Shell & Petronas Preparing Award for Iraq Oil Wells

Shell and Petronas are in the process of awarding a deal to drill new oil wells at Iraq's super giant Majnoon oil field which will include engineering, procurement and construction deal to build various production installations at the field.

Potential firms in the bidding lists are reportedly Halliburton, Weatherford International, and Petrofac which will be responsible to develop Majnoon to175,000 barrels a day by 2012.

The oil field is owned by Shell of 45%, Petronas 30%, and Iraq's state-run Missan Oil holding 25%.

ExxonMobil Enters Oil Recovery Enhancement Project with Petronas Malaysia

ExxonMobil has reportedly entering a joint venture project with Petronas Malaysia for a recovery of an oil field, Tapis expected to begin in 2013.

The project which is estimated at $1 billion is considered by many timely in concordance with Petronas's recent announcement of re-shifting its focus backs towards domestic exploration and production and away from its wide-reaching international portfolio. It will look at reviving the 1980s Tapis which is regarded as one of the best API grades in the world and was used extensively in the Asia-Pacific benchmark.

New LNG Plant in Australia's Queensland

Australia's recent four mega-projects involving LNG plants have seen second approval under the environmental prior to signing of the official project.

BG Group PLC's proposed liquefied natural gas project in Queensland is the second project to after Santos Ltd. (STO.AU) and Malaysia's Petroliam Nasional Bhd or Petronas, received the Queensland government approval last month.

Australia's new Prime Minister Julia Gillard, who was swarn in Thursday, extended an olive branch to furious resources companies by offering to negotiate a compromise on the tax, but there's no certainty she'll give much ground.

The third project is a joint venture between ConocoPhillips and Origin Energy Ltd. with the last one a standalone venture by Royal Dutch Shell PLC.

All projects are now waiting for tax reforms from the Australian federal governments.

Mergers & Acquisition: $11 Billion Deal between Schlumberger and Smith International

As expected by analysts what would be a continual strong year for mergers and acquisition activities in 2010 is beginning to unveil when a $11 Billion deal between Texas-based oilfield tech services giant Schlumberger Ltd and Smith International Inc.

The merged between the two companies is aimed for access of technical leap to develop unconventional gas plays focusing on shale gas is going to be produced. In financial terms, the merging will gives technical advantage in drilling and bring down the cost per horizontal well.

Mergers & Acquisition (M&A) for 2010 Outlook - Oil & Gas

It is a sign of recovery for the oil and gas outlook where merger’s & acquisition (M&A) value in Upstream oil and gas industry is estimated at $46 billion for the year of 2010. In 2009, this value was catapulted to $153 billion.

In 2009, most of the buyers for the M&A came from National Oil Companies representing 50% of all deals greater than $1 billion in 2009 and similar trend is forecasted for 2010. International oil companies like ExxonMobil however, took the unconventional route with assets acquisition of $41 billion purchase of U.S. independent XTO Energy. China lead the M&A game in 2009 with similar prospect expected for 2010.

It is expected for 2010 that M&A activities will revolve around risk management for current portfolio balancing; venturing into new projects with shared risks and for better management of current resources.

Malaysia’s Proton Lubricant Business Reaching 2 Million Litres Mark

Malaysia's PETRONAS and Proton Holdings Bhd, the national car company are in collaborations to grow its lubricant business.

It is expected that the collaboration will amount up to two million litres in the next two to three years.

The two companies under the agreement gives Petronas the exclusive rights as Proton partner for all its domestic and global original equipment manufacturered (OEM) lubricants and functional fluids. Petronas in turn will support Proton to produce lubricants that cater specifically to its specific requirements.

Burma Military Jinta Privatising Oil and Gas

Burma’s military government, widely known as Junta is planning to privatize Burma's 50 million oil reserve industry.

This following rumours that a meeting between petrol and diesel business and the government was held in Naypyitaw.

The Junta government had earlier reduced its subsidy for petrol in the country.

