Petroleum Intelligence Weekly articles from October 2008

Petroleum Intelligence Weekly archives from October 2008

Prices, crisis put big dent in demand.
October 6, 2008... Consumers in developed OECD economies are hurting. Oil price anxieties may have receded a little following crude's hasty retreat from the high of $147 per barrel reached in July, but they have been replaced by concerns over the financial sector...

US gas outlook takes turn for the Worse.
October 6, 2008... Back at the start of July, the US natural gas industry was heading for its highest annual output in more than 30 years, with production threatening to top 20 trillion cubic feet for the first time since 1974. Benchmark Nymex gas prices stood...

Ecopetrol makes ill-timed Wall Street debut.
October 6, 2008... Colombia's state Ecopetrol has made its US stock market debut at what looks like a most inopportune time, with oil prices weakening and financial market turmoil turning investors away from risky emerging market equities. The company's American...

Terms take shape for Iraqi bid rounds.
October 6, 2008... The six oil fields to be awarded in Iraq's first licensing round will put more than 43 billion barrels of oil reserves into the hands of international oil companies (IOC), whose challenge will then be to arrest declining output and ultimately...

Credit crisis complicates Repsol's plans.
October 6, 2008... Global financial market turmoil is complicating life for many major oil companies, but particularly for Spain's Repsol YPF. One of its major shareholders, cash-strapped builder Sacyr Vallehermoso, may have to sell its 20% stake in the firm,...

Chevron faces decision on Reliance stake.
October 6, 2008... As Reliance Petroleum Ltd. (RPL) prepares for the commissioning of its giant 580,000 barrel per day export refinery at Jamnagar on India's west coast, a huge decision is looming for the company's strategic partner Chevron. The US major acquired...

Global supply weathers the storm.(Statistical data)
October 6, 2008... Global oil markets have been buffeted by stormy weather both in the Gulf of Mexico and on Wall Street, leaving Opec in a quandary about how to respond. The producer group is dealing with competing pressures--to cut output in response to...

Corporate.(GENERAL)
October 6, 2008... CORPORATE -- Already partners in two international gas pipeline projects, Russia's state Gazprom and Italy's Eni are now advancing plans to swap assets. Eni Chief Executive Paolo Scaroni and Gazprom Chairman Alexei Miller have agreed to sign a...

Environment.(GENERAL)(European Union's plans to control carbon dioxide emissions)(Brief article)
October 6, 2008... ENVIRONMENT -- European Union politicians have delivered a major blow to the automotive industry by reinstating a 2012 deadline for reducing carbon dioxide ([CO.sub.2]) emissions from passenger vehicles. The European Commission's environment...

European Union.(GENERAL)
October 6, 2008... EUROPEAN UNION -- The European Commission has fined nine companies, including Exxon Mobil, Total and South Africa's Sasol, almost $1 billion for operating a price-fixing "paraffin mafia." The nine were found guilty of participating in a...

Tankers.(GENERAL)
October 6, 2008... TANKERS -- A surge in piracy off northern Somalia in the Gulf of Aden--a key oil shipping route leading to the Suez Canal--could have a huge impact on crude oil and commodity prices. The International Maritime Bureau has this year recorded 61...

Brazil.(COUNTRIES)(Petroleo Brasileiro S.A's drilling plans)(Brief article)
October 6, 2008... BRAZIL -- Petrobras is once again trying to manage expectations of the oil and gas potential of the country's subsalt after a state governor suggested the offshore Jubarte field could contain reserves of up to 4 billion boe. Petrobras said it...

Egypt.(COUNTRIES)
October 6, 2008... EGYPT -- With the ink barely dry on agreements improving price terms for the country's gas producers, state-owned Egyptian Natural Gas Holding Co. (Egas) has launched its first bid round in over two years, aimed at encouraging international...

Germany.(COUNTRIES)
October 6, 2008... GERMANY -- E.On has concluded an agreement with Gazprom to acquire a 25% stake in the giant West Siberian Yuzhno-Russkoye gas field, but in return is cutting its 6.43% indirect Gazprom stake to a direct one of 3.5%. The balance, a 2.93% stake...

