Petroleum Intelligence Weekly articles from June 2007

Petroleum Intelligence Weekly archives from June 2007

Kovykta fears undercut BP's Libya deal.
June 4, 2007... You win some, you lose some. BP gained a major new upstream position through last week's gas exploration deal in Libya, but could soon lose a more valuable asset in Russia, where its grip on the Kovykta gas field license looks to have been...

Change in China spreads to domestic gas.
June 4, 2007... The balance of power between China's three state oil firms is shifting again, with the recent cooperation agreement signed by Sinopec and China National Offshore Oil Corp. (CNOOC) set to change the look of the domestic gas sector, currently...

Despite tumble, products still leading crude.
June 4, 2007... Crude and product futures took a big tumble early last week, suggesting that, for the moment at least, the US gasoline market may have reached a peak. But in the medium term, strong crack spreads, low product stocks and stricter environmental...

Canadians lose their shirt in 'Gas Vegas'.
June 4, 2007... The Bank of Montreal (BMO) has become the latest North American financial institution to be stung by huge losses from natural gas trading, confirming last week that losses from its Henry Hub futures and options trading portfolio, executed both...

Bumpy start for Nigeria's new president.(Olusegun Obasanjo )
June 4, 2007... New president, new start? Nigeria's President Umaru Yar'Adua, sworn in last week, has pledged to bring peace to the oil-rich Niger Delta, where production has collapsed amid killings, kidnappings, vandalism and unrest. On top of existing...

Private sector pours into Mideast refining.
June 4, 2007... With the regional economy thriving on the back of high oil prices and strong margins, money is once again pouring into Mideast refining. There are some new aspects to the latest boom, however, with investment opportunities in many projects...

Deepwater drives resurgence in Australian oil.
June 4, 2007... With big finds and a slew of new LNG developments, gas represents a growth sector for Australia. In oil, however, it's largely--and perhaps inaccurately--regarded as a mature province. High oil prices have encouraged the development of a string...

Corporate.(GENERAL)
June 4, 2007... CORPORATE -- The leading majors last year spent almost as much on share buybacks and dividend payouts as they did on capital projects, a fact that is sure to rile politicians who think the industry is not using enough of its windfall profits...

Drilling.(GENERAL)
June 4, 2007... DRILLING -- Exploration activity in Southeast Asia hit a 10-year high last year, according to consultants Wood Mackenzie, who believe the current boom could last through to 2010 provided there is sufficient access to rigs. Over 270 exploration...

Industry restructuring.(GENERAL)
June 4, 2007... INDUSTRY RESTRUCTURING -- Abu Dhabi National Energy Co. (Taqa) is to buy Canada's Northrock Resources from US-based parent Pogo Producing for $2 billion. The move adds to Taqa's rapidly growing resource base and raises much-needed cash for...

People.(GENERAL )(John Manzoni leaves British Petroleum Company PLC)(Brief article)
June 4, 2007... PEOPLE -- Embattled BP refining boss John Manzoni is leaving the UK supermajor to become the next president and chief executive of Canadian independent Talisman Energy. Manzoni, who has been criticized for his handling of safety management...

Pipelines.(GENERAL)
June 4, 2007... PIPELINES -- Neither of the proposed Arctic gas pipeline projects currently under consideration is economically viable under present cost estimates, Exxon Mobil Chief Executive Rex Tillerson has said. Exxon's 70% owned affiliate Imperial Oil is...

Argentina.(COUNTRIES)
June 4, 2007... ARGENTINA -- Gas exports to Chile resumed last week after two days of cuts, but further rationing is seen as unusually low temperatures have prompted a boost in demand. Temperatures fell below freezing in Argentina last week, resulting in high...

Caspian Sea Shah Deniz gas and condensate field.(COUNTRIES)
June 4, 2007... AZERBAIJAN -- BP has completed repair work to the first well on the Caspian Sea Shah Deniz gas and condensate field, which the company had been forced to shut down in January only weeks after it came on stream. The first well is adding 159...

