Petroleum Intelligence Weekly articles from May 2007

Petroleum Intelligence Weekly archives from May 2007

Behind hysteria, US gasoline follows history.
May 7, 2007... All might soon be quiet on the US gasoline front. Right now, traders are focusing on unexpected refinery outages, high gasoline prices, falling US inventories and sluggish imports, with many predicting that gasoline's tightness might dominate...

Browne's media mastery deserts him at the last.
May 7, 2007... "Downfall," "Humiliation," "Silly Old Fuel"--the press has certainly had a field day with the resignation of BP Chief Executive John Browne. The story of Browne's attempts to block newspaper revelations of his private life, which ultimately led...

PDV takeover threatens Orinoco's future.
May 7, 2007... May 1 in Venezuela this year marked not only Labor Day, but the day when the leftist government of President Hugo Chavez reversed the privatizations of the 1990s, assuming control of the last remaining oil developments still in the hands of...

Opec fine-tuning rests with Saudi Arabia.
May 7, 2007... Opec is preparing for a second-quarter slide in product demand, but with an eye on the increasing appetite for crude as refiners, especially in the US, come out of maintenance and begin rebuilding product inventories. Lighter gasoline-rich...

Downstream boosts Big Oil's Q1 earnings.(Financial report)
May 7, 2007... Weaker oil and gas prices didn't cause many problems for the US majors in the first quarter. Despite the lackluster upstream, a strong downstream environment lifted quarterly profits for Exxon Mobil, Chevron and ConocoPhillips, with US refining...

Lukoil looks overseas for growth.
May 7, 2007... As the Kremlin's state-owned favorites Gazprom and Rosneft devour most of the upstream assets up for grabs in Russia, opportunities are fast shrinking for the privately owned companies that built up their empires under late President Boris...

Australia's LNG ambitions tied up in red tape.
May 7, 2007... Could Australia's dream of becoming Asia-Pacific's leading LNG producer and Qatar's main rival on the global stage be over before it's even begun? Uncertainty over environmental and project approvals and spiraling costs are hampering plans to...

Industry Restructuring.(GENERAL)
May 7, 2007... INDUSTRY RESTRUCTURING -- Eni has continued its recent buying spree with the $4.76 billion acquisition of US independent Dominion Energy's Gulf of Mexico portfolio, a deal which will triple the Italian major's US production to around 110,000...

Algeria.(COUNTRIES)
May 7, 2007... ALGERIA -- Energy Minister Chakib Khelil has indicated that foreign investors will be expected to provide more than cash if they wish to be selected in future oil and gas projects. A new bid round is planned for the end of this year, Khelil...

Australia.(COUNTRIES)
May 7, 2007... AUSTRALIA -- The South Australia state government is to review a 28-year-old law limiting individual shareholder ownership in local independent Santos to 15%, sparking rumors the company could become a takeover target. The sales cap was...

Iran.(COUNTRIES)
May 7, 2007... IRAN -- Tehran is poised to sign a multibillion-dollar deal with China's state Sinopec to develop the onshore Yadavaran field, which has estimated peak production of more than 300,000 b/d. A Sinopec delegation is due to visit Iran later this...

Iraq.(COUNTRIES)
May 7, 2007... IRAQ -- A war of words between Iraqi Oil Minister Hussein al-Shahristani and Kurdish Energy Minister Ashti Hawrami is threatening to derail the draft oil law approved by the Iraqi cabinet in February (PIW Mar.5,p3). Al-Shahristani last month...

Japan.(COUNTRIES)
May 7, 2007... JAPAN -- Domestic oil product sales, excluding direct crude burning, for fiscal 2006 fell 5.2% to 3.86 million b/d compared with fiscal 2005, caused mainly by a 1.5% drop in gasoline consumption to 1.04 million b/d, the largest drop since the...

Kuwait.(COUNTRIES)
May 7, 2007... KUWAIT -- Reneging on a pledge by his predecessor to come clean on the extent of the country's oil and gas reserves, Oil Minister Sheikh Ali al-Jarrah al-Sabah last week said they would never be disclosed. Citing "national security," he opined...

Royal Dutch Shell, Mitsui and Mitsubishi.(COUNTRIES)
May 7, 2007... RUSSIA -- As part of last month's deal finalizing state Gazprom's entry into the Sakhalin-2 project, the project's original shareholders, Royal Dutch Shell, Mitsui and Mitsubishi, have reportedly agreed to make annual dividend payments to the...

