An uproar over a plan by the Alberta Energy Regulator to tighten the sale of oil and natural gas assets in the province has forced the government agency to rethink its rules.
Swamped with angry calls from industry executives and banks, the AER has indicated that it will at least ease a new threshold…

In a production report in the July 10 issue Petroleum News reported that ExxonMobil-operated Point Thomson production averaged 263 barrels per day in May, down 83.5 percent from an April average of 1,599 bpd, a variation caused by equipment commissioning, the company said.
Production at Point Thoms…

Calgary-based Seven Generations Energy was launched eight years ago, backed by funding from management and private investors, to pursue the development of a company that would leave its imprint for generations to come.
These days, based on its Iroquois-inspired name, the company might be inclined to…

Alaska Gov. Bill Walker said when announcing budget cuts June 29 that he was shutting down two megaprojects – the Susitna-Watana hydroelectric project and the Knik Arm crossing.
The Alaska Energy Authority has been working the proposed Susitna-Watana dam.
Walker put a hold on work on a number of l…

The U.S. Army Corps of Engineers posted a public notice July 13 regarding an application from the Alaska Department of Transportation and Public Facilities to make improvements to the Dalton Highway. The public comment period ends Aug. 11.
DOTandPF is asking to reconstruct the Dalton Highway between M…

U.S. crude oil production continues to drop, the U.S. Energy Information Administration said July 12 in its Short-Term Energy Outlook. The average was 9.4 million barrels per day in 2015, EIA said, and its forecast for 2016 is 8.6 million bpd, dropping to 8.2 million bpd in 2017.
The agency’s estim…

If you are looking for a piece of history from the construction of the trans-Alaska oil pipeline, the recent publication of Wilma Knox’s autobiography is both enjoyable and educational.
For more than 30 years Knox, an Anchorage resident, and her husband Robert, traveled the state as a journalists an…

Two Alaska oil producers are being fined for separate North Slope oil spills associated with Clean Water Act violations, the U.S. Environmental Protection Agency announced July 13.
BP Exploration Alaska is being fined for a 700-gallon spill involving natural gas, crude oil and produced water that oc…

The number of rigs drilling for oil and natural gas in the U.S. increased by nine the week ending July 8 to 440.
A year ago, 863 rigs were active. Depressed energy prices have sharply curtailed oil and gas exploration.
Houston oilfield services company Baker Hughes Inc. said 351 rigs were drilling…

The oil and gas industry may not be to blame if northeastern Colorado tap water is so full of methane it can be set on fire, researchers say.
Fewer than 5 percent of the region’s water wells that were checked for methane pollution had been tainted by oil and gas leaks, according to a study released…

Crowley Maritime Corp. assisted the Alaska Vocational Technical Center to win a three-year grant that will help students develop skills to successfully establish careers in the maritime industry.
AVTEC, with the help of Crowley’s marine services group in Valdez, Alaska, serving as lead industry part…

Fluor Corp. announced it has been granted full notice to proceed by Dominion Virginia Power to build its Greensville County, Virginia, power station. Fluor was awarded the contract by Dominion in April 2015 on a limited notice-to-proceed basis. Once completed, the combined-cycle, natural gas-fired p…

Arctic Slope Regional Corp. said recently that it is pleased to announce the acquisition of Builders Choice Inc. by its wholly owned subsidiary ASRC Construction Holding Co. LLC. Headquartered in Anchorage, Alaska, BCI was founded 20 years ago and is now Alaska’s leading provider of customized modul…

NovaCopper Inc. is exercising the discipline of a marathon runner as it paces towards the finish line – developing the high-grade copper deposits at its Upper Kobuk Mineral Projects in Northwest Alaska into world-class mines.
This year’s US$5.5 million program for UKMP – a budget identical to 2015 –…

Hecla Mining Company July 11 said it produced 4.24 million ounces of silver and 62,965 oz. of gold during the second quarter of 2016, both significant increases compared with output during the same period last year. ‘Our strategy of accelerating growth has silver and gold production up 71 percent an…

Northern Empire Resources Corp. July 11 announced the start of a C$500,000 phase-1 exploration program at its Richardson gold project in Interior Alaska. Expected to take six weeks to complete, this initial 2016 program will include 500 soil samples, 300 meters of trenching, prospecting, 100 line-ki…

Freegold Ventures Ltd. July 6 said drilling is about to begin at its Shorty Creek copper-gold project near Livengood, Alaska. The company acquired this project through a long-term lease with Fairbanks-based Gold Range Ltd. Freegold has carried out ground geophysics and soil sampling over the two tar…

