East Africa Set for Major Gas, Oil Transformation

By Jacinta Moran in Cape Town; Edited by Jeremy Lovell, Platts, Jul 12, 2012
Oil and gas activity has started rolling in East Africa, as drilling activity ramps up, long-awaited deals are sealed and oil companies scramble to get a slice of what could be an energy goldmine. (see related map: East Africa oil and gas resources) [or right here below

click on map to enlarge -- D.R.]

In Uganda, Tullow Oil has resolved a long-standing dispute with the government for the development of a number of oil-rich blocks, and the UK-listed explorer has also made Kenya's first ever major oil discovery.

Significant gas reserves have been found in Mozambique and Tanzania, where LNG facilities are now been planned. Drilling will kick off in Ethiopia later this year, while Madagascar is believed to hold significant reserves of gas and the Puntland region of Somalia is also showing positive signs. [Read more]

(Also, please see my posts "East African Oil & Gas" and "Third Tanzanian Gas Discovery for Ophir-BG. For gas reserves, please see "Wood Mackenzie: East Africa�s Yet-to-Find Reserves Hold 95 tcf of Gas," OffshoreEnergy Today.com, Aug 22, 2012---Recent discoveries and high profile M&A activity in Mozambique and Tanzania are attracting attention and Martin Kelly, Wood Mackenzie�s Head of Sub-Sahara Upstream Research, says the interest is justified: �100 tcf of gas has been discovered to date in East Africa and we estimate yet-to-find reserves could be as much as 80 tcf in Mozambique and 15 tcf in Tanzania. There is clearly plenty of gas to supply the likely commercialization route of LNG � theoretically enough to support up to 16 LNG trains. �The Rovuma basin is the most prolific in the region, and one of the hottest conventional gas plays in the world, with 85 tcf discovered so far. Globally in 2011, it yielded the third most hydrocarbons, and we expect it to top the list in 2012 if the first half of the year is anything to go by,�Kelly continues. Update:  East Africa may be the new hotspot for explorers but the region will first need to invest in infrastructure to develop and transport the products for domestic and international consumption. The region's regulatory and infrastructure gaps could hinder the transition from gas exploration to production in the medium term, while governments need to be more realistic about timeframes for revenue flows, delegates heard at an industry conference in London on October 2, 2012. [...] Total now expects first commercial oil in Uganda in 2017, a year later than originally expected. The French major entered Uganda's nascent industry early this year after it and China's CNOOC took a third of Tullow's assets for $2.9 billion---please see Jacinta Moran "East Africa Faces Energy Infrastructure Issue," Platts, Oct 4, 2012 -- D.R.)
 

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Argentina's Senate Approves Bill to Expropriate YPF

by OGJ editors, OGJ, Houston, Apr 26, 2012
Argentina�s Senate voted in approval of Argentina President Cristina Fernandez de Kirchner's bill to expropriate YPF SA, and the Lower House of Congress is expected to vote on the measure next week. YPF was a state-run company until it was [fully] privatized in 1999. [Please see remarks below -- D.R.]

Kirchner asked Congress to renationalize YPF by expropriating 51% of it from Repsol YPF SA, which holds 57% of the company [thus slashing Repsol's stake to 6.4% -- D.R.]. She has said YPF underinvested in exploration and production, forcing Argentina to become a net energy importer. [Please see remarks below -- D.R.]

Repsol has vowed to take legal action, saying YPF invested about $3 billion in 2011 and that the company was the biggest investor in Argentina�s oil and gas industry.

�The unlawful expropriation of YPF does not affect the growth capacity of any of Repsol�s businesses outside Argentina,� Repsol said (OGJ Online, Apr. 17, 2012).

The Argentina Senate voted 63-3 in favor of expropriating YPF with 4 members abstaining from the vote. [Full story]

(The full privatization of YPF was completed in 1999 when Repsol of Spain acquired controlling stock from the Argentine state and the stock market---please see Sang-Hyun Yi, "The Political Economy of Privatization of YPF in Argentina," paper, Pusan University of Foreign Studies. For Argentina's crude oil production during the last years, please see "Top 6 Oil Producers in Central & South America, 2006-Feb. 2011 -- EIA." There has been a gradual erosion of Argentine crude oil output from its peak in 1998: in 1998 Argentina produced a record 846,700 barrels per day, but production has declined since, falling to 587,200 barrels per day in 2011---please see U.S. EIA data. The EIA attributed this decline to relatively low levels of exploration activity, combined with natural declines from maturing fields---please see EIA, Argentina Country Analysis Brief. ExxonMobil's Argentinean operations were so far unaffected by YPF takeover: The Argentinean government's decision to take control of Spanish-owned YPF didn't affect ExxonMobil's first-quarter operations in the country. The U.S. oil major said it finished drilling two unconventional wells in that period and will complete or frack those wells in the second quarter. Exxon said it will continue to observe developments in the region---please see SmartBrief, Apr 27, 2012. Update: The Chamber of Deputies [The Lower House of Congress] voted 207 to 32 in favor of expropriating YPF [...], clearing the way for President Cristina Fernandez to sign the bill into law---please see The Telegraph, May 4, 2012 -- D.R.)

