Petroleum Intelligence Weekly articles from April 2008

Petroleum Intelligence Weekly archives from April 2008

SEC rules still cloud majors' reserves outlook.
April 7, 2008... Of the top five international oil companies (IOC) to have reported so far, BP was the only one able to declare it had more than replaced production with new reserves in its 2007 filings to the US Securities and Exchange Commission (SEC). But...

US Gulf faces possible gas glut.
April 7, 2008... News that Chesapeake Energy--the third-largest US gas producer--is sitting on as much as 20 trillion cubic feet of gas just north of Louisiana's Henry Hub gas pricing point has emerged as the US industry is undergoing its biggest changes in...

Ecuador eases pressure on private firms.
April 7, 2008... Ecuador's president, Rafael Correa, was elected in late 2006 on a pledge to tackle corruption and redistribute wealth for the benefit of the country's poor. He had made the oil industry one of his main targets for reform. Over a year after...

High stakes for BP in Russian risks.
April 7, 2008... This year marks the fifth anniversary of BP's investment in the TNK-BP joint venture in Russia. It is also five years since the arrest at gunpoint of Yukos Chief Executive Mikhail Khodorkovsky on fraud and tax evasion charges. That symbolic...

Foreign legion sets up camp in Alaska.
April 7, 2008... Alaska used to be all about three oil companies--Exxon Mobil, BP and Arco--but today it's a much more cosmopolitan place. France's Total has become the latest foreign firm to wash up on its shores via a deal with Chevron, which is...

India's operators kept waiting by the bureaucrats.
April 7, 2008... One hundred-dollar oil should, in theory, be a wakeup call for those countries heavily dependent on crude imports to meet their energy needs. But that doesn't seem to be the case in India, which relies on imports for 79% of the crude it...

Mideast refinery plans slip down the Agenda.
April 7, 2008... Most Mideast oil producers ensure that their national oil companies control the juicy upstream opportunities, but they've been much readier to open up the dowdier downstream to private investors, both domestic and foreign. A global product...

Corporate.(GENERAL)(Brief article)
April 7, 2008... CORPORATE -- Oil and gas shares on London's Alternative Investment Market (AIM), a haven for junior company listings, fell 7% in the first quarter but still managed to beat the 9% drop in the overall AIM market and the 10% drop on the London...

Corporate.(GENERAL)
April 7, 2008... CORPORATE -- Royal Dutch Shell Chief Executive Jeroen van der Veer is calling for government intervention to give direction to long-term corporate planning. Presenting scenarios to 2050 in New York last week, the Shell boss summed up the...

Environment.(GENERAL)
April 7, 2008... ENVIRONMENT -- US Senator Barbara Boxer has slammed the Bush administration for dragging its feet over protection for the polar bear after Interior Secretary Dirk Kempthorne declined to appear at a Senate oversight hearing last week. The...

Industry restructuring.(GENERAL)
April 7, 2008... INDUSTRY RESTRUCTURING -- Leading UK energy supplier Centrica is to buy US marketer Strategic Energy, a subsidiary of Great Plains Energy, for $300 million on a debt-free basis. The acquisition will add over 26,000 industrial and commercial...

LNG.(GENERAL)
April 7, 2008... LNG -- Gazprom, the world's largest gas producer, has unveiled plans for a massive jump into the LNG business. Starting from scratch, the Russian state-controlled giant is aiming to produce around 90 million metric tons of LNG annually by 2030,...

Pipelines.(GENERAL)
April 7, 2008... PIPELINES -- The president of Turkmenistan, Gurbanguly Berdimuhammedov, said privately during a recent visit to Turkey that he was still open to proposals to build a trans-Caspian gas pipeline, an official who was present at the talks tells...

Algeria.(COUNTRIES)
April 7, 2008... ALGERIA -- Royal Dutch Shell has ceded 20% stakes in its Reggane Djebel Hirane (Blocks 328b, 352d, 362b) and Zerafa (Blocks 345, 346 and 322b) contract areas to Liwa Energy, a subsidiary of Abu Dhabi's state Mubadala Development. State oil firm...

