros - Thursday, 17 November, 2011

Key Energy in Play With Baker Hughes Chasing Shale Oil

By Tara Lachapelle and David Wethe - Thursday, 17 November, 2011

Kurdish government, ExxonMobil ink oil search deal

SULAIMANIYAH, Iraq (AP) — The Kurdish regional government has signed a deal with ExxonMobil to explore oil fields in northern Iraq, Kurdish officials said Sunday, putting them in sharp conflict with Iraq's national government.

The government in Baghdad wants to control all energy contracts signed in Iraq. With the deal, ExxonMobil becomes the first oil major to do business in the Kurdish region in defiance of the central government's wishes.

The deal was announced Sunday by Kurdish officials at an oil and gas conference in Irbil in comments carried on Kurdish television. Details of the deal were published on Friday by the Financial Times newspaper.

The Kurdistan Regional Government has clashed with Baghdad over who has the right to sign deals with international oil companies to develop Iraq's vast energy resources.

The Kurds, who control three provinces in northern Iraq, want to be able to sign contracts with international oil companies to develop their own fields, while Baghdad maintains it has final authority.

Kurdish officials have already signed a number of contracts with smaller energy companies, but the deal with ExxonMobil is significant because it's the first with an international oil major.

At the conference, Kurdish Natural Resources Minister Ashti Hawrami vowed to press ahead.

"These deals are legal. There is no legal problem about them. We will go on with these deals," he said.

The Iraqi government thinks differently. Following the Financial Times story, the Iraqi government on Saturday issued a statement slamming the agreement.

"The Iraqi government will deal with any company that breaks its laws in the same way that it has dealt with similar companies in the past," said Deputy Prime Minister Hussain al-Shahristani in a statement.

The central government has previously blacklisted energy companies that signed contracts with the Kurdish government, so that they cannot work in the rest of the country or purchase crude oil.

Even so, it remained unclear what steps, if any, the central government will take against ExxonMobil, which is already developing one of Iraq's biggest oil fields. ExxonMobil is working with Royal Dutch Shell PLC to develop the 8.6 billion West Qurna Stage 1 field near the southern city of Basra.

An official at al-Shahristani's office said the deal between ExxonMobil and the Kurdish government was signed on Oct. 18. He said company representatives met with al-Shahristani to discuss the deal, but the deputy prime minister refused to approve it because it was outside the purview of the Oil Ministry.

The official did not want to be identified because he was not authorized to speak to reporters.

ExxonMobil has not commented. Iraq sits on the world's third-largest oil reserves, with at least 115 billion barrels.

Iraq has been struggling to develop its oil and gas reserves after years of war, international sanctions and neglect. Foreign companies with the resources and expertise to develop the oil fields, such as ExxonMobil, are seen as key to helping revive the nation's vital energy sector.

By YAHYA BARZANJI - Thursday, 17 November, 2011

Chevron Reiterates Statement Regarding Oil Seep At Project In Brazil

Chevron Corporation recently reiterated that its efforts to respond to oil seeps and a subsequent sheen in the vicinity of its Chevron- operated Frade project have been successful.

Since receiving approval from the Brazilian National Agency of Petroleum (ANP) late Sunday, Chevron Brazil immediately commenced plugging and abandonment activities on an appraisal well within the Frade field which was suspected to be contributing to oil being expressed through seep lines located on the ocean floor.

Chevron Brazil can currently advise that due to successful well control operations, the amount of oil observed coming from nearby seep lines on the ocean floor has decreased significantly. Chevron Brazil will continue to monitor the situation during the plugging and abandonment process in the coming days, which will culminate in the final cementing of the well.

Chevron's current estimates continue to place the sheen volume around the approximate range previously stated of 400 - 650 barrels (64 - 104 cubic meters). Chevron Brazil is working a fleet of 17 vessels. There are currently up to eight vessels working at the sheen with six vessels working in pairs to contain and recover the oil near the head of the sheen and two boats working on mechanical dispersion toward the tail of the sheen.

In parallel, the company will continue to coordinate and deploy considerable resources to help control the oil sheen which is located about 120 kilometers offshore and moving in a south easterly direction away from the Brazilian coast. The Frade project is located 370 kilometers (230 miles) offshore north east of Rio de Janeiro, Brazil in water depths of approximately 1200 meters (3800 feet).

