Gazprom/CNPC, Amec, Tullow, and Altima

WTI $108.42 +1.19, Brent $115.07 +6c , B/WTI Diff – $6.65 -$1 , Natural Gas $3.58 -11c

Good morning – Taper tantrums…………………..

Its Non-Farm payroll day today and consensus is 180,000 although they will probably rework the old numbers to confuse everyone. Either way any chance of tapering QE will be closely monitored.

It’s the final day of the G20 junket as the Russians say that a US strike on Syria would ‘drive another nail into the coffin of international law’. Mind you they also said that ‘Britain is just a small island: no-one pays any attention to them’.

Oil Price

We had the API inventory stats which showed a fall in crude of 1.84m barrels against a consensus of 180,000 barrels, oops! The market rallied, unsurprisingly better in WTI than Brent which itself has struggled at $116, my trading spies tell me that if it doesn’t break that level then watch $114.50 on the downside. Another reason for the rally was the ISM service sector number which showed the fastest growth for 8 years.

Gazprom/CNPC

Too late for yesterday’s blog was confirmation of the deal between Gazprom and CNPC for the latter to buy a 20% stake in the Yamal LNG project from Novatek and also a significant gas import deal. The first cargoes of LNG should move in 2017. It is noticeable that the statement says that the price of this contract is not linked to Henry Hub which I take to indicate that it may be somewhat lower than currently negotiated international prices, if you know what I mean….

Amec

Amec has announced a contract in the North Sea with Taqa to undertake the EPC modifications to the Tern oil production platform in the Cladhan field, Northern North Sea. This comes as no great surprise as Amec has completed the FEED work on the project and they also have a long-term engineering framework agreement with Taqa.

Tullow Oil

The OMV operated Wisting Central exploration well (Tullow 20%) has come in as an oil discovery in the Hoop-Maud Basin in the Barents Sea. The well encountered 50-60 metres of net light oil pay in good quality relatively shallow middle to lower Jurassic reservoir rocks.

Tullow consider this to be a ‘major frontier light oil discovery’ and has opened the Hoop-Maud Basin by providing a new shallow play in the region.

This discovery must come as a welcome relief to Tullow as they must have thought that they were firing blanks in the exploration department, moving north has done the trick. Early days then but a good result and there will be much testing and work to be done to get this find up and running.

Altima Resources

The company has confirmed that condensate and gas sales have started from the 15-35-41-11W5M well. The well is producing at a restricted rate of 3mmcfd to ensure that liquids were produced. Altima also confirmed that construction of its own pipeline and facilities will begin in the second week and September.

More good news from Altima as it moves into production from this field. The share price has increased from c4¢ to 14¢ over the past quarter as the company has geared up for this moment. Altima expects to have three to four production wells on-stream by the end of this year which will have an extremely positive impact on revenue and cash flow. Altima continues to be a stock to watch in the short term.

And finally…

International football tonight in World Cup qualifiers, England host Moldova, Wales go to Macedonia with a miraculously fit Bale, Northern Ireland play Sweden and Scotland host Belgium. Woy Hodgson fields a 3rd eleven as many players are either unfit or not deemed good enough……………

Andy Murray lost his quarter-final last night in straight sets to Stanislas Wawrinka but was magnanimous in defeat and probably found that Wimbledon took more out of him than he expected.

The Italian Grand Prix on Sunday may be a very close run thing, Lewis Hamilton is fastest in first practice today but rain is forecast for the weekend……….

In the cricket there is a ODI today against the Aussies but the prayers for rain by those in green and gold have been answered and Headingly is awash with very little chance of any play.

Sort of sport, it was the Tullow golf day earlier in the week, I wasn’t expecting an invite, I don’t even get press releases, but it looked like good fun all round!

Also it was the Edison summer party on Wednesday evening which apparently went very well, the blog must be considered serious opposition as we weren’t even invited………………………………compliments indeed!