ENERGY INDUSTRIES – AUSTRALIA

Demerger option looms for Origin

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 28 & 22 : 2-May-16

The commencement of production at the Australia Pacific LNG project means Origin Energy’s oil and gas business accounts for the biggest proportion of its operations. This will strengthen the case for those who advocate that Origin should spin off its electricity and gas retailing arm, which boasts 4.3 million customers. However, Origin has some $A9bn worth of debt, which would make a demerger difficult to pursue at present, particularly given the continued weakness of the crude oil price.

CORPORATES
ORIGIN ENERGY LIMITED – ASX ORG, AUSTRALIA PACIFIC LNG LIMITED, AGL ENERGY LIMITED – ASX AGL, CREDIT SUISSE (AUSTRALIA) LIMITED, BG GROUP PLC, CONOCOPHILLIPS, CREDIT SUISSE (AUSTRALIA) LIMITED, UBS HOLDINGS PTY LTD, SANTOS LIMITED – ASX STO, HONY CAPITAL, ENN HOLDINGS, SINOPEC CORPORATION, BORAL LIMITED – ASX BLD, ALLAN GRAY AUSTRALIA PTY LTD

Energy giants target Bight’s $100bn prize

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Original article by Matt Chambers
The Australian – Page: 17 & 18 : 26-Apr-16

Wood Mackenzie has estimated that the Great Australian Bight could yield about 1.9 billion barrels of oil equivalent. However, Andrew Harwood of Wood Mackenzie notes that the downturn in the crude oil price has prompted many resources groups to shun frontier drilling. Nevertheless, BP and Chevron are among the oil producers that are seeking to undertake exploration programs in the Great Australian Bight.

CORPORATES
WOOD MACKENZIE, BP PLC, CHEVRON CORPORATION, SANTOS LIMITED – ASX STO, STATOIL AS, BHP BILLITON LIMITED – ASX BHP, WOODSIDE PETROLEUM LIMITED – ASX WPL, GREENPEACE, CONSERVATION COUNCIL OF SOUTH AUSTRALIA INCORPORATED, INTERNATIONAL FUND FOR ANIMAL WELFARE, THE WILDERNESS SOCIETY

Woodside, Origin under ratings pressure after Fitch downgrades

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 27 : 26-Apr-16

Fitch Ratings has downgraded the credit ratings outlook of both Woodside Petroleum and Origin Energy from "stable" to negative. The two groups currently boast credit ratings of "BBB+" and "BBB" respectively. Fitch expects further volatility in the crude oil price and says it is unlikely to rebound for some time. However, Bernstein Research is upbeat about the outlook for the oil price.

CORPORATES
WOODSIDE PETROLEUM LIMITED – ASX WPL, ORIGIN ENERGY LIMITED – ASX ORG, FITCH RATINGS LIMITED, BERNSTEIN INVESTMENT RESEARCH AND MANAGEMENT, AUSTRALIA PACIFIC LNG LIMITED

Falling oil price puts squeeze on Woodside

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Original article by Paul Garvey
The Australian – Page: 21 : 21-Apr-16

Woodside Petroleum has reported sales revenue of $US982m ($A1.26bn) for the March 2016 quarter, which is 30 per cent lower than the same period in 2015. The group has been hit by the downturn in the crude oil price, while production was 4.8 per cent lower than the December 2015 quarter at 23.7 million barrels of oil equivalent. Production was affected by scheduled maintenance at the North West Shelf project and the end of production at the group’s Balnaves oilfield.

CORPORATES
WOODSIDE PETROLEUM LIMITED – ASX WPL, APACHE ENERGY LIMITED, UBS HOLDINGS PTY LTD

Chevron forced to shut down Gorgon

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Original article by Paul Garvey
The Australian – Page: 20 : 7-Apr-16

Mechanical problems at the Gorgon LNG plant in Western Australia have prompted Chevron to suspend production for up to two months. The energy group said the repair work is "routine", and it has stressed that this will not affect the schedule for the project’s first processing line to achieve full production. The $A55bn Gorgon project – which was originally slated to cost $A37bn – exported its first LNG in late March 2016.