Thursday, 17 November, 2011

Oil near $102 after 36 percent rally in 6 weeks

SINGAPORE – Oil prices fell slightly to near $102 a barrel Thursday in Asia, pausing a 36 percent rally during the last six weeks.

Benchmark crude for December delivery was down 39 cents at $102.20 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose $3.22 to settle at $102.59 in New York on Wednesday.

Brent crude for January delivery slumped 54 cents to $111.34 a barrel on the ICE Futures Exchange in London.

Oil has soared from $75 on Oct. 4 amid signs the U.S. economy is growing slowly — rather than slipping into a recession as some analysts feared during the summer.

Oil prices jumped Wednesday after Canadian pipeline company Enbridge announced it would ship crude away from a key delivery point in Cushing, Oklahoma. The company bought a 50 percent stake in the Seaway pipeline from ConocoPhillips and plans to use it to transport oil from Cushing to refineries along the Gulf Coast, where much of it will be shipped overseas because of rising demand from Latin America.

The benchmark U.S. crude is West Texas Intermediate, or WTI.

"The belief that rising domestic production is flooding Cushing dictated the fate of WTI for most of the year," Barclays Capital said in a report. "This is where the reversal of Seaway has a huge totemic significance, in its ability to debottleneck Cushing."

J.P. Morgan raised its 2012 forecast for the average price of crude to $110 from $97.50.

In other Nymex trading, heating oil fell 0.9 cent to $3.13 per gallon and gasoline futures slid 2.6 cents to $2.61 per gallon. Natural gas gained 0.2 cent at $3.35 per 1,000 cubic feet.

By ALEX KENNEDY, Associated Press - Thursday, 17 November, 2011

Gas summit starts with call for fair price

Leaders of the world's biggest gas suppliers opened their first summit in the Qatari capital on Tuesday by calling for a fair gas price while Iran, whose president was absent from the ceremony, warned that Western taxation will derail the energy market.

"There is an urgent need to achieve stability to the natural gas (industry) ... which does not have a fair price yet," said Egyptian Petroleum Minister Abdullah Ghorab.

"This is the cornerstone for developing the gas industry," he told the opening session of the first summit of the 12-member Gas Exporting Countries Forum (GECF).

Algerian President Abdelaziz Bouteflika and the leader of Libya's National Transitional Council, Mustafa Abdel Jalil, were among those attending the one-day summit.

Iranian President Mahmoud Ahmadinejad, who had been expected to represent the Islamic republic "wanted to be here but could not come," his representative, Iranian Oil Minister Rostam Qasemi told the summit.

Qasemi termed the summit "a turning point in the history of the natural gas industry," but blasted taxes against energy exports by Western consumers.

Any taxation by consumer countries "will derail the energy market," warned Qasemi who also said the falling dollar has "negatively affected the world economy."

The summit was opened by Qatar's Emir Sheikh Hamad bin Khalifa al-Thani who called for "innovative solutions" to the challenges facing the gas industry for the benefit of both consumers and producers.

According to organisers, the summit was to discuss "the priority of long-term contracts as the basis of security for exporters and consumers of natural gas."

It will also seek ways to establish a fair price for gas under a gas-to-oil indexation, with the aim of overcoming the disparity between crude oil and gas prices, organisers said.

The leaders would review cross investments and technological collaboration between GECF members.

Besides Oman which was admitted Sunday, the GECF also comprises Algeria, Bolivia, Egypt, Equatorial Guinea, Iran, Libya, Nigeria, Qatar, Russia, Trinidad and Tobago, and Venezuela.

Kazakhstan, Norway and the Netherlands are observers.

Russia is the world's largest gas producer and sits on 30 percent of global reserves, while Qatar is the largest liquefied natural gas (LNG) exporter with a production capacity of 77 million tonnes a year.

GECF has been working for a fair gas price which its leaders say is the fastest growing energy source, but they deny it aims to control prices or become a cartel like the Organisation of Petroleum Exporting Countries (OPEC).

The producers want "a fair price for gas that is linked to an energy commodity, especially crude oil ... Gas prices are not yet in parity with oil," Qatar's Energy Minister Mohammed bin Saleh al-Sada told reporters on Sunday.

"Fair prices are determined by demand and production (supply). It is not the duty of this forum to determine prices," he said.

"The summit wants to send a message (to the world) about reliable gas supplies," Sada said.

Gas prices are currently determined either in long-term contracts between sellers and buyers, which some exporters index to oil, or on spot markets.