Moscow.(COUNTRIES)
May 7, 2007... RUSSIA -- Moscow has agreed to a more than 80,000 b/d boost in seaborne crude oil exports in May, pleasing traders looking to move oil out of the country before a sharp rise in oil export taxes in June from $154/ton to $200.60/ton ($27.37/bbl)....

Saudi Arabia.(COUNTRIES)
May 7, 2007... SAUDI ARABIA -- Despite soaring costs, state Saudi Aramco and US Dow Chemical have issued a tender for design work for the Ras Tanura integrated refinery and petrochemicals project and will soon finalize their delayed memorandum of...

Singapore.(COUNTRIES)
May 7, 2007... SINGAPORE -- A fire broke out at Exxon Mobil's refinery on Jurong Island last week, killing two people and forcing the indefinite closure of one 115,000 b/d crude distillation unit (CDU). "It will not be started up until it is safe to do so,"...

Big oil sees higher Q1 profits on refining strength.
May 7, 2007... Exxon Mobil turned in the biggest first-quarter result, but rival Royal Dutch Shell recorded the biggest year-on-year increase thanks to strong downstream operations and better-than-expected price realizations. Shell's oil price realization was...

Contract dispute.(Marketview)
May 7, 2007... WASHINGTON -- A twelfth straight gasoline stockdraw in the US last week was not enough to rally crude and product prices. Traders took profits and focused more on high crude stocks, expectations that US refiners will soon ramp up runs and the...

PIW market indicators.
May 7, 2007... PIW Market Indicators 1 Week 2 Weeks 4 Weeks Spot Crude Ago Ago Ago Opec Basket $64.14 $63.62 $63.59 UK Brent (Dtd.) 66.56 67.38 68.08 UK B-wave...

Ailing WTI faces lengthy convalescence.(West Texas Intermediate)
May 14, 2007... The recent dislocation of West Texas Intermediate (WTI) from world oil markets has been attributed to various upstream, midstream and downstream factors--refinery outages, lack of storage, large volumes of imported Canadian crude and a limited...

Reserves Survey yields as much heat as light.(Petroleum Intelligence Weekly suerveys)(Survey)(Brief article)
May 14, 2007... The PIW Reserves Survey published last month has sparked some argument and debate, but so far no formal comment from any of the countries with controversial reserves totals. One example of the response to the survey is the article by former...

Yukos auction helps Rosneft keep rising.
May 14, 2007... Russia's state Rosneft has overtaken Lukoil to become the country's biggest producer after securing the Samara and East Siberian lots in the liquidation auction of former Russian oil major Yukos. These assets take its crude and condensate...

Wait goes on for recovery in Omani output.(Petroleum Development Oman and Royal Dutch-Shell PLC forecasts)
May 14, 2007... Oman has been counting on enhanced oil recovery (EOR) to reverse the slide in its oil production that began in 2000, but it looks as though it might have to wait a little longer. Petroleum Development Oman (PDO), the Royal Dutch Shell-led joint...

Gulf exporters unmoved by Asia's stock ideas.
May 14, 2007... Faced with Opec cutbacks and rising regional competition for imports, joint stockpiling has become Asian buyers' latest idea for ensuring security of supply. South Korea started it two years ago, Japan is considering it, and it may also have...

GTL thinking adjusts to new realities.
May 14, 2007... A few years ago, Qatar was set to become the gas-to-liquids (GTL) capital of the world, with projects lined up to deliver 700,000 barrels per day of GTL products, mainly clean diesel, by 2012. Fast forward to today, and while the Gulf state is...

IOCs consider theories of evolution.
May 14, 2007... The international oil companies (IOCs) are hardly an endangered species, but they are certainly in a period of evolution, with state-owned national oil companies (NOCs) in the ascendant thanks to high prices and their control of access to...

The search for solid ground on oil reserves.
May 14, 2007... The following article by Sadad al-Husseini, retired executive vice president of Saudi Aramco, explores several key issues related to reserves definitions and the purpose of reserves estimates, and provides a critique of the recent PIW Reserves...

Reliance's Ambani on the oil company of the future.(Petroleum Comment)
May 14, 2007... Energy Intelligence President Tom Wallin recently had the opportunity to talk with Mukesh Ambani, chairman and chief executive of India's Reliance Industries, in his office in Mumbai. Ambani has a very different view of the international...

Corporate.(GENERAL)(Statoil ASA's average output fall)(Brief article)
May 14, 2007... CORPORATE -- Norway's Statoil could see average output fall as low as 1.15 million boe/d in 2007, down 11.5% from previous guidance, as production delays at home and abroad hamper the group's growth profile. Statoil indicated at its 2006...

