US navy Seals take over oil tanker seized by Libyan rebels – The Guardian

American navy Seals have seized a North Korea-flagged tanker that had been loaded with crude oil at a rebel-held port in eastern Libya, the Pentagon has announced.

The operation to take control of the Morning Glory took place a week after Libya failed to prevent the tanker from leaving the rebel-controlled eastern port of Es Sider loaded with an estimated $20m (£12m) cargo, in a crisis that has brought the country to the brink of civil war, the Guardian reported.

“The Morning Glory is carrying a cargo of oil owned by the Libyan government’s national oil company,” said John Kirby, a Pentagon spokesman. “The ship and its cargo were illicitly obtained from the Libyan port of Es Sider.”

There were no casualties in the operation, which took place in international waters off the coast of Cyprus late on Sunday night. The raid was authorised by the US president, Barack Obama, after receiving a request for assistance from Tripoli. The Seals boarded the 21,000-tonne tanker using helicopters and fast boats from a warship, the USS Roosevelt.


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Africa-focused oil groups Caracal and TransGlobe to merge – The FT

Caracal Energy and TransGlobe Energy, two Africa-focused junior oil companies, have announced plan to merge, the Financial Times has reported. The move with create a group worth nearly $2 billion with operations in Chad and Egypt. In a joint statement, the companies said the merger will “facilitate future organic and acquisition growth in Africa”.

The company created by merging Caracal and TransGlobe aims to lift oil production to 31,000-34,000 barrels a day this year, up from 25,100b/d in 2013. London-listed Caracal sees more upside in Chad as it plans to drill up to 42 wells there between 2014 and 2016. “Through the combination of complementary asset bases, we will create a solid regional platform for compounding reserves and production growth,” said Gary Guidry, chief executive of Caracal.

Guidry will be the head of the merged company. Before running Caracal, he was chief executive of Tanganyika Oil, a Calgary-based oil group with assets in Syria and Egypt that was bought by Sinopec of China for $1.8bn in 2008. Glencore Xstrata, the commodities trading house, is a partner of Caracal and holds 25 per cent of several of its oilfields in Chad following a $300m financing deal in 2012, when the group was known as Griffiths Energy.


According to the FT, the larger oil companies including Royal Dutch Shell, Total of France, and ConocoPhillips and Chevron of the US are selling some of their mature onshore assets in the continent to instead focus their attention on new growth areas, particularly in deep water offshore in west and east Africa.


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Libya PM Zeidan dismissed as oil tanker “breaks blockade” – BBC News

Libya’s parliament has dismissed PM Ali Zeidan after a tanker laden with oil from a rebel-held port reportedly broke through a naval blockade. Libyan MPs had called a vote of confidence in Zeidan after they were told the North Korean-flagged ship had escaped to sea. Defence Minister Abdullah al-Thinni has been named interim prime minister.

Earlier, Libyan officials had said they had “complete control” of the tanker as it tried to leave the port of Sidra. But the rebels rejected the assertion.

Separatist militants have occupied three major eastern ports since August. They are seeking a greater share of the country’s oil revenues, as well as autonomy for the historic eastern region of Cyrenaica, BBC News reported.

The tanker was reported to have taken on at least 234,000 barrels of crude at Sidra’s oil terminal. It was the first vessel to have loaded oil from a rebel-held port since the separatist revolt against the central government in Tripoli erupted in July.


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Tullow Suspends Work Off Guinea as Partner Investigated by U.S. – Bloomberg

Tullow Oil, a U.K. explorer operating mostly in Africa, has suspended work at a project off Guinea following the start of an investigation into its partner, Hyperdynamics Corp.  A U.S. probe into Hyperdynamics means Tullow, which had planned to start drilling a deepwater well by April 1 this year, is unable to meet its contractual obligations. The company spokesman said Tullow “cannot proceed with its activities on the license until these issues are resolved.”

The U.S. Department of Justice and the U.S. Securities and Exchange Commission are probing Houston-based Hyperdynamics over the acquisition and retention of exploration rights in Guinea. Since last year the U.S. also has been examining how iron-mining rights were awarded in the West African nation’s Simandou area.

Tullow, the operator of the oil and gas project, joined the concession in 2012 by acquiring 40 percent from Hyperdynamics, which now has 37 percent. The London-based company agreed to pay $27 million in cash to Hyperdynamics to cover past costs and as much as $200 million for future expenses, it said at the time. Korea National Oil Corp.’s Dana Petroleum unit also is a partner in the venture.

