Exxon Mobil's LNG project in PNG attacked

Villagers in Papua New Guinea attacked Exxon Mobil's liquefied natural gas project late last week, burning heavy machinery and using high-powered weapons to damage construction equipment, a newspaper reported.

The attack took place on Friday night at Kaiam, Papua New Guinea, near the project's Kopi LNG facility, Papua New Guinea's The National paper reported.

The attacks were part of ongoing land disputes within the footprint of the $15 billion PNG LNG project.

Residents of the area have been frustrated by what they see as their exclusion from participating in the initial stages of construction of PNG LNG's 6.6 million tonne per year processing plant that began earlier this year, the paper said.

No one was wounded in the attacks, which took place at the worksite of Australia-based Clough Curtain joint venture, according to the paper.

Media reports have suggested that the project could be delayed due to landowner disputes with the government.

Exxon Mobil officials could not immediately be reached for comment.

At a conference in Singapore last week, Papua New Guinea's minister of planning and development, Paul Tiensten, said there was 'infighting' among the landowners affected by the project, but said the project was still expected to stay within the original cost estimate and start exporting LNG in 2014.

Tiensten said some of the approximately 60,000 landowners affected by the project question the division of benefits from the project.

LNG benefit-sharing negotiations late last year resulted in violence in Port Moresby and earlier this year, a fatal gunbattle erupted between tribal groups arguing over a share of the project.

The Papua New Guinea government holds equity in the project, while Exxon Mobil is the majority stakeholder. Other equity holders include Oil Search, Santos, and Japan's Nippon.

PNG LNG has long-term supply agreements with China's Sinopec , Japan's TEPCO and Osaka Gas, and Taiwan's CPC.

Shell Increases Oil Trade with Iran

While its competitors bowed to international pressure against trade with Iran, the U.K.-registered oil giant Shell increased its purchase of crude from the isolated regime over the summer, according to a report in Tuesday's Guardian.

The British broadsheet says it obtained confidential documents revealing that Shell paid Iran at least $1.5 billion for crude oil in the summer months alone, as competitors including BP halted orders from the Islamic Republic.

Iran is under strict economic and military embargoes implemented by the United Nations Security Council and many countries unilaterally, including, of course, the United States.

Shell's only response to the Guardian's report was to insist that the purchase of Iranian crude in no way violates any sanctions.

The importation of oil from Iran has not been banned by the sanctions currently in place, but most large petroleum companies have voluntarily stopped purchasing from the nation.

Any money paid to Iran for crude goes to the state-owned oil company, and in turn to help fund the government. Run by Islamic clerics and hardline President Mahmoud Ahmadinejad, the Islamic government has made the development of its nuclear power program a cornerstone policy.

The U.S. government and many of its allies insist the energy program is hiding a clandestine effort by the Iranians to develop nuclear weapons capability - a charge the country's leaders flatly deny.

British foreign secretary William Hague said recently that the U.K. does not encourage trade with Iran due to "serious concerns about the nature of Iran's nuclear program," reports the Guardian.

Asked to comment on the story Monday night, a spokesman for Hague's office told the newspaper that the government was, "serious about intensifying the pressure on Iran to return to the negotiating table."

SapuraAcergy chooses 6G acoustic positioning technology

SapuraAcergy has become the first company in Southeast Asia to take advantage of the benefits available from Sonardyne’s new 6G (Sixth Generation) acoustic positioning technology. The subsea engineering and installation contractor has taken delivery of US$1.55 million worth of 6G products from Sonardyne for use in projects in South East Asia.

SapuraAcergy will be upgrading its conventional and deepwater construction vessel, Sapura 3000. The vessel’s existing Sonardyne Ranger Ultra-Short BaseLine (USBL) positioning system will be upgraded to the latest Ranger 2 standard that interfaces with the new 6G product range.

In addition to the upgrade, Sonardyne is trialling its Lodestar subsea Inertial Navigation System on the Sapura 3000’s ROV system to improve pipe touch-down monitoring.

Over the next two years, SapuraAcergy will, use the 6G equipment for precise positioning of structures and pipelines on projects in South East Asia.

The new range of Sonardyne 6G products has been developed to produce innovative navigation, positioning and communications solutions for a wide range of subsea operations.

Aker wins Kanowit subsea orders

Aker Process Systems Asia Pacific has won two subsea contracts from Petronas Carigali for subsea equipment offshore Malaysia.

One is for a subsea production system and associated services for the Kanowit field. The other involves delivering 5,600 m (18,372 ft) of subsea umbilicals to tieback the field’s subsea wells to the Kumang Cluster, offshore Bintulu, Sarawak.

The subsea production system engineering, procurement, and construction work order is worth around $45 million. It follows a frame agreement signed by the two parties last year covering equipment supply over a period of three years or until completion of Kanowit, which is Petronas’ first subsea project in the Malaysian sector.

The production system will comprise two subsea trees, wellheads, a subsea control system, a manifold with a high integrity pressure protection system, a pipeline-end manifold, and all tie-in equipment.

Aker Solutions' manufacturing base in the Port Klang Free Zone will deliver the equipment, with all subsea hardware due to be completed in 2011.

