Petroleum Intelligence Weekly articles from December 2008

Petroleum Intelligence Weekly archives from December 2008

PIW Top 50 casts doubt on mega-mergers.
December 1, 2008... A decade after the mega-mergers that created today's international majors, the latest PIW ranking of the world's top 50 oil companies casts doubt on the wisdom of the supermajor strategy. While six international majors still rank among the top...

Rising stocks pose problem for Opec.
December 1, 2008... Crude oil inventories are rising fast, particularly in the Atlantic Basin, and causing a headache for Opec. Anecdotal evidence suggests millions of barrels of crude are now in storage at sea, while balances for the first and second quarter of...

US in line to soak up LNG supply surge.
December 1, 2008... The US could soon be back in the LNG import game, possibly as early as next year, and not just because of the way the global financial crisis is hitting LNG prices and bringing them closer to depressed North American gas prices. With a number...

Angola looks to follow Brazil's subsalt lead.
December 1, 2008... It may be Africa's fastest growing producer, but Angola's offshore also ranks as a mature oil province due to the declining size of recent discoveries. Brazil, however, could change all that. The two countries' South Atlantic waters share...

Reliance keen to diversify global portfolio.(Reliance Industries Ltd.)
December 1, 2008... Indian private-sector giant Reliance Industries is embarking on a change in international strategy. Having built up a modest overseas exploration portfolio over the past few years, the company is now looking to use revenues from its huge gas...

Heating oil not hot enough to rescue oil price.
December 1, 2008... The arrival of the Northern Hemisphere winter normally sees heating oil consumption rise, giving a lift to both oil demand and oil prices, although in recent years unseasonably mild weather has neutralized the typical upward price effect. Even...

Eastern Europe rivals batten down hatches.
December 1, 2008... The deepening global financial crisis has started to make itself felt in Central and Eastern Europe, where regional heavyweights OMV, Mol and PKN Orlen are battening down the hatches, scaling back spending plans, building up cash balances and...

Corporate.(GENERAL)
December 1, 2008... CORPORATE -- Lukoil appears to have emerged as the front-runner to take a stake of close to 30% in Spain's Repsol YPF, although sources with the Russian company insist that financing such a deal would be impossible at present given the global...

LNG.(GENERAL)
December 1, 2008... LNG -- The first commissioning cargo for the world's first gravity-based offshore LNG terminal, Adriatic LNG, is due to arrive in March next year, according to Riccardo Pasetto, gas supply director at Italian gas and power firm Edison. Full...

Angola.(COUNTRIES)(Brief article)
December 1, 2008... ANGOLA -- The country's total production capacity is set to climb toward 2.1 million b/d next year with the start-up of Chevron's deepwater Tombua-Landana field in the fourth quarter of 2009. The 100,000 b/d project on Block 14 will eventually...

Australia.(COUNTRIES)
December 1, 2008... AUSTRALIA -- India's private-sector Essar Oil has made its debut in the country's upstream, picking up two offshore exploration blocks out of 13 awarded last week in the resource-rich North West Shelf area. The Indian firm's Essar Exploration...

Brazil.(COUNTRIES)
December 1, 2008... BRAZIL -- Petrobras has made another big light oil discovery in the subsalt layer of the Espirito Santo Basin. The discovery in the Parque das Baleias (Whale Park) area holds 1.5 billion-2 billion boe of recoverable light, 30[degrees] API oil...

China.(COUNTRIES)(Brief article)(Statistical data)
December 1, 2008... CHINA -- Crude imports surged to 3.82 million b/d in October, up 28% year-on-year. This leaves average imports for the first 10 months of the year at 3.63 million b/d, up 10.6% from the same period in 2007 (PIW Nov.3,p8). Saudi Arabian volumes...

Iran.(COUNTRIES)
December 1, 2008... IRAN -- State-owned China National Petroleum Corp. (CNPC) is poised to finalize an agreement with Tehran to acquire a 50% stake in the multibillion-dollar development of Phase 11 of the South Pars field and a 25% interest in the Pars LNG...

Iraq.(COUNTRIES)
December 1, 2008... IRAQ -- Royal Dutch Shell looks to be extending its reach in the country, signing a memorandum of understanding (MOU) with Turkey's state explorer, TPAO, and pipeline operator Botas to cooperate in gas exploration. The preliminary agreement...

