Valero cuts back on runs
HOUSTON: Leading US oil refiner Valero Energy, stung by a quarterly loss and slumping fuel demand, said it may cut production further and delay some scheduled refinery work.
The San Antonio-based refiner said its 16 refineries may run at just 78 per cent of capacity between July and September, down from 80 per cent to 85 per cent now.
Valero’s main refining hub on the Gulf Coast will run between 1.2 million and 1.25 million barrels per day (bpd) in the third quarter of 2009, 75 per cent of the total 1.6-million bpd capacity.
Chevron hires new lawyer
SAN FRANCISCO: Chevron has hired a new general counsel with extensive Washington DC experience as the US oil company gears up for a politically charged legal fight over a potential $27 billion liability in Ecuador.
Chevron said that R Hewitt Pate, 47, would serve as vice president and general counsel and report to Charles James, the current general counsel who became an executive vice president this year.
China trims fuel prices
BEIJING: China will trim retail fuel prices by a modest 3 per cent after two big increases last month had raised rates to their highest ever, showing the world’s No 2 oil consumer was sticking to its partly liberalised price regime.
China will cut gasoline and diesel prices by 220 yuan per tonne, the government said, to track falling global crude prices, the second modest since a similar small cut in January.
Oil price has hit floor: IEA
CAPE TOWN: Volatile oil prices have reached a floor of between $50-$60 a barrel and Opec is unlikely to announce major output cuts in September, a senior IEA oil analyst said.
“The evidence so far suggests that prices have probably reached a floor which maybe around $50 to $60,” Eduardo Lopez, a senior oil demand analyst at the International Energy Agency (IEA), told Reuters on the sidelines of an oil and gas conference.
Nakilat Q2 profit surges
DUBAI: Qatar Gas Transport (Nakilat), the world’s largest shipper of liquefied natural gas (LNG), saw profit rise almost three-fold in the second-quarter on revenues from its core shipping business.
Net income in the three months to June rose to 179.29 million riyals ($49.26 million), up 252.2 per cent from the year earlier period, according to Reuters calculations, based on first-half earnings.
China keen on oil pipeline
KUALA LUMPUR: Chinese investors may be keen to fund a Malaysian-Thai oil pipeline, said a Malaysian company building a $10 billion refinery project that will be eventually backed by China’s top oil firm, CNPC.
The Business Times cited Merapoh Executive Chairman Nazri Ramli as saying the refinery, due to be completed in 2013-2014, could be linked to the pipeline as it will be faster to transport crude oil products from the Middle East to East Asia this way.
But this is the third such proposal floated in recent years, designed to channel less traffic through Asia’s energy hub Singapore.
CNPC completes Algeria refinery
BEIJING: China’s state energy group CNPC said it has completed construction of a 10,000-barrel-per-day refinery in Algeria under an engineering and construction contract worth $385 million.
CNPC’s engineering and construction unit put the plant, a condensate splitter in eastern Algeria, into operation over the weekend after 39 months of work, a report on CNPC’s website said.
Africa is a focal area for Chinese state oil companies, for equity investment in oil and gas production and engineering projects including pipelines and refineries.
Cosmo to refine 3.5pc less
TOKYO: Japan’s Cosmo Oil plans to refine 6.56 million kilolitres (454,000 barrels per day) of crude oil in July-September, down 3.5 per cent from a year earlier, reflecting sluggish demand at home, an industry newspaper said.
The operating rates of Cosmo’s crude distillation units (CDUs) will average 70.7 per cent during the three months, the NenryoYushi said without citing sources.
Cosmo, Japan’s fourth-biggest refiner, said last month it planned to refine 2.12 million kilolitres (430,000 barrels per day) of crude oil in July, down 7 per cent from a year earlier.
S Korea crude runs up 1.4pc
SEOUL: Total crude processing volume in August for South Korean refiners will be about 1.4 per cent higher than in July, a Reuters survey showed.
But the volume will still be only 79 per cent of total capacity due to weak refining margins, which have slipped to a discount of $0.50 a barrel from a discount of $0.40 in June and a premium of $2.89 at the beginning of this year.
South Korea’s largest refiner, SK Energy, will slash its refinery run rates in September to 669,000 barrels per day (bpd), or 60 per cent of its total capacity, due to its planned turnaround, against the 65 per cent run rates set for August and July, sources said.
Mitsui, allies agree on project
TOKYO: Mitsui Oil Exploration, a unit of Japanese trading house Mitsui & Co, said it and its partners agreed with oil monopoly PetroVietnam earlier in the day to begin design work on a $4 billion natural gas project in Vietnam.
