Petroleum Intelligence Weekly articles from June 2008

Petroleum Intelligence Weekly archives from June 2008

World economy passes the $130 oil test.
June 2, 2008... How much more difficult is $130 per barrel oil for the world economy than $100 oil or $70 oil? More cracks are starting to show, certainly, but there hasn't yet been an implosion. On their own, oil prices at these levels are not enough to cause...

High oil prices no threat to China's subsidies.
June 2, 2008... With some Asian economies struggling with $130 per barrel oil and considering scrapping their fuel subsidies, all eyes are on China. The argument is that Beijing has been propping up global oil demand by maintaining retail prices for gasoline,...

Old friends await Gazprom in North America.
June 2, 2008... Gazprom's pending acquisition of an equity stake in the Rabaska LNG import terminal near Montreal in Canada and its role as supplier to the 500 million cubic foot per day facility may be only its first foray into the North American natural gas...

Service sector in favor with private equity.
June 2, 2008... Although facing significantly reduced deal flow as access to debt funding has tightened with the global credit crunch, the private equity sector appears to have lost none of its appetite for energy and in particular the oil-field services...

Majors pay up to stabilize Nigerian JVs.
June 2, 2008... Nigeria's upstream joint ventures with international oil companies should be on a surer financial footing after state Nigerian National Petroleum Corp. (NNPC) signed deals worth more than $6 billion last month with three of its foreign...

Mideast minnows fight to stay afloat.
June 2, 2008... The Middle East's new small and medium-sized oil firms have been one of the success stories of the past few years, but these companies are finding life in a high-oil-price environment increasingly tough. Firms such as Kuwait Energy and the...

Taxes, nationalism leave Russian output limping.
June 2, 2008... After surging strongly through most of the early years of this decade, Russian oil production has gone into reverse, with volumes dropping almost 1% year-on-year during the first four months of 2008 (PIW Apr.21,p1). A general slowdown had been...

Wanda Jablonski: Queen of the Oil Club.(Reprint)
June 2, 2008... Former PIW reporter Anna Rubino has written the first-ever biography of Wanda Jablonski, the founder of PIW. Queen of the Oil Club: The Intrepid Wanda Jablonski and the Power of Information, published this month by Beacon Press, is based on...

Corporate.(GENERAL)(Rex Tillerson will retain his positions in Exxon Mobil Corp.)(Brief article)
June 2, 2008... CORPORATE -- Rex Tillerson will retain his positions as both chairman and chief executive of Exxon Mobil after shareholders rejected a resolution calling for the separation of the two jobs. Despite a heavy campaign mounted by members of the...

OPEC.(GENERAL)
June 2, 2008... OPEC -- Indonesian Energy Minister Purnomo Yusgiantoro has confirmed that the country will quit the oil exporters' organization, possibly when its membership lapses at the end of the year. Purnomo said the exit documents informing Opec of...

Brazil.(COUNTRIES)
June 2, 2008... BRAZIL -- State-controlled Petrobras is to delay production testing on two subsalt oil discoveries in the offshore Santos Basin because of an upcoming deadline for drilling on other prospective subsalt acreage, underlining how the company's...

Germany.(COUNTRIES)
June 2, 2008... GERMANY -- The country's federal antitrust regulator has launched an inquiry into the motor fuel retail sector, prompted, it said, by numerous complaints not just from consumers but also from independent filling stations. The Bundeskartellamt...

India.(COUNTRIES)
June 2, 2008... INDIA -- With a tax row already threatening to undermine the country's forthcoming licensing round, a family feud now looks likely to delay first gas from the prolific KG-D6 Block (PIW JUN02,p3). Reliance Industries' plans to start producing...

Indonesia.(COUNTRIES)
June 2, 2008... INDONESIA -- Jakarta has awarded five exploration blocks to several major foreign oil companies, including Italy's Eni, China National Offshore Oil Corp. (CNOOC) and Malaysia's state Petronas, according to the country's oil and gas directorate,...

