July 23, 2012:

The Venezuelan national petroleum company Petróleos de Venezuela, S.A. (PdVSA) has awarded Japan-based Toyo Engineering Corporation and its consortium partners Foster Wheeler AG (FW) and the Venezuelan engineering company Y&V Ingeniería y Construcción, C.A. (Y&V) a more than 4-year contract for detailed engineering, procurement services and construction management for a major refinery expansion project at its El Palito Refinery in Carabobo State. According to Oil and Gas Journal (OGJ), Venezuela had 211 billion barrels of proven oil reserves in 2011, the second largest the world. This number represents a major upward revision from 99.4 billion barrels in 2010, due to the the inclusion of the massive reserves of extra-heavy oil in Venezuela’s Orinoco belt.

The US Energy Information Administration notes that Venezuela contains billions of barrels in extra-heavy crude oil and bitumen deposits, most of which are situated in the Orinoco Belt in central Venezuela. The US Geological Survey has pegged the mean estimate of recoverable oil resources from the Orinoco Belt at 513 billion barrels of crude oil. This project is aiming to double the processing capacity of the refinery by building a new facility to process the heavy crude oil abundantly produced from the Orinoco Belt of the country. The new refinery processes heavy crude oil (140,000 BPSD) and part of the products from the existing refinery (140,000 BPSD) is to be further treated in the new refinery as well.

The project also aims to improve quality of the product and to meet higher environmental standards and increasing demand in Venezuela, as well as for export. Heavy crude oil processing units to be placed at El Palito Refinery include:

• Atmospheric Distillation
• Vacuum Distillation
• Hydrotreating
• Continuous Catalyst Regeneration
• Sulfur Recovery
• Hydrogen Production
• Tank yard and other auxiliary facilities.

Toyo is performing Front End Engineering Design (FEED) in a consortium with FW and Y&V and has been awarded this contract under the trust relationship with PDVSA. At present, TOYO is performing the PMC (procurement management consulting) for another refinery project and the EPC (engineering, procurement and construction) for a fertilizer complex in Venezuela in consortium with Y&V.

By Green Car Congress

July 23, 2012:

KAMPALA - Uganda is confident its planned refinery with a 120,000-barrel per day capacity will attract investors, the oil minister said on Thursday, rejecting arguments by British explorer Tullow Oil that a plant of more than 60,000 bpd will not be viable. Energy minister Irene Muloni told Reuters in an interview the project's initial phase with a refining capacity of 20,000 barrels per day (bpd) would be completed by 2015. Uganda, East Africa's third-largest economy struck commercial oil deposits in 2006 in the Albertine rift basin along its border with the Democratic Republic of Congo. The government estimates reserves at 2.5 billion barrels. "We have a study and this study has established what is viable and what is not viable," Muloni said. "It depends on how they're looking at it ... We can't start arguing about whether this works or it doesn't .. the feasibility study is there and shows the refinery would still be viable at the capacity we want."

Muloni said the project was not yet at a phase to start looking for investors. She said the government intended to develop the refinery as a public-private partnership venture in which a private investor with "expertise and financial muscle" would have a dominant stake. In May Tullow, which operates in Uganda, said it favoured a refinery with a capacity capped at 60,000 bpd, adding output above that level would make the project unviable and would have difficulty attracting investors. The company early this year completed its long delayed $2.9 billion partnership venture with France's Total and China's CNOOC and says the three firms plan to spend up to $750 million on exploration and appraisal activity in the country this year.

OIL LAWS

Muloni said the refinery's capacity would be expanded to 60,000 bpd in two years after the initial phase was completed in 2015. "By that time more exploration will have gone on and more oil will have been discovered... So we think by then we can increase capacity to 120,000 bpd," she said, adding that level could be reached by 2017. So far only 40 percent of the Albertine has been explored. Commercial production, Muloni said, would likely commence in late 2013 or 2014, producing a minimum amount of crude to feed a thermal power plant, and thereafter gradually rise as the various stages of the refinery are completed. Muloni also rejected criticism from transparency watchdog, Global Witness, that proposed laws concentrated too much power in the executive branch and did not require government to disclose crucial information.

"The role of parliament is to make good laws, scrutinise, debate, analyse, get input and feedback and that's what's happening now," she said. "You talk about the minister having many powers (but) I don't see them." Parliament is scrutinising three pieces of legislation designed to manage the sector and the government is awaiting their passage before it starts a licensing round to auction more blocks.