Australia.(COUNTRIES)(Brief article)
April 7, 2008... AUSTRALIA -- Exploration spending in 2007 soared 58% year-on-year to US$2.4 billion on the back of rising drilling costs and equipment shortages, as the number of wells drilled actually fell 7% to 111. Despite recent huge bids by Big Oil to...

Iran.(COUNTRIES)
April 7, 2008... IRAN -- Gasoline imports are soaring in the wake of the government's decision last month to ease rationing. Gulf shipping sources say gasoline imports climbed to 390,000 tons (110,000 b/d) in March--a rise of some 100,000 tons from February...

Japan.(COUNTRIES)
April 7, 2008... JAPAN -- Brazil's state-controlled Petrobras has completed the acquisition of an 85% stake in a refining unit of Exxon Mobil's affiliate TonenGeneral Sekiyu, paying around 5.5 billion yen ($55 million) for the stake in Nansei Sekiyu, a 100,000...

Myanmar.(COUNTRIES)
April 7, 2008... MYANMAR -- Asian state oil companies are busy consolidating their upstream positions in the gas-rich but politically volatile country as Western firms stay away. Thai state PTT Exploration and Production (PTTEP) expects to sign a deal with...

Russia.(COUNTRIES)(Brief article)
April 7, 2008... RUSSIA -- TNK-BP, the Russian-UK joint venture that is under pressure on several fronts, has announced an impressive reserve replacement ratio of 179% for last year, marking the fifth year in succession that it has exceeded its objective of at...

Russia.(COUNTRIES)(Brief article)
April 7, 2008... RUSSIA -- Legislation putting the first formal limits on foreign oil investors has been approved in a third and final reading by the State Duma, or lower house of parliament. The law's numerous critics say it will scare off foreign investors....

United States.(COUNTRIES)
April 7, 2008... UNITED STATES -- BP has announced a deepwater oil discovery in the Gulf of Mexico in the vicinity of its 2003 Tubular Bells discovery. "This discovery... has the potential to become an important new source of production for the USA," Andy...

Global oil supply runs ahead of demand.
April 7, 2008... Global oil supply rose by nearly 500,000 b/d in March to 87.77 million b/d, running well ahead of demand even before the start of the usual second-quarter inventory build. Output was up from February's 87.3 million b/d as Opec and non-Opec both...

Refiners back on top.(Marketview)
April 7, 2008... WASHINGTON -- With oil prices at times trading below $100 per barrel in recent days--and appearing poised to fall further to the downside--it looked as though some investors would jump out of commodities and back into equities and the dollar....

Storage costs soar, CSOs increase.
April 7, 2008... It is becoming increasingly expensive for European refiners and importers to meet government obligations to hold emergency stocks of oil--particularly of middle distillates. Traders reckon the costs have quadrupled since the second quarter of...

PIW market indicators.(Petroleum Intelligence Weekly)(Statistical table)
April 7, 2008... PIW Market Indicators ($/barrel) Mar. 31- Mar. 24- Mar. 3- Spot Crude Apr. 2 Mar. 28 Mar. 7 Opec Basket $96.95 $98.24 $97.29 UK Brent...

Bulls run riot amid mounting economic gloom.
April 14, 2008... Last week was distinguished by dire forecasts for the economy, yet oil prices still romped ahead to new record highs. Markets brushed aside warnings that the global economy is suffering its biggest financial shock since the Great Depression of...

Saudis back bid for better Mideast products pricing.
April 14, 2008... Slowly but inexorably, the changes under way in the oil markets of the Middle East are inching them toward greater transparency. The combination of rapidly growing regional energy demand and the need for clearer market signals with a full range...

Refining pain hurts Sinopec's upstream push.
April 14, 2008... Chinese state Sinopec is in a bind. It has been prevented by Beijing from profiting from what it does best--refining--while being forced to build an upstream business at home and abroad virtually from scratch. Bowing to Beijing's quest for...