Tullow’s exit from its contractual arrangements, declaring what’s known as ‘force majeure’, follows a February 7 filing from Hyperdynamics, which said it may be subject to fines and “civil and criminal penalties” if violations of the Foreign Corrupt Practices Act are uncovered.

“We have retained legal counsel to represent us in these matters, initiated an internal investigation, and we are cooperating fully with the government,” Hyperdynamics said at the time.

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South Africa: State given 20 percent of future oil ventures

South Africa’s parliament has passed changes to its main petroleum law, giving the state a stake of 20 percent in new gas and oil exploration and production ventures. The bill has also given South Africa’s mines minister wide-ranging discretionary powers to place certain minerals in a ‘value-addition’ category, which means a portion of the extracted resource would have to be processed domestically instead of exported in raw form.

The oil industry has hit back at the legislation, saying that move would discourage investment in South Africa’s oil industry. In addition, the speed in passing the bill ahead of general elections in May has alarmed petroleum operators such as Shell, Total and Exxon Mobil, which are looking to explore in South Africa in the wake of big offshore gas discoveries in neighbouring Mozambique, Reuters reported. It must still be signed into law by President Jacob Zuma before it becomes effective.

The Offshore Petroleum Association of South Africa (OPASA) said in a statement that the changes will have “a chilling effect” on investment in the industry. Among its members are Shell, Anardarko, petrochemical group Sasol and BHP Billiton Petroleum.

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China’s January crude oil imports hit record high. Russia expects 2014 oil output to renew post-Soviet record

China’s crude oil imports rose 11.9 percent in January from a year earlier to a record 6.63 million barrels per day (b/d), as companies restocked ahead of the Lunar New Year holiday despite lukewarm demand growth. The surprisingly high figure could also be due to data distortions ahead of the week-long break that fell across the first week of February, as companies tend to advance book cargos that are due to arrive in early February.

China, the world’s top energy consumer, took in 28.16 million tonnes, or 6.63 million bpd, of oil last month, up 5.1 percent from the previous record of 6.31 million in December of last year, according to the General Administration of Customs.

Demand for crude appeared less robust than the imports indicate as the top two state refiners Sinopec and PetroChina were due to process 1.9 percent less oil in January than in December, according to energy consultancy ICIS C1. That suggests some of the imports went straight into storage. China will not release its official throughput data for the first two months of this year until mid-March.

Elsewhere, Russia announced it expects its oil output to reach 525 million tonnes (10.54 million b/d) this year, up 0.4 percent from 2013, a figure that would set a post-Soviet record high. Russia, the world’s leading oil producer, added almost 1.4 percent to its crude output last year to reach 10.51 million b/d, the previous annual post-Soviet record. The gas production figure would also set a record since the collapse of the Soviet Union. In 2013, Russia produced 668 billion cubic metres of gas, with the bulk coming from state-controlled Gazprom, which meets the quarter of Europe’s gas needs.


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Tullow shares fall as Mauritania exploration well disappoints

After a string of disappointments, Britain’s Tullow Oil is under pressure to regain its reputation for successful exploration. However, the problems have continued after the oil major disclosed that a key well in West Africa did not find oil in commercial quantities. According to Tullow, the company said the Fregate-1 well off the coast of Mauritania was not a commercial find, but had encountered 30 metres of gas condensate and oil. Shares have plummeted further with the news, trading down 3.4 percent at 817.25 pence by 1052 GMT on Wednesday 12 February.

Tullow said while not commercial by itself, the well opened up a new oil area, deeper than current gas fields off the coast of Mauritania. The company will now drill two more wells off the coast of Mauritania in an attempt to see if there is more oil there, enough for a commercial development. Tullow’s shares have lost almost a third of their value over the last 12 months. In 2013 it was the biggest declining stock in the FTSE 100 blue chip index outside the mining sector. Tullow, having issued guidance for its 2013 revenue and profit in January, reported 2013 operating profit of $381 million, a 68 percent fall on the year but ahead of a consensus forecast of $349.7 million.

Analysts view

  • Analysts had reportedly been keenly awaiting the result of the well and had said a positive result would be a major boost for the company, after drilling setbacks in French Guiana, Mozambique and Ethiopia last year, Reuters reported.
  • “While unsuccessful, the result details reaffirm the potential of making a big oil find offshore Mauritania via the follow-on wells,” Morgan Stanley analysts said in a note.
  • “We had hoped for a commercial discovery here, providing an additional offshore ‘leg’ to the exploration story,” analysts at brokerage Canaccord said. “We expect the East African program to continue to deliver success, but think an additional ‘leg’ is required to see further upside in the near term.”