Iran.(COUNTRIES)
June 2, 2008... IRAN -- The volumes of Iranian crude in floating storage will start falling this month as customers who deferred liftings in April and May because of refinery turnarounds, particularly in Asia, begin increasing nominations, a senior Iranian oil...

Iran.(COUNTRIES)
June 2, 2008... IRAN -- Bahrain and Dubai are both negotiating schemes to import some 1 Bcf/d of Iranian gas under long-term agreements that would involve either investing in buyback deals to develop the gas or providing financing for such schemes, senior...

Italy.(COUNTRIES)(Gaz de France signed a agreement with Hoegh LNG)(Brief article)
June 2, 2008... ITALY -- Gaz de France (GDF) has agreed terms for the development of its Triton LNG import project off the country's Adriatic coast, targeted to start operation in late 2012. The French firm has signed a joint development agreement with...

Mexico.(COUNTRIES)(Brief article)
June 2, 2008... MEXICO -- Oil production dropped to 2.767 million b/d in April and exports fell sharply to 1.439 million b/d, according to state Pemex. Oil production was down for the fourth consecutive month, further eroding the country's chances of reaching...

Qatar.(COUNTRIES)
June 2, 2008... QATAR -- Doha is working to sign binding sales agreements with China National Offshore Oil Corp. (CNOOC) and Thailand's state PTT for long-term LNG supplies, but other gas-hungry suitors should expect to be turned away unless they are prepared...

Russia.(COUNTRIES)(executives of TNK-BP have to leave the country when their visas expire)(Brief article)
June 2, 2008... RUSSIA -- All senior expatriate managers at TNK-BP, including Chief Executive Robert Dudley, will have to leave the country when their visas expire on Jul. 30 unless there is a last-minute reprieve, as relations between the joint venture's UK...

Russia.(COUNTRIES)
June 2, 2008... RUSSIA -- Exxon Mobil's plans for offshore development in the Black Sea and on the country's Pacific shelf seem to be suffering as a result of politics and a lack of legal clarity. The US supermajor has canceled a contract with Norway's Beta...

United States.(COUNTRIES)(XTO Energy Inc. acquired Headington Oil )(Brief article)
June 2, 2008... UNITED STATES -- XTO Energy has checked off the last remaining item on its wish list of North American shale plays courtesy of a $1.85 billion deal with privately held Headington Oil to acquire a large swath of acreage in the Bakken Shale oil...

Spending soars in Aramco's latest five-year plan.(What's New Around the World)
June 2, 2008... State-owned Saudi Aramco expects to spend $129 billion on oil, refining and petrochemical projects between 2009 and 2013, a massive 40% rise from the $90 billion envisaged in Aramco's five-year program for the 2008-12 period. Aramco's...

Demanding answers.(Marketview)
June 2, 2008... NEW YORK -- It has always mattered a lot where oil supply comes from, but until last week, it didn't seem to matter where oil demand came from, only that there was a lot of it at the global level and that it was growing. Increasingly obvious...

Asian governments wrestle with fuel price issue.
June 2, 2008... High oil prices are prompting governments across Asia to either raise fuel prices or devise ways of cushioning their impact on state budgets. Following Indonesia's move to raise pump prices by about 30% last month, Bangladesh and Sri Lanka...

PIW market indicators.(Petroleum Intelligence Weekly)(Statistical table)
June 2, 2008... PIW Market Indicators ($/barrel) May 26- May 19- Apr. 28- Spot Crude May 28 May 23 May 2 Opec Basket $125.18 $123.73 $108.34 UK Brent (Dtd.) ...

Demand growth vulnerable to subsidy shift.
June 9, 2008... Fuel subsidies in the developing world have had a remarkable social and economic impact, insulating ordinary consumers from much of the run-up in energy prices, supporting economic growth and underpinning oil demand, albeit at considerable cost...

Plateau output may be just 12 years away.
June 9, 2008... A plateau in world oil production could be just 12 years and 8 million barrels per day away, according to the latest disquieting analysis from France's Total, whose chief executive, Christophe de Margerie, told a workshop at the company's Paris...

