Petroleum Intelligence Weekly articles from September 2007

Petroleum Intelligence Weekly archives from September 2007

Nymex, ICE still thriving, still fighting.
September 3, 2007... With the huge growth in energy trading this decade, the profile of the two main energy exchanges has grown sharply. Both the New York Mercantile Exchange (Nymex) and the IntercontinentalExchange (ICE) have developed new products, seen trading...

President's men take control Of Iran's oil sector.
September 3, 2007... President Mahmoud Ahmadinejad has tightened his grip on Iran's oil and gas industry by appointing his own people to the upper echelons of the oil ministry and National Iranian Oil Co. (NIOC), and by overseeing personally the award of lucrative...

Merger trend may sweep up hungary.s mol.
September 3, 2007... The message from Hungary's Mol remains the same--an emphatic "no" to a merger with Austria's OMV. Speaking to PIW last month, Mol Chief Executive Gyorgy Mosonyi derided a combination of his company with its Austrian neighbor as a move which...

Opec spare capacity keeps on rising.
September 3, 2007... One key barometer of potential turbulence in oil markets is Opec's spare crude oil production capacity. As with hurricanes, low readings point to stormy weather ahead. But Opec spare capacity is on the rise, suggesting at least a lull in the...

China turns its attention to Myanmar.
September 3, 2007... China's roving eye for international energy assets, which has taken it as far afield as Sudan and Venezuela, has now settled on prospects closer to home in Myanmar. Beijing is accelerating plans for an oil pipeline through Myanmar to its...

Is drilling sector set for its own megamergers?
September 3, 2007... The recent blockbuster merger of drillers Transocean and GlobalSantaFe (GSF) created an offshore juggernaut with a market capitalization of almost $46 billion and a 146-rig fleet capable of drilling in virtually every offshore hot spot. The...

Adding capacity a challenge for Abu Dhabi.
September 3, 2007... The UAE remains the only Mideast Opec member besides Saudi Arabia actively pursuing substantial expansions of crude oil output capacity, but delays to several projects mean it is unlikely to reach its stated target of raising capacity to 3.5...

Mol's Mosonyi: fighting for independence.(dialogue with Gyorgy Mosonyi)(Interview)
September 3, 2007... Q. To start with the most obvious question, why is Mol so resistant to a merger with OMV? A. Because of business reasons. A combination of the two companies will be value destroying, mainly due to trust regulations. This is not a new...

Industry restructuring.(GENERAL)
September 3, 2007... INDUSTRY RESTRUCTURING--US engineering and construction group CB&I is buying the Lummus Global business from Swiss-based ABB for roughly $850 million in cash and the assumption of about $100 million in liabilities. Lummus Global is a leading...

People.(GENERAL)(appointment of John Browne)(Brief article)
September 3, 2007... PEOPLE--Former BP Chief Executive John Browne is taking his energy expertise to the private equity market, joining US Riverstone Holdings as a managing director and managing partner. Riverstone specializes in the energy and power sectors and...

Refining.(GENERAL)(Brief article)
September 3, 2007... REFINING--US refiners are facing increased scrutiny following the fatal BP Texas City explosion and other refinery accidents, which could lead to more fines, more downtime for plants and a tighter US products market, according to one...

Reserves.(GENERAL)
September 3, 2007... RESERVES--Worldwide upstream oil and gas investment continues to skyrocket, but it is failing to generate significant increases in reserves, according to a new report from consultants John S. Herold and Harrison Lovegrove. Worldwide upstream...

Canada.(COUNTRIES)(Brief article)
September 3, 2007... CANADA--Energy Alberta has submitted a preliminary application to build what would be Alberta's first nuclear power station to provide electricity for oil sands extraction.The company has filed a site preparation license with the Canadian...

China.(COUNTRIES)
September 3, 2007... CHINA--The country's top state oil firms posted a mixed bag of first-half results, with Sinopec's earnings climbing thanks to higher refining margins, but profits for PetroChina and China National Offshore Oil Corp. (CNOOC) hit by the fall in...

Germany.(COUNTRIES)
September 3, 2007... GERMANY--Russia's Lukoil has promised to resume pipeline crude supplies in September at regular levels of some 140,000 b/d after significant reductions in the past few months. In return for resuming shipments, however, it wants a higher price...

