Tullow Oil sale of stake in Uganda project to Total, CNOOC dropped

MOSCOW (MRC) -- Tullow Oil's plan to sell another stake in its 230,000 barrel per day project in Uganda to France's Total and China's CNOOC has been called off due to a tax dispute with the Ugandan authorities, Tullow said, as per Hydrocarbonprocessing.

The London-listed firm had previously sold about two-thirds of the project to CNOOC and Total for USD2.9 billion, in transactions completed by 2012.

It had planned to sell the two companies around another roughly 22% holding in the project in a deal that had been expected to close in late 2018.

That would have cut Tullow's remaining stake to about 11%, raising USD200 million that would have helped the firm cut its net debt, which stood at USD2.9 billion at mid-year, and reduce its operational commitments to the project by around USD700 million.

Tullow said the firms could not reach an agreement with the Ugandan Revenue Authority on the tax relief on money Total and CNOOC would have paid to Tullow, leading to the majors declining to extend the deadline for the deal to be completed.

Shares in Tullow were down around 3.3% at 210.1 pence at 1157 GMT.

"Tullow will now initiate a new sales process to reduce its 33.33% operated stake in the Lake Albert project, which has over 1.5 billion barrels of discovered recoverable resources," it said.

The firm said the partners in the Uganda project had aimed to reach a final investment decision on development by the end of 2019 but that terminating the stake sale "is likely to lead to further delay".

Chief Executive Paul McDade told Reuters it was too early to give a new timeframe for the final investment decision or to talk about potential new partners in the project. He said Total and CNOOC had not yet indicated their view on a fourth partner coming in.

"Whilst frustrations around the project were clear, the termination of the (sale and purchase agreement) and inevitable further delay to the project was an unlikely scenario," said David Round, analyst at BMO Capital Markets.

"Whilst removal of the deal, resultant delay, and project risking clearly impacts valuation, this also has repercussions for Tullow's growth and deleveraging story, and puts more pressure on the on-going program in Guyana."

Tullow has just made a discovery and is doing further exploration work offshore Guyana, one of the world's most-watched basins.
MRC

MOSCOW (MRC) -- Most of a highly toxic chemical stored at a fire-damaged Philadelphia oil refinery has been rendered inert, clearing the way for closer inspections of the site following a June blaze that led to the plant's closure, officials said, as per Hydrocarbonprocessing.

About 340,000 pounds of hydrofluoric acid (HF) stored at Philadelphia Energy Solutions was chemically neutralized, Philadelphia Fire Commissioner Adam Thiel said in a briefing. HF can burn the skin and form a potentially deadly fog at room temperature.

The process "substantially reduces the risk to the community," Thiel said, noting some HF acid still remained at the site. Initial phases of the fire probe, including data gathering, have largely been completed, Thiel said.

HF is used by more than one-third of U.S. refineries in the alkylation process to make high-octane gasoline. Labor unions and environmentalists have urged it be replaced, particularly in densely populated areas.

PES' alkylation unit was destroyed in a fire and series of blasts on June 21 just minutes after the chemical was dumped into a safety vessel. The HF in that vessel has been neutralized, Thiel said.

Removing the HF will allow investigators, including the U.S. Chemical Safety and Hazard Investigation Board, to physically examine damaged areas of the refinery.

Since the fire, PES has closed the refinery, which was the largest and oldest on the East Coast, and filed for Chapter 11 bankruptcy.

Most of the roughly 1,100 PES workers have been laid off without health benefits, including 640 union employees.

PES on Thursday asked the bankruptcy judge to hire an investigations and crisis management attorney to advise the company on the seven federal, state and local investigations into the cause of the June blasts, court documents show.

The refiner has agreed to retain about 80 union employees as a caretaker group until the last of the HF is neutralized. Afterwards, the number of workers will be reduced, according to an agreement reached last week, which is subject to bankruptcy court approval.
MRC

MOSCOW (MRC) -- Polish oil and gas company PGNiG said Thursday it will resell U.S. natural gas to Ukraine’s Energy Resources of Ukraine (ERU), moving a step closer to becoming a gas exporter in the region, Kallanish Energy reports.

Under the deal, PGNiG will receive a liquefied natural gas (LNG) cargo from the U.S. in early November. The gas will be injected into the Polish transmission system after regasification, from where it will reach Ukraine and ERU via the gas connection in Hermanowice, near the border with Ukraine.

