Petroleum Intelligence Weekly articles from July 2007

Petroleum Intelligence Weekly archives from July 2007

BP puts brave face on eviction from Kovykta.
July 2, 2007... Gazprom's removal of the TNK-BP joint venture from the giant Kovykta gas field in East Siberia looks at first sight like one of the more vicious examples of resource nationalism in the industry's recent history. BP and its Russian partners have...

Venezuela finds limits to majors' patience.
July 2, 2007... Venezuela has become the first major producer to push resource nationalism to the limit, with its decision to take majority control of four multibillion-dollar heavy oil projects in the Orinoco River Basin ultimately proving too much for Exxon...

Japan's refiners address the need for change.
July 2, 2007... Japanese refiners have released their 2006-07 financial results over the past few weeks, and they haven't made pretty reading. Nippon Oil, the country's largest refiner, saw operating income from refining plunge 85%, almost matched by an 84%...

FSU states key to 2007 non-Opec growth.(non-organization of the petroleum exporting countries)(former Soviet Union)
July 2, 2007... Non-Opec supply is often the toughest nut to crack in projecting global oil supply and demand, and 2007 has proved no exception to that trend. PIW's sister publication, Oil Market Intelligence, has a comparatively optimistic view of 2007...

Exxon adjusts its views, but retains doubts.
July 2, 2007... Environmental campaigners love to hate Exxon Mobil, depicting the world's largest publicly traded oil company as a dinosaur, stuck in denial about the impact of rising energy consumption on the air, land and climate. While its rivals have...

New Mideast firms plan next spending spree.
July 2, 2007... The Mideast's new breed of oil companies--conceived a few years ago to be more versatile international investors than the region's state giants--continue to spend billions on oil and gas assets around the globe. Having poured their start-up...

Obstacle course awaits new US refineries.
July 2, 2007... Plans to build the US' first new oil refinery in more than 30 years have been met with the usual level of skepticism by the industry, and with good reason--the permitting process is daunting, there's a shortage of skilled labor, and, most...

Opec.(GENERAL)
July 2, 2007... OPEC -- Governments promoting biofuels and greater fuel efficiency are only adding to future oil demand insecurity, which is no incentive for refiners and oil producers to invest in new capacity, Opec says in its new World Oil Outlook, covering...

Pipelines.(GENERAL)
July 2, 2007... PIPELINES -- Russia's Gazprom and Italy's Eni have agreed to begin work on a 900 km gas pipeline to run under the Black Sea to Bulgaria and on to Europe, avoiding troublesome transit countries, but at a very high price. Gazprom deputy head...

Reserves.(GENERAL)
July 2, 2007... RESERVES -- The leading international majors failed to replace reserves for the third year in a row in 2006, underlining the problems they face from resource nationalism and a tight drilling rig market. Excluding acquisitions and divestitures,...

Canada.(COUNTRIES)
July 2, 2007... CANADA -- Just a few weeks after casting doubts on the viability of the proposed Mackenzie Gas Project, Exxon Mobil is preparing to exit another gas development. Exxon and partner Royal Dutch Shell are looking to sell their combined 18% stake...

The chairman of listed Sinopec Corp., Chen Tonghai, has resigned two years ahead of schedule, citing "personal reasons.".(COUNTRIES)
July 2, 2007... CHINA -- The chairman of listed Sinopec Corp., Chen Tonghai, has resigned two years ahead of schedule, citing "personal reasons." Local press reports had suggested he was under investigation for "economic irregularities" and "serious breaches...

Crude imports in May totaled 3.07 million b/d, up 4.6% year-on-year.(COUNTRIES)
July 2, 2007... CHINA -- Crude imports in May totaled 3.07 million b/d, up 4.6% year-on-year. Angola and Iran were the top two suppliers, pushing Saudi Arabia into the third spot. Mideast imports made up 40% of total volumes, while imports from Africa totaled...

Equatorial Guinea.(COUNTRIES)
July 2, 2007... EQUATORIAL GUINEA -- Australian junior Roc Oil has postponed plans to drill a deepwater well on Block H in the Rio Muni Basin, pending the outcome of a dispute with US independent Pioneer Natural Resources. The well was penciled in for drilling...