Greenland.(COUNTRIES)(Brief article)
September 3, 2007... GREENLAND--The US Geological Survey (USGS) has slashed its assessment of potential oil resources off East Greenland, while increasing its assessment of potential gas and natural gas liquids (NGLs) in the region. The move calls into question the...

India.(COUNTRIES)
September 3, 2007... INDIA--Steel tycoon Lakshmi Mittal is considering taking stakes in two large refinery projects currently under development by state refiners Bharat Petroleum and Hindustan Petroleum. Sources close to Mittal told PIW that the billionaire is...

Nicaragua.(COUNTRIES)
September 3, 2007... NICARAGUA--Managua has said it will return seven oil storage tanks seized from Exxon Mobil last month in connection with a row over $3 billion in unpaid taxes owed by the US supermajor. In exchange, government officials said Exxon will agree to...

Peru.(COUNTRIES)
September 3, 2007... PERU--Japanese trading house Marubeni has expanded its LNG portfolio by buying a 10% stake in Peru LNG from South Korea's SK Energy for $100 million. The acquisition will expand Marubeni's sources of LNG supply for import into Japan. The Peru...

Romania.(COUNTRIES)
September 3, 2007... ROMANIA--In a breakthrough move giving it access to the European downstream market, Kazakhstan's state Kazmunaigas (KMG) has signed a $2.7 billion agreement to acquire a 75% stake in Rompetrol. Headquartered in the Netherlands, Rompetrol...

Russia.(COUNTRIES)
September 3, 2007... RUSSIA--BP and state Gazprom are reportedly in negotiations on the gas giant taking a stake in the Atlantic LNG project in Trinidad, suggesting the two companies are advancing their own joint venture plans after Gazprom took control of the...

Russia.(COUNTRIES)
September 3, 2007... RUSSIA--London-listed Sibir Energy has negotiated a deal to strengthen its control over the 240,000 b/d Moscow Refinery through a share swap and buyout of the city of Moscow worth up to $922 million. In addition to firming Sibir's hold over the...

United States.(COUNTRIES)(Brief article)
September 3, 2007... UNITED STATES--BP has admitted it may be forced to scrap a $3.8 billion expansion of its Whiting, Indiana refinery because of concerns about increased waste discharges. The expansion is aimed at increasing the plant's capacity for processing...

Kazakhstan freezes work on Kashagan.(Brief article)
September 3, 2007... Losing patience with the repeated delays to the giant Kashagan oil field development in the Caspian Sea, Kazakhstan has imposed a 90-day moratorium on work on the Eni-led project and demanded that the Agip KCO consortium developing the field...

In rude health.(Marketview)
September 3, 2007... LONDON--Crude oil futures moved into recovery mode last week, indicating that what market bears had predicted would end in a strong down move is likely to prove nothing more dramatic than a correction to the rally that last month took prices...

Total appoints new head of trading.
September 3, 2007... France's Total has confirmed that Pierre Barbe, former head of crude oil supply and trading, has been promoted to head of trading and shipping, replacing Francois Groh, who has left the group. Barbe will also sit on the group's corporate...

Jakarta's ghost stalks Opec in Vienna.
September 10, 2007... Ten years ago in November, Opec met in Jakarta and decided under pressure from Saudi Arabia to increase output by a surprisingly generous 2.5 million barrels per day--a policy that went sour as the financial crisis in Asia spread and smothered...

Eni standoff leaves Kashagan in turmoil.
September 10, 2007... Alarm bells are ringing over the Eni-led development of Kazakhstan's giant offshore Kashagan oil field. With its targeted peak production of 1.5 million barrels per day within 15 years, the project is supposed to make up a large chunk of future...

TNK-BP starts to spread its wings.
September 10, 2007... Drawing on its experience of rehabilitating mature oil fields in Russia, TNK-BP is seeking similar "brownfield" opportunities in other parts of the former Soviet Union where it has a competitive advantage, the Russian-UK joint venture's chief...

Exports take edge off China's consumption.
September 10, 2007... Chinese oil demand data has traditionally been a complex subject, even for the most seasoned analysts, but recent figures have been even more puzzling than usual. Crude imports are soaring, but product consumption isn't--it's still rising, but...

IOCs stress their unique selling points.
September 10, 2007... International oil companies (IOCs) dominated energy supply for much of the 20th century, but at the start of the 21st they are facing challenges that threaten to reduce their influence and erode their market share--restricted access to...

