Petroleum Intelligence Weekly articles from May 2008

Petroleum Intelligence Weekly archives from May 2008

Oil industry faces fight to improve image.
May 5, 2008... Big Oil's image is taking a beating in the US, as angry consumers struggle to cope with skyrocketing retail gasoline and diesel prices while oil company profits just keep on climbing. Record fuel prices are taking a toll on an already sluggish...

TNK-BP chief sees smooth Moscow handover.
May 5, 2008... Oil companies generally prefer stability to change, so when Dmitry Medvedev is inaugurated on May 7 as president of Russia, continuity will be the watchword that most will be looking for. TNK-BP President and Chief Executive Robert Dudley said...

Explorers hopeful of progress in Northern Iraq.
May 5, 2008... For more than a year, the absence of an Iraq-wide oil law has worked to frustrate the ambitious output plans of the Kurdistan Regional Government (KRG) in northern Iraq. The KRG can sign all the upstream exploration deals it likes, but without...

Sudan's oil future lies due south.
May 5, 2008... The start of a nationwide census this month has set the clock ticking toward a referendum due in 2011 on whether Sudan stays united or not. Oil will be a pivotal consideration. If the south votes to secede, some 70% of Sudan's oil production...

Thirsty CNOOC has eye on 'teapot' refiners.
May 5, 2008... Once dismissed as uncompetitive manufacturers of poor-quality products, China's independent "teapot refineries" now find themselves on the acquisition radar of state China National Offshore Oil Corp. (CNOOC). CNOOC has plans for becoming a...

Nuclear offers solution to Gulf energy crunch.
May 5, 2008... The United Arab Emirates continues to demonstrate it's serious about pursuing nuclear energy, a technology the Middle East has long vilified for its perceived threat to oil demand. Despite ranking fifth globally in both oil and gas reserves,...

Al-Hassan: Sudan's hopes for growth.(Zubair Ahmed al-Hassan)(Interview)
May 5, 2008... Sudan has struggled through civil war and sanctions to develop nearly 500,000 barrels per day of oil production capacity. Less than a decade after significant output began, decline is now setting in. Worryingly for Khartoum, the best future...

Corporate.(GENERAL)
May 5, 2008... CORPORATE--Exxon Mobil may have delivered first-quarter earnings of $10.89 billion last week, but it still found itself under fire from the company's oldest continuous shareholders, the Rockefeller family, some of whom are supporting an...

European Union.(GENERAL)(Brief article)
May 5, 2008... EUROPEAN UNION -- The growing risk of supply disruptions has prompted the European Commission to launch a review of the oil reserves that member states use to cushion themselves in case of emergency. The public consultation was launched Apr. 22...

Industry restructuring.(GENERAL)
May 5, 2008... INDUSTRY RESTRUCTURING--BG has followed up its acquisition of a 9.9% stake in Queensland Gas Co. with a $12 billion bid for Australian gas utility Origin Energy (PIW Apr.21,p6). Origin is the leading gas utility in Australia and New Zealand....

Azerbaijan.(COUNTRIES)(Baku-Tbilisi-Ceyhan Co.)(Brief article)
May 5, 2008... AZERBAIJAN -- The BP-operated Baku-Tbilisi-Ceyhan (BTC) oil pipeline is expected to be running at over its design capacity of 1 million b/d by the end of 2008 as production ramps up from the first platform on the deepwater Guneshli structure,...

Brazil.(COUNTRIES)(Brief article)
May 5, 2008... BRAZIL -- It may be doing well with the drill bit, but Petrobras is struggling enough downstream to merit some assistance from the government, which is hiking gasoline and diesel prices from May 2 in a bid to boost revenues for the...

India.(COUNTRIES)(Brief article)
May 5, 2008... INDIA -- Following a heated parliamentary debate over a proposal last month to end seven-year tax holidays for new refineries from April next year, the government has changed its mind and said it will now extend the tax breaks to any refinery...

