National Oil Company Monitor Q4 2011

National Oil Company Monitor Q4 2011

Table of contents
Partnerships and alliances North and South America Dale Nijoka Global Oil & Gas Leader Europe, Middle East and Africa Asia and Oceania Privatization and consolidation North and South America Europe, Middle East and Africa Asia and Oceania Government policy developments North and South America Europe, Middle East and Africa Asia and Oceania NOC strategy North and South America Europe, Middle East and Africa Asia and Oceania Sources 2 2 3 4 5 5 5 6 7 7 7 8 9 9 9 10 11

Attracting investment in Iraqs oil sector

Iraq will hold its fourth oil and gas bidding round in April, when 12 new oil and gas exploration blocks will be auctioned to international energy firms. Forty-six energy companies have been pre-qualified to participate in the auction, which is expected to add 29 trillion cubic feet of gas and 10 billion barrels of oil to Iraqi reserves. After two bidding rounds in 2009, Iraq signed contracts with oil majors to help manage brownfield oil development work, and in 2010 the Government held an auction for gas fields. A total of 11 oilfield development contracts were awarded with the aim of raising Iraqs oil production capacity to more than 13.5 million b/d in seven years under original Government plans. In November, the Iraqi cabinet approved an agreement with Royal Dutch Shell and Mitsubishi Corporation, forming a joint venture (JV) to gather raw gas from three major oil fields, adding an important domestic energy source for Iraq and offering the potential for gas exports. The JV will be called Basrah Gas Company (BGC) and will be held by Iraqs South Gas Company (51%), Shell (44%) and Mitsubishi Corporation (5%). BGC will gather raw gas that is currently flared because of a lack of infrastructure to collect it. Approximately 700 million standard cubic feet of gas is currently burned off each day in southern Iraq. JV will collect and process raw gas from the Rumaila, Zubair and West Qurna 1 fields in the southern part of the country. The primary market for the gas will be Iraq, but any surplus could potentially be exported in the future. The field development contracts were signed with international companies despite the absence of an Iraqi federal oil and gas law. However, the Kurdistan Regional Government (KRG) and the federal Government of Iraq have agreed that the 2007 draft hydrocarbons law will be used as the basis for discussions on a federal law. The parties may adopt the original draft oil law as it stands or make amendments or changes, taking into consideration that the two oil sectors have changed from what they were when the document was first designed. Once agreed, the law will be presented to parliament for debate and approval. This is expected to happen in the first quarter of 2012. By the end of 2010, the KRG had signed 45 production-sharing contracts for oil exploration with companies from 17 countries. Most of the contracts so far have been with smaller, independent players. However, the KRG is trying to encourage oil majors to invest in oil blocks in the country that are still unassigned. In October, the KRG signed an oil exploration contract with ExxonMobil covering six exploration areas. The KRG is also interested in having larger companies farm-in to existing deals where they are able to provide different expertise or new financing. In 2012, Kurdistan plans to export 175,000 barrels of oil a day compared with the 100,000 barrels a day set in the Iraqi national budget for 2011. Meanwhile, Iraq is expected to begin negotiations for re-entry to OPECs quota system in 2014, when the countrys oil output is expected to reach 4.5 million b/d. At its meeting in December, OPEC agreed to a new crude production ceiling of 30 million b/d, effectively bringing it in line with actual production by member countries. The ceiling includes output from Iraq and Libya but output limits were not assigned to individual countries.

All currency is US$ unless otherwise stated.

National Oil Company Monitor Q4 2011

Partnerships and alliances

North and South America
Venezuela signs agreements with Argentina, Colombia, Ecuador and Russia
Venezuela signs joint-study agreement with Argentina for mature fields The presidents of Venezuela and Argentina signed an agreement to jointly develop mature oil fields in their countries. According to the agreement, NOCs of both the countries Petrleos de Venezuela SA (PDVSA) and Argentinas Yacimientos Petrolferos Fiscales (YPF) would evaluate mature fields such as UN 6, Nardo and Nieblas in Venezuela and Loma Amarilla and other areas in Argentina. The NOCs would later form a development plan for the fields.1 Venezuela signs three agreements with Colombia The Venezuelan and Colombian presidents signed three agreements to strengthen oil and gas cooperation between the two countries. The agreements included: A letter of intent for a project study to build a pipeline connecting Venezuelas Orinoco Oil Belt with the Colombian port of Urumaco. The deal would enable Venezuela to supply oil to the Asian markets An agreement to study the extension of a gas pipeline, currently linking both countries, to Ecuador and Panama

