Petroleum Intelligence Weekly articles from October 2007

Petroleum Intelligence Weekly archives from October 2007

Nobody betting on comfortable winter balances.
October 1, 2007... Three weeks after Opec's surprise decision to add 500,000 barrels per day to output from November, the jury is still out on how winter balances will shape up. What is clear is that the current market is tight, with demand outpacing supply in...

OMV puts its case direct to Mol investors.
October 1, 2007... Austria's OMV has intensified its courtship of Mol with a direct appeal to the 40% of the Hungarian company's shareholders not controlled by either Mol's management or OMV itself. The Austrian firm is starting to make the right noises, talking...

ETFs the latest vehicle for oil's new investors.
October 1, 2007... As oil prices have soared over the past four years, so has energy's appeal to the broader investment community. Hedge funds have become heavier players in energy futures, commodity indices have grown in popularity, and, most recently,...

Dar's dire quality hits Sudan's oil revenues.(Dar Blend crude)
October 1, 2007... The heavy rains that swept across Sudan this past summer also swamped many of its oil facilities, cutting into production and slowing the country's surge in oil output, which has nearly doubled to around 500,000 barrels per day since the Melut...

Repsol seen drifting after recent setbacks.(Repsol YPF S.A.)
October 1, 2007... For Spain's Repsol YPF, the past 12 months have, to say the least, been difficult. It has wrestled with resource nationalism in Bolivia, Ecuador and Venezuela, struggled to advance plans for the partial sell-off of its Argentine YPF subsidiary,...

Provinces raise royalties for Canada's operators.
October 1, 2007... Canada has been promoting itself as a politically secure and economically attractive place for oil and gas companies to do business, offering a contrast to other major producing countries that have been making life more difficult for existing...

Exxon keeps options open in Orinoco row.
October 1, 2007... After declining to accept a bit-part in the Cerro Negro heavy oil project in Venezuela, Exxon Mobil has now taken its case to arbitration at the World Bank's International Center for Settlement of Investment Disputes (ICSID) as it seeks...

Industry restructuring.(GENERAL)
October 1, 2007... INDUSTRY RESTRUCTURING--The long-awaited merger between Norway's Statoil and the oil and gas business of domestic rival Norsk Hydro comes into effect Oct. 1, marking the genesis of combined group StatoilHydro. The deal creates a company with...

Belarus.(COUNTRIES)(crude exports)(Brief article)
October 1, 2007... BELARUS--Newly formed state firm Belarusian Oil (Beloil) will handle all product exports from the country's two refineries from the end of this year as part of an efficiency drive sparked by the termination of subsidized Russian crude supplies...

Chad.(COUNTRIES)
October 1, 2007... CHAD--The government and state China National Petroleum Corp. (CNPC) are planning to build a small refinery in one of several deals struck with Beijing. Chadians hope the latest scheme, agreed during President Idriss Deby's recent trip to...

China.(COUNTRIES)(crude imports)(Brief article)
October 1, 2007... CHINA--Crude imports in August totaled 3.32 million b/d, up 19% year-on-year, bringing imports in the first eight months of the year to 3.33 million b/d, a 15% year-onyear increase (PIW Aug.27,p8). The top suppliers in August were Saudi Arabia...

Colombia.(COUNTRIES)
October 1, 2007... COLOMBIA -- State-owned Ecopetrol sold the full 10.1% stake offered in its initial public offering on the Bogota Stock Exchange last week, raising over $3.2 billion for its $12.5 billion five-year investment plan. Colombian President Alvaro...

Iran.(COUNTRIES)(gasoline shipments)(Brief article)
October 1, 2007... IRAN -- In its bid to become self-sufficient in oil products, Tehran has slashed imports of gasoline, which have been running as high as 200,000 b/d over the past year, equivalent to 40% of domestic demand (PIW Jun.25,p4). Gulf-based shipping...

Iraq.(COUNTRIES)(crude exports)(Brief article)
October 1, 2007... IRAQ -- September oil exports are expected to come in at an average of 1.73 million b/d as a tender for nearly 5 million bbl of oil from the northern Kirkuk fields boosted a scheduled 1.57 million b/d export volume from the southern...