'Perfect storm' threatens us gas producers.
September 10, 2007... Bad weather is normally good for the natural gas industry, pushing up demand and prices. Unfortunately for North American gas producers, the current version of "the perfect storm" affecting the sector is having just the opposite effect. A...

Opec still making room for non-Opec.
September 10, 2007... With volumes lost to heavy maintenance and damage to a key gas pipeline in the North Sea, and a temporary hurricane-related halt to Mexican offshore production, a slump in non-Opec supply was half expected in August. But despite the...

TNK-BP's dudley: Russia has room for US.(Interview)
September 10, 2007... The loss of the giant Kovykta gas field to Gazprom earlier this year was seen as a big blow for Russian-UK joint venture TNK-BP (PIW Jul.2,p1). But Chief Executive Robert Dudley told PIW in an interview in Oxford last month that the company,...

Corporate.(GENERAL)(Total Corp. )(Brief article)
September 10, 2007... CORPORATE--Total has cut its mediumterm output growth target for the second time this year, revising down its projected output growth for the 2006-10 period to an average 4%/yr from the 5% level outlined in February (PIW Feb.19,p1). The new...

Formula prices.(GENERAL)(prices and rates of petroleum)(Brief article)
September 10, 2007... FORMULA PRICES--Saudi Arabia effectively increased its prices for October loading crude to Asia, its key export market. Discounts for heavier grades to both Northwest Europe and the US widened, though winter is approaching in the Northern...

Algeria.(COUNTRIES)
September 10, 2007... ALGERIA--State-owned Sonatrach has terminated its 2004 contract with Spain's Repsol YPF and Gas Natural (GN) to develop the 4 million ton/yr integrated Gassi Touil LNG project - the only domestic project in which Sonatrach had a minority stake...

Australia.(COUNTRIES)
September 10, 2007... AUSTRALIA--State-owned PetroChina signed two key term agreements last week to purchase up to 4 million tons/yr of LNG from the huge Browse and Gorgon projects, operated by Woodside Petroleum and Chevron, respectively. Woodside will sell...

Brazil.(COUNTRIES)(Petroleo Brasileiro S.A.)(Brief article)
September 10, 2007... BRAZIL--State-controlled Petrobras has started work on construction of a new heavy crude refinery in Pernambuco state without the expected participation of state Petroleos de Venezuela (PDV). The $4 billion Abreu e Lima refinery is supposed to...

Canada.(COUNTRIES)(Nexen Inc.)(OPTI Canada)(Brief article)
September 10, 2007... CANADA--Yet another oil sands project has run into problems with timing and costs, this time Nexen and Opti Canada's Long Lake development, which now looks as though it may come in around 15% over its original $5 billion budget. A combination...

Ghana.(COUNTRIES)
September 10, 2007... GHANA--The buzz around Tullow Oil's recent deepwater Mahogany and Hyedua discoveries is continuing, with the UK independent announcing that it has raised its upside estimate for recoverable reserves from the finds to 1.3 billion bbl. Tullow had...

Iraq.(COUNTRIES)(Brief article)
September 10, 2007... IRAQ--The cabinet has withdrawn a draft hydrocarbon law sent to parliament in July after it failed to muster enough support from lawmakers and reverted instead to an older version endorsed by the Council of Ministers in February (PIW Jul.9,p1)....

Japan.(COUNTRIES)(Table)(Brief article)
September 10, 2007... JAPAN--Crude imports rose 7.1% to 4.32 million b/d in July, but volumes from the two biggest suppliers, Saudi Arabia and the UAE, were down 4% and 10%, respectively. However, significant jumps came from Qatar, Kuwait and Sudan, which upped...

Libya.(COUNTRIES)
September 10, 2007... LIBYA--Some 35 companies have qualified to bid as operators in the Epsa-4 licensing round for 12 exploration areas containing 41 blocks, with a further 21 companies qualified to bid as investors, state National Oil Corp.(NOC) announced last...

Nigeria.(COUNTRIES)
September 10, 2007... NIGERIA--President Umaru Yar'Adua has set up a National Energy Council (NEC) to initiate and develop policy, and is airing proposals for reform of state Nigerian National Petroleum Corp. (NNPC), which include stripping away its regulatory...

Russia.(COUNTRIES)(Brief article)
September 10, 2007... RUSSIA--State experts have approved plans to build the Baltic Pipeline System-2 (BPS-2) bypassing Belarus via the Russian Baltic Sea port of Primorsk, allowing the government to take a decision on construction of the pipeline. The BPS-2 plan...