Mitsui said the start date for production at the project off the southwest coast of Vietnam is not fixed yet, but it is expected to be in 2014 at the earliest.
Mitsui added that Chevron and its other partners will begin work on the front end engineering and design (Feed) work, and that the investment on a gas pipeline and upstream development is expected to total around $4 billion.
Philippines seeks jet fuel
SINGAPORE: The Philippines’ top refiner Petron Corp, a rare oil products importer, is seeking 80,000 barrels of jet fuel for August 10-12 delivery in a tender to meet rising demand and as its refinery runs at just 66 per cent of capacity, the company said.
Petron said its 180,000 barrels per day (bpd) refinery is currently running at around 120,000 bpd.
“The increase in demand was not anticipated. We have also maxed out our treaters (for production of jet fuel),” said company spokeswoman Virginia Ruivivar.
Petron had previously imported gasoline, diesel and jet fuel late last year to early this year to cover a supply shortfall, after its refinery at Bataan had shut for an extended period since December.
Showa Shell restarts RFCC
TOKYO: Japan’s Showa Shell Sekiyu said it has restarted a 61,000 barrels per day (bpd) residue fluid catalytic cracking unit (RFCC) at its Yokkaichi refinery earlier than its initial projection, and expects to restart another secondary unit by the end of July.
A company spokesman said the RFCC unit at the western Japan-based refinery has been operating normally since being restarted on July 24.
Showa Shell restarted its No 3 135,000 bpd crude distillation unit (CDU) at the same refinery on July 18 after scheduled maintenance.
Tepco to import extra LNG
SINGAPORE: Tokyo Electric Power Co (Tepco) will import an extra cargo of liquefied natural gas from Abu Dhabi for September, ahead of peak winter demand, industry sources said.
Tepco usually imports 5 LNG cargoes from gas-rich Abu Dhabi every month, under a long-term supply deal, they said, and the company has the right to negotiate for an additional lot when the need arises.
Tombua production in Q3
LUANDA: Chevron will start producing at its Tombua-Landana plant in Angola this quarter, Chevron spokeswoman in Angola Eunice de Carvalho said.
Tombua-Landana is located in Block 0, off the coast of Angola’s oil-producing enclave of Cabinda, and Chevron has said it expects to produce up to 100,000 barrels of oil per day there by 2011.
Gas generated from the plant will later be used to supply Angola’s first liquefied natural gas plant. The plant, expected to be ready by 2012, will mark the first step in Angola’s bid to cash in on its gas reserves.
Indian firms scout for spot LNG
NEW DELHI: Indian firms are talking to various players, including BG and Malaysia LNG, to buy a first spot chilled-gas cargo to commission the Dabhol terminal in western India, a top official at the firm that owns the facility said.
“We hope to commission the LNG terminal by October. We are talking to various parties including BG and Malaysia LNG,” R K Goel, director of finance at Gail (India) Ltd, told Reuters.
Malaysia LNG, majority owned by state-owned Petronas, has three liquefaction plants with a total capacity of 22.7 million tonnes a year at Bintulu, Malaysia.
Duncan Q2 profit up 74pc
NEW YORK: Energy services provider Duncan Energy Partners’ second-quarter profit jumped 74 per cent, helped by its acquisition of assets from Enterprise Products Partners in December 2008.
Quarterly profit rose on account of an allocation of $15.3 million of earnings from interests in midstream businesses acquired from Enterprise Products, the company said.
Duncan Energy had bought interests in certain companies from Enterprise Products for $730 million. For the quarter, net income attributable to shareholders rose to $23.2 million, or 40 cents a share, up from $13.3 million, or 32 cents a share, a year earlier.
Enterprise Q2 beats forecast
NEW YORK: Pipeline operator Enterprise Products Partners reported better-than-expected adjusted second-quarter earnings helped by increased volumes and cash flow from its Independence Hub platform and Trail pipeline system.
For the quarter, net income attributable to Enterprise was $187 million, or 32 cents per unit, compared with $263 million, or 52 cents per unit, a year earlier.
Excluding items, net income attributable to the company was 43 cents per unit, while analysts on average were expecting earnings of 42 cents per unit, according to Reuters Estimates.
Gazprom may cut investments
MAGNITOGORSK: Gazprom’s investment programme for 2010 could be cut to $21 billion from the $25 billion earmarked for this year, a senior manager at the gas export monopoly said.
Analysts are closely watching the whopping costs of the world’s largest gas firm and have criticised the company for spending too much.
