Petroleum Intelligence Weekly articles from December 2006

Petroleum Intelligence Weekly archives from December 2006

Russia gives little, aims to gain a lot.
December 4, 2006... A Polish veto has stalled any talks on a new cooperation agreement between Russia and the European Union, but Moscow has no intention of accepting the EU Energy Charter Treaty and transit protocols in their current form anyway. President...

Contractors are Spain's new power brokers.
December 4, 2006... Recent ownership changes at Repsol YPF were consolidated last week with the arrival of two new board members nominated by Sacyr Vallehermoso, the Spanish construction firm which has now built up a 20% stake in the oil major. Sacyr's move has...

Big Oil loses out again in India.
December 4, 2006... Big Oil had high hopes of winning at least some of the more promising deepwater blocks in India's latest licensing round, breaking the near monopoly enjoyed by local champions Oil and Natural Gas Corp. (ONGC) and Reliance Industries. Interest...

Geology gets tougher in aging Algeria.
December 4, 2006... Algeria has revised down its oil production target for 2010, from 2 million barrels per day to around 1.5 million to 1.6 million b/d, PIW is told. This is little changed from current output of 1.4 million b/d. The sharp downgrade reflects...

Diverse crudes reshape Canada's export mix.
December 4, 2006... Canada is becoming ever more firmly established as the prime source for US imports of crude, which, due to the varied menu of Canadian export streams, is making for a complicated game of matching qualities with pipeline availability, refinery...

China's March in Central Asia stirs concern.(China National Petroleum Corp. enters the industry in Russia)
December 4, 2006... As Western oil companies struggle to make inroads in Russia and Central Asia, state-owned giants from China are stepping into the breach and entering long-term strategic alliances with their former Soviet neighbors. These relationships are...

N. America's independents return home.(North American )
December 4, 2006... Given the recent rise of resource nationalism it is perhaps not surprising that independent North American oil and gas producers appear to be retreating to their own backyards. Snapshots of 10 of the biggest US and Canadian independents show...

Corporate.(GENERAL)(forecasts of Shell Canada Ltd)(Brief article)
December 4, 2006... CORPORATE -- Expansion of high-cost oil sands projects is driving a near 50% jump in 2007 capital expenditure at Royal Dutch Shell affiliate Shell Canada. Of the planned spend of C$4 billion (US$3.5 billion), some C$2.45 billion is going to oil...

Environment.(CENERAL)
December 4, 2006... ENVIRONMENT -- BP and chemical maker DuPont plan to begin testing next year a biofuel version of butanol that could potentially rival ethanol as a gasoline additive. The butanol will be made from sugar beets and tested in the UK, where BP and...

Environment.(CENERAL)
December 4, 2006... ENVIRONMENT -- After years of a very low public profile on greenhouse gas (GHG) emissions, cleaner fuels, recycling and other environmental issues, Exxon Mobil is turning a green face to the public. In television commercials, print and internet...

Industry restructuring.(CENERAL)
December 4, 2006... INDUSTRY RESTRUCTURING -- ScottishPower has agreed to a [euro] 17.2 billion ($22.5 billion) takeover by Spanish utility Iberdrola. An enlarged Iberdrola would be Europe's fourth largest utility with a market capitalization of [euro] 63.8...

People.(CENERAL)
December 4, 2006... PEOPLE -- Georgina Kessel, a former head of Mexico's energy regulator CRE is to succeed Fernando Canales as energy minister in the new government appointed by incoming Mexican President Felipe Calderon.

Brazil.(COUNTRIES)(regulations of petroleum licencing)(Brief article)
December 4, 2006... BRAZIL -- The National Petroleum Agency (ANP) canceled the country's eighth licensing round last week after legal objections to new rules intended to tame the enthusiasm of state-controlled Petrobras, which has dominated previous rounds. ANP...

Ecuador.(COUNTRIES)(future of oil industry)(Brief article)
December 4, 2006... ECUADOR -- Oil companies are on red alert after left-wing populist Rafael Correa swept to victory in last week's presidential elections. Correa has pledged to seize greater control of the country's oil wealth for the state but was at pains to...

India.(COUNTRIES)
December 4, 2006... INDIA -- Malaysian state Petronas swooped on a local share placement by UK independent Cairn Energy ahead of this month's IPO in Cairn India, snapping up most of the 11.88% stake. Cairn, which is developing a claimed 3.6 billion boe of reserves...

Japan.(COUNTRIES)(statistics of petroleum imports)(Brief article)
December 4, 2006... JAPAN -- Crude imports fell 9.2% to 3.84 million b/d in October because of lower domestic demand and refinery maintenance, according to the latest official statistics. Supplies from Saudi Arabia edged up 6.5% to 1.25 million b/d but volumes...