United Kingdom.(COUNTRIES)
September 10, 2007... UNITED KINGDOM--Prospects for realizing the gas resource potential of the deepwater West of Shetland region have been boosted by a significant gas and condensate discovery by Total. The 205/5a-1 well on the Tormore prospect was drilled to a...

United states.(COUNTRIES)(Brief article)
September 10, 2007... UNITED STATES--Alaska Governor Sarah Palin has unveiled a plan to boost the state's royalty rate on oil production, saying the existing tax system is tainted by political corruption and has failed to work as promised, mostly due to...

Correction.(Correction notice)
September 10, 2007... CORRECTION--In the "NICARAGUA" brief in last week's PIW, it was erroneously reported that the Nicaraguan government has alleged that Exxon Mobil owes $3 billion in unpaid taxes (PIW Sep.3,p9). The government has in fact alleged that Exxon owes...

Chinese services firm goes global.
September 10, 2007... It's not just China's mainstream oil companies that are making a splash internationally --the country's largest offshore contractor, China Oilfield Services Ltd. (COSL), is also moving beyond its domestic heartlands and winning new business in...

Back in form.(Marketview)
September 10, 2007... WASHINGTON--Oil markets were able to shrug off a sharp downturn in financial markets last week and pushed higher to within striking distance of the all-time highs set earlier this summer. New York Mercantile Exchange (Nymex) light, sweet crude...

PIW Market Indicators.(Petroleum Intelligence Weekly )(Statistical table)
September 10, 2007... PIW Market Indicators 1 Week 2 Weeks 4 Weeks Spot Crude Ago Ago Ago Opec Basket $70.83 $68.58 $67.98 UK Brent (Dtd.) 74.35 ...

Saudis lead Opec defense of $80 ceiling.
September 17, 2007... Last week's Opec agreement reflected Saudi Arabia's desire to keep supply and demand balanced during the forthcoming Northern Hemisphere winter by increasing real output. But the kingdom's ulterior motive was to surprise the market and make...

Pemex missing out on the NOC adventure.
September 17, 2007... With a longer history and a bigger production base than many of its peers, Mexico's state Pemex should be thriving in the new era of ambitious, aggressive national oil companies (NOCs). But it's not--instead, it's retained its role as Mexico's...

Changes underway in Russian crude export patterns.
September 17, 2007... Russia's crude export patterns are changing, both by accident and by design. Moscow's new strategy of increasing exports through its own ports and holding back more volumes for domestic refining had already started hitting deliveries via the...

Price is right for Reliance gas ambitions.
September 17, 2007... While the country's state firms have been leading the current trend towards global expansion by national oil companies (NOCs), Indian private sector giant Reliance Industries has been making a name for itself at home with its plans for...

Heating oil heats up as winter beckons.
September 17, 2007... After sweating it out at the gasoline pump over the summer, US consumers may also be paying a lot for heating oil this winter. While low stocks mean traders haven't yet completely written off gasoline, middle distillates--heating oil and...

Kazakh operators try to avoid Kashagan fallout.(Kazakhstan)
September 17, 2007... As it seeks to more than double current oil production of around 1.5 million barrels per day in the next 10-15 years, Kazakhstan will need to rely heavily on western oil companies such as Eni, Chevron and BG. But following the trend set by...

Majors eye potential of Iraq's producing fields.
September 17, 2007... While Iraq's undeveloped oilfields may be regarded as the major long-term prize for foreign investors, there is also huge potential, and relatively little risk, in improving the performance and expanding the development of the country's...

IEA.(GENERAL)(petroleum prices compared)(Statistical table)
September 17, 2007... IEA--A mix of uncertainties are keeping global oil markets on edge and prices high, the International Energy Agency noted in its latest monthly report released last week.Despite revising down its demand forecast and adjusting up its non-Opec...

Australia.(COUNTRIES)
September 17, 2007... AUSTRALIA--Chevron has received final state environmental approvals for its delayed Gorgon LNG scheme offshore Western Australia, clearing a major hurdle for the huge project. The approval follows an LNG sales deal agreed this month by Gorgon...

Brazil.(COUNTRIES)(petroleum industry plans to boost)(Industry overview)(Brief article)
September 17, 2007... BRAZIL--State-controlled Petrobras has earmarked almost a third of its planned international spending between 2008 and 2012 to the US Gulf of Mexico. The region will eat up some $4.9 billion of the company's $15 billion budget for the period...