Kazakhstan.(COUNTRIES)(legislation on oil development)(Brief article)
October 1, 2007... KAZAKHSTAN -- Foreign oil investors have been dealt a nasty blow by the country's parliament, which has given unanimous approval to proposed new legislation giving the government the right to cancel oil development contracts on national...

Mauritania.(COUNTRIES)
October 1, 2007... MAURITANIA -- Malaysia's state Petronas is to acquire Australian independent Woodside Petroleum's Mauritanian assets for $418 million, adding to its already huge 14-country portfolio of African acreage. Woodside was the biggest operator in...

Myanmar.(COUNTRIES)
October 1, 2007... MYANMAR -- India's state Oil and Natural Gas Corp. (ONGC) signed up for three deepwater blocks along the country's Rakhine coast last week against a background of violent protests in the former capital, Yangon (p7). Despite calls by the...

Russia.(COUNTRIES)
October 1, 2007... RUSSIA -- Tatneft has chosen Royal Dutch Shell as its strategic partner for developing Tatarstan's sizable bitumen reserves, giving the Anglo-Dutch supermajor another significant boost in the Russian upstream after losing the operatorship of...

Sao Tome.(COUNTRIES)
October 1, 2007... SAO TOME -- Not content with interests in three other blocks in the Joint Development Zone (JDZ) with Nigeria, Switzerland-based Addax is moving into a fourth, after agreeing to buy Exxon's 40% stake in Block 1 for $77 million and 2% of profit...

UAE.(COUNTRIES)
October 1, 2007... UAE -- Abu Dhabi has confirmed it will shut in 600,000 b/d of offshore oil production at the end of next month in order to carry out scheduled maintenance, but stressed that the move had been flagged well in advance and would cause little...

United States.(COUNTRIES)
October 1, 2007... UNITED STATES -- Royal Dutch Shell and state Saudi Aramco have decided to go ahead with a $7 billion, 325,000 b/d capacity expansion at their refinery in Port Arthur, Texas, more than doubling capacity to 600,000 b/d. When completed in 2010,...

Venezuela.(COUNTRIES)(petrochemicals industry)(Brief article)
October 1, 2007... VENEZUELA -- President Hugo Chavez has announced plans to spend $20 billion between now and 2013 revamping the country's petrochemical industry. But critics say the leftist president's grandiose "petrochemical revolution" will not work because...

Myanmar investments on the line.
October 1, 2007... The monk-led protests in the streets of Yangon, Myanmar, began to take a violent turn last week as the ruling military began a crackdown on protests that were initially sparked by a rise in fuel prices. Analysts now fear a repeat of the deadly...

Partial to partials.(Marketview)(crude oil industry)
October 1, 2007... SINGAPORE--Funny goings-on in the Mideast partials market could reignite debate over the best method of price discovery for the massive flow of oil from the region into Asia. [GRAPHIC OMITTED] A buying frenzy in the Platts Dubai...

PIW market indicators.(Petroleum Intelligence Weekly)(Statistical table)
October 1, 2007... PIW Market Indicators 1 Week 2 Weeks 4 Weeks Spot Crude Ago Ago Ago Opec Basket $75.80 $75.42 $71.37 UK Brent (Dtd.) 77.10 77.73 74.76 UK...

DME volumes rebound from summer lull.(Industry overview)
October 8, 2007... The Dubai Mercantile Exchange (DME) Oman futures contract is out of intensive care and showing signs of increasing health. The opening of the DME's trading floor last month and the implementation of a new market-makers program gave a boost to...

Credit crunch could hit oil's smaller players.
October 8, 2007... The financial community is still counting the cost of the subprime meltdown in the US, but one major result of the crisis has been a general reduction in liquidity and reassessment of risk among major financial institutions. While this is...

Chevron, total on defensive over Myanmar.
October 8, 2007... A minority stake in Myanmar's Yadana gas field has caused much less trouble for Chevron than it did for its previous owner, Unocal, but that may be about to change. The recent bloody protests against the ruling military junta have focused...