Mexico.(COUNTRIES)(Brief article)(Statistical data)
December 1, 2008... MEXICO -- Crude production rose by 35,000 b/d in October to 2.757 million b/d as output recovered from hurricane-related shut-ins in September, according to the latest data from state Pemex. Associated gas production also rose in October...

Oman.(COUNTRIES)
December 1, 2008... OMAN -- Occidental Petroleum and Abu Dhabi's Mubadala Development Co. have signed an exploration and production sharing agreement for a gas block in the north of the country. The oil ministry awarded the partners a 20-year deal for Block 62,...

Papua New Guinea.(COUNTRIES)
December 1, 2008... PAPUA NEW GUINEA -- The government has agreed a deal with Abu Dhabi's state International Petroleum Investment Co. (Ipic) that will help it raise roughly A$1.68 billion ($1.1 billion) to fund its share of the Exxon Mobil-led PNG LNG project....

Russia.(COUNTRIES)
December 1, 2008... RUSSIA -- Gazprom has signed a long-term gas supply contract with Slovakia guaranteeing the state gas giant's position in the country and solidifying its access to European markets. Under the accord, the Russian company's export arm, Gazprom...

Saudi Arabia.(COUNTRIES)(Brief article)
December 1, 2008... SAUDI ARABIA -- In the latest sign that Riyadh is rethinking the need for near-term increases in oil capacity, state Saudi Aramco has canceled a planned upgrade of its onshore Dammam oil field to boost output by 100,000 boe/d. Aramco alerted...

United States.(COUNTRIES)(Brief article)
December 1, 2008... UNITED STATES -- Whales are once again complicating life for Royal Dutch Shell, with a federal appeals court overturning the Department of the Interior's approval of the company's exploration plans for Alaska's Beaufort Sea on the grounds that...

Northern Iraq export prospects inch forward.(What's New Around the World)(Addax)(Genel Enerji)
December 1, 2008... Iraq's oil ministry has given Norway's DNO and an alliance of Switzerland's Addax and Turkey's Genel Enerji the go-ahead to build spur pipelines from their oil fields--Tawke and Taq Taq, respectively--in the Kurdistan region of northern Iraq...

One loud bear.(Marketview)
December 1, 2008... WASHINGTON -- Just when it looked as though the oil market was changing course, it found itself under pressure again, falling back to the $50/bbl. On Nov. 24, US benchmark West Texas Intermediate (WTI) jumped $4.57/bbl to $54.50/bbl on what...

German body sees oil supply crunch by 2018.(Brief article)
December 1, 2008... While the International Energy Agency's 2008 World Energy Outlook forecasts no peak in oil supply before 2030, one German institute is taking a very different view (PIW Nov.17,p1). The Hannover-based Federal Institute for Geosciences and...

PIW market indicators.(Petroleum Intelligence Weekly)(Statistical table)
December 1, 2008... PIW Market Indicators ($/barrel) Nov. 24- Nov. 17- Oct. 27- Spot Crude Nov. 26 Nov. 21 Oct. 31 Opec Basket $45.01 $45.40 $57.64 UK Brent...

PIW ranks the world's top 50 oil companies.(Company rankings)
December 1, 2008... While the global oil and gas business has been shaken to its core by this year's credit crisis and the closely related plunge in oil prices and demand, none of that has been reflected yet in PIW's annual ranking of the world's top 50 oil...

PIW's Top 50: how the firms stack up.(Company rankings)
December 1, 2008... PIW's ranking of the world's 50 largest oil companies is based on operational data from over 130 firms. The focus on operations allows meaningful comparisons of all types of companies--including state-owned firms--and thus differs from more...

Trying to measure corporate social responsibility.
December 1, 2008... The high oil prices of recent years and intensified public criticism of oil companies are contributing to a trend that started to take shape about 10 years ago, as firms began releasing information on environmental and social performance issues...

Opec plays game of great expectations.
December 15, 2008... In a break with their normal conservatism, Opec ministers have been raising expectations that their Dec. 17 meeting in Algeria will produce a major cut in oil supply. This strategy puts a lot of pressure on the organization to deliver both a...

China bids for role in Brazil's subsalt.
December 15, 2008... With a question mark over how Brazil will finance the development of its vast subsalt oil reserves, China has laid its cards on the table with the offer of a $10 billion loan to state Petrobras. As the scale and potential of the subsalt has...

Indonesia leads regional upstream renaissance.
December 15, 2008... Oil prices may be falling and capital budgets may be suffering, but that hasn't prevented Southeast Asia's upstream from enjoying something of a renaissance. The revival is largely down to improvements in fiscal terms in countries including the...