Peregrine Diamonds Ltd. July 7 posted results from preliminary economic assessment for phase-one development of the CH-6 and CH-7 kimberlite pipes at its Chidliak diamond project in Nunavut. The PEA, prepared by JDS Energy and Mining Inc., envisions an open-pit diamond mine with a life of roughly 10 y…

Wellgreen Platinum Ltd. July 12 reported the start of a 2,500-meter drill program and field work at its Wellgreen platinum group metal-nickel project in southwestern Yukon Territory. The drilling will test resource expansion potential along the North Arm and the Middle Arm of the deposit, some of wh…

Golden Predator Mining Corp. July 13 said it has begun a 1,600-meter engineering and metallurgical drill program at its Brewery Creek gold property. Located 55 kilometers (34 miles) east of Dawson City in Yukon Territory, Brewery Creek is a past-producing heap leach gold mining operation where more…

Northern Freegold Resources Ltd. July 7 reported the start of the 2016 exploration program at its Freegold Mountain gold-copper project in Yukon Territory. Initially, the company will focus on the controls of mineralization at Nucleus and Revenue in order to vector in on higher grade mineralized zon…

Independence Gold Corp. July 7 reported the completion of its phase-1 exploration program the Boulevard and Moosehorn projects in the White Gold District, Yukon Territory. This work included geologic mapping, prospecting and the collection of 1,056 soil samples on both gold properties. In addition,…

Canadian Zinc Corp. July 7 reported the closing of a C$10.2 million public offering through a syndicate of underwriters co-led by Paradigm Capital Inc. and Canaccord Genuity Corp. and including Dundee Securities Ltd. As a result of the financing, Canadian Zinc issued 34,135,000 common shares at C25…

It has been a long time since I took high school civics, so it is easy to understand how things may have changed. However, one of its precepts that has served me to this day is the idea that there was a significant difference of opinion among our founding fathers as to whether the newly-formed natio…

Is it time to take large oil and gas projects off the

In the past four weeks, four good-sized projects have been given final investment decisions.

Two came from : a third train for the Tangguh LNG plant in Indonesia, and the development of the Atoll gasfield off the coast of Egypt. Another was ’s $1.9bn development of the Greater Enfield oilfields in western Australia, and the largest by far was the -led $36.8bn expansion of the .

The oil price crash has meant that the number of large projects being given the green light has plummeted. Over 2007-13, there were on average 40 large projects — defined as having reserves of 50m barrels of oil equivalent or more — approved each year, according to Wood Mackenzie.

In 2015, there were just eight.

So far this year there have been six: the recent four, plus ’s investment , also offshore in Egyptian waters, and ’s plan to develop the prosaically-named KG DWN 98/2 off the east coast of India.

Angus Rodger at Wood Mac has been looking at the projects that have been approved, and come to some interesting conclusions about what it takes for the big beasts to survive in this harsh environment.

The projects that are making progress generally share characteristics that make their economics more appealing.

One is that they were typically based on existing facilities, rather than greenfield sites. Sometimes they use all the same infrastructure, sometimes they are a “step out” from an earlier investment. That has two benefits: the spending on new infrastructure is lower, and the useful life of existing facilities can be extended by running additional production through them.

The projects that have been approved also usually have one company in sole ownership or in a clear leading role. That means there is less “partner drag” as different parties in a consortium try to agree on a decision.

The favoured developments also often have strong local demand, so they are not necessarily dependent on the vicissitudes of world markets. Egypt and Indonesia, for example, both have rapidly growing energy demand.

The decision to go ahead with a project can also be helped by falling costs for services and equipment such as drilling rigs.

However, another recent piece of Wood Mac research suggested the decline in costs has been much sharper in US shale than in the rest of the industry.

There will still be some large investments, even in deep water, that are financially viable. Break-evens vary widely from project to project.

Even so, when companies are deciding where to deploy their precious — and dwindling — investment dollars, US shale in general .

That may not be true forever. Cuts in investment reduce future supply, and if oil demand keeps on growing then prices could one day go much higher.

A project that brings new oil on to the market in the 2020s when prices are above $100 per barrel could end up looking like a masterstroke.

But inside oil companies, it is tough to make that case. There will probably still be only about ten large projects that are approved this year, Mr Rodger expects.

“Even if the project looks sound based on expectations of future oil prices, the overwhelming focus on cost-cutting means it is very hard to get everyone to agree this is the right time to spend $10bn,” he says.

