Oil-for-Food Corruption Trial Opens in Paris

Total, CEO fight charges as oil-for-food trial opens in Paris

Πηγή: Downstream Today
By Geraldine Amiel, Dow Jones Newswires
Jan 21 2013

The trial of Total SA (TOT) and its Chairman and Chief Executive Christophe de Margerie for alleged corruption and bribery--in connection with the U.N.-led Oil-for-Food program in Iraq between the two Gulf wars--opened Monday in a Paris court.

Total and its CEO reject the charges, a spokeswoman for the group said.

Total, de Margerie and 18 other companies and individuals are listed as defendants in the case. Some defendants Monday called into question the constitutionality of the charges, as the alleged wrongdoing would have occurred outside France. All are denying any wrongdoing.

The trial is scheduled to last until Feb. 20, if there are no postponements.

If found guilty, individuals could be jailed for up to 10 years and fined 150,000 euros ($199,770) and companies could be fined as much as EUR1.875 million.

The United Nations' Oil-for-Food program, which ran from 1996 to 2002, allowed the Iraqi authorities to sell around $65 billion worth of crude oil to buy primary goods and mitigate the impact on the Iraqi population of the international embargo and sanctions against the country at that time. Part of the proceeds were also used to pay damages to Kuwait following the Iraqi invasion of the country in 1991 and U.N. operations there.

Under the program, the Iraqi authorities sold oil at a U.N.-fixed price per barrel to companies and individuals through contracts, with the money paid to an escrow account at the United Nations. Companies such as Total bought some of the oil, either directly or from intermediaries who had initially signed a contract with the Iraqi government.

Oil Search Dilutes Interests in Yemen with Sale of Block 3 Stake to Total

Πηγή: Rigzone
By Quintella Koh|
Dec 31 2012

Australia-listed Oil Search revealed Monday that it has completed the sale of its 40 percent interest in Block 3 (Gardan), onshore Yemen, to French major Total for $44 million. As part of the deal, Total will assume operatorship of the block.

Oil Search disclosed that based on the current book value, an after tax profit from the sale will be included in its 2012 full year results.

Commenting on the deal, Oil Search's Managing Director Peter Botten said, "The completion of the sale of Oil Search’s interest in Block 3, Yemen is in line with our strategy to optimize our international acreage portfolio in the Middle East and North Africa, with a focus on licenses with material upside. Drilling is currently underway on a large prospect in Kurdistan, with encouraging preliminary indications, and a high potential well in Tunisia is due to commence drilling in early 2013."

With the sale of its Block 3 interest, Oil Search's remaining asset in Yemen is its 34 percent interest and operatorship of Block 7 (Al Barqa), also onshore Yemen, which contains the Al Meashar oil field discovered in 2010.

"The company is planning to acquire a 2D seismic program over prospective areas in [Block 7], subject to a stable and safe operating environment," Oil Search said in its disclosure.

Block 7 has been in force majeure since mid-2011 due to the "Arab Spring" uprising. Oil Search's most recent well drilled on the block, Al Meashar-1, was in March 2010. The well – at that time – flowed oil, gas and drilling fluids at an unstable rate of 200 barrels of oil per day and 100 barrels of drilling fluid per day.

Cyprus Picks Novatek for Offshore Gas Exploration

Neoklis Sylikiotis

Πηγή: RIANOVOSTI
Oct 31 2012

Cyprus has picked Russia’s largest independent gas producer Novatek to explore the island’s offshore oil and gas deposits, Minister of Commerce, Industry and Tourism Neoklis Sylikiotis said late on Tuesday.

Novatek, which is pursuing the goal of doubling its gas output by 2020 from the current 50 billion cubic meters of gas, took part in a licensing round in Cyprus for three hydrocarbon blocks in Cyprus’s exclusive economic area along with Italy’s Eni, France’s Total, Malaysia’s Petronas, Korea’s Kogas and other companies.

The Cypriot Cabinet of Ministers decided on Tuesday to start talks with a consortium of Novatek and Total to grant them a license for exploratory drilling at one of the blocks. Another block will be explored by Total independently and the third block will be operated by Eni and Kogas, the minister said.