CORPORATES
CHEVRON CORPORATION, CHUBU ELECTRIC POWER COMPANY INCORPORATED, EXXONMOBIL CORPORATION, ROYAL DUTCH SHELL PLC, OSAKA GAS COMPANY, TOKYO GAS COMPANY LIMITED

Floating LNG gets a sinking feeling

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 15 : 29-Mar-16

Tri-Zen International’s Tony Regan says recent decisions to shelve two floating LNG projects is disappointing. Floating LNG technology was once regarded as a good alternative to costly onshore gas projects. However, Woodside Petroleum has abandoned plans to develop the Browse project using Shell’s floating LNG technology, while the partners in Indonesia’s Abadi gas project have also dropped plans to use the technology. Woodside will look at alternative floating LNG solutions.

CORPORATES
WOODSIDE PETROLEUM LIMITED – ASX WPL, ROYAL DUTCH SHELL PLC, TRI-ZEN INTERNATIONAL PTE LTD, INPEX CORPORATION, EXXONMOBIL CORPORATION, BERNSTEIN RESEARCH

Woodside shelves $50bn Browse

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Original article by Matt Chambers
The Australian – Page: 19 & 22 : 24-Mar-16

Woodside Petroleum and its partners will not proceed with the Browse floating LNG project due to the downturn in the crude oil price, which is currently trading at around $US40 a barrel. It is estimated that the project would cost $A50bn to develop, and Woodside CEO Peter Coleman says crude oil would have to be trading at between $US50 to $US60 per barrel for Browse to break even. Coleman adds that other options will be considered for developing the Browse project.

CORPORATES
WOODSIDE PETROLEUM LIMITED – ASX WPL, ROYAL DUTCH SHELL PLC, BP PLC, MITSUBISHI CORPORATION, MITSUI AND COMPANY LIMITED, PETROCHINA COMPANY LIMITED, ALLAN GRAY AUSTRALIA PTY LTD, BHP BILLITON LIMITED – ASX BHP

Gorgon’s maiden gas shipment

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Original article by Paul Garvey
The Australian – Page: 20 : 22-Mar-16

Bulk cargo carrier "Asia Excellence" has left Australia with the first shipment of LNG from Chevron’s $A55bn Gorgon project. The joint venture project was originally slated to cost $US37bn, but was beset by cost over-runs and construction delays. The first of three processing lines has been completed, with the other two trains slated to commence production in the next 12 months. The inaugural shipment comprises 160,000 cubic metres of LNG and will be delivered to buyers in Japan.

CORPORATES
CHEVRON CORPORATION, CHEVRON AUSTRALIA PTY LTD, GORGON JOINT VENTURE, EXXONMOBIL CORPORATION, ROYAL DUTCH SHELL PLC, OSAKA GAS COMPANY, TOKYO GAS COMPANY LIMITED, CHUBU ELECTRIC POWER COMPANY INCORPORATED, WOOD MACKENZIE

New Santos chief executive wields axe as senior execs go

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 15 : 22-Mar-16

Santos has appointed Vince Santostefano to the post of COO, while Angus Jaffray will become executive vice president for strategy and corporate services. Meanwhile, James Baulderstone will step down as vice president of corporate development. Santos’s vice president for Queensland, Trevor Brown, will also leave the group. Both had been seen as potential successors to ex-CEO David Knox. New CEO vice president Queensland has commenced a restructuring program.

CORPORATES
SANTOS LIMITED – ASX STO, WOODSIDE PETROLEUM LIMITED – ASX WPL, AZURE CONSULTING, THE BOSTON CONSULTING GROUP PTY LTD, CROWN CORK AND SEAL COMPANY

Price rout casts doubt on expansion

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 15 : 14-Mar-16

EnergyQuest’s Graeme Bethune has downplayed suggestions that some of the Queensland LNG production trains may be put on hold. The three projects will eventually have six trains, and Credit Suisse and RBC Capital Markets are among the firms which believe that at least one train could be mothballed amid a downturn in commodity prices. Santos and Origin Energy have indicated that the second trains of their LNG projects are expected to commence production on schedule.

CORPORATES
ENERGYQUEST, CREDIT SUISSE (AUSTRALIA) LIMITED, RBC CAPITAL MARKETS, SANTOS LIMITED – ASX STO, ORIGIN ENERGY LIMITED – ASX ORG, AUSTRALIA PACIFIC LNG LIMITED, GLADSTONE LNG PTY LTD, QUEENSLAND CURTIS LNG PTY LTD, ROYAL DUTCH SHELL PLC, AUSTRALIAN ENERGY MARKET OPERATOR LIMITED