Formula prices.(GENERAL)(Saudi Arabia)(Brief article)
May 14, 2007... FORMULA PRICES -- Taking advantage of strong global refining margins, Saudi Arabia has effectively raised prices for June-loading cargoes to Asia, by more than customers had expected, while widening discounts to benchmarks on cargoes loading...

Futures.(GENERAL)
May 14, 2007... FUTURES -- The first six months following the launch of an Oman sour crude futures contract by the Dubai Mercantile Exchange (DME) Jun. 1 will be crucial for gaining the confidence of the market, and for sending the right signals to other...

Industry restructuring.(GENERAL)
May 14, 2007... INDUSTRY RESTRUCTURING -- Crimson Exploration has bought producing gas fields and undeveloped acreage in South Texas and South Louisiana from Exco Resources in a deal valued at $289.5 million. General Electric (GE) has paid $154 million for oil...

China.(COUNTRIES)(oil reserves of PetroChina Company Ltd.)(Brief article)
May 14, 2007... CHINA -- PetroChina has announced the country's largest discovery in over a decade, the Jidong field in Bohai Bay, which is thought to hold proven reserves of 2.97 billion boe. While boosting PetroChina's proven reserves, which were a little...

Equatorial Guinea.(COUNTRIES)
May 14, 2007... EQUATORIAL GUINEA -- Exxon Mobil faces fines of $300 million or more if it doesn't reach a deal by August to stop gas flaring from Zafiro, the country's largest producing oil field. The threat of a fine was made last week by Deputy Energy...

Indonesia.(COUNTRIES)
May 14, 2007... INDONESIA -- Jakarta now hopes to raise the outstanding $880 million for the BP-led Tangguh LNG project from domestic and foreign investors, instead of relying on Chinese banks as initially planned. Delays in securing the loan may push back the...

Iran.(COUNTRIES)(consortium is led by ONGC Videsh Ltd. makes gas discovery)(Brief article)
May 14, 2007... IRAN -- A consortium of Indian oil companies has made a significant gas discovery in the Farsi block in the northern Gulf. The companies said the find, approximately 90 km off the port of Bushehr, could contain gas reserves of up to 10 Tcf and...

Kuwait.(COUNTRIES)
May 14, 2007... KUWAIT -- Kuwait Petroleum Corp.'s (KPC) board has doubled the budget allocated for the new 615,000 b/d Al-Zour refinery to $12 billion rather than scrapping it because of high cost (PIW Jan.8,p7). The decision "takes into account the reality...

Mexico.(COUNTRIES)(Petroleos Mexicanos' growth)(Brief article)
May 14, 2007... MEXICO -- Tax reforms last year helped alleviate some of state Pemex's financial burden, but were insufficient to allow the company to grow--a fact borne out in this year's disastrous first-quarter results, according to Pemex Chief Executive...

Nigeria.(COUNTRIES)(attacks on foreign oil installations )(Brief article)
May 14, 2007... NIGERIA -- The recent spate of attacks on foreign oil installations and workers in the Niger Delta has continued with the abduction of four US contractors working for Chevron. The four men were taken from a pipe-laying barge offshore Escravos....

Papua New Guinea.(COUNTRIES)(Liquefied Natural Gas Ltd. investments)(Brief article)
May 14, 2007... PAPUA NEW GUINEA -- Australia's Liquefied Natural Gas Ltd. (LNGL) has become the latest company to jump on the country's LNG bandwagon, announcing that it has bought acreage earmarked to supply gas for a 1 million ton/yr project. LNGL's...

Saudi Arabia.(COUNTRIES)(gas reserves)(Brief article)
May 14, 2007... SAUDI ARABIA -- The kingdom has set itself a new target of increasing gas reserves by almost 40% over the next 10 years, more than double the forecast gas reserve growth outlined by state Saudi Aramco late last year. Some 73 Tcf of new reserves...

United States.(COUNTRIES)
May 14, 2007... UNITED STATES -- With gasoline prices edging closer to a record high, House of Representatives Democrats are fast-tracking legislation to crack down on gasoline price gouging and directing the Antitrust Task Force of the Judiciary Committee to...

Venezuela.(COUNTRIES)
May 14, 2007... VENEZUELA -- ConocoPhillips is continuing talks with Caracas in the hopes of hammering out an "amicable solution" that will keep it in the oil-rich nation, according to the company's Chief Executive Jim Mulva. Conoco, along with Chevron, Exxon...

Chevron gets warm welcome in Turkmenistan.(What's New Around the World)
May 14, 2007... Chevron got a warm welcome in Ashkhabad earlier this month when top executives met the new president of Turkmenistan, Gurbanguly Berdimuhammedov. While the visit represents the first high-level overture from a Western major since...