All the three blocks are located close to Block 12 where US-based Noble Energy discovered a large offshore gas field with reserves estimated at 250 billion cubic meters, the minister said.

Total warns against oil drilling in Arctic

Πηγή: FT
By Guy Chazan
Sept 25 2012

Total SA says energy companies should not drill for crude in Arctic waters, marking the first time an oil major has publicly spoken out against offshore oil exploration in the region.

Christophe de Margerie, Total’s chief executive, told the Financial Times the risk of an oil spill in such an environmentally sensitive area was simply too high. “Oil on Greenland would be a disaster,” he said in an interview. “A leak would do too much damage to the image of the company”.

Last week, Royal Dutch Shell had to postpone until next year an attempt to drill into oil-bearing rock off the Alaskan coast after a piece of safety equipment was damaged during testing. It has spent $4.5bn and seven years preparing to drill.

ExxonMobil, ENI of Italy and Norway’s Statoil have also signed deals to explore for oil in Russia’s Arctic waters, while others have secured licences to drill off Greenland.

Mr de Margerie emphasised that he was not opposed to Arctic exploration in principle. Total has a number of natural gas ventures in the region, including a stake in the vast Shtokman field in Russia’s Barents Sea. The Total chief executive said gas leaks were easier to deal with than oil spills.

His comments were welcomed by environmental groups that are opposed to Big Oil’s presence in what they see as a near-pristine wilderness.

“The rest of the oil industry should heed his warning,” said Ben Ayliffe, head of Greenpeace’s Arctic campaign. “Given the risks, companies shouldn’t be touching the Arctic with a barge pole.”

Shell declined to comment. It has said in the past that it is well prepared for spills, with round-the-clock response teams on Alaska’s North Slope and a fleet of specialised vessels that will be in place before drilling starts.

According to a 2008 study by the US Geological Survey, the Arctic contains just over a fifth of the world’s undiscovered, recoverable oil and gas resources. The melting of the polar ice cap has made the area more accessible to the majors than ever before.

The region’s challenges are formidable, however, ranging from icebergs the size of cities to storms, darkness and fierce cold. There is also no certainty of success: UK-listed explorer Cairn Energy spent $1bn exploring off Greenland and failed to find commercial volumes of oil.

Total’s Arctic projects are concentrated in Russia. As well as its stake in Shtokman, it has interests in a number of onshore developments, such as a big liquefied natural gas venture in Russia’s far north known as Yamal LNG. It also operates a Siberian oilfield called Kharyaga.

Gazprom announced in August that it was shelving Shtokman due to excessive costs. But Mr de Margerie said as far as he was concerned, it was still on. “Gazprom never told me in writing that the project is over,” he said. “Discussions are not ... as active as I would like. [But] the reserves are still there.”

Total JV chief wants Libya oil sector freed

French oil company Total exploited only a marginal share of Libya’s oil output before the war.

Πηγή: Al Arabiya
By By JESSICA DONATI AND ALI SHUAIB (Reuters)Oct 4 2011


The head of French oil company Total’s Libyan joint venture called for the formerly all-powerful National Oil Corp (NOC) to act more as a regulator and leave smaller companies with more operational independence, cutting red tape.

“NOC should retain the role of regulator and more authority should be given to individual operators,” Ahmed M. Abulsayen, chairman of the Operators’ Committee, told Reuters in an interview.

He said optimizing NOC’s role was a key issue for the sector and red tape had to be cut to allow greater efficiency.

The government ministry in charge of oil should be responsible for some functions the NOC previously carried out such as issuing new bidding rounds and concluding contracts, he said.

“These privileges are all state authorities that should be separated,” he said, adding that bureaucracy needed to be trimmed to speed up processes.

“The new government, transitional or future, will have to take part of the load of tasks from the NOC. That goes without saying,” he added.

Oil pumping


Total’s offshore Al-Jurf field is currently pumping around 41,500 barrels per day of oil, not far off full capacity of 50,000 bpd.

The first cargo of crude to be pumped from Al-Jurf since the outbreak of war will not be exported this week, but sent to a domestic refinery near the capital instead, Abulsayen said.

