Under the contract, the supply of up to 875 billion cubic metres of gas. The contract envisages annual supplies of up to 35 bcm of Rosneft-produced gas to the power plants of INTER RAO – Electric Power Plants (or any other INTER RAO UES power plants) beginning on [January 1ST 2016 and running through December 31 ST 2040] on a take-or-pay basis. 32.3 bcm of gas is to be supplied in 2016.

Under the agreement, natural gas and dry stripped gas will be supplied from oil fields, which will allow Rosneft to significantly increase associated petroleum gas utilisation.

Rosneft President and Chairman of the Management Board Igor Sechin said: “Rosneft has significant reserves of gas and producing and selling this gas is a priority in terms of generating additional profit for Rosneft shareholders. Concluding an agreement to supply gas directly to Russia’s largest generating utilities is the most effective way to monetise our reserves. It will also guarantee fuel supplies for power generation on transparent terms.”

“Our partnership with Rosneft, a global oil and gas major, is strategic in nature and will guarantee stable supplies of fuel to INTER RAO UES’ power stations,” said Boris Kovalchuk, chairman of the management board at INTER RAO UES. “This contract is designed to guarantee stability for our company in the long term and will allow us to considerably improve the efficiency of power generation in Russia.”

BP has signed the deal to sell its 50% stake in TNK-BP to Russian oil giant Rosneft. This can make the Russian state-owned enterprise the world’s biggest listed oil company. Also, BP expects to have two seats on Rosneft’s nine person board. The deal is due to be completed by the first half of 2013.

“This is a good big deal which is important not only for Russia’s energy sector, but for the entire Russian economy,”commented Russia’s President Vladimir Putin. The move demonstrates Russia’s willingness to cooperate with foreign partners, Putin said, adding that he hoped to build a sound relationship with BP.

The Alfa-Access-Renova (AAR) consortium led by billonaires Mikhail Fridman hired Rothschild Group to organize a loan to buy out BP’s 50% stake in the TNK-BP oil venture. TNK-BP was Russia’s 3rd largest oil company in terms of reserves and crude oil production. It was 50% owned by BP and 50% by a group of Russian businessmen. The money was borrowed by TNK-BP, rather than AAR, Kommersant Daily reported citing its sources.

Rothschild Group raised funds from several banks, it said. Rothschild is one of the world’s largest independent financial advisory groups, employing approximately 2,800 people in 40 countries around the world and have a full-scale advisory businesses across the world including locally staffed offices in China, Brazil, India, the United States of America, the Middle East and Asia Pacific.

BP said on Monday it agreed to sell its 50% stake in the consortium to Rosneft for a mix of $17.1 billion in cash and 12.84 % of Rosneft, according to Interfax. The British company is also planning to use some of the money it’s reaped from the sale to raise its stake in Rosneft to 19.75%. Such a stake gives BP the right to claim a share of Rosneft’s earnings, as well as production and reserves.

On Monday Rosneft also confirmed earlier speculation about the acquisition of the other half of TNK – BP from a quartet of Soviet-born billionaires who make up the Alfa Access Renova (AAR) consortium. Rosneft said it “agreed terms with the AAR consortium to acquire AAR’s 50% interest in TNK-BP for cash consideration of $28.0 billion, subject to the negotiation, corporate and regulatory approval and certain other conditions.”

Rosneft President  Igor Sechin has estimated the cost of the deal to consolidate 100% of  TNK-BP at $61bln. “Taking Rosneftegaz’s stock  into account, this  deal will require $61 billion – the third largest deal in the world,” Sechin said during a meeting with Vladimir Putin.

There’s no real market estimate of what TNK-BP is, because the market capitalization of TNK-BP holding, the listed entity, is just about $40 billion. At the same time you shouldn’t forget that the TNK-BP holding doesn’t include a 50% stake in Slavneft.” Nor does it take into account a Ukrainian refinery, as well as some huge international assets for which around $1bln was paid last year, Nazarov added.

