Petroleum Intelligence Weekly articles from March 2008

Petroleum Intelligence Weekly archives from March 2008

Chinese power cuts complicate demand picture.
March 3, 2008... As the bellwether of global oil demand, China's ups and downs have a huge impact on global markets. The country came to a near standstill last month because of acute power shortages that were reminiscent of the 2003 crisis that sparked a surge...

Obstacles litter Gazprom's path to expansion.
March 3, 2008... Flush with money and with the backing of the Kremlin, Russian state giant Gazprom is making a concerted push to become a global upstream player. Gazprom is negotiating billion-dollar gas deals in the Middle East and West Africa and is looking...

Opec set to tweak, not raise or cut.
March 3, 2008... Perennial price hawks Iran and Venezuela are pushing for a cut in output when Opec next meets in Vienna on Mar. 5, but even they cannot be too serious about it now that crude futures on the Nymex are back at $100 per barrel. Cutting output at...

BP saves big changes for the downstream.
March 3, 2008... A visitor from outer space would never guess that BP is a company with some big problems. At his first strategy presentation since taking over as chief executive in May, a confident Tony Hayward trumpeted the company's upstream record and its...

New faces seek European LNG capacity.(liquefied natural gas)
March 3, 2008... New faces are appearing in the European LNG sector. Utilities that have previously been entirely reliant on pipeline gas, such as German giants E.On and RWE, as well as smaller companies such as the Netherlands' Essent, are joining established...

Bioethanol poses problems for EU retailers.
March 3, 2008... With biodiesel production lagging well behind Europe's ever-growing appetite for diesel, many of the region's fuel retailers are focusing on bioethanol as the best means of meeting the European Commission's interim target of sourcing 5.75% of...

Nigeria still waiting for its fresh start.
March 3, 2008... Nigerian President Umaru Yar'Adua's new oil team promised a fresh start for the country's energy sector at a conference in Abuja last month, reiterating plans for oil, gas and power sector reform, while looking forward to gross new oil and...

Corporate.(GENERAL)(Eskenazi)(Brief article)
March 3, 2008... CORPORATE -- Banking magnate Enrique Eskenazi can look forward to a $126 million windfall over the next two years from a special dividend to be paid from Repsol's Argentine YPF affiliate, in which Eskenazi's Petersen now holds a 14.9% stake...

The challenge facing independent US Gulf Coast.(GENERAL)(Brief article)
March 3, 2008... LNG -- The challenge facing independent US Gulf Coast LNG operators--too much regasification capacity and not enough supply--has prompted one of their number, Cheniere Energy, to put itself up for sale (PIW Jan.14,p1). The Houston-based firm...

Pipelines.(GENERAL)
March 3, 2008... PIPELINES -- The proposed Nabucco gas pipeline from Turkey to Austria has gained critical momentum after a senior US official said it would be pursued with "the same commitment" Washington put behind the successful campaign to build the...

Hungary.(COUNTRIES)
March 3, 2008... HUNGARY -- Russia's state Gazprom has slotted another piece of its proposed South Stream gas pipeline to Europe into place, picking up Hungary as a new partner--although state-backed oil company Mol seems to have been left out of the deal. The...

India.(COUNTRIES)
March 3, 2008... INDIA -- A panel of top government officials has approved Cairn India's plan to recoup the cost of building an $800 million oil pipeline from its Rajasthan fields to the coast through crude oil sales. The proposal now goes to Petroleum Minister...

Indonesia.(COUNTRIES)
March 3, 2008... INDONESIA -- Exxon Mobil and state Pertamina have agreed to sell a combined 10% interest in the giant Cepu Block in Java to four local government-owned companies, a move geared toward expediting Exxon's acquisition of land needed to build...

Mexico.(COUNTRIES)(Brief article)
March 3, 2008... MEXICO -- Crude production remained steady in January, averaging 2.957 million b/d, but exports fell for the second consecutive month to 1.434 million b/d. Crude exports to the Americas were down to 1.216 million b/d--120,000 b/d less than in...