Turkey seeks better gas transit terms.
October 8, 2007... Turkey is leveraging its position as a bridge between Europe and Asia to try and get a piece of the Caspian gas pie. Without indigenous production, the "only thing we can rely on is geography, the position of Turkey in the region," Saltuk...

Big names come back to Colombia.
October 8, 2007... For the past four years, Colombia has been trying hard to attract foreign investment in order to halt the decline in its oil production. It's had some success--there has been an influx of small and medium-sized players, and oil output has...

Rockies gas line a mixed blessing for producers.
October 8, 2007... With their gas sometimes selling for as little as $1 per thousand cubic feet, US Rocky Mountain producers are counting the days until the early 2008 start-up of the Rockies Express pipeline. The problem for Rockies producers is that too much...

China drives oil demand as US stalls.
October 8, 2007... The US, the key engine of OECD oil demand growth, may be faltering, but it's having little impact on overall world oil consumption, with economic growth in non-OECD countries driving increasing consumption regardless of current record-high oil...

Industry restructuring.(GENERAL)
October 8, 2007... INDUSTRY RESTRUCTURING--ConocoPhillips is seeking buyers for its 100% interest in the onshore Chuanzhong gas block in China's Sichuan province, which it acquired as part of its takeover of US independent Burlington Resources at the end of 2005...

Trading.(General.)(Brief article)
October 8, 2007... TRADING--Former Coastal Chairman Oscar Wyatt has pleaded guilty to paying illegal surcharges to Iraq under the UN's oil-for-food program, bringing his month-long trial to an abrupt end. Wyatt told a federal judge in New York that he paid...

Angola.(COUNTRIES)(BP)(Brief article)
October 8, 2007... ANGOLA--BP has started production from its deepwater Greater Plutonio development at a rate of around 80,000 b/d. The long-awaited project on offshore Block 18, in which the UK supermajor has a 50% interest, will deliver an eventual 220,000 b/d...

Canada.(COUNTRIES)
October 8, 2007... CANADA--The backlash against Alberta's proposed hike in oil and gas royalties has begun, with North America's largest gas producer, EnCana, threatening to slash spending in the province next year if the increase goes ahead. EnCana said it would...

Indonesia.(COUNTRIES)
October 8, 2007... INDONESIA--State-owned Pertamina now thinks its Banyu Urip field, the main field on the onshore Cepu block, could contain oil reserves of around 350 million bbl, rather than the 250 million bbl originally estimated. But development costs for...

Iran.(COUNTRIES)
October 8, 2007... IRAN--France's Total remains a long way from a final investment decision on its Pars LNG venture, with negotiations with National Iranian Oil Co. at a stalemate, a source inside Total tells PIW. Iran in April gave Total and Malaysian state...

Iraq.(COUNTRIES)(Kurdistan Regional Government )(Brief article)
October 8, 2007... IRAQ--The Kurdistan Regional Government (KRG) in northern Iraq has awarded four new production sharing contracts (PSCs), ignoring advice from the US to allow the upstream contract process to be controlled by the central government in Baghdad...

Japan.(COUNTRIES)(Statistical table)(Brief article)
October 8, 2007... JAPAN--Crude imports in August rose by 3% to 4.18 million b/d, despite the top two exporters, Saudi Arabia and the UAE, cutting supply by 19% and 13%, respectively, in line with Opec cuts (PIW Sep.10,p8). But other Mideast sources Iran, Iraq,...

Kazakhstan.(COUNTRIES)(Agip KCO)(Brief article)
October 8, 2007... KAZAKHSTAN--Agip KCO, the Eni-led operator of the giant Kashagan field, is having to do some "imaginative thinking" to resolve its difficulties with the government over the project's huge cost overruns and delays to production start-up, sources...

Norway.(COUNTRIES)
October 8, 2007... NORWAY -- The formal launch of Statoil's merger with the oil and gas business of rival Norsk Hydro has been overshadowed by the resignation of the new group's chairman, Eivind Reiten, just days after bribery allegations surfaced in connection...