Iraq.(COUNTRIES)
May 5, 2008... IRAQ -- The oil ministry in Baghdad and Royal Dutch Shell aim to sign a preliminary agreement this summer to establish a joint venture to exploit associated gas and channel it for domestic use and export for at least 20 years, Iraqi and...

Japan.(COUNTRIES)(Brief article)
May 5, 2008... JAPAN -- Crude oil imports fell 0.7% year-on-year to 4.55 million b/d in March, according to the latest official statistics. This puts average imports in the first quarter at almost 5.11 million b/d, up 16.9% from 4.37 million b/d for the same...

Malaysia.(COUNTRIES)
May 5, 2008... MALAYSIA -- Qatar-based Gulf Petroleum has received approval from Kuala Lumpur to build a $5 billion integrated refinery complex in the northern state of Perak. The complex, which would include a petrochemicals plant and storage, is expected to...

Norway.(COUNTRIES)(OSLO)(Statoil ASA)(Brief article)
May 5, 2008... NORWAY -- Oslo has issued state-controlled StatoilHydro with a writ in connection with a long-running dispute concerning massive cost overruns on the giant Asgard development in the Norwegian Sea. Oslo, which holds 62.5% of Statoil, is...

Russia.(COUNTRIES)
May 5, 2008... RUSSIA -- Lukoil is refocusing its expansion plans on downstream and overseas investments, as its target set in 2006 of doubling production to 4 million b/d by 2016 continues to slip further from its grasp. The country's biggest privately held...

Turkmenistan.(COUNTRIES)
May 5, 2008... TURKMENISTAN -- Ashkhabad has agreed in principle to resume gas exports to neighboring Iran, which were cut at the end of 2007 in an acrimonious dispute over prices. The two sides have agreed to take into account "the significantly higher...

UAE.(COUNTRIES)(Aabar)(Brief article)
May 5, 2008... UAE -- After exploding onto the scene in 2005 as the country's first publicly listed oil company, Aabar has become the first casualty of an increasingly competitive Mideast oil sector, deciding at its annual general meeting last week to abandon...

Worst oil strike in decades hits Nigerian output.(What's New Around the World)
May 5, 2008... Nigeria's white-collar oil union, Pengassan, reached a settlement with Exxon Mobil May 1 to resume operations immediately after inflicting the most damaging labor strike in decades on the country's oil industry. The strike, which started on...

Opec's gamble.(Marketview)
May 5, 2008... NEW YORK -- When asked what they can do about rising oil prices, Opec ministers throw up their arms and claim they are as much a victim of commodity markets as anybody else. Ministers argue that the fundamental economic law of supply and demand...

PIW market indicators.(Statistical table)
May 5, 2008... PIW Market Indicators ($/barrel) Apr. 28- Apr. 21- Mar. 31- Spot Crude Apr. 30 Apr. 25 Apr. 4 Opec Basket $110.76 $110.13 $97.62 UK Brent...

Industry could benefit from lower oil price.
May 12, 2008... Don't say it too loudly, but international oil company (IOC) executives would be unlikely to complain if oil prices were to fall $40 per barrel or more over time. Relentlessly rising oil prices--benchmark West Texas Intermediate crude passed...

Opec keen to keep stock levels lean.
May 12, 2008... US President George W. Bush heads to Saudi Arabia this week to ask for an increase in Opec oil output. He's likely to be disappointed. Opec has consistently argued that the current economic uncertainty is not of its making and that the current...

Rebel states disrupt Bolivia's nationalization.
May 12, 2008... The Bolivian government has now taken majority control of the last four of the country's oil and gas companies still in private hands, officially closing a two-year process of returning the petroleum industry to state management. But President...

Analysts rethink 2008 oil price forecasts.
May 12, 2008... Benchmark West Texas Intermediate (WTI) crude will average $105 per barrel in 2008, according to the latest PIW poll of pundits--a hefty 30% increase from forecasts at the start of this year. In this fourth year of the bull run, oil prices have...