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PFC Energy 50 Ranking of World�s Top Energy Companies: SuperMajors, led by Chevron, Top 2011 Value Growth Performance

by PFC Energy, press release, Washington D.C., Jan 23, 2012

The six SuperMajors posted the best group performance among companies returning to this year�s PFC Energy 50 list. ExxonMobil, Royal Dutch Shell [#3 at $234.6 bn -- D.R], Chevron, BP [#6 at $135.5 bn -- D.R.], TOTAL [#8 at $121.0 bn -- D.R.] and ConocoPhillips [#10 at 96.8 bn -- D.R.] increased their combined market capitalization 8% during 2011 to $1.2 trillion. Chevron (#4 at $211.9 bn) increased its valuation by 15% from $183.6 bn one year ago�the largest percentage increase of any returning company.

 

ExxonMobil (#1 at $406.3 bn) kept the first place position it has held every year except 2007 and 2009, when the list was headed by PetroChina, this year at #2 with a market valuation of $276.6 bn.

 

�At higher oil prices than four years ago the combined $3.6 trillion valuation of the PFC Energy 50 companies still falls short of the peak $5.2 trillion in December 2007,� commented PFC Energy�s Chairman and CEO, Robin West. �Several factors drive the lower valuation, including significantly lower North American gas prices and less buoyant global equity markets.�

 

Marathon [#44 in 2010 -- D.R.] ended its six-year run on the PFC Energy 50 when it spun off downstream operations in July as Marathon Petroleum. Marathon Oil (+30%) and Marathon Petroleum (+14%) led the Exploration & Production and Refining & Marking segments in share price performance. The combined market value of the two companies increased 24%.

 

Underperforming the overall list were National Oil Companies and companies located in emerging markets. With investors viewing these companies more critically due to country risk exposure and lack of portfolio diversification, the groupings posted value declines of 14% and 16%, respectively. 

 

The combined value of the four service sector companies on the PFC Energy 50 list (Schlumberger, Halliburton, National Oilwell Varco and [Luxembourg-based] Tenaris) declined by 16% as the global energy industry achieved high activity levels with no significant tightness in services and equipment markets. 

 

A major story of 2011 has been the expanding oil and gas potential of the North American onshore, which has created an intense demand for infrastructure. In recognition of their growing importance, this year�s PFC Energy 50 list includes midstream and pipeline companies. Four companies from that segment made the list�Enterprise (#25), TransCanada (#37), Enbridge (#40) and Kinder Morgan (#41). As a group, these new entrants to the PFC Energy 50 posted the year�s largest value gains. [Full Story -- D.R.] 

 

(PFC Energy, the Washington-based consulting firm, publishes an annual Top 50 ranking of the biggest publicly-traded energy companies, based mainly on capital market performance. The listing includes companies from nine sectors: International Oil Companies; National Oil Companies; Exploration & Production; Midstream/Infrastructure, Refining & Marketing; Gas/Utilities; Oilfield & Drilling Services; Equipment, Engineering & Construction; and Alternative Energy. State-backed national oil companies, or NOCs, had a bad 2011. Only two publicly traded NOCs -- Norwegian Statoil (+9%) and Colombian Ecopetrol (+1%) -- posted positive performance. The largest declines among NOCs experienced Indian ONGC (-33%, #24 in 2011 versus #21 in 2010), Brazilian Petrobras (-33%, #5 in 2011 versus #3 in 2010) and China's CNOOC (-26%, #15 in 2011 versus #10 in 2010). The full PFC Energy 50, January 2012 report is also available at https://workspaces.acrobat.com/?d=MRjCvriadJ0ApxoN67GMvQ Also, please see my previous post "World Watch: PFC Energy 50 Ranking of World's Top Energy Companies, Jan 2011." -- D.R.)

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North Dakota Surpasses OPEC Member Ecuador in Oil Production

By Joe Carroll, Bloomberg, Jan 10, 2012
North Dakota oil production surged 42 percent to 510,000 barrels a day in November, exceeding the output of OPEC member Ecuador, as energy explorers accelerated drilling in the Bakken Shale formation.

The state�s daily crude output topped a half-million barrels for the first time during the month, North Dakota�s Oil and Gas Division said today in a statement. North Dakota�s 6,300 wells produced enough oil to displace imports from foreign suppliers such as Iraq or Colombia, Lynn Helms, division director, said in the release [Helms added that a half a million barrels a day represents about 10% of U.S. production. Please see a press release from ND Oil and Gas Division, Jan 10, 2012 -- D.R.].

Oil producers including EOG Resources Inc. (EOG) and Continental Resources Inc (CLR). have spurred a five-fold increase in North Dakota�s oil output by using intensive drilling practices to tap the Bakken, a geologic formation that stretches from southern Alberta to the northern U.S. Great Plains. It�s estimated to hold as much as 4.3 billion barrels of technically recoverable oil in North Dakota and Montana, according to a 2008 report by the U.S. Geological Survey.