World gas demand dipped in the wake of the global financial crisis but the GECF says it rebounded last year, rising 7.3 percent, mainly due to Japan boosting LNG imports after its March tsunami and nuclear crisis.

The International Energy Agency estimated last month that around $10 trillion of investments would be needed in the gas industry until 2035, or about $400 billion a year.

By Omar Hasan - Tuesday, 15 November, 2011

Gazprom Executive: Proposal To Build 3rd LNG Train At Sakhalin-2 "Misleading"

MOSCOW -(Dow Jones)- A proposal to build a third train at Russia's Sakhalin-2 liquefied natural gas plant is "misleading," as the current reserves at the project may not justify it, an executive at Russian state gas firm OAO Gazprom ( GAZP.RS) said Tuesday.

"The proposal to build a third LNG train at the Sakhalin-2 plant is somewhat misleading, I think," Gazprom's head of Eastern gas projects, Viktor Timoshilov, said, noting that current reserves at the Lunskoye offshore field may not justify the project.

Sakhalin-2 is expected to produce 11 million tons of LNG this year, Timoshilov said.

Sakhalin Energy--a joint venture that operates the Sakhalin-2 project--has Gazprom as the majority partner with a 50% plus 1 stake, while Royal Dutch Shell PLC (RDSA) holds 27.5%, and Japanese firms Mitsui & Co. (8031.TO) and Mitsubishi Corp. (8058.TO) control 12.5% and 10% respectively.

By Nasdaq - Tuesday, 15 November, 2011

Repsol Makes A New Good Quality Oil Discovery In Brazil

Repsol Sinopec Brazil and its partners Petrobras and BG Group have announced a new oil discovery in the Carioca area, located in block BM-S-9, which confirms the potential in the Brazilian pre-salt Santos Basin area.

The discovery was made in the 4-SPS-81A (4-BRSA-973A-SPS) well, known as Abaré, and is located 35 km south of the Carioca discovery well and 293 km off the São Paulo coast.

Initial tests have shown the existence of a good quality oil of 28 ° API in carbonate reservoirs at a depth of 4,830 meters. A drill stem formation test is planned to evaluate productivity of the interval.

Additionally, further tests are being carried out at the Carioca Northeast well, discovered last January by Repsol and the same consortium. The results obtained so far indicate a production potential of over 28,000 barrels per day, revealing higher than initial production expectations. Currently, the well produces a restricted flow rate of 23,400 barrels per day as required by the Brazilian National Agency of Petroleum, Natural Gas and Biofuels (ANP).

In addition to the discovery in Abaré, four wells have been drilled and two more tests have been carried out in accordance with ANP Carioca Assessment Plan commitments.

In light of the new results obtained, the consortium plans to carry out further tests to evaluate the total potential of the Carioca area. For this, ANP has approved an additional program of activities and extended the deadline for the declaration of commerciality until December 31, 2013. The project's development and production start-up schedule in the Carioca area continues as planned.

Repsol in Brazil

Repsol has a significant and diversified projects portfolio in Brazil, including a producing field (Albacora Leste) a block under development (BM-S-7: Piracuca SP), two planned pilot projects (BM-S-9: Guara and Carioca) and fourteen exploration blocks of great potential.

At the end of last year, Repsol and China's Sinopec entered into an agreement to jointly develop the company's exploration and production projects in Brazil, creating one of Latin America's largest energy companies, valued at $17.773B. Repsol has a 60% stake in the company and Sinopec owns the remaining 40%.

Repsol Sinopec Brazil is the leading International company in exploration rights in the Santos, Campos and Espírito Santo basins, participating in 14 blocks and operating six of seven.

Brazil's offshore boasts one of the world's fastest-growing oil and gas reserves

Tuesday, 15 November, 2011

OPEC - Oil Growth Forecast Unchanged On Economic Woes

The Organisation of the Petroleum Exporting Countries (OPEC), said its forecast for global oil demand growth in 2012 remained unchanged at 1.2 million barrels a day mb/d, but noted that uncertainties in the world economic outlook for the coming year have increased due to the challenges facing the Organisation for Economic Cooperation and Development (OECD) economies.

In its latest Monthly Oil Market Report (MOMR) the 12-member group also projected global oil demand growth at900,000 barrels per day in 2011 - unchanged from its September figures, noting that demand in industrialised nations is seen dropping further "as a result of slowing economic momentum, particularly in the (European Union)."