BP needs to weather storm over TNK-BP.
June 9, 2008... If it can weather the current storm enveloping its TNK-BP joint venture, BP could still be better placed to prosper in Russia than many of its peers, thanks to its solid ties to the country's state energy giants. It invested $1 billion in...

LNG players eye Australia's coal fields.
June 9, 2008... Canada's oil sands have been one of the hottest plays of the past few years, but the next big thing in unconventional oil and gas could lie some 8,000 miles away in Australia, where interest in the LNG potential of Queensland's coalbed methane...

Shell takes initiative in Mideast gas.(Royal Dutch-Shell PLC)
June 9, 2008... Royal Dutch Shell is positioning itself as the Middle East's major regional gas marketer, pursuing unconventional deals and offering to establish joint ventures with local entities that will guarantee it access to reserves. Having already...

Big oil survives its annual inspection.
June 9, 2008... Annual shareholder meetings can be volatile affairs, especially when they're held by high-profile, high-profit oil companies, and in recent months BP, Royal Dutch Shell and, most recently, Exxon Mobil have found themselves under fire from...

Growing needs put pressure on oil storage.
June 9, 2008... With oil supply straining to keep up with demand, the industry's infrastructure--oil fields, refineries, drilling rigs, pipelines--is at full stretch. It's the same story for storage facilities, which are struggling to keep up with consuming...

Arctic.(GENERAL)(Brief article)
June 9, 2008... ARCTIC -- Officials from the five countries bordering the Arctic Ocean--Canada, Denmark, Norway, Russia and the US--have pledged to honor existing international legislation and work to defuse tensions as they move to stake claims to the...

Corporate.(GENERAL)
June 9, 2008... CORPORATE -- BP has signed four-year engineering agreements with three companies--the UK's Amec, Australia's WorleyParsons and Texas-based KBR--to provide engineering and project management services to the group's offshore developments. No...

LNG.(GENERAL)
June 9, 2008... LNG -- South America has entered the world of international LNG trade, with Argentina receiving its first cargo at the end of May and Brazil set to take its first delivery next month. But the advent of LNG imports looks certain to put upward...

Australia.(COUNTRIES)
June 9, 2008... AUSTRALIA -- A Jun. 3 explosion at the Apache Energy-operated Varanus Island oil and gas processing hub has cut Western Australia's gas supply by 30%, impacting some of the world's biggest mining operations. Apache said it was investigating the...

Bolivia.(COUNTRIES)
June 9, 2008... BOLIVIA -- The country's leftist government has nationalized gas pipeline company Transredes after failing to reach a negotiated agreement to take control of the firm from its biggest shareholder, US-based Ashmore Energy International. The...

India.(COUNTRIES)
June 9, 2008... INDIA -- The government has joined the subsidy-cutting trend sweeping Asia, raising gasoline and diesel prices by around 10% last week, its biggest-ever single increase, but one that risks fueling inflation and provoking a public backlash,...

Iraq.(COUNTRIES)(Brief article)
June 9, 2008... IRAQ -- Oil exports hit record levels in May, both in terms of volumes and revenues. Exports jumped just above 2 million b/d for the first time since the US led-invasion in March 2003, while high oil prices lifted revenues to a record $7...

Malaysia.(COUNTRIES)(Brief article)
June 9, 2008... MALAYSIA -- In an effort to tackle the rising cost of subsidies, Kuala Lumpur has announced an increase in retail fuel prices, with gasoline and diesel rising by 41%-63% to 83cents/liter and 80cents/liter, respectively, effective last week (PIW...

Mexico.(COUNTRIES)(Brief article)
June 9, 2008... MEXICO -- As congressional hearings progress on the government's energy reform proposal, the contentious issue of deepwater drilling has emerged at the forefront of debate (PIW May26,p4). Giving testimony last week, state Pemex's upstream...