US gas prices high--only by local standards.
April 14, 2008... Who's leading the herd in the North American natural gas market, the bulls or the bears? This year, it's hard to tell, despite the fact that prompt-month gas is trading on the Nymex in the high $9 per million Btu range and the 12-month strip...

'Grey Zone' still chills new Arctic allies.
April 14, 2008... The selection of Norway's StatoilHydro by Russia's Gazprom as a partner for the $40 billion Shtokman gas project in the Barents Sea marked a major thaw between the two countries. The subsequent resolution of a maritime dispute in the Arctic...

Oil producers face spending obstacles.
April 14, 2008... Oil prices of more than $100 per barrel and the recent run-up in US natural gas prices to around $10 per million Btu have given oil companies the financial strength to comfortably increase budgets, with global upstream spending on pace to rise...

Higher oil price transfers US cash to Opec.
April 14, 2008... The US is transferring a growing part of its wealth to oil producing nations, and to Opec members in particular. The US intake from Opec jumped to 57.6% of its crude imports in 2007, versus 50.9% in 2006, and cost a whopping $150 billion, up...

Corporate.(GENERAL)(Brief article)
April 14, 2008... CORPORATE -- Australia's BHP Billiton expects annual output growth of at least 10% over the next few years, having flatlined at about 320,000 b/d for the last two years. Offshore northwest Australia, BHP's 80,000 b/d Stybarrow field came on...

Formula prices.(GENERAL)
April 14, 2008... FORMULA PRICES -- Saudi Arabia effectively lowered its term prices for most May loadings, with the exception of lighter grades to Asia. Refiners in Europe and Asia welcomed the relative reduction, although US term customers grumbled that term...

Industry restructuring.(GENERAL)
April 14, 2008... INDUSTRY RESTRUCTURING -- China's State Administration of Foreign Exchange, a sovereign wealth fund, has accumulated around 1.3% of France's Total, reportedly worth about [euro][euro] 1.8 billion ($2.82 billion). US Devon Energy has agreed to...

LNG.(GENERAL)
April 14, 2008... LNG -- Woodside Petroleum chief Don Voelte is doubtful about Australia's LNG plans, saying estimates of tripling exports to 60 million tons/yr by 2017 are unrealistic. Coupled with a tight market for engineers and other skilled labor, building...

Angola.(COUNTRIES)(Brief article)
April 14, 2008... ANGOLA -- State Sonangol's bid round for 10 blocks--three in deepwater, three in ultra-deep, one in shallow and three onshore--has been indefinitely postponed by Luanda, Sonangol's exploration director, Severino Cardoso, said on the sidelines...

Brazil.(COUNTRIES)(Brief article)
April 14, 2008... BRAZIL -- State-controlled Petrobras plans to create a special management unit for the subsalt zone off the Atlantic coast, where the huge Tupi field was discovered last year. Chief Executive Jose Sergio Gabrielli said last week the...

China.(COUNTRIES)
April 14, 2008... CHINA -- The first long-term LNG supply from the Mideast was finalized Apr. 10 in Beijing when state PetroChina signed a binding deal for 3 million tons/yr (4.14 Bcm/yr) with Qatargas and Royal Dutch Shell to start in 2011. The volume will come...

Ecuador.(COUNTRIES)
April 14, 2008... ECUADOR -- Evoking memories of the dispute that led to Occidental being stripped of its main production assets, Brazilian state-controlled Petrobras is under examination for alleged irregularities in the sale of upstream interests. State oil...

Kazakhstan.(COUNTRIES)(Brief article)
April 14, 2008... KAZAKHSTAN -- Moving again to extract more upstream rent, the government has slapped local firms with new crude oil export duties approved by parliament last week. The levy will start at $15/bbl, based on an average first-quarter price of...

