Member Info for GozoMike

Last top up for me, 14,000 at 29.99

(Bloomberg) -- Investors still haven’t forgiven oil companies for being ill-prepared for a crude-price collapse four years ago. Perhaps more than half a trillion dollars will change their minds.

With oil above $80 a barrel as costs languish at an eight-year low, the industry is seeing green. In 2018 alone, it will rake in as much extra money as it did in the previous five years combined, according to consultant Rystad Energy AS. You could liquidate Facebook Inc. and it wouldn’t touch what oil companies will generate in free-flowing cash over the next three years.

They may need every dollar. So far nothing oil companies have done -- from $25 billion buyback programs to better earnings than in the days of $115 oil -- has gotten them out of the doghouse with investors. Share-prices increases have fallen well behind the surge in crude. while in the U.S., oil companies haven’t kept up with broader index gains at all.

“The comeback in free cash flows has only gradually started to be visible,” said Espen Erlingsen, a partner at Rystad, by email. Investors are probably “waiting to see how these oil companies will spend the extra money.”

Free cash flow at international oil companies is expected to more than double this year, to a record $175 billion. Then it will rise again in 2019, to close to $200 billion, and stay around that level for at least two years after that, according to Rystad Energy.

The estimate comes with a big caveat. Oil prices can’t fall from today’s level of more than $80 a barrel, and companies can’t return to pre-crash spending heights.

There are reasons to doubt the sustainability of crude’s rally. Oil prices have surged in the past year, in part because a snap-back of U.S. sanctions on Iranian fuel exports is driving fears of supply shortages. BP Plc Chief Executive Bob Dudley said those concerns could subside by the end of the year and that prices “feel high.”

Investors are also uncertain whether they can trust oil company executives to exercise restraint as crude keeps soaring. Firms committed to increasingly large projects from 2008, buoyed by a bullish crude market. By 2014, when prices collapsed, costs and investments for international oil companies rose to $560 billion, while free cash flow fell to less than $50 billion, not enough to cover dividend payments, Rystad data show.

While the same companies cleaned up their balance sheets and are now more profitable than before the crash, investor confidence in the sector hasn’t been fully restored. The S&P 500 Energy Index has gained about 7 percent so far this year, lagging the S&P 500’s 8 percent rise. Crude oil traded in the U.S. has jumped 22 percent over the same time period.

“The concern of some investors is that capital discipline isn’t really here to stay,” said Jason Gammel, an analyst at Jefferies LLC. “We’re not that far into the recovery yet.”

Executives will have the chance to make their case this week at the Oil & Money conference in Lond

Overdue for a Q4 presentation, hopefully we will get the update before the next FSC
https://www.yoursoundenergy.com/app/panel/qa

Algeria will continue to supply gas to Morocco through the Maghreb-Europe pipeline as the two countries prepare to renew a contract that will expire in 2021, Algerian Energy Minister Mustapha Guitouni told Reuters.

Morocco will take full ownership of the pipeline that channels gas to Spain in 2021, the Algerian minister said following talks with Morocco’s Energy Minister Aziz Rabbah in Marrakech on the sidelines of the 11thArab Energy Conference.


The 1300 km pipeline, currently owned by Spain, channels gas from the Algerian field of Hassi R’mel to Spain.

Morocco receives royalties for the pipeline worth 0.5 billion cubic meters of gas, representing half the country’s consumption.

The Algerian and Moroccan press had speculated that the agreement may not be renewed as Algeria prepares a direct pipeline to export gas to Spain without going through Morocco.

Significant discoveries in Tindrara by Sound Energy as well as Morocco’s renewable energy plan and its project to build an LNG gas terminal have also led to speculations that the country may do without Algerian gas.

The Moroccan LNG project is part of efforts to diversify the country’s energy mix and autonomy. The project includes two new combined-cycle gas turbine power plants, each with a capacity of 1200 MW, an LNG terminal and onshore regasification unit at the Port of Jorf Lasfar as well as pipelines connecting the terminal to the Maghreb-Europe pipeline.