Complex gas offers IOCs Chinese opening.
May 12, 2008... In China, as in many other countries, difficult gas field developments beyond the technical capabilities of local national oil companies are providing an opening for international oil companies (IOC) keen to secure an upstream foothold. While...

US gas set for record storage levels.
May 12, 2008... Preliminary gas storage forecasts suggest the US could be on course for a record level of gas inventories when the current refill season ends in October. According to recent data released by the US Energy Information Administration (EIA), gross...

Nigeria drags down global supply in April.
May 12, 2008... Global supply fell in April by some 370,000 barrels per day, according to preliminary soundings taken by PIW, as a result of a sharp drop in Nigerian output and an off month for Iraq, compounded by seasonal declines in non-Opec supply and other...

Interview: Opec secretary-general Abdullah al-Badri.(Interview)
May 12, 2008... Opec stands accused of taking a gamble, both with its own long-term interests and with the health of the global economy, by not trying to rein in oil prices by putting more crude on the market. The group's secretary-general, Abdullah al-Badri,...

Formula prices.(GENERAL)
May 12, 2008... FORMULA PRICES -- Saudi Arabia effectively lowered its term prices for all June-loading grades, with the exception of lighter grades to Asia. Saudi Arabia has been making its lighter crudes gradually more expensive over time (PIW Apr.28,p2)....

Futures.(GENERAL)
May 12, 2008... FUTURES -- The Dubai Mercantile Exchange (DME) will start trading financially settled Brent and Oman crude futures contracts on Jun. 2, one year after launching its physically settled Oman crude futures contract (PIW Jun.11,p1). DME officials...

Industry restructuring.(GENERAL)
May 12, 2008... INDUSTRY RESTRUCTURING -- Australian independents Anzon and Nexus Energy have scrapped plans for a $606 million merger. The decision follows the failure of the two companies to agree revised merger terms in light of recent drilling success on...

LNG.(GENERAL)(liquefied natural gas)(Brief article)
May 12, 2008... LNG -- Project delays and outages slowed growth in global LNG trade to almost 8% last year, according to a report due out shortly from the Paris-based International Group of LNG Importers (GIIGNL). Overall LNG trade totaled nearly 171 million...

China.(COUNTRIES)
May 12, 2008... CHINA -- State-owned PetroChina is planning two more grassroots refineries in joint ventures with state Qatar Petroleum (QP) and Petroleos de Venezuela (PDV). The Chinese firm is also considering buying a 49% stake in a refinery in Osaka,...

Ghana.(COUNTRIES)
May 12, 2008... GHANA -- Shares in UK independent Tullow Oil jumped by almost 25% May 6 as investors digested promising drilling news from the company's offshore Jubilee field. A drilling update from the Mahogany-2 appraisal well indicated that the field may...

Italy.(COUNTRIES)(Brief article)(Statistical data)
May 12, 2008... ITALY -- The country's oil demand is set to fall by 10% between 2007 and 2020, from 1.68 million b/d to 1.51 million b/d, according to new forecasts from national refining association Unione Petrolifera. Oil product demand is seen dropping to...

Libya.(COUNTRIES)(Brief article)
May 12, 2008... LIBYA -- Negotiations with Italy's Eni, Petro-Canada, and US Occidental, with partner OMV, over new contract terms--agreed on a preliminary basis last year--have been completed and "all the main conditions agreed," according to state-owned...

Russia.(COUNTRIES)
May 12, 2008... RUSSIA -- Faltering production in West Siberia and a discouraging tax regime continue to put pressure on crude and condensate output, which showed a year-on-year drop for a fourth straight month in April. According to preliminary government...

Russia.(COUNTRIES)
May 12, 2008... RUSSIA -- Dmitry Medvedev's arrival as the country's president appears to have paid dividends for state gas giant Gazprom, with the government set to transfer the sought-after Sakhalin-3 Kirinsky Block to the gas monopoly without an auction....

Crude's relentless rise lifts Q1 profits of international majors.(Financial report)
May 12, 2008... The upstream earnings of the major oil companies benefited from benchmark WTI crude prices averaging $98/bbl in the first quarter, but downstream profits were squeezed as companies were unable to pass those higher crude costs on to consumers....