Norway.(COUNTRIES)(future of oil industry)(Brief article)
December 4, 2006... NORWAY -- The Goliat discovery in the harsh waters of the Arctic Barents Sea is looking more promising as appraisal drilling and development planning move forward. The latest appraisal well at Goliat South has indicated more oil and natural gas...

Russia.(COUNTRIES)(frecasts of Rosneft)(Brief article)
December 4, 2006... RUSSIA -- Development costs are soaring at the Vankor field, which is destined to feed a new oil pipeline from East Siberia to the Pacific coast. Cost estimates for the Rosneft development have risen to $6 billion through 2010 from last year's...

Saudi Arabia.(COUNTRIES)(introduction of natural gas drilling raises expectations)(Brief article)
December 4, 2006... SAUDI ARABIA -- While international companies knuckle down to exploration drilling for natural gas in Eastern Province, state Saudi Aramco has notched up yet another new gas discovery of its own (PIW Oct.9, p7). Aramco said last week the...

South Korea.(COUNTRIES)(crude imports statistics)(Brief article)
December 4, 2006... SOUTH KOREA -- Crude imports totaled nearly 2.4 million b/d in October, 6.6% higher than one year ago. Imports from Kuwait and Iran jumped by more than 60% to 292,000 b/d and 267,000 b/d, respectively, while volumes from Oman fell by 37% to...

United States.(COUNTRIES)
December 4, 2006... UNITED STATES -- Proving that political risk is not just a problem in places like Bolivia, Exxon Mobil and its partners have had their leases to Alaska's gas-laden Point Thomson field on the North Slope yanked away by outgoing Governor Frank...

United States.(COUNTRIES)(environmental regulations )(Brief article)
December 4, 2006... UNITED STATES -- The Supreme Court is being asked to determine whether the Bush administration has the authority to regulate the greenhouse gas emissions that are blamed for global warming. While the administration contends that it has no such...

Angola, Ecuador, Sudan Give Opec A Boost.(Organization of the Petroleum Exporting Countries)
December 4, 2006... Opec could soon get a shot in the arm from an influx of new members, with Angola's cabinet last week voting to join the producer group and Ecuador to consider rejoining after left-wing populist Rafael Correa romped home in the presidential...

Breaking out.(Marketview)(Market overview)
December 4, 2006... LONDON -- The front-month light, sweet crude oil futures contract on the New York Mercantile Exchange appears to have broken free of a two-month $57-$62 straitjacket. The West Texas Intermediate contract has struggled to get out of it ever...

BP fuel oil Splurge Sinks Platts.
December 4, 2006... BP's seemingly insatiable appetite for high-sulfur fuel oil has created a headache for Platts, with the sheer number of barge deals last week overwhelming Rotterdam logistics, causing the pricing agency to limit bids and offers with dates after...

PIW market indicators.(Statistical table)
December 4, 2006... PIW Market Indicators Last 2 Weeks 4 Weeks Spot Crude Week Ago Ago Opec Basket $56.51 $54.89 $55.74 UK Brent (Dated) $61.17 $59.39 $58.37...

Crude outlook weighs heavily on Opec.
December 11, 2006... Opec is preparing the ground for more supply cuts even before its recent cutbacks have hit the market. Against a backdrop of high crude stocks and faltering prices, the producer group is taking its defense of $60 oil seriously. Its prescience...

Charts point to bull run in 2007.(crude oil futures )
December 11, 2006... A number of key drivers and indicators suggest that crude oil futures could be poised for yet another historic bull run in 2007. From the standpoint of technical market analysis, weekly chart action shows that crude has most likely forged a...

Contest for rare openings shapes majors.
December 11, 2006... A paradox of plenty--that's the primary challenge facing major international oil companies. The very robust financial results of recent years stand in sharp contrast to the limited investment options, both upstream and downstream. This stark...

Midlife Saudis look beyond giant fields.(Saudi Arabian Oil Co.)
December 11, 2006... Saudi Aramco just declared that it's taking a breather after rolling out a series of giant oil field projects--so what does this mean for the future of development in the world's top oil nation? In essence it means that after the current run...

Bigger Opec is bullish for oil.
December 11, 2006... Will an influx of more members bring Opec more clout in world oil markets? The addition of Angola, Ecuador and Sudan would lift the producer group's 34% share of current global production to 37% and give it more muscle to manage markets and...