Supplying the Ukrainian company will continue until the end of 2019. The companies didn’t provide further details such as pricing, volumes and suppliers.

PGNiG CEO Piotr Wozniak noted the company has the opportunity to purchase LNG on “competitive terms,” has reserved full capacity at the domestic Swinoujscie LNG terminal and has available capacity in the gas pipeline system in Poland and on its borders.

“This makes PGNiG a natural partner for cooperation in building a modern and secure gas market in our part of Europe,” he said. The only current limitation in the development of large-scale exports to Ukraine is the capacity of gas pipelines in Poland in the direction of Silesia–Podkarpacie. However, such capacity should be expanded by 2021 “at the latest,” Wozniak added.

As Poland continue its campaign to reduce the Russian monopoly concerning European gas supply, LNG imports to the country accounted for 20% of total imports in 2018, compared to an 8.5% share in 2016.

Roughly 7.5 billion cubic meters (Bcm) of gas have been imported in nearly 70 cargos – which include spot deliveries and medium- and long-term contracts.
MRC

MOSCOW (MRC) -- Russian gas giant Gazprom has started pumping gas into the Power of Siberia Pipeline bound for China, Kallanish Energy reports, which cited the governor of the Republic of Yakutia making the statement.

The pipeline will deliver 38 billion cubic meter per year (Bcm/y) of natural gas from eastern Siberian fields to China. Under the 30-year contract signed in 2014, deliveries start of Dec. 1.

Gazprom didn’t confirm the news, but had said in June start-up operations for the onshore pipeline were underway. It also said construction of the border-adjacent Atamanskaya compressor station, which will maintain the required pressure during gas deliveries to China, was nearing completion.

MRC

MOSCOW (MRC) -- The Alliance to End Plastic Waste announced that Jacob Duer will serve as the inaugural President and CEO of the newly formed not-for-profit, effective October 1, according to Hydrocarbonprocessing.

Duer joins the AEPW from the United Nations, where he most recently served as a Program Director for the UN Environment Program.

"Jacob is an experienced, impact-driven, global leader with a breadth of expertise working across a broad range of stakeholders in the public and private sectors," said David Taylor, Chairman of the Board, President and CEO of Procter & Gamble, and Chairman of the AEPW. "His demonstrated leadership, passion for promoting sustainability, and track record of building solution-oriented multilateral partnerships will be an invaluable asset as the AEPW grows into this next phase."

In this newly created role, Duer will advance the Alliance mission to develop, deploy, and bring to scale solutions that will minimize and manage plastic waste and promote solutions for used plastics. This includes plastic reuse, recovery, and recycling to keep it out of the environment. Since launching in January, the Alliance has initiated projects focused on: river renewal; municipal and city partnerships; idea incubation; and IT infrastructure.

"Being strongly committed to environmental sustainability, I am honored to lead the Alliance as a unique solution model to address plastic waste as one of the most pressing environmental issues of today," said Duer. "Working with all stakeholders, the Alliance will play a lead role in driving sustainable solutions for the future."

The Alliance is the only organization bringing together the entire plastics value chain (manufacturing, packaging, collecting, and converting) and the associated technical, materials, logistics, and engineering expertise. In total, the Alliance has committed to a goal of USD1.5 billion to deliver sustainable solutions over five years.

"As a strategic partner to the AEPW, we are excited about the vision and leadership that Jacob will bring to this role,” said Peter Bakker, President, World Business Council for Sustainable Development. “This is an important inflection point as we build an unparalleled force to systematically and sustainably bring solutions to scale that will end plastic waste in the environment."

The Alliance to End Plastic Waste (AEPW) welcomed 12 new companies from across the plastics value chain, including Chinese state-owned Sinopec. The new members expand both the global footprint of the Alliance and the participation of companies across the plastics value chain seeking to develop and bring to scale solutions to help eliminate plastic waste in the environment.

As MRC informed before, in mid-January 2019, an alliance of global companies from the plastics and consumer goods value chain launched a new organization to advance solutions to eliminate plastic waste in the environment. BASF co-founded a global alliance of nearly 30 companies to advance solutions that reduce and eliminate plastic waste in the environment, especially in the ocean. The Alliance to End Plastic Waste (AEPW) has committed over USD1.0 billion with the goal of investing USD1.5 billion over the next five years to help end plastic waste in the environment. New solutions will be developed and brought to scale that will minimize and manage plastic waste. This also includes the promotion of solutions for used plastics by helping to enable a circular economy.
MRC