Niger.(COUNTRIES)
June 9, 2008... NIGER -- China National Petroleum Corp. (CNPC) has been awarded the Agadem Block in a $5 billion deal, one of the state firm's largest overseas investments in the last two years. The asset was previously operated by Malaysia's state Petronas...

Russia.(COUNTRIES)
June 9, 2008... RUSSIA -- State-owned Rosneft is running into problems negotiating a $5 billion Western bank loan to repay a short-term facility it took out last year to finance the purchase of Yukos assets, market sources claim. Rosneft has to repay $8.6...

Russia.(COUNTRIES)
June 9, 2008... RUSSIA -- The massive Shtokman LNG project in the Barents Sea will start up in 2014, according to Yuri Komarov, general director of Gazprom's Sevmorneftegas, which holds the license to the Arctic acreage. But that timetable looks likely to...

Sudan.(COUNTRIES)(Brief article)
June 9, 2008... SUDAN -- Total is preparing for fresh oil exploration on Block B in the south for the first time since 1985, when it quit the acreage due to the civil war. The only Western major still active in the country, Total confirmed to PIW that it had...

Ukraine.(COUNTRIES)(Socar)(Brief article)
June 9, 2008... UKRAINE -- The government's plans to start using the Odessa-Brody oil pipeline in its originally intended direction next month are beginning to look increasingly optimistic, with a host of important issues still to be resolved. Kiev plans to...

Global supply bounces back in May.(What's New Around the World)
June 9, 2008... While pessimism may be growing over the medium-term supply outlook, global oil production surged forward in May (p1). Preliminary soundings by PIW show non-Opec output up 400,000 b/d from a depressed April, and Opec adding 160,000 b/d to the...

Under attack.(Marketview)
June 9, 2008... NEW YORK -- The surge in oil prices above $130/bbl has triggered a variety of responses that at least temporarily halted the price rally and shaved some $10/bbl off its peak. Powerful financial, physical and regulatory pressures are testing the...

Obituary: Dillard P. Spriggs.(Obituary)
June 9, 2008... Dillard P. Spriggs, founder of International Petroleum Finance, died last week following a long illness. After working for eight years with famed oil industry analyst Walter Levy, Dillard in 1958 joined Wall Street brokerage Baker, Weeks, where...

PIW market indicators.(Petroleum Intelligence Weekly )(Statistical table)
June 9, 2008... PIW Market Indicators ($/barrel) Jun. 2- May 26- May 5- Spot Crude Jun. 4 May 30 May 9 Opec Basket $120.78 $124.30 $115.63 UK Brent...

Money flows swamp paper market capacity.
June 16, 2008... Oil markets have not calmed down since the speculative frenzy that pushed the US oil price $10.75 higher on Jun. 6. Nor are they likely to settle down any time soon. Put simply, the extreme volatility stemmed from the inability of the paper...

Project woes loom large over Aramco.
June 16, 2008... As it struggles to start pumping from the 500,000 barrel per day Khursaniyah project, Saudi Aramco's next batch of oil projects looks likely to miss its start-up deadlines as well. That includes the high-profile 1.2 million b/d Khurais field,...

Fuel pump pain only the start for consumers.
June 16, 2008... Gasoline has topped $4 per gallon and diesel is $5/gallon in most US markets, but American consumers are learning that the pain does not stop at the fuel pump. They are finding that oil and natural gas and their derivative products are woven...

Korea, Japan part company in equity quest.
June 16, 2008... Japan and South Korea, Asia's largest and fourth-largest crude importers, respectively, are conducting the politics of energy security in different ways, with varying success. Fronted by state Korea National Oil Corp. (KNOC), Seoul is combing...

Rosneft leaves rivals' ambitions in the shade.
June 16, 2008... State-controlled Rosneft has become the latest, but by no means the least, of Russia's oil giants to outline its ambitions to 2020. Having grown into Russia's biggest producer by absorbing most of Yukos, Rosneft reckons it already has the...