By Reuters

July 23, 2012:

SIOUX FALLS, S.D. — A company planning a $10 billion oil refinery in southeastern South Dakota has asked the state Supreme Court to expedite a hearing on an air-quality permit. Dallas-based Hyperion Resources said delays and litigation have prevented the company from securing money from investors to move forward. The company submitted its initial air-quality application in 2007. Save Union County, the Sierra Club and Citizens Opposed to Oil Pollution appealed a decision in March by Circuit Court Judge Mark Barnett, upholding the company's air quality permit. Hyperion officials want the Supreme Court to hear the permit appeal as early as possible in the court's August term or as soon as possible after that. "Understandably, financial entities and supporters are unwilling to supply money to a project that may be undertaken and then have its permit overturned, resulting in large financial losses," Hyperion said in court documents.

Hyperion has until March to start building the refinery that would process 400,000 barrels of Canadian tar sands crude oil each day, The Argus Leader reported Monday (http://argusne.ws/OTqhXp ). Hyperion contends that the refinery would be a clean, modern plant that would reduce the nation's dependence on oil from overseas. Opponents say it would emit too much pollution and deplete the quality of life of people living in the area.

By Therepublic.com

July 23, 2012:

NAIROBI – The Kenya Petroleum Refineries Limited (KPRL) has received its first shipment of 82,000 tonnes of crude oil since transforming into a merchant refinery. The latest cargo delivery is part of the 246,000 tonnes of crude oil expected to dock at the port of Mombasa by September this year. “This is a milestone that marks our transformational process since the KPRL inception,” said – CEO Brij Mohan Bansal while receiving the first consignment at the – Kipevu terminal. KPRL converted into a merchant refinery on- July 1 from a toll refinery after securing funding to purchase its own crude oil for processing into refined petroleum products to be sold to oil marketing companies. KPRL received $250 Million (Sh21billion) from Standard Chartered Bank to fund the process on June 20, 2012. “This is our first independent purchase of crude oil,” Bansal said.

The latest delivery was purchased at a cost of Sh5.46 billion from the United Arabs Emirates (UAE). Galana Oil Company won the import tender through the competitive Open Tendering Process (OTS). The crude oil shipment was loaded on July 7 at the Jabel Dhana port, in the UAE and arrived in Mombasa on the – July 21, 2012. “The oil will be pumped to the KPRL’s Changamwe plant for processing. This is the same grade of crude oil currently being processed at KPRL and as I said earlier this is a major milestone for KPRL,” added Bansal. KPRL’s Changamwe plant produces Liquefied Petroleum Gas (LPG) known as cooking gas, Premium Motor Gasoline (PMS), known as Super Petrol, Kerosene, Automotive Gas Oil (AGO) or Diesel, Industrial Diesel Oil (IDO) and Fuel oil, also known as Furnace fuel.However the Energy Ministry is still facilitating the crude oil procurement through the OTS.

“The most competitive bidder shall be awarded the tender to procure the crude oil, which shall then be sold to KPRL,” Bansal said. KPRL blends and stores petroleum products for the Kenyan market and export.

By Capitalfm

July 22, 2012:

Kenya Petroleum Refineries Ltd., the East African nation’s only oil processor, said it took the first delivery of crude since it began sourcing fuel to process and sell refined products to retailers. A shipment of 82,000 metric tons of Murban crude was delivered to Mombasa port on July 21 after being purchased by Galan Oil, a trading company, for $65 million, the company said in an e-mailed statement today. The company, based in Mombasa, used to take crude from fuel retailers and refine it for a fee, under what is known as a tolling arrangement. Kenya last year announced plans to drop that model and become a so-called merchant refiner, after KPRL customers complained of losses and inefficient processing.

KPRL, as the company is known, will now compete with Kenyan companies including KenolKobil Ltd., (KNOC) the East African nation’s biggest fuel retailer by market value, in importation of crude for processing. Last month KenolKobil was awarded a tender to deliver 30,704 tons of automotive gasoil in July and 50,000 tons of premium motor gasoline in August. KPRL is jointly owned by Essar Energy Plc (ESSR) and the Kenyan government.

By Bloomberg