Test flows at BG's Mzia-3 well off the southern part of Tanzania's coast reached a maximum rate of 101M cf/day, nearly double the flow rate measured at Mzia-2 last year.
BG and partners Statoil (NYSE:STO), Exxon Mobil (NYSE:XOM) and Ophir Energy plan to build a two-train LNG export terminal, with operations expected to start in the early 2020s and a final investment decision set for 2016.
Gorgon and other gas projects worth nearly $200B are nearing completion in Australia, with seven LNG projects due to start exporting gas between late 2014 and 2017, but with LNG exports from the U.S. due to begin next year, wary Asian buyers are holding off on long-term contracts.
The $54B Gorgon project is expected to start up in mid-2015 but so far has locked in sales for just 65% of its share of capacity, which leaves it highly exposed to the risk of falls in the spot price.
Norway's oil fund reports a 3.3% profit on its investments in Q2, and its investments in Russian government bonds, banks and energy companies were broadly unchanged, but the fund's chief executive warns the effect on European equities from tensions between Russia and the West could hurt future earnings.
Oil and gas sector stocks were the fund's best Q2 performers; among individual stocks, Apple, Royal Dutch Shell (RDS.A, RDS.B) and BG Group (OTCPK:BRGXF, OTCQX:BRGYY) contributed the most to earnings.
The Norwegian Oil and Gas Association weighs in with a report says the country risks discouraging investment in its oil industry if it repeats surprise tax increases and political meddling in projects.
Former BG Group (OTCQX:BRGYY, OTCPK:BRGXF) CEO Chris Finlayson has been named Interoil's (NYSE:IOC) chairman as the company develops one of the largest natural gas fields to be discovered in Asia in recent years.
InterOil is planning on building an LNG plant in the Gulf of Papua, which will use supply from the Elk and Antelope gas fields as feedstock. Elk and Antelope were discovered in 2006 and 2009, and are estimated to contain as much as 7T cf of gas.
Finlayson says he's excited at the prospect of working on one of the largest gas finds in recent years. "It’s a world-class field with extremely competitive development costs that is ... very close to the main Asian markets. The proposed project will target customers in China and Japan as the U.S. adds to supply competition in the global LNG market."
InterOil’s project gained important backing this past March when Total (NYSE:TOT), agreed to acquire a 40.1% holding in the Elk-Antelope gas field. It is expected that Total will operate the LNG plant.
The Tanzanian government says it will invest at least $1.2B to revamp its ailing state power utility, as the country tries to guarantee reliable power to domestic and industrial consumers.
It expects the reforms to help the country attract enough investments to diversify power sources and boost generation capacity to at least 10K MW over the next 10 years, from the current 1,600 MW.
Around half of the projected new power capacity will be generated from natural-gas fired plants, as a flurry of natural gas discoveries off the southern coast has made the country a hotspot for natural gas exploration, attracting Exxon (NYSE:XOM), Cnooc (NYSE:CEO), Rosneft (OTC:RNFTF) and BG Group (OTCPK:BRGXF, OTCQX:BRGYY).
Gold mining companies such as Africa Barrick Gold (OTC:ABGLF) and AngloGold Ashanti (NYSE:AU) remain some of Tanzania's largest power consumers.
Although gas resources haven’t yet been declared commercially viable, estimates of discoveries indicate recoverable offshore gas resources of at least 24T-26T cf, potentially sufficient for a four-train liquid natural gas plant, the IMF says.
Exxon Mobil (NYSE:XOM), Statoil (NYSE:STO) and BG Group (OTCPK:BRGXF, OTCQX:BRGYY) are planning to build the country's first LNG export plant.
But with BP, Shell and other oil majors also shedding assets, the market is tough for sellers; also, with Chinese buyers stepping back as they digest recent acquisitions, BG could find speedy asset sales challenging, analysts say.
Shares have fallen ~25% from their April 2011 peak, although the company is still worth nearly $70B - perhaps a problem in itself, since BG could still be too large to purchase outright even the likes of Exxon.