Iraq.(COUNTRIES)(draft petroleum law)(Brief article)
July 2, 2007... IRAQ -- The country's draft petroleum law is still waiting for a green light from Kurdish officials following changes to the text introduced by the state Shura Council, a panel of judges tasked with reviewing the legal language of the draft,...

Mexico.(COUNTRIES)(Pemex)(Brief article)
July 2, 2007... MEXICO -- Fiscal reforms proposed by President Felipe Calderon could lighten state Pemex's massive tax burden, but analysts have warned that the company's real difficulties go deeper than a simple lack of cash. The reforms aim to raise...

Nigeria.(COUNTRIES)(production started at Royal Dutch-Shell PLC)(Brief article)
July 2, 2007... NIGERIA -- Royal Dutch Shell has restarted output in the western Niger Delta and hopes to beef up exports next month, mainly from storage. The company is currently producing 38,000 b/d, but has yet to commit to a timetable for returning to full...

Russia.(COUNTRIES)
July 2, 2007... RUSSIA -- State Gazprom has resumed talks with German utility E.On on jointly developing the huge West Siberian Yuzhno-Russkoye gas field, which is the designated first source of gas for the Nord Stream pipeline to run directly under the Baltic...

South Korea.(COUNTRIES)(crude oil imports)(Brief article)
July 2, 2007... SOUTH KOREA -- Crude imports in May rose less than 1% from the previous year to total 2.52 million b/d, according to the latest official data. Imports from Saudi Arabia were down slightly to 719,000 b/d, while volumes from the UAE fell 19% to...

Turkey.(COUNTRIES)(Turkish Petroleum Corporation)(Brief article)
July 2, 2007... TURKEY -- State Turkish Petroleum (TPAO) is expecting bids by the end of August for a new licensing round covering several blocks in the Mediterranean, but avoiding disputed waters close to Cyprus. The blocks on offer are within a 12 mile zone...

United States.(COUNTRIES)
July 2, 2007... UNITED STATES -- Royal Dutch Shell and state Saudi Aramco are likely to proceed with a 300,000 b/d expansion of their 285,000 b/d Motiva refinery at Port Arthur, Texas, but the final go-ahead will depend on the project's cost. There was now "a...

Yemen.(COUNTRIES)
July 2, 2007... YEMEN -- The Total-led Yemen LNG (YLNG) project has secured a deal to receive source gas from state Safer Exploration & Production Operations, a breakthrough which should allow it to move forward with attempts to tie up $2.2 billion of project...

OMV move puts Mol on the Spot.(What's New Around the World)
July 2, 2007... Austria's OMV has spent [euro] 1 billion ($1.35 billion) on almost doubling its stake in Mol to 18.6% and begun pursuing a "friendly" merger with the Hungarian firm in an attempt to solidify the company's supremacy in Central Europe's oil and...

Atlantic plays.(Marketview)(supply and demand of crude oil)
July 2, 2007... NEW YORK -- Why is the spread between US benchmark West Texas Intermediate (WTI) and European marker Brent coming in so rapidly--from $6.50/bbl on May 24 to 70 cents during trade on Jun. 28? And why is WTI now nearly trading in back-wardation,...

PIW market indicators.(Petroleum Intelligence Weekly)(Statistical table)
July 2, 2007... PIW Market Indicators 1 Week 2 Weeks 4 Weeks Spot Crude Ago Ago Ago Opec Basket $67.33 $67.74 $66.27 UK Brent (Dtd.) 71.58 72.06 71.30 UK B-wave...

Kovykta, Orinoco raise questions of strategy.
July 9, 2007... The determination of major oil and gas producing nations such as Russia and Venezuela to reassert state control over their natural resources raises intriguing questions about which countries have found the most effective approach for getting...

Iraq inches towards legal framework for oil.
July 9, 2007... Slowly, and not without setbacks, the authorities in Iraq are edging toward establishing a legal framework for the country's oil and gas resources. But depths of patience are required, as announcements of progress--like last week's premature...

