Home' Trinidad and Tobago Guardian : April 21st 2016 Contents BG8 ENERGY
BUSINESS GUARDIAN www.guardian.co.tt APRIL 21 • 2016
Energy company Statoil and partners Repsol Sinopec
Brasil and Petrobras have struck oil off the coast of
Brazil, in a deepwater offshore area called the Campos
Basin, the Norwegian firm said on Monday.
The appraisal well encountered a 175-meters hydro-
carbon column and produced around 16 million stan-
dard cubic feet of gas and 4,000 barrels per day of
oil, Statoil said.
Repsol Sinopec Brasil is currently the operator with
a stake of 35 per cent, but Statoil will take over as
operator in the third quarter. It has a stake of 35 per
cent, while Petrobras holds the remaining 30 per
Repsol Sinopec Brasil is a joint venture of Spain s
Repsol and China s Sinopec. Reuters
Adeal to freeze oil output by
OPEC and non-OPEC
producers fell apart on
Sunday after Saudi Arabia
demanded that Iran join in
despite calls on Riyadh to
save the agreement and help prop up crude
The development will revive oil industry
fears that major producers are embarking
again on a battle for market share, especially
after Riyadh threatened to raise output steeply
if no freeze deal were reached.
Iran is also pledging to ramp up production
following the lifting of Western sanctions in
January, making a compromise with Riyadh
almost impossible as the two fight proxy
wars in Yemen and Syria.
Some 18 oil nations, including non-OPEC
Russia, gathered in the Qatari capital of Doha
for what was expected to be the rubber-
stamping of a deal---in the making since Feb-
ruary---to stabilise output at January levels
until October 2016.
But OPEC s de facto leader Saudi Arabia
told participants it wanted all members of
the Organization of the Petroleum Exporting
Countries to take part in the freeze, including
Iran, which was absent from the talks.
Tehran had refused to stabilise production,
seeking to regain market share post-sanc-
After five hours of fierce debate about the
wording of a communique---including
between Saudi Arabia and Russia---delegates
and ministers announced no deal had been
"We concluded we all need time to consult
further," Qatar s energy minister Mohammed
al-Sada told reporters. Several OPEC sources
said if Iran agreed to join the freeze at the
next OPEC meeting on June 2, talks with
non-OPEC producers could resume.
Russian oil minister Alexander Novak called
the Saudi demand "unreasonable" and said
he was disappointed as he had come to Doha
under the impression that all sides would
sign the deal instead of debating it.
Novak said Russia was not shutting the
door on a deal but the government would
not restrain output for now.
Russia is a key ally of Iran and has been
defending Tehran s right to raise output post-
sanctions while also supporting the Islamic
Republic in many of its conflicts with Riyadh.
The failure to reach a global deal could
halt a recent recovery in oil prices.
"With no deal today, markets confidence
in OPEC s ability to achieve any sensible sup-
ply balancing act is likely to diminish and
this is surely bearish for the oil markets,
where prices had rallied partly on expectations
of a deal," said Natixis oil analyst Abhishek
In December, OPEC failed to agree on out-
put policy for the first time in years after
Iran disagreed over a production ceiling pro-
posed by Saudi Arabia, arguing again that it
wanted to boost output post-sanctions.
"Without a deal, the likelihood of markets
balancing is now pushed back to mid-2017.
We will see a lot of speculators getting out
next week," said Deshpande, who added that
prices could fall close to US$30 per barrel.
Brent oil has risen to nearly US$45 a barrel,
up 60 per cent from January lows, on opti-
mism that a deal would help ease the supply
glut that has seen prices sink from levels as
high as US$115 hit in mid-2014.
Amrita Sen of Energy Aspects said oil
prices could fall below US$40 on Monday
in a knee-jerk reaction.
"While today s lack of a freeze deal has
no negative impact on balances---since Iran
is really the only country likely to raise output
substantially---it has a huge negative impact
on sentiment especially as the deal had been
hyped up so much," she said.
Gary Ross, the founder and executive chair-
man of New York-based consultancy PIRA,
said the failure to reach a deal was negative
but would not have a long-lasting impact.
"The market has recently moved up due
to tightening balances. We see geopolitical
risks to supply rising, we see U.S. production
declining. In many respects, the rebalancing
has already started," he said.
