Oil & Gas Atlas: Energy prices in flux:: Macquarie

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Oil & Gas Atlas
Energy prices in flux as US economic statistics and EU debt concerns cloud economic outlook

Energy Market Indices WoW Changes
⇒ S&P/TSX Energy Index: -1.1%
⇒ S&P 500 E&P Index: -1.2%
⇒ Oil Service Sector Index: -1.4%
⇒ UK FTSE Oil & Gas Producers Index: -1.1%
⇒ Asia Pacific Oil & Gas Producers Index: -3.9%


Weekly Equities Recap
WTI crude futures closed 2% higher WoW, boosted mid-week on the release of US
consumer income and spending reports, lower fuel supplies, and reports of a diesel
shortage in China. European sovereign debt issues arose again late in the week,
applying downward pressure to oil prices.
Thai oil company PTT E&P entered in a deal last week to buy 40% of Statoil’s Kai
Kos Dehseh SAGD oil sands project for C$2.28bn.The project’s first phase is slated
to produce oil in 2011 at a rate of 10mbbl/d, and is ultimately expected to produce
up to 300mbbl/d.
The US Department of State issued a press release on Tuesday stating that it will
not conduct an investigation into Inpex’s past investments in Iran’s energy sector.
This is following Inpex’s decision to pull out of Iran. The statement also recognized
Inpex’s pledge that it will not engage in any energy related activity in Iran in the
future that could result in sanctions under the Iran Sanctions Act.
In Europe, the Cairn-Vedanta deal continued to progress as the date of
13 December 2010 was confirmed for Vedanta shareholders to vote on the deal
(Cairn shareholders approved the deal on 7 October 2010). Afren released further
information of the Okwok-9 appraisal well offshore Nigeria confirming a 25mmboe
base case commercial development and stated the results also confirmed the
company's sub-surface model (which has pre-drill upside of a further 50mmboe).
In Kurdistan, media reports of a potential move towards oil export agreements with
Baghdad failed to move shut-in producers such as DNO. Operationally, the potential
difficulties of drilling in the region were highlighted by Sterling Energy's Sangaw
North well, which is dealing with a gas pressure kick with H2S at surface and a
parted drill string in the hole.