New Iraq exports: test of politics vs. pragmatism.
December 15, 2008... Iraq's oil sector and the prospects for a much-needed boost in exports remain in flux in the absence of a country-wide oil law. Baghdad and the Kurds in the north still seem committed to pursuing a two-track oil policy--the former pursuing...

Surplus upgrading offsets delays in Alberta oil sands.
December 15, 2008... The recent spate of delays and deferrals affecting bitumen upgrading projects in Canada is not expected to create a processing bottleneck for Alberta's oil sands. In fact, between the upgrader projects that will proceed, the Enbridge and...

Russia's erratic oil exports face testing times.
December 15, 2008... After a steep drop in Russian crude oil exports in November, December should see flows rebound sharply to healthy mid-summer levels as oil firms drain brimming domestic storage facilities. But the economics behind the recovery are dubious...

Lessons from the oil price fall.(Petroleum Comment)
December 15, 2008... The massive $100 per barrel decline in oil prices since July is prompting the same kind of questioning and search for answers as the price surge that preceded it. In 2006, PIW carried an article by David Hufton, managing director of oil broker...

Excerpts from "the price of oil market transparency".(Excerpt)
December 15, 2008... The big question everyone in the industry is asking is why crude prices remain so high in the face of overwhelming evidence of oversupply. Opec, Chinese oil demand growth, Iraq and a myriad of real or feared supply disruptions have all been...

Formula prices.(GENERAL)
December 15, 2008... FORMULA PRICES -- Asian refiners were left mystified by Saudi Arabia's decision to make January-loading crude to Asia relatively more expensive, as refining margins and price developments for rival grades suggested such a big increase was not...

Corporate.(GENERAL)
December 15, 2008... CORPORATE -- Canadian independent Talisman Energy is anticipating significant reductions in its capital spending program next year, but these should not have any impact on its investments in its North American unconventional gas plays....

Corporate.(GENERAL)
December 15, 2008... CORPORATE -- UK independent Tullow Oil announced successful drilling results on both the Jubilee field in Ghana and the Kingfisher field in Uganda, which it expects to lead to upgrades of current resource estimates. The group said results from...

European Union.(GENERAL)
December 15, 2008... EUROPEAN UNION -- The EU has agreed to new legislation that requires fuel suppliers to cut their greenhouse gas emissions from fuel production by 6% from 2010 levels by 2020. The Fuel Quality Directive expects most of these savings to come from...

IEA.(GENERAL)(International Energy Agency)(Statistical data)
December 15, 2008... IEA -- In its continuing downward adjustments to world oil demand projections, the International Energy Agency has finally trimmed away all the demand growth for 2008 as economic conditions worsen (PIW Nov. 17,p8). With supply continuing to...

Industry restructuring.(GENERAL)(Brief article)
December 15, 2008... INDUSTRY RESTRUCTURING -- Marathon Oil will not split into two companies for now, saying the global economic downturn and the fall in commodity prices have forced it to evaluate the move more fully. It had previously said it might make such a...

Australia.(COUNTRIES)(Brief article)
December 15, 2008... AUSTRALIA -- The $590 million Reindeer gas development offshore Western Australia has been put on ice, but it's not quite clear why, with project partners Santos and Apache offering different reasons for the decision. Santos says further...

Azerbaijan.(COUNTRIES)(Brief article)
December 15, 2008... AZERBAIJAN -- In another setback for the country's oil sales, a sharp fall in projected crude oil exports for January has heightened concerns over BP's failure to plug a gas leak that for three months has shut down one of the five platforms in...

Canada.(COUNTRIES)
December 15, 2008... CANADA -- While major international oil companies may be resisting spending cuts so far, EnCana and Petro-Canada have just unveiled cuts to their 2009 capital expenditures in response to weak credit markets and volatile oil and gas prices (p2)....

China.(COUNTRIES)(Brief article)
December 15, 2008... CHINA -- Beijing unveiled a new plan to reform its oil product pricing system and ease pressure on refiners, which were making significant losses because of high crude costs and caps on domestic fuel prices. The government will continue to...

Indonesia.(COUNTRIES)(Minarak Labuan)(Brief article)
December 15, 2008... INDONESIA -- Australia's Santos has agreed to pay US$22.5 million to exit from its share of the project linked to the disastrous mudflow in East Java. Santos' 18% stake in the Brantas production sharing contract will be transferred to Minarak...