Japan.(COUNTRIES)(crude imports)(Brief article)(Statistical data)
October 6, 2008... JAPAN -- Crude imports averaged 4.13 million b/d in August, down 1.2% year-on-year. Top supplier Saudi Arabia provided 1.02 million b/d, up 2.9% from August 2007, while supplies from the UAE dipped 0.4% to 982,000 b/d (PIW Sep.8,p6). Japan...

Kazakhstan.(COUNTRIES)
October 6, 2008... KAZAKHSTAN -- BP has finally decided to shed its three minority stakes in Kazakhstan, ending a long but low-key relationship with the Central Asian republic. Up for sale are both of BP's holdings in the Caspian Pipeline Consortium (CPC), along...

Qatar.(COUNTRIES)
October 6, 2008... QATAR -- International oil companies are evaluating data packages released by state Qatar Petroleum (QP) for four gas exploration blocks ahead of submitting bids, industry sources tell PIW. The blocks are the first to target nonassociated gas...

Russia.(COUNTRIES)
October 6, 2008... RUSSIA -- Regional producer Tatneft is preparing to go it alone with its extensive bitumen reserves, likely ending the hopes of Royal Dutch Shell and Chevron for participating in the technology-intensive development. Rustam Minnikhanov, deputy...

Russia.(COUNTRIES)(crude production)(Brief article)
October 6, 2008... RUSSIA -- Overall crude and condensate production averaged 9.84 million b/d in August, up 0.6% from the previous month, but 0.8% lower than in August 2007. The figures come amid mounting signs that the country will not manage to deliver growth...

South Korea.(COUNTRIES)(crude imports)(Brief article)(Statistical data)
October 6, 2008... SOUTH KOREA -- Crude imports averaged 2.27 million b/d in August, up 2% year-on-year, according to the latest official data (PIW Sep.8,p7). Imports from biggest supplier Saudi Arabia rose almost 20% to 873,000 b/d, while supplies from the UAE...

United States.(COUNTRIES)
October 6, 2008... UNITED STATES -- Kinder Morgan Energy Partners and Energy Transfer Partners (ETP) are to build a new $1.3 billion, 187 mile pipeline to transport gas from the booming Fayetteville Shale play. The 2 Bcf/d line will originate in Conway County,...

TNK-BP boardroom returns to normal.
October 6, 2008... It is too soon to say whether TNK-BP's warring shareholders have entirely settled their differences, but a board meeting late last month, the first since the Sep. 4 truce was agreed, went off well and has provided a platform from which to move...

Gasoline washout.(Marketview)
October 6, 2008... WASHINGTON -- Benchmark US crude prices, after plunging more than $10/bbl in one session early last week amid the broader stock market chaos in the US, seemed to be searching for some stability in the $90 range as PIW went to press. ...

PIW market indicators.(Statistical table)
October 6, 2008... PIW Market Indicators ($/barrel) Sep. 29- Sep. 22- Sep. 1- Spot Crude Oct. 1 Sep. 26 Sep. 5 Opec Basket $91.47 $98.28 $104.39 UK Brent...

Majors primed for M&A frenzy, if so inclined.
October 13, 2008... Rising oil prices have masked the weaknesses of major oil companies for years, but if the global economic downturn spurs a period of flat or falling prices--as many analysts now predict--Big Oil will need to rethink its business strategy....

Smaller traders pushed to the sidelines.
October 13, 2008... These are good times to have deep pockets. Three months ago, credit lines for smaller oil-trading companies and refiners were stretched as oil soared to a record $147 per barrel. In the current financial turmoil, credit has become even tighter...

Buyers change for Nigeria's shaky exports.
October 13, 2008... Disruptions to Nigerian crude loadings are causing notable shifts in buying practices. Some long-standing customers are shopping elsewhere and more crude is being sold into Africa, judging by Nigerian loadings for July to September. US refiner...

