Ensign (Australia) Holdings Pty. Ltd., a unit of Ensign Resource Service Group Inc., Calgary, has gained majority ownership of more than 50% of the shares of Australian onshore drilling contractor Australian Oil & Gas Corp. Ltd. (AOG) in a bid that values AOG at $175 million (Aus.) on a fully diluted basis. The Ensign unit's final bid for AOG of $2.70 (Aus.)/share made on July 11 is an increase over its July 4 bid price of $2.60 (Aus.)/share.
In other recent company news:
- PTT Exploration & Production PLC (PTTEP) said it plans to acquire certain upstream petroleum assets, mainly onshore, in Iran, Oman, and Bahrain.
- EnCana Corp. said it is seeking prospective buyers for its interests in two crude oil pipelines.
- TotalFinaElf SA told Russia's Prime Minister Mikhail Kassianov, while he was on a visit to Paris, that it is ready to take a 25% stake in the development of the supergiant Shtokmanovskoye gas field in arctic waters off northern Russia.
- India's petroleum ministry has given an ultimatum to British Gas PLC, Reliance Industries Ltd., and state-owned Oil & Natural Gas Corp. (ONGC) to resolve by September the issue of operatorship of the joint venture Panna-Mukta and Tapti oil and gas fields, or to prepare for government intervention.
Bidding war for AOG
Ensign outbid offers from Precision Drilling (Australia) Pty. Ltd., a unit of Calgary-based Precision Drilling Corp., and a wholly owned Australian subsidiary of Parker Drilling Co. of Houston, both of which made takeover bids for AOG earlier this year.
In May, Precision made an offer of $2.25 (Aus.)/share for AOG, valuing the company at $144 million (Aus.). Then, in June, Parker made a $2.50 (Aus.)/share offer for AOG, valuing the firm at $153 million (Aus.). Both Precision and Parker announced that neither firm would be increasing its bid for AOG to counter Ensign's most recent bid.
Ensign's offer for AOG was automatically extended 2 weeks, through July 24, pursuant to Australian regulations.
"Our strong North American operations will be augmented by AOG's international operations, thereby positioning the Ensign Group to effectively compete in an international oil field services market," said Selby Porter, president, Ensign Resource.
The employees and operations of AOG would form the cornerstone of international operations for the Ensign Group, Ensign said.
PTTEP's search for acreage
The majority Thai state-owned firm also is looking to obtain exploration and production stakes in three other countries in the region-Qatar, Iraq, and Yemen-in addition to Sudan, although the priority to acquire assets in these nations are not as high as in the other prospect areas.
PTTEP Pres. Chitrapongse Kwangsuksith said the firm would likely make a decision about the acquisition in one of the three priority countries by yearend. The acquisition could involve more than $100 million in E&P costs over a period of time, he said. "These are the countries which offer great opportunities for us but are less accessible by major international oil firms, particularly American ones, because of political barriers," Chitrapongse said, referring to Iran, Iraq, and Yemen.
PTTEP has been consulting with Thailand's government as to whether it is politically correct for PTTEP to engage in business in those countries.
PTTEP's move to acquire the Middle East assets follows close on the heels of efforts made by other Asian oil companies, including Malaysia's Petronas, Indonesia's Pertamina, and India's Oil & Natural Gas Corp.
It also forms part of PTTEP's plan to expand its business and diversify its production portfolio, which remains mostly natural gas-based, to focus more on oil.
In addition to the Middle East, the company is also looking to expand recently acquired assets in Viet Nam, Indonesia, and Myanmar, Chitrapongse said.
PTTEP last year bought a 34.17% stake in Medco Energi, one of the largest independent oil and gas producers in Indonesia (OGJ Online, Oct. 9, 2001). Also, in February, the firm committed as much as $50 million for 2 years of exploration work in Vietnamese waters.
EnCana's search for buyers
Calgary-based EnCana currently holds an indirect 70% interest in the Cold Lake Pipeline System and an indirect 100% interest in the Express Pipeline System. Both systems link Canada's oil sands production areas with the US Rocky Mountain and Midwest regions.
The Cold Lake system extends 297 miles and comprises two legs. The west leg, which extends between Cold Lake and Edmonton, Alta., consists of a 24-in., 235,000 b/d blend line and a 12-in. diluent (condensate) line.
The south leg, meanwhile, delivers as much as 200,000 b/d of blended oil from Cold Lake to Hardisty, Alta. In Hardisty, the line connects with the Express system as well as another interprovincial system.
The Express system is made up of two systems-Express and Platte-which extend 1,717 miles. The 24-in. Express line spans 785 miles from Alberta's oil transportation hub at Hardisty to Casper, Wyo. The line can transport as much as 172,000 b/d of oil to Montana, Wyoming, and Utah. Using "comparatively modest investment in pumping stations," EnCana said, the Express system could be expanded to 280,000 b/d.
The 20-in. Platte system extends 932 miles from Casper to Wood River, Ill., and can carry as much as 150,000 b/d of oil. The system serves refineries in Colorado, Kansas, and Illinois.
The assets, effective Dec. 31, 2001, are worth a net value of $1.3 billion, EnCana said. The systems are held through Alberta Energy Co. Ltd., an indirect wholly owned subsidiary of EnCana.
TotalFinaElf: Arctic field stake
The massive Shtokmanovskoye field lies in 350 m of water in the Barents Sea 550 km off Murmansk, north of the Arctic Circle. Because of the region's heavy sea ice cover and remoteness, its development would be among the most technologically daunting and costly ever undertaken by the oil and gas industry.
Since 1996, TotalFinaElf has been interested in the field and formed an association with Russia's OAO Gazprom, Finland's Fortum Oy, and Conoco Inc. to examine the feasibility of its development.
Although not indicating a wish to serve as operator of the development, TotalFinaElf has expressed a strong desire to be involved, a spokeswoman said. The company hopes an association will be formed by yearend for the purpose with the share of each partner determined.
Russia is reportedly anxious to hold a 50% stake at least, possibly through Gazprom and OAO Rosneft, which have formed a joint venture for the exploration stage of the operation.
Reserves of the field, situated in an area where no development has ever taken place, are estimated at 3 trillion cu m of natural gas. First stage of the development-expected to require a $10 billion budget-would involve an offshore production platform, subsea pipelines leading to an onshore point not yet determined, and an onshore line to take the gas to the European market via St. Petersburg, which may include already existing segments. The gas would be shipped to Europe and Russia.
First gas of 22 billion cu m/year is expected in 2010. It is envisioned as the first part of four development stages involving a total ultimate outlay of $25 billion.
Panna-Mukta ultimatum
BG, Reliance Industries, and ONGC have been at loggerheads ever since BG claimed operational control after buying Enron's 30% stake in the fields for $350 million in January (OGJ Online, Jan. 23, 2002).
The move prompted ONGC-which owns the largest stake in the venture, 40%-to stake a counterclaim (OGJ Online, Feb. 19, 2002). Reliance, which matches BG's stake in the project with 30% equity, is backing ONGC.
Although the partners are tight-lipped over the imbroglio, sources revealed that if BG fails to give the chief operating officer's post to ONGC and the chief financial officer's role to Reliance, the Indian partners would bring into force a notice to strip the UK major of its operational control, therefore jeopardizing operations.
One of the options before the government steps in would be to take control through ONGC. "If ONGC could be trusted with Bombay High and several other fields in the region, there is no reason why it cannot be given control of Panna-Mukta and Tapti," a petroleum ministry official said. "Besides, ONGC discovered the field, and has the highest stake."