 �This is big news for the state and the country,� Helms said. �Oil production in the state has increased anywhere from 8,000 to 40,000 barrels a day every month since June.�

Production will continue to increase as drillers hone their techniques, Andrew Steinhubl, co-leader of consulting firm Bain& Co.�s North American oil and gas practice, said in a Jan. 6 interview from Houston.

Rising Crude Production

In the Bakken formation alone, crude production rose 56 percent in November to 443,425 barrels a day from a year earlier, state figures showed. Bakken oil accounted for 87 percent of the state�s total November output.

Continental, the Enid, Oklahoma-based oil company controlled by billionaire Harold Hamm, is the largest leaseholder in the Bakken shale region, with 901,000 acres, based on third-quarter 2011 data compiled by Bloomberg Industries. Hess Corp. of New York and Denver-based Whiting Petroleum Corp. are second and third with 900,000 acres and 680,000 acres, respectively.

Bakken crude is a low-sulfur variety preferred by refiners not equipped to handle heavier, more corrosive types of oil. Bakken crude rose 1.5 percent to $97.97 a barrel today at the Clearbrook, Minnesota, hub, according to data compiled by Bloomberg. The price has increased 15 percent in the past year.

Ecuador, with 500,000 barrels of daily output in November, was the smallest member of the Organization of Petroleum Exporting Countries, according to data from the International Energy Agency in Paris (Also, please see my post "World's Top 23 Crude Oil Producers, November 2011/Notes" -- D.R.).

To contact the reporter on this story:Joe Carroll in Chicago at jcarroll8@bloomberg.net

To contact the editor responsible for this story: Tina Davis at tinadavis@bloomberg.net  (Full story)

(North Dakota produced a record 152.9 million barrels of crude in 2011, up more than 35 percent from the previous record of 113 million set a year earlier. Daily production was up to a record 534,000 barrels per day in December 2011---please see Grand Forks Herald, Feb 8, 2012. For the North Dakota oil ranking, please see Aaron and David Rachovich, "United States: Top 8 Crude Oil Producing States, 2006-Feb.2011." Update: North Dakota has overtaken California as the third-largest oil-producing state in the nation---please see my post "Five States Accounted for about 56% of Total U.S. Crude Oil Production in 2011." Update 2: Crude oil output in North Dakota reached a record high in February [2012] as a mild winter boosted activity in the Bakken shale prospect, bringing the state closer to overtaking Alaska as the second-largest oil producer in the country. North Dakota crude oil production rose by about 12,000 barrels per day (bpd), to more than 558,000 bpd, data from the state regulator showed [...], affirming the state's position as the third-largest producing state in the union after Texas and Alaska---please see Reuters, Apr 11, 2012. Update 3: North Dakota passed Alaska in March 2012 to become the second-leading state in crude oil production, trailing only Texas---please see my post "North Dakota Tops Alaska in Oil Production, Trailing Only Texas." Operators increased North Dakota's Bakken production from less than 3,000 barrels per day in 2005 to over 230,000 barrels per day in 2010. The Bakken's share of total North Dakota oil production rose from about 3 percent to about 75 percent over the same period. North Dakota produced an average of 307,000 barrels of crude oil per day in 2010 and comprised about 5.6 percent of the nation's total crude production. For North Dakota's oil production in historical perspective, please see my post/remarks here -- D.R.)

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[Petroleum Intelligence Weekly Ranks World's Top 50 Oil Companies -- ] Suncor Up, ConocoPhillips Down in PIW`s New Top 50 Oil Rankings

EI/PIW press release via Reuters, Dec 8, 2011

Divestitures and acquisitions were more significant in altering the �Big Oil� leadership landscape than either organic growth or the megamergers of yesteryear, according to the results of Petroleum Intelligence Weekly�s �Top 50� global oil company rankings, released today.

ConocoPhillips� �shrink-to-grow� strategy, which had it spinning off considerable assets in 2010, resulted in the company falling out of the Top 10 for the first time in four years, with the Houston-based giant dropping to 12 from 8 a year earlier.

Conoco�s slippage in 2010 paved the way for Russian Gazprom�s first-time entry into the elite Top 10 that year, moving up to 10 from 12 a year earlier. France�s Total marked the only other shift on the leader board, moving up to 9 from 10 a year earlier [i.e., Saudi Aramco maintained its hold on the top spot, followed by the National Iranian Oil Co. at No. 2; with ExxonMobil at No. 3 and the Petroleos de Venezuela at No. 4. China National Petroleum Corp. retained its spot as the No. 5, followed by U.K.'s BP, Royal Dutch Shell of the Netherlands/UK and Chevron. Please also see the Saudi Aramco website, the HighBeam Business article and my remarks below -- D.R.].     