Chevron breaks new ground in Mideast Gulf.
October 13, 2008... It's a measure of the industry's maturity that Chevron clinched an extension for its prized onshore fields in the Saudi-Kuwaiti Neutral Zone last month because of its expertise in steamflooding to boost recovery of heavy oil. Even the Mideast...

Kremlin steps in to fund oil firms.
October 13, 2008... Moscow is expected to throw a lifeline to Russia's state and private oil majors to avert a looming funding crisis in the sector over its foreign debts. State gas giant Gazprom, with debts of around $60 billion, and state Rosneft, with about $20...

Kazakh projects wrestle with climbing costs.
October 13, 2008... A sharp increase in capacity at the supergiant, Chevron-operated Tengiz field will soon nudge Kazakhstan's oil production beyond the 1.5 million barrel-per-day mark and cushion the republic with extra revenues as the global financial crisis...

China catches a chill from global crisis.
October 13, 2008... As a global recession looks increasingly inevitable, all eyes are now turning to China, which has been the economic miracle of the world these past few years. With economies stalling in the US, Europe and Japan, will growth in China's economy...

Formula prices.(GENERAL)
October 13, 2008... FORMULA PRICES -- November term contract differentials for Saudi Arabia continue to look tight relative to the pricing of competing crudes. Amid mounting evidence of an economic downturn and a growing threat to demand, refiners across the globe...

Angola.(COUNTRIES)(Brief article)
October 13, 2008... ANGOLA -- A delayed upstream licensing round could be relaunched before the end of the year, giving the 43 international companies that prequalified as operators and 38 as nonoperators a chance to bid for the 10 blocks on offer--three in...

India.(COUNTRIES)(Brief article)
October 13, 2008... INDIA -- Reliance Industries is set to begin test runs later this month at its giant new Jamnagar refinery on the west coast. Commissioning will be carried out in phases and Reliance is hoping for a repeat of the existing plant's start-up in...

Iran.(COUNTRIES)
October 13, 2008... IRAN -- Plans for the proposed Persian Pipeline to export natural gas into the heart of Europe are advancing, with partners signing a string of agreements, according to Deputy Oil Minister Akbar Torkan. The proposed pipeline would carry 100...

Kazakhstan.(COUNTRIES)
October 13, 2008... KAZAKHSTAN -- ConocoPhillips has trumped an offer from Royal Dutch Shell to secure a prized oil and gas block in the Caspian Sea, teaming up with the UAE's Mubadala Development to explore and develop N Block. Exclusive rights to the block were...

Norway.(COUNTRIES)(Tore Torvund and Morten Ruud quits Statoil ASA)(Brief article)
October 13, 2008... NORWAY -- Questionable payments for work in Libya nearly a decade ago have led to the downfall of two senior executives at StatoilHydro, who quit their posts last week after an anticorruption inquiry. The resignations of Tore Torvund, executive...

Norway.(COUNTRIES)
October 13, 2008... NORWAY -- Interest in mature acreage remains intense, with 47 companies applying for the Awards in Predefined Areas (APA) 2008 license round, two more than in 2007. APA aims to encourage exploration in mature areas where expectations are for...

Peru.(COUNTRIES)
October 13, 2008... PERU -- Several senior officials have resigned amid corruption allegations relating to the award of oil and gas exploration contracts. Alberto Quimper Herrera, a member of the board of the state oil and gas regulator, Perupetro, and Cesar...

Russia.(COUNTRIES)
October 13, 2008... RUSSIA -- Exports of crude oil via pipeline monopoly Transneft surged to 3.623 million b/d (14.829 million metric tons) in September, up 161,000 b/d from August. Transshipments from neighboring Kazakhstan, Azerbaijan and Belarus were up...

UAE.(COUNTRIES)(Brief article)
October 13, 2008... UAE -- US Occidental has struck a preliminary agreement to appraise and develop two small fields under a new concession, the first awarded by Abu Dhabi in nearly three decades. In a new departure, Oxy will hold 100% of the Jarn Yaphour and...

