AVA Energy Acquires Eximius Group

AVA Energy Limited, a leading international Energy recruitment business based in London has acquired the Energy division of Eximius Group Ltd.

Eximius Energy reported sales of £11m for the last financial year and has built an excellent brand and reputation in the Energy market.

The two businesses bring together a group of very experienced and successful consultants who will deliver a full service offering across the Energy sectors of Oil & Gas, Nuclear, Power, Hydro, Solar and Energy Trading.

Sam Carter (Director of AVA Energy) said “this deal brings together two excellent businesses and a very experienced team from Eximius who will be able to substantially grow the combined business. Lots of companies have left the energy space or are heavily diversifying, whilst AVA and Eximius are consolidating. This is a very exciting time for everyone involved”.

Ed Stevens (Co-Founder & Managing Director of Eximius Energy) said “the bringing together of these two specialist Energy businesses offers AVA the opportunity to deliver an exceptional service to contractors, candidates and clients; and deliver on this exciting and competitive advantage”.

Nick and Ed Stevens were advised by Fladgate LLP and AVA Energy Limited were advised by Baker & McKenzie LLP

Oil production begins at Golden Eagle in UK North Sea

Project operator, Nexen Petroleum UK, reports that oil has begun to flow from the Golden Eagle development in the UK North Sea. Two wells in the area have the potential to produce about 18,000 barrels of oil per day and ultimately 15 production wells and six water injection wells will be drilled, boosting production at the Golden Eagle development where a peak rate of about 70,000 barrels per day is expected in 2015. The project, which includes the Golden Eagle, Peregrine and Solitaire fields, is situated about 70km (44 miles) north-east of Aberdeen, on Blocks 20/1S, 20/1N and 14/26a.

A 36.54% interest in the development is held by Nexen, a wholly-owned subsidiary of Chinese offshore oil producer CNOOC. Maersk Oil North Sea UK has a 31.56% interest, Suncor Energy UK holds 26.69% and 5.21% is held by Edinburgh Oil and Gas. Chief executive at CNOOC, Li Fanrong, said that the Golden Eagle development had been delivered on schedule, on budget and to world-class safety standards. Over 2,500 jobs in the UK were supported by GEAD, thus making a significant production contribution to the company for the near future.

Martin Rune Pedersen, managing director at Maersk Oil UK, also commented that the announcement represents a great achievement by the Golden Eagle project teams. The scale of this project is important for the UK North Sea and for Maersk Oil. Delivering it safely, on time and on budget is an excellent performance.

Technip awarded furnace engineering contract by Sasol for new US cracker

Sasol Ltd. has awarded a contract to Technip to provide furnace engineering and procurement for its planned world-scale ethane cracker and derivatives complex that will be located in Lake Charles, Louisiana, adjacent to the company’s existing operations in Westlake, La. The project involves the engineering and procurement for eight proprietary Ultra Selective Conversion furnaces for the complex and will be executed out of Technip’s operating centre in Houston.

Sasol selected Technip for the contract to provide its proprietary ethylene technology and front-end engineering design for the cracker, which will be capable of producing an estimated 1.5 million tonnes of ethylene per annum. This award endorses Technip’s strategy of becoming involved early to design an effective project execution scheme, thus delivering value to clients. According to senior vice president of Technip Process Technology, Stan Knez, after being selected for their ethylene technology early on in the project, Technip is pleased about extending their involvement by supplying the furnaces, the most crucial part of the cracker.

Sasol has said that in addition to a primary ethane cracker, the $8.1 billion complex will include six chemical manufacturing plants. Site preparation has already commenced and the new complex is currently on schedule for commissioning in 2018.

Alfa of Mexico seeks $1 billion for investment in energy projects.

It has been reported by Alfa, a Mexican consortium, that it wants to raise capital by issuing about $1 billion worth of shares for investment in Mexican energy projects in shale gas, conventional hydrocarbons and electricity. Under Mexico’s new energy laws, many opportunities have opened up for the private sector and the company is looking at taking advantage of a favourable situation. The new energy reforms have ended the monopoly of state-owned oil company Pemex and national power company CFE and shareholders are due to cast their vote on the investment proposal at a special meeting to be held on 4 November.