Kazakh champion eyes growth at home and abroad.
July 9, 2007... Empowered by rising production and high oil prices, Kazakhstan's national energy champion Kazmunaigas (KMG) is hungry for new assets both at home and abroad. The company's upstream affiliate, KMG E & P, which raised more than $2 billion from an...

New specs play havoc with US utilization rates.(petroleum refineries)
July 9, 2007... Opec output cuts and geopolitical uncertainties have certainly played their part, but one of the main factors behind the recent strength in oil markets has also been the abnormally low level of refinery utilization in the US, which has brought...

Abu Dhabi rethinks sour gas ambitions.
July 9, 2007... Abu Dhabi is rethinking ambitious plans for developing technically challenging sour gas deposits in its Shah and Bab fields after initial bids from international oil companies highlighted the cost and complexity of the proposed project. State...

China's wholesale reforms make little difference.
July 9, 2007... It's been six months since China liberalized its wholesale products market, but it's hard to tell if anything's changed. Of the 11 new companies issued with wholesale licenses since January, seven are subsidiaries of state China National...

Maintenance hits global supply in June.
July 9, 2007... Global oil supply lost a little ground in June as maintenance activity slashed Norway's output by more than 400,000 barrels per day compared with May and a similarly heavy schedule of work on upstream infrastructure shaved about 170,000 b/d...

Industry restructuring.(GENERAL)
July 9, 2007... INDUSTRY RESTRUCTURING -- Houston-based master limited partnership Linn Energy has agreed to pay $2.05 billion for the US Midcontinent exploration and production assets of Dominion Resources. The deal is by far the largest that Linn has...

Opec.(GENERAL)
July 9, 2007... OPEC -- Venezuela has given a boost to Iran, pledging to sell gasoline to its Opec ally as part of a package of cooperation that aims to strengthen the ties between the two anti-US producers. Iran is currently struggling to meet soaring...

Angola.(COUNTRIES)(Brief article)
July 9, 2007... ANGOLA -- The Jun. 18 start-up of Total's deepwater Rosa oil field should allow the French major to maintain production from its prolific Block 17 at around 500,000 b/d. The block is one of four that have transformed the country into the...

Argentina.(COUNTRIES)(Brief article)
July 9, 2007... ARGENTINA -- Repsol YPF may have to wait until next year to complete the sale of a 25% stake in its local YPF affiliate, according to the stake's likely buyer, banking magnate Enrique Eskenazi. Repsol has been looking to reduce its exposure to...

India.(COUNTRIES)
July 9, 2007... INDIA -- Norsk Hydro's international expansion efforts have received a boost from a wide-ranging upstream agreement with state Oil and Natural Gas Corp. (ONGC) which will see the Norwegian firm take a stake of up to 20% in the prolific offshore...

Indonesia.(COUNTRIES)
July 9, 2007... INDONESIA -- State Pertamina may soon take over operatorship of the Natuna D-Alpha block from Exxon Mobil and is expected to usher in a new consortium of foreign oil companies to develop its huge but C[O.sub.2]-laden gas reserves. The new...

Japan.(COUNTRIES)(Brief article)
July 9, 2007... JAPAN -- Crude imports in May fell 11% from the previous year to 3.45 million b/d. Saudi Arabia was in the top spot with 1.01 million b/d, down 11% from May 2006. Oman volumes more than doubled to 123,000, b/d while there were significant...

Kuwait.(COUNTRIES)(Brief article)
July 9, 2007... KUWAIT -- Electricity and Water Minister Mohammad al-Olaim has been named as the country's acting oil minister following the resignation of Sheikh Ali al-Jarrah, who decided to stand down after being questioned by members of parliament over...

Norway.(COUNTRIES)(Brief article)
July 9, 2007... NORWAY -- BP has submitted a $5.1 billion development plan for the Skarv and Idun fields in the Norwegian Sea, but is now expecting to bring the fields on stream in 2011 rather than 2010. BP's plan involves a floating production vessel and an...

State Rosneft.(COUNTRIES)
July 9, 2007... RUSSIA -- State Rosneft has agreed to sell a 50% stake in its Tomskneft production unit, acquired during recent liquidation auctions for bankrupt oil major Yukos, to state bank Vnesheconombank. Rosneft gave few details other than to say the...