Ukraine.(COUNTRIES)
October 13, 2008... UKRAINE -- Prime Minister Yulia Tymoshenko is hoping a new framework agreement with Russia for long-term gas supplies will avert any recurrence of the pricing disputes that have led to cuts in gas flows (PIW Jan.2'06,p1). Under the deal, agreed...

Sakhalin is set for busy few years.(COUNTRIES)
October 13, 2008... The next few years are looking very busy offshore Sakhalin, in Russia's Far East. The Exxon Mobil-operated Sakhalin-1 project is to push on with developing its two remaining fields, while the Gazpromled Sakhalin-2 consortium, now entering its...

Squeeze tighter.(Marketview)
October 13, 2008... LONDON -- Hit by the credit crunch and with a heavy refinery maintenance season looming, Europe's gas oil market is facing an even tighter winter than last year. Refiners are enjoying a 70% increase in gas oil margins over this time last year,...

Opec rings alarm bell over oil price crash.
October 13, 2008... Worried about crumbling oil demand, falling oil prices and declining incomes, Opec oil producers have called an extraordinary meeting on Nov. 18 to consider a possible cut in output to counter the weaker market conditions. Price hawks Iran and...

PIW market indicators.(Statistical table)
October 13, 2008... PIW Market Indicators ($/barrel) Oct. 6- Sep. 29- Sep. 8- Spot Crude Oct. 8 Oct. 3 Sep. 12 Opec Basket $79.66 $90.01 $97.37 UK Brent...

Opaque outlook clouds Opec's judgment.
October 20, 2008... Opec has woken up to the urgency of the oil price crash, but faces a titanic struggle to arrest the meltdown. Markets paid scant regard to Thursday's snap decision to pull forward the emergency Opec meeting by three weeks to Oct. 24, driving...

Oil majors set to dig into cash reserves.
October 20, 2008... Officially at least, the global financial crisis has had almost no impact on the major international oil companies (IOC). The world is going into recession, credit has dried up and the oil price is collapsing, but the majors are just fine....

Turkey aims to turn the tide in Black Sea.
October 20, 2008... As upstream terms tighten, Turkish state oil company TPAO is bucking the worldwide trend with a new push to draw investors to its Black Sea acreage. "There are no fixed terms on the contract," TPAO head Mehmet Uysal tells PIW. Terms may have...

Iraq bid round brings majors head to head.(international oil companies)
October 20, 2008... In order to placate opposition to the award of its most prized producing fields to international oil companies (IOC), Iraq has chosen bidding parameters that throw competition wide open among all firms--including majors that previously sought...

Cheaper oil, costly credit squeeze oil sands.
October 20, 2008... Oil companies with exposure to the Canadian oil sands are feeling the pinch. The soaring oil prices that fueled a surge in investment in these high-cost, unconventional megaprojects are now imploding, playing havoc with project economics....

Lenders put Asia projects under closer scrutiny.
October 20, 2008... Financial turmoil and falling energy prices are casting a shadow on large oil and gas projects in the Asia-Pacific region, the main driver of global energy demand growth. The easy money and high oil prices that made many regional projects...

IEA.(GENERAL)(International Energy Agency)
October 20, 2008... IEA -- The International Energy Agency has slashed its demand estimates for this year and next to reflect the deepening economic crisis, but has also suggested that long-term supply growth will be hit by the downturn. The watchdog for the...

Industry restructuring.(GENERAL)
October 20, 2008... INDUSTRY RESTRUCTURING -- Hungary's Mol has now become the largest shareholder in Croatian refiner Ina, having raised its interest to 47.15% by snapping up a 22.15% stake through a public offer. It is expected to assume majority control through...

LNG.(GENERAL)
October 20, 2008... LNG -- Russian Gazprom's ambitious plans to become a global LNG player are racing ahead, with an investment in Canada looking more likely and a strong pitch being made toward Alaska. Although not confirmed, Gazprom could secure a 27% stake in...

Opec.(GENERAL)
October 20, 2008... OPEC -- The latest Monthly Oil Market Report sets a somber tone just ahead of the producer group's Oct. 24 emergency meeting. "Even if governments are successful in calming equity markets and unfreezing credit markets in the near future, the...