Given that Rosneft earned $10.2bln in net income during 2011, the Russian oil producer will need to finance the deal. About $15bln should come in a form of loans from international banks, with an additional $3bln coming from domestic lenders, Reuters quotes unnamed financial sources.

Rosneft is the leader in the Russian oil industry and one of the largest oil and gas companies in the world. Its main shareholder is the Russian government-owned Rosneftegaz, which holds 75.16% of its stock.

Source: rt.com

TransCanada Corp. said on Monday it had restarted its major oil pipeline to the central United States from Canada following a five-day outage to check for a potential defect on the line in the U.S. Midwest.

TransCanada, the country’s largest pipeline company, said it would operate the 590,000 barrel-a-day Keystone pipeline at reduced rates for up to 24 hours while it completes its testing.

The outage of the line, which extends to southern Illinois, and the Cushing, Okla., storage hub from Hardisty, Alta., will affect scheduled shipments for this month, though the extent is not yet known, spokesman James Millar said in an email.

The Keystone pipeline

“We will be having direct discussions with our customers regarding the impact this will have on their deliveries to us,” Mr. Millar said.

The line, which can move up to a quarter of Canada’s crude exports to the United States, will return to regular contractual deliveries in November, he said.

The unplanned shutdown pushed up oil prices last week, but they have since fallen back. November crude on the New York Mercantile Exchange sank $1.32 (U.S.) to $88.73 a barrel on Monday on economic worries and expectations that Keystone would restart.

TransCanada shut the pipeline late Wednesday when an in-line inspection tool detected what the company called a “small anomaly” on the pipe.

It did not give the location, but the U.S. Pipelines and Hazardous Materials Safety Administration said it had sent an inspector to observe repairs on a section between Missouri and Illinois.

The pipeline is the first phase of TransCanada’s overall Keystone system and has been in operation since 2010.

The next phase, between Cushing and Gulf Coast refineries, is under construction amid opposition from some landowners. The contentious Keystone XL project, between Alberta and southern Nebraska, still requires U.S. federal approval after U.S. President Barack Obama rejected the initial application early this year.

TransCanada has re-applied to build that $5.3-billion portion of the system, hoping for an approval early next year.

Source:  Reuters/The Canadian Press

The BP Texas City refinery is one of the largest and most complex in the U.S., with a Nelson complexity index of 15.3. The facility is strategically positioned to provide products throughout the U.S. Gulf Coast, Midwest and Southeast, as well as into export markets. The refinery has the flexibility to process a wide range of crude oils, and has access to price-advantaged mid-continent and Canadian crudes via pipelines as well as waterborne cargoes. The cogen facility provides steam for the refinery and other local third-party facilities and the electric power for the refinery, selling any excess to the utility grid. In addition to the Texas City facilities, the transaction includes three intrastate NGL pipelines originating at the refinery, shipper history on Colonial pipeline representing 50,000 barrels per day (bpd) and light product terminals in Jacksonville, Fla.; Charlotte and Selma, N.C.; and Nashville, Tenn. The transaction also includes assignment of branded-jobber contracts supplying approximately 1,200 BP retail locations, representing approximately 64,000 bpd of gasoline sales, in the southeastern U.S.

• Adds a world-scale 451,000 barrel per day refinery
• Includes 100% ownership of cogeneration facility
• Adds four light product terminals, refinery-related pipeline assets and Colonial Pipeline shipper history
• Assignment of branded-jobber contracts for approximately 1,200 retail locations
• Expands MPC’s integrated operations model
• Expected to be immediately accretive to earnings

“This world-scale refinery and related assets complement our current geographic footprint and align well with our strategic initiative of growing in existing and contiguous markets to enhance our portfolio. This acquisition will provide MPC the opportunity to capture synergies across our existing Gulf Coast operations; optimize commercial and process improvements; expand our retail presence in the Southeast; and enhance our ability to sell products into export markets,” said MPC President and Chief Executive Officer Gary R. Heminger. “The acquisition of these assets at an attractive price provides the opportunity to add significant long-term value to our shareholders. We are pleased that MPC’s financial performance and cash generation allow us to continue our balanced approach of making value-enhancing investments in the business and returning capital to our shareholders.”

