Petroleum Intelligence Weekly articles from February 2008

Petroleum Intelligence Weekly archives from February 2008

Caracas and Exxon--who has most to lose?
February 18, 2008... It's tempting to see the escalating row between Exxon Mobil and the Venezuelan government over compensation for the nationalization of the Cerro Negro heavy oil project as a defining moment in the current era of resource nationalism--the US'...

Industry leaders warn of oil's looming crisis.
February 18, 2008... For several years now, oil companies have been enjoying the good times, riding the wave of high oil prices to huge profits. But while investors have been rewarded by the sector's strong financial performance, anxiety is growing that the...

Algeria eyes move to short-term LNG sales.
February 18, 2008... Algeria is set to mark out new ground in the LNG sector, looking at a shift away from the long-term contracts that have traditionally underpinned investment in new LNG plants and toward short-term and spot contracts. "We could be selling on the...

Time running out for Saudi gas ventures.
February 18, 2008... Despite drilling 14 wells in Saudi Arabia's inhospitable Rub al-Khali desert, four international joint ventures (JV) led by Royal Dutch Shell, Russia's Lukoil, China's Sinopec and Italy's Eni have few commercial strikes to show for their...

China's peak oil debate still in its infancy.
February 18, 2008... Although the questionable ability of the world's oil supplies to meet future demand growth is an issue that affects every nation on the planet, the debate on "peak oil" has tended to be a largely Western affair. Much of the anxiety over a...

Europe facing slowdown in Russian crude.
February 18, 2008... For years, European refiners have watched Russian crude export flows swell in line with the steady rise in output from West Siberia and the Volga-Urals. That export growth has slowed as the country's tax regime--designed to encourage exports of...

Tupi adds luster to BG's investor appeal.
February 18, 2008... Carnival may be over in Rio, but the party is still going strong for BG. Already an investor favorite thanks in large part to its years of steady upstream growth, the UK company is now the proud owner of a 25% stake in Brazil's giant Tupi...

Khelil: Algeria is looking for a better deal.(Interview)
February 18, 2008... Algeria wants more from its energy partners--more in terms of technology, market access and asset swaps from companies bidding for acreage in its forthcoming licensing round; more lucrative, short-term contracts from its LNG customers; and more...

Corporate.(GENERAL)(Brief article)(Statistical data)
February 18, 2008... CORPORATE -- Total bucked the trend of falling output among the leading majors in 2007, seeing full-year production increase 1.5% to 2.39 million boe/d. But the French major could not buck the industrywide trend on reserves, replacing just 23%...

Formula prices.(GENERAL)
February 18, 2008... FORMULA PRICES -- Saudi Arabia eased its March formula prices for US loading cargoes, which refiners said were "fair", while European and Asian customers complained that prices for their regions came in on the high side, as refining margins...

IEA.(GENERAL)(International Energy Agency )
February 18, 2008... IEA -- The International Energy Agency (IEA) has backed off from its projection of strong oil demand growth this year in the face of a worsening economic outlook for key world economies. As a result of a 200,000 b/d downward revision to 2008...

Australia.(COUNTRIES)
February 18, 2008... AUSTRALIA -- Woodside Petroleum has inked a deal with Royal Dutch Shell to acquire its North West Shelf oil interests for $398.5 million. In return, Shell will have a "right of final offer" for the Australian firm's assets in Libya, should it...

Indonesia.(COUNTRIES)
February 18, 2008... INDONESIA -- State-owned Pertamina is ready to take over the stalled Natuna DAlpha block if fresh talks with current operator Exxon Mobil fail to produce a result. Pertamina is still awaiting the government's decision, but is "prepared" for any...

IRAQ.(COUNTRIES)(Brief article)
February 18, 2008... IRAQ -- Defying warnings from Baghdad, state Korea National Oil Co. (KNOC) has gone ahead with the signing of a memorandum of understanding (MOU) with the Kurdistan Regional Government (KRG) covering four exploration blocks (PIW Jan.21,p3). In...

IRAQ.(COUNTRIES)(Brief article)
February 18, 2008... IRAQ -- Baghdad remains coy on the prospects of Russian companies' winning prized upstream deals in Iraq, despite Moscow agreeing to write off 93% of the country's $12.9 billion debt. "As a member of the Paris Club of creditors, Russia just...

Myanmar.(COUNTRIES)
February 18, 2008... MYANMAR--Thailand's state PTT Exploration and Production (PTTEP) is looking for further asset swaps with China National Offshore Oil Corp. (CNOOC) after sealing an initial agreement to exchange 20% stakes in its offshore M3 and M4 blocks for...