Myanmar.(COUNTRIES)
March 3, 2008... MYANMAR -- New US economic sanctions against the military regime unveiled last week target several firms, including a Singapore-registered company with stakes in six exploration blocks operated by China National Offshore Oil Corp. (CNOOC)--the...

Norway.(COUNTRIES)(StatoilHydro)(Brief article)
March 3, 2008... NORWAY -- An old problem may be coming back to haunt state StatoilHydro, with local press reports suggesting its Statfjord late-life development project is running some $1 billion over the original $2.5 billion budget estimate provided when the...

Russia.(COUNTRIES)
March 3, 2008... RUSSIA -- Rosneft's attempt to sit out the turmoil in global financial markets has been in vain, with the state firm forced to refinance $5 billion in short-term debt coming due in March at higher interest rates (PIW Aug.20,p1). The refinancing...

Russia.(COUNTRIES)
March 3, 2008... RUSSIA -- Seaborne crude exports are slated to rise to a modest 2.786 million b/d in March from only 2.678 million b/d set for February, according to preliminary port schedules set by monopoly pipeline operator Transneft. The modest rebound...

South Korea.(COUNTRIES)(Brief article)
March 3, 2008... SOUTH KOREA -- Crude imports averaged 2.66 million b/d in January, up 13.9% year-on-year. Imports from most suppliers rose, with Iraqi volumes doubling to 168,000 b/d. Saudi Arabia, the top supplier, hiked exports by nearly 7% to 733,000 b/d,...

Uganda.(COUNTRIES)
March 3, 2008... UGANDA -- Tullow Oil's plans have suffered a setback with news that the UK independent's first well on its deep Ngassa prospect will have to be redrilled, but most likely not until next year, putting the brakes on some of the excitement the...

United States.(COUNTRIES)(Brief article)
March 3, 2008... UNITED STATES -- Crude imports averaged 9.82 million b/d in December, down 160,000 b/d from November, but up 270,000 b/d from the same month in 2006, according to preliminary data from the US Energy Information Administration. For the fourth...

Exxon appeals against Valdez punitive damages.(COUNTRIES)
March 3, 2008... Nearly two decades after spilling 11 million gallons of crude into the Gulf of Alaska, Exxon Mobil has asked the US Supreme Court to overturn a $2.5 billion punitive damages judgment against the company over the 1989 Exxon Valdez disaster....

No news rallies.(Marketview)
March 3, 2008... NEW YORK -- Crude prices are now capable of hitting new highs without even a hint that something or someone somewhere might constrain supply or boost demand. Such rallies, as the Nymex saw last Tuesday and Wednesday, culminating in a...

Petroplus shifts focus to US refinery deals.
March 3, 2008... Already one of the most acquisitive refiners in Europe, Petroplus has teamed up with private equity firms Blackstone and First Reserve to establish an investment vehicle to scope out refinery buying opportunities in the US (PIW Feb.26'07,p2)....

PIW market indicators.(Petroleum Intelligence Weekly )(Statistical table)
March 3, 2008... PIW Market Indicators ($/barrel) Last 2 Weeks 4 Weeks Spot Crude Week Ago Ago Opec Basket $94.31 $92.97 $88.03 UK Brent...

US oil import bill set to top $400 billion.
March 10, 2008... Despite China's growing importance in the global oil market, the US remains by far the world's largest consumer and importer of crude and products. And with the run-up in oil prices over the past four years, the country is paying dearly for its...

Gulf contractors stretched to breaking point.
March 10, 2008... As the Mideast Gulf's largest oil and gas expansion projects slip further behind schedule, the region's national oil companies (NOC) are beginning to realize that there are not enough workers to complete the current slate of projects on time....

Opec opts for a spell on the sidelines.
March 10, 2008... Opec would like to disappear from everybody's radar screen for a while. In Vienna last week, ministers decided to keep output unchanged and take a six-month break before meeting again--this after holding four meetings in the previous six months...