An agreement signed between PDVSA and Colombian NOC Empresa Colombiana de Petrleos (Ecopetrol) to jointly develop three mature blocks in Venezuela the 16 Lama and 12 Lama blocks in Lake Maracaibo in Zulia state and the Guafita and La Victoria fields in Apure state2 PDVSA signs amended contract with Petroecuador for Sacha PDVSA and Ecuadorian state-run Petroecuador have renewed their contract for Rio Napo JV in Ecuador. Rio Napo, a 30:70 JV between both the NOCs, operates the Sacha oil field. The original contract, which was signed in September 2008, has now been extended for another 15 years. In addition, both the companies have committed to invest $1.27b in the field through 2026. The JV aims to increase production from the field from the current level of 51,200 b/d to 60,042 b/d in 2012 and 64,000 b/d in 2013, before declining steadily to 15,000 b/d in 2026.3 PDVSA signs two contracts with Russian NOCs Gazprom and Rosneft PDVSA and Gazprom plan to form MoU to develop gas field in Gulf of Venezuela PDVSA and Russian state-run company Gazprom have signed a memorandum of understanding (MoU) on a possible joint venture for the development of the Robalo gas field in the Gulf of Venezuela. According to the terms of the MoU, PDVSA will provide Gazprom with proposals on the cooperation terms and conditions, along with geological data of the field. The NOCs are also

expected to undertake negotiations on the project scheme, shareholding structure and other aspects related to the Robalo field development. The Robalo gas field is estimated to hold 15 trillion cubic feet (tcf) of natural gas reserves. Both the NOCs have also expressed interest in joint collaborations on additional projects in the future.4 PDVSA eyeing a deal with Rosneft for heavy oil Russian NOC OAO Rosneft has signed a preliminary MoU with PDVSA to form a JV with PDVSAs subsidiary, Corporacion Venezolana del Petroleo (CVP), to produce heavy oil under the Carabobo 2 project in Venezuela. While Rosneft plans to hold 40% of the JV, CVP will own the remaining 60%. Under the MoU, Rosneft will pay an entry bonus of $1.1b, out of which $440m will be paid on receiving the approval of the Government of Venezuela and its Parliament; the remaining $660m will be paid after a final investment decision is made. In addition, once Rosneft receives the requisite approvals on the final agreement, the company will offer a

National Oil Company Monitor Q4 2011

market rate $1.5b credit facility to PDVSA with annual disbursements of not more than $300m. The JV company, once formed, is expected to conduct exploration and development work at the project sites, build project infrastructure and construct an upgrading plant with a capacity of 200,000 barrels per day (b/d). In addition, PDVSA will construct a pipeline to connect the plant site to the port of Araya. While the MoUs will boost Rosnefts presence in the country, they will benefit Venezuela by augmenting domestic exploration and production activities and boosting exports.5

optimization. Both the companies plan to jointly invest 60m Brazilian real ($33.3m)* in the development of technological solutions.6

Chilean NOC signs new service contract in Ecuador

Chilean NOC Empresa Nacional del Petrleo (ENAP) signed a new service contract with Ecuadors Ministry of Non-Renewable Natural Resources and state-run company Petroecuador for Block 3 Jambel in the Gulf of Guayaquil, Ecuador. ENAP plans to drill two exploratory wells, one onshore and the other offshore, at a cost of $43m. The contract will help strengthen the ties between the two countries. Ecuador is an important crude oil supplier to Chile.7

While the MoU is in line with MOLs strategy to diversify its international portfolio, it is expected to benefit Uzbekneftegaz with investment from MOL along with technological assistance in increasing Uzbekistans crude oil and gas condensate production. The NOCs did not disclose further details around the MoU.8

IOC-NOC partnership continues to strengthen

Iraqi NOC signs final agreement with Shell and Mitsubishi Iraqi NOC South Gas Company has signed the final $17.2b agreement to form a JV company with Royal Dutch Shell (Shell) and Mitsubishi Corp. The JV company, Basra Gas Co., will be held by South Gas Company, Shell and Mitsubishi in 51:44:5 ratios. The primary purpose of the JV will be to collect associated gas from Rumaila, Zubair and West Qurna phase 1 fields in southern Iraq to process and sell domestically. While the preliminary agreement for the deal was signed in September 2008, the companies were awaiting Government approval on the establishment of the JV.

Petrobras signs technical agreement with BG subsidiary

Brazilian state-run Petrleo Brasileiro (Petrobras) has signed a cooperation agreement with the Brazilian subsidiary of the BG Group for joint development of technologies. The deal has been made to address challenges faced by the companies in the development of pre-salt blocks in the Santos basin. The agreement will be valid for three years and will cover areas such as well construction and production

Europe, Middle East and Africa

MOL and Uzbekneftegaz sign MoU
Hungarian Magyar Olaj (MOL) has signed an MoU with Uzbekistans stateowned Uzbekneftegaz to jointly conduct exploration projects in Uzbekistan. In addition, the NOCs are expected to create a working group, which will draft reports on activities on a quarterly basis.