Choppy waters.(Marketview)(inclusion of Ekofisk in Platts' Brent assessment methodology)
May 14, 2007... The decision by pricing service Platts to include Norway's Ekofisk crude in its dated Brent assessment methodology as of Jun. 8, and Royal Dutch Shell's subsequent proposed rewriting of its standard North Sea trading contracts to accommodate...

PIW market indicators.(crude oil prices)(Statistical table)
May 14, 2007... PIW Market Indicators 1 Week 2 Weeks 4 Weeks Spot Crude Ago Ago Ago Opec Basket $62.01 $63.70 $62.53 UK Brent (Dtd.) 63.12 65.80 66.18 UK B-wave...

Refiners adapt to loss of Nigerian quality.
May 28, 2007... With a violent cocktail of politics, poverty and criminality shutting in a growing volume of Nigerian oil, refineries are scrambling to find replacements, and bidding up prices for gasoline-rich, low-sulfur crude, with benchmark Brent climbing...

BP-Shell rumors revive concept of megamergers.
May 28, 2007... Rumors of a possible tie-up between BP and Royal Dutch Shell have some analysts talking about a new era of megamergers, but is such a scenario plausible? Roughly five years after the original round of megadeals, the supermajors find themselves...

Reserves issue adds to problems for Kuwait.(Kuwaiti Oil Minister Sheikh Ali al-Jarrah al-Sabah's views on the estimation of the size of Kuwaiti oil reserves)
May 28, 2007... Problems are mounting for Kuwaiti Oil Minister Sheikh Ali al-Jarrah al-Sabah, who is under pressure to resign after admitting in a newspaper interview that he sought advice from a former oil and finance minister, his cousin Sheikh Ali...

Anti-Opec bill misguided, possibly damaging.(passage of the No Oil Producing and Exporting Cartels Act of 2007 by the United States House of Representatives)
May 28, 2007... With gasoline pump prices at record highs, US politicians are desperate to show voters they are doing something--and Opec offers a very easy target. In a display of pure political theater, the House of Representatives has passed the No Oil...

Buyers lose grip on Asian LNG pricing.(liquefied natural gas)
May 28, 2007... China's Scrooge-like reputation among Asian LNG buyers suffered a dent this month when traders revealed the price it paid in April for its first-ever spot LNG cargo--over $8 per million Btu, or nearly three times the $3.15-$3.17/MMBtu it...

Russia rethinks bypass routes to Europe.
May 28, 2007... Tempers have cooled since the New Year when Russia and Belarus traded blows over crude exports, further rocking European confidence in Moscow's ability to deliver the goods via pipelines across unruly neighboring transit countries. And now...

Forecasts leave producers and consumers at odds.
May 28, 2007... For consumers, the fundamental challenge facing the oil industry today is the need to make sure supply growth keeps pace with rising demand. The concern is that without the huge investments needed to meet this goal, oil prices will rise even...

Formula Prices.(GENERAL)
May 28, 2007... FORMULA PRICES -- Mexico made most of its crudes for June delivery effectively a little more expensive to the key regions US, Europe and Asia, and only eased the differential for Isthmus going to Europe. Pemex narrowed the discount for its...

Futures.(GENERAL)
May 28, 2007... FUTURES -- The Intercontinental-Exchange's (ICE) new Dubai sour crude futures contract was launched last week, marking the latest stage in the battle between ICE and the New York Mercantile Exchange (Nymex) to establish the dominant Mideast...

Industry Restructuring.(GENERAL)(Brief article)
May 28, 2007... INDUSTRY RESTRUCTURING -- Gas pipeline and production firm Williams is selling nearly its entire power trading business to a unit of investment bank Bear Stearns for a base purchase price of $512 million, plus around $2.4 billion in electricity...

Bolivia.(COUNTRIES)
May 28, 2007... BOLIVIA -- The government plans to audit three companies run by subsidiaries of Repsol YPF, BP and Royal Dutch Shell, prior to taking majority control of them as part of the country's hydrocarbons nationalization process, according to...

China.(COUNTRIES)
May 28, 2007... CHINA -- Sinopec and China National Offshore Oil Corp. (CNOOC) have signed a cooperation agreement to jointly work on gas projects. The two companies will look at expanding gas reserves, building pipeline networks and securing gas supplies. The...

Kazakhstan.(COUNTRIES)(Brief article)
May 28, 2007... KAZAKHSTAN -- Eni's Agip KCO, the operator of the giant Kashagan field in the Caspian Sea, announced last week that a new well had tested positively at an initial flow rate of more than 35,000 b/d. Eni said the well is one of four that have...