Kazakhstan.(COUNTRIES)
December 15, 2008... KAZAKHSTAN -- With one eye on bagging an exploration block in the Caspian Sea, BG plans to cooperate with two Kazakh state oil and gas companies in identifying upstream opportunities both in Central Asia and overseas. The deal with Kazmunaigas...

Mexico.(COUNTRIES)
December 15, 2008... MEXICO -- State-owned Pemex is scrambling to upgrade its overstretched transportation and distribution network as domestic demand for gasoline rises, but pressing needs for investment in other areas, namely exploration and production, may limit...

Russia.(COUNTRIES)
December 15, 2008... RUSSIA -- Gazprom is sticking with record-high spending plans for 2009 and won't abandon priority projects because of the global economic crunch, even though it may have to rely heavily on the Kremlin, borrowing money from Russian state banks...

Spain.(COUNTRIES)
December 15, 2008... SPAIN -- In a further sign of growing demand weakness for natural gas in Europe, Spanish gas grid operator Enagas has reported that gas burned in November in Spain's modern gas-fired power plants was down by 10% year-on-year. For a long time,...

United States.(COUNTRIES)(Brief article)
December 15, 2008... UNITED STATES -- President-elect Barack Obama is filling key energy and environment posts with candidates who share his vision of combating climate change and creating a "green economy" in which fossil fuels play a diminished role. Although not...

US gas goes flat.(Marketview)
December 15, 2008... HOUSTON -- Much like heating oil, US natural gas prices typically receive a boost from the arrival of the Northern Hemisphere winter. And much like heating oil, there has been precious little sign of that seasonal fillip for North American gas...

PIW market indicators.(Petroleum Intelligence Weekly )(Statistical table)
December 15, 2008... PIW Market Indicators ($/barrel) Dec. 8- Dec. 1- Nov. 10- Spot Crude Dec. 10 Dec. 5 Nov. 14 Opec Basket $37.89 $40.77 $50.75 UK...

Opec offers record cut, but few details.
December 22, 2008... The output deal agreed by Opec ministers in Algeria Dec. 17 will see the producer group attempt to cut actual production by some 3.1 million barrels per day from reported November output levels, making it the largest cut in the organization's...

Rise in oil inventories is all at sea.
December 22, 2008... The current imbalance between oil supply and oil demand is resulting in a rise in crude inventories, but not in the usual places. Onshore stocks in key consuming economies have failed to show the pronounced spike implied by most recent supply...

Eni's Scaroni sees stark choices for oil industry.
December 22, 2008... The petroleum business is facing a daunting choice, according to Paolo Scaroni, chief executive of Italy's Eni. Either oil prices will plunge further in the near term and lead to a downturn in investment, in turn leading to another cycle of...

Good timing spares most Qatari projects.
December 22, 2008... While several of its Mideast neighbors have responded to the global economic downturn and falling oil prices by putting the brakes on oil and gas development, Qatar has forged ahead with its most ambitious projects. This is mainly because the...

Ghana tests Tullow's technical, financial skills.
December 22, 2008... Ghana's big day could be just 18 months away. The deepwater Jubilee field is due to start pumping 120,000 barrels per day in the second half of 2010, launching the country as a new West African oil exporter. Getting there will be no cakewalk....

Independents lead cuts in 2009 spending.
December 22, 2008... With crude and North American gas prices testing new lows as the year ends, oil and gas companies are reassessing their capital spending plans for 2009. While many national oil companies (NOCs) and international oil companies (IOCs) are likely...

KNOC turns attention to producing assets.
December 22, 2008... The fall in oil prices and the subsequent softening in asset valuations have presented an opportunity for state Korea National Oil Corp. (KNOC). Long the poor relation to its larger Chinese and Indian rivals, KNOC has been set a series of...

Eni's Scaroni scans the stormy horizon.(Interview)
December 22, 2008... After the annual Oil & Money Conference in October, at which Eni Chief Executive Paolo Scaroni received the Petroleum Executive of the Year Award for 2008, Energy Intelligence President Tom Wallin had the opportunity to sound out Scaroni on...

Corporate.(GENERAL)
December 22, 2008... CORPORATE--The $50 billion fraud allegedly perpetrated by Wall Street executive Bernie Madoff has claimed at least one oil industry victim, with Royal Dutch Shell's Dutch pension fund revealing a $45 million exposure and joining the growing...