* Brazil real = $0.554939 (as of 12 January 2012)

National Oil Company Monitor Q4 2011

The 25-year JV contract will help Iraq reduce flaring of natural gas and will help Shell and Mitsubishi strengthen their relationships with Iraq. The project is expected to start output by 2013 and is likely to utilize all the gas currently being flared by 2017.9 TPAO and Shell sign offshore and shale exploration contracts State-run Turkish Petroleum Corporation (TPAO) signed an agreement with Shell for joint exploration of the offshore Antalya field, along the Mediterranean coast, as well as for conducting shale gas surveys near Diyarbakir in southeastern Turkey. The offshore drilling agreement would involve exploration work, seismic data gathering and exploratory drilling. Shell is expected to fund the exploration costs under the contract. The agreement for shale exploration would involve drilling five wells, which can be later increased to 10.10 Ukraine signs deals with Total and Eni Agreement with Total for Black Sea shelf Ukraine NOC Naftogaz Ukrainy has signed an agreement with Frances Total to jointly explore the Black Sea shelf. The companies plan to cooperate in studying the Black Sea shelf and possibly file subsoil license applications for hydrocarbons. MoU with ENI Ukraine for research and cooperation agreement Naftogaz has also signed an MoU with Italy-based ENIs subsidiary, ENI Ukraine Holdings, for fulfilling conditions for a research and cooperation agreement.11

Asia and Oceania

PETRONAS and Shell sign EOR contracts
Malaysian NOC Petroliam Nasional Berhads (PETRONAS) subsidiary, PETRONAS Carigali Sdn Bhd (PCSB), signed 30-year production sharing contracts (PSCs) with Shell Malaysia for enhanced oil recovery (EOR) at the Baram Delta (BDO) and North Sabah fields. The companies are planning to invest $12b in the project. While the deal is in line with Shells strategy to invest in Malaysia and work with the countrys NOC, it would benefit PETRONAS by building capabilities in the EOR technology area and increasing the average recovery factor in the two fields from 36% to 50%, along with extending the field-life to beyond 2040. PCSB and Shell have equal sharing interests in the North Sabah contract and 60:40 interests in the BDO PSC.12 an agreement with PetroVietnam to develop long-term cooperation in the oil and gas sector in Vietnam, India and other countries. Under the three year agreement, the companies will cooperate in various areas, including exchange of industryrelated information as well as working visits of specialists and authorities in various domains of the industry, new investments and expansions and operations across the oil and gas value chain. The MoU will benefit both the NOCs in strengthening their relationships. The MoU is also in line with OVLs strategy to increase investments in Vietnams oil and gas sector.14

PetroVietnam signs MoU with LUKOIL

Vietnamese NOC PetroVietnam signed an MoU with Russia-based LUKOIL for cooperation in oil and gas exploration and development in Russia, Vietnam and other countries. Although the companies did not provide further details, the MoU will continue to enhance the relationship between the two companies. Under the MoU, both the companies plan to share information on potential exploration blocks.13

ONGC and PetroVietnam ink cooperation deal

ONGC Videsh Ltd. (OVL) the overseas arm of Indias state-owned Oil and Natural Gas Corp. (ONGC) has signed

National Oil Company Monitor Q4 2011

Privatization and consolidation

North and South America
CNOOC to acquire interests in Nexens deepwater wells
Chinese NOC China National Offshore Oil Corp. (CNOOC) has formed a JV with Canadas Nexen to acquire stakes in the latters assets in the US Gulf of Mexico (GOM). Under the deal, CNOOC will farm-in to Nexens three deepwater wells by acquiring a 20% working interest for an undisclosed amount. CNOOC is also negotiating for a 10%25% stake in another three exploration wells in the same area. The deal marked the third major investment by the Chinese NOC in North America the other two being the acquisition of OPTI Canada and partnership with Chesapeake in Eagle Ford shale.15

stake in Portugal-based Galp Energias subsidiary, Petrogal Brasil. Sinopec will also make a shareholder loan to Petrogal Brasil of $390m in order to help the latter in reimbursing 30% of the loans to Galp Energia (of $1.3b). According to Sinopec, the stake purchase is expected to result in a total cash payout of $5.18b. While the deal with Sinopec will help Galp Energia finance its Brazilian upstream projects, it will help increase Sinopecs production in Brazil to 21,300 barrels of oil equivalent per day (boe/d) by 2015 and 112,500 boe/d by 2024. Galp Energia has a significant presence in Brazil, with assets in offshore blocks in the Santos basin. On completion of the transaction, Galp Energia will retain 70% of Petrogal Brasil and continue to be the controlling shareholder.16 Sinopec subsidiary acquires Canadian upstream company Sinopec International Petroleum E&P Corp. (SIPC), a wholly owned subsidiary of Sinopec Group, acquired Canadian upstream company Daylight Energy for C$2.2b ($2.16b)**. SIPC has purchased all of Daylight Energys shares at C$10.08 per share value.