Canada's Nations Petroleum.(COUNTRIES)
June 4, 2007... AZERBAIJAN -- Six months after selling its main asset in Kazakhstan, Canada's Nations Petroleum, formerly Nation's Energy, is putting its oil fields in Azerbaijan up for sale, industry sources say. The company is understood to be looking at...

China.(COUNTRIES)(Brief article)(Statistical data)
June 4, 2007... CHINA -- Crude imports in April were up 23.2% year-on-year at a record 3.62 million b/d, latest customs figures show. The rise has been attributed to oil firms' building commercial inventories, as well as possible filling of the country's third...

Iraq.(COUNTRIES)(Brief article)
June 4, 2007... IRAQ -- The government is taking steps to boost crude oil output by 40% over the next four years, according to Oil Minister Hussein al-Shahristani. The war-ravaged country, which currently produces 2.8 million b/d, wants to see production grow...

Malaysia.(COUNTRIES)
June 4, 2007... MALAYSIA -- Plans for a $7 billion crude pipeline to cut delivery times for shipments of Mideast oil to East Asia have advanced after promoter and operator Trans-Peninsula Petroleum (TPP) signed key partner agreements, although skepticism still...

Russia.(COUNTRIES)
June 4, 2007... RUSSIA -- State Rosneft will continue to attract international oil and gas companies to offshore projects in the country in order to minimize and manage risk, according to Rosneft President Sergei Bogdanchikov. But Rosneft will be able to...

Tunisia.(COUNTRIES)
June 4, 2007... TUNISIA -- Qatar has signed a memorandum of understanding (MOU) with the government to build a 150,000 b/d refinery on the North African country's east coast, according to state Qatar Petroleum (QP). Over the next six months a Qatari-Tunisian...

UAE.(COUNTRIES)
June 4, 2007... UAE -- The Dubai Mercantile Exchange (DME) received a boost from the Dubai government with the announcement that the tiny but influential oil producer will price its oil exports against the DME Oman futures contract. The announcement, just...

United States.(COUNTRIES)(cases against mergers of Western Refining Company L.P. and Giant Industries Inc.)(Brief article)
June 4, 2007... UNITED STATES -- A federal judge has denied the Federal Trade Commission's (FTC) request for a preliminary injunction to block Western Refining's $1.13 billion merger with Giant Industries. Western said that the court ruling supported its own...

Qatar leads growth in global LNG trade.
June 4, 2007... Qatar vaulted to top place among the world's LNG producers in 2006 on the back of a 20% rise in its deliveries, while volumes from each of the erstwhile top trio of Indonesia, Malaysia and Algeria shrank. Latest figures from the Paris-based...

The heat is off.(Marketview)
June 4, 2007... NEW YORK -- Typically, news that the key gasoline pipeline between the US Gulf Coast and Northeast had to close down would send the gasoline price soaring. Instead, US gasoline futures dropped on May 31 after Colonial Pipeline announced a day...

PIW market indicators.(Petroleum Intelligence Weekly )(Statistical table)
June 4, 2007... PIW Market Indicators 1 Week 2 Weeks 4 Weeks Spot Crude Ago Ago Ago Opec Basket $65.21 $66.39 $62.26 UK Brent (Dtd.) 68.46 70.77 63.99 UK B-wave...

Exxon fires warning on arctic gas.
June 11, 2007... The broadside fired by Exxon Mobil Chief Executive Rex Tillerson last month over the economic viability of the proposed Mackenzie Gas Project in Canada and the Alaska gas pipeline from the North Slope hit a number of intended targets, not least...

No clear winner from early DME-ICE skirmishes.
June 11, 2007... Ever keen to rush to judgment, oil traders have been trying to take stock of two new Mideast sour crude futures markets, the Dubai Mercantile Exchange (DME) Oman contract and the rival Dubai contract launched by the IntercontinentalExchange...

Investor-friendly approach works for Peru, Colombia.
June 11, 2007... Bolivia and Venezuela's tough approach to foreign energy investors may be making the headlines at the moment, but their policy of resource nationalism is not shared by all their Latin American neighbors. Peru and Colombia, for example, have...