The umbilicals contract, valued at $5 million, covers project management, engineering, procurement, and manufacturing of subsea steel tube umbilicals and auxiliary equipment to connect the host platform to the Kanowit subsea field.

Aker Solutions' umbilical facility in Moss, Norway, will be responsible for this consignment, which should be delivered by next spring.

The Kumang Cluster project is 250 km (155 mi) offshore Bintulu. Phase 1 is based around a central processing platform at the Kanowit field (KAKG-A), and a drilling platform on the F9 field (F9JT-A) and the Kumang field (KUJT-A). The facilities will supply gas to the MLNG-2 terminal in Bintulu.

Petronas reviews crude price formula

Petronas is reviewing its crude price formula, paving the way for a change for the first time in eight years, industry sources said yesterday.

The move comes after two other South-East Asian producers – Vietnam and Indonesia – said they planned to review their price formulae, abandoning volatile local benchmarks in favour of European bellwether Brent to price their crudes.

Petronas has been using 100% Tapis prices from the Asian Petroleum Price Index (APPI) since 2002.

The company has sought feedback from market participants to change the formula to 25% Tapis APPI and 75% of prices from Japan’s RIM and Platts. Other benchmarks such as dated Brent and Dubai, which have higher liquidity, may be considered. — Reuters

Murphy, Petronas farm into Brunei block

Total has signed a deed of amendment (DOA) with Petroleum Brunei concerning deepwater block CA-1, previously known as Brunei block J.

The DOA amends the original production sharing contract for the block, signed in 2003, and allows Petronas Carigali Overseas and Murphy Oil subsidiary Canam Brunei to join the existing consortium. Total will remain operator with a 54% interest, the other partners being BHP Billiton and Hess.

Deepwater block CA-1 covers over 5,850 sq km (2,258 sq mi) in water depths ranging from 1,000- 2,750 m (3,280-9,022 ft). It is around 100 km (62 mi) northwest of the coast of Brunei Darussalam.

Marc Blaizot, senior VP, Geosciences at Total Exploration & Production, said the new agreement would ‘‘enable exploration operations to resume on this promising block, and a drilling campaign to start within a short period of time based on the seismic studies already performed’’. - offshore-mag

Malaysia, Brunei to develop offshore oil blocks

Malaysia's Petronas and Brunei's government have agreed to jointly develop one of two offshore blocks off Borneo island, the Malaysian government said on Wednesday.

The offshore exploration areas, formerly designated as Block L and Block M and now renamed CA1 and CA2, were awarded to Petronas and Murphy Oil Corp in 2003 but were cancelled in April after Malaysia and Brunei agreed that the blocks were not part of Malaysia.

Petronas and Brunei on Tuesday signed the production sharing agreement for Block CA1. Both countries hoped that the agreement for Block CA2 would be finalised soon.

"Both leaders noted that the signing represented a significant step forward in the development of cooperation between the petroleum authorities of both countries in this area," the Malaysian government said in a statement.

Malaysia and Brunei also said there was potential for future cooperation beyond Block CA1 and CA2 and a possible joint venture in a third country in oil and gas exploration. - Reuters

OMV to buy Petronas interests in Pakistan

OMV AG has signed an agreement to purchase the exploration and production interests in Pakistan of Petronas International Corp. Ltd.

The interests include the Mubarak, Mehar, and Daphro exploration licenses and Mehar and Mubarak development and production licenses. Terms of the agreement, which must be approved by the government, weren’t disclosed.

The only current production is from Rehmat gas field on the Mubarak block in Sindh Province, where output averaged 14 MMscfd of gas and 34 b/d of condensate in 2008-09 but is declining, according to Government Holdings Private Ltd. (GHPL), a partner.

A later discovery on the block, Saqib 1A, tested 25 MMcfd of gas in March 2008 and is being developed to produce through the Rehmat gas plant.

A gas discovery on the Mehar block in Sindh Province has been approved for development. GHPL estimates the field holds 564 bcf of gas and 82 million bbl of condensate in place.

Saipem Wins Onshore Contracts Worth Around $500 Million

Italian oil services company Saipem SpA said it has won onshore contracts in Africa worth a total of around $500 million.

In Algeria, Sonatrach has awarded Saipem a contract at the Hassi Messaoud oil center.

Saipem has also received a contract from the joint venture between the Nigerian National Petroleum Corp. and Chevron Corp. (CVX) for engineering, procurement and construction at the Olero Creek Restoration project.

In Congo, the Porte Noire Port Authority has awarded Saipem an engineering, procurement and construction contract to build an 800-meter-long pier.

Syria, Iraq to build pipeline

Syria and Iraq have signed an initial agreement to build two crude oil pipelines to the Mediterranean Sea, an Iraqi official said.

Iraqi government spokesman Ali al-Dabbagh said the larger pipeline with a 1.5 million barrel daily capacity would carry heaver crudes and the smaller pipeline with a 1.25 million daily capacity would carry lighter crude oil, the Global Arab Network Web site reported Sunday.

The Iraqi spokesman said a third pipeline for gas, already approved by his government, will also be constructed by the two countries in the future.

The Iraqi government has signed a series of agreements with major international oil companies to quadruple its crude oil production capacity in the next seven years, with the aim of raising Iraq's oil production to a 12 million barrel daily capacity, the report said.