This year�s rankings reaffirmed the continued importance of the so-called �supermajors� � ExxonMobil, BP, Royal Dutch Shell and Total � which held onto their Top 10 spots. But companies in developing-countries like China were racing to catch up, moving up the ranks as they grew their operations through billions of dollars in strategic acquisitions.

The PIW Top 50 rankings compare petroleum-industry majors, independents and national oil companies based operational size, rather than market cap or other financial measures, to provide a holistic view of the industry landscape. They incorporate six unique operational criteria � oil and gas reserves, oil and gas production, product sales and refinery distillation capacity � from fiscal year 2010, the latest for which complete data were available.

For the first time the Top 50 also took a hard look at M&A, correlating companies� movement in the rankings with the announced deal value of their mergers and acquisitions in 2009, 2010 and year-to-date 2011. The analysis reaffirms M&A�s importance to companies� operational growth strategies, showing large net buyers � particularly in China � have generally fared better than net sellers.

�Companies are increasingly rising or falling based on their ability to look beyond the integrated model to grow their operations,� said Ian Nathan, a senior research analyst at PIW parent company Energy Intelligence Group and lead author of the Top 50. �With new reserves becoming ever scarcer, companies that come up with innovative ways to create value will reap ever bigger rewards.�

Among this year�s PIW Top 50 highlights:

• The year�s biggest gainer, Canada�s Suncor, soared 10 spots, to 39 from 49, on the strength of its Petro-Canada acquisition and impressive gains in oil and gas production and product sales.
• Colombia�s Ecopetrol returned to the list, resurfacing at 48 on significant increases in oil output and gas reserves. Meanwhile, New York-based Hess fell out off the Top 50 from 47 as its growth in oil reserves was unable to compensate for a drop in gas reserves.
• China�s Sinopec and CNOOC each gained four spots, with Sinopec jumping from 26 to 22 and CNOOC from 38 to 34 as they continued executing long-established growth strategies.
• Gazprom notwithstanding, Russian companies were a mixed bag in terms of growth. Novatek advanced to 41 from 44, but Rosneft, majority owned by the Russian government, fell to 19 from 16.

For a complete list of the Top 50 or to subscribe, please contact us at CustomerService@energyintel.com. [Read more]

(Please see my post "[Energy Intelligence] 'Top 100' Oil Rankings Heavy on Houston Firms,"  by Barrett Goldsmith, Houston Business Journal, Dec 3, 2010. 2011 marks the 23rd consecutive year that Saudi Aramco has achieved the top spot in the PIW rankings. Pemex retained its spot as the No. 11 in PIW's new Top 50 oil rankings for 2010. Also, Petrobras retained its spot as the No. 15 in PIW's new Top 50 oil rankings for 2010. Furthermore, please see Forbes ranking of oil and gas companies by oil and gas production "Mid 2012 Ranking of the World's Biggest Oil & Gas Companies," and PFC Energy ranking of the biggest publicly-traded energy companies, based mainly on capital market performance: "PFC Energy 50 Ranking of World�s Top Energy Companies." -- D.R.)

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Platts Top 250 Global Energy Company Rankings 2011

Platts, Nov 2, 2011
The Platts Top 250 recognizes outstanding financial performance for the previous fiscal year. Each company listed in the Platts Top 250 has distinguished itself through its remarkable performance and the outstanding efforts and dedication of its team. [...]

Top Ten

The entry of German multi-utility E.ON AG to the top ten in 2009� the only non-Integrated Oil and Gas (IOG) company to do so in the last five years�proved fleeting [please see remarks below -- D.R.]. The oil and gas giants reasserted their dominance of the top ten rankings, taking all ten spots despite a stricken BP dropping far from sight. On the back of higher oil prices, the top ten companies brought in a combined $178.874 billion in profits, a 20.4% increase from 2009, but still down from the bumper year of 2008, when profits hit an all-time high of $214.042 billion.

US giant Exxon Mobil Corp retained the top spot in 2010, while Chevron Corp moved up from ninth in 2009 to second place as it boosted its return on invested capital (ROIC) to 16% from 10.2% in the previous year. Gazprom OAO, PetroChina Co Ltd, Total SA and the China Petroleum & Chemical Corp took third, fourth, fifth and eighth places, respectively, while Royal Dutch Shell climbed from tenth to sixth.

Three re-entrants to the top ten in 2010 included ConocoPhillips�now the subject of an innovative demerger into upstream and downstream businesses� which moved up from 24th place to seventh. Meanwhile Russia�s OJSC Rosneft Oil Company and Lukoil Oil Company rose from 14th and 11th places, respectively to take the ninth and tenth spots.

E.ON dropped back to 13th from sixth, and Brazil�s Petrobras-Petroleo Brasilier fell from fourth in 2009 to 12th in 2010. But the biggest omission from the top ten was UK major BP. Ranked second in 2009, BP dropped to 118th on account of the cost of the Macondo oil spill in the US Gulf of Mexico. Although in dollar terms its asset base expanded, as did its revenues, BP�s profits were wiped out. The company posted a loss for 2010 of $3.719 billion.