The gas terminal will have a storage capacity of 5 billion cubic meters of LNG per year, a fitted marine jetty, regasification plants and high-pressure gas transmission pipes.

Morocco, which imports most of its energy needs, seeks to reduce its dependency on imported fossil fuels, with plans aimed at bringing the share of LNG to 13 pc of its energy mix by 2025 and generating over 50 percent of its energy from renewables by 2030.

Morocco will extend Algeria's gas import deal, Algerian energy minister Mustapha Guitouni told Reuters on Monday (October 1st). He recalled that in 2021, Morocco will own the gas pipeline.
Mr. Guitouni spoke after his meeting with Aziz Rebbah, Minister of Energy, Mines and Sustainable Development, as part of the work of the 11th Arab Energy Congress, organized by the Organization of Arab Countries exporters of oil (Opaep), in Marrakech.
According to the Algerian minister, further meetings will be held to negotiate the terms of the contract .

"We discussed the supply of gas and electricity," he told reporters without providing further details. Morocco will take over the Maghreb-Europe gas pipeline in 2021 , he added, according to the same source .

These statements confirm the revelations made by Médias24 in a previous article .

Indeed, the Maghreb-Europe gas pipeline (GME) is owned by Spain until 2020. In 2021, it becomes property of Morocco . It is not the end of a contract but a change of ownership.

Recall that since its entry into service in 1996, the Maghreb-Europe gas pipeline, 1,300 km long, starts from the Algerian Hassi R'mel deposit, crosses 540 km of Moroccan territory before continuing its route (sea and land) to its final destination, Cordoba.

In exchange for the right of passage for Algerian gas (13.5 billion cubic meters per year), since 2011 Morocco has been receiving an annual fee, in kind, of half a billion cubic meters of gas, ie around half of the annual consumption of the Kingdom.

The Algerian press recently reported that its Minister of Energy launched Wednesday, September 12th, a deflection site of the GME directly linking Algeria to Spain without going through Morocco, and which will be ready in 2020.

The Algerian minister said that the connection of the GME Medgaz gas pipeline (which has a capacity of 8 MM m3 / year) was only to increase the volume of gas exports from Algeria. The media in both countries (Morocco and Algeria), however, interpreted his statements as a desire to prepare for the non-renewal of the gas transmission agreement in 2021.

At a press conference on September 24, Abdelmoumen Ould Kaddour, CEO of Sonatrach, explained that "Algeria has no interest in cutting gas through the Maghreb-Europe gas pipeline". "On the contrary, we have no interest in it, our interest is to increase our exports, we have launched a second gas pipeline to increase our capacity and not to close the existing Maghreb-Europe gas pipeline". he added.

These rumors were also denied by Guitouni a few days ago.

https://youtu.be/VvLX4Y2AI9g

http://northafricapost.com/25600-algeria-risks-sanctions-if-it-buys-russian-arms-u-s-ambassador.html

I would think JP is paying tax at 45% so that explains it

Unless we farm out Sidi and get the farminee to foot the bill. Otherwise all we can afford is a Berber with a divining rod.

According to my rough calcs, we are about due for another CPR. It has been months since this part was finished, so some news soon I hope. Perhaps on the 25th?.

Agreed, enough is enough. Filtered

Taken over by Wolverine.

The purpose of the business is natural gas extraction.

Agreed Shedulike, all 3 drills could fail. However that is unlikely IMO. Even if that were to be the case our SP would be underpinned by our existing discovery once GSA is a done deal, allegedly very soon. SP could easily be fragile in the case of 3 failures but TE5 horst is still worth 40-60p

Yes I agree the gas will go to Europe but the profits would go to China. It is of interest to China as an investment home for their surplus trillions. I really don't care who ends up as the eventual owner. I just hope it costs them a great deal of money and soon. GLA

Sound Energy has confirmed the existence of a volume of reserves in place in the only TE-5 well of 18 billion m3, following the certification of the results obtained by independent experts of the company "RPS Energy Consultants Ltd".