“And that reluctance to be countercyclical is one reason you’re not going to see a rush back to big projects.”

“This is a test case for ONGC. It is a challenge for ONGC to derive a strategy for getting the right price for all future production from deep water fields,” said Sengupta.

Investors who follow the leveraged loan market might be feeling a bit like a New Yorker in a downpour, or a Londoner at rush hour, trying to hail a car using Uber. With demand shooting up, they are witnessing “surge pricing”.

Uber itself tapped the market last week, in a to fuel growth in its ride-hailing service. But overall issuance has been sluggish in the US. Merger and acquisition activity has come off the boil, meaning fewer deals that need to get financed with debt, and private equity firms are complaining that public companies are too expensive to justify launching buyouts.

So supply is tight, just as demand is returning.

Last year, the largest leveraged loan ETF suffered outflows of $1.3bn, but it has made back half of that since March — helping push up the average price of a loan in the S&P/LSTA 100 index to 92 cents on the dollar from below 86 cents at the nadir in February.

Leveraged loans are low risk for investors, because they have a variable interest rate and get repaid before bonds. However, the oil price collapse raised concerns about the solvency of oil explorers and other commodities plays who have borrowed in the loan market. Loan prices have appeared to move ever more closely in sync with the oil price in the past few years, but recent trading suggests that link is breaking.

While the , loan prices just keep marching ahead.

That break was overdue. Oil companies account for less than 5 per cent of the index — a fact that has sometimes got lost amid all the concern about the high-yield bond market, a sister market whose index is much more heavily weighted towards the oil and gas industry.

Loans offer a decent yield for conservative investors, in the region of 4 to 5 per cent. Uber, one of the riskier propositions, agreed to pay near the top of that range.

As a result, with ultra-low rates looming like stormclouds over ever-larger swaths of the credit markets, demand seems more likely to increase than decrease, as long as the US economy holds up. Unlike Uber customers, loan buyers may find the surge pricing does not come to an end any time soon.

stephen.foley@ft.com

BP has said it has drawn a line under the cost of the 2010 Deepwater Horizon disaster, taking an additional $5.2bn pre-tax charge that brings the company’s final bill for the disaster to $61.6bn.

The additional charges relate to extra costs under its 2012 settlement to compensate business and individuals that suffered losses as a result of the oil spill in the Gulf of Mexico, and further payments for some of about 85,000 claimants who sought damages but were not covered by that deal.

Much of the cost of the disaster can be written off against tax, leaving BP with an additional net charge of $2.5bn, to bring the post-tax total to $44bn.

Brian Gilvary, BP’s chief financial officer, said the company had “made significant progress” in resolving outstanding claims, and was now able to estimate “all the material liabilities remaining from the incident”.

He added that the move “provides our investors with certainty going forward”.

Until now, the provision made by BP in its accounts for the cost of the disaster has not included some items, including the full amount of the 2012 settlement. That was initially estimated at $7.8bn, but BP had not been able to specify a precise amount in its accounts because claims for business losses came in much higher than it had expected.

Transocean’s Deepwater Horizon drilling rig, working under contract for BP, was hit by an explosion and fire when oil and gas escaped from the well it had just finished drilling. The explosion killed 11 men and the well leaked more than 3m barrels of oil into the waters of the Gulf.

A US federal judge ruled in 2014 that BP had acted with “gross negligence” in its actions leading up to the accident.

The cost of the disaster is much higher than analysts initially expected while oil was still leaking into the Gulf of Mexico.

BP initially circulated estimates for the rate at which oil was flowing from the ruptured Macondo well that turned out to be much lower than those that were later judged to be accurate.

Analysts also underestimated the costs to BP of official penalties and damages, and of litigation by victims of the spill.

In a statement, Moody’s had said yesterday it “has assigned a Baa2 rating to the proposed foreign currency senior unsecured bonds to be issued by ONGC Videsh Vankorneft Pte Ltd (OVVPL).

Starting the first of the two planned roadshows here to auction 46 discovered small gas and oil fields, Pradhan said he is confident of receiving good response.

is bracing for strike action on seven of its North Sea platforms in the biggest industrial dispute to hit UK oilfields for a decade.

Workers for , which provides maintenance services to Shell, voted on Wednesday in favour of strike action to protest against changes to pay and conditions.

The dispute reflects growing tensions in industrial relations in the North Sea as companies to keep the basin competitive in the face of declining production, high costs and low oil prices.

Shell said it did not expect immediate disruption to production and was putting in place contingency measures to ensure essential maintenance could continue if the strike went ahead.