The first tanker would sail with just under half a million barrels of crude, and stop off at Mellitah on its way to the Zawiya refinery, where it would load an additional quarter of a million barrels from the terminal.

Exports remained complicated by sky-high shipping insurance rates, he said, adding there remained confusion over which waters were part of the war zone decreed by NATO and the transitional government needed to take action in order for operations to return to normality.

The main obstacle preventing foreign workers from returning, Abulsayen said, was the difficulty in obtaining visas, navigating customs and a lack of shipping agencies willing to operate in the area.

Total’s second field near Sirte, where fighting continues, remained offline as the danger of attacks persists and was unlikely to begin producing anytime soon, as it feeds into the Waha system and badly damaged oil terminal Es-Sider.

A team of locals remained close by, he said, but had been unable to prevent looting and supporting infrastructure from being destroyed.

“We never left the field alone,” said Abulsayen.

Catastrophe averted


Key activities to maintain the condition of the offshore field were undertaken illegally and independently from NOC to avert the risk of a catastrophic spill, Abulsayen said.

“We operated out of Zarzis [Tunisia] without a mandate” said Abulsayen, adding that two missions had been put in place without the official approval from NOC, as the state oil companies was overloaded with other tasks.

The potential magnitude of spill at Al-Jurf could have caused a disaster ten times the scale of Macondo, in the Gulf of Mexico, he said, as offshore fields can be dangerous if the condition of facilities is allowed to deteriorate.

Abulsayen added that efforts made during the height of the conflict had enabled Total to restart operations rapidly.

“Off shore fields are a hostile environment and it was the result of our collective efforts over eight months that we were able to make a speedy return to production,” he said.

Glencore signs Libyan fuels contract

Πηγή: Fin24
Sep 05 2011 10:43

Benghazi - Commodities trader Glencore has signed its first contract to deliver fuels to Libya’s interim council, industry sources said, in a further sign that rival Vitol is losing its position as top supplier to rebels that are now interim leaders.

“They are supplying products,” said an industry source in Libya familiar with the transaction.

It was not clear when delivery would begin, but a second industry source said the contract was conditional on the lifting of UN sanctions on Libya.

Glencore declined to comment.

Vitol, along with Qatar, was a top supplier for the rebels in east Libya during the first few months of the revolt and while it is still sending fuel, the National Transitional Council (NTC) has diversified its business partners.

Over the past week, Russia’s Gunvor and France’s Total have supplied their first tankers to Libya since the conflict between rebels and forces loyal to Muammar Gaddafi began in February.

Fuel shortages

Even during peacetime, the North African oil producer relied on imports of fuels such as gasoline because of insufficient refining capacity. Import requirements have surged since the conflict began in February due to refinery outages.

Libya’s NTC badly needs fuels to help relieve strain on its infrastructure and restore order in the country.
Long lines have appeared at petrol stations across eastern parts of Libya over the last week, occasionally resulting in friction between residents in the heavily-armed country.

A spokesperson for the NTC said that some of the $15bn international powers agreed to unfreeze at a conference in Paris last week would be spent on paying for fuel imports.

Russian’s recognition of TNC … in contracts.

Russia abstained in the U.N. vote on Libya. Striding over the wall kept closing an eye to the West approaching TNC’s recognition that followed two important contracts.

The first was on the Yamal LNG Integrated Project which consists of the production, treatment, transportation, liquefaction and shipping of natural gas and natural gas liquids from the South Tambey field on the Yamal Peninsula in Northwestern Siberia. On 2 March the French Total bought a $4B stake in Russia's Novatek, teams on Yamal LNG project .

On 24 March the suck of the Russian ambassador to Tripoli by Medvedev stoked new tension between President Dmitry Medvedev and Vladimir Putin, the prime minister, after Vladimir Chamov called the Kremlin's acquiescence to air strikes targeting Libya a "betrayal of Russia's interests". Putin and Medvedev had opposite opinions on the NATO’s intervention from day one when Medvedev rejected Putin’s “crusade” remark over Libya.