Here Come the Russians

Although the year-to-year changes in the top ten companies can be small, the big trends can be seen from longerterm comparisons. In 2006, the top ten consisted of five west European integrated oil and gas companies, three US majors, PetroChina and Petrobras. In 2010, there were still three US majors but now two Chinese and three Russian companies, with only two European companies remaining. [...]

The entry of Russian companies into the ranks of the world�s top energy enterprises is a striking feature of the 2010 list, and features not only oil and gas, but also electricity industry companies as a result of privatization in the sector. Of the top ten fastest-growing companies, three are Russian: RusHydro JSC, Bashneft OJSC and Moscow United Electric Grid OJSC, with RusHydro recording a giant three-year CGR of 106.1%. There are now 15 Russian companies in the top 250, compared with 11 in 2009 and nine in 2006.

Mighty Gazprom�s position remains pre-eminent in natural gas, based on its huge production volumes and monopoly grip on Russia�s gas pipelines and exports. However, it may one day have a challenger in the form of private gas company Novatek OAO, which is operator of the planned Yamal LNG project. Novatek has moved up from 126th position in 2009 to 104th in 2010. Profits rose from $854 million to $1,358 million with an impressive ROIC of 19% in 2010�the twelfth-highest ROIC out of the entire top 250. It is also the 34th fastest-growing company based on its three-year CGR. Including AK Transneft OAO, the country�s oil pipeline monopoly, Russia now has eight companies primarily focused on oil in the top 250 as well as two gas and five power sector companies. [...]

Asian Leaders

The number of Asian companies in the top 250 continues to rise, reaching 70 in 2010, up from 67 in 2009 and 56 in 2006. In addition, despite having more companies represented, the average ranking of Asian companies has also improved from 135.2 in 2006 to 134.9 in 2009 and 131.3 in 2010 (a lower number denotes a higher ranking). Asian companies are not just increasing in number, but are increasing their rankings relative to their international peers.

Within Asia, the average ranking of Japanese companies overall has improved from 145.9 to 132.1. This partly reflects the Japan Petroleum Exploration company dropping out of the top 250, but the improvement is notable given the sharp fall in the ranking of the Tokyo Electric Power Co (Tepco) which was ranked 54th in 2009, but 131st in 2010.

This is the result of the financial impact of the Fukushima nuclear disaster in March 2011 and Japanese reporting of financial data based on fiscal years running from April-March. Tepco recorded a loss of $14,881 billion in fiscal 2010. Other Japanese companies dropping down the rankings include Tohoku Electric Power Co, which fell from 119th to 156th and Chugoku Electric Power Co, which dropped from 134th to 178th.

By contrast, Japan�s oil and gas companies performed well. JX Holdings was the shining star, rising from 129th in 2009 to 18th in 2010. Idemitsu Kosan Co Ltd increased its ranking from 144th to 70th. Tokyo Gas Company Ltd upped its place in the list from 108th to 74th. For China, most change was seen within the power sector. The number of Chinese companies in the top 250 was the same in 2010 as in 2009, but the Shenzhen Energy Group, Huadian Power Intl Corp and Shenergy Co. Ltd were displaced by Shanxi Lu�an Environmental Energy Development Co., Shanxi Xishan Coal and Electricity Power Co. and China Longyuan Power Group. In the oil sector, PetroChina moved up from seventh in the rankings to fourth, and CNOOC from 29th to 15th. The biggest mover, however, was China Yangtze Power Co., which jumped from 163rd in 2009 to 112th in 2010.

By contrast, India saw three new companies join the top 250 list�the newlylisted Coal India, oil and gas producer Cairn India Ltd and the IPP company NHPC Ltd. As in Japan, the oil sector also gave India its strongest movers. The Indian Oil Corp Ltd jumped from 78th in 2009 to 42nd in 2010, while the Hindustan Petroleum Corp Ltd rose from 174th to 142nd. [...]

(Please see my post "Platts Top 250 Global Energy Company Rankings 2010." Separately, please watch "Top 250 Energy Company Rankings [2011] analysis: 'Big Oil' dominates, but Asia steals the show," Platts, Nov 2, 2011 and see Platts 2011 rankings for 2010, pdf file. Update: It�s all eyes on China, India and the wider Asia-Pacific region when it comes to rapid financial growth and fast-rising energy companies. Seventy companies from the region were in the spotlight tonight when the 2012 Platts Top 250 Global Energy Company Rankings were unveiled at an awards dinner in Singapore. The 2012 rankings reflect fiscal 2011 financial performance in four key areas: asset value, revenues, profits and return on invested capital/ROIC. ...  In an East-West energy showdown, Western majors still dominated. Western integrated oil and gas/IOG and exploration and production/E&P companies took all of the Top 10 spots on the 2012 list, except for one � ninth place � which went to PetroChina Co. Ltd. ExxonMobil reigned supreme in the number one spot of the Top 250 roster for the eighth consecutive year. Anglo-Dutch major Royal Dutch Shell plc moved up from sixth position to second, displacing U.S. major Chevron to third. ConocoPhillips dropped one place from seventh to eighth. Although French major Total slipped from fifth position to seventh, other European majors saw improvements. Like Shell, Norway�s Statoil also ascended, climbing from 11th place to sixth between the 2011 and 2012 rosters. One of the standout movers among the Top 10 and the overall rankings was BP. The U.K. oil major took fourth position on this year�s list, after having plummeted from second place in 2010 to 118th place last year after more than $38 billion in losses from the Macondo oil spill in the Gulf of Mexico. Other majors, including Russian oil and gas giants, held on to their relatively high global rankings, despite slipping in the standings. Gazprom/Open Joint Stock Company � OJSC Gazprom dropped to fifth place this year from third place, while Rosneft dipped from ninth to 10th. OJSC LUKOIL slipped out of the Top 10 this year to 11th place---please see Platts, press release, Oct 23, 2012. -- D.R.)