Heminger also stated, “We have a long-standing commitment to safe and environmentally-conscious operations. BP has made significant investments to improve the safety, reliability and environmental performance of the refinery in recent years. We will leverage those investments in the refinery with our continuing focus on safe and reliable operations. In addition, we have been a part of the Texas City community for many years through our Texas City refinery, and this acquisition will deepen our commitment to that area.”

Conference Call

At 11:30 a.m. EDT today, MPC will hold a webcast and conference call to discuss this transaction. Interested parties may listen to the conference call on MPC’s website at http://www.marathonpetroleum.com by clicking on the “Conference Call Oct. 8″ link in the upper right corner of the page.

Additional materials concerning the transaction, including a slide presentation, can be found prior to the conference call on MPC’s website at http://www.marathonpetroleum.com by clicking on the “Conference Call Oct. 8″ link in the upper right corner of the page or by hovering over the “Investor Center” link, selecting “Events and Presentations” from the drop-down menu and clicking “I Agree” on the “Terms of Use” page. Replays of the conference call will be available on the company’s website through Tuesday, Oct. 22.

For additional information about the company, please visit our website at http://www.marathonpetroleum.com.

The Company is primarily engaged in exploration and production of hydrocarbons, production of petroleum products and petrochemicals, and marketing of outputs. Rosneft has been included in the Russian Government’s List of Strategic Enterprises and Organizations. The state holds 75.16% in the Company (through OJSC ROSNEFTEGAZ).

Rosneft is also one of the leading independent gas producers in Russia and the company plans to invest $20bln in the Junin 6 project, with an additional $16 billion going to Carabobo 2 project.

The Junin 2 project has special significance, according to President Hugo Chavez during talks with the Rosneft head during his visit to Venezuela.

“This will be first oil, which is developed by the Russian company in South America,” the Venezuelan President said, adding that earlier, only U.S. companies had the right to produce oil in Venezuela.

Venezuelan President Hugo Chavez(R) talking with Russian Igor Sechin, president of Russian oil company Rosneft , during an inspection of the construction site of a housing project in Caracas on September 26, 2012. (AFP Photo / Presidencia)

The Carabobo 2 project covers a part of Venezuela’s vast Orinoco heavy crude belt, which is to be jointly developed by Rosneft and Petroleos de Venezuela S.A. (PDVSA). The Junin 6 project is also in the Orinoco belt and involves the National Oil Consortium, which has Russian oil companies such as Rosneft, Lukoil, TNK – BP, Gazpromneft and Surgutneftegaz, as members.

Rosneft has a vast and high-quality reserve base, with total proved hydrocarbon reserves of 22.8 bln barrels of oil equivalent – among the best indicators for a global publicly traded oil and gas company. Moreover, Rosneft is second-to-none on an international scale in terms of total proved liquid hydrocarbon reserves. The Company’s proved reserve-to-production ratio is 25 years. Rosneft operates mainly conventional reserves, so the Company is well-placed for efficient increase in hydrocarbon production. In addition, Rosneft has access to 12.5 bln barrels of oil equivalent of probable reserves and to 10.5 bln barrels of oil equivalent of possible reserves, which will become the main source of proved reserve extension in the future.

Source: RT.com

Oil rose for the first time in three days as clashes in Syria raised tension in the Middle East and a report indicated China’s manufacturing may contract at a slower pace in July.

Futures gained 0.4 per cent as the unrest in Syria has forced tens of thousands of people to seek shelter across the borders in Turkey, Iraq and Lebanon. The preliminary reading of a Chinese purchasing managers’ index showed it would be at the highest level since February. Oil slumped 4 per cent yesterday on Europe’s debt crisis.