Daylight Energy has assets in Western Canadas northeast British Columbia and northwest Alberta.17

Europe, Middle East and Africa

Gazprom signs agreement with Wintershall to swap assets
Gazprom has signed a framework agreement with Germany-based Wintershall to provide terms and conditions of a potential asset swap deal. According to the terms of the agreement, Wintershall will receive 25% and one share in the development project for two blocks of the Achimov deposits in Russia. In exchange, Gazprom will receive interests of equal value in selected exploration and production projects by Wintershall in the North Sea (Netherlands and UK). Gazprom will ultimately receive half of Wintershalls shares in these concessions. The asset swap would provide both the companies with opportunities to work on technically complex and challenging projects.18

Sinopec announces acquisitions in Brazil and Canada

Sinopec acquires stakes of Petrogal Brasil Chinese NOC China Petrochemical Corp. (Sinopec Group) plans to buy a 30%

** C$1 = $0.982125 (as of 12 January 2012)

National Oil Company Monitor Q4 2011

SOCAR to acquire ExxonMobils Switzerland-based unit

Azerbaijans state-owned company, State Oil Company of Azerbaijan Republic (SOCAR), has signed a deal to buy ExxonMobils Swiss downstream unit, Esso Schweiz, for an undisclosed amount. The deal, which is in line with SOCARs strategy to develop its downstream business in Europe and Asia, will include a retail network with more than 170 service stations, an industrial and wholesale fuels marketing division, a gas bottling plant in Wangen bei Olten, retailer Deville Mazout in Geneva and Essos aviation business at Geneva and Zurich airports, along with supply and distribution business with associated terminals and pipelines. SOCAR is expected to rebrand Esso retail fuel stations with the SOCAR brand within the next 12 months.19

Petrobras farms out 50% stake to Shell

Petrobras subsidiary, Petrobras Tanzania, has sold a 50% stake in offshore Blocks 5 and 6 to Shells Tanzanian subsidiary, Shell Deepwater Tanzania. Petrobras Tanzania will remain the operator of the blocks. The blocks are located in the offshore region of Tanzania, in the Indian Ocean at water depths of up to 3,000 meters. The transaction value was not disclosed by the companies.21

the Cuu Long Joint Operating Company (which operates five oil fields in Block 15-1 Cuu Long basin), a 36% stake in Block 15-2 in the same basin that contains the Rang Dong (Aurora) oil field and a 16.3% stake in the Nam Con Son gas pipeline (which takes natural gas from the Lan Tay field in the Nam Con Son basin to the Dinh Co. gas processing plant in Ba Ria-Vung Tau province). PetroVietnam is one of the partners in Block 15-1 with a 50% stake, along with Korean NOC, Korea National Oil Corp. (KNOC), with 14.2%, SK Corp. with 9% and GeoPetrol with 3.5%. If the deal is finalized, it will help the NOC strengthen its ownership over South China Sea resources.23

Abu Dhabis state-owned company farms in Tanzanian offshore block

Abu Dhabi NOC Mubadala Development Companys subsidiary, Mubadala Oil & Gas, has signed a deal to buy a 20% stake in Dominion Petroleums offshore Block 7 in Tanzania. Mubadala has offered $22.4m, which includes $20m as an upfront cash payment and the remaining $2.4m as a cost for seismic work on the block. While the deal is in line with Mubadalas strategy to expand in East Africa, it would benefit Dominion in leveraging Mubadalas technical capabilities in deepwater drilling.22

Sinopec increases its stake to 25% in Australian LNG project

Sinopec Group has signed an initial agreement to increase its stake in Australia Pacific LNG from 15% to 25%, with a view to ensure more gas supply to meet the growing demand in China. The stake purchase would reduce ConocoPhillips and Origin Energys stakes to 37.5% each. The Chinese NOC would also buy an additional 3.3m tons of LNG per year through 2035. Sinopec bought the initial 15% stake in the project in April 2011 and signed an agreement to buy 4.3m tons of LNG for 20 years starting mid-2015. The financial details of the current deal have not been disclosed.24

OVL acquires 25% stake in Satpayev block

OVL signed a tripartite agreement with the Government of Kazakhstan and its NOC, Kazmunaigaz (KMG), to acquire a 25% stake in the Satpayev block in the north Caspian Sea. The Satpayev block is estimated to hold 1.8b barrels of oil reserves and is expected to commence production by 2020. While the stake purchase will support OVLs plans to explore for hydrocarbons in Kazakhstan, it also finalizes a deal that was under discussion for a long period of time.20

Asia and Oceania

PetroVietnam bids for ConocoPhillips Vietnam assets
PetroVietnam is bidding to acquire ConocoPhillips assets offshore Vietnam valued at around $1.5b. The bid is expected to include ConocoPhillips 23.3% stake in

National Oil Company Monitor Q4 2011

Government policy developments

North and South America
Colombia pre-launches 2012 licensing round
The Colombian oil regulator Agencia Nacional de Hidrocarburos (ANH) has pre-launched the bidding for its oil licensing round for 2012, offering 113 onshore and offshore blocks. The 2012 round offers 31 blocks that are located in mature basins, 34 blocks that are considered as new prospects and 48 blocks that are located in frontier basins. The blocks in the frontier basin offer the biggest sedimentary area. Out of the total blocks on offer, around 30% of the blocks possess potential for unconventional reserves. For the 2012 round, ANH has also modified its regulatory policies to remove certain conditions, allowing a bidder to be awarded adjacent blocks and allowing a single bidder to submit bids that exceed its financial capacity.