Mexico.(COUNTRIES)
May 28, 2007... MEXICO -- The country became a gas exporter for the first time in April, according to new data from state Pemex. Oil production continued to tread water, despite dire predictions of an imminent decline (PIW Apr.30,p7). The net gas exports were...

Qatar.(COUNTRIES)
May 28, 2007... QATAR -- The troubled Oryx gas-to-liquids project is experiencing more technical problems and delays, limiting the plant to as little as 25% of capacity production, with no firm timetable as to when the latest snags will be resolved (PIW...

Russia.(COUNTRIES)(Rosneft and TNK-BP invest in Verkhnechonskneftegas)(Brief article)
May 28, 2007... RUSSIA -- State Rosneft and TNK-BP have finally agreed to share equally an 11.29% stake in East Siberia's Verkhnechonskneftegas, according to Rosneft head Sergei Bogdanchikov. The 11.29% stake is held by East Siberian Gas Co. (ESGC), a 50-50...

South Korea.(COUNTRIES)(imports of crude)(Brief article)
May 28, 2007... SOUTH KOREA -- Crude imports in April fell 2.9% from the previous year to 2.27 million b/d, according to the latest official data. Imports from Saudi Arabia were steady, edging up 0.1% to 696,000 b/d, while volumes from the UAE fell 32% to...

Syria.(COUNTRIES)
May 28, 2007... SYRIA -- Royal Dutch Shell is turning to enhanced oil recovery (EOR) to reverse falling output from its older fields. "Production is declining so we are studying in detail the introduction of EOR technologies, such as high-pressure air...

United Kingdom.(COUNTRIES)(Brief article)
May 28, 2007... UNITED KINGDOM -- The government has announced new measures to secure energy supplies and cut carbon dioxide emissions, restating its intention to push ahead with new nuclear power plants and calling for more energy efficiency and an expansion...

United States.(COUNTRIES)
May 28, 2007... UNITED STATES -- The Alaska state Legislature has given nearly unanimous bicameral consent to Governor Sarah Palin's plan to spur construction of a multibillion-dollar North Slope natural gas pipeline. The recent arrest of one current and two...

United States.(COUNTRIES)(imports of crude supplies)(Brief article)
May 28, 2007... UNITED STATES -- After dipping to abnormally low levels in February, crude imports rebounded by 14% in March thanks to higher volumes from Opec exporters and Mexico, according to Energy Information Administration (EIA) data. The largest...

Indonesia to drop APPI from crude price formula.(What's New Around the World)
May 28, 2007... Indonesia is to drop pricing assessments from the Asian Petroleum Price Index (APPI) from its formula for setting the official Indonesian Crude Price (ICP), the country's energy ministry has announced. The prospective elimination of APPI...

Sweet tooth.(Marketview)(rise in prices of gasoline futures due to stable supply and demand for gasoline in the United States )
May 28, 2007... WASHINGTON -- The gasoline supply situation in the US has improved--but only somewhat. Refinery utilization has finally rebounded above the 90% level and is at its highest level this year, stocks have risen for three straight weeks, output is...

PIW market indicators.(Petroleum Intelligence Weekly )(Statistical table)
May 28, 2007... PIW Market Indicators 1 Week 2 Weeks 4 Weeks Spot Crude Ago Ago Ago Opec Basket $66.26 $64.55 $63.70 UK Brent (Dtd.) 69.80 67.82 65.80 UK B-wave...

Anadarko, NOCs drive upstream asset deals.
May 28, 2007... US independent Anadarko and a handful of national oil companies (NOCs) can be thanked for making 2006 such an active year for upstream merger and acquisition activity. Anadarko made two big purchases midyear, followed by numerous divestments in...

Major international oil and gas reserve deals in 2006.
May 28, 2007... MAJOR INTERNATIONAL OIL AND GAS RESERVE DEALS IN 2006* Description/ Region/Buyers Sellers Reserves Included CANADA Royal Dutch Shell Shell Canada...

Refining M & A slows, but value per barrel rises.
May 28, 2007... Downstream deal making moved at a steady pace in 2006, with several sizable refining assets changing hands in the US and abroad. Although last year's merger and acquisition (M & A) activity didn't match 2005's impressive pace--when $22.7...

A profile of worldwide refinery deals in 2006.
May 28, 2007... A PROFILE OF WORLDWIDE REFINERY DEALS IN 2006 Region/Buyer Seller Assets Purchased US EnCana ConocoPhillips 50% stake in Wood River ...