Russia.(COUNTRIES)
February 18, 2008... RUSSIA--Total crude exports via the network of pipeline operator Transneft to destinations outside of the former Soviet Union rose to 3.893 million b/d in January from 3.834 million b/d the previous month, as producers pushed more volumes...

Sudan.(COUNTRIES)
February 18, 2008... SUDAN -- The first exploration well has been spudded in Block 5B, which has been at the center of conflicting claims by the government in Khartoum and the semiautonomous Government of Southern Sudan (Goss) in Juba. Operator WNPOC is targeting...

Turkmenistan.(COUNTRIES)(Buried Hill Energy )(Brief article)
February 18, 2008... TURKMENISTAN -- In a potential flashpoint with Azerbaijan, Cyprus-registered independent Buried Hill Energy has started work offshore Turkmenistan in an area that is claimed by both Caspian states. Buried Hill told PIW that it had signed a...

United States.(COUNTRIES)
February 18, 2008... UNITED STATES--Royal Dutch Shell was the big spender and big winner in the federal lease sale for acreage in Alaska's remote Chukchi Sea, with winning bids on 275 tracts at a price of $2.1 billion. The sale brought in $2.66 billion overall, a...

No recovery in sight for Omani oil output.
February 18, 2008... In what will be a major blow both to Royal Dutch Shell and the Omani government, Shell-led Petroleum Development Oman (PDO) has given up trying to reverse the decline in oil output from its giant onshore Block 6 in the short term and now...

Sucked dry.(petroleum market)(Market overview)
February 18, 2008... LONDON--Gas oil is sweeping all before it as Europe's middle distillate crunch strengthens refining margins. The ICE February gas oil crack to Brent soared above $18/bbl before the gas oil contract's Jan. 12 expiry, and the February-March gas...

India helps refiners with modest price hike.
February 18, 2008... India has raised gasoline and diesel prices for the first time in 20 months to reduce the burden of high oil prices on state-run refiners. A liter of gasoline has risen by 2 rupees (5 cents), and a liter of diesel by 1 rupee, Petroleum...

PIW market indicators.(Statistical table)(Market overview)
February 18, 2008... PIW Market Indicators ($/barrel) Last 2 Weeks 4 Weeks Spot Crude Week Ago Ago Opec Basket $89.55 $85.77 $87.18 UK Brent...

Reports of IOCs' demise greatly exaggerated.(international oil companies)
February 25, 2008... It has become commonplace to suggest that international oil companies (IOC) are an endangered species. In this view, the combination of fewer upstream openings, aggressive national oil companies (NOC) and rising resource nationalism with a host...

Opec's growing spare capacity can't cool prices.
February 25, 2008... Opec spare capacity is a high-profile, albeit somewhat problematic, barometer of the state of the world oil market. Low spare capacity over the past four years has been cited as a prime--if not the prime--cause of the tripling of oil prices...

Yemen Lures majors with new gas terms.
February 25, 2008... Although viewed as a marginal and declining oil province, Yemen is trying to encourage foreign investment by offering gas production sharing agreements (PSA) for new and existing contracts. The oil ministry has rolled out new gas purchase terms...

India to rival Singapore as Asia products hub.
February 25, 2008... With product exports set to double to more than 1.6 million barrels per day by 2010, India is poised to challenge Singapore as Asia's product export hub, exploiting the flexibility of its geographical position, which allows it to reach beyond...

Oil firms learn about the birds and the bees.
February 25, 2008... The US government decided to go ahead with a lease sale in the Alaskan Chukchi Sea earlier this month, despite calls from environmentalists to delay the round pending deliberations on whether polar bears should be listed as "threatened" under...

Colombia still searching for a big discovery.
February 25, 2008... Colombia kicked off its latest licensing round earlier this month, with the government looking for more private investment as it tries to boost oil production and extend the country's self-sufficiency beyond 2015. Crude production did creep...

Recession poses main threat to refining margins.
February 25, 2008... Analyzing the refining industry for much of this decade has been relatively straightforward, with margins rising steadily on the back of a variety of factors--robust demand growth, supply constraints caused by new sulfur specifications, limited...

Exxon's Olsen makes the case for the IOCs.(Interview)
February 25, 2008... The inexorable rise of the national oil companies (NOC) and their eclipse of the international oil companies (IOC) at a time of rising resource nationalism was the lead theme at the IP Week conference in London last week. In a keynote address,...

Corporate.(GENERAL)
February 25, 2008... CORPORATE -- The growing shortage of skilled workers, rather than cost pressures or geopolitical restrictions on access to reserves, has become the top strategic threat to the oil and gas industry, according to a new study by consultants Ernst...