The official launch of the bidding process is expected to commence on 16 February 2012, with blocks being awarded in November 2012 and contracts signed in November or December 2012. The country has offered a reduced number of blocks as compared to the previous licensing round, when 228 blocks were offered. Nevertheless, the countrys regulator is hoping to match its success in terms of the number of contracts signed in the 2012 round.25

Europe, Middle East and Africa

Governments of Iraq and Kurdistan likely to conclude on oil law draft soon
Prime Ministers of Iraq and the Kurdistan Regional Government (KRG) have signed a deal to decide upon the 2007 draft of oil law. Both the Governments have decided to either amend the 2007 version by bringing out a new version or adopt the original version. The KRG and the Iraqi Government have been in discussion over the legal rights to oil and gas reserves located in the autonomous region of Kurdistan.27

Bolivia plans to award contracts for two blocks

Bolivia plans to hold the licensing round for two blocks, in order to expand domestic production of oil and gas. The countrys NOC, Yacimientos Petrolferos Fiscales Bolivianos (YPFB), plans to launch a tender, inviting foreign companies to bid for contracts to conduct studies into the Cedro and Carohuaicho 8B gas blocks. YPFB plans to increase exploration in order to develop 54 tcf of gas reserves and 1.4b barrels of oil in the country. Bolivia plans to offer an additional five blocks with potential reserves of 100m barrels of crude oil and 1 tcf of gas during 2012.26

Governments outline plans to offer blocks to investors

Uganda to offer relinquished blocks and lift moratorium on new areas Uganda is planning to offer relinquished blocks, along with unlicensed areas, in a competitive bidding round soon. This announcement shows a change in policy by the Government, which had announced in June 2011 that it would continue to hold a moratorium on new license applications. The Government is likely to provide more details soon on the relinquished blocks that will be put in the licensing round.28

National Oil Company Monitor Q4 2011

Morocco plans to offer 22 blocks Morocco plans to offer 22 onshore and offshore blocks in the country to oil and gas companies. The Government launched a campaign during an Africa-focused oil conference in Cape Town in order to attract investors to the country. Morocco plans to adopt a bilateral process, rather than making companies wait for a licensing round, to offer these blocks to the companies. Of the 22 blocks on offer in the country, 13 are located offshore and 9 are onshore.29 Greece to offer three oil blocks in 2012 The Government of Greece plans to invite bids for three oil blocks in the country. The country is expected to publish the tender for the three blocks (located near Patras and Katakolon and expected to hold 280m barrels of crude oil) in early 2012 with bids to be submitted during the next six months and commencement of test drilling around the end of 2012.30

The readmission to the OPEC quota system would not only mean scaling back the countrys ambitious 2017 production targets, but could also result in renegotiation of the oil contracts signed with IOCs.31

Asia and Oceania

China brings in new resource tax regime
China has extended the 5%10% value-based resource tax from oil and gas-rich regions in northern and eastern China to the whole country. The new regime has replaced taxes of CNY8-30/ton for crude oil and CNY2-15 per thousand cubic meters of gas. The new mandate is expected to increase the tax liability of some Chinese NOCs.32

India plans to award NELP IX blocks in 2012 and conduct shale licensing in 2013
The Government of India is expected to award oil and gas blocks, offered under the 9th round of the New Exploration Licensing Policy (NELP IX), in March 2012. The NELP IX licensing round was launched in October 2010; bidding closed by the end of March 2011. A total of 74 bids were received for 33 offered blocks, with one exploration block receiving no bids. The countrys upstream regulator, the Directorate General of Hydrocarbons (DGH), has also delayed the countrys first shale gas licensing round from the end of 2011 to year-end 2013. DGH plans to complete mapping of reserves by March 2012 and related policies by year-end 2012.33

Iraq plans to enter OPEC quota system again

Iraq is expected to apply for re-entry to OPECs crude production quota system in 2014. The country foresees its oil production increasing to 3.4m b/d in 2012 and 4.5m b/d in 201415, from current production levels of 2.7m b/d. Iraq had exited OPECs quota system after the 1990 invasion of Kuwait, when its oil exports were rationed under the UN-mandated oil-forfood program.