Trade unions accused Shell of recruiting “scab labour” after advertisements appeared on job agency websites offering maintenance work on week-by-week contracts.

Leaders of the Unite and RMT unions said their members had overwhelmingly backed strike action.

Paul Goodfellow, head of Shell’s upstream business in the UK and Ireland, said he was disappointed by the vote and hoped that Wood Group and its employees could resolve their dispute without a walk-out.

“Our priority is to ensure that the safety of our people and assets will not be compromised during any industrial action,” he added.

Dave Stewart, head of Wood Group’s eastern region, said the company wanted to reach an agreement with unions that “meets our mutual goal of safeguarding these jobs in the North Sea now and in the future”.

Wood Group employees are facing an average reduction in base salaries of 3 per cent.

are expected to lead to the loss of about 120,000 jobs in the UK energy sector this year, according to Oil & Gas UK.

Deirdre Michie, chief executive of the industry group, said: “Industrial action can only add to the industry’s challenges as it focuses on tackling the current downturn to restore North Sea competitiveness and sustain jobs in the industry in the longer term.

“The changes we are making now to improve the efficiency of the sector will be critical to shaping the future of the industry and safeguarding the jobs it currently supports.”

In its submission to the panel, ONGC said RIL and the regulator had known about the fields being connected more than a decade ago.

National Company KazMunaiGas has sweetened its offer to buy out minority shareholders in its London-listed subsidiary after talks with China’s sovereign wealth fund, according to the Kazakh state oil company’s chairman.

KazMunaiGas, which is 100 per cent owned by the Kazakh state, last month launched an attempt to over KazMunaiGas Exploration Production, or KMG EP, its UK-listed subsidiary, and offered to buy out its minority shareholders.

NC KMG’s proposals to reform its relationship with KMG EP, Kazakhstan’s third-largest oil producer, have run into stiff opposition from the London-listed unit’s independent directors. They said the changes would “severely undermine the corporate governance of the company” and threatened to resign.

On Wednesday, NC KMG increased its buyout offer to KMG EP’s minority shareholders from $7.88 to $9 per global depositary receipt, meaning the transaction is worth up to $1.3bn.

NC KMG also dropped one of the most contentious elements of the proposed package of changes to the agreement governing its relationship with KMG EP.

Frank Kuijlaars, chairman of NC KMG, said the company had dropped the element — which would have given the parent company veto powers over the appointment of independent directors to the board of its subsidiary — after a meeting with China Investment Corporation, the Chinese fund that is the largest minority shareholder in KMG EP, with an 11 per cent stake.

“That was their number one concern,” he told the Financial Times. “We said let’s give in, let’s recognise this. Giving up a veto doesn’t mean you cannot challenge certain decisions.”

The move underscores Beijing’s growing sway in central Asia as it targets investment in the region. Chinese companies own close to a quarter of Kazakhstan’s oil production.

Beijing’s concerns over KMG EP are in line with those of other shareholders, who described NC KMG’s offer to buy out minority investors as “a fiasco” and “outrageously low”, and told the Financial Times that they would planned by the Kazakh government if the oil company did not alter its position.

NC KMG controls about 65 per cent of the voting rights in KMG EP.

Chris Hopkinson, deputy chief executive of NC KMG and chairman of the board of KMG EP, said that the proposed changes were necessary to allow the parent company to push through efficiency improvements at KMG EP’s Soviet-era oilfields.

Several shareholders in KMG EP said on Wednesday that the revisions to NC KMG’s proposals were not sufficient.

“Too little, too late,” said Jacob Grapengiesser, partner at East Capital, one of the top funds specialising in the former Soviet Union and a KMG EP shareholder.

Glass Lewis, the shareholder advisory service, on Wednesday advised that investors vote against the proposals by NC KMG to tighten its grip on KMG EP.

Mr Kuijlaars said that CIC had not indicated whether it would support NC KMG’s proposals, but added he would be surprised if the Chinese fund sold its shares.

MEXICO CITY — During the economic turmoil of the early 1990s, power cuts in Havana were so routine that residents called the few hours of daily electricity “lightouts.”

Now, grim economic forecasts; ; and government warnings to save energy have stoked fears among Cubans of a return to the days when they used oil lamps to light their living rooms and walked or bicycled miles to work because there was no gasoline.

Addressing members of Parliament last week, ’s economy minister, Marino Murillo, said the country would have to cut fuel consumption by nearly a third during the second half of the year and reduce state investments and imports. His comments, to a closed session, were published on Saturday by the state news media.