Corporate.(GENERAL)(Brief article)
February 25, 2008... CORPORATE -- Cost pressures on upstream oil and gas projects look set to increase after three of the world's top steel makers, Japan's Nippon Steel, South Korea's Posco and Germany's ThyssenKrupp, agreed new iron ore term contracts at levels...

Opec.(GENERAL)
February 25, 2008... OPEC -- The producer group said in its latest Monthly Oil Market Report that the rise in global oil volumes this year will be more than adequate to cover expected demand growth (p1). Opec has maintained its forecast of growth in global supply...

Refining.(GENERAL)(Thomas O'Malley stepping down from Petroplus International N.V.)(Brief article)
February 25, 2008... REFINING -- Thomas O'Malley, the high-profile former boss of US refiners Tosco and Premcor, is stepping down from his current position as chief executive of independent Swiss-listed refiner Petroplus on Mar. 1 and will be replaced by industry...

Algeria.(COUNTRIES)
February 25, 2008... ALGERIA -- While plans for broader cooperation between state Sonatrach and Russian gas giant Gazprom appear to have stalled, Russian state rival Rosneft is pressing forward with upstream plans in the North African country. A joint venture...

Australia.(COUNTRIES)
February 25, 2008... AUSTRALIA -- Woodside Petroleum may push back work on its Browse LNG project in favor of development of the Sunrise LNG project in the Timor Sea and construction of a second train at the Pluto LNG plant. Woodside expects to reach a final...

Australia.(COUNTRIES)
February 25, 2008... AUSTRALIA -- Despite an increase in oil production last year, the country's seven refineries are struggling to fill their plants with indigenous supply, leading to an 8.4% rise in crude imports in 2007 to 466,000 b/d, with increasing flows...

Brazil.(COUNTRIES)
February 25, 2008... BRAZIL -- The oil and gas resource potential hinted at by last year's massive Tupi discovery has prompted the country's top legal officials to recommend that the government suspend all new upstream oil and gas auctions. The step should be taken...

Indonesia.(COUNTRIES)
February 25, 2008... INDONESIA -- Exxon Mobil's role as operator of the Natuna D-Alpha project looks increasingly uncertain following Jakarta's decision to hand over the development rights for the offshore block to state Pertamina. Energy Minister Purnomo...

Nigeria.(COUNTRIES)
February 25, 2008... NIGERIA -- In another example of increasing direct cooperation between state energy companies, Russia's state Gazprom expects to announce a major deal in the coming months that will give it a foothold in the country's gas sector. Gazprom has...

Russia.(COUNTRIES)
February 25, 2008... RUSSIA -- Nikolai Tokarev, the new head of state oil pipeline operator Transneft, has called on Moscow to take control over broad swathes of the Russian crude trading business. Stunned oil traders have said that the call raises the prospects of...

Sudan.(COUNTRIES)(appointments of Omar al-Bashir and Zubeir Ahmed al-Hassan)(Brief article)
February 25, 2008... SUDAN -- President Omar al-Bashir has replaced long-serving Energy Minister Awad Ahmed al-Jaz, who will take over the finance ministry, in a cabinet reshuffle of 12 ministerial posts. Former Finance Minister Zubeir Ahmed al-Hassan has been...

Venezuela.(COUNTRIES)
February 25, 2008... VENEZUELA -- In its efforts to secure compensation for the loss of upstream assets seized by Caracas last year, Exxon Mobil appears to be demanding several times more than the assets' estimated fair market value, according to legal and oil...

Yemen.(COUNTRIES)(Nexen Inc.)(Brief article)
February 25, 2008... YEMEN -- Canadian independent Nexen is studying the use of enhanced oil recovery (EOR) on the country's mature Block 14, but would only implement such a program if it decides to ask for--and is granted--an extension to its concession that...

'Caracas effect' hits reserves bookings.
February 25, 2008... Oil companies reporting reserve replacement figures have for some years now talked about the "PSC effect"--when high oil prices force downward revisions to reserves associated with production sharing contracts--but in their 2007 accounts, the...

Beating the drums.(Marketview)
February 25, 2008... WASHINGTON -- US benchmark West Texas Intermediate (WTI) closed above $100/bbl for the first time ever on Feb. 19. A refinery fire in Texas caused gasoline to soar, helping lift crude by a blistering $4.51/bbl in one session to $100.01/bbl. WTI...

PIW market indicators.(petroleum intelligence weekly)(Statistical table)
February 25, 2008... PIW Market Indicators ($/barrel) Last 2 Weeks 4 Weeks Spot Crude Week Ago Ago Opec Basket $92.75 $90.23 $85.07 UK Brent...