Tupi partners aim to avoid Kashagan pitfalls.
March 10, 2008... Brazil's recent Tupi find has been described as the biggest oil and gas discovery since Kashagan in Kazakhstan in 2000-a comparison that operator Petrobras will be happy with as a guide to Tupi's ultimate resource potential, but perhaps less so...

SEC reserves revisions won't boost disclosure.
March 10, 2008... The US Securities & Exchange Commission (SEC) is set to update and modernize its antiquated rules on booking oil and gas reserves this year. That will come as a relief to oil companies, which have lobbied the SEC for years to revise its rules...

Majors begin reevaluating Asia's upstream.
March 10, 2008... The Asia-Pacific region may not hold much potential for large discoveries, but low-cost, high-return barrels under attractive fiscal regimes are proving temptation enough for many international players in today's opportunity-constrained...

Medvedev style promises softer approach.
March 10, 2008... Dmitry Medvedev's victory in last week's Russian presidential election has been well received by investors looking for a shift under the country's new leader, who represents a liberal faction within the Kremlin. The contrast between Medvedev...

Formula Prices.(GENERAL)(Brief article)
March 10, 2008... FORMULA PRICES--Saudi Arabia gave its term clients in Europe a break as it lowered formula price adjustment factors for all April-loading grades. But lighter crude to Asia, and especially the US, became effectively more expensive ahead of...

Industry Restructuring.(GENERAL)
March 10, 2008... INDUSTRY RESTRUCTURING--Statoil-Hydro is paying $1.8 billion, plus a provisional additional payment of up to $300 million, to acquire Anadarko's 50% interest in the Peregrino heavy oil field offshore Brazil and its 25% stake in the Kaskida...

Tankers.(GENERAL)
March 10, 2008... TANKERS--This year's phase-out of all older single-hull tankers carrying heavy oil is likely to pose big problems for the bunker trade. The International Maritime Organization (IMO) has ruled that all older ships of 600-5,000 dwt laden with...

China.(COUNTRIES)(Statistical table)(Brief article)
March 10, 2008... CHINA -- Crude imports in January were up 1.8% year-on-year at 3.3 million b/d, with Angola the top supplier with average shipments of 577,000 b/d, followed by Iran with 523,000 b/d. Russian volumes dropped nearly 45% to 239,000 b/d, while...

China.(COUNTRIES)(Brief article)
March 10, 2008... CHINA -- Beijing has unveiled new fuel marketing rules aimed at securing stable supply at the pump by imposing a wholesale benchmark price to prevent fuel hoarding and illegal price fixing by wholesalers and refiners during supply crunches....

Iraq.(COUNTRIES)
March 10, 2008... IRAQ -- The cabinet has given the oil ministry in Baghdad the go-ahead to sign technical support contracts to develop five producing fields with five of the world's top oil firms, Iraqi sources tell PIW. The companies--BP, Chevron with partner...

Iraq.(COUNTRIES)(Brief article)
March 10, 2008... IRAQ -- Crude oil sales in February were up around 60,000 b/d from January at 1.89 million b/d, according to PIW analysis of monthly shipping data. Exports from the southern Basrah Oil Terminal jumped some 50,000 b/d to around 1.59 million b/d...

Japan.(COUNTRIES)(Statistical table)(Brief article)
March 10, 2008... JAPAN -- Crude imports oil rose 8.6% year-on-year in January to 4.69 million b/d, according to the latest official data. Volumes from Saudi Arabia jumped by almost 34% to 1.25 million b/d, while Iranian and Qatari volumes also showed huge...

Libya.(COUNTRIES)
March 10, 2008... LIBYA -- US private equity firm Colony Capital's $3.9 billion purchase of a controlling interest in Libyan state-owned European refiner Tamoil appears to be in tatters, with Tripoli transferring ownership of Tamoil holding company Oilinvest to...