Gazprom deputy chief executive Alexander Ananenkov told a meeting chaired by Prime Minister Vladimir Putin in the Urals city of Magnitogorsk that to meet a plan to install large-diameter pipes capable of carrying 1.5 million tonnes in 2010, the investment programme would need to total 645 billion roubles ($21 billion).
Gulfmark beats expectation
BANGALORE: Shares of marine transportation services provider GulfMark Offshore rose as much as 5 per cent, a day after it beat analysts’ second-quarter profit estimates on lower dry dock expenses and tax rate, and cut its tax rate view for the remainder of 2009.
“We started the year guiding less than 12 per cent and we are currently guiding 4 per cent... Rate reduction represents real cash savings, not one time or special items,” chief financial officer Quintin Kneen said on a conference call with analysts.
Kneen said the reduction in tax-rate outlook was driven by a shift in the company’s pre-tax profitability from a high tax-rate region like the Gulf of Mexico to areas of operation with lower taxes.
Oltchim eyes $88m loan
BUCHAREST: Romanian chemical plant Oltchim said it has approved plans to borrow 62 million euros ($88 million) to buy petrochemical assets owned by top oil and gas group Petrom.
“We approved contracting ... a loan worth 62 million euros with a 6-year maturity, which will be used to buy the petrochemical assets of Petrom’s Arpechim Pitesti (refinery) ... and for working capital,” Oltchim said in a statement.
About 80 per cent of the loan, which was approved in a general shareholders meeting, will be guaranteed by the state-owned bank Eximbank.
Petrolifera suspends well
TORONTO: Petrolifera Petroleum said it suspended its La Pinta No 1 well in northern Colombia after tests indicated a casing breach, sending its shares down 22 per cent, making it one of the top losers on the Toronto Stock Exchange.
The La Pinta No 1 well is drilled solely by Petrolifera on its 100 per cent-owned Sierra Nevada License, in the Lower Magdalena Basin onshore northern Colombia.
Alberta back to normal
CALGARY: Imperial Oil said its Strathcona refinery in Edmonton, Alberta, is producing fuel at its usual rates following a power outage more than a week ago that contributed to tight gasoline supplies in the region.
“Refinery operations have returned to normal,” Imperial spokesman Jon Harding said.
The 187,000 barrel a day refinery was one of two plants in the Edmonton area that were knocked off line in power outages during a severe electrical storm on July 18, and had to go through a restart process lasting several days.
The other one affected was Petro-Canada’s 135,000 bpd Edmonton plant. Its catalytic cracker unit suffered some damage and the company was working to assess the extent.
Alon to cut rates in Q3
NEW YORK: Alon USA Energy said it will slow its 70,000-barrel-per-day Big Spring, Texas refinery during the third quarter in order to tie-in a new ultra-low suphur gasoline unit.
The timing of the work is not yet finalised, Alon spokesman Joseph Israel said.
BP warns of flaring plans
HOUSTON: BP warned of planned flaring at its 265,000-barrel-per-day (bpd) Los Angeles-area refinery in Carson, California, in a notice filed with California pollution regulators.
Sources familiar with refinery operations said the flaring was not due to a problem affecting production at the refinery.
The notice did not state what units might require use of the plant’s safety flare. The refinery has completed the restart of a gasoline-producing fluid catalytic cracker, sources said.
Conoco shuts Carson
HOUSTON: A hydrogen plant at ConocoPhillips 139,000-barrel-per-day (bpd) refinery in Carson, California, shut down, according to a notice filed with California pollution regulators.
The shutdown triggered flaring at the refinery, according to the notice filed with the California Office of Emergency Services.
Eugene Island pipeline shut
HOUSTON: The Eugene Island pipeline has been shut down pending repairs after a leak spilled 1,400 barrels of crude oil into the Gulf of Mexico off Louisiana, Shell Pipeline said.
“At this time, we cannot forecast when restart will occur,” Shell said in a news release.
The 20-inch-diameter line, which carries Eugene Island grade crude to shore, lost pressure and released crude about 60 miles (96.5 km) southwest of Houma, Louisiana, in waters about 60 feet deep, Shell said.
Cleanup began and the cause was under investigation. Mild weather, calm seas and distance from shore mean the oil likely will not reach land, Shell said.
Mexico restarting FCC
MEXICO CITY: The fluid catalytic cracker (FCC) at Mexico’s Minatitlan refinery was being restarted after state oil company Pemex completed planned maintenance, Pemex said in a statement.