On 6 June Moscow which had voiced concern about civilian casualties and excessive use of force since the NATO-led air campaign, already had opened discussion with the rebels in Benghazi in an attempt to become a middleman. In his press conference after the G8, Medvedev said that he had sent Mikhail Margelov to Benghazi to begin talks, that “Gaddafi’s regime has lost legitimacy and he must leave” and that Russia would not give him asylum.

On 31 August Exon Mobile signed an Arctic oil exploration deal with Russian state owned oil company, Rosneft, in a strategic move ahead of industry rivals, BP. As part of the deal, Rosneft will be allowed access to oil reserves in the Gulf of Mexico and elsewhere. The very same day, Russia finally recognized TNC as the governing authority in the country. Where there’s smoke there’s fire they say.

The race is on for Libya's oil, with Britain and France both staking a claim

Alain Juppé said it would be 'fair and logical' for France's companies to benefit. Photograph: Jean-Pierre Muller/AFP/Getty Images

Πηγή: Guardian

By Julian Borger and Terry Macalister

Thursday 1 September 2011

Rebel leaders dismiss suggestions that firm promises have been made, but supportive countries look set to benefit.

The starting pistol has been fired on bids by Britain and other western powers to secure a slice of the oil prize in Libya when France said it was "fair and logical" for its companies to benefit.

Alain Juppé, the French foreign minister, planted his flag in the sand as the Guardian was told that BP was already holding private talks with members of Libya's interim government.

Libya is a vital energy producer, and BP had previously committed itself to spending more than $1bn on exploration plans under Muammar Gaddafi's government.

Shell was also becoming active before the civil war broke out, as was Total of France, but the conflict over the past few months has brought the country's existing oil production of 1.6m barrels a day – 2% of the world's total – to a halt.

Rebel leaders had already made clear that countries active in supporting their insurrection – notably Britain and France – should expect to be treated favourably once the dust of war had settled.

But they were anxious to shut down any suggestion that firm promises had already been made to carve up the country's only real wealth-providing industry with foreign powers or companies.

The new Tripoli government has denied the existence of a reported secret deal by which French companies would control more than a third of Libya's oil production in return for Paris's support for the revolution.

The French foreign minister said he was also unaware of the letter referring to the reported deal, which was dated 3 April and published on Thursday in the French daily newspaper Libération. It purported to show an undertaking by the National Transitional Council (NTC) to reserve "35% of total crude oil in exchange for the total and permanent support for our council".

The document was addressed to the Qatari government, which Libération described as acting as an intermediary between Libya and France, and says the NTC authorised "brother Mahmoud" to sign the deal with France – a reference to Mahmoud Shammam, the interim government's information minister, according to Libération.

Shammam on Thursday rejected the letter as a forgery. "It's a joke. It's false," he said, according to Reuters, while Juppé said he was unaware of the letter.

But the French foreign minister told RTL radio: "What I know is the NTC said very officially that concerning the reconstruction of Libya it would turn in preference to those who helped it. That seems fair and logical to me."

Samuel Cuzlik, a Middle East energy analyst with the consultancy IHS Global Insight, also questioned whether the letter may have been a forgery prepared by the Gaddafi regime to discredit the rebels by suggesting they were prepared to hand over the country's riches to foreign companies.

He pointed out that it would be highly disruptive – if not impractical – to earmark a particular part of oil production for one country as that would involve breaking contracts signed in the past with other firms.

"The new government clearly wants to get the oil industry back up and running as quickly as possible, and they know that can be best done with the help of the foreign companies that previously operated them," Cuzlik said.

"Anything that led to further delays in production – and financial income – would not be welcome."

France's Total was the operator of al-Jurf field in the Mediterranean which has been untouched by war, while ENI of Italy had the most dominant position, producing 273,000 barrels of oil a day.

ENI is also the operator of the 190-mile (310km) pipeline that can carry 11bn cubic metres of gas annually from the Libyan coast to Sicily. This has been inactive for more than six months.

BP has no producing assets, but was just about to drill its first exploratory well before the civil war broke out, while Shell has been employed to try to upgrade an ageing liquefied natural gas terminal.

BP declined to comment on any discussions with Libya's interim government, but respected industry sources confirmed the two sides are in contact over future oil production.