Cuba’s economy grew by just 1 percent in the first half of the year, compared with 4 percent last year, as export income and fuel supply to the island dropped, said Mr. Murillo.

“This has placed us in a tense economic situation,” he said.

Weak oil and nickel prices and a poor sugar harvest have contributed to Cuba’s woes, officials said. ’s economic agony has led many Cubans to wonder how much longer their oil-rich ally will continue to supply the island with crucial oil — especially .

Those fears grew last week after Mr. Murillo warned of blackouts and state workers were asked to cut their hours and sharply reduce energy use.

“We all know that it’s Venezuelan oil that keeps the lights on,” said Regina Coyula, a blogger who worked for several years for Cuban state security. “People are convinced that if Maduro falls, there will be blackouts here.”

President Raúl Castro of Cuba acknowledged those fears on Friday but said they were unfounded.

“There is speculation and rumors of an imminent collapse of our economy and a return to the acute phase of the ‘special period,’” Mr. Castro said in to Parliament, referring to the 1990s, when Cuba lost billions of dollars’ worth of Soviet subsidies.

“We don’t deny that there may be ill effects,” he added, “but we are in better conditions than we were then to face them.”

Mark Entwistle, a business consultant who was Canada’s ambassador to Cuba during the special period, said that despite its dependency on Venezuelan fuel, than it was before the Soviet collapse.

Besides, he said, Cuba has “this phenomenal social and political capacity to absorb critical changes.”

Still, some are perturbed at the prospect of power cuts. None of the Havana residents interviewed over the weekend had experienced power failures in their neighborhoods.

In an unusually blunt speech to journalists this month, Karina Marrón González, a deputy director of Granma, the official Communist Party newspaper in Cuba, warned of the risk of protests like those of August 1994, when hundreds of angry Cubans took to the streets of Havana for several hours.

“We are creating a perfect storm,” she said, according to a of her speech that was published in various blogs. She added, “Sirs, this country cannot take another ’93, another ’94.”

Herbert Delgado-Rodríguez, 29, an art student, remembered his mother cooking with charcoal in the 1990s.

“I don’t know if it will get to the point where there will be protests in the street,” he said. However, he added, Cubans “won’t tolerate the extreme hardships we faced in the ’90s.”

One worker at a bank said employees had been told to use air-conditioning for two hours each day and work a half-day. Fuel for office cars had been cut by half, she said. A university professor said she had been given a fan for her office and told to work at home when possible.

José Gonzáles, who owns a small cafeteria in downtown Havana, was more sanguine.

“Raúl is simply urging us to cut back on unnecessary consumption, that’s all,” he said, adding that talk of another special period was “just a lot of speculation.”

Not all offices or companies have been affected, and Mr. Murillo said the idea was to ration energy in some users so that others — homes, tourist facilities and companies — could use as much as they need.

In all, he said, the government aimed to cut electricity usage by 6 percent and fuel by 28 percent in the second half of the year.

Under an agreement signed in 2000, Venezuela supplies Cuba with about 80,000 barrels of oil per day, a deal worth about $1.3 billion, said Jorge Piñon, an energy expert at the University of Texas. In return, Cuba sends thousands of medical and other specialists to Venezuela.

On Friday, Mr. Castro said there had been a “certain contraction” of that oil supply.

How large of a contraction is unclear. Reuters last week that shipments of crude to Cuba had fallen 40 percent in the first half of this year. Mr. Piñon said that at least part of the reduction was oil that Venezuela refines in Cuba and then ships out again.

Cuba’s energy problems may also be a product of growing demand on the electricity grid, he said. Electricity consumption has risen significantly over the past 10 years as Cubans who receive remittances from abroad kept air-conditioners whirring and private restaurants, bars and bed-and-breakfasts added refrigerators and heated food in toaster ovens.

Tourism has soared since the United States and Cuba in December 2014. The number of visitors rose 13.5 percent in the first four months of 2016 and is likely to rise further when commercial flights from the United States begin this year.

If Venezuela did halt oil exports to Cuba, it would not necessarily precipitate a political crisis, experts and bloggers said.

The United States may offer help in order to prevent instability or a mass exodus of desperate Cubans. The Cuban government might speed reforms and open the door wider to foreign investment, Mr. Entwistle said.

“To extrapolate some dire political consequence is unwise,” said Mr. Entwistle, adding, “There are so many levers that they have to push and pull.”

Energy major Essar Oil is expecting some incentives for exploration of gas keeping in view challenges and difficulties like deep and ultra deepwater gas production.