Opec focus is on near-term supply gains.
December 11, 2006... Any Opec decisions taken this week in Nigeria on further production restraint won't be felt in consuming markets until well into first-quarter 2007, with the greatest concern focused on the size of potential surpluses anticipated in the second...

Eni's Paolo Scaroni: the paradox of plenty.
December 11, 2006... As an outsider with direct oil sector experience, Paolo Scaroni's appointment last year to head Italy's Eni was something of a surprise, but there have been few complaints since. Eni has been one of the few majors to sustain volume growth this...

Corporate.(petroleum companies)(Brief article)
December 11, 2006... CORPORATE -- The late November rise in oil prices lifted oil equities in the final week of the month, led by the 18.6% gain at Hess. The IPF Index, which is compiled by Energy Intelligence's International Petroleum Finance, climbed 6.3% in...

Industry restructuring.(petroleum)(Brief article)
December 11, 2006... INDUSTRY RESTRICTIROMG -- The UK's BG has put its assets in Mauritania up for sale, less than three years after acquiring them for US$132 million from Australia's Hardman Resources. US investment bank Jefferies is to auction the portfolio,...

People.(GENERAL)
December 11, 2006... PEOPLE -- Javier Gutierrez has become chief executive of Colombia's state-owned Ecopetrol, succeeding Isaac Yanovich. He previously headed state electricity grid Interconexion Electrica.

Canada.(COUNTRIES)(oil reserves investments)(Brief article)(Statistical data)
December 11, 2006... COUNTRIES -- The Canadian Association of Petroleum Producers (Capp) has released estimates of remaining oil reserves at the end of 2005 that show impressive gains in both conventional and nonconventional "established" oil reserves, as well as...

China.(COUNTRIES)(petroleum imports)(Brief article)(Company rankings)
December 11, 2006... CHINA -- Crude imports in October fell to 2.56 million b/d, or 3.8% down on the same month last year. Iran emerged as the top supplier, upping its volumes by 7% to 423,000 b/d year-on-year, followed by Oman with 326,000 b/d and Angola with...

Colombia.(COUNTRIES)
December 11, 2006... COLOMBIA -- State-owned Ecopetrol plans to develop frontier areas and increase production at existing fields as part of a $12 billion expansion plan over five years, with about 80% of that amount dedicated to exploration and production. Big...

Egypt.(COUNTRIES)(Statoil and Austria's OMV secure natural gas licensing )(Brief article)
December 11, 2006... EGYPT -- A natural gas licensing around has seen Norway's Statoil and Austria's OMV secure their first upstream interests in the country. Statoil won an 80% operating interest in deepwater Block 9 in the 2006 Egyptian Natural Gas Holding (Egas)...

India.(COUNTRIES)
December 11, 2006... INDIA -- State-run Oil and Natural Gas Corp. (ONGC) is reviewing its downstream expansion plans because of the risk of excess refining capacity. Plans by Indian Oil Corp., Reliance Industries and others to build refineries will result in an...

Iraq.(COUNTRIES)(oil production)(Brief article)
December 11, 2006... IRAQ -- The US report by the Iraq Study Group (ISG) last week ventured some shortand long-term fixes for the oil sector but the proposals offered little that was new. Production from existing fields could be restored to 3 million-3.5 million...

Philippines.(COUNTRIES)
December 11, 2006... PHILIPPINES -- Exxon Mobil has agreed to farm in to an offshore block in the western Sandakan Basin, giving the moribund upstream sector a much-needed shot in the arm. Exxon will hold a 50% operating stake in the deepwater...

Russia.(COUNTRIES)
December 11, 2006... RUSSIA -- Exports of crude oil outside of the Commonwealth of Independent States fell by 117,000 b/d in November, as producers kept more oil on the domestic market, which offered significantly better netbacks because of hefty export duties....

Russia.(COUNTRIES)(environmental violations)(Brief article)
December 11, 2006... RUSSIA -- The General Prosecutor's Office is to step up overseeing the oil and gas sector in cooperation with the government, including potentially bringing criminal charges against individuals involved in environmental damage caused by the...

Sudan.(French Total and White Nile Petroleum Co.)(Brief article)
December 11, 2006... SUDAN -- French Total and UK-listed explorer White Nile are set on a collision course over their competing claims to Block B, which is southeast of the prolific Muglad Basin. While Total has earmarked funds to shoot seismic and drill two to...

Venezuela.(Petroleos de Venezuela)(Brief article)
December 11, 2006... VENEZUELA -- The landslide reelection of President Hugo Chavez is being variously interpreted as both a further threat to foreign oil interests in the country and a hopeful new start for the sector as the regime completes the reforms triggered...