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Angolan Oil Production Has Doubled Since 2003

EIA, Today in Energy, Oct 14, 2011

 Source: U.S. Energy Information Administration, Angola Country Analysis Brief & Short-Term Energy Outlook Table 3c: OPEC Crude Oil Production.Download CSV Data [Note: Presumably, crude oil production excluding condensates since the mid-2000s -- D.R.]

Angola has emerged as Africa's second largest oil producer [after Nigeria, and please see remarks below -- D.R.]; its oil production has grown 147% since 2000. Angola is the eighth largest supplier of crude oil to the United States [please see remarks below -- D.R.] and the second largest crude supplier to China, according to data for January through July 2011. Angola is still rebuilding from a 27-year civil war that ended in 2002. Security issues remain, especially in the disputed oil-rich Cabinda exclave. Border disputes have halted some oil developments.

A member of the Organization of the Petroleum Exporting Countries (OPEC), Angola has production targets ranging from 1.52 to 1.66 million barrels per day (bbl/d); however, the country is currently increasing its oil production and capacity. In 2010, Angola produced about 1.85 million bbl/d of crude oil [excluding condensates -- D.R.] and, given very low levels of domestic consumption, exported all but 50 thousand bbl/d.

Oil is crucial to the Angolan economy, accounting for over 95% of export revenues and over 75% of government revenue. In 2010, Angola exported almost 1.8 million bbl/d of crude oil; the majority of crude oil exports went to China (45%) and the United States (23%), representing 17% and 4% of those countries' total crude oil imports, respectively.

Production in 2011 is down, averaging 1.65 million bbl/d, due to temporary technical problems. Industry analysts expect Angolan production to grow beyond 1.85 million bbl/d by the end of 2011, and perhaps reach 2.5 to 3 million bbl/d of capacity by 2016, based on planned project startups.

International oil companies, including Chevron, ExxonMobil, Total, Eni, and BP, play a major role in Angola, operating most production. The Angolan government recently held a licensing round for a pre-selected group of private companies to explore and produce in the country's pre-salt offshore areas�an area believed to be of similar geological makeup to the Brazilian pre-salt.

China is a major investor in Angola and has provided several multi-billion dollar oil-backed loans to fund infrastructure development. The China Petroleum & Chemical Corporation (Sinopec) and China National Offshore Oil Corporation (CNOOC) are among the national oil companies working in Angola. Angola is now the second largest supplier of oil to China, behind Saudi Arabia.

According to EIA's recently released Angola Country Analysis Brief, Angola had 10.9 trillion cubic feet (Tcf) of natural gas reserves in 2011, up from an estimated 2 Tcf in 2007. Natural gas production in Angola is tied directly to oil production and is often vented or flared, with limited volumes consumed domestically. An Angolan liquefied natural gas (LNG) terminal, due to commence operation in 2012, will allow Angola to export its natural gas and reduce flaring. [Full story]

(Please see Aaron and David Rachovich, "Africa's Top 8 Oil Producers, 2006-2010 -- EIA." Angola was in 2009-2010/full year the seventh largest supplier of crude oil to the United States---please see our post "U.S. Crude Oil Imports from Top 15 Countries ... -- EIA." According to Oil and Gas Journal (OGJ), Angola's proved oil reserves stood at 9.5 billion bbl as of Jan 1, 2011---please see our post "World's Top 22 Proven Oil Reserves Holders, Jan 1, 2011 -- OGJ," while BP Statistical Review of World Energy, June 2011, places Angolan proved oil reserves as high as 13.5 billion bbl---please see our post "World's Top 23 Proven Oil Reserves Holders, 2007-2010 -- BP." -- D.R.)

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Sunoco, Exiting Oil Refining, Puts Last Two Plants on Block

by OGJ editors, OGJ, Houston, Sept 6, 2011
Sunoco Inc., Philadelphia, hopes to sell its remaining two refineries and plans to leave the oil refining business to complete what it calls �a fundamental shift away from manufacturing.� [Please see remarks below -- D.R.]

The company has retained Credit Suisse Securities (USA) LLC to help it review strategy.