Refining.(GENERAL)
October 20, 2008... REFINING -- European refineries are facing more stringent emissions controls that could cost them as much as [euro]1.5 billion ($2 billion) per year under new European Union proposals. Refiners' group Europia warns that the proposals to update...

Angola.(COUNTRIES)
October 20, 2008... ANGOLA -- Italy's Eni has made a second oil discovery in deepwater Block 15/06 with the Ngoma-1 well, which was drilled to a total depth of 3,383 meters in 1,421 meters of water, encountering an oil column of 127 meters in high-permeability...

Colombia.(COUNTRIES)
October 20, 2008... COLOMBIA -- India's Oil and Natural Gas Corp. and China's Sinopec are going to court after national oil company Ecopetrol took control of the Teca oil field, operated by their Mansarovar Energy Colombia joint venture. Colombia says the contract...

Iraq.(COUNTRIES)(Brief article)
October 20, 2008... IRAQ -- Talks between the oil ministry and the Kurdistan Regional Government (KRG) could pave the way for exports of oil from northern Iraq via Turkey, but a final deal would have to include the fate of upstream contracts signed since 2007 by...

Libya.(COUNTRIES)
October 20, 2008... LIBYA -- Canadian Verenex has struck oil with another wildcat in its Ghadames Basin Area 47 acreage, making it the most successful driller so far under Epsa-4 contracts with state National Oil Corp. When Verenex announced a previous discovery...

Norway.(COUNTRIES)(Brief article)
October 20, 2008... NORWAY -- StatoilHydro has warned that its troubled Snohvit LNG project in the Barents Sea could cost up to 16 billion Norwegian kroner ($2.6 billion) more than originally envisaged due to a combination of cost inflation, equipment failures and...

Saudi Arabia.(COUNTRIES)(Saudi Arabian Oil Co.)(Brief article)
October 20, 2008... SAUDI ARABIA -- Saudi Aramco is planning to raise capacity further at the giant offshore Karan gas development, which is now being designed to produce 1.8 Bcf/d, versus an initial 1 Bcf/d. Aramco increased Karan's production target to 1.5 Bcf/d...

Russia.(COUNTRIES)(Brief article)
October 20, 2008... RUSSIA -- TNK-BP and state Rosneft have launched commercial crude production from the huge Verkhnechonsk field, a cornerstone of ambitious plans for the largely unexploited regions of East Siberia. Production is expected to peak at 180,000 b/d...

United States.(COUNTRIES)(Brief article)
October 20, 2008... UNITED STATES -- BP has logged a third big deepwater discovery on Mississippi Canyon Block 948 in the Gulf of Mexico to add to its previous Kodiak and Tubular Bells finds. The Freedom well encountered over 550 net feet of hydrocarbon-bearing...

Turkmen audit proves massive gas reserves.(What's New Around the World)
October 20, 2008... Preliminary results from an audit of Turkmenistan's natural gas reserves have confirmed its status among the elite group of countries with massive natural gas production potential. They also dispel concerns that the small Central Asian nation...

Crashing out.(Marketview)
October 20, 2008... WASHINGTON -- The world's oil markets are still trending downward, moving in sympathy with sick equity markets. Oil prices soared on Oct. 13 by $3.49 to $81.19/bbl, following the euphoric jump in the stock market. But when equities promptly...

PIW market indicators.(Statistical table)
October 20, 2008... PIW Market Indicators ($/barrel) Oct. 13- Oct. 6- Sep. 15- Spot Crude Oct. 15 Oct. 10 Sep. 19 Opec Basket $71.34 $77.98 $89.20 UK Brent...

Price fall mixed blessing for Saudi projects.
October 27, 2008... With the credit crisis and falling oil prices casting a long shadow over Opec kingpin Saudi Arabia, questions are being raised about the viability of the kingdom's oil projects. Most obviously vulnerable are the country's private-sector-funded...