Russia.(COUNTRIES)
October 8, 2007... RUSSIA--Crude exports to destinations outside the former Soviet Union via the Transneft pipeline system spiked in September to 4.037 million b/d, up from 3.709 million b/d in August, as oil firms looked to move more crude abroad before the...

South Korea.(COUNTRIES)(crude oil imports compared)(Statistical table)(Brief article)
October 8, 2007... SOUTH KOREA--Crude imports in August fell nearly 12% to 2.24 million b/d. Crude volumes from Saudi Arabia and the UAE fell to 733,000 b/d and 423,000 b/d, respectively, but Iranian and Iraqi volumes surged significantly compared with the same...

United Kingdom.(COUNTRIES)
October 8, 2007... UNITED KINGDOM--Nexen Petroleum is seeking consent from London for the installation of additional oil treatment facilities on its North Sea Buzzard field--part of the Forties crude system--in order to deal with unexpectedly high levels of...

United States.(COUNTRIES)(Brief article)
October 8, 2007... UNITED STATES--Record oil prices and an increase in the number of blocks on offer helped make last week's Central Gulf Sale 205 the second most successful Gulf of Mexico lease sale ever, with a staggering $2.9 billion in high bids. It was the...

Global oil supply bounces back.(What's New Around the World)(Statistical table)
October 8, 2007... Global supply bounced back by more than 1 million b/d in September from a storm and maintenance induced slump in August (PIW Sep.10,p5). About two-thirds of the monthly gain was from non-Opec sources, with the remainder largely driven by higher...

Laws of gravity.(Marketview)
October 8, 2007... MOSCOW--Crude futures have finally decided to obey the rules of gravity. After front-month ICE Brent futures settled above $80/bbl for the first time on Sep. 27, and then climbed to an all-time intraday high of $81.05/bbl on Sep. 28, a...

PIW market indicators.(Marketview)(petroleum prices compared)(Statistical table)
October 8, 2007... PIW Market Indicators Spot Crude 1 Week Ago 2 Weeks Ago 4 Weeks Ago Opec Basket $75.20 $76.17 $73.76 UK Brent (Dtd.) 77.80 78.25 76.68 UK B-wavea ...

BP looks for reserves boost in Azerbaijan.
October 15, 2007... As BP struggles to get its hands on new proven oil and gas reserves, the UK supermajor is looking to deepen its involvement in one of its key areas of operation--Azerbaijan. Accounting for roughly 10% of the company's global capital...

Ecuador springs tax surprise on investors.
October 15, 2007... With Ecuador's president, Rafael Correa, winning broad public support for his plans to change the country's constitution and increase the state's role in key economic sectors such as petroleum, most foreign oil companies were expecting the...

Past returns to haunt StatoilHydro.
October 15, 2007... Acquisitions can often bring unwelcome baggage--as Chevron is being reminded in Myanmar, and as Norway's newly merged Statoil and Norsk Hydro are also discovering. The revelation that Norsk Hydro paid $6.85 million in "consultancy fees" to an...

US takes star role in shell upstream plans.(Royal Dutch-Shell PLC)
October 15, 2007... Royal Dutch Shell is poised to become the most aggressive explorer in the deep waters of the US Gulf of Mexico following its industry-best showing in this month's lease sale. Shell's $555 million outlay at the sale sent a powerful signal about...

EOR offers opening for Adnoc's partners.
October 15, 2007... Abu Dhabi National Oil Co. (Adnoc) is on the lookout for innovative enhanced oil recovery (EOR) techniques to help maintain plateau rates at its existing producing fields and lift the UAE's overall output capacity to 3.5 million barrels per day...

Litmus test looms for East Africa's potential.
October 15, 2007... UK independent Tullow Oil will this month drill the first deepwater well on Lake Albert, targeting the biggest reserves to date in Uganda, where resource estimates have jumped sharply. Sweden's Lundin Petroleum has just taken a block in...