Based in Monterrey, Alfa also has operations in the manufacture of car parts, processed foods, petrochemicals and telecommunications and registered sales of $15.9 billion in 2013. The company represents just one of a few Mexican businesses that are due to benefit directly from the amendments in energy law. Alfa has been producing shale oil and gas in Texas for several years and will pursue joint ventures with Pemex next year, specifically in three onshore mature fields and will also increase the generation of electricity during the next five years.

According to Ramon Leal, Chief Financial Officer at Alfa, the company was considering a possible alliance or additional investment with Canadian oil company Pacific Rubiales Energy Corporation. Its options with Pacific Rubiales are still being analysed, which could mean raising the stake and making an acquisition offer, maintaining the stake and doing joint ventures, or reducing the stake and using the money for other purposes. Mr Leal added that should Alfa make a bid for Pacific Rubiales, it would do so in a consortium and not alone, to maintain a healthy balance sheet. Trading of Alfa shares on the Mexican stock market were recently down 4.1% to $39.45 pesos ($2.92).      

Profit up at Halliburton helped by healthy North America drilling.

It has been reported by oilfield services provider, Halliburton Co, that they have recorded a quarterly profit that is better than anticipated. The results have been bolstered by healthy shale drilling activity in North America and the company shares rose nearly 4 per cent, with its quarterly dividend increasing from 15 cents per share to 18 cents. About half of its revenue is acquired from North America and Halliburton also gained from higher income in its international operations. The company said that in the third quarter ending 30 September, revenue growth was almost 22 per cent in North America, while operating income went up 38 per cent. According to Chief Executive, Dave Lesar, the service intensity levels surged to unprecedented levels, as completion volumes per well were up more than 50 per cent compared to the third quarter of last year and this level of activity is expected to continue.

Strong drilling in North America also helped market leader, Schlumberger Ltd, record a quarterly profit that was better than expected. During the quarter, the revenue of Halliburton grew about 18 per cent in the Middle East and Asia region. In Europe, Africa and Commonwealth of Independent States, income increased by 9 per cent and crept up by 4 per cent in Latin America.  Net income attributable to the company, grew from $706 million or 79 cents per share a year earlier, to $1.20 billion or $1.42 per share. Shareholders on record as of the 5 December are due to receive payment on the 26 December. For the Macondo well eruption, Halliburton cut its contingency losses by $100 million and recorded an expected insurance recovery of $95 million with regard to the settlement. Last month, a $1.1 billion settlement was reached by the company for a majority of claims concerning its involvement in the 2010 oil spill, having set aside $1.3 billion for the process.   

Shell finalises Marcellus and Utica deals

After giving its U.S. shale gas portfolio an overhaul, Royal Dutch Shell recently completed a previously reported deal in which it acquires 155,000 net acres in the Marcellus and Utica areas of Pennsylvania. Under a joint venture, the Dutch energy giant has been developing Marcellus gas in north-eastern and central Pennsylvania with Houston-based Ultra Petroleum Corp. In exchange for Shell’s 19,000 net acres of leasehold interest in the Pinedale of Wyoming, Ultra Petroleum Corp. will hand over $925 million in cash. This includes relevant gathering and processing contracts. 

In the Marshlands area, Shell receives 63,000 net acres, as well as 92,000 net acres in the Tioga area of mutual interest (AMI), an unincorporated joint venture with Ultra, giving Shell 100% interest in Tioga AMI. At Ultra, first-half net production from the Marcellus and Utica assets averaged 109 MMscfd. New discovery wells in Tioga County, dubbed Neal and Gee, were drilled to a total measured depth of about 14,500 feet and 15,500 feet, with lateral lengths of 3,100 feet at Gee and 4,200 feet at Neal, respectively. Upstream Americas Director at Shell, Marvin Odum, said in a statement that they refocused their resources strategy to select fewer plays with specific scale and economic characteristics best suited to their portfolio. The Appalachian basin is one of those areas and these two high-pressure wells both exhibit exceptional reservoir quality.

Most operators tapping the Utica, which lies below the Marcellus, are targeting  eastern Ohio which tends to be rich with liquids or Western Pennsylvania where the play is mainly dry. According to Shell, the Gee well has been in production for nearly a year and had an initial flowback rate of 11.2 million cubic feet of natural gas per day. The company also reported that production of the Neal well was initiated in February, with observed peak flowback rates of 26.5 million cubic feet of natural gas per day.         

