Is Rosneft about to buy its first foreign refining assets? That is the speculation doing the rounds today as Venezuelan president Hugo Chavez arrived in Moscow on a state visit. Talks with Russia’s leaders will focus on plans for cooperation between the two countries, including in the energy sector.
Rosneft has been in talks to buy a 50 per cent stake in Germany’s Ruhr Oel from the Venezuelan state company Petroleos de Venezuela. Ruhr Oel is a 50:50 joint venture between PDVSA and BP. BP has a right of refusal on PDVSA’S stake.
The deal could be worth between $1bn and $2bn. What better time to announce a deal than during a state visit? One interesting element of the potential transaction is that it could lead to BP eventually being given the right to explore for oil in the Russian waters of the Arctic Ocean.
Total’s top table was the place to be sitting at last night’s Oil and Money dinner at the Dorchester Hotel in London.
Delegates kept wandering past to congratulate Andrew Gould (right), the chairman and chief executive of Schlumberger, for being awarded the Petroleum Executive of the Year Award – the first service company to receive this award.
That was certainly not a point lost on Christophe de Margerie. The chairman and CEO of Total – and winner of the prize last year – was there to hand over the award to Mr Gould.
Firmly tongue in cheek, the personable Frenchman told the audience that he had had “a nightmare” the night before – namely that Total, “a major oil and gas company” had to give a prize to “a contractor”. How “embarrassing”.
It’s a return to business as usual for BP. The UK oil group is raising $3.5bn in its first bond sale since the Deepwater Horizon accident in the Gulf of Mexico on April. The company’s last significant sale was last August when it raised $2bn.
The sale comes just days before Bob Dudley takes over as chief executive of the UK oil group. He faces a daunting in-tray, including cleaning up the oil spill, repairing the company’s reputation in the US, setting out a new strategy for BP and ensuring it does not fall victim to rivals like Exxon.
Among Mr Dudley’s most difficult internal challenges will be tackling “Fortress E&P”, the company’s powerful exploration and production division which is regarded internally as a semi-autonomous unit.
Shares in Cairn Energy are up 2.95 per cent to 439.40p this afternoon in London after the Edinburgh-based oil and gas explorer said it had found oil off the shores of Greenland. The company, led by founder Sir Bill Gammell, has been drilling there since early summer.
Cairn said its Alpha-1S1 well in Baffin Bay, between Greenland and Canada, “observed oil intermittently over a 400m section” and initial analysis of various hydrocarbon samples recovered from the well confirms the presence of two oil types.
“The presence of both oil and gas confirms an active, working petroleum system in the basin and is extremely encouraging at this very early stage of our exploration campaign for the Sigguk block and the entire area,” said Sir Bill in a statement.
It’s a big milestone but it’s not the end of the story.
152 days after the accident on April 20 in the Gulf of Mexico which killed 11 workers and led to the worst environmental disaster in US waters, BP on Sunday finally sealed its ruptured Macondo well.
The UK oil group has promised to restore the damage done to the waters off the gulf coast and the livelihoods of the people affected by the spill. But even once the clean-up effort is scaled back, BP faces challenges on numerous fronts: potential litigation – it could face civil fines of $1,100 per barrel of oil spilled and up to $4,300 per barrel if gross negligence is found – as well as a host of ongoing investigations into the causes of the accident on the Deepwater Horizon rig.
Prepare for a media scrum next Wednesday. Tony Hayward, BP’s outgoing chief executive, will be grilled by the Energy and Climate Change Select Committee next week as part of its inquiry into the risks of deepwater drilling in the UK following the company’s oil spill in the Gulf of Mexico.
It will be Mr Hayward’s first appearance in public for several weeks and will no doubt be watched closely not just by the rest of the oil industry but also by lawmakers in the US. Mr Hayward’s was grilled mercilessly by a House of Representatives committee in Washington, DC in June over the accident on April 20 which killed 11 workers.
Expect next week’s evidence session to be somewhat less antagonistic: not only is Mr Hayward being replaced by Bob Dudley in October but since that time BP has also capped the Macondo well and is in the process of finally sealing it completely.
BP will publish its report into the Gulf of Mexico spill on Wednesday. It should make for some very interesting reading.
The report, which has been prepared by Mark Bly, the UK oil group’s head of safety, is the first of many investigations into the accident on April 20 which killed 11 workers and led to almost 5m barrels of oil spewing into the waters of the gulf.
Mr Bly and members of his team will hold a briefing in Washington, DC on Wednesday. We can expect the report to be detailed and technical and to focus on the sequence of events leading up to the explosion of the Deepwater Horizon rig.
Cairn Energy has been forced to suspend its operations on one of its rigs in the Arctic after four Greenpeace campaigners scaled the rig early on Tuesday morning in a bid to stall oil drilling in the region.
The UK oil and gas explorer has plans to drill four wells in the waters of Baffin Bay Basin, off Greenland’s west coast, but the recent BP oil spill in the Gulf of Mexico has raised fears over the risks of offshore drilling.
Cairn announced last week that its first well had shown evidence of hydrocarbons.
A Greenpeace ship, the Esperanza, has been in a stand-off with the Danish navy off Greenland for the past few days. Many environmentalists argue that Arctic drilling is fraught with risks, from drifting icebergs to hostile weather, but as oil companies scramble to find new reserves around the world to meet demand its reserves have caught they eye of the industry.