Occidental Petroleum Corp. has agreed to buy oil and gas properties, mainly in California and Texas, from Plains Exploration & Production Co., Houston, and certain subsidiaries, for $865 million. The transaction is expected to close by Sept. 30.
In other recent company news:
- GE Energy Financial Services agreed to buy Kinder Morgan Inc.’s natural gas retail distribution and related operations in Colorado, Nebraska, Wyoming, and Hermosillo, Mexico, for $710 million, plus working capital.
- Total SA acquired Chevron Corp.’s 17% interest in the Brass LNG project in the Niger Delta, 90 km west of Bonny Island, Nigeria. Terms of the transaction were not disclosed.
- Colombia will privatize as much as 20% of state-owned Ecopetrol in a bid to draw much-needed investment for modernizing the country’s ailing petroleum sector, the government said.
- Trident Resources Corp. filed a registration statement in late July with the US Securities & Exchange Commission for a proposed initial public offering of common stock.
- Inpex Holdings Inc. of Japan is buying stakes in three exploration permits off Western Australia, subject to Australian government approvals. Various sellers are involved in the acquisitions.
- BP PLC recently agreed to pay an undisclosed settlement to 1,000 Colombian farmers who claimed their livelihoods were endangered by construction of the Ocensa pipeline, Colombia’s largest, laid in the 1990s through part of the state of Antioquia.
Oxy buys Plains assets
The properties being acquired by Oxy include interests in Asphalto, Buena Vista, and Mt. Poso fields in California’s San Joaquin Valley, Sansinena field near Plains E&P’s Montebello field in the Los Angeles basin, Pakenham field in West Texas, and several minor properties.
Plains E&P’s independent reserves engineers estimated these producing properties as of Dec. 31, 2005, had proved reserves of 45 million boe, and the properties generate sales volumes of about 7,200 boe/d of oil.
Plains E&P will use the proceeds for debt reduction and to continue repurchasing shares.
GE Energy acquisition
GE Energy’s transaction, expected to close by Apr. 1, 2007, remains subject to conditions and regulatory approvals, including approvals from state utility commissions.
The retail business being sold consists of 11,400 miles of distribution and transmission pipelines, underground storage fields, field system lines, and related facilities. The business will adopt a new name after the closing.
KMI expects to use proceeds from the sale to retire debt and repurchase stock. The sale does not include Terasen Gas, the large British Columbia natural gas utility that KMI bought last year.
With this transaction, GE Energy, Stamford, Conn., expands beyond wholesale pipelines and gas services into retail gas distribution. The retail gas distribution business’ headquarters will be maintained in Lakewood, Colo.
Total-Brass LNG
Current Brass LNG project partners are Nigerian National Petroleum Corp. (NNPC) 49%, Italy’s Eni SPA 17%, and ConocoPhillips 17%. Project sanctions for the first two trains of Brass LNG are expected by yearend, with production scheduled to start in 2011.
Initially, two trains will be built, each with a capacity of 5 million tonnes/year, with most of the LNG intended for export to Europe and the US. Feed gas will be supplied from the partners’ production, with Total accounting for 570 MMcfd of gas for at least 20 years.
The interest is in addition to Total’s 15% stake in Nigeria LNG (NLNG), a joint venture company whose capacity was expanded to nearly 18 million tonnes/year with the commissioning of Trains 4 and 5 earlier this year. Train 6, with a capacity of 4 million tonnes/year, is under construction and scheduled to come on stream in 2007.
Ecopetrol’s privatization
Colombia will privatize as much as 20% of state-owned Ecopetrol in a bid to draw much-needed investment for modernizing the country’s ailing petroleum sector, the government said.
The move is Ecopetrol’s first opening to private investors and comes just as other Latin American countries such as Venezuela, Bolivia, and Ecuador are wresting control from foreign firms over their natural resources.
Economists have estimated the public share offering could be worth $3-4 billion.
A large injection of capital into Ecopetrol is essential if the company is to increase exploration and boost output, the government said.
Colombian oil production has fallen from a peak of 820,000 b/d in 1999, due in part to violence associated with the country’s 4-decade-old guerrilla war. Colombia produced 538,709 b/d of oil in May.
Oil analysts have said the difference between Colombia and some of its neighboring countries is that Colombian oil production is declining.
In bucking the Andean trend toward state control over the energy sector, Colombia is looking for partners to share the risk of exploring for oil in a country where Marxist rebels often attack pipelines and other energy installations.
A marked reduction in violence during the past 2 years has allowed Ecopetrol to return to areas long abandoned by oil companies. Also, lower royalty rates introduced by President Alvaro Uribe have encouraged multinational exploration.
Uribe, popular for cutting crime as part of his US-backed crackdown on the guerrillas, is well liked on Wall Street for his market-friendly economic policies. Two months ago he won reelection with a 62% majority vote.
Also, earlier this month Colombia sold its biggest state gas transportation company, Ecogas, to local pension and employee funds for $301 million.
Trident Resources’ IPO
Trident Resources’ subsidiary, private Trident Exploration Corp. of Calgary, is a natural gas exploration and development outfit focused mainly on coalbed methane in the Western Canadian Sedimentary Basin, where it has positions in the Horseshoe Canyon and Mannville plays in Alberta.
Trident Exploration also explores for other unconventional gas resources, including tight gas and shale gas. It has properties located in British Columbia, Washington, and other areas in the northwest US.
Founded in 2000 and incorporated in 2003, Trident and the Southern Ute Indian Tribe acquired properties at Corbett, Alta., booked Horseshoe Canyon coal gas reserves at the end of 2004, and declared Corbett commercial in July 2005. Trident bought the tribe’s interest in December 2005 for $202.6 million and purchased Rakhit Petroleum Consulting for $6 million earlier this year.
Inpex in Australia
Inpex is buying a 35% interest in oil-prone WA-357-P license from permit operator Apache Corp. WA-357-P covers 481 sq km in 200-500 m of water.
The gas-condensate properties are in Browse basin where Inpex plans to drill next year. Inpex bought 20% interest each in WA-274-P and WA-281-P off the North West Shelf.
The WA-274-P license covers 2,760 sq km in 300-500 m of water. Inpex Browse acquired a 20% stake from operator Coveyork Pty. Ltd., a wholly owned subsidiary of Santos Ltd.
The adjacent WA-281-P license covers 2,340 sq km in 150-450 m of water. Inpex acquired 17.34% interest from Santos Offshore Pty. Ltd. and 2.66% interest from Beach Petroleum Ltd.
BP’s Ocensa suit
A lawsuit for $28 million, which was to have been brought against BP in London’s high court, alleged that laying the Ocensa pipeline in Colombia ruined farming, including raising livestock and fish farming, and gold mining in that area.
The farmers also claimed they were harassed by far-right paramilitary groups because of their opposition to the pipeline. One community leader was killed in an act blamed on the paramilitaries, and a lawyer who represented the farmers fled Colombia after she discovered she was on a paramilitary hit list. She was granted political asylum in Britain in 2002.
The farmers never accused BP of working with the paramilitaries. But their opposition to the pipeline put them in the paramilitaries’ sights, their lawyers said.
BP and lawyers for the farmers said in a joint statement that the “amicable” settlement established a trust fund by the BP Colombia subsidiary to help farmers deal with environmental management, business development, and other issues. Lawyers for the farmers said BP negotiated the settlement after publication of two reports commissioned by environmental experts from Colombia’s National University detailing the extent of the damage to the zone.
The 100,000 b/d Ocensa oil line extends from BP’s Cusiana and Cupiagua oil fields in the eastern plains to the Caribbean coast.