Page 8 - NorthAmOil Week 40

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This move raises questions about Petro-
bras’ plans for the facility, as Golar had been
the only company to submit a binding offer
for the lease contract. The NOC has revealed
that Compass Gas e Energia, a local firm,
declined to bid, and BP Energy do Brasil, a
subsidiary of BP (UK), has asked for more
time to finalise its offer.
In other news, Brazilian officials are
reported to be in talks with Argentina on a gas
import deal. The two sides are discussing pro-
posals for the construction of a $1.2bn pipe-
line that would pump gas from unconventional
fields in Argentina’s Vaca Muerta formation to
southern Brazil.
Elsewhere in South America, ExxonMobil is
pushing forward with work at the Stabroek block
offshore Guyana. The US super-major said last
week that it had taken a final investment decision
(FID) in favour of developing the Payara section Deals close in US
of the block after securing the Guyanese govern- Some major oil and gas deals have been com-
ment’s approval for its plans, which carry a price pleted in the US in recent days. Most notably,
tag of $9bn. this week Chevron announced that it had closed
its $13bn acquisition of Noble Energy after more
If you’d like to read more about the key events shaping than 90% of the latter’s shareholders approved
the Latin American oil and gas sector then please click the transaction. (See: Deals close as US industry
here for NewsBase’s LatAmOil Monitor . consolidation gains momentum, page 9)
The acquisition gives Chevron a number
Middle Eastern political and production of domestic and international assets that the
deals come to the fore super-major has described as being comple-
As production numbers were announced for mentary to its existing operations. Domestically,
September, compliance with the cartel’s out- this includes shale acreage in the Permian Basin,
put cut deal came into sharp focus. This has Denver-Julesburg (DJ) Basin and the Eagle Ford
broadly improved, with surprising laggard shale. Internationally, Noble’s most attractive
the UAE catching up by making swingeing assets are located in the Eastern Mediterranean,
reductions to production during the month. offshore Israel and Cyprus, as well as off Equato-
However, there is little sign of compliance rial Guinea in West Africa.
from Iraq, which saw another output increase, Another notable deal that closed over the past
despite repeated promises to make compen- week involved the sale of Barnett shale gas assets
satory cuts. belonging to Devon Energy to Banpu Kalnin
Iran, Libya and Venezuela all also recorded Ventures (BKV). Devon announced on October
production upticks, with the Islamic Republic 1 that the transaction had been completed. The
registering an additional 120,000 barrels per US company received a cash payment of $320mn
day, while exports doubled to 1.5mn bpd. Mean- from BKV upon closing of the deal, after adjust-
while, cartel kingpin Saudi Arabia also registered ing for a $170mn deposit that was paid in April
a significant increase in exports as it reduced its and purchase price adjustments.
official selling prices (OSPs) to Asia. Under the sale agreement, Devon stands to
Following the US’ brokering of a peace deal receive further contingent cash payments of up to
between the UAE and Israel, the three parties $260mn, depending on future commodity prices.
this week agreed to co-operate on energy-related The company said upside participation would
matters. The deal was as wide-reaching as it was begin at either a Henry Hub gas price of $2.75 per
vague, but will be played as a major foreign pol- million British thermal units ($76.07 per 1,000
icy win by the White House in the run-up to the cubic metres) or a West Texas Intermediate (WTI)
November presidential election. oil price of $50 per barrel, starting in 2021.
Washington was not done in the region, The announcement that the Barnett shale
though, and will play a mediatory role in the deal had closed came within days of Devon’s
coming to the table of Israel and Lebanon as they announcement that it was merging with another
seek to resolve a lengthy dispute about their mar- shale company, WPX Energy. The latter has core
itime border. An agreement could lead to explo- positions in the Permian and Williston basins
ration in Lebanon’s Block 9 by a consortium led and this, combined with the Barnett sale, illus-
by Total. trates Devon’s shift towards more oil-rich assets.
The merger is being touted as providing a
If you’d like to read more about the key events shaping roadmap for future consolidation in the shale
the Middle East’s oil and gas sector then please click industry, involving stock rather than cash, and
here for NewsBase’s MEOG Monitor . little to no premium.™

P8 www. NEWSBASE .com Week 40 08•October•2020