Nigeria.(COUNTRIES)(Brief article)
March 10, 2008... NIGERIA -- UK-listed junior Afren and local independent Global Energy Co. (GEC) have joined forces and signed production sharing contracts for two prospective gas-rich licenses covering 3,500 sq km in the onshore Anambra Basin. The deal follows...

Russia.(COUNTRIES)(Transneft got Licensing)(Brief article)
March 10, 2008... RUSSIA -- The East Siberian Pacific Ocean (Espo) oil pipeline's second phase will be completed by 2015 at an estimated cost of $14.75 billion, but will only reach its ultimate capacity of 1.6 million b/d by 2025, according to the latest plan...

United States.(COUNTRIES)(Brief article)
March 10, 2008... UNITED STATES -- The state of Alaska is preparing to take BP to court to recover several hundred million dollars in taxes and royalties lost during the partial shutdown of the Prudhoe Bay oil field in 2006 (PIW Aug.14'06,p1). The state...

United States.(COUNTRIES)(Brief article)
March 10, 2008... UNITED STATES -- President George W. Bush insisted at a conference in Washington last week that his country is a leader in advancing renewable energy and addressing global warming, but critics--mainly from Europe--poked holes in this assertion...

Global supply rises again in February.(Statistical table)
March 10, 2008... Global oil supply continued to increase in February, adding about 550,000 b/d as non-Opec gains were aided by a small Opec increase, despite quiet attempts by Mideast Gulf members to rein in volumes in advance of an expected second-quarter...

Dollar driven.(Marketview)
March 10, 2008... NEW YORK -- With Opec's decision to do nothing dominating last week's news, it was easy to miss the role that gasoline and heating oil, as well as the ever-falling US dollar, played in the oil price's frenetic advance to almost $106/bbl. ...

NTR eyes new refining deals, awaits Kern green light.(Brief article)
March 10, 2008... NTR Acquisition, a blank-check company formed to buy downstream assets, is looking for new refinery deals in the US while it waits for regulatory approval for last year's purchase of California refiner Kern Oil. Although NTR has no...

PIW Market Indicators.(Petroleum Intelligence Weekly)(Statistical table)
March 10, 2008... PIW Market Indicators ($/barrel) Last 2 Weeks 4 Weeks Spot Crude Week Ago Ago Opec Basket $96.50 $94.88 $85.77 UK Brent (Dtd.)...

'Specumentals' behind current oil price strength.
March 17, 2008... With oil now trading steadily above $100 per barrel, the already heated debate on what is driving the market has moved up a gear. Supporters of supply and demand fundamentals are accusing speculators of inflating the oil price bubble. Unfazed,...

Biofuels mandate set to fail, US refiners say.
March 17, 2008... As crude oil prices have pushed past inflation-adjusted records, the administration of US President George W. Bush has once again ratcheted up rhetoric stating that America must wean itself off its addiction to oil. But Bush's preferred...

Asia holds key to Canada's demand security.
March 17, 2008... Refiners in Asia can look forward to a steady diet of Canadian crude from some time in the next decade as tankers from the country's west coast start making the journey to China and other Asia-Pacific consumers. The US, of course, has grown...

Study outlines hard choices for Africa's refiners.
March 17, 2008... Sub-Saharan African refiners are cautiously embracing a joint study with the World Bank that could change the future of African refining--if they and their governments agree to implement its recommendations. The study has four...

Shell considers hitching ride on Chinese jet.
March 17, 2008... China's aviation fuel market is the fastest-growing jet kerosene market in the world and represents a potentially lucrative downstream opportunity for the international majors--if only they could find a way in. Access to the market continues to...

North American output running to standstill.
March 17, 2008... The prospects for North American oil supply faithfully reflect the outlook for non-Opec producing regions globally, with a few high-growth areas fighting to maintain forward momentum against steep decline rates in mature fields (PIW Feb.4,p5)....

Corporate.(GENERAL)(Brief article)
March 17, 2008... CORPORATE--Simply maintaining production and reserves is becoming an increasing challenge for the leading majors, with Chevron admitting that it does not expect to see any significant rise in its proven reserves between now and the end of the...