Market turmoil forces new oil role on Moscow.
October 27, 2008... Although top Russian officials insist that Moscow is well positioned to weather the growing global economic storm, there are mounting signs that the financial crisis could have an indelible impact on Russia's oil industry, both domestically and...

Economic storm darkens oil demand outlook.
October 27, 2008... Uncertainty over oil demand is causing headaches both for producers and consumers. A number of different scenarios remain credible, but the demand outlook is vulnerable to a variety of factors, including the sudden drop in the oil price and the...

EU carbon plans put pressure on refiners.
October 27, 2008... European refiners are under pressure, from new capacity coming on line outside the region, but also from European Union lawmakers. International negotiations on reducing greenhouse gas emissions begin in Poland in December, but if these fail,...

Lower price adds to challenges facing Iran.
October 27, 2008... The sharp fall in the oil price has sounded alarm bells in Iran, which may soon lack sufficient funds to maintain production capacity at its current level of 4.2 million barrels per day. Iran's predicament is worsened by the effects of US-led...

Caracas gets ready to tighten its belt.
October 27, 2008... High oil prices have underpinned much of Venezuela's economic growth over the past four years, so when the drop in international oil prices dragged the country's own crude basket below $70 per barrel last week, it was seen by many observers as...

Majors hope to feel benefit of falling costs.
October 27, 2008... The plummeting oil price is raising questions about the economic models used to determine the viability of new oil and gas projects, particularly high-cost deepwater and oil sands developments. But while pressure is mounting on one side from...

Corporate.(GENERAL)
October 27, 2008... CORPORATE--National oil companies (NOC) such as Petrobras, Gazprom and PetroChina are now matching international oil companies (IOC) in their spending on research and development (R&D), according to a new survey by consultants Booz & Co. The...

Corporate.(GENERAL)(Brief article)
October 27, 2008... CORPORATE--The oil industry could be facing a self-imposed peak in its drilling and operational capabilities as a generation of workers begins to retire and a shortfall of new personnel leaves a yawning skills gap, according to BP's upstream...

Algeria.(COUNTRIES)(Arzew LNG )(Brief article)
October 27, 2008... ALGERIA -- Corrosion detected during maintenance on the GZ3 pipeline taking gas to the Arzew LNG plant has prompted state Sonatrach to declare force majeure on some LNG exports for the second time this year. Production at Arzew will be down by...

China.(COUNTRIES)
October 27, 2008... CHINA -- State-owned PetroChina expects to start making money from its refining business again next month following the recent fall in the oil price. Chairman Jiang Jiemin said the firm will break even with crude at $85/bbl, although $80/bbl...

China.(COUNTRIES)(Brief article)
October 27, 2008... CHINA -- Fuel smuggling from Hong Kong appears to have reemerged following the recent fall in oil prices, which has made fuel sold overseas cheaper than domestic fuel, the retail prices of which are controlled by Beijing. According to local...

Cuba.(COUNTRIES)
October 27, 2008... CUBA -- Officials with state Cupet claim the country could hold over 20 billion bbl of recoverable oil reserves in its section of the Gulf of Mexico. If the estimate proves correct, the Caribbean island would rank among the world's larger oil...

Ecuador.(COUNTRIES)(Brief article)
October 27, 2008... ECUADOR -- Brazil's Petrobras and privately held French independent Perenco have agreed to convert their oil production contracts into service agreements, President Rafael Correa has announced. The move follows year-long negotiations with the...

India.(COUNTRIES)
October 27, 2008... INDIA -- State-owned Oil and Natural Gas Corp. (ONGC) has no plans to revise its $2.59 billion takeover offer for UK-listed Russia specialist Imperial Energy in light of the recent dramatic slump in oil prices. When ONGC Videsh, the company's...

Indonesia.(COUNTRIES)
October 27, 2008... INDONESIA -- Jakarta has awarded 22 of the 25 oil and gas blocks on offer in the first phase of its 2008 upstream bid round. While US major Chevron took two blocks off West Papua and ConocoPhillips won the Arafura Sea Block, the others were...