It will try to sell its 330,000-b/cd refinery in Philadelphia and 175,000-b/cd facility at Marcus Hook, Pa. If unsuccessful, it will idle the main processing units in July 2012.

Key processing capacities at Philadelphia are 113,500 b/cd of fluid catalytic cracking, 68,000 b/d of catalytic reforming, 85,600 b/cd of catalytic hydrotreating for pretreatment of reformer feeds, and 78,000 b/cd of cat hydrotreating for diesel desulfurization. The Philadelphia refinery also has 16,700 b/d of alkylation (hydrofluoric acid) capacity.

The Marcus Hook refinery has capacities of 93,000 b/cd for FCC, 15,600 b/cd for cat reforming, 36,000 b/cd of cat hydrotreating for reformer feed, and 12,000 b/cd of posthydotreating for FCC naphtha. It has 10,000 b/d of alkylation (sulfuric acid) capacity.

Restructuring

Sunoco has been restructuring for several years. Earlier this year it completed the sale of its 170,000 b/d refinery in Toledo, Ohio, to Toledo Refining Co. LLC, a unit of PBF Holding Co. LLC (OGJ Online, Mar. 1, 2011).

In 2010 it shut a 150,000 b/d refinery at Eagle Point, NJ, and [in 2009 -- D.R.] sold an 85,000-b/d refinery in Tulsa to Holly Corp. (OGJ Online, June 16, 2010).

It also sold its polypropylene [PP -- D.R.] business, Sunoco Chemicals Inc., to Braskem SA, and shut down a PP plant in Texas (OGJ Online, Apr. 6, 2010). And it is separating its metallurgical coke business through an initial public offering of shares in SunCoke Energy.

The company expects to incur pretax noncash charges of $1.9-2.2 billion in the third quarter as it exits refining. The charges relate to impairment of plant and equipment. If it must idle process units, it expects additional pretax charges of as much as $500 million related to contract terminations, staffing costs, and severance.

Sunoco has been expanding its remaining business units, retail marketing and logistics.

The company has more than 4,900 branded retail locations in 24 states, with APlus convenience stores operated by it or dealers in 600 of the retail outlets.

It also holds 35% [sic -- D.R.] interest in and is general partner of Sunoco Logistics Partners LP, a publicly traded master limited partnership that operates 3,350 miles of crude oil trunkline, 500 miles of crude oil gathering lines, and 2,500 miles of oil product pipelines. [Full story]

(Please see Sunoco's website/news room: "Sunoco to Exit Refining and Conduct Strategic Review of the Company," Sept 6, 2011. As of Jan 1, 2011, Sunoco, with crude oil distillation capacity of its three refineries---Marcus Hook, Toledo and Philadelphia---of 673,000 barrels per day, was ranked 10th on the list of top 20 U.S. refiners---please see my post "Top 20 Largest Refining Companies/Refiners in the U.S. as of Jan 1, 2011." PBF Energy Company LLC on Tuesday, March 1, 2011, announced that its subsidiary, Toledo Refining Company LLC, has completed its purchase of the Toledo Refinery in Ohio from Sunoco, Inc. It is worthy of note that Sunoco has owned refineries for 117 years. Formerly known as the Sun Oil Company of Ohio, it bought its first refinery in 1894. -- D.R.)