Russia rocked as Azerbaijan answers back.
December 11, 2006... Russia's threat to cut gas supplies to Azerbaijan and hike prices looks to have backfired after Baku said it may be forced to halt pipeline shipments of crude oil to the Russian Black Sea port of Novorossiysk. Such a move would deprive Russia...

Do not disturb.(Marketview)
December 11, 2006... NEW YORK -- Evidently unfazed by higher-than-normal temperatures or talk of more Opec output cuts, oil prices continued their holding pattern, though last week more on the higher end of the narrow trading range at some $62/bbl. This cautious...

Saudis squeeze more out of less jet.(Marketview)(Brief article)
December 11, 2006... Saudi Aramco has upped the ante in recent jet fuel term contract talks by telling potential bidders that volumes would be reduced next year due to extensive maintenance work at domestic refineries in the first half. Market sources say that...

PIW market indicators.(Marketview)(petroleum industry)(Statistical table)
December 11, 2006... Last 2 Weeks 4 Weeks Spot Crude Week Ago Ago Opec Basket $59.33 $57.59 $55.01 UK Brent (Dtd.) $63.80 $62.50 $58.21 UK B-wave[dagger] $63.55 $62.23...

PIW top 50: NOCs back in spotlight.
December 18, 2006... After losing ground to the supermajors over most of the last five years, national oil companies (NOCs) are back in the spotlight in PIW's latest ranking of the world's top oil companies. The hybrid, partly state-owned NOCs from emerging...

Opec gives kick to prices as balances weigh.
December 18, 2006... Fears of a bearish outlook prevailed at Opec last week, as the group agreed in Abuja, Nigeria, to a new 500,000 barrel per day production cut. The decision, effective Feb. 1, follows a 1.2 million b/d reduction pledged at the group's Doha...

Huge buybacks make big oil a Wall Street hit.
December 18, 2006... Share buybacks of unprecedented magnitude have become commonplace in the oil and gas industry. With oil prices hovering around $60 per barrel and the industry driving toward yet another year of record profits, huge share repurchases have become...

US overlooks clean diesel in efficiency push.
December 18, 2006... Might recent adoption by the US of new diesel standards that are the strictest in the world cause a dramatic shift toward greater use of the fuel and less use of gasoline--a shift that would make the country's gas-guzzling transport system more...

Tighter specs alter Asia-Pacific products trade.(petroleum market)
December 18, 2006... The Asia-Pacific region is steadily catching up with Europe and the US in achieving cleaner fuel standards as more countries mandate deeper cuts in the sulfur content of gasoline and diesel. Adding to the demand growth challenge in the region,...

Newly confident Colombia plans for oil growth.(forecast and trend of petroleum industry)
December 18, 2006... Colombia still hasn't come up with any big new oil finds, but after years of well-publicized effort to bring in more private explorers and developers, it has stabilized output at around 535,000 barrels per day. More importantly, the country has...

East Siberia looks to Asia for new flows.
December 18, 2006... East Siberia is poised to begin crude oil exports to China at the end of this decade thanks to extensive upstream investments by Russian oil companies and construction of the new East Siberian Pacific Ocean pipeline. Initial indications are...

Corporate.(GENERAL)
December 18, 2006... CORPORATE -- Worldwide upstream spending is expected to be higher in 2007, led by increased spending from national oil companies, according to a 300-company survey completed by Lehman Brothers. The companies surveyed by the investment bank plan...

Formula prices.(GENERAL)(exports)(Brief article)
December 18, 2006... FORMULA PRICES -- Saudi Arabia adjusted its term contract prices for January crude exports by tightening differentials for exports to the US, while easing most differentials for Europe. Differentials for exports to Asia were mixed, with...

Futures.(GENERAL)
December 18, 2006... FUTURES -- As crude futures trading continues to grow on both the New York Mercantile Exchange (Nymex) and the IntercontinentalExchange (ICE), levels have reached nearly 11 times that of actual world oil production. On Dec. 7, ICE traded a...

IEA.(GENERAL)(International Energy Agency)
December 18, 2006... IEA -- The sharp rise in OECD commercial inventories in September, which resulted in the largest third-quarter stockbuild in 15 years, was completely undone in the following two months, the International Energy Agency (IEA) said in its latest...

Australia.(COUNTRIES)
December 18, 2006... AUSTRALIA -- The Western Australian government gave the green light to Chevron's massive Gorgon gas project, albeit with a raft of tough new environmental conditions. The state upheld an appeal by the Gorgon consortium--Chevron, Royal Dutch...