Some analysts think a good start would be for BG to reduce its unusually high 74% stake in the Queensland Curtis gas project, which is due to start up in Q4; BG has said it was considering selling pipeline and water treatment plants connected with the project that could be worth $3.5B-$4.5B.
As much as ~$700B oil companies have in their capital spending pipeline may no longer be needed, as the big discoveries of shale oil in recent years have added ~66B barrels of crude oil resources, enough to meet demand growth in the coming years, according to Goldman Sachs' head of European energy research Michele della Vigna.
New projects that require oil prices to be above $80-$85/bbl to break even ought to be delayed or canceled - which could include big investments considered in Canadian heavy oil or in deep waters off shore - della Vigna says.
It's also potentially bad news for the oil service companies that make money helping oil companies with their big projects; the winners are likely to be companies with the best roster of low-cost investments: SNP, BRGXF, BRGYY, AFRNF, STOSF.
Egypt is willing to approve a potential deal allowing BG Group (BRGXF, BRGYY) to import natural gas from Israel for its local facility if the parties involved agree to help meet the country's domestic demand at a reasonable price, WSJ reports.
The partners in Israel's Leviathan offshore natural gas field, including Noble Energy (NBL), signed a preliminary agreement last month with BG for the supply of natural gas from the field to BG's existing natural gas liquefaction facilities in Egypt.
According to the deal, Leviathan would supply 7B cubic meters/year for 15 years via an underwater pipeline, or average volumes of 685M cf/day, the equivalent of just over 70% of the BG-operated Idku plant's daily volumes.
The partners in Israel's Leviathan natural gas field, including Noble Energy (NBL), Delek Group (DGRLY) and Ratio Oil (RTEXF) have announced a newly signed preliminary agreement with BG Group (BRGYY, BRGXF), for a deal exporting gas to BG's LNG plant in Idku, Egypt.
Although still far from finalized, the deal may be valued at $30B, and would supply an annual 7B cubic meters of gas to BG for 15 years. The final agreement is expected to be completed by the end of the year.
BG Group (BRGYY, BRGXF) says it plans to sell its ~63% stake in the Central Area Transmission System, or CATS, gas pipeline in the U.K. North Sea, and associated infrastructure, to Antin Infrastructure Partners for up to £562M ($954M).
BG says the sale would result in a post-tax profit of $700M and will not impact its rights to use the 251-mile pipeline network.
The sale is part of BG's strategy to streamline its portfolio as its core business is hurt by falling output and restrictions on sales from Egypt, one of its key gas-producing operations.
"With so much LNG supply capacity set to come on stream, Asian buyers have more power to bargain for lower prices in LNG contracts, lowering the potential prices Canadian producers would receive, and could squeeze the economics of certain LNG projects,” TD says.
Canadian projects still offer attractive spreads and proximity to Asian markets despite the challenges, but proponents must move quickly to grab first-mover advantage, TD says as it expects two LNG projects to secure final investment decisions before the end of the year.
Cnooc (CEO) and Gazprom (OGZPY) appear to be the front-runners among international companies that have submitted bids to develop Tanzania's lucrative gas and oil blocks.
Cnooc, which is already developing the kingfisher oil field in neighboring Uganda, will compete with Statoil (STO) and Exxon Mobil (XOM) for block 4/3A off Tanzania's southern coast; Gazprom is the sole bidder for block 4/3B.
Alex B. Gray+ FollowFollowing- Unfollow|Send Message3 Dec 2010
BG Group BRGYY.PK announced that its second Tanzanian exploratory well discovers natural gas.
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Alex B. Gray+ FollowFollowing- Unfollow|Send Message28 Oct 2010
BG Group BRGYY.PK announces its first permanent production from its Tupi field in block BM-S-11 in the Santos Basin of offshore Brazil.
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BRGYY vs. ETF Alternatives
BG Group plc (LSE: BG.L) is a world leader in natural gas, with a broad portfolio of business interests focused on exploration and production and liquefied natural gas. Active in more than 20 countries on five continents, BG Group combines a deep understanding of gas markets with a proven track...More