More about → Sunoco, Exiting Oil Refining, Puts Last Two Plants on Block

Top 28 Largest Refineries in the U.S. as of Jan 1, 2011 -- EIA

by Aaron and David Rachovich

U.S. Refineries* Operable Capacity 

Rank  Jan 1, 2011	Corporation	Company	State	Site	Barrels per Calendar Day (b/cd)
1.	Exxon Mobil	ExxonMobil Refining & Supply	Texas	Baytown	560,640
2.	Exxon Mobil	ExxonMobil Refining & Supply	Louisiana	Baton Rouge	502,000
3.	Hovensa LLC (50% Hess, 50% PDVSA)	Hovensa LLC	Virgin Islands (territory of the U.S.)	Kingshill	500,000
4.	Marathon Oil	Marathon Petroleum	Louisiana	Garyville	464,000
5.	PDV America Inc	Citgo Petroleum	Louisiana	Lake Charles	427,800
6.	BP PLC	BP Products North America	Texas	Texas City	406,570
7.	BP PLC	BP Products North America	Indiana	Whiting	405,000
8.	WRB Refining LLC (50% ConocoPhillips, 50% Cenovus)	WRB Refining	Illinois	Wood River	362,000
9.	Exxon Mobil	ExxonMobil Refining & Supply	Texas	Beaumont	344,500
10.	Sunoco Inc	Sunoco Inc (R&M)	Pennsylvania	Philadelphia	335,000
11.	Chevron	Chevron USA Inc	Mississippi	Pascagoula	330,000
12.	Deer Park Refining LTD Ptnrshp (50% Royal Dutch/Shell, 50% Pemex)	Deer Park Refining	Texas	Deer Park	327,000
13.	Valero Energy	Premcor Refining Group	Texas	Port Arthur	292,000
14.	Koch Industries	Flint Hills Resources	Texas	Corpus Christi	290,078
15.	Motiva Enterprises LLC (50% Royal Dutch/Shell, 50% Saudi Aramco)	Motiva Enterprises LLC	Texas	Port Arthur	285,000
16.	Access Industries	Houston Refining LP	Texas	Houston	280,390
17.	Chevron	Chevron USA Inc	California	El Segundo	273,000
18.	Koch Industries	Flint Hills Resources	Minnesota	Saint Paul	262,000
19.	BP PLC	BP West Coast Products	California	Los Angeles	253,000
20.	ConocoPhillips	ConocoPhillips Co	Louisiana	Belle Chasse	247,000
21.	ConocoPhillips	ConocoPhillips Co	Texas	Sweeny	247,000
22.	Chevron	Chevron USA Inc	California	Richmond	245,271
23.	ConocoPhillips	ConocoPhillips Co	Louisiana	Westlake	239,400
24.	Exxon Mobil	ExxonMobil Refining & Supply	Illinois	Joliet	238,600
25.	ConocoPhillips	ConocoPhillips Co	New Jersey	Linden	238,000
26.	Motiva Enterprises LLC (50% Royal Dutch/Shell, 50% Saudi Aramco)	Motiva Enterprises LLC	Louisiana	Convent	235,000
27.	Motiva Enterprises LLC (50% Royal Dutch/Shell, 50% Saudi Aramco)	Motiva Enterprises LLC	Louisiana	Norco	233,500
28.	Total SA	Total Petrochemicals Inc	Texas	Port Arthur	232,000

*Only refineries with atmospheric crude oil distillation capacity.

Source: U.S. Energy Information Administration/EIA, Ranking of U.S. Refineries, Updated/Reviewed June 2011.

(ExxonMobil's Baytown Refinery is the largest oil refinery in the United States. Also, the Baytown area which is home to several of ExxonMobil's integrated sites---including the Baytown Refinery, Baytown Chemical Plant, Baytown Olefins Plant, Mont Belvieu Plastics Plant, Americas Area Engineering Office and Baytown Technology & Engineering Complex---is the largest petroleum & petrochemical complex in the United States. Texas is home to 26 refineries, with a total capacity of 4.72 million barrels per day. Louisiana is home to 19 refineries, with a total capacity of 3.22 million barrels per day. And California is home to 20 refineries, with a total capacity of 1.96 million barrels per day. Nearly half---49%---of U.S. refinery distillation capacity is located in the Gulf Coast region, i.e., PAD district 3 comprising Alabama, Arkansas, Louisiana, Mississippi, New Mexico and Texas. January 2011 U.S. refining capacity of 17.7 million barrels per day, excluding the Virgin Islands, reached the highest level recorded since 1982---please see EIA, Today in Energy, Jun 29, 2011, here. Also, please see "Top 20 Largest Refining Companies/Refiners in the U.S. as of Jan 1, 2011;" "World's Top 25 Largest Refining Companies, Jan 1, 2011 -- OGJ;" "Top 10 Largest Refining Companies in Asia, the USA and Western Europe -- OGJ;" and "World's Top 21 Largest Oil Refineries -- OGJ." Update 1:  Royal Dutch Shell Plc and Saudi Aramco became co-owners of the largest U.S. refinery on Thursday when a new crude distillation unit at their joint-venture Motiva Enterprises Port Arthur, Texas, plant [ranked 15th as of Jan 1, 2011, above -- D.R.] received oil for the first time, said Shell's Chief Financial Officer. The 325,000 barrel-per-day (bpd) atmospheric crude distillation unit that started processing on Thursday combines with existing crude units to give Motiva's Port Arthur, Texas, refinery a total crude oil refining capacity of 600,000 bpd, said Shell Chief Financial Officer Simon Henry during the company's first quarter earningscall. [�] With the startup of the new Port Arthur crude unit, Exxon Mobil Corp's 560,640 bpd Baytown, Texas, refinery becomes the nation's second-largest refinery---please see "Motiva Port Arthur refinery becomes U.S. largest - Shell," Reuters, Apr 26, 2012. Update 2: But by far the biggest refining story in North America in 2012 centered on the massive expansion at Motiva Enterprise LLC's Port Arthur, Tex., refinery. The 325,000 bpd, $10 billion expansion, largest at a US refinery in nearly 40 years and designed for feedstock flexibility, was dedicated on May 31, raising capacity to 600,000 bpd and making it the largest US refinery. On June 9, 2012, however, the new crude distillation unit sprung leaks traced to massive corrosion; a fire ensued and the expansion was shut down. Motiva has since traced the problem to faulty design. The unit will not restart before the end of first-quarter 2013, if then---please see Warren R. True and Leena Koottungal, "Asia, Middle East lead modest recovery in global refining," OGJ, Dec 3, 2012 -- D.R.)

More about → Top 28 Largest Refineries in the U.S. as of Jan 1, 2011 -- EIA