In the bunker.(Marketview)
May 12, 2008... LONDON -- Strong global middle distillate demand is undermining high-sulfur fuel oil (HSFO) in Europe, leaving surplus volumes with nowhere to go. Benchmark barge prices for European HSFO, with a sulfur content of up to 3.5%, have been...

Indonesia weighs benefits of leaving Opec.
May 12, 2008... More membership changes could be looming for Opec, with Indonesia considering leaving the oil exporters' group as declining crude production has turned it into a net importer. President Susilo Bambang Yudhoyono said Jakarta "was studying...

PIW market indicators.(Petroleum Intelligence Weekly)(Statistical table)
May 12, 2008... PIW Market Indicators ($/barrel) May 5- Apr. 28- Apr. 7- Spot Crude May 7 May 2 Apr. 11 Opec Basket $114.13 $108.37 $102.57 UK...

Opec windfall raises doubts over supply.
May 19, 2008... Opec's annual oil revenues are soaring to unprecedented heights and could top $1 trillion within the next year or two. According to PIW estimates, Opec net oil revenues will grow by more than $305 billion this year to $980 billion, assuming an...

Split decision helps EnCana punch its weight.
May 19, 2008... In the late 1990s, when oil prices were low, consolidation and mergers were the order of the day. Now, with oil over $120 per barrel, it seems the reverse may be true, at least for some. Frustrated by what it sees as the unfairly low stock...

Russian cabinet mixes the old and the new.
May 19, 2008... Russia has a new president in Dmitry Medvedev, a new if rather familiar prime minister in Medvedev's predecessor, Vladimir Putin, and now a new cabinet. But those hoping to see a new energy policy were likely dismayed by the appointment of Igor...

Mideast gas market comes of age.
May 19, 2008... If Dubai's recent agreement to pay market prices for Qatari LNG from 2010 is anything to go by, the Mideast gas market seems to be maturing. With oil prices at $100 per barrel, an equivalent gas market price would be $16 per million Btu,...

Refiners put distillates in the driver's seat.
May 19, 2008... The US summer driving season may be just about to begin, but the country's independent refiners are increasing production of middle distillates rather than gasoline. Strong demand for diesel for passenger vehicles in Europe and for power...

Nigeria, Sao Tome see little action in JDZ.(Joint Development Zone)
May 19, 2008... When Nigeria and its tiny island neighbor, Sao Tome and Principe, launched their Joint Development Zone (JDZ) to great fanfare in 2003, officials were so confident of its appeal that they contemplated minimum signature bonuses of $100 million...

Indonesia seeks solution to plunging output.
May 19, 2008... The news that Indonesia is considering quitting Opec hardly comes as a surprise, given that oil output has plummeted by more than 33% since the start of the decade to an average of 952,000 barrels per day last year, leaving the country a net...

Deconstructing peak oil: assumptions are the key.(Petroleum Comment)
May 19, 2008... The steady rise in oil prices continues to raise increasingly widespread concerns about the onset of peak oil. Dr. Nansen G. Saleri, president and chief executive of Houston-based Quantum Reservoir Impact LLC and former head of reservoir...

Corporate.(GENERAL)
May 19, 2008... CORPORATE -- High oil prices have in many respects been bad news for the oil industry, ConocoPhillips Chief Executive Jim Mulva has admitted. While the oil industry's upstream profits have soared thanks to record oil prices, the industry's...

IEA.(GENERAL)(The International Energy Agency)
May 19, 2008... IEA -- The International Energy Agency (IEA) has again lowered its forecast for growth in global oil demand this year, the result of downward adjustments to demand in both developed and developing economies. And this latest downward revision...

Australia.(COUNTRIES)
May 19, 2008... AUSTRALIA -- In a surprise move, Canberra has ended its tax exemption on condensate, drawing criticism from independent Woodside Petroleum, the operator of the North West Shelf (NWS) project, which will be hit hard by the tax change. The...

