Kuwait to Begin Offshore Exploration in 2017

By Reuters 2015-09-17 16:52:45

Kuwait plans to start an offshore oil exploration programme within two years, state news agency KUNA on Wednesday cited a Kuwait Oil Co (KOC) executive as saying, part of plans to boost oil output capacity.

In comments suggesting Kuwait will maintain energy investments despite plunging oil prices, KOC’s manager of planning, Bader Al-Attar, was quoted as saying his country aimed to add a total of 700,000 barrels per day (bpd) of crude oil production capacity from offshore and onshore areas.

Attar did not identify the potential offshore locations.

Most of Kuwait’s production is from the onshore Burgan field, the world’s second largest, in the southeast of the country, though it also extracts reserves from an offshore Neutral Zone where it shares facilities with Saudi Arabia.

Attar also said Kuwait aims to boost production capacity to 3.5 million bpd by the end of 2015, including from the Neutral Zone, from around 3.15 million bpd now.

A Kuwaiti oil industry source told Reuters last week his country will raise oil output by between 250,000 and 270,000 bpd by the end of the year to make up for production lost from two shut oil fields.

Attar was quoted saying by KUNA his country still wanted to lift output capacity to 4 million bpd by 2020 and sustain this level to 2030. (Reporting by Reem Shamseddine; Editing by Sami Aboudi and David Holmes)

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UASC Flag Ship Cargoes Delayed

By MarEx 2015-09-17 16:33:37

A fire aboard the United Arab Shipping Company’s (UASC) M/V Barzan is expected to delay cargoes by up to two weeks. The flames broke out in the ship’s number two hold as it was about to call Felixstowe in the UK last week.

The M/V Barzan, which is an LNG-ready ship, was 60 nautical miles off Cape Finistere, at the Northwestern tip of Spain when the fire broke out. The crew extinguished the fire and vessel was diverted to Rotterdam for inspection.

The 18,800-TEU vessel is the company’s flagship and the largest in the fleet. Barzan operates UASC’s Asia-Europe service.

This is the second fire onboard a UASC vessel in recent weeks. On August 28, the 13,500-TEU M/V Alula­ sustained a fire in Hamburg.

UASC is a member of the Ocean Three Alliance (OTA), which also includes CMA CGM and the China Shipping Container Lines (CSCL). The OTA services operates in the Asia-Europe, Asia-Mediterranean, Transpacific and Asia-US East Coast trade lanes.

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World’s First Undersea Compression Plant Online

By MarEx 2015-09-17 16:20:32

The world’s first subsea gas compression plant has come online at about 1,000 feet underwater at the Asgard Field in the Norwegian Sea.

Statoil S.A. began the project in 2005 at a cost of about $2.3 billion. The company expects to add about 306 million barrels of oil equivalent over the field’s life. The underwater plant’s ability to compress gas will enable Statoil to produce more oil or gas from the reservoir.

Statoil’s compression plant in Asgard will increase production in the Midgard reservoir by about 20 percent and 25 percent for the Mikkel reservoir.

Until now, compression plants have only been installed on offshore platforms and on land facilities. Statoil says they’ve employed more than 40 new technologies in the compression plant.

The Norwegian Petroleum Directorate recently granted Statoil permits to build a second subsea compressor in the Gullfaks field in the North Sea.

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World’s First Undersea Compression Plant

By MarEx 2015-09-17 16:20:32

The world’s first subsea gas compression plant has come online at about 1,000 feet underwater at the Asgard Field in the Norwegian Sea.

Statoil S.A. began the project in 2005 at a cost of about $2.3 billion. The company expects to add about 306 million barrels of oil equivalent over the field’s life. The underwater plant’s ability to compress gas will enable Statoil to produce more oil or gas from the reservoir.

Statoil’s compression plant in Asgard will increase production in the Midgard reservoir by about 20 percent and 25 percent for the Mikkel reservoir.

Until now, compression plants have only been installed on offshore platforms and on land facilities. Statoil says they’ve employed more than 40 new technologies in the compression plant.

The Norwegian Petroleum Directorate recently granted Statoil permits to build a second subsea compressor in the Gullfaks field in the North Sea.

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Non-authorization of EX-IM Bank Impacts U.S. Economy

By MarEx 2015-09-17 16:08:51

President Franklin D. Roosevelt created the U.S. Export-Import (EX-IM) Bank in 1934 as part of his New Deal to finance and insure foreign purchases of U.S. products. But despite filling export financing gaps through its loan guarantee and insurance programs for 81 years, the federally-backed bank’s future is uncertain.