Chinese and Russian companies also had a significant presence in the country but could face difficulties after being equivocal early on about the rebel plan to unseat Gaddafi.

Abdeljalil Mayouf, an executive at Libyan rebel oil firm Agoco told Reuters: "We don't have a problem with western countries like the Italians, French and UK companies. But we may have some political issues with Russia, China and Brazil."

EU oil companies get set to return to Libya

Libya oil and gas facilities. Frattini: 'It is clear that Eni will play a No. 1 role' (International Energy Agency)

Πηγή: EUobserver

BY ANDREW RETTMAN

22.08.11 @ 21:00

EU oil firms are preparing to return to Libya amid good will generated by Nato support. The military alliance has also carried out "prudent planning" for a potential peacekeeping mission.

Italian foreign minister Franco Frattini on Monday (22 August) said energy company Eni has sent a delegation to meet rebel leaders in Benghazi after opposition forces entered Tripoli at the weekend, signalling the end of the Gaddafi regime.

"I won't be revealing any secrets if I say that Eni technicians have already been called to Benghazi to reactivate plants ... The facilities were made by Italians and therefore it is clear that Eni will play a No. 1 role in the future," he told Rai TV.

Eni spokesman Cesaro Fabio declined to comment on the Benghazi trip. He told EUobserver that Eni's oil and gas licences in the country are valid until between 2042 and 2047, however. The firm's pre-war oil output in Libya was 270,000 barrels a day. It also operated the 10-billion-cubic-metre-a-year Greenstream gas pipeline.

Stefan Leunig, a spokesman for Germany's Wintershall, previously on 100,000 barrels a day, said: "Starting up production could be done within several weeks under standard technical conditions. This of course depends on the state of the export infrastructure as well as a stable security situation."

A spokeswoman for French firm Total said: "We are monitoring the situation closely to see when we can restart operations." A spokesman for Austria's OMV said it last had contact with rebel leaders in late June, but is also "monitoring the situation, and in particular the further, recent developments very closely."

BP told rebels in July it wants to restart drilling at its offshore facility in the Ghadames basin. "We are keen to resume those activities when conditions allow," BP spokesman Robert Wine said.

For their part, rebel authorities have promised an oil windfall for Nato members but said rebel-hostile countries such as Russia will lose out.

Abdeljalil Mayouf, information manager at the rebel-controlled Agoco oil company, told Reuters on Monday: "We don't have a problem with Western countries like the Italians, French and UK companies. But we may have some political issues with Russia, China and Brazil."

Aram Shegunts, the head of the Libya-Russia Business Council, commented: "Our companies won't be given the green light to work there ... Our companies will lose everything because Nato will prevent them from doing business in Libya."

Libya before the conflict erupted in February had an output of 1.6 million barrels a day of oil and 15 billion cubic metres a year of gas. It also has 47 billion barrels of proven oil reserves - the largest in Africa and the ninth largest in the world.

With the war entering its final stages, some opinion-makers have begun to call for Nato to send in ground troops.

"Some sort of international assistance, and most likely an international force, is likely to be needed for some time to restore and maintain order ... It is up to Nato, the European Union and the UN, working with the Libyan opposition, the African Union and the Arab League, to put together a response to the new Libyan reality," Richard Hass, the head of the Council on Foreign Relations think-tank in Washington and a former state department official, said in the FT on Monday.

The British government the same day said "We do not see any circumstances in which British troops would be deployed on the ground." But a Nato official told this website the alliance has drawn up plans for ground operations as part of routine procedure.

"Nato always does prudent planning. Nato stands ready to play a supporting role - but clearly the alliance will not be in the lead," he said.

The UN resolution which mandated Nato air strikes in Libya excluded "a foreign occupation force of any form on any part of Libyan territory."

The EU in April also drew up plans to send in soldiers to deliver humanitarian aid in a project entitled EUfor Libya, which fell by the wayside due to lack of UN support.

EU external relations spokesman Michael Mann said on Monday the bloc will send a "needs assessment" mission to Libya in the coming days. He added the EU intends to play a major role in constructing the new Libyan state.

"We have a number of funds available to set up civil society, help set up elections, for institution building and of course to help the recovery of the economy," he said.