Sibur Holdings to Build Worldscale Polypropylene Plant

Russian's petrochemical group of companies, Sibur Holding is planning for a worldscale polypropylene plant which will also become the biggest polypropylene complex in Russia.

The plant will utilize German's technology company, Linde for building the PP plant. The polypropylene plant will have a nameplate capacity of 500,000 tpa capacity.

The PP chemical plant will be located in Tobolsk in the Tyumen region, Russia.

China Increasing Oil Stock

As part of China's third phase strategic oil reserves, the country has announced that it will buildup its reserve capacity as commented by China's National Energy Administration Head, Zhang Guobao. China is planning to be in the league of international standard of developed countries of at least 90 days of oil rerserve.

Given China's hunger for oil, this would be a huge requirement and work will be starting on 5.4 million cubic meter oil reserve in Karamay City for a gross combined storage for the country amounting to 26.8 million cubic meters.

Improving Economy Boosting Oil Demand

The International Energy Agency had revised its forecast for world oil demand on improved Asian economic activity however most likely will still be offset by countries like Russia who are pumping more crude than the added rise in consumption.

The agency which is based in Paris revised the forecast to 83.94 million barrels a day. The world is still having a huge reserve of oil supply with non-Organization of Petroleum Exporting Countries producing more supply than previously expected. Russia, the world's biggest oil producer churns out a total of 360,000 barrels a day as new fields being developed in Western Siberia and enhanced oil recovery techniques are used to squeeze out more hydrocarbons from existing fields.

Despite current projection, some analysts think Russia will pump around 9.7-9.8 million barrels a day on average this year rather than 10.07 million barrels a day as expected by the IEA with global crude demand to rise 1.6% next year outpacing non-OPEC supply growth of about 1% in 2010.

Countries like the U.S which is the biggest consumer for oil and energy has 8 days higher average on its inventory which stands at 61.7 days this year. China has indicated a move to follow the same lead.

Sasol - Petronas Joint Feasibility Study on Uzbekistan GTL

Sasol is in the stage of doing feasibility study with Petronas for a Gas-to-Liquid (GTL) proposition in Uzbekistan. The two giants, Sasol which is the biggest producer of motor fuels from coal and Petronas, one of the seven sisters will be doing the study overseen by a joint-venture company.

The GTL plant which will be using Sasol's technology is rumoured to produce 1.3 million tonnes of fuel components including diesel, kerosene and liquefied petroleum gass similar to Sasol's GTL plant in Qatar.

Petronas Entering Cameroon

Malaysian national oil company, Petroliam Nasional (Petronas) and Noble Energy have been granted a production sharing contract offshore Douala in Cameroon. Societe Nationale des Hydrocarbures (SNH), the national petroleum company of Cameroon has confirmed that the deal was to develop the Gulk of Guinea with exploration rights worth US$119 millions.

The deal is seen as an extension to Noble-Petronas current involvement in Cameroon's YoYo gas project.

The exploration right is reported to contain oil reserves of between 40 million and 70 million bbl with SNH holding 25% interest in production right. Both Petronas and Noble Energy are given a 25-year exploitation license renewable for ten additional years.

Malaysia Regulates New Petrol Quality RON95

Malaysia has requested its National Oil Company, Petronas to supply the country with new petrol quality of RON95 instead of the current available petrol quality RON92 and RON97. The country's administration move will eliminate RON92 to better position with global petrol quality.

The move has been getting different response from the Malaysian people. The move will help Malaysia as a whole to save subsidy by supplying a lower quality petrol RON95 at a price expected to be as close to the current RON97. However, the government will also increase the price of RON97 which expected by analysts to be the country's premium petrol. Whilst many of today's car are designed to run by RON95; some of outdated models are incompatible.

The move is also likely to incur significant cost for PETRONAS under its marketing arm, PETRONAS Dagangan Bhd as RON95 petrol is formulated with a detergent to prevent the build-up of deposits that degrade the engine's performance. The company has said that the change involves the whole supply chain from refineries to delivery of the fuel to the consumers which comes September 9 is likely to be followed by other oil companies like Shell, BHP, Caltex and Exxon Mobil in the country as set by the Malaysian government.