National Oil Company Monitor Q4 2011

NOC strategy
North and South America
Ecopetrol plans to invest $8.5b in 2012
Ecopetrol plans to invest up to $8.5b in 2012 (up by $1.7b from 2011), 94% of which will be invested in its projects in Colombia. According to the NOCs investment plan, $4.1b will be allocated for production activities, $2.0b for the transportation segment, $1.4b for exploration activities and around $1.0b for downstream and other investments. The NOC has also set an oil and gas production target of 750,000 boe/d for 2012, which is 10.6% higher than its 2011 target. Further, it plans to drill 42 exploration wells (36 of which are in Colombia) during the year and also develop a shale gas project in the Mid Magdalena valley in the country. Ecopetrol has also outlined a long-term investment plan of $80b over the next 10 years, along with goals to achieve production targets of 1m boe/d by 2015 and 1.3m boe/d by 2020.34

Petroecuador will keep its midstream pipeline operations, as well as the refining and downstream fuel sales operations. The full merger and modernization of the entities is expected to be complete by the end of 2014. The two companies are expected to spend $15m on the merger.35

KNOC to boost its investment in Kazakhstan

Korean state oil company KNOC is planning to increase its investment in Kazakhstan in order to increase its oil production in the country. The NOC plans to increase its production to 50,000 b/d in the next few years from its current production of 15,000 b/d. While the company plans to increase its investments in the country, it does not want to adopt the inorganic path of growth. Overall, KNOCs plan to increase investments in Kazakhstan is in line with the South Korean Governments objective of achieving an energy self-sufficiency ratio of 20% in 2012.38

Europe, Middle East and Africa

New chief executive for Sonatrach
Algerias Energy and Mines Minister, Youcef Yousfi, appointed Abdelhamid Zerguine as the new Chief Executive of the Algerian state oil company Sonatrach, replacing Noureddine Cherouati. Before this, Zerguine was the head of Sonatrachs Swiss subsidiary Samco and has also held the position of Vice President of Sonatrachs pipeline division between 2001 and 2005. Zerguine has not announced any change in the strategy for the company and plans to continue to focus on increased domestic exploration activities of Sonatrach.36

NIOC awards Azar field rights to Iranian firms

Irans state-owned oil company, National Iranian Oil Company (NIOC), has awarded the rights to develop the Azar field to a consortium of domestic companies, after it failed to complete a deal with Russias Gazprom Neft. NIOC awarded the contract to the domestic companies consortium, which includes Oil Industries Engineering and Construction Company and Civil Servants Pension Fund. According to the agreement, the field would be developed in six years and is likely to produce 50,000 65,000 b/d of oil for a 25-year period. The Iranian NOC is expected to rely more on local contractors in the future, as international sanctions on the country are likely to increase the reluctance of foreign companies to work in the country.39

Rosneft hires BP executive for offshore advice

Russian state oil company Rosneft has hired Laurence Bates, a former BP executive, to advise its president on offshore issues. Bates has been appointed as the Vice President and Business Development Adviser in the company, in line with the NOCs view to strengthen its presence in international offshore areas. Bates previously worked as Vice President and Project Director in the Russian shelf division at BP.37

Ecuadorian state oil companies to merge

Ecuador has decided to merge upstream operations of its NOCs, Petroecuador and Petroamazonas, as part of a restructuring exercise. Petroamazonas will take over the upstream operations of both companies, which currently produce close to twothirds of Ecuadors daily crude output.

National Oil Company Monitor Q4 2011

Kazmunaigaz hires a new CEO

Kazakhstans state-owned oil company, Kazmunaigaz, has appointed a new CEO, Bolat Akchulakov, to replace its long-time head, Kairgeldy Kabyldin. Akchulakov was previously the Deputy Minister of Oil and Gas and Managing Director of SamrukKazyna (Kazakhstans sovereign wealth fund that holds 100% of Kazmunaigazs shares). According to Reuters reports, Kabyldin has moved to a new role as Chief of KazTransOil, the oil transportation arm of Kazmunaigaz.40

Li will be instrumental in his new role due to his past experience in operations safety management, which is a key priority for the company after its oil spill accident in Bohai Bay. Simultaneously, Yang Hua will help the CNOOC group develop a long-term production growth strategy.41

Indian oil ministry: domestic NOCs should invest $14.8b overseas by 2017
Indias petroleum ministry has set a target for state-owned companies to invest INR780b ($15.1b)*** in overseas acquisitions during the next five years, through 2017. The Petroleum Ministry has also set performance targets for the Indian NOCs; for example, OVL has a target of doubling its production from the 2010 level of 9.5m tons of oil equivalent (MMTOE) to 20 MMTOE by 2017. The other state-owned companies (such as Oil India Limited and GAIL India) together have to produce another 20 MMTOE. The ministry also aims to increase LNG imports in the country from the current 12.5m tons to 40m tons by 2017.42

Asia and Oceania

Li Fanrong named as CNOOCs new CEO
Chinese NOC China National Offshore Oil Corp. Ltd (CNOOC) has appointed Li Fanrong, previously Executive Director, as its new CEO. Li succeeded Yang Hua after the latter resigned from the CEO position due to additional responsibilities as President of the CNOOC group and Vice Chairman of CNOOC Ltd.