An FCC unit is the primary gasoline-making plant in most refineries.
Pemex announced that work on the refinery’s FCC, gasoline hydrotreater and two crude units began on July 15.
The refinery is undergoing a $2.5 billion upgrade that when completed in 2010 will increase processing capacity to 249,000 barrels per day and boost its production of higher value light oil products like gasoline while cutting heavy fuel oil output.
Petro-Canada repairs plant
CALGARY: Petro-Canada has repaired a damaged gasoline unit at its 135,000 barrel a day Edmonton, Alberta, refinery, and the plant is again producing the fuel, the company said.
The damage to the catalytic cracker, after a power outage more than a week ago, was not deemed severe and the unit was brought back into service on the weekend, Petro-Canada spokeswoman Sneh Seetal said.
“It takes time to return the unit back to safe service because it’s a systematic and orderly approach that they take. But it is back into service and is producing product,” Seetal said.
Tesoro shuts Golden Eagle
HOUSTON: Tesoro shut a hydrocracker at its 166,000-barrel-per-day (bpd) Golden Eagle refinery in Martinez, California, for three weeks of unplanned repairs on July 21, a company spokesman said.
“The hydrocracker was shut down completely on July 21 for unscheduled maintenance,” said Tesoro spokesman Lynn Westfall. “Repairs are expected to take around three weeks.”
The 35,000-bpd hydrocracker sustained a valve breakdown in February and was scheduled to undergo 39 days of work in the second quarter of this year.
No impact from Port Arthur
HOUSTON: Valero Energy said a shut sulphur recovery unit at its 287,000-barrel-per-day (bpd) Port Arthur, Texas, refinery had no impact on production.
The SRU was shut after an electrical breaker tripped offline, according a notice filed with the Texas Commission on Environmental Quality.
PetroRabigh hits snag
DUBAI: Saudi-based Rabigh Refining and Petrochemical (PetroRabigh) is facing problems at its new gasoline-making residual fluid catalytic cracking (RFCC) unit, traders said.
Because of this, Saudi Aramco will need to continue importing two or three cargoes per month of gasoline into the Red Sea region until September, when they hope gasoline production will start to increase at PetroRabigh, traders said.
They will only need to import limited amounts during the fourth quarter, they added.
GIC, Suez sell plant stake
KUWAIT: Gulf Investment Corporation (GIC) and France’s GDF Suez have sold a total 30 per cent stake in their $2.1 billion Al Dur power and water project in Bahrain, a GIC spokesman said.
Kuwait-based GIC has sold half of its 50 per cent stake in the project, he said. GDF Suez has sold 5 per cent and remains the biggest shareholder with 45 per cent.
“We sold down because there was an interest in the project from other investors,” the GIC spokesman said.
The buyers were all Bahrain-based. They were the Social Insurance Organization of Bahrain, Instrata Bunya Fund, First Energy Bank, Bahrain Islamic Bank and Capital Management House, the spokesman said.
Aramco output at 12mbpd
KHOBAR: Saudi Aramco’s oil output capacity reached 12 million barrels per day in June when three new oilfield projects started, the Al-Hayat newspaper reported Aramco’s chief executive as saying.
One of those projects was the Shaybah oilfield expansion, Khalid Al-Falih said.
“Production capacity of the company was 12 million barrels per day in June, when output started from three fields which are Nuayyim, Khurais and Shaybah,” the paper reported Falih as saying.
The global fall in oil demand was temporary and growth in consumption would eventually resume, he said.
If the world fails to invest in oil sector capacity during this period of lower demand, then global output capacity would be reduced and result in a rapid rise in oil prices in the future, the paper reported him as saying.
Tawke field output rising
OSLO: Norwegian oil firm DNO International said its net entitlement production from the Tawke oilfield in the Kurdish region of Iraq in June was running at 13,723 barrels of oil per day (bpd) with output continuing to rise this month.
Exports from the Tawke field, which are being developed by DNO, started on June 1 this year after Iraq’s central government gave the go-ahead for Kurdish oil to be exported through a national pipeline.
Dolphin signs refinancing
LONDON: Abu Dhabi-based Dolphin Energy has signed a $4.1 billion debt package that refinances a $3.45 billion debt facility that was due to mature at the end of July, banking sources close to the deal said.
Last week the company issued a $1.25 billion, 10-year bond, which was the final tranche to be completed.
The other tranches in the refinancing are a $1.42 billion, 10-year commercial loan tranche and a 10-year, $218 million tranche that is guaranteed by Italian export credit agency Gruppo Sace, the bankers said.