Crude exports plummeted to 3.726 million b/d in June from 4.044 million b/d the month.(COUNTRIES)
July 9, 2007... RUSSIA -- Crude exports plummeted to 3.726 million b/d in June from 4.044 million b/d the month before as higher export duties reduced incentives for shipping crude abroad. Transshipments from Kazakhstan, Azerbaijan and Belarus were slightly...

Saudi Arabia.(COUNTRIES)
July 9, 2007... SAUDI ARABIA -- A total of 43 international oil companies have been prequalified for the proposed 400,000 b/d Jizan refinery on the kingdom's remote west coast, but the oil ministry expects to delay issuing formal tender documents until after...

Sudan.(COUNTRIES)
July 9, 2007... SUDAN -- China National Petroleum Corp. (CNPC) has signed a six-year exploration agreement for Block 13 offshore northern Sudan with state Sudapet and Indonesia's state Pertamina. CNPC already has a 35% stake in Block 15, which lies to the...

United Kingdom.(COUNTRIES)(decommissioning liability of United Kingdom Offshore Operations Association)(Brief article)
July 9, 2007... UNITED KINGDOM -- Laws governing liability for decommissioning North Sea oil and gas infrastructure need to reviewed in order to reinvigorate asset trading in the region, according to industry lobby group Oil and Gas UK. The group, formerly...

United States.(COUNTRIES)(Minerals Management Service and the National Marine Mammal Laboratory study of Berlin sea)(Brief article)
July 9, 2007... UNITED STATES -- The opening of the Bering Sea to oil and gas drilling could hinge on a study into the habits and habitats of the North Pacific right whale. The $5 million study by the federal Minerals Management Service and the National Marine...

Correction.(Correction notice)
July 9, 2007... CORRECTION -- In the "FSU States Key To 2007 Non-Opec Growth" story in last week's PIW, there was an erroneous reference to the BP-Eni Karachaganak gas-condensate field (PIW Jul.2,p3). The correct reference should of course have been to the...

Fresh trouble looms as Nigerian truce ends.(What's New Around the World)(militant attacks)(Brief article)
July 9, 2007... Oil companies are readying themselves for more disruption in the Niger Delta after militants declined to renew a truce with the government that expired Jul. 3. One unidentified group seized five foreign hostages from a drilling rig operated by...

Up and away.(Marketview)
July 9, 2007... Crude oil futures hit new 10-month highs last week with fundamentals and technicals pairing up to push prices and sentiment higher. August Brent futures traded in a $4/bbl range from a $70.32 low on Jun. 28 to a $74.32 high on Jul. 5, while the...

US LNG imports hit record level in Q2.
July 9, 2007... The US saw its heftiest-ever level of LNG imports in the second quarter, with 6 million tons entering the country, equivalent to 3.2 Bcf/d, US Department of Energy data and industry estimates indicate. In fact, second-quarter import rates...

PIW market indicators.(Petroleum Intelligence Weekly)(Statistical table)
July 9, 2007... PIW Market Indicators 1 Week 2 Weeks 4 Weeks Spot Crude Ago Ago Ago Opec Basket $69.31 $67.49 $66.02 UK Brent (Dtd.) 73.87 71.96 70.08 UK B-wave...

Gazprom, Rosneft leave investors seeing double.
July 16, 2007... The cooperation agreement signed last week by Rosneft and Royal Dutch Shell highlights one of the peculiar challenges facing foreign investors in Russia--how to maintain good relations with both Rosneft and the country's other state energy...

Forward curve tells a tale of tightness.
July 16, 2007... The current structure of the forward price curve for crude oil tells a story of tightness stretching all the way out to 2015, but the curve's profile has changed dramatically over the past six months. Compared with January, the flat price for...

Mol maintains resistance to OMV's overtures.
July 16, 2007... The prospects for a swift merger agreement between Austria's OMV and Hungary's Mol are receding, with Mol rejecting OMV's offer of "friendly negotiations" in favor of pursuing its own strategy. OMV is unlikely to give up on its Hungarian...

