Buffett To Back Occidental With $10B In Bidding War For Anadarko
Warren Buffett
Warren Buffett’s Berkshire Hathaway has committed to invest US$10 billion in equity in Occidental Petroleum if Occidental completes its proposed acquisition of Anadarko, Occidental said on Tuesday, a day after Anadarko said that it would resume talks with Occidental despite having agreed to a deal with Chevron.
Contingent upon Occidental completing the acquisition of Anadarko, Berkshire Hathaway will receive 100,000 shares of Cumulative Perpetual Preferred Stock with a liquidation value of US$100,000 per share, together with a warrant to purchase up to 80.0 million shares of Occidental common stock at an exercise price of US$62.50 per share, Occidental said.
“We have long believed that Occidental is uniquely positioned to generate compelling value from Anadarko’s highly complementary asset portfolio. We are thrilled to have Berkshire Hathaway’s financial support of this exciting opportunity,” Occidental’s president and CEO Vicki Hollub said.
On Monday, Anadarko said that it plans to resume negotiations with Occidental after Occidental announced last week a proposal to buy Anadarko at a higher price than Anadarko had agreed in a deal with Chevron announced earlier this month.
While negotiations are being held, the Chevron Merger Agreement “remains in effect and accordingly the Anadarko board reaffirms its existing recommendation of the transaction with Chevron at this time,” Anadarko said yesterday, noting that there is no guarantee that the talks would necessarily result in a superior transaction than the one pending with Chevron.
Chevron said on April 12 that it had entered into a definitive agreement to buy Anadarko in a stock and cash transaction valued at US$33 billion that would boost Chevron’s position in the Permian, the Gulf of Mexico, and in liquefied natural gas (LNG).
On April 24, Occidental Petroleum said that it is proposing to buy Anadarko at a higher price than the one Anadarko had accepted from Chevron, opening a bidding war for one of the U.S. companies with the strongest positions in the Permian.
Source: Oilprice.com
Our desire is for Ghanaians to have reliable and affordable electricity supply-Prez Akufo-Addo
Ghana’s President Nana Akufo-Addo has said it is the desire of his administration to ensure that Ghanaians especially businesses, have access to reliable and affordable power supply to spur industrialization in the country.
According to the President, a reliable and an affordable power supply is crucial to the survival of government’s ‘1 District 1 Factory’ initiative, which is intended to propel industrial and economic growth in the country.
President Akufo-Addo expressed this in a speech delivered on his behalf by the Chief of Staff Mrs. Akosua Frema Osei Opare at a sod cutting ceremony for the construction of a 330kV Bulk Supply Point at Pokuase, in the Greater Accra Region.
The project, which is the first project under the Ghana Power Compact II, when completed would help to improve power supply in Pokuase, Kwabenya,Nsawam, Legon and the surrounding communities.
The US$33 million project, which is being executed by Elecnor of Spain, is expected to be completed in the first quarter of 2021.
It is the first project under the Ghana Power II spearheaded by the Millennium Challenge Corporation (MCC) through the Millennium Development Authority, leading to the private sector participation in Ghana’s power sector by Power Distribution Services (PDS) Ghana limited.
The project, when completed, would help improve power supply in Pokuase, Nsawam, Kwabenya, Legon and the surrounding communities.”We believe that availability of affordable electricity is crucial to the success of our industrialization endeavours, such as the 1 District, 1 Factory initiative,” he said.
Minister for Energy John-Peter Amewu, who highlighted the importance of the Bulk Supply Point as far as power supply in the country is concerned, however, called on the contractor to make sure that the project is executed in accordance with specification.
He said, under the current administration led by President Akufo-Addo, the situation whereby contractors fail to execute projects according to specification would not be tolerated.
Pokuase Gets 330kV Bulk Supply Point To Improve Power Supply
A ground breaking ceremony has been performed for the construction of 330kV Bulk Supply Point at Pokuase in the Greater Accra Region of Ghana.
The US$33 million project, which is being executed by Elecnor of Spain, is expected to be completed in the first quarter of 2021.
It is the first project under the Ghana Power II spearheaded by the Millennium Challenge Corporation (MCC) through the Millennium Development Authority, leading to the private sector participation in Ghana’s power sector by Power Distribution Services (PDS) Ghana limited.