Formula prices.(GENERAL)(Brief article)
March 17, 2008... FORMULA PRICES--Mexico tightened the adjustment factor for April loadings of its Maya crude grade to the US to $3.85/bbl, effectively raising the price by 10 cents, according to state Pemex. Mexico also tightened the differential for its...

IEA.(GENERAL)(International Energy Agency )
March 17, 2008... IEA--Opec's decision to hold the line on production targets and, especially, not to meet again until September has not gone down well with the International Energy Agency (IEA) (PIW Mar.10,p2). In its latest monthly oil market report, the...

LNG.(GENERAL)
March 17, 2008... LNG--Royal Dutch Shell says it is on track to build a floating LNG (FLNG) production facility with a capacity of 3.5 million tons/yr, potentially turning the supermajor into the first oil giant to launch a floater that can act both as a gas...

Australia.(COUNTRIES)(Brief article)
March 17, 2008... AUSTRALIA -- Chevron has unveiled plans to develop its 100% owned Wheatstone gas field off the country's northwest coast as a new LNG project, possibly coming to market before its bigger, but long-stalled, Gorgon development. The plant will...

Australia.(COUNTRIES)(Brief article)
March 17, 2008... AUSTRALIA -- Weighed down by debt, troubled local minnow AED Oil has been thrown a lifeline by China's state Sinopec, which has agreed to take a 60% stake in its Timor Sea oil assets in a deal worth $927 million. Sinopec will become operator of...

China.(COUNTRIES)(Brief article)
March 17, 2008... CHINA--Beijing is to set up an energy commission and a new energy bureau, both run by economic policymakers at the National Development and Reform Commission (NDRC), confirming earlier speculation that the establishment of an energy ministry is...

Ecuador.(COUNTRIES)(Brief article)
March 17, 2008... ECUADOR -- Quito says it has concluded talks with foreign oil companies on its plans for boosting state control of the energy sector, although several firms insist they are still hammering out the details of their new contracts. As part of an...

Hungary.(COUNTRIES)
March 17, 2008... HUNGARY -- Mol has sealed a surprise deal with state Oman Oil Co. (OOC) that should further improve its chances of fending off the unwanted advances of Austria's OMV, as well as making the company a significant player in the Caspian region (PIW...

Russia.(COUNTRIES)
March 17, 2008... RUSSIA -- In line with its strategic objectives of increasing oil production and improving its refining operations, Gazprom Neft is planning to increase its capital spending by 36% this year to $3.7 billion. The company, the oil-producing arm...

Russia.(COUNTRIES)
March 17, 2008... RUSSIA -- Crude exports via the network of national pipeline operator Transneft to destinations outside the former Soviet Union fell 9% to 3.53 million b/d in February from 3.89 million b/d in January, as trading problems through Europe and...

Thailand.(COUNTRIES)(Brief article)
March 17, 2008... THAILAND -- State-owned PTT is confident of inking a binding sales and purchase agreement for Qatari LNG imports by the end of the year as part of its drive to secure more gas from overseas. PTT LNG Managing Director Komol Phithaksphongs told...

Venezuela.(COUNTRIES)(Brief article)
March 17, 2008... VENEZUELA -- The government's toughening of terms for foreign oil investors looks set to continue, with Caracas now considering imposing a new windfall tax to take full advantage of high oil prices. The extra revenues would be used to resolve...

Iraq outlines details of first bid round.
March 17, 2008... Iraq intends to offer five big producing fields and two small ones in its first bid round, planned for this year, in an attempt to boost output by a significant amount as quickly as possible, a senior government official involved in the process...

Stop making sense.(Marketview)
March 17, 2008... NEW YORK -- When US inventory data showed an impressive growth in crude and gasoline stocks last Wednesday, oil prices fell, as might have been expected. But the focus on fundamentals quickly faded, with crude oil futures prices recovering...

