Crude oil traded near a two-month low in New York on signs slowing U.S. demand may take pressure off fuel stockpiles and as energy companies prepare to return workers to the Gulf of Mexico as Tropical Storm Ernesto passes.

Oil fell below $70 a barrel yesterday after a report showed consumer confidence in the U.S., the world’s biggest oil user, dropped to a nine-month low. Prices also slid as Ernesto tracked northeast toward Florida and the Carolinas, away from the Gulf of Mexico where about quarter of U.S. oil production is based.

“Demand in the key consumer is slowing,” said Tobin Gorey, commodity analyst at Commonwealth Bank of Australia Ltd. in Sydney.” The demand story and pretty comfortable inventories have been in the market for a while” but were over-shadowed by hurricane risks and Iran, he said.

Crude oil for October delivery was at $69.80 a barrel, up 9 cents, in after-hours electronic trading on the New York Mercantile Exchange at 9:07 a.m. in Sydney. Prices today are barely changed from a year ago. Read more » »

HONG KONG (Reuters) - CNOOC Ltd. (0883.HK: Quote, Profile, Research), China’s top offshore oil and gas firm, beat forecasts with a 38 percent jump in first-half earnings on Tuesday after higher oil prices offset a hefty windfall tax payout.

The company reaffirmed its output targets for 2006.

Analysts expect CNOOC to sustain growth in the second half if oil prices hold steady, while rivals PetroChina Co. Ltd (0857.HK: Quote, Profile, Research) (PTR.N: Quote, Profile, Research) and Sinopec Corp. (0386.HK: Quote, Profile, Research) (SNP.N: Quote, Profile, Research) suffer from loss-making refining businesses.

Chairman Fu Chengyu also told reporters on Tuesday the firm would soon announce details on deals related to buying liquefied natural gas for its Fujian and Shanghai terminals — potentially multibillion-dollar deals. He did not elaborate.

CNOOC managed the highest interim earnings growth among China’s triumvirate of energy companies, and reiterated it would churn out 9 percent more oil and gas this year, or 168 to 170 million barrels of oil equivalent (BOE). Read more » »

Prices sink back below key benchmark level as Ernesto threat subsides.

Oil fell below $70 a barrel on Tuesday, extending a steep sell-off the previous session, although Iran’s determination to press ahead with its nuclear program was expected to check the slide.
U.S. crude for October delivery sank $1.11 to $69.50 on the New York Mercantile Exchange while Brent crude in London lost $1.08 to $69.74 a barrel.

U.S. crude sank $1.90 Monday after Ernesto, which was briefly the first hurricane of the U.S. season, was downgraded to a tropical storm. Read more » »

The Chinese government will soon issue an industry policy to regulate the coal-chemicals sector, after a circular last month ordered local authorities to tighten their grip on the approval of new coal-to-petrochemicals projects in China.

Industry insiders familiar with the situation said the move aimed to ward off a potential investment spree as soaring global crude prices press China to turn to alternatives based on its abundant
coal resources.

“Investment in coal-chemicals projects in China has shown signs of overheating. Many proposed plants will face great risk in terms
of both technical feasibility and capital investment if we don’t put a brake on them,” said an official from the National Development and Reform Commission (NDRC), who wished to remain anonymous. “The upcoming policy aims to set the coal-chemicals industry on the right development track.” Read more » »

Black Dragon Resource Companies, Inc. has acquired a net revenue interest of 22.2% in the 1275 acre Hunter-Mannning lease of the Spider Field, located in Desoto Parish, Louisiana (just southeast of Shreveport). The lease contains eight wells recently drilled and completed in the Paluxy sands. The first four of these wells have been completed and have generated almost $1 million of oil and gas production in the last six months. Two of the remaining wells have been completed in the last week and are producing at comparable rates with their companions. The remaining two wells will be completed within the next two weeks. The open hole logs on these last two wells are very similar to the other six and substantial production is expected. The interest acquired by Black Dragon includes mineral rights in all depths. The interest and rights to cash flow for the property begins on July 1, 2006 .The acquisition was for a total purchase price of $2 million which was paid for as cash and a sellers note by Black Dragon. Read more » »

Rowan Companies, Inc. has been awarded a contract to drill four wells offshore Trinidad.

The Rowan Gorilla III will soon relocate to Trinidad to begin a one-year term contract for EOG. The new contract is with another operator and should extend the rig’s stay in the area by about six months to March 2008. The Company expects the new contract will generate approximately $45 million of drilling revenues.

Danny McNease, Chairman and Chief Executive Officer, commented, “We are pleased to extend our work commitment in Trinidad. This contract reflects the continuing strength of the market for high-specification jack-ups throughout the world.”

Dune Energy, Inc. has spudded a new well targeting the Barnett Shale formation.

The well, the Pitts #2, located in Wise County, Texas, will be drilled to a total depth of approximately 9,000 feet. This well is an offset to Dune’s Pitts #1, which is currently on production. Management expects the Pitts #2 to reach total depth in about 30 days, which will then allow the rig to be moved to a location to be determined. Dune owns a 95% WI interest and a 73.15% NRI in the well.

The Pitts #2 is the third of four wells Dune has committed to drill with the same rig (the McPeek #2 being the first). In addition, as previously announced, Dune expects delivery of the Itera #1 Rig in mid September 2006, for an initial term of two years. The Itera #1 Rig, which will be dedicated solely to Dune, will be capable of drilling both horizontal and vertical wells.

Westside Energy Corporation has provided an interim operations update on the Barnett Shale play in North Texas.

Since Westside’s last update in March:

Westside’s initial horizontal well in Hill County, the Primula #1H, reached its targeted vertical depth of 8,450 feet. The vertical portion of the well has been logged to determine the shale thickness and quality, and to calibrate the Company’s 3-D seismic data for use in selecting future drilling locations in the area. The horizontal portion of the well has been kicked off. Read more » »

Pilgrim Petroleum Corporation has entered into a master operating agreement with General Energy Corporation that covers Pilgrim Petroleum’s additional and current leases and all future properties in Wichita, Clay, Archer, Jack, Cook and Montague counties of North Texas.

General Energy will begin immediately to perform all the necessary work to assure that Pilgrim Petroleum’s properties are in full compliance with the regulations of the Texas Railroad Commission and re-establish oil production on the inactive leases over the coming months. General Energy will work in conjunction with American Petroleum, Pilgrim Petroleum’s current operator. General Energy Corporation is an RRC of Texas fully bonded operator. Read more » »

Technip has been awarded a program management services (PMS) contract by Saudi Aramco and its partner Total, for the development of a large grass-roots refinery in Jubail on the east coast of the Kingdom of Saudi Arabia. Once built, the complex will be one of the largest refineries in the Middle East, processing approximately 400,000 barrels per day (BPD) of Arabian crude oil.

According to the terms of the contract, over an 18-month period, Technip will carry out the front-end engineering design (FEED), develop capital and operating cost estimates, prepare the engineering, procurement and construction (EPC) bid packages, and provide management services during the execution of the project’s detailed engineering, procurement and construction phases. In exchange for these services, Technip will be compensated by the client on a cost plus fee basis. Read more » »