Week in review
Abu Dhabi 
ABU DHABI, March 3, 2017 – TOGY’s coverage of this week’s news covered major moves by multinationals and NOCs in terms of investment and divestments in markets around the globe. Other news items included the publication of year end results for major oil and gas companies, an extension on Equatorial Guinea’s latest bidding round and legal battles in Nigeria.
On February 28, Saudi Aramco signed a share purchase agreement with Malysian NOC Petronas for investment of USD 7 billion into Malaysia’s USD 270-billion Refinery and Petrochemical Integrate Development (RAPID) project in Johor. The move overturned Saudi Aramco’s original stance of abandoning the project in January.
France’s Total announced on Monday that it had reached an agreement with Pereco for the sale of various Gabon assets. Valued at USD 350 million, the transaction will see Total offload wholly owned subsidiary Total Participations Petrolières Gabon. As a result, the company will divest its interests in the Grondon, Gonelle, Barbier and Mandaros fields in the offshore Grondin area. Total Gabon, while still holding a majority shareholding in the mentioned fields, will hand operatorship to Perenco.
In addition, Total and Brazil’s Petrobras inked the definitive agreements to acquire Petrobras assets on Wednesday. Valued at USD 2.23 billion, the deal will see Total land a 22.5% stake in the Lara concession area in Block BM-S-11. The company will also gain a 35% operating interest in the Lapa field, which was brought on stream in December 2016 using the Cidade de Caraguatatuba floating production, storage and offloading vessel. Onshore, Total will acquire a 50% stake in two cogeneration plants in Bahia state, namely the Rômulo de Almeida and Celso Furtado.
Bumped bidding round
The Ministry of Mines and Hydrocarbons of Equatorial Guinea announced on Monday that it was extending the deadline for the licensing round it launched last June, dubbed EGRonda 2016, until April 28 this year. Winners will be announced on June 5, it added, citing a recent surge of exploration interest as a reason for the extension. PSCs are expected to be signed on September 15 and to be ratified by the end of 2017.
Year end results
Pemex announced its quarterly net results late on Monday, revealing a significant reduction in fourth-quarter losses on account of increased operational efficiency, lower costs and improved oil prices. Pemex posted a loss of USD 1.58 billion over the final three months of 2016, compared with USD 9.8 billion over the same period one year earlier. It achieved the results in part due to a 26% decrease in operational costs.
Houston-based independent EOG Resources released its fourth quarter and 2016 full-year results on Monday, reporting a loss for both periods. In a company statement, EOG announced it had incurred losses of USD 142.2 million for the fourth quarter 2016 and USD 1.1 billion for the whole year. Nevertheless, the numbers revealed an improvement over 2016 when the company lost USD 284.3 million and USD 4.5 billion over the same periods.
Norway’s BW Offshore announced its fourth quarter and full-year results on Tuesday, saying totals had been driven down by impairment losses of some USD 222.6 million booked during the quarter. The company’s net losses for 2016, at USD 133 million, were nevertheless considerably smaller than in 2015, when they amounted to USD 216 million.
Italy’s Eni posted a fourth-quarter net profit of EUR 340 million on Wednesday, recovering from a loss of EUR 562 million over the same period in 2015. The consolidated adjusted net profit over the last three months of the year came out at EUR 459 million, beating analysts’ expectations. The company’s full-year 2016 net loss went down from EUR 8.77 billion to EUR 1.46 billion.
France’s utilities giant Engie posted EUR 400 million of net losses for 2016 on Thursday, mostly on account of EUR 3.8 billion of impairments linked to low power prices in Europe and new nuclear provisions in Belgium. The company nevertheless did considerably better than in 2015, when it lost some EUR 4.6 billion, and said it reached its target with a net recurring income share of EUR 2.5 billion. Total revenues for the year stood at EUR 66.6 billion, some EUR 3.3 billion less than in 2015, while EBITDA was EUR 10.7 billion, down EUR 600 million year-on-year.
Legal issues
Authorities in Nigeria laid corruption charges against Eni and Shell on Thursday in a case related to the acquisition of offshore Block OPL 245 in 2011. The deal saw the two oil majors pay USD 1.3 billion to the Nigerian government for the exploration licence of the block, estimated to contain up to 9 billion barrels of oil.
Prosecutors at Nigeria’s anti-corruption unit, the Economic and Financial Crimes Commission (EFCC), allege that USD 801 million went to Nigerian businesses and individuals in the form of bribes. Eni and its partner Shell deny the charges, saying that the money they paid went straight to Nigeria’s government.
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