Asian refiners keen to top up their Tan.
July 16, 2007... Not only is the world's crude slate getting heavier, it's also getting more acidic, with major new fields in West Africa, Sudan, Brazil and China all producing acidic--or high Total Acid Number (Tan)--crude. Such feedstock is very difficult for...

MLPs become serious players in upstream M & A.
July 16, 2007... Master limited partnerships (MLPs) are starting to emerge as important players in the US market for oil and gas property deals. Anybody who still needs convincing need only look at the recent $2 billion purchase of Dominion Resources'...

Big oil learns how to grow its own fuel.
July 16, 2007... With high oil prices and concerns over energy security and the environment prompting governments in many consuming countries to mandate greater use of biofuels in transportation, oil companies are rethinking where green fuels fit into their...

Deepwater Gulf set for rebound, storms permitting.
July 16, 2007... The long-term pace of decline in US oil production will be largely determined by the deepwater Gulf of Mexico, but uncertainties over the timing of new field start-ups and mature-field decline rates, not to mention the vagaries of the weather,...

Mexico.(GENERAL)
July 16, 2007... FORMULA PRICES -- Mexico has widened the adjustment factor for August loadings for its key Maya grade going to the US by 25 cents, according to state Pemex. August-loading Isthmus for the US will effectively be 20 cents/bbl cheaper than July,...

Saudi Arabia.(GENERAL)(Brief article)
July 16, 2007... FORMULA PRICES -- Saudi Arabia made its August loading Arab Extra Light effectively 40 cents/bbl cheaper going to Asia, but the heavier grades Arab Medium and Arab Heavy more expensive by 30 cents and 50 cents, respectively. All grades to the...

Algeria.(COUNTRIES)
July 16, 2007... ALGERIA -- State-owned Sonatrach has awarded a $2.8 billion, cost-reimbursable engineering, procurement and construction contract to Halliburton subsidiary KBR for a new 4.5 million ton/yr LNG export train at the country's Skikda complex. The...

China.(COUNTRIES)
July 16, 2007... CHINA -- Beijing has imposed a 5% duty on crude exported by foreign companies from fields offshore China, the country's customs and finance ministries said last week. It will be effective from next month, but existing export contracts will be...

Iran.(COUNTRIES)(Brief article)
July 16, 2007... IRAN -- The massive Azadegan field has finally come on stream at an initial rate of around 3,000 b/d, according to the country's oil ministry. Azadegan, in southwest Khuzestan province near the Iraqi border, has estimated in-place reserves of...

Kuwait.(COUNTRIES)
July 16, 2007... KUWAIT -- The debate over the country's oil reserves bubbled to the surface again last week when deputies in parliament challenged the government to disclose the correct figure. After a closed-door session with lawmakers in which a variety of...

Kuwait.(COUNTRIES)
July 16, 2007... KUWAIT -- The relaunch of the Al-Zour refinery project has received a strong initial response from contractors, with more than 30 international firms submitting applications to be prequalified for the 615,000 b/d project's engineering,...

Libya.(COUNTRIES)(Brief article)
July 16, 2007... LIBYA -- Tripoli continues to buck the global trend on access to upstream opportunities with the launch last week of its fourth licensing round since 2004. International companies are invited to bid on 12 prospective gas areas covering 41...

Malaysia.(COUNTRIES)(Brief article)
July 16, 2007... MALAYSIA -- Prime Minister Abdullah Ahmad Badawi said his government has agreed "in principle" to a private-sector proposal for a crude pipeline to be built across mainland northern Malaysia, linking the Gulf of Thailand and the South China...

New Zealand.(COUNTRIES)
July 16, 2007... NEW ZEALAND -- The first awards in the long-awaited Great South Basin licensing round saw blocks won by Exxon Mobil, Austria's OMV, Thailand's PTT Exploration and Production (PTTEP) and Japanese trading house Mitsui. The government expects...

Nigeria.(COUNTRIES)
July 16, 2007... NIGERIA -- President Umaru Yar'Adua has said he wants to revamp state Nigerian National Petroleum Corp. (NNPC) to make it more transparent and dynamic so it can raise funds on the international capital markets. But such fund-raising would...