The project, when completed, would help improve power supply in Pokuase, Nsawam, Kwabenya, Legon and the surrounding towns.
Delivering a welcome address at the sod cutting ceremony, Tuesday, 30th April, 2019, Board Chairperson for Millennium Development Authority Prof. Yaa Ntiamoa-Baidu said the Bulk Supply Point would enhance significantly the services provided by PDS to its customers in Pokuase and the surrounding towns.
According to her, besides the project, there are other infrastructural projects in the pipeline. These, she said, include seven primary sub-stations, replete with their interconnecting circuits and low voltage Line Bifurcation Activities to cover Accra East and Accra West Regions of PDS’s operations.
“I’m happy to add that significant progress has also been made in installing IT driven state-of-the-art Meter Management Systems, Geographical Information Systems, Outage Management System, Enterprise Resource Planning Systems and a Data Centre. These are inputs needed for what will become a well-run and competitive distribution operations. A total of US$55.2million will fund these projects,” she said.
According to her, MiDA is confident that Messrs Elecnor, which is the first contractor for the infrastructural projects under the compact, would engage all the parties to the project and work harmoniously with them to ensure the completion and delivery of the project within 24 months’ construction period.
She charged the contractor to set the best example in handling the project for others to emulate.
Prof. Ntiamoa-Baidu commended the people of the United States of America, through the Millennium Challenge Corporation, for the intervention which would increase reliable power supply.
Ghana: Use laid down procedures to get your grievances resolved-BOST MD to workers
Ahead of May Day tomorrow, the Board of Directors and Management of the Bulk Oil Storage and Transportation (BOST) Company have commended the workers for their contributions towards the shaping of the company.
In a brief touching message to the workers, Managing Director of BOST, Mr. George Mensah Okley, commended the entire workers for their commitment and dedication towards the forward march of the company.
“The staff, both juniors and seniors, over the years, have displayed loyalty, commitment and responded to calls to duty and must be parted on the back,” he said.
He continued that “management and board of BOST are delighted to have first class calibre of workers who understand the vision and mission of the company.”
According to him, management and board would continue to fashion out programmes and policies that would inure to the benefit of the staff and the company.
He advised the workers to use laid down procedures to get their grievances addressed instead of resorting to ways that would bring the name of BOST into disrepute.
“On the occasion of the Labour Day, we wish everyone well and pray that we continue to hold each other’s hands for the betterment of BOST and mother Ghana,” he said.
BP profit dips on lower prices
British oil major BP posted a slight dip in the first quarter underlying replacement cost (RC) profit, citing the weaker oil price and margin environment at the start of the quarter.
The company’s underlying RC profit, BP’s definition of net profit, was $2.4 billion for 1Q 2019, down from $2,6 billion in the corresponding quarter last year.
Upstream production, excluding Rosneft, for the quarter was 2,656 mboe/d, 2% higher than a year earlier due to the acquisition of the BHP assets and growth of major projects.
To remind, BP in October 2019, acquired BHP’s subsidiary Petrohawk Energy Corporation, a wholly owned subsidiary of BHP that holds a portfolio of unconventional onshore US oil and gas assets.
As for the upstream highlights in the first quarter of 2019, BP’s Constellation field in the Gulf of Mexico was the company’s first Upstream major project brought online in 2019. The Constellation start-up was followed by the second stage of the West Nile Delta development, the Giza and Fayoum fields, in Egypt and the Angelin development offshore Trinidad.
“These are the first of five Upstream major projects expected to begin production in 2019. BP has now safely brought 22 new upstream major projects into production since 2016, remaining on track to deliver 900,000boe/d from new projects by 2021,” BP said on Monday.
Since the start of the year, BP has taken final investment decisions on the Atlantis Phase 3 development in the Gulf of Mexico, Azeri Central East in Azerbaijan and Seagull in the UK North Sea. On 1 March, BPX Energy assumed full control of the BHP acquired US field operations.
In March, BP confirmed a gas discovery, operated by Eni, in the Nour North Sinai offshore prospect in the Egyptian Eastern Mediterranean.
“Looking ahead, we expect second-quarter 2019 reported production to be broadly flat with the first quarter reflecting ramp up of major projects offset by ongoing seasonal turnaround and maintenance activities in high margin regions,” BP said.