Mauritania.(COUNTRIES)(Brief article)
April 14, 2008... MAURITANIA -- Sweetening further its relations with national oil companies, French Total sold a 20% stake in Blocks Ta7 and Ta8 in the onshore Taoudenni Basin to Qatar Petroleum International. The deal follows the sale of another 20% stake to...

Mexico.(COUNTRIES)
April 14, 2008... MEXICO -- A watered-down energy reform proposal presented to Congress last week would allow some expansion of private-sector involvement in the oil industry as well as budgetary and administrative changes that affect state oil company Pemex....

Norway.(COUNTRIES)(Brief article)
April 14, 2008... NORWAY -- Production was lower than forecast in February but bounced back in March, preliminary data from the Norwegian Petroleum Directorate (NPD) show. At 2.095 million b/d, oil output in February was nearly 100,000 b/d below earlier NPD...

Russia.(COUNTRIES)
April 14, 2008... RUSSIA -- Crude oil exports via the pipeline system of state monopoly Transneft rebounded by 230,000 b/d from February to reach 3.763 million b/d in March as producers turned away from an oversupplied domestic market. Another 471,000 b/d was...

Saudi Arabia.(COUNTRIES)(Brief article)
April 14, 2008... SAUDI ARABIA -- The oft-delayed request for proposal (RFP) for the Jizan refinery--envisaged as a private sectorled venture--should be released toward the end of May if the documents are approved by the Supreme Petroleum Council, PIW...

Venezuela.(COUNTRIES)
April 14, 2008... VENEZUELA -- Indian state Oil and Natural Gas Corp. (ONGC) has inked a deal with state Petroleos de Venezuela (PDV) for a 40% stake in the San Cristobal oil field, while refiner Reliance Industries announced a term deal for 150,000 b/d of...

Vietnam.(COUNTRIES)
April 14, 2008... VIETNAM -- After years of little progress, state Petrovietnam has signed an agreement with Kuwait Petroleum International (KPI) and Japanese investors Idemitsu Kosan and Mitsui Chemicals to build a $6 billion refinery-petrochemical complex....

Data drama.(Marketview)
April 14, 2008... NEW YORK -- In an extravagant display of its usual drama, the Nymex energy futures market got all fired up last week after US Energy Information Administration data showed commercial inventories dropping by some 10 million bbl in a week. Within...

PIW market indicators.(Statistical table)
April 14, 2008... PIW Market Indicators ($/barrel) Apr. 7- Mar. 31- Mar. 10- Spot Crude Apr. 9 Apr. 4 Mar. 14 Opec Basket $101.81 $97.62 $101.34 UK Brent...

Next US president to ditch Bush energy policies.
April 21, 2008... The next president of the US, the world's largest energy consumer, will support a cap-and-trade program to cut greenhouse gas emissions, reject the oil industry's push for more access to drilling offshore and in Alaska, and attempt to move the...

Fears grow that Russian output has peaked.
April 21, 2008... Three months may not mark a definitive trend, but the fall in Russia's overall oil production since the start of the year is certainly beginning to set alarm bells ringing. With preliminary data from Russia's Industry and Energy Ministry...

NOCs use IOC ties to explore the third way.
April 21, 2008... The determinedly international ambitions of many national oil companies (NOC) have seen them extending the scope of their operations and looking to leverage their relationships with international oil companies (IOC) in new ways to enter regions...

Gasoline offers few clues to market direction.
April 21, 2008... It used to be that tracking developments in US conventional gasoline going into the driving season gave a pretty good guide to the likely course of the wider oil market over the coming summer. But those days are gone--while the US remains the...

Diesel squeeze looms as China hikes imports.
April 21, 2008... Asia's current gas oil crunch has been blamed on a combination of refinery maintenance and a sharp hike in Chinese imports, which jumped to 1.66 million tons in the first quarter (138,000 b/d), a modest volume but a sixfold increase from the...

New Bakken oil estimate causes a stir.
April 21, 2008... A new report released by the US Geological Survey (USGS) concerning the size of the Bakken oil shale formation in Montana and North Dakota is causing a stir in the US oil and gas industry, and it's not hard to see why. At a time when energy...

