WTI $48.04 -20c, Brent $50.64 -32c, Diff -$2.60 -12c, NG $3.01 -8c
A mixed day yesterday, it might have been worse as the EIA inventory stats were worse than forecast at a build of 4.95m barrels against expectations of +1.77m. Crude did stage a late comeback which saved the day to a certain extent. More on the OGA licences later when I have looked at them all.
Rockhopper has announced that it has commenced international arbitration proceedings against the Republic of Italy in relation to the Ombrina Mare project. This follows the decision by the Ministry of Economic Development not to award the company a production concession covering the Ombrina Mare field which has clearly resulted in very significant lost profits. It seems that the Energy Charter Treaty (ECT) that was set up in 1998 and had Italy as a founding signatory has been breached and damages and compensation are distinctly possible.
Given the wording of the statement from Rockhopper I would be incredibly surprised if they were taking this lightly and of course have said that they have taken ‘legal and expert opinions’ which must have helped make this decision. In addition to this the company say that they have secured non-recourse funding for the arbitration from a specialist in this form of claim. To you and me this means no win no fee and seems very wise, above a certain level RKH still get a ‘very material proportion’ of any award.
The company has said that whilst it had hoped to avoid this process it has become pretty much the only option and protects its shareholders interests ‘at no extra cost to the company’. At this stage it is impossible to try to guess quite how much RKH might be awarded should they win, and of course this case is likely to take a couple of years but a spreadsheet of the Ombrina Mare project would likely suggest a very substantial number, indeed what says the settlement may well exceed what RKH paid for MOG in the first place…..
Sound has announced that the Badile well has reached its second casing point so a long time to go yet, while over at TE- in Tendrara things are getting interesting as drilling has completed. At this stage, although further gas has been encountered nothing can be read into the situation until further wireline logging and testing has taken place.
The honeymoon is over for England’s new manager, his first outing as a permanent fixture led to a 1-0 defeat by Germany, something he may have to get used to. As i said yesterday it was a B vs B team and little can be got from it.