Aker Solutions books higher profit, expects increase in energy demand
Aker Solutions recorded an increase in its first quarter 2019 net income which totaled NOK 149 million ($17.2M) compared to NOK 105 million ($12.1M) in the prior-year period.
Revenue rose 32% to NOK 7.3 billion ($844M) in the first quarter 2019 from NOK 5.5 billion ($635.9M) a year earlier, supported by progress and deliveries on key projects in several markets.
Aker Solutions has two reporting segments: Projects and Services.
Revenue in Projects rose 40 percent to NOK 6 billion in the quarter from NOK 4.2 billion a year earlier, mainly driven by the field design sub segment.
Revenue in Services was NOK 1.3 billion, up 12 percent from NOK 1.2 billion in the same quarter last year, with the increase driven by international growth in the company’s production asset services sub-segment.
Orders totaled NOK 5.5 billion in the quarter, bringing the backlog to NOK 33.3 billion. Key awards included the subsea gas compression FEED contract from Chevron for the Jansz-Io field offshore Australia.
“This is the international breakthrough for our subsea compression technology, which already has provided great results at Åsgard for Equinor since 2015,” said Aker Solutions’ Chief Executive Officer Luis Araujo.
According to the company, tendering activity remains high in main markets – and Aker Solutions is currently bidding for contracts totaling about NOK 55 billion. The majority of this is in the subsea area – and key projects are anticipated to be awarded this year.
In the longer term, Aker Solutions expects an increase in global energy demand and that investment efforts in sustainable energy solutions will be rewarded.
Aker Solutions sees overall revenue in 2019 up close to 10 percent from 2018 on the back of a strong order intake last year and continued high tendering activity.
Source: Offshoreenergytoday.com
Top 2019 GOM Equity Producers
A combined Chevron Corporation and Anadarko Petroleum Corporation entity would take first place in a table of top 2019 Gulf of Mexico (GOM) equity producers, Rystad Energy has confirmed.
The combined entity would produce just over 400,000 barrels of oil equivalent per day from the region, according to Rystad Energy, which listed BP plc and Royal Dutch Shell plc as second and third in the list, respectively. Equinor ASA and Fieldwood Energy LLC placed fourth and fifth, respectively, in Rystad Energy’s rankings.
The remaining companies in Rystad Energy’s top 10 list of 2019 GOM Equity producers can be seen below. Companies are placed in order.
6. ExxonMobil Corporation
7. BHP
8. The combined Murphy and LLOG entity
9. Hess Corporation
10. Talos Energy Inc
On April 12, Chevron revealed that it had entered into an agreement to buy Anadarko. The deal would shake up the U.S. upstream sector, creating a company that rivals ExxonMobil domestically, according to GlobalData.
Following the agreement, Occidental Petroleum Corporation made a proposal to acquire Anadarko on April 24. Occidental’s proposed Anadarko deal would put the company alongside ConocoPhillips in a peer group of two as a “super-independent”, according to Zoe Sutherland, a corporate analyst at Wood Mackenzie.
On April 23, Murphy Oil Corporation revealed that its subsidiary, Murphy Exploration & Production Co. – USA, had entered into a definitive agreement to acquire deepwater GOM assets from LLOG Exploration Offshore LLC and LLOG Bluewater Holdings LLC.
Bidding War Heats Up As Anadarko Plans To Negotiate Occidental’s Bid
Anadarko Petroleum Corporation said on Monday that it plans to resume negotiations with Occidental Petroleum after Occidental announced last week a proposal to buy Anadarko at a higher price than Anadarko had agreed in a deal with Chevron announced earlier this month.
Chevron said on April 12 that it had entered into a definitive agreement to buy Anadarko in a stock and cash transaction valued at US$33 billion that would boost Chevron’s position in the Permian, the Gulf of Mexico, and in liquefied natural gas (LNG).
Last Wednesday, Occidental Petroleum said that it is proposing to buy Anadarko at a higher price than the one Anadarko had accepted from Chevron, opening a bidding war for one of the U.S. companies with the strongest positions in the Permian.
Occidental Petroleum sent a letter to Anadarko’s board of directors on April 24, offering “a superior proposal” to buy Anadarko for $76.00 per share, in which Anadarko shareholders would receive $38.00 in cash and 0.6094 shares of Occidental common stock for each share of Anadarko common stock.