What does Scotland’s ‘no’ vote mean for the energy sectors?

The recent voting in the Scottish referendum that swung in favour of a ‘no’ vote led to companies across the energy sector, from oil and gas to wind farm developers expressing relief at the outcome. Alastair Young, a partner with law firm Bracewell & Giuliani, said that the ‘no’ vote reinstates regulatory and fiscal certainty which is critical for the oil and gas industry in the North Sea when it comes to making investment decisions, do deals and in efforts to maximise recovery of the UK’s oil and gas reserves for the benefit of everyone. Independence would have ushered in a major period of uncertainty as policies forming the foundation of entire industries faced being redrawn. Warnings that emanated from the ‘no’ campaign indicated that an independent Scotland would be burdened with costs and liabilities that are presently shared across the entire UK market.

Ian McLelland, a gas and oil analyst at Edison Investment Research, noted that declining production from the North Sea means that the nation is becoming less and less oil and gas self-sufficient. He believed that the ‘no’ vote could see much needed capital injections to some of the smaller cap North Sea oil and gas explorers, move a step closer via mergers and acquisitions or capital raising on public markets. According to Tony Ward, Head of Power & Utilities at EY UK & Ireland, the energy market of Scotland is closely tied with that of the UK, which has up until now managed to reduce and then level the cost burden across all users. He added that the dismantling of this fully integrated market would have likely led to the creation of a significant degree of asymmetry in the separated markets, particularly in respect of the allocation of costs and assets. The ability to adopt a nationwide approach enables the whole process to be smoother.

The future of the North Sea featured prominently in the campaign, with the UK government arguing that there were insufficient oil reserves to sustain an independent Scotland, at the same saying that the UK was in the best position to maximise the extraction of the remaining reserves. It also argued that only the whole of the UK could afford to support commitments on tax relief for decommissioning the North Sea. For the time being, the UK power market is likely to continue as one entity, thus avoiding the chaos that would have followed had the UK insisted on an independent Scotland being solely responsible for its own electricity assets. The referendum result boosted shares in Scottish-based power firms such as SSE. Several projects had been put on hold in Scotland pending the outcome and in the event of a ‘yes’ vote, billions of pounds more would have been thrown into doubt.

The burden of subsidising wind farms is currently shared by all UK energy consumers, even though a disproportionate share of them are being built in Scotland. The energy secretary, Ed Davey, said that in an independent Scotland this would not continue and that forcing Scottish consumers to carry those subsidies alone would have added up to £189 to their annual energy bills. With a ‘no’ vote, this outcome appears unlikely. A lobby group, Scottish Renewables, is calling for Holyrood to have a greater say in energy matters via a new joint Scottish and UK Government energy policy.

Oslo initiates Rosneft’s NCS development.

The main messages that emerged from the annual conference and exhibition that was recently held by the Offshore Northern Seas (ONS) in Stavanger, was that the Ministry of Petroleum and Energy in Norway has confirmed its intention of persevering with additional activity in the mature and frontier areas on the NCS and also to retain old investors and attract new companies, while building stronger connections with Russia’s Rosneft oil company. According to Energy Minister, Tord Lien, stability and predictability is a policy that Norwegian Oil and Gas is committed to maintaining and will continue to seek a broad political consensus that will benefit both the country and industry. In order to compensate for declining production, Norway is prepared to attract new investments and as a result of stable and successful exploration activity over the past decade, many discoveries have been made. The Minister said further that after 40 years of production, 56% of expected recoverable resources are still in the ground.