*** INR1 = $0.019312 (as of 12 January 2012)

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National Oil Company Monitor Q4 2011

Sources
1.  Venezuela, Argentina presidents agree on joint field developments, Platts Commodity News, 1 December 2011, via Dow Jones Factiva, 2011 Platts. 2.  Colombia and Venezuela Sign Energy Accords, IHS Global Insight Daily Analysis, 30 November 2011, via Dow Jones Factiva, 2011 IHS Global Insight Limited. 3.  Petroecuador, PDVSA renew controversial Rio Napo contract, Platts Commodity News, 1 November 2011, via Dow Jones Factiva, 2011 Platts; Petroecuador, PDVSA extend contract for Ecuador oil field, EFE News Service, 2 November 2011, via Dow Jones Factiva, 2011 EFE News Service. 4.  PDVSA, Gazprom ink JV accord on Robalo gas field, Platts Oilgram News, 10 October 2011, via Dow Jones Factiva, 2011 McGraw-Hill, Inc. 5.  Rosneft Takes an Important Step in Expanding into the Strategic Market of Venezuela, ENP Newswire, 12 December 2011, via Dow Jones Factiva, 2011 Electronic News Publishing. 6.  Petrobras and BG Agree to Technical Co-Operation in Brazil, IHS Global Insight Daily Analysis, 14 October 2011, via Dow Jones Factiva, 2011 IHS Global Insight Limited. 7.  ENAP signed oil operation agreement in Ecuador, ENP Newswire, 6 October 2011, via Dow Jones Factiva, 2011 Electronic News Publishing. 8.  Uzbekneftegaz, MOL Group ink memorandum, Uzbekistan Daily, 8 November 2011, via Dow Jones Factiva, 2011 UzDaily. com; Hungarys MOL Signs MoU with Uzbekneftegaz on Exploration Co-Operation in Uzbekistan, IHS Global Insight Daily Analysis, 9 November 2011, via Dow Jones Factiva, 2011 IHS Global Insight Limited. 9.  Iraq natural gas joint venture gets final approval, Shell press release, http://www.shell.com/home/content/media/news_ and_media_releases/2011/iraq_natural_gas_jv_final_approval_15112011.html, 15 November 2011. 10.  Shell Secures Accord with Turkeys TPAO for Mediterranean Exploration, IHS Global Insight Daily Analysis, 24 November 2011, via Dow Jones Factiva, 2011 IHS Global Insight Limited. 11. Ukraine Brings in Total, Eni, International Oil Daily, 3 October 2011, via Dow Jones Factiva, 2011 Energy Intelligence Group Inc. 12.  Shell and PETRONAS sign deal for Malaysian EOR, Upstream, 18 November 2011, via Dow Jones Factiva, 2011 Upstream. 13.  LUKOIL seeks to explore oil/gas with Petrovietnam, Reuters News, 18 November 2011, via Dow Jones Factiva, 2011 Reuters Limited. 14.  ONGC and PetroVietnam Sign Three-Year Co-Operation Deal, IHS Global Insight Daily Analysis, 14 October 2011, via Dow Jones Factiva, 2011 IHS Global Insight Limited. 15.  Nexen, CNOOC In Deepwater Gulf of Mexico Joint Venture, Dow Jones International News, 1 December 2011, via Dow Jones Factiva, 2011 Dow Jones & Company, Inc. 16.  Sinopec signs up for a new stake in Santos basin, Upstream, 18 November 2011, via Dow Jones Factiva, 2011 Upstream. 17.  Chinas Sinopec completes acquisition of Canadas Daylight Energy, Platts Commodity News, 26 December 2011, via Dow Jones Factiva, 2011 Platts. 18.  Gazprom, BASF swap assets, International Gas Report, 7 November 2011, via Dow Jones Factiva, 2011 McGraw-Hill, Inc. Wintershall and Gazprom agree on framework for asset swap, Wintershall press release, http://www.wintershall.com/en/ press/detail/news/wintershall-and-gazprom-agree-on-framework-for-asset-swap.html, 28 October 2011. 19.  SOCAR Buys in Swiss Downstream, International Oil Daily, 17 November 2011, via Dow Jones Factiva, 2011 Energy Intelligence Group, Inc. 20.  ONGC Videsh enters into tripartite agreement with Kazakhstan and Kazmunaigaz, Datamonitor News and Comment, 17 October 2011, via Dow Jones Factiva, 2011 Datamonitor Ltd; ONGC Videsh Limited signs a tripartite agreement with Kazmunaigaz, Kazakhstan, ONGC Videsh press release, http://ongcvidesh.com/(X(1)S(hsusmxfmdsx1db55wg2p503f))/ NewsContent.aspx?ID=894&AspxAutoDetectCookieSupport=1, 13 October 2011. 21.  Petrobras Teams With Shell in Oil & Gas Exploration in the Country, All Africa, 20 October 2011, via Dow Jones Factiva, 2011 AllAfrica. 22.  Mubadala Seals Tanzania Deal, International Oil Daily, 7 December 2011, via Dow Jones Factiva, 2011 Energy Intelligence Group Inc. 23.  PetroVietnam Bid Put at USD1.5 Bil. for ConocoPhillips Vietnam Acreage, IHS Global Insight Daily Analysis, 1 November 2011, via Dow Jones Factiva, 2011 IHS Global Insight Limited.