Congress allowed EX-IM’s lending authority to expire on June 30 as Tea Party Republicans seeking to limit government intervention in the free market assert the bank chose winners and losers by deciding which companies are approved for loans and insurance.

Due to the lapse in its authority, EX-IM is no longer processing new applications or engaging in new business, and is now focusing on its $107 billion portfolio until it is reauthorized.

According to EX-IM, it backed $27.5 million in exports in 2014, which is about two percent of the U.S. total. The institution also added that small business exports represented more than $10 billion of that total. And in the past six years, the Bank has financed the sale of more than $200 billion in U.S. exports, supporting over 1.3 million private-sector American jobs.

President Obama is among the bank’s supporters, noting that EX-IM supported about 164,000 jobs in 2014, and that it places the U.S. on an equal footing with foreign nations that insure and export their products.

EX-IM’s seaborne shipping policy is that most products insured by the bank should be transported on U.S.-flagged vessels. This includes direct loans of any amount, guarantees above $20 million and products with repayment periods of more than seven years.

Many of the bank’s political supporters have argued that cargo preference laws for U.S. vessels is a cost-effective way to support the nation’s commercial fleet. Cargo preference is one of the ways that U.S. deepwater fleet and U.S. merchant seaman are maintained. The U.S. deepwater fleet supports military operations around the world.

Earlier this week, General Electric (G.E.) stated that it would move 500 jobs overseas in response to EX-IM non-authorization. G.E. intends to move about 400 of those jobs to France, whose export credit agency has already offered financing services. The remaining 100 jobs will be relocated to Hungary and China. The jobs are shifting away from Texas, New York, Maine and South Carolina.

While most developed nations have an export credit agency, China appears to be the country most likely to gain if EX-IM is not reauthorized. According to a White House release, the majority of global official export credit agency activity remained flat in 2014, China’s grew by over 40 percent.

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Senator McCain Calls for South China Sea Response

By Reuters 2015-09-17 13:17:39

The head of the U.S. Senate’s military committee criticized the Obama administration on Thursday for failing to challenge China’s building of artificial islands in the South China Sea by sailing within 12 nautical miles (22.2 km) of them, saying this amounted to de facto recognition of Chinese claims.

Assistant Secretary of Defense David Shear responded to Senator John McCain, the chair of the Senate Armed Services Committee, by saying that such patrols had not been conducted since 2012, but were among future U.S. options.

The exchange at a hearing of the committee came ahead of a visit to Washington next week by Chinese President Xi Jinping, when U.S. concerns about China’s pursuit of territorial claims in the South China Sea will be high on the agenda.

McCain said it was time the United States conducted patrols within 12 nautical miles of China’s artificial islands in the Spratly archipelago.

“The administration has continued to restrict our Navy ships from operating within 12 nautical miles of China’s reclaimed islands,” he said. “This is a dangerous mistake that grants de facto recognition of China’s man-made sovereignty claims.”

McCain said the restrictions had continued, even after China sent naval vessels within 12 nautical miles of the Aleutian Islands off Alaska last week.

McCain said sailing within 12 miles of the artificial islands would be “the most visible assertion of freedom of the seas.”

Shear responded by saying: “We have in recent years conducted freedom-of-navigation operations in the vicinity of those features, and doing so again is one of the options, one of the array of options we’re considering.”

U.S. Pacific commander Admiral Harry Harris said China’s building of airfields on the artificial islands and their further militarization was of “great concern militarily” and posed a threat to all other countries in the region.

“China is building three runways of 10,000-foot (3,048- meter) length, which is only a thousand feet shorter than would be required for landing a space shuttle,” he said.

“And they’re also building deep-water port facilities there, which could put their deep-water ships, their combatant ships, there, which gives them an extra capability.

“And if you look at all of these facilities then you can imagine a network of missile sites, of runways, their fifth-generation fighters and surveillance sites and all of that, it creates a mechanism by which China would have de facto control over the South China Sea in any scenario short of war.”

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Asian port safety network expands

China, Japan, and South Korea have agreed to expand the Northeast Asia Logistics Information Service Network in light of risks highlighted by the recent Tianjin port explosion.
To the 13 ports already covered by the information-sharing agreement, the three countries agreed on 10-11 September to add
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