Non-Opec lifts global oil supply in May.
June 11, 2007... Global oil supply remained ample in May despite the start of maintenance programs in the North Sea and seasonal declines in natural gas liquids output, according to preliminary soundings taken by PIW. Total supply hit 85.635 million barrels per...

Looming surplus puts tanker market on edge.
June 11, 2007... Looming oversupply is threatening to tip the global oil tanker market over the edge. Demand fundamentals remain relatively strong--of the 86 million barrels per day of total global oil demand, 50 million b/d is carried to market on tankers--but...

Tight rig market hits Indian drilling.
June 11, 2007... It's happened in Canadian oil sands, it's happened in the Gulf of Mexico, and now it's happening in India--tightness in the rig market and the oil-field services sector is hitting drilling plans, with the government forced to postpone its...

World tour beckons for Statoil, Hydro.
June 11, 2007... The planned merger between Norway's Statoil and Norsk Hydro was born as much out of necessity as opportunity, and the need for the alliance looks, if anything, greater now than it did when the deal was unveiled in December. Recent downgrades to...

Corporate.(GENERAL)
June 11, 2007... CORPORATE -- Global upstream spending is now expected to rise by 13% this year over 2006 levels, up from a projection of 9% growth made at the end of last year, according to the latest spending survey by Lehman Brothers. Worldwide spending is...

Formula prices.(GENERAL)(crude loading prices)(Brief article)
June 11, 2007... FORMULA PRICES -- Saudi Arabia effectively made its lighter crudes loading in July more expensive relative to their benchmarks in the three key markets of Asia, the US and Europe, and moved mostly in line with market developments. State Saudi...

Industry restructuring.(GENERAL)
June 11, 2007... INDUSTRY RESTRUCTURING -- Dominion Resources has sold a huge chunk of its US onshore gas assets to Loews and XTO Energy for a combined $6.5 billion. Loews is paying $4 billion for Dominion operations in the Permian Basin, Michigan and Alabama...

LNG.(GENERAL)
June 11, 2007... LNG -- Indonesia has agreed to renew term supplies to Japan, but concerns over meeting future domestic demand mean the new contracts could cover volumes of as little as 3 million tons/yr, or just one-quarter of current supplies under two term...

Argentina.(COUNTRIES)(forecast of Repsol-YPF S.A. )(Brief article)
June 11, 2007... ARGENTINA -- Recent corporate restructuring at Repsol YPF has fueled speculation that the company is preparing for the flotation of part of its YPF subsidiary later this year. Repsol has separated YPF into a standalone business unit, breaking...

Australia.(COUNTRIES)
June 11, 2007... AUSTRALIA -- The upstream sector should brace itself for a wave of consolidation, with private equity firms expected to play a growing role in oil sector acquisitions, according to global accounting firm Ernst & Young. "The recent Wandoo buy...

Azerbaijan.(COUNTRIES)(plans of State Oil Company of Azerbaijan )(Brief article)
June 11, 2007... AZERBAIJAN -- State Socar plans to open an export terminal at the Georgian Black Sea port of Kulevi in August, while also starting a feasibility study to look into building a 200,000 b/d refinery nearby, Socar Vice President Elshad Nassirov has...

Indonesia.(COUNTRIES)
June 11, 2007... INDONESIA -- With a view to reviving sliding oil production, Jakarta is increasing pressure on Exxon Mobil to fast-track 10,000 b/d of output from its Cepu field by late 2008. This is considerably earlier than the end-2009 or early 2010 Exxon...

Nigeria.(labour unions protest against rise in petroleum prices)(Brief article)
June 11, 2007... NIGERIA -- The rebel Movement for the Emancipation of the Niger Delta (Mend), which has brought chaos to the southern oil producing Niger Delta region, will suspend attacks on oil installations for one month to allow new President Umaru...

Crude exports fell by 117,000 b/d in May from April, despite a massive push to move oil abroad to take advantage of the lag in Moscow's export duties behind climbing global crude prices.(COUNTRIES)
June 11, 2007... RUSSIA -- Crude exports fell by 117,000 b/d in May from April, despite a massive push to move oil abroad to take advantage of the lag in Moscow's export duties behind climbing global crude prices. Total Russian exports dipped to 4.044 million...