PIW market indicators.(Petroleum Intelligence Weekly )(Statistical table)
March 17, 2008... ($/barrel) Last 2 Weeks 4 Weeks Spot Crude Week Ago Ago Opec Basket $100.48 $97.29 $90.06 UK Brent (Dtd.) ...

Exxon bloodied but unbowed in Caracas row.
March 24, 2008... Exxon Mobil got a bloodied nose in the UK's High Court last week as a judge overturned the $12 billion worldwide freezing order it had obtained against state-owned Petroleos de Venezuela (PDV) in February. After securing injunctions in the UK,...

Economic woes offer mixed signals for oil.
March 24, 2008... The US economy continues to play havoc with oil markets. Crude futures hit a new record of over $111 per barrel at the start of last week, before tumbling as financial markets reacted to the collapse of Wall Street investment bank Bear Stearns...

Iraq ponders Shell's grand plan for gas.
March 24, 2008... Iraq's plans for advancing oil field development in partnership with international oil companies under either technical support contracts or long-term service agreements have yet to bear fruit, with debate raging in Baghdad over the precise...

Heavy lifting puts strain on Asian refiners.
March 24, 2008... More than 4 million barrels per day of new crude distillation and conversion capacity is coming on line in Asia this year and next, largely in China and India, but the outlook for margins may not be as rosy as refiners had hoped. The new...

Oil price bubble may be slow to burst.
March 24, 2008... Oil prices have risen so steeply and so speedily in the past few weeks that some industry executives are now openly describing the market as a speculative bubble. But unlike other recent financial bubbles--the dot-com boom of the 1990s, for...

Italy, Germany bypass EU in Russian relations.
March 24, 2008... Russia's energy relations with Italy and Germany--partners in two key pipeline projects--are booming as the two European powers pursue bilateral energy relations independent of the European Union and at times in conflict with EU-and US-backed...

Back to reality for big oil's growth plans.
March 24, 2008... The leading majors have been criticized for funneling too little of their record profits back into the business. Shareholders have benefited from the run-up in oil prices, but the general public is suffering, many lawmakers and public interest...

Trading -- The Chicago Mercantile Exchange (CME) is buying the New York Mercantile Exchange (Nymex) for around $9.4 billion in a deal that is expected to be finalized before the end of this year.(GENERAL)
March 24, 2008... TRADING -- The Chicago Mercantile Exchange (CME) is buying the New York Mercantile Exchange (Nymex) for around $9.4 billion in a deal that is expected to be finalized before the end of this year, according to executives of the two commodities...

Bolivia.(COUNTRIES)
March 24, 2008... BOLIVIA -- Beleaguered state Yacimientos Pretroliferos Fiscales de Bolivia (YPFB) has got its fifth new president in less than two years, with Santos Ramirez, a prominent senator from the ruling Movement Toward Socialism (MAS) party, appointed...

China.(COUNTRIES)(Brief article)
March 24, 2008... CHINA -- State-controlled PetroChina saw oil and gas output rise 4.8% to 3.04 million boe/d last year, with crude production a marginal 1% higher at 2.3 million b/d, but gas volumes continuing to soar, up 18.6% at 4.46 Bcf/d. The company's...

Egypt.(COUNTRIES)
March 24, 2008... EGYPT -- State-owned Egyptian Natural Gas Holding Co. (Egas) has confirmed a new 1 Tcf gas discovery in the Nile Delta, but company president Mahmoud Latif is coming under fire for not negotiating a high enough price for the country's gas...

India.(COUNTRIES)
March 24, 2008... INDIA -- Malaysia's state Petronas has increased its stake in Cairn India to 12.7% in an effort to secure access to crude as prices soar. The acquisition was part of a private placement of 113 million shares representing 5.97% of Cairn India...

Iran.(COUNTRIES)
March 24, 2008... IRAN -- Switzerland's EGL has inked a final long-term agreement with state National Iranian Gas Export Co. to buy up to 5.5 Bcm/yr of gas to cover its 50% share of the 10 Bcm/yr Trans-Adriatic Pipeline (Tap) that it plans to build with Norway's...