Malaysian Having Closer Tie with Iran on Oil Exploration

Malaysian under one of the country's state Chief Minister of Kedah had a discussion with Iran for investment in oil exploration and exploitation in Iran. Iran Ambassador to Malaysia Mehdi Khandaqabadi assuring Iran's great potentials through economic and cultural cooperation with Iran and Malaysia would transpire into benefits for both countries.

Also on discussion was to declare the two islands of Malaysian Langkawi and Iranian Kish as sister cities, promoting better ties and perhaps investment opportunities through government support.

Floating USD20 Billion of Oil & Gas Assets

Derrick Petroleum Services in their comprehensive study of the Top 1000 global oil and gas companies has identified that as much as $20 billion of oil and gas assets excess currently for sale worldwide. The whole assets are currently floating through 69 separately announced transactions.

Derrick estimation only takes into account deals with value greater than $10 million with North America leading the inventory with over $9 billion followed by Africa (22%), Europe, South America, Asia, Australia and Middle East.

Some of these assets could worth more due to their potential in future discoveries such as Devon Energy's offer for its four discoveries (Kaskida, Cascade, Jack and St. Malo) in the deepwater Gulf of Mexico.

It is interesting to note that most of the potential buyers are Middle Eastern and National Oil Companies compared to the usual Western investors and public listed companies.

Petronas to Produce 5 Billion cm of Gas in Turkmenistan

The Turkmenistan government had announced that Malaysian state oil firm Petronas could produce up to 5 billion cubic metres of gas annually in the Turkmen portion of the Caspian Sea with opportunity to double up the capacity in the near future.

Petronas had invested about $2 billion in the Caspian shelf project since 1996 and is likely to be the sourced for the planned Nabucco project. The Nabucco project will be responsible to ship gas volumes of Central Asian gas to Europe.

Italy Triton LNG Terminal Postponed

GDF Suez has postponed the start-up of its Triton LNG terminal in Italy from 2012 to 2013. However, the date is yet to be confirmed as the company has not taken the final investment decision. The comissioning date of 2013 may be due to lengthy process of protocols with the local and national authorities of the LNG terminal. Italy is venturing into many LNG projects as Qatar had earlier agreed to lower prices of LNG over the long run. The agreement was much influenced by the European countries as a whole.

Japanese Economy Taking Hit

Japan, who has been prone to deficit for nearly 30 years is experiencing its first deficit indicating the economy trouble wave is rippling towards Japan. Japan posted a trade deficit of Y725.3bn in fiscal 2008. However, the government of Japan is confident that the economy is in its state for a rebound especially in the indsutrial production and exports. The petrochemical industry in the country is yet to see a clear signs of rebound and the industry is now in wait and see situation.

Petchem Overcapacities Expected

Petchem industry is feeling the pinch as industrial analysts are worrying on overcapacities including Bayer CEO in the recent interview. The financial crisis has turned the chemical and plastics industry into a huge overcapacities at least for 2009 and 2010 petrochemical outlook.

The mostly hit industry is plastics and polymers business used in the auto industry which is not building a huge industry overcapacities and inventories. Bayer CEO also predicted that growth in Bayer's pharmaceuticals and crop chemicals businesses to be much affected in 2009.

$9 Billion Refinery Investment Needed

As the economy is collapsing it is getting harder and harder for oil and gas projects to seek external funds to invest in their projects. PetroSA who is planning for a $9 billion refinery project is currently in the same situation as the state-owned oil and gas company starting negotiations with potential investors.

PetroSA is trying to get external fund for its new capacity 400,000 barrels a day refinery in Coega, answering South African Petroleum Retailers' Association call for security of oil supply via partnership between the government and the private sector. The country is currently facing poor sustainable oil supply due to low buffer in the country resulting from poor stock planning.

PetroSA vice-president of new ventures: midstream, Joern Falbe, said on Friday that PetroSA had "from the beginning" indicated that it was looking for a partner in the $9bn project.