After countless delays, Gazprom has chosen France's Total to help it to develop the massive Shtokman gas field in the Barents Sea.(COUNTRIES)
July 16, 2007... RUSSIA -- After countless delays, Gazprom has chosen France's Total to help it to develop the massive Shtokman gas field in the Barents Sea. Unfortunately for Total, however, the terms of the agreement appear unlikely to give the French major...

Regional prosecutors on the Pacific island of Sakhalin.(COUNTRIES)
July 16, 2007... RUSSIA -- Regional prosecutors on the Pacific island of Sakhalin have started criminal proceedings against Sakhalin-2 construction contractor Starstroi, reviving environmental concerns that seemed to have disappeared seven months ago with state...

Sudan.(COUNTRIES)(Brief article)
July 16, 2007... SUDAN -- Efforts to kick-start independent oil exploration in the newly autonomous south have been dealt a blow, with the National Petroleum Commission (NPC) announcing that it plans to expel UK independent White Nile Petroleum from a disputed...

United States.(COUNTRIES)(Brief article)
July 16, 2007... UNITED STATES -- The head of the Chemical Safety and Hazard Investigation Board (CSB) has urged Congress to expand the federal watchdog's ability to probe the cause of incidents at oil refineries and chemical plants. The trend in the chemical...

IEA sees tests ahead for world oil market.(What's New Around the World)(International Energy Agency )(Brief article)
July 16, 2007... World oil markets will be severely tested over the next five years as oil demand grows and non-Opec supply growth struggles to keep pace, the International Energy Agency (IEA) has predicted in its latest Midterm Oil Market Report. Demand...

More money.(Marketview)
July 16, 2007... WASHINGTON -- After rising about 10% in the past month, US refined product prices took a dive following the release of relatively bearish inventory data from the US government on Jul. 11 that showed increases in both distillate and gasoline...

Canadian gas exports to US set for steep decline.
July 16, 2007... The long-term outlook for Canadian gas exports was bad even before Exxon Mobil declared that the planned Mackenzie Gas Project was uneconomic, but the latest projections look grimmer still, according to Calgary-based consultants Ziff Energy...

PIW market indicators.(Statistical table)
July 16, 2007... PIW Market Indicators 1 Week 2 Weeks 4 Weeks Spot Crude Ago Ago Ago Opec Basket $71.62 $69.86 $67.74 UK Brent (Dtd.) 77.60 74.98 72.06 UK B-wave...

Pressure builds for drop in global stocks.
July 23, 2007... The health of the oil market for the remainder of 2007 will be largely measured by changes in inventory levels. Record-high oil prices indicate that most investors have decided that stocks now are tight, but current inventory numbers tell a...

Rising LNG imports end US isolation.
July 23, 2007... The isolation of regional natural gas markets is starting to give way to the forces of globalization, as arbitrage trade movements in the LNG sector for the first time demonstrably pull down prices in the once starkly independent US gas market....

Tight fundamentals send physical prices over $80.
July 23, 2007... It's not yet apparent from the futures screen, but oil prices are hitting record levels, selling in some cases for more than $80 per barrel. A relatively local issue--production problems in the North Sea--has been the key cause of this physical...

US oil execs offer bleak supply outlook.
July 23, 2007... Last week's report from the US National Petroleum Council (NPC) sees Big Oil admit that con-ventional oil and gas will probably not be able to keep pace with surging worldwide energy demand between now and 2030, suggesting that high prices are...

Market access key to Total's Shtokman role.
July 23, 2007... With the intriguing framework agreement bringing France's Total into Gazprom's huge Shtokman gas development in the Barents Sea, Moscow has, to an extent, departed from its growing drive to reassert control over Russia's vast energy resources....

Economic issues derail North Sea carbon capture.
July 23, 2007... The carbon capture and storage (CCS) lobby has suffered a double blow this year with the scrapping of BP's Peterhead sequestration project in Scotland and the decision by Royal Dutch Shell and Statoil to shelve plans for carbon dioxide-based...