Ecuador.(COUNTRIES)
September 17, 2007... ECUADOR--The government plans to begin renegotiating oil contracts with foreign companies in order to boost its share of oil revenue amid high international oil prices, although changes to contract terms are expected to be minor. The ministry...

Kazakhstan.(COUNTRIES)
September 17, 2007... KAZAKHSTAN--Efforts to resolve the future of the troubled Kashagan project kicked off in earnest last week when Eni chief executive Paolo Scaroni held talks with Kazakh Prime Minister Karim Massimov in Astana. In a statement, project operator...

Nigeria.(COUNTRIES)(production of crude)(Brief article)
September 17, 2007... NIGERIA--Production in the Niger Delta shut in due to civil strife is being rapidly restored, with engineering crews now free to move around in the region to fix damaged infrastructure such as pipelines, according to minister of state for...

Norway.(COUNTRIES)(Norsk Hydro ASA)(Brief article)
September 17, 2007... NORWAY--Three Norsk Hydro board members have decided not to stand for reelection in protest at the way the government handled a recent row over options payouts to executives (PIW Aug.13,p6). Hydro named the three board members as Hakan Mogren,...

Oman.(COUNTRIES)(British Petroleum Company PLC)(Brief article)
September 17, 2007... OMAN--BP expects early production from its Khazzan and Makareem tight gas fields in 2011, slightly later than originally predicted when the UK supermajor signed its agreement for the fields earlier this year (PIW Mar.26,p3). First commercial...

Qatar.(COUNTRIES)
September 17, 2007... QATAR--The owners of the Oryx gas-toliquids (GTL) plant, South Africa's Sasol and state Qatar Petroleum (QP), will spend $50 million to install additional downstream equipment by mid-2008 to solve a technical problem that is still limiting...

Russia.(COUNTRIES)
September 17, 2007... RUSSIA--State gas giant Gazprom is in talks with five companies over the giant Shtokman gas and condensate field, suggesting that companies outside of the initially short-listed suitors could still join the Barents Sea development. In what may...

Russia.(COUNTRIES)
September 17, 2007... RUSSIA--China may soon lose oil supplies from its largest Russian supplier, state Rosneft, which wants to redirect crude flows to refineries that it acquired earlier this year in liquidation auctions for former oil major Yukos. Rosneft's turn...

South Africa.(COUNTRIES)(Sasol Ltd. shares)(Brief article)
September 17, 2007... SOUTH AFRICA--Synthetic fuel producer and refiner Sasol will transfer 10% of its issued share capital, worth roughly $2.48 billion, to a mix of black investors in the country's biggest black economic empowerment deal to date. If approved by...

South Korea.(COUNTRIES)(plans of GS Caltex)(Brief article)
September 17, 2007... SOUTH KOREA--GS Caltex will invest more than $3 billion on building its third heavy oil upgrading unit (HOU) by 2010, a move reflecting its commitment to its refinery upgrading program despite surging construction costs worldwide. Chief...

United States.(COUNTRIES)
September 17, 2007... UNITED STATES--Independent refiner Sinclair Oil is planning a $1 billion expansion of its Tulsa refinery that will raise the plant's nameplate capacity to 115,000 b/d, increase its gasoline output and enable it to process more heavy Canadian...

Hunt deal exposes divisions in Iraq.
September 17, 2007... The production-sharing contract signed Sep. 8 between US independent Hunt Oil and the Kurdistan Regional Government (KRG) in northern Iraq has exposed the deep divisions between the KRG in Erbil and Iraqi oil authorities in Baghdad over the...

Alive & Kicking.(Marketview)(Industry overview)
September 17, 2007... WASHINGTON--Oil prices on the New York Mercantile Exchange (Nymex) set new records last week, breaching an important psychological barrier to briefly trade above $80 per barrel. A huge reduction in US crude inventories was the main driver,...

Rosneft lines up stake in Shell refinery.
September 17, 2007... Rosneft is poised to become the first Russian company to break into the Western European downstream sector by lining up a stake in Germany's largest refinery via an asset swap with new strategic partner Royal Dutch Shell (PIW Jul.16,p1)....

PIW Market Indicators.(petroleum prices compared)(Statistical table)
September 17, 2007... PIW