Indonesia.(COUNTRIES)(Pertamina Humas P.T.)(Brief article)
May 19, 2008... INDONESIA -- State-owned Pertamina has decided to halve the capacity of a new refinery it plans to build with Iran to 150,000 b/d--a size that Pertamina chief Ari Soemarno described only two months ago as "not economically feasible." Priyo...

Iran.(COUNTRIES)
May 19, 2008... IRAN -- Royal Dutch Shell and Repsol YPF have responded to US and European pressure on oil companies not to do business with Tehran by pulling out of plans to develop Phase 13 of the giant South Pars development. But the two companies made it...

Iran.(COUNTRIES)(Brief article)
May 19, 2008... IRAN -- Tehran's decision to ease the rationing imposed on drivers last summer continues to push up gasoline imports, which last year cost the Treasury more than $5 billion. The government introduced regulations allowing drivers to top up their...

Kazakhstan.(COUNTRIES)
May 19, 2008... KAZAKHSTAN -- Western majors developing the giant Kashagan field in the Caspian Sea appear headed for more trouble after telling the government that first oil, which was initially due to flow in 2005, may not now start pumping until 2012-13...

Qatar.(COUNTRIES)
May 19, 2008... QATAR -- Doha is wooing investors once more with the offer of four new gas blocks, some of which will target deeper and hitherto untapped offshore geological structures, Saad al-Kaabi, director of oil and gas ventures with state Qatar Petroleum...

Russia.(COUNTRIES)
May 19, 2008... RUSSIA -- Crude exports via the Transneft pipeline system to destinations outside the former Soviet Union jumped to 4.011 million b/d in April from a modest 3.763 million b/d the previous month. The April increase comes amid a dip in seasonal...

Russia.(COUNTRIES)(British Petroleum Company PLC formed a joint venture with TNK-BP)(Brief article)
May 19, 2008... RUSSIA -- A power struggle is developing between the shareholders of Russian-UK joint venture TNK-BP, with BP coming under pressure not solely from the Kremlin, but also, it seems, from its partners, TNK owners Alfa and Access Renova (AAR). At...

Saudi Arabia.(COUNTRIES)
May 19, 2008... SAUDI ARABIA -- Defying the recent uncertainty surrounding some Mideast Gulf refinery projects, France's Total and state Saudi Aramco have confirmed they will go ahead with a 400,000 b/d export refinery in the industrial city of Jubail (PIW...

Singapore.(COUNTRIES)
May 19, 2008... SINGAPORE -- The Government of Singapore Investment Corp. (GIC) has bought an 11% stake in US energy infrastructure company AEI for $400 million in a move to increase its exposure to the growing energy infrastructure market in developing...

Uzbekistan.(COUNTRIES)
May 19, 2008... UZBEKISTAN -- State oil firms continue to make inroads in the Central Asian republic, with Malaysia's Petronas and Korea National Oil Corp. (KNOC) both unveiling new oil and gas deals. Petronas has strengthened its position by signing...

BP could sign first Iraqi technical support deal.(What's New Around the World)
May 19, 2008... BP could become the first major oil company to sign a technical support contract with Iraq if a final proposal for the Rumaila oil field submitted to the oil ministry last week wins approval, industry and Iraqi sources tell PIW (PIW Mar.10,...

Feeling toppy.(Marketview)
May 19, 2008... NEW YORK -- Seasoned traders are feeling increasingly nervous about the current oil market and think they see a trading pattern that signals a top to prices. Their sense is that last week's pattern--$2 up one day, $2 down the next, then back up...

World gas consumption up 2.5% in 2007.
May 19, 2008... Global natural gas consumption grew by 2.5% in 2007 to 2.95 Tcm (285.4 Bcf/d), according to estimates from Paris-based institute Cedigaz, with year-on-year movements ranging from a 6.8% rise in Asia-Pacific and a 4.3% rise in North America to a...