The British firm will have to deepen further research to measure accessibility to this deposit in order to exploit it. Sound Energy claims that the final decision on the discovery at Tendrara will be announced before the end of 2018. Already, the English group announced in 2017 the discovery of a potentially giant gas field in the Oriental, after the completion of the drilling of its last well T-8, of several hundreds of billions of m3 by connecting the 8 wells which the group has the authorization as well as other new deposits.

As such, the company wants to continue its exploration program and intends to expand its portfolio in Morocco. The group is accelerating its research and plans to drill three gas wells in the east (Tendrara, Matarka and Anoual). These are TE-9 in July, TE-10 in September and TE-11 in November. This means that 2018 will be decisive for Tendrara, which represents a continuation of the Algerian trias and the Hercynian Saharan platform with a very significant gas potential. Such announcements are likely to have a positive impact on the prices of publicly traded groups. Sometimes they lead to communicative bubbles with scandal scents like the Lone Star Energy case in Talsint

Economiste 03/04/2018

Is Morocco becoming a natural gas producing country? The discoveries announced by SDX and Sound Energy confirm the promising potential of the deposits. For now, guardianship remains on guard and prefers to wait before making statements. Is it for caution or a communication strategy that is getting ready? Whether it is the Onhym or the Ministry of Energy, they do not want to relive the same scenario of Talsint and the speculations that tainted this episode.
It goes without saying that the context is this time different with gas: international investors are on the lookout. They observe more closely the Moroccan energy landscape, with a particular interest for the gas component. Large groups are surprised even at the postponement of the call for tenders originally planned last December, which has been postponed until next June.
Already a short list of 93 groups has been selected by ONEE, which is the leader in the implementation of "Gas to Power". This call for tenders must concern the development, financing, construction, operation and maintenance of the said project. Except that this delay gives free rein to speculation!
There is another intriguing element for these global behemoths: the non-renewal of the agreement with Algeria on the Maghreb-Europe gas pipeline. This platform, which will become the property of the state in 2021, will have a new vocation, said Aziz Rabbah, Minister of Energy and Mines, who stressed the importance of the development of two strategic projects, namely Jorf Lasfar and the Morocco-Nigeria gas pipeline ( see L'Economiste, 15 June 2017 ).
This being said, there is every reason to believe that by then the Maghreb-Europe gas pipeline will supply the national market from Tendrara (Oriental) and the Gharb, as well as Spain and Portugal. Will Morocco be ready in 2021 to meet an annual demand of more than 9 billion m3? To the delight of Moroccans, the answer could be "yes". If this is confirmed, Algeria will be completely out of this strategic market.
This will further depress the Sonatrach who has recently experienced difficult times. Abderrahim El Hafidi, Secretary General at the Ministry of Energy, announced last June in Copenhagen, that the twenty companies working in Morocco in the exploration for natural gas argue "very positive" indicators found in several sites, particularly in the region of Tendrara (120 km from the Maghreb-Europe gas pipeline).
Onhym, in its 2016 activity report, confirms this trend by announcing gas indices and discoveries in the areas of Gharb, Meskala, Tendrara and Essaouira.
■ Sound Energy: 2018, the Tendrara year
On the ground, the discoveries confirmed at the beginning of 2018 in Tendrara by the British oil and gas producer Sound Energy are quite positive. And this, when the Onhym keeps silence

Drilling delay could just be because Saipem don,t want to drill in the Sahara in August. I don,t blame them.
I think we will spud in 6 weeks and be nearing the reservoir for site visit 3 rd week October.

Slovenia government is in a mess. Following the elections June 3rd, tbe SDS Democrats have 25 out of 90 seats and despite being the largest party, are unable to form a coalition. The second largest party LMS have held talks with five other parties but was unable to form a government when New Slovenia NSI pulled out. On Monday parliament is expected to give a further 14 days for a new PM to emerge. Failing an agreement, there will be another general election in the autumn. Reuters

JJ Traynor promoted to Sound Board