Friday, March 6, 2009

Chevron puts East Kalimantan deepwater project under review

Fox-Davies Capital Friday Energy And Mining News Wrap

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Gas Matters reports that Chevron puts East Kalimantan deepwater project under review. Chevron has previously said it would invest around $6 billion in the projects.
Comments: ConocoPhillips announced a budget cut in 2009.
Upstream online reports that Arawak, which eased back production from the fields on the back of a significant deterioration in margins owing to high taxation as well as falling commodities prices, said the decision to resume output came after a new tax code came into force in Kazakhstan on 1 January. It is believed that that customs export duty will no longer be applicable to crude export sales provided that payments are made in compliance with the new tax regime.
Comments: a confirmation of an improvement of the visibility on tax regime in the region should enhance interest in the country assets (in relative terms). We believe Zhaikmunai is good way to play the region.

Oxus Gold 
 (OXS)  announced that the Company is currently preparing an addendum to the existing bankable feasibility study ("BFS") for Phase 2. This addendum envisages the accelerated development of Phase 2 at a very significantly reduced capital cost. The accelerated development of Phase 2 is expected to produce approximately 100k oz of gold annually by 2010, increasing AGF’s production to an estimated 160,000 ounces annually, prior to completion of the final stage of Phase 2 which would further increase AGF’s production to over 250,000 ounces annually, in line with the existing BFS.

Negotiations have also commenced with a major Asian contracting and financing group, with a view to concluding a cooperation agreement to develop and finance the underground sulphide project. The company is also forecasting the sale of 60k oz in 2009 as its 50% share of production. reports that Petra Diamonds  (PDL)  will increase the screen size and crusher settings in the processing plant at Cullinan in order to increase recovery of larger stones. Mining operations are about to re-focus on the BA west (BAW) section of the underground workings where “the mine has traditionally delivered large D flawless diamonds as well as blue diamonds when compared with the eastern side”.

Petra CEO, Johan Dippenaar said the company had no plans at this stage to cut back on production, despite dropping prices and sales volumes in the international rough diamond markets. He said Petra had not yet sold diamonds in 2009 as the first tenders were still under way, but he commented reports in the markets were that some diamond prices had halved. Asked about the future of the “C cut” - a project which involves a major deepening of the mine - Dippenaar said Petra’s intention was to first establish the new operating parameters of Cullinan under its management compared with De Beers.

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