Private sector fuels India's refining boom.
October 15, 2007... The boom in Indian refining, which could see the country emerge as the dominant export player in Asian product markets over the next five years, has been notable for the role played by the domestic private sector--companies like Reliance and...

Corporate.(GENERAL)
October 15, 2007... CORPORATE--BP has announced a strategic overhaul of its business structure involving what Chief Executive Tony Hayward describes as a "fundamental shift" in how the company works (PIW Jul.30,p6). Aiming to turn around the group's ailing...

Formula prices.(GENERAL)
October 15, 2007... FORMULA PRICES--Saudi Arabia lowered its November term contract formula prices for Europe and especially the US, but increased formula prices for cargoes going to Asia, where 50% of Saudi crude oil exports end up. Asian clients will have to pay...

Industry restructuring.(GENERAL)(Brief article)
October 15, 2007... INDUSTRY RESTRUCTURING--Italy's Eni has made--and had rejected--a $3 billion takeover offer for UK independent Burren Energy. Norwegian independent Pertra is to merge with local competitor Det Norske Oljeselskap in an agreed share swap deal...

Australia.(COUNTRIES)
October 15, 2007... AUSTRALIA--Chevron's giant Gorgon LNG project off the country's northwest coast has taken another step forward, receiving final federal environmental approval from Canberra. The federal green light came after Western Australia gave state...

Bahrain.(COUNTRIES)(Brief article)
October 15, 2007... BAHRAIN--US Occidental and Thailand's PTT Exploration & Production have emerged as winners in the tiny Gulf producer's first international bid round, which attracted just three bidders for the four offshore blocks on offer. The kingdom's tender...

Ghana.(COUNTRIES)
October 15, 2007... GHANA--Tullow Oil's latest drilling efforts have drawn a blank, with the UKlisted independent plugging and abandoning its 1N-3X appraisal well on the shallowwater Tano Block. The well on the Tano field, discovered in 1970, was testing a known...

India.(COUNTRIES)(Brief article)
October 15, 2007... INDIA--The much-delayed seventh bid round to be held under the country's New Exploration Licensing Policy (Nelp) terms is now set to be launched in the week beginning Oct. 29, a government source has told PIW. With 80-85 blocks on offer, Nelp-7...

Iran.(COUNTRIES)(Brief article)
October 15, 2007... IRAN--Austria's OMV may soon be in more trouble with the US after revealing that it is chasing two exploration blocks in Iran with Turkish strategic partner Petrol Ofisi, in which OMV bought a 34% stake in March last year (PIW Mar.20'06,p8)....

Japan.(COUNTRIES)
October 15, 2007... JAPAN--Brazil's state-controlled Petrobras is in the final stage of talks to acquire a unit of Exxon Mobil downstream affiliate TonenGeneral Sekiyu KK, local news reports indicated last week. Petrobras has been eyeing Nansei Sekiyu, which...

Kazakhstan.(COUNTRIES)(Brief article)
October 15, 2007... KAZAKHSTAN--The government has softened its stance over the hugely delayed and overbudget Kashagan field, saying it has no plans to change the production sharing agreement held by the Eni-led Agip KCO operating company. "We are not talking...

Kenya.(COUNTRIES)
October 15, 2007... KENYA--Sweden's Lundin Petroleum has signed a production sharing contract for Block 10A, one of four handed back by state China National Offshore Oil Corp. earlier this year. Lundin plans to test whether the onshore block in the Anza Basin in...

Qatar.(COUNTRIES)
October 15, 2007... QATAR--Indonesia's state Pertamina and Germany's Wintershall have been awarded an offshore exploration block that has been kicking around unlicensed for several years, as part of the emirate's efforts to boost its oil output capacity to 1...

Ukraine.(COUNTRIES)
October 15, 2007... UKRAINE--Gazprom has reached an agreement with the government setting out a payment scheme for settling the country's $1.3 billion debt to the Russian gas monopoly by the end of this month, quelling concerns that a cut in gas supplies to...