Corporate.(GENERAL)
December 22, 2008... CORPORATE--Lukoil's negotiations on the purchase of a stake in Spain's Repsol YPF have stalled because the sides cannot agree on a sale price, sources claim, adding that no progress is expected before the middle of January. Russian gas giant...

Environment.(GENERAL)(Brief article)
December 22, 2008... ENVIRONMENT--European Union heads of government have agreed a detailed program to cut overall EU greenhouse gas emissions by 20% from 1990 levels by 2020, inclusive of concessions for Eastern Europe. The legally binding targets--which also...

Industry Restructuring.(GENERAL)(Nexen Inc. acquired long lake oil sands project in canada)(Marathon Oil Co. acquired Petroliam Nasional Bhd.)(Brief article)
December 22, 2008... INDUSTRY RESTRUCTURING--Nexen is to take a majority stake in the Long Lake oil sands project in Canada, buying an additional 15% stake from embattled joint-venture partner Opti Canada for C$735 million (US$612.5 million). The agreement boosts...

LNG.(GENERAL)(liquified natural gas)(Brief article)
December 22, 2008... LNG--The Chevron-led Angola LNG (ALNG) project has taken a major step forward with the award of a $550 million contract for some of the pipelines needed to connect deepwater fields to the development's initial 5 million ton/yr liquefaction...

Algeria.(COUNTRIES)
December 22, 2008... ALGERIA--Results from the country's first licensing round in four years have been disappointing, with just four gas exploration areas awarded out of the 16 originally on offer. Italy's Eni took the Kerzak exploration license in the Timimoun...

Australia.(COUNTRIES)
December 22, 2008... AUSTRALIA -- LNG producers are likely to get concessions under revised government plans for a greenhouse gas emissions trading scheme (ETS) set for launch in 2010. In its white paper on the ETS last week, Canberra said LNG schemes appear...

Indonesia.(COUNTRIES)(Brief article)
December 22, 2008... INDONESIA -- The government has lowered domestic prices of gasoline and gas oil by 9% and 12%, respectively, in an effort to curb inflation and maintain economic growth amid the current downturn. RON 88 gasoline now costs about 45cents/liter...

Jordan.(COUNTRIES)
December 22, 2008... JORDAN -- Royal Dutch Shell is in the final phase of talks with Amman over an oil shale concession that could initially cover almost one-quarter of the Mideast country. Subject to the approval of both the cabinet and parliament, the deal would...

Russia.(COUNTRIES)
December 22, 2008... RUSSIA -- Unfazed by the credit crunch, state-controlled Rosneft is continuing talks with China on a $15 billion loan secured by long-term crude supplies. The financial terms are still under discussion, but the deal could be finalized by March...

Saudi Arabia.(COUNTRIES)
December 22, 2008... SAUDI ARABIA -- Despite announcing plans for job cuts and plant closures else-where in its business, the US' Dow Chemical has said it remains committed to its projects in the Middle East, including the giant Ras Tanura Integrated Petrochemicals...

Turkmenistan.(COUNTRIES)(Eni Corp. chief executive Paolo Scaroni visits Ashgabat)(Brief article)
December 22, 2008... TURKMENISTAN -- Eni Chief Executive Paolo Scaroni was due to visit Ashkhabad last week in a bid to get a visa ban lifted so that employees of the Italian major could take over at former UK-listed independent Burren Energy, which Eni bought a...

United States.(COUNTRIES)(Brief article)
December 22, 2008... UNITED STATES--In its latest Annual Energy Outlook, the Energy Information Administration (EIA) has made dramatic changes to its projections for US oil consumption, which it now expects to remain virtually unchanged from 2007 to 2030. In last...

Caspian pipeline expansion gets green light.(What's New Around the World)
December 22, 2008... A six-year stalemate was broken Dec. 17 when shareholders of the Caspian Pipeline Consortium (CPC) signed a memorandum of understanding (MOU) on the expansion of the crude pipeline that runs from the giant Tengiz oil field in Kazakhstan to a...

Heating oil cools.(Marketview)
December 22, 2008... LONDON -- Opec may be taking action to reverse the decline, but both oil prices and oil demand are still falling, with even Europe's habitual middle distillate shortfall starting to diminish. The ICE gas oil futures curve is in steep...

PIW market indicators.(Statistical table)
December 22, 2008... PIW Market Indicators ($/barrel) Dec. 15- Dec. 8- Nov. 17- Spot Crude Dec. 17 Dec. 12 Nov. 21 Opec Basket $41.41 $39.02 $45.40 UK Brent...