The $76.00 per share cash-and-stock proposal from Occidental represents a premium of around 20 percent to the current value of the transaction with Chevron that Anadarko had accepted, Occidental said in a statement.
Today, Anadarko said that it “is resuming its earlier negotiations with Occidental because Anadarko’s board of directors, following consultation with its financial and legal advisors, has unanimously determined that the Occidental Proposal could reasonably be expected to result in a ‘Superior Proposal’ as defined in the Chevron Merger Agreement. The Occidental Proposal reflects significant improvement with respect to indicative value, terms and conditions, and closing certainty as compared to any previous proposal Occidental made to Anadarko.”
While negotiations are being held, the Chevron Merger Agreement “remains in effect and accordingly the Anadarko board reaffirms its existing recommendation of the transaction with Chevron at this time,” Anadarko said, noting that there is no guarantee that the talks would necessarily result in a superior transaction than the one pending with Chevron.
Source: Oilprice.com
Energy Economist asks 17 questions about Aker Energy Deal
A Petroleum Economist and Political Risk Analyst Dr Theo Acheampong has waded into the ‘controversial’ Aker Energy deal by asking about 17 questions regarding the deal.
Policy Think Tank MANI-Africa and Ministry of Energy seem to be at war over the 450-550 million barrels of oil discovered by Aker Energy in the Pecan South-1A well in the Deepwater Tano Cape Three Points (DWT/CTP) block offshore Ghana.
According to IMANI-Africa, the Petroleum Agreement (PA), covering the new discovery, worth more than $30 billion, expired in 2014 and by law, did not automatically fall under the company’s PA with the government.
At a media engagement in Accra, Senior Vice President of IMANI, Kofi Bentil, asked the government not to approve Aker Energy’s Plan of Development submitted for approval last month, in its current form.
According to Mr Bentil, the new discoveries, by law, ought to be negotiated under a new PA as stipulated by the Petroleum (Exploration and Production) Act, 2016 Act 919 but the government seemed uninterested in the gains.
He said if the government failed to clarify circumstances surrounding the agreement with Aker Energy, IMANI and its associates would go to court to seek declaration on the ownership on the discovery.
But the Energy Minister, John-Peter Amewu, at a news briefing in Accra, described the claims by IMANI as total falsehood.
In providing some background information on the agreement, Mr. Amewu said the PA covering the DWT/CTP contract area operated by Aker Energy was executed on 8thFebruary, 2006, between the Government of Ghana -GNPC, AMERADA HESS Corporation, Lukoil-and FUELTRADE subsequently formed in 2015.
He disclosed that Fueltrade’s participating interest was set at 2% for which it paid about US$9 million with a performance guarantee of US$2 million.
“The contract area has 7 discoveries namely pecan north, almond, cob, beech, pecan, paradise and hickory north. The first five are oil discoveries while paradise and hickory north are gas discoveries. Aker Energy acquired the interest of AMERADA HESS Ghana Limited in February 2018 and proceeded to continue the unfinished works under the programme of appraisal to HESS,” he added.
The Energy Minister criticised IMANI for misinforming Ghanaians on a potential loss of US$30 billion to the country, if the government failed to negotiate a new petroleum agreement.
“IMANI tried to alarm Ghanaians about a potential loss of US$30 billion to the country if the government failed to negotiate a new petroleum agreement with new terms with the DWT/CTP partners. This is absolutely false,” he said.
Below are Dr. Theo Acheampong’s questions:
BEGGING QUESTIONS ON OIL AND GAS INDUSTRY
1. When was the original Hess Agreement ratified by Parliament for the Deepwater Tano Cape Three Points (DWT/CTP) block offshore Ghana, and what was the total exploration period duration?
2. When did exploration cease; and did the Minister of Energy give any extensions, when and why?
3. At the time of Hess’ exit in June 2018, what was the status of the seven (7) discoveries namely Pecan North, Almond, Cob, Beech, Pecan, Paradise and Hickory North?
4. Were these seven (7) discoveries all appraised and what was the result of the appraisal for each of the discoveries?
5. Did Hess declare commerciality on any of the discoveries? If so, which of the discoveries and when were these commercialities declared for each discovery?