France's Total and state Rosneft.(COUNTRIES)
June 11, 2007... RUSSIA -- It's not all bad news for foreign oil companies at the moment. France's Total and state Rosneft have resolved their differences over the Vankor acreage in East Siberia, and could soon be working together on other projects. Senior...

Syria.(COUNTRIES)(contracts of Royal Dutch-Shell PLC )(Brief article)
June 11, 2007... SYRIA -- Royal Dutch Shell has expanded its role in the country's hydrocarbons sector with the signing of an agreement to study gas production and distribution, including exports to Turkey and Europe, Deputy Oil Minister Hassan Zeinab has told...

Thailand.(COUNTRIES)
June 11, 2007... THAILAND -- State Petroleum Authority of Thailand (PTT) is expecting to import its first LNG cargo in early 2011 as the country races to meet burgeoning domestic gas demand. With current domestic demand of 3 Bcf/d forecast to reach 5 Bcf/d by...

United states.(COUNTRIES)(Brief article)
June 11, 2007... UNITED STATES -- BP has suffered the 19th fatality at its Texas City refinery in less than three years, with a contract worker killed by electrocution last week while working on an idled residual hydrotreater at the facility. BP said it will be...

TNK-BP turns attention to Uvat.
June 11, 2007... TNK-BP is pouring both a sizable amount of money and significant hopes for the future into the Uvat development in West Siberia, even as Russian officials appear to be closing in on a decision to remove another of the company's major projects,...

Stormy waters.(Marketview)(effects of Cyclone Gonu )
June 11, 2007... WASHINGTON/NEW YORK -- Oil markets had a scare last week, with Cyclone Gonu weakening as it headed toward land and shipping and production operations in the Mideast Gulf affected only minimally (p8). Nonetheless, that the biggest storm to hit...

Tropical storm hits Omani oil exports.
June 11, 2007... In an unexpected foreshadowing of what may lie in store for the Gulf of Mexico later this year, oil exports from Oman were knocked out last week as rough seas from downgraded Tropical Storm Gonukept tankers waiting to load crude and products....

PIW market indicators.(Petroleum Intelligence Weekly)(Statistical table)
June 11, 2007... PIW Market Indicators 1 Week 2 Weeks 4 Weeks Spot Crude Ago Ago Ago Opec Basket $65.91 $64.89 $64.55 UK Brent (Dtd.) 71.34 68.46 67.82 UK B-wave...

NOCs point to future of power-sharing.(national oil companies)
June 18, 2007... "A Shared Future" was the theme of last week's 12th Asia Oil and Gas conference, but from the tone of many of the speeches, that sharing will involve greater cooperation among an increasingly confident set of national oil companies (NOCs) at...

Support our ambitions, Putin tells Big Oil.
June 18, 2007... Money isn't the main thing Russia is looking for from international oil investors--with foreign direct investments of $150 billion and capital inflows of $60 billion so far this year, it doesn't need to be. Instead, President Vladimir Putin...

Cuban question resurfaces in the deepwater.
June 18, 2007... Cuba has been off-limits to US investors since the 1960s, but given the island's apparently limited geological potential, that hasn't been a big deal for US oil companies. All that may be about to change, however, with exploration drilling set...

Tamoil deal brings flash, cash to Libya.
June 18, 2007... It didn't come out of the blue, but the marriage of US private equity and the Socialist People's Libyan Arab Jamahiriya--better known as Libya--still warrants a leap of the imagination. The $3.4 billion purchase of a 65% stake in Libya's Tamoil...

Oil demand growth picks up after slow Q1.
June 18, 2007... Seasonally high temperatures helped crimp global oil demand growth during the past winter, and now high oil prices seem to be having a similar, if less marked, effect, with demand growth starting to pick up in April and May after a very slow...