Oil companies scramble for deepwater rigs.
June 16, 2008... For all the talk about oil running out, oil companies and offshore drillers are doing their part to prove the doomsayers wrong. Dozens of deepwater drilling rigs are under construction, explorers are signing longer rig contracts and rig rates...

Latin American fuel subsidies promote demand.
June 16, 2008... The complex, sometimes perverse effects of fuel subsidies are starkly apparent in Latin America, where the costly effort to cushion consumers from high oil prices is becoming unsustainable. Oil demand is rising across the region, driven by...

Exploration.(GENERAL)
June 16, 2008... EXPLORATION -- Lehman Brothers is forecasting a 20% rise in worldwide exploration and production (E&P) spending in 2008, up from a previous estimate of 11% in December. The 398 private and state oil companies surveyed by the investment bank now...

Formula prices.(GENERAL)
June 16, 2008... FORMULA PRICES -- Adjustments to diferentials by Saudi Arabia effectively increased July term prices to the US, lowered those to Europe and followed a familiar pattern in Asia with cuts for heavier grades and increases for lighter ones. As...

IEA.(GENERAL)(International Energy Agency )
June 16, 2008... IEA -- The International Energy Agency (IEA) again trimmed its estimate of global demand growth in 2008, this time by 80,000 b/d, reflecting measures by non-OECD countries to cut fuel subsidies. But the IEA has reduced its estimate of non-Opec...

Industry restructuring.(GENERAL)(Brief article)
June 16, 2008... INDUSTRY RESTRUCTURING -- Tex-as-based XTO Energy is paying $4.2 billion for privately held Hunt Petroleum, a deal that gives XTO a big land position in the Haynesville Shale gas play of northwest Louisiana and East Texas. The purchase comes...

LNG.(GENERAL)(liquefied natural gas)(Flex LNG)(Rift Oil )(Brief article)
June 16, 2008... LNG -- Interest in floating LNG (FLNG) projects is continuing to grow, with the latest signing of two more preliminary deals by Flex LNG in Papua New Guinea (PNG) and Nigeria. Flex LNG, which was set up with the aim of commercializing the...

Angola.(COUNTRIES)
June 16, 2008... ANGOLA -- After drilling three dusters, Australian independent Roc Oil has hit oil with the fifth well in a multiwell exploration program on its onshore Cabinda South Block. The Coco-1 exploration well was drilled to a depth of over 2,600...

Egypt.(COUNTRIES)
June 16, 2008... EGYPT -- The government does not expect to sign any new natural gas export contracts until the end of 2010 or until world prices stabilize and is to put the gas prices in all agreements under review. "We will review prices of natural gas in all...

Indonesia.(COUNTRIES)
June 16, 2008... INDONESIA -- Pertamina expects to submit a development plan for the giant Natuna D-Alpha gas field, along with a list of potential partners, as early as next month. The state company's priority is to sell the gas to Malaysia's Bintulu LNG...

Iraq.(COUNTRIES)(Brief article)
June 16, 2008... IRAQ -- The UN on Jun. 5 presented its first analysis of possible solutions for the country's disputed territories. The UN suggested that two of the four districts studied remain under federal administration, while two others--with the...

Kazakhstan.(COUNTRIES)
June 16, 2008... KAZAKHSTAN -- Jumping the gun, Astana announced that construction of a $1.5 billion pipeline had started as part of a scheme to ship crude from the Tengiz and Kashagan fields to Azerbaijan for export to world markets via the Baku-Tbilisi-Ceyhan...

Norway.(COUNTRIES)(Brief article)
June 16, 2008... NORWAY -- More than a year after its intended start-up date, Marathon Oil has finally pumped first oil from its Alvheim project in the central North Sea. Nagging electrical problems having delayed completion until Jun. 9, ramp-up is expected to...

Russia.(COUNTRIES)
June 16, 2008... RUSSIA -- Crude exports via the Transneft pipeline system to destinations outside the former Soviet Union dipped to 3.989 million b/d in May from 4.011 million b/d in April. This marks a rare break from the usual surge in exports ahead of a...