6. What was the status of the Pecan discovery at the time of Hess’ exit? How many wells had been drilled? Was any well drilled during the appraisal period?
7. What are the current dimensions of the production and discovery area for the Deepwater Tano Cape Three Points (DWT/CTP) block offshore Ghana?
8. What was the objective of the four-well new drilling programme by Aker approved by the Petroleum Commission for Pecan-4A, Pecan South and Pecan South East?
9. What are the exact locations of the four new ‘appraisal’ wells and what is the status of the appraisal report?
10. Is there any pressure communication between the reservoirs of the Pecan4A and Pecan South and main Pecan field — that is, is this an extension of the same field, and if it is not, then is that now what the petroleum agreement defines as a discovery?
11. What is the position of the Petroleum Agreement, E&P law and other regulations on the classification of exploration or appraisal wells including new exploration activity during the appraisal period?
12. What were the factors that led to Hess’ decision to sell its equity in the field, and why did it fail to submit a Plan for Development and Operations (PDO)?
13. What is the format for submission of a Plan for Development and Operations (PDO)?
14. Did the new operator follow this prescribed format when it submitted its PDO on 28 March 2019?
15. What is the procedure/process for approving a PDO?
16. Who is telling the truth: is the basis for IMANI’s $30bn gross valuation of the Deepwater Tano Cape Three Points (DWT/CTP) block right given the known reserves and resources?
17. What is the procedure for extension of petroleum agreements?
Tanzania approves $309m for Stiegler’s Gorge contractor
The Tanzanian government continues to provide support for the development of the Stiegler’s Gorge Hydropower project on Rufiji River, with the latest being the issuance of an advance payment totaling $309.645 million to Egyptian company- Arab contractors to enable the construction of the project.
According to the Citizen, the advance payment forms part of 15% of the total cost of the project, furthermore, clause 14.2 of the signed contract stated that the 15% advancement payment has been portioned at 30% local and 70% foreign currency (US Dollar).
Permanent Secretary Ministry of Energy Dr Hamis Mwinyimvua elaborated: “What is being paid…is 70% foreign portion of the advance payment. The local portion (30%) will be settled once contractual processes are finalised by the contractor.”
The Citizen reports that on 15 April 2019, CRDB and UBA banks issued Advance Payment and Performance Guarantees to the Contractor-the joint venture of Arab Contractors and Elsewedy Electric S.A.E as per the project requirements.
“The issued guarantees triggered the next milestones of the project including settling of the advance payment by the client which is happening today,” said Dr. Mwinyimvua.
The minister added: “I’m very confident that the advance payment settled today will enable the contractor now to fully mobilize and immediately begin implementation of the works as agreed.”
Meeting environmental requirements
Earlier this year Tanzania’s National Environmental Management Council approved the construction of the planned 2,100MW hydroelectric dam and assured that it will not have adverse impact on the local ecology.
“We are determined to make sure that all water sources in Morogoro, Iringa, Dodoma, Njombe, Mbeya and Ruvuma regions are well protected and sustained,” said the director general of the Council, Dr Samuel Gwamaka.
The development of this hydropower project has been surrounded by a lot of criticism from various stakeholders because of its location close to the Selous Game Reserve.
However, addressing the concerns, President John Magufuli previously said: “After all, only 3.5% of the total area in the reserve will be used for hydro-electric power generation. However, wildlife will get enough drinking water compared to the past.”
Ghana: $95 million was ‘wasted’ without a single oil discovery – Dr Amin reveals
Dr.Mohammed Amin Adam, Deputy Minister for Energy
A Deputy Minister for Energy in-charge of Petroleum, Dr Mohammed Amin Adam, has revealed that Ghana spent a total of US$95 million dollars between 2013 and 2016 for drilling oil wells but none resulted in the discovery of crude oil in commercial quantities.
According to him, 13 petroleum contracts were signed between the previous government and oil investors with US$880 million set aside for exploration works.
Dr Amin Adam explained that it was for that reason the current administration decided to change its strategy to pursue aggressive exploration in order to increase the country’s oil reserves and production before the Jubilee Oilfield got exhausted.
He disclosed this at a news conference in Accra, to respond to some concerns raised by IMANI Africa, a policy think tank, on alleged omissions and/or commissions on the part of Government in respect of the Petroleum Agreement between government and Aker Energy.