Belarus.(COUNTRIES)(exports)(Brief article)
December 18, 2006... BELARUS -- Moscow plans to introduce its onerous export duty on crude oil deliveries to Belarus from January, in a further display of the Kremlin's growing dissatisfaction with its neighbor. After flowing untaxed for years thanks to a special...

Indonesia.(COUNTRIES)
December 18, 2006... INDONESIA -- The energy ministry awarded 18 exploration blocks to a range of local and international companies including ConocoPhillips, Norwegian Statoil and China National Offshore Oil Corp. (CNOOC). The Kuma Block offshore west Sulawesi went...

Kazakhstan.(COUNTRIES)
December 18, 2006... KAZAKHSTAN -- Playing a balancing act between its two powerful neighbors, Kazakhstan looks set to drop its opposition to the $1.9 billion takeover of local producer Karazhanbasmunai by China's Citic, while at the same time approving the sale of...

Mexico.(COUNTRIES)(decrease in oil production)(Brief article)
December 18, 2006... MEXICO -- Crude oil production is set to fall by 50,000 b/d from Jan. 1 due to the accelerating decline of the giant Cantarell oil field. State Pemex's chief European representative, Raul Cardoso, told PIW that cuts were under discussion with...

Oman.(COUNTRIES)(Brief article)
December 18, 2006... OMAN -- BP has won a contract to explore and develop two sought-after gas fields, securing a new operational role in the country. BP concluded negotiations for the Khazzan and Makarem complex gas fields, previously part of Petroleum Development...

Tanzania.(COUNTRIES)(construction of oil drilling rigs )(Brief article)
December 18, 2006... TANZANIA -- Brazil's state-controlled Petrobras has taken its second plunge into the country's offshore, signing up for Block 6, which covers 1,100 sq km and involves water depths of 500-3,500 meters. Petrobras is committed to invest at least...

United Kingdom.(COUNTRIES)(Brief article)
December 18, 2006... UNITED KINGDOM -- Virgin Fuels, a new investment vehicle launched by airline and recording tycoon Richard Branson, is seeking to catalyze consumers, industry and government into tackling global warming by developing renewable jet fuel and other...

United Kingdom.(COUNTRIES)(petroleum revenue tax)(Brief article)
December 18, 2006... UNITED KINGDOM -- The government slapped higher taxes on motorists and air passengers ahead of next year's full budget but also gave notice that decommissioned oil fields that are redeveloped will be exempted from petroleum revenue tax (PRT)...

United States.(COUNTRIES)(Brief article)
December 18, 2006... UNITED STATES -- Congress passed a bill opening up more deepwater areas in the Gulf of Mexico to drilling, which the industry says should boost domestic natural gas supply. The White House signaled support for the measure, which gives companies...

Yemen.(COUNTRIES)(Brief article)
December 18, 2006... YEMEN -- Asian firms snapped up five of eight blocks in the country's third oil bidding round, which also introduces gas into its production sharing agreements for the first time. India's Gujarat State Petroleum was awarded Block 19 in Al-Jawf...

Gazprom muscles closer to Sakhalin-2 stake.(What's New Around the World)
December 18, 2006... In a striking victory in Moscow's drive to strengthen state control over Russia's natural resources, Royal Dutch Shell has bowed to the heavy environmental pressure and coughed up new offers that could potentially give natural gas giant Gazprom...

Appetizing fudge.(Marketview)
December 18, 2006... LONDON -- Opec's decision to cut production by 500,000 b/d from Feb. 1, 2007, was welcomed by the bulls in the marketplace and crude oil futures prices firmed by $1 per barrel in the space of a few minutes. It was a fudge, of course--but a...

PIW market indicators.(Statistical table)
December 18, 2006... PIW Market Indicators Last 2 Weeks 4 Weeks Spot Crude Week Ago Ago Opec Basket $57.38 $59.06 $54.89 UK Brent (Dtd.) $62.41 $63.68 $59.39 UK...

PIW ranks the world's top oil companies.
December 18, 2006... National oil companies, particularly those from Russia, China and other emerging economies, are making most of the gains in this year's ranking of the world's top oil companies. With resource nationalism and state control of the petroleum...

PIW's top 50: how the firms stack up.(Company rankings)
December 18, 2006... PIW's ranking of the world's 50 largest oil companies is based on operational data from over 125 firms. The focus on operations allows meaningful comparisons of all types of companies--including state-owned firms--and thus differs from more...

The Russians are coming.(Company rankings)
December 18, 2006... Fully 15 years after the breakup of the Soviet Union, what looks to be an enduring structure for the Russian oil and gas industry is finally taking shape. This year's PIW rankings show the steady rise of the Russian companies as initial...