‘‘Geopolitical risk is outweighing the situation in Europe and ultimately it’s going to spike the price,’’ said Rich  , chief market strategist and founder of Iitrader.com in Chicago. ‘‘The Chinese manufacturing headline is pushing oil to the up side. The market was a little bit oversold yesterday.’’

The euro zone’s private sector shrank for a sixth month in July as manufacturing output nosedived, notably in the core countries of Germany and France, adding to the likelihood that the bloc will slump back into recession, business surveys showed on Tuesday.

Also weighing on prices was further evidence that the economy of the world’s biggest oil consumer was slowing: data showed US manufacturing activity in July expanded at its slowest pace since late 2010.

An improvement in China’s manufacturing sector, and the conflict in Syria as well as Iran’s tensions with the West over its nuclear programme, kept oil prices supported.

Source: Reuters

In its monthly report, the organization said it expects non-OPEC oil supply to rise by 0.67 million barrels a day this year and 0.92 million barrels in 2013.
The report said total daily OPEC crude-oil production averaged 31.36 million barrels in June, a decline of 106,000 barrels from May.

Excluding Iraq, production averaged 28.38 million barrels a day, down 170,000 from May.

OPEC’s report comes just days after a similar annual forecast by the EIA.

On Tuesday the U.S. Energy Information Administration cut its 2012 world oil demand growth forecast by 130,000 barrels per day to 670,000, citing expectations for slower global economic growth.

The agency also cut its oil demand growth estimate for 2013 by 360,000 bpd to 730,000 bpd.

The EIA said global oil and liquids demand growth was likely to be slower than previously expected due to less optimistic forecasts for global economic growth, which were lowered by 0.1 percent in 2012 and 0.6%in 2013 versus a month earlier.

Lower expectations for world oil demand growth is attributable to “the debt crisis in Europe and possible weak economic growth in China,” said EIA Administrator Adam Sieminski. Still, he said “most of the growth in oil demand next year will occur in China, the Middle East and Brazil.”

Source: rt.com

The Transportation Department’s Pipeline and Hazardous Materials Safety Administration (PHMSA) said its probe uncovered two dozen regulation violations related to the leak on Enbridge’s Line 6B near the town of Marshall, about mid-way between Detroit and Lake Michigan.

“We will hold pipeline operators accountable if they do not follow proper safety procedures to protect the environment and local communities,” Transportation Secretary Ray LaHood said in a statement. Enbridge has 30 days to respond to the order. PHMSA’s order against Enbridge accuses the company of failing to adhere to regulations for maintaining pipeline integrity.

The agency also said the company attempted to bring the pipeline back into service despite receiving multiple leak alarms the night it ruptured, leading to the release of more oil. Enbridge’s 30-inch line ultimately spilled more than 20,000 barrels of heavy crude and contaminated 38 miles (60 km) of the Kalamazoo River. The accident shut down the pipeline for more than two months and spawned a massive clean-up that the company has estimated will cost more than $700 million. Following the Enbridge spill and other major pipeline accidents, the Transportation Department enhanced its oversight last year.

The department is collecting more data on pipelines and in 2011 closed 102 enforcement cases, its highest level for a single year. Last December, Congress passed a pipeline safety bill that raised maxiumum fines and authorized an increase in the number of pipeline inspectors. Enbridge said it was reviewing the PHMSA order. “We will not comment specifically on the contents of the (Notice of Probable Violation) until that analysis is complete,” the company said in a statement.

Source: (Reuters)

With initial bidding to start soon there is likely to be competition from other global parties including another Indian state company Oil India.

Of the six assets offered in Alberta only the Surmount location, which is run in tandem with Total SA, is currently producing oil.

With foreign investors pouring money into the Alberta oil sands ownership of the industry has become a contentious issue in Canada.

In a recent interview with Today, Canadian Green Party leader Elizabeth May explained her worries.  “It’s naive to think there’s no difference between Sinopec or PetroChina and Imperial Oil or Exxon,” said May.