“All the oil discoveries in Ghana were petroleum contracts signed under the government of President J. A. Kufuor and those that were signed from 2013 to 2016, which is the highest number of petroleum contracts signed by government of Ghana, as I speak to you, not a single well has been drilled,” he said.
This, he said, would increase the country’s revenue from oil production in order to speed up the country’s infrastructural development and improve the welfare of the people.
The Deputy Minister said the nation had between 55 and 60 per cent net oil stake in the DWT/CTP oil block as agreed in the petroleum agreement with Aker Energy.
IMANI Africa, a policy think tank, on Thursday, April 25, stated at an advocacy programme raised concerns about various omissions and/or commissions on the part of the Government in respect of the Plan of Development submitted by Aker Energy covering the Deepwater Tano/Cape Three Points (DWT/CTP) contract area.
Responding to why the Ghana National Petroleum Corporation (GNPC) failed to acquire the 10 per cent participating interest in the DWT/CTP block in 2015, Dr Adam said although funds were allocated for that purpose the GNPC Management at that time failed to seize that opportunity.
Therefore, when Aker Energy acquired the right of interest of HESS in the DWT/CTP, the nation lost the opportunity to acquire the 10 per cent participating interest.
More so, the Management of the GNPC had used the funds meant for that purpose in guaranteeing for the Karpower deal and other transactions, which did not fall under its mandate.
Dr Adam called for investigations into reasons that motivated the GNPC to use the funds for the 10 per cent participating interest in guaranteeing for the Karpower project.
Aker Energy Deal: Senior Journalist faults IMANI-Africa; urges them to apologize
Abdul Malik Kweku Baako
A seasoned Journalist and Editor of the New Crusading Guide, Abdul Malik Kweku Baako has asked IMANI Africa to apologise for creating an impression of a conflict of interest in Aker Energy deal.
Policy think tank, IMANI Africa, at a press conference in Accra on Thursday, April 25 accused the Chief Executive Officer of the Ghana National Petroleum Corporation (GNPC), Dr K. K. Sarpong, of engaging in a conflict of interest situation in a US$4.4 billion petroleum agreement between Ghana and Aker Energy Ghana Limited.
Vice President of IMANI Africa, Mr Kofi Bentil, alleged that Dr Sarpong “and his family own Fueltrade,” one of the local partners of the Deepwater Tano/ Cape Three Points (DWT/CTP) Petroleum Agreement, with a two per cent stake.
Aker Energy is the operator of the field with a 50 per cent stake and recently submitted a US$4.4 billion plan of development to the government for approval to allow for development and production activities to start.
With Dr Sarpong being the CEO of GNPC, another partner of the DWT/CTP with a 10 per cent stake, Mr Bentil said it was ethically wrong for a company he and his family own to also be a partner of the field.
“It does not look right. We put it out here publicly because we want clarification.
“We are not against Ghanaian participation in our oil industry but protecting the public purse includes avoiding such conflicts,” he said at the press conference.
“It is a zero sum game; what Ghana has, Aker does not have. So, if it is true that the company is negotiating with itself or there are powers on both sides, I think it is a matter of concern and we need some answers concerning that one,” he added.
Reacting to the alleged conflict of interest raised by IMANI on Joy FM on Saturday, April 27, Kweku Baako said: “IMANI has been doing a good job and without organization, like that, we wouldn’t have been where we are today but with the issue of K.K Sarpong, IMANI and Kofi Bentil goofed.”
“There is a hint of innuendo there even though you say allegedly.”
Bulk oil distributor, Fueltrade has also refuted claims by Senior Vice President of IMANI Africa that it is owned by the CEO of the Ghana National Petroleum Corporation (GNPC), K. K. Sarpong.
Fueltrade in a press release denied Dr Sarpong’s involvement in the company.
The statement said “Fueltrade Ltd wishes to state that its shareholders are Messrs Chris Chinebuah and Dzifa French Cudjoe, who have the full legal and beneficial interest in the company.
“Fueltrade categorically states that it is not legally or beneficially owned by Dr. K. K. Sarpong and/or his family.”
The company questioned why IMANI, with all the time it had before the press conference did not verify their claims with the Registrar-Generals office but went ahead to spew such falsehood.