US, EU biofuels mandates miss their targets.
April 21, 2008... Government schemes designed to stimulate the renewable fuel sector are actually serving to distort energy markets, and are at times working against the very objectives that prompted European and North American lawmakers to get into the...

Corporate.(GENERAL)(Chinese sovereign wealth fund)(British Petroleum Company PLC)(Brief article)
April 21, 2008... CORPORATE -- It doesn't quite bear comparison with the 22% holding built up by the Kuwait Investment Office in the late 1980s, but a Chinese sovereign wealth fund has been quietly amassing a sizable stake in BP. The Chinese firm has accumulated...

Corporate.(GENERAL)
April 21, 2008... CORPORATE -- Canadian junior First Calgary Petroleums (FCP) has capitulated to a dissident shareholder group that has been seeking to replace long-time Chief Executive Richard Anderson and reshape the company's board of directors. FCP and...

Environment.(GENERAL)
April 21, 2008... ENVIRONMENT -- Speaking barely 18 months after authoring a UK government report that reviewed the economics of climate change, former World Bank chief economist Nicholas Stern said that the report "seriously underestimated the scale and growth...

IEA.(GENERAL)(International Energy Agency)
April 21, 2008... IEA -- The International Energy Agency (IEA) slashed its 2008 global oil demand estimate by 310,000 b/d as a result of a more pessimistic view of economic growth. Because of a recent downward revision of the outlook for global economic growth...

Industry restructuring.(GENERAL)
April 21, 2008... INDUSTRY RESTRUCTURING -- The UK's BG has made its first foray into the Asia- Pacific LNG market, paying $232 million for a 9.9% stake in Australian coalbed methane producer Queensland Gas Co. (QGC), and spending a further $387 million to take...

LNG.(GENERAL)
April 21, 2008... LNG -- The US merchant LNG business has become tough going for at least one company, with Cheniere Energy last week making 200 of its 360 employees redundant, leaving just 80 people at its Houston headquarters and 80 operations workers at its...

Hungary.(COUNTRIES)
April 21, 2008... HUNGARY -- Exxon Mobil has signed two small but intriguing deals focusing on unconventional gas prospects in the country's Mako Trough--an area that could hold contingent gas resources of some 54 Tcf, according to one of Exxon's new partners,...

Indonesia.(COUNTRIES)
April 21, 2008... INDONESIA -- State-owned Pertamina may not renew LNG export contracts with South Korea and Taiwan due to falling output from existing gas fields. Pertamina Deputy President Director Iin Arifin Takhyan said the country's LNG production could...

Japan.(COUNTRIES)
April 21, 2008... JAPAN -- In another example of the regional alliances the country's refiners are pursuing as domestic demand dwindles, Cosmo Oil has signed a memorandum of understanding with South Korea's Hyundai Oilbank to cooperate in refining and overseas...

Russia.(COUNTRIES)
April 21, 2008... RUSSIA -- State gas giant Gazprom has claimed the massive Chayandinskoye oil and gas field without contest, giving the company a foundation for its development plans in East Siberia. Deputy Industry and Energy Minister Andrei Dementyev said...

United States.(COUNTRIES)(Brief article)
April 21, 2008... UNITED STATES -- A leak in an offshore pipeline has taken almost 2% of the country's natural gas production off line, helping to boost North American gas prices above the $10/MMBtu level in what is normally a "shoulder" month, between the peak...

Venezuela.(COUNTRIES)(Brief article)
April 21, 2008... VENEZUELA -- Tightening terms for the oil sector even further, the National Assembly has approved a new windfall profits tax that is aimed at capturing a big chunk of the extra income earned by oil companies during periods of high oil prices....

Yemen.(COUNTRIES)(Brief article)
April 21, 2008... YEMEN -- The oil ministry has finally signed long-awaited production sharing agreements (PSA) for seven of the eight blocks awarded in the country's third bidding round in 2006 (PIW Dec.18'06,p7). The ministry had planned to have the PSAs...