United Kingdom.(COUNTRIES)(Brief article)
June 16, 2008... UNITED KINGDOM -- The area west of the Shetland Islands in the deepwater Atlantic contributed about half of the country's oil reserves in 2007 and holds the potential for more large discoveries. A new study by consultants Hannon Westwood...

Saudi summit to address widening crisis.(COUNTRIES)
June 16, 2008... Representatives from major oil-producing and consuming countries will meet in Jeddah, Saudi Arabia, on Jun. 22 to discuss soaring oil prices amid mounting international protests over the cost of fuel. The meeting was proposed by the Saudi...

Truckers revolt.(Marketview)
June 16, 2008... LONDON -- Protests over the price of transport fuels are sweeping Europe, with truckers and fishermen in revolt. European refiners have been enjoying record margins on gas oil on the prompt market since April, illustrating how severe the market...

PIW market indicators.(Petroleum Intelligence Weekly )(Statistical table)
June 16, 2008... PIW Market Indicators ($/barrel) Jun. 9- Jun. 2- May 12- Spot Crude Jun. 11 Jun. 6 May 16 Opec Basket $129.46 $121.45 $119.08 UK Brent...

Saudi summit: high hopes, hard realities.
June 23, 2008... In the run-up to the Jun. 22 producer-consumer summit meeting in Saudi Arabia, most observers were not expecting much in terms of concrete action and were viewing the Jeddah gathering as essentially a public relations exercise. Despite this...

Politics put dent in Gazprom's US strategy.
June 23, 2008... Russian state gas giant Gazprom's plans for gaining a foothold in the US market, specifically in gas pipeline projects in Alaska, face serious obstacles in the form of the frosty political atmosphere between Washington and Moscow, and the...

Saudis signal new rules for crisis management.
June 23, 2008... By calling a global crisis summit on oil prices, Saudi Arabia has rightly emphasized the important role energy plays in the world--and the economic and human costs of its ever-rising price. As the largest exporter, Saudi Arabia has not been...

Abuja revives bid round investigation.
June 23, 2008... Nigerian President Umaru Yar'Adua sent shivers down the spines of some oil block licensees last week when his government resumed investigations into licensing rounds conducted under his predecessor, Olusegun Obasanjo. The probe is likely to...

Canada's gas has passed its peak.
June 23, 2008... Higher natural gas prices and the discovery of several potentially prolific unconventional plays may boost drilling in Western Canada during the second half of this year, but increased activity won't be enough to stem the region's declining...

High oil prices no cure-all for Caracas.
June 23, 2008... With oil prices over $130 per barrel, Venezuela's treasury coffers are swelling. Yet the country's economic performance in the first quarter was disappointing, with a sharp drop in GDP growth and a spectacular fall in investment. With oil...

EU biofuels doubts don't deter Neste.
June 23, 2008... Finnish refiner Neste Oil's decision to invest $1 billion in building an 800,000 ton per year biodiesel plant in the Netherlands underlines the group's ambition to become one of the world's largest biodiesel producers. But the investment...

LNG.(GENERAL)
June 23, 2008... LNG -- Gazprom Deputy Chief Executive Alexander Medvedev has confirmed that the Russian state gas giant is in an early stage of negotiations with Exxon Mobil on joining the US supermajor's BlueOcean LNG floating regasification plant, being...

Reserves.(GENERAL)(Brief article)
June 23, 2008... RESERVES -- After years of lobbying by oil companies, the US Securities and Exchange Commission (SEC) has completed recommendations for modernizing the standards it obliges the industry to use for booking reserves and is poised to propose a new...

China.(COUNTRIES)(Brief article)
June 23, 2008... CHINA -- Beijing has announced a surprise rise in retail prices for gasoline and diesel, effective Jun. 20, the first such increase in eight months but part of the growing trend across Asia toward cutting fuel subsidies (PIW Jun.9,p1). Gasoline...