They are “convinced that Imani Africa and Kofi Bentil did not undertake any verification because they set out to act and speak with malice and/or reckless disregard for the truth, in order to achieve a collateral purpose.”
But Vice President for IMANI Africa also denied that the polity think tank accused Dr K.k Sarpong wrongly.
According to him, it was a question they put forward for the needed clarification to be given to the public on the subject.
Russia Meets Ukraine, Belarus, Poland To Discuss Tainted Oil
Russia is holding talks with Ukraine, Poland, and Belarus over a contamination of its crude oil that had Poland, Slovakia, Ukraine, and Belarus shut down their sections of the Druzhba pipeline earlier this week, Reuters reports.
The discussion will focus on the removal of tainted oil from the pipeline.
The problem has strained relations between Moscow and Minsk as Belarus was the first to report the problematic oil last week, warning that it could damage refinery equipment. The oil was contaminated with organic chlorine, a substance used in oil production to boost output but dangerous in high amounts for refining equipment. The amounts of the chemical were found to be at levels much higher than the maximum allowable amount.
A TASS report from yesterday quoted Russian Deputy Prime Minister Dmitry Kozak as saying that Belarus would be provided with clean oil on Monday, adding that “A considerable portion of poor quality oil has already been evacuated to tanks in the territory of Russia.”
The official also said, “The issue of compensation has not been raised so far. The issue was put forward regarding the need to increase indicative balances for oil product supplies to the domestic market. Discussion is in progress.”
Though a rare occurrence, oil contamination could have longer-lasting effects on European refineries as not all of them have enough oil in storage to keep operating as usual. Germany’s refining industry is fine for the time being with ample supplies, but Polish refiners could face some challenges in finding alternative crude oil supplies.
The Druzhba pipeline that runs from Russia to Germany with branches into countries along the way has the capacity to transport up to 1 million barrels of crude daily. Yet the contamination has also been found in tanker cargoes loaded at the Ust Luga port.
According to Reuters trading sources, at least five vessels belonging to Rosneft, Surgutneftegaz, and Kazakh companies have set sail from the terminal with contaminated cargo. The buyers of the cargoes include Total, Trafigura, Vitol, and Equinor.
Source: Oilprice.com
Total profit falls despite output growth
French oil and gas company Total recorded a 4 percent decrease in first quarter profit while its production grew by 9 percent.
Total on Friday posted an adjusted net profit of $2.8 billion for the first quarter of this year, a 4% decrease when compared to $2.9 billion in the same period last year.
Commenting on the results, Chairman and CEO Patrick Pouyanne said: “Markets remained volatile with Brent averaging $63/b in the first quarter, down 6% from last year, while natural gas prices were down 11% in Europe and 30% in Asia. Adjusted net income was $2.8 billion this quarter, down 4%, and return on equity held steady at 12% this quarter.
“With strong growth in production that reached 2.95 Mboe/d, up 9% year-on-year, the Group’s cash flow (DACF) increased by more than 15% year-on-year to $6.5 billion (B$), driven by the ramp-up in cash-accretive projects, including Egina in Nigeria, lchthys in Australia and Kaombo in Angola.”
Total’s production was also positively impacted by increase in portfolio effect linked in particular to the integration of Maersk Oil’s assets. It was negatively affected by the natural decline of the fields and to planned maintenance, notably in Qatar.
According to Total, since the start of the second quarter 2019, Brent has traded at around $70/b in a context of compliance with OPEC quotas, disrupted production in Venezuela and uncertainty in Libya. The environment remains volatile, however, with uncertainty around the evolution of non-OPEC supply and the impact of global economic growth on demand.
The company maintains its spending discipline in 2019 with a net investment target of 15-16 B$, cost savings of 4.7 B$ and an average production cost of $5.5/boe.
Production growth should exceed 9% in 2019, thanks to the ramp-up of projects started in 2018 and the startups this year of Kaombo Sul in Angola, lara 1 in Brazil, Culzean in the UK and Johan Sverdrup in Norway. To take advantage of the favorable cost environment, the Group is working to launch profitable projects, including Mero 2 in Brazil, Tilenga & Kingfisher in Uganda and Arctic LNG 2 in Russia.