The Norwegian Oil and Gas industry is facing the threat of increasing costs and the depletion of traditional fields. In these circumstances, partnerships are vitally important and conferences play a key role for companies and other stakeholders. Norway wishes to have firmer ties with the energy company that has Igor Sechin at its helm. Even though sanctions and restrictions have been imposed on the Russian company, which include a ban on the transfer of technology for deepwater production, Tord Lien does not foresee any difficulties with regard to cooperation opportunities on the NCS between Statoil and Rosneft. Export restrictions are aimed at goods for use in Russia and will not be applicable or have an impact on foreign companies taking part in petroleum activities or rounds of licences. It is within this framework that the interest shown by Rosneft in the next round of Norway licences and its collaboration with Statoil in the Arctic Barents Sea, gives an inkling of the central role that the Russian company will play in the region in the not too distant future. In fact, the two companies have already begun activities at the Pingvin Licence PL713 prospect in the Norwegian section of the Barents Sea. Within this licence, Rosneft has an active interest of 20% in four fields via its 100% indirect subsidiary, Energy RN Nordic Oil AS.

With oil companies predicting a 21% drop in investments for 2015, the implementation of new projects such as Aasta Hansteen and Johan Sverdrup are specifically important to prevent a decline in investments and output and to counteract uncertainty among companies interested in investing on the NCS. At present, there is a strong focus on keeping pace with technology and conferences like the Stavanger event, provide the ideal platform to promote new products. 

Green energy production is increasing at a much quicker rate.

The International Energy Agency, a Paris-based organisation that was established to ensure reliable, affordable and clean energy for its 29 countries, has revealed in a recent report that wind, solar and other forms of renewable energy grew at a much faster rate last year. Green energy is now producing 22% of the world’s electrical power and in 2013 an investment of more than $250bn (£150bn) was pumped into green generating techniques. However, because politicians are a bit wary about the cost of subsidies, this rate of growth is expected to slow down.

According to the executive director of the IEA, Maria van der Hoeven, renewables are a necessary part of energy security. However, just when they are becoming a cost-competitive option in an increasing number of cases, concerns about the cost implications of deploying renewables are being fuelled by the rise in uncertainty of policy and regulations in some key markets. She added further that many renewables no longer need high incentive levels, but instead, given their capital-intensive nature, they require a market context that assures a reasonable and predictable return for investors. The IEA also said in its annual medium-return report that by the year 2020, hydro and other green technologies could be producing 26% of the world’s electricity. It also indicated that green technology is already being used as much as gas for generating electrical power.

From a top figure of $280bn reached in 2011, the total level of investment in renewables is now less and is predicted to be just $230bn on average per annum until the end of the decade, unless governments make increasing policy commitments for higher spending. The installation of new wind farms and solar supplies is presently showing a healthy growth rate, although the IEA thinks that it is insufficient to meet the targets of climate change. This has prompted calls to Brussels from green power campaign groups for Europe to endorse targets that are stronger and more binding. The deputy chief executive of the European Wind Energy Association, Justin Wilkes, said that the IEA report hits the nail on the head when it comes to ambitious national targets for 2030. A target of 27% is not only too low but it does not compel member states to follow through. If any advances are to be made to improve the energy, competitiveness and climate goals of Europe, the heads of state in that region need to agree in October on a binding 30% renewables target. 

The IEA also reported that onshore wind in Brazil, Chile and South Africa has already become a more favourable option over new fossil fuel plants such as coal or gas. In Britain, although onshore wind is the most economical of the renewable technologies, opposition to this system still exists in sections of the Conservative party. However, because of its high costs, offshore wind remains a controversial issue. Latest figures released by the industry body, Energy UK, reveal that in July wind contributed to just over 4% of power generated in Britain. This is  in comparison to 42% for gas, 24% for nuclear and 17% for coal. 

Jorunn Saetre – Oil Woman of the Year is elected to Faroe Petroleum board.

Jorunn Saetre – Oil Woman of the Year is elected to Faroe Petroleum board.

Faroe Petroleum, an independent oil and gas company specialising in exploration and production in Norway, has appointed “Oil Woman of the Year”, Jorunn Saetre as an independent non-executive director to its board. The title was awarded to her by The Stavanger Society of Petroleum Engineers and she is due to take up the position next month. 

The chemical engineer has built up an impressive career portfolio spanning 30 years. She has held senior roles with Halliburton, fulfilling duties as director of Halliburton’s European research centre and as head of the entire Scandinavian operations of Halliburton. At present, she is a board director for AGR Group ASA and in charge of its Stavanger office. 

Jorunn Saetre will succeed Hanne Harlem who is stepping down from the firm’s board after four years of service. Harlem will spend her time concentrating on her role with the city of Oslo.