Repsol grasps the nettle with YPF spin-off.
June 18, 2007... Repsol YPF is preparing for more corporate upheaval as it attempts to reverse its run of misfortunes. The proposed fix for the ailing Spanish major is the sale of a 45% stake in its YPF subsidiary through a mix of private sale and stock market...

Qatar's woes underline GTL's growing pains.
June 18, 2007... With Sasol and Qatar Petroleum (QP) finally admitting that problems at their Oryx gas-to-liquids (GTL) plant might delay full nameplate production until mid-2008, GTL's future is looking a little less rosy. The good news is that Oryx's...

Formula prices.(GENERAL)
June 18, 2007... FORMULA PRICES -- Mexico has kept the adjustment factor for July loadings unchanged for its key Maya grade going to the US, according to state Pemex. July-loading Isthmus for the US will effectively be 25cents/bbl more expensive than June, and...

Industry restructuring.(GENERAL)(Equator Exploration mergers with Camac Energy Holdings Ltd.)(Brief article)
June 18, 2007... INDUSTRY RESTRUCTURING -- Tiny African explorer Equator Exploration plans to merge with Camac Energy Holdings Ltd. (CEHL)--an affiliate of US-based Camac International--in a reverse takeover deal that will combine the companies' assets offshore...

LEA.(GENERAL)(Brief article)
June 18, 2007... IEA -- The International Energy Agency has raised its 2007 demand estimates and lowered forecast non-Opec supply while maintaining its call for Opec to provide more oil before the market swings into deficit--possibly as early as this month, the...

Reserves.(GENERAL)(Survey)(Brief article)
June 18, 2007... RESERVES -- BP's annual Statistical Review of World Energy has stuck with its usual practice and used Kuwait's official 101.5 billion bbl estimate for the country's end-2006 reserves, a much higher figure than the 55.8 billion bbl estimate...

Algeria.(COUNTRIES)(Brief article)
June 18, 2007... ALGERIA -- The government is ready to go to court over its efforts to raise the price of gas it supplies to Spain's Gas Natural (GN) through the Maghreb-Europe pipeline, Energy Minister Chakib Khelil has said. Algeria announced in March that it...

Azerbaijan.(COUNTRIES)(Brief article)
June 18, 2007... AZERBAIJAN -- International majors currently hovering around previously abandoned exploration blocks in the Caspian Sea will be paying great attention to results from the SDX-4 exploration well on BP's Shah Deniz development. BP has yet to...

Chile.(COUNTRIES)
June 18, 2007... CHILE -- The government has launched the country's first-ever exploration tender, offering onshore blocks in the southern Magallenes Basin as it seeks to diversify energy sources in the face of reduced gas exports from Argentina. Ten blocks...

India.(COUNTRIES)
June 18, 2007... INDIA -- Not content with its role as the country's biggest private-sector refiner, Reliance Industries is now looking at buying refining assets in the US and the Middle East (PIW May 14,p7). "There are takeover opportunities in the US and we...

Indonesia.(COUNTRIES)(Brief article)
June 18, 2007... INDONESIA -- State Pertamina is looking to acquire more upstream assets in Southeast Asia and elsewhere overseas to shore up its declining domestic production, Chief Executive Ari Soemarno said last week. Pertamina is currently in discussions...

Iran.(COUNTRIES)
June 18, 2007... IRAN -- Despite refinery investment problems at home, oil minister Seyed Kazem Vaziri Hamaneh has outlined ambitious plans for expanding the country's downstream presence in Asia, with refinery projects planned in Singapore, Malaysia,...

Nigeria.(COUNTRIES)
June 18, 2007... NIGERIA -- With no immediate prospect of restoring crude output shut in by civil unrest and sabotage, Royal Dutch Shell is slashing costs at its Shell Petroleum Development Co. of Nigeria (SPDC) affiliate, the company has confirmed. SPDC is...

Nigeria.(COUNTRIES)
June 18, 2007... NIGERIA -- Concerns over civil unrest have not prevented the partners in the Brass LNG scheme from taking a small step forward with the award of a project management contract to US engineering giant Bechtel. Bechtel had completed front-end...