PIW market indicators.(Statistical table)
May 19, 2008... PIW Market Indicators ($/barrel) May 12- May 5- Apr. 14- Spot Crude May 14 May 9 Apr. 18 Opec Basket $119.06 $115.63 $106.36 UK Brent...

Qatar finds the easy oil running out.
May 26, 2008... Qatar has become the latest Mideast producer to find that it is running out of new oil fields. The situation isn't urgent yet, as the country is in the midst of raising output from 900,000 barrels per day to over 1 million b/d by the end of...

Majors pull back from renewables.
May 26, 2008... The withdrawal of Royal Dutch Shell and BP from two big alternative energy projects--an offshore UK wind farm and a carbon capture and storage (CCS) scheme in Australia, respectively--has added to the growing perception that Big Oil is losing...

North America still driving asset deals.
May 26, 2008... Carrying on last year's trends, upstream merger and acquisition (M&A) activity so far in 2008 has been focused predominantly on North America, which has seen 48 of the 75 transactions worldwide, according to data from energy research firm John...

Gasoline falters as diesel demand soars.
May 26, 2008... Diverging trends in global consumption of gasoline and diesel have left product markets not exactly tight but certainly imbalanced. Gasoline is continuing to lose market share in the OECD, while the world's appetite for diesel keeps on...

Tax row wrecks India's big opportunity.
May 26, 2008... Having tweaked its upstream terms to attract more foreign companies and more firms with deepwater experience, India was likely betting that the latest bid round under its New Exploration Licensing Policy (Nelp) would lure a host of top...

Mexico still drifting in the deepwater.
May 26, 2008... As Mexican legislators debate an energy reform proposal presented by President Felipe Calderon in early April, pressure is mounting on the government to address an issue that has been ignored for several years--cross-border drilling in the Gulf...

Azeri Socar adapts to new marketing role.
May 26, 2008... Azerbaijan's state oil company, Socar, is gearing up to become a major exporter of light, sweet crude to Europe and Asia as production from the BP-operated Azeri-Chirag-Guneshli (ACG) fields approaches its targeted plateau of 1 million barrels...

Corporate.(GENERAL)
May 26, 2008... CORPORATE -- Exxon Mobil plans to invest $100 million to complete testing of new technology that makes the removal of carbon dioxide ([CO.sub.2]) and other impurities from natural gas simpler and less expensive while converting trillions of...

LNG.(GENERAL)
May 26, 2008... LNG -- Russia's Gazprom is finally set to take an ownership position in the North American gas sector through a stake in the proposed $840 million Rabaska LNG import facility near Montreal, Canada. In the letter of intent signed with the...

China.(COUNTRIES)(Brief article)
May 26, 2008... CHINA -- Crude imports in April fell 4% year-on-year to 3.48 million b/d as global prices hit new records and some domestic refineries underwent scheduled maintenance. Angola and Iran were top suppliers, with volumes rising over 10% to 608,000...

Indonesia.(COUNTRIES)(Brief article)
May 26, 2008... INDONESIA -- Energy Minister Purnomo Yusgiantoro has confirmed that the government will raise pump prices by an average of 28.7% due to the rising cost of subsidizing domestic fuels. Government officials had earlier marked Jun. 1 as a possible...

Iran.(COUNTRIES)
May 26, 2008... IRAN -- The 2.5 million b/d Opec exporter is storing increasing volumes of crude oil onboard very large crude carriers anchored outside its main Kharg Island terminal. Gulf shippers say Iran has around 31 million bbl of crude sitting in...

Japan.(COUNTRIES)(Brief article)
May 26, 2008... JAPAN -- Tokyo is negotiating a second loan to state Petroleos de Venezuela (PDV), again with the aim of locking in crude supplies. Venezuela's energy ministry said last week that it was seeking money to finance the expansion of its El Palito...

Nigeria.(COUNTRIES)
May 26, 2008... NIGERIA -- President Umaru Yar'Adua has asked Royal Dutch Shell and Exxon Mobil to repay more than $1.9 billion after a government committee alleged that the pair had underpaid taxes on two production sharing contracts (PSC). The federal...