Carioca row keeps Brazilian waters bubbling.(What's New Around the World)
April 21, 2008... Haroldo Lima, director of Brazilian oil regulator ANP, faced a backlash last week after "unofficially" claiming that an oil field discovered off the country's southeastern coast may hold a colossal 33 billion boe of reserves. If the estimate...

A familiar tale.(Marketview)
April 21, 2008... WASHINGTON -- It's a return to the same old story in the oil market. The weakening US dollar, setting new lows against the euro, lifted US benchmark West Texas Intermediate (WTI) to fresh all-time highs, this time above $115/bbl, with traders...

PIW market indicators.(Petroleum Intelligence Weekly)(Statistical table)
April 21, 2008... PIW Market Indicators ($/barrel) Apr. 14- Apr. 7- Mar. 17- Spot Crude Apr. 16 Apr. 11 Mar. 21 Opec Basket $105.47 $102.57 $99.40 UK Brent (Dtd.)...

Big oil price does little for big oil.
April 28, 2008... With the price of benchmark West Texas Intermediate (WTI) crude averaging $98 per barrel in the first quarter of this year--up 68% year-on-year--it would seem safe to assume the majors will report bumper first-quarter earnings. But that is...

Consumer pleas fall on deaf ears.
April 28, 2008... Oil-consuming countries are getting increasingly frustrated with oil producers. High oil prices are hurting their economies but not, apparently, providing any incentive for Opec producers to hike upstream spending beyond their existing...

PIW Scorecard: light-heavy spreads widen.
April 28, 2008... Stumbling refining margins forced Mideast producers to offer easier pricing for term supplies of heavier crudes in the first quarter, but they were much less generous when it came to their lighter grades. The message, once again, was that the...

'Reality check' awaits Australian LNG developers.
April 28, 2008... Operators are in a state of denial over the likelihood of any of the 12 Australian LNG projects now awaiting final investment decisions (FID) actually getting built when and where they want. While rising costs are a worldwide problem, in...

Aramco hatches plan to tackle project woes.
April 28, 2008... State-owned Saudi Aramco is spearheading an initiative to create Saudi-based engineering, procurement and construction (EPC) companies, backed by international EPC operators but partnered with local entities. The idea is to form a cadre of...

Latin America sees need for new refineries.
April 28, 2008... As a region, Latin America's traditional role in world oil markets has been as an exporter of crude, principally to the US. But this could be about to change. With plans for building as many as 10 new refineries and upgrading several others...

Gazprom Neft's grand plans for growth.
April 28, 2008... Building on the strong domestic and international connections of state parent Gazprom, Russia's Gazprom Neft has detailed its ambitions for becoming a global player. By 2020, at a cost of some $70 billion, the oil unit of the gas giant intends...

Drilling.(GENERAL)
April 28, 2008... DRILLING -- Exploration and development work in North America should pick up in the second half of this year as a result of the recent surge of interest in shale gas plays, according to Halliburton Chief Executive David Lesar (PIW Apr.21,p4)....

Industry restructuring.(GENERAL)
April 28, 2008... INDUSTRY RESTRUCTURING -- BP and US independent Devon Energy have spoiled StatoilHydro's plans for buying Anadarko Petroleum's 25% stake in the Kaskida oil discovery in the deepwater Gulf of Mexico. BP and Devon have chosen to exercise their...

LNG.(GENERAL)(liquefied natural gas)(Brief article)
April 28, 2008... LNG -- The UAE will start importing LNG from Qatar around the end of the decade, becoming the first Mideast oil producer to sign up for such a deal to help meet soaring domestic energy demand. State-owned Qatargas and Royal Dutch Shell have...

Azerbaijan.(COUNTRIES)
April 28, 2008... AZERBAIJAN -- Defying the global credit crunch, state Socar has come up trumps in its first foray into international financial markets. A $500 million, three-year unsecured loan being raised for Socar has been oversubscribed and should total at...