Russia.(COUNTRIES)
June 18, 2007... RUSSIA -- Oleg Mitvol, deputy head of the country's environmental oversight board and Russia's self-ordained environmental champion, is compiling a dossier on the reserves of smaller producers, which could fall under increased pressure from the...

Sudan.(COUNTRIES)(High Tech Petroleum )(Brief article)
June 18, 2007... SUDAN -- A private local oil company recently hit with US sanctions is hawking a large stake in its biggest upstream asset to international investors. Khartoum-based High Tech Petroleum (HTP) had received expressions of interest from 17...

United Kingdom.(COUNTRIES)(Brief article)
June 18, 2007... UNITED KINGDOM -- It's another fortnight before Gordon Brown takes over as prime minister, but he is already facing calls to reduce the tax burden on North Sea operators, with BG warning that current tax rates pose a threat to future gas...

Talisman keen to settle tangguh row.(What's New Around the World)
June 18, 2007... Talisman Energy Chief Executive Jim Buckee was heading to Beijing last week to try to settle a legal spat with China National Offshore Oil Corp. (CNOOC) over a contested stake in Indonesia's Tangguh LNG project. The dispute involves one of...

Forties saga.(Marketview)
June 18, 2007... US benchmark Nymex light, sweet crude (WTI) has rattled around in a $2.90/bbl range between $67.42 and $64.52 over the past week at an average discount of $3.80 to Brent ICE crude futures. Compared with an average of $4.75 for the previous two...

Russia approves St. Petersburg commodities exchange.(Marketview)
June 18, 2007... Moscow has approved the establishment of a commodities exchange in St. Petersburg in the hopes of sparking Russian interest in trading energy contracts, such as the New York Mercantile Exchange's (Nymex's) moribund Russian export blend crude...

PIW market indicators.(Statistical table)
June 18, 2007... PIW Market Indicators 1 Week 2 Weeks 4 Weeks Spot Crude Ago Ago Ago Opec Basket $65.33 $66.27 $66.39 UK Brent (Dtd.) 68.97 71.30 70.77 UK B-wave...

Algeria sends mixed message on production.
June 25, 2007... Confusion still reigns over Algeria's ambitions for its oil production. Although PIW was told in November that the government had revised down its 2010 output target from 2 million barrels per day to 1.5 million-1.6 million b/d, Algerian...

US heating oil enjoys long, hot summer.
June 25, 2007... Given that temperatures are soaring on the US East Coast, traders shouldn't really be bidding up the price of heating oil, but that's exactly what's happening, with a mixture of fund speculation and pockets of tightness in middle distillate...

Apache sells expansion story to US investors.
June 25, 2007... Long respected for its acquisition smarts, US independent Apache wants the world to know that it is no less proficient with the drill bit than with the checkbook. In particular, it is drawing attention to the success of its overseas exploration...

IEA, Opec at odds on spare capacity.
June 25, 2007... Recent projections from the producing and consuming sides of the market have reached contrasting conclusions about the course of market fundamentals for the rest of this year, in large part because of their very different views of where Opec...

Iran wrestles with runaway gasoline demand.
June 25, 2007... Iran is struggling in its bid to restrain runaway gasoline consumption, which is rising at a rate of more than 10% per annum, making the 3.8 million barrel per day oil producer the world's second-largest gasoline importer behind the US. As the...

Deal-making pays off for ConocoPhillips.
June 25, 2007... ConocoPhillips has been one of the integrated oil sector's most innovative deal makers, buying rivals and striking unique alliances designed to give the US major growth opportunities across the petroleum business. At the heart of this strategy...

Angola's oil faces limits to growth.(Statistical data)
June 25, 2007... Angola led the world with a 14% rise in production last year and is aiming for 2 million barrels per day in 2008. On Jan. 1, it added its growing heft to Opec, raising the group's share of global output to around 35% and hold on proven reserves...

Robust returns draw new investors to energy.
June 25, 2007... One of the biggest upstream transactions so far this year involves a company few energy investors have ever heard of. But Loews, a New York-based conglomerate with interests in everything from cigarette makers to hotels, is typical of the new...