Uzbekistan.(COUNTRIES)
October 15, 2007... UZBEKISTAN--With limited opportunities at home in Russia, Lukoil is pushing ahead with plans to start gas production from its $2 billion Kandym-Khauzak- Shady-Kungrad development in the Central Asian republic. The project remains heavily...

New management arrives at Russia's transneft.(Brief article)
October 15, 2007... The imminent arrival of a new management team at Russian pipeline operator Transneft looks set to have a significant impact on the major projects targeted by the oil transportation monopoly's previous bosses. According to Transneft...

The comeback kid.(Marketview)
October 15, 2007... NEW YORK--The loss of some 700,000 b/d of low-sulfur, gasoline-and diesel-rich Nigerian crude due to civil unrest over the past 18 months has been one of the many fundamental factors supporting the oil price, but last week's announcement by...

Private firm plans UK heavy oil upgrader.(Sonhoe Development)(Brief article)
October 15, 2007... A privately owned UK company, Sonhoe Development, has unveiled plans to build a $4 billion heavy oil upgrading facility in northeast England. The plant will be able to process around 200,000 b/d of heavy crude into low-sulfur diesel, kerosene...

PIW market indicators.(Petroleum Intelligence Weekly)(Statistical table)
October 15, 2007... PIW Market Indicators 1 Week 2 Weeks 4 Weeks Spot Crude Ago Ago Ago Opec Basket $75.07 $75.33 $75.42 UK Brent (Dtd.) 77.57 78.00 77.73...

Demand growth next year hinges on non-OECD.
October 22, 2007... The world economy is expected to grow by 5 % next year, with global oil demand forecast to rise by 1.4%, or roughly 1.22 million barrels per day, with all growth in demand coming from non-OECD countries. Growth in oil demand, particularly in...

Nigeria term deals reflect Yar'Adua caution.
October 22, 2007... After weeks of intense lobbying, Nigerian President Umaru Yar'Adua has approved term crude lifting contracts for the year ahead. The list--which covers around 930,000 barrels per day of state Nigerian National Petroleum Corp. (NNPC) equity...

Crude targets pose challenge for KNOC.
October 22, 2007... Lack of cash and lack of expertise are preventing state Korea National Oil Corp. (KNOC) from meeting ambitious energy targets set by the government in Seoul. South Korea wants domestic firms' international operations to meet 18% of the...

Service contracts do little for Mexican gas.
October 22, 2007... In sharp contrast to its faltering oil output, Mexico's gas production is rising--but not fast enough, and not as much as it could be. Production has risen nearly 8% per year since 2002 to its current level of almost 6.5 billion cubic feet per...

BP gets to grips with the performance gap.
October 22, 2007... After a couple of years marred by US safety scandals, production delays in the Gulf of Mexico and the undignified exit of former boss John Browne, BP has begun what it describes as a "fundamental shift" in how the company works, aimed at...

Devon departs from standard independent script.
October 22, 2007... In terms of strategy, US independent Devon Energy regards itself as something of a hybrid, combining its peers' heavy exposure to repeatable resource plays with a commitment to the type of high-risk exploration and capital-intensive projects...

Oil-field services firms under fire in Africa.
October 22, 2007... Big Oil's business practices are in the spotlight again, with Chevron and Total facing criticism for the mere fact of investing in Myanmar and heads rolling at Norway's StatoilHydro in con nection with alleged bribery in Libya. But it is not...

Corporate.(GENERAL)(Brief article)
October 22, 2007... In another sign of the growing power of the Middle East's new energy investment vehicles, Abu Dhabi National Energy Co. (Taqa) has signed a letter of intent with privately held Kuwait Energy Co. (KEC) to pursue joint upstream opportunities in...

IEA.(GENERAL)(Statistical table)
October 22, 2007... Expectations that already tight oil market conditions will get even tighter in the fourth quarter are underpinning current high oil prices, the International Energy Agency said in its latest monthly report. Risks to global demand from the US...

Opec.(GENERAL)
October 22, 2007... With oil prices surging toward $90/bbl, Opec is arguing that market fundamentals are improving, and predicting a balanced market in the coming quarters. The perception of a tight crude market has eased as a result of downward revisions to US...