Saudi Arabia has taken a tough stance on
Iran, the only major OPEC producer to refuse
to participate in the freeze.
Deputy Crown Prince Mohammed bin
Salman told Bloomberg that the kingdom
could quickly raise production and would
restrain its output only if Iran agreed to a
Iran s oil minister Bijan Zanganeh said
OPEC and non-OPEC should simply accept
the reality of Iran s return to the oil market:
"If Iran freezes its oil production ... it cannot
benefit from the lifting of sanctions."
The African nation of Gabon wants to rejoin OPEC
after more than two decades, two OPEC sources said,
becoming the second former member in a year to
seek a return to the oil exporters group just as it is
taking the first steps in years to prop up prices.
If it returned, Gabon would be the smallest producer
in the Organisation of the Petroleum Exporting Coun-
tries and bring its ranks to 14 countries following
last year s return of Indonesia, which had quit in
"They sent the request to OPEC officially," said
one of the sources, an OPEC delegate.
An oil official in Gabon declined to comment.
Gabon joined OPEC in 1975 and left in 1995 over
the exporter group s refusal to grant its request for
reduced annual contributions in line with the country s
small production, news reports said at the time.
The move to rejoin comes as key OPEC members
and outside producers such as Russia are attempting
to support prices through a deal to freeze output
which will be discussed this weekend in Doha. The
initiative has helped oil prices to start recovering
from a 12-year low reached in January.
OPEC in 2014 had abandoned its traditional role
of cutting supply to support the market, accelerating
a drop in prices which were falling due to oversupply
and prompting critics to question its relevance.
Gabon produces 200,000 barrels of oil per day
(bpd) according to the International Energy Agency,
and output is in decline. Last year, the government
launched an offshore licensing round in a bid to boost
Ecuador, which pumps 530,000 bpd, is currently
the smallest OPEC producer.
The next step, the sources said, would be for OPEC
oil ministers to discuss Gabon s request. They hold
their next meeting in June.
OPEC rules state that a country needs to have "a
substantial net export of crude" in order to become
a full member.
Companies that drill for oil and gas in US
waters should be required to work more closely
with rig workers and regulators, as they do in
Norway and the United Kingdom, to reduce
the risk of accidents, the US Chemical Safety
The board investigates major industrial acci-
dents. It is concluding a long-running probe
into the catastrophic blowout of a BP well six
years ago in the Gulf of Mexico that killed 11
workers and injured many others. The out-of-
control leak also dumped millions of gallons of
oil into the Gulf of Mexico
The agency issued its safety recommendations
On Thursday the Obama administration was
planning to issue a final rule to improve the
safety of offshore oil drilling equipment. Federal
investigators blamed a faulty blowout preventer
for the 2010 spill and called for stronger reg-
ulations of equipment that prevents oil and gas
from rushing to the surface.
Industry officials have complained that the
proposed changes would cost billions of dollars
more than projected.
Regulators have forced the industry to comply
with a new set of safety management rules,
but the CSB called this "performance-based"
protocol weak. It also said the regulations fail
to cover contractors, a major segment in offshore
"What we re worried about is how do we
make the industry do what they re putting on
paper," said Cheryl MacKenzie, a CSB inves-
She said safety gaps could be filled by giving
the Bureau of Safety and Environmental
Enforcement --- the offshore regulator --- more
power to "challenge companies and verify that
they are doing what they said they would do."
CSB also recommended getting workers more
involved in safety decisions, for instance by
letting workers elect worker representatives to
be part of discussions over safety.
"These are the people who have their hands
on the equipment," MacKenzie said. "They
need to be involved ... This is not a CSB tenet,
this is a well-known concept."
The CSB report said there were lessons to
learn from places like Norway and the United
In a statement, Vanessa Allen Sutherland,
the CSB chairwoman, called on the industry
and the federal government to take "a tripartite"
approach where workers, companies and reg-
ulators are entwined in improving safety. AP
to rejoin OPEC
stops oil freeze
Agency: New rules needed to make offshore drilling safer
Statoil and partners
strike oil off Brazil
Links Archive April 20th 2016 April 22nd 2016 Navigation Previous Page Next Page