OPEC's forecast for world economic growth in 2011 also remained unchanged at 3.6per cent, while the forecast for global growth in 2012 had been revised down from 3.7per cent to 3.6per cent.

"The forecast for world economic growthin 2011 remains unchanged at 3.6percent, while the forecast for global growth in 2012 has been revised down from 3.7percent to 3.6per cent. US growth remains unchanged at 1.6per cent for 2011 and 1.8per cent for 2012.

"While growth expectations in the Euro-zone remain at 1.6per cent for this year, the forecast for next year has been revised down to 0.7per cent from 0.8perceent previously.

"Similarly, while the forecast for Japan for this year remains unchanged at minus 0.8percent, the forecast for 2012 has been revised down to 2.2per cent from 2.4per cent previously. Growth levels in the developing countries remain high. China remains unchanged at 9.0per cent for 2011 and 8.5per cent for 2012. India is forecast to see growth of 7.6per cent in both 2011 and 2012, in line with the previous report.

"World oil demand growthin 2011 is forecast at 0.9 mb/d, unchanged from the previous report.Despite the emerging winter season, OECD oil demand is expected to see a further contraction as a result of slowing economic momentum, particularly in the EU. Moreover, US gasoline demand has been on the decline for the past four months reflecting the sluggish economy. The forecast for global oil demand growth in 2012 also remains unchanged at 1.2 mb/d. However, uncertainties in the world economic outlook for the coming year have increased due to the challenges facing the OECD economies.

"Non-OPEC supplyin 2011 is forecast to increase by 0.2 mb/d, representing a downward revision of around 140,000b/d from the previous report. In 2012, non-OPEC supply is forecast to grow by 0.8 mb/d in line with the previous assessment. Brazil, Canada, Colombia, the US, Ghana, and Russia are expected to be the main contributors to next year's growth, while Norway, UK, and Mexico are anticipated to experience the largest declines. OPEC NGLs and non-conventional oils are estimated to average 5.7 mb/d in 2012, indicating growth of 360 tb/d over the current year. In October, OPEC production averaged 29.89 mb/d, a minor increase over the previous month", OPEC, suppliers of a third of world's oil said in the report.

The Group also noted that the fourth quarter was by nature a high season for oil consumption as the world demanded more heating and fuel oil, but added that despite the winter demand for oil products, OECD oil demand was expected to remain negative as a result of the slowing economic momentum.

"Growing economic uncertainties in the EU have dampened the continent's oil usage. US gasoline demand has been on the decline for the past four months reflecting economic woes and the latest cold front in the US is not expected to alter the country's oil consumption forecast. Weakening Chinese oil demand is being offset by strengthening oil use in other non-OECD economies. As a result of these offsetting factors, world oil demand is forecast at 0.9 mb/d y-o-y to average 87.8 mb/d, unchanged", OPEC said.

By Chika Amanze-Nwachuku - Tuesday, 15 November, 2011

Oil hovers near $98 ahead of inventories data

SINGAPORE – Oil prices hovered near $98 a barrel Tuesday in Asia amid expectations that U.S. crude inventories are falling in a sign demand could be increasing.

Benchmark crude for December delivery was up 2 cents at $98.16 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 85 cents to settle at $98.14 in New York on Monday.

Brent crude was up 30 cents to $112.19 a barrel on the ICE Futures Exchange in London.

Crude has surged about 30 percent from $75 on Oct. 4 amid growing investor optimism that the U.S. economy would avoid recession this year. Traders are now mulling whether weak economic growth will boost demand enough to justify further price gains.

Falling crude inventories in the U.S. and Europe suggest supplies aren't keeping up with demand. Analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., predict crude stocks fell 1.5 million barrels last week.

The American Petroleum Institute reports its weekly supply figures later Tuesday and the Energy Department's Energy Information Administration announces its data on Wednesday.

"Unexpectedly resilient economic data has exacerbated the tightness in physical commodities," Goldman Sachs said in a report. "We maintain our view that global growth will provide enough support to demand to drive key commodity prices higher over the next 12 months."

Goldman recommended investors buy the December 2012 crude futures contract.

In other Nymex trading, heating oil added 1.5 cents to $3.18 per gallon and gasoline futures fell 0.5 cents to $2.54 per gallon. Natural gas fell 2.4 cents at $3.43 per 1,000 cubic feet.

By ALEX KENNEDY, Associated Press - Tuesday, 15 November, 2011