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24.  Sinopec ups stake in $20bn Pacific LNG, Oil & Gas News, 21 December 2011, via Dow Jones Factiva, 2011 Al Hilal Publishing & Marketing Group; China Petrochemical Corp to increase stake in Australian LNG venture, China Economic Review Daily Briefings, 13 December 2011, via Dow Jones Factiva, 2011 China Economic Review Publishing. 25.  Colombia Announces Plans to Hold New Oil & Gas Licensing Round in 2012, IHS Global Insight Daily Analysis, 25 November 2011, via Dow Jones Factiva, 2011 IHS Global Insight Limited. 26.  Bolivia to Launch Licensing Round Next Month, IHS Global Insight Daily Analysis, 18 October 2011, via Dow Jones Factiva, 2011 IHS Global Insight Limited; Bolivia plans licensing round to boost oil, gas output, Platts Oilgram News, 17 October 2011, via Dow Jones Factiva, 2011 McGraw-Hill, Inc. 27.  Government, Kurds in New Deal to Try to Bridge Iraqi Oil Law Differences, IHS Global Insight Daily Analysis, 4 November 2011, via Dow Jones Factiva, 2011 IHS Global Insight Limited. 28.  Licensing Round for Relinquished Blocks Planned in Uganda for 2012, IHS Global Insight Daily Analysis, 7 November 2011, via Dow Jones Factiva, 2011 IHS Global Insight Limited. 29.  Morocco Seeks Explorers for 22 Open Blocks, IHS Global Insight Daily Analysis, 3 November 2011, via Dow Jones Factiva, 2011 IHS Global Insight Limited. 30.  Greece Plans Three Oil Exploration Concessions for 2012, IHS Global Insight Daily Analysis, 11 October 2011, via Dow Jones Factiva, 2011 IHS Global Insight Limited. 31.  Iraq seen entering OPEC quota negotiations in 2014: official, Platts Commodity News, 18 December 2011, via Dow Jones Factiva, 2011 Platts. 32.  Resource tax to hit oil and gas sector in China, ICIS Chemical Business, 7 November 2011, via Dow Jones Factiva, 2011 Elsevier Engineering Information. 33.  Indian Government Delays NELP IX Block Awards, IHS Global Insight Daily Analysis, 2 December 2011, via Dow Jones Factiva, 2011 IHS Global Insight Limited; How About Indian Shale Gas, LNG Intelligence, 22 December 2011, via Dow Jones Factiva, 2011 Energy Intelligence Group. 34.  Ecopetrol Updates Strategy and Unveils Investment Plans for 2012, IHS Global Insight Daily Analysis, 23 November 2011, via Dow Jones Factiva, 2011 IHS Global Insight Limited. 35.  Ecuador to combine state Petroecuador, Petroamazonas by late 2012: officials, Platts Commodity News, 28 October 2011, via Dow Jones Factiva, 2011 Platts. 36.  New Sonatrach chief set to explore, Platts European Gas Daily, 21 November 2011, via Dow Jones Factiva, 2011 McGraw-Hill, Inc.; Algeria appoints Zerguine as new Sonatrach chief, Platts Oilgram News, 18 November 2011, via Dow Jones Factiva, 2011 McGraw-Hill, Inc. 37.  Rosneft hires BP offshore advisor, Platts Energy in East Europe, 4 November 2011, via Dow Jones Factiva, 2011 The McGraw-Hill, Inc. 38.  KNOC Plans to Increase Investment to Boost Oil Production in Kazakhstan, IHS Global Insight Daily Analysis, 8 November 2011, via Dow Jones Factiva, 2011 IHS Global Insight Limited. 39.  NIOC drops Gazprom from Azar over allegations about its commitment, Upstream, 14 October 2011, via Dow Jones Factiva, 2011 Upstream; NIOC Awards Azar Field Rights to Iranian Firms After Gazprom Neft Deal Falls Through, IHS Global Insight Daily Analysis, 12 October 2011, via Dow Jones Factiva, 2011 IHS Global Insight Limited; Iran consortium inks Azar oil field deal, NIOC press release, http://en.nioc.ir/Portal/Home/ShowPage.aspx?Object=News&Categ oryID=9d32c839-2930-4ee6-9321-782d4ac9484a&WebPartID=226bf060-bfaf-46d5-bbf3-df520caaea82&ID=d0a90d34a551-4071-b044-305de2747c50, 12 October 2011. 40.  Kazmunaigaz Replaces CEO, Heralding New Dynamic in Talks with Foreign Investors, IHS Global Insight Daily Analysis, 6 October 2011, via Dow Jones Factiva, 2011 IHS Global Insight Limited. 41.  CNOOC Shuffles Leadership, Taps Li Fanrong as CEO, The Wall Street Journal Asia, 24 November 2011, via Dow Jones Factiva, 2011 Dow Jones & Company, Inc. 42.  Oilmin wants PSUs to earmark R78k cr for foreign buyouts, Financial Express, 22 December 2011, via Dow Jones Factiva, 2011 Indian Express Online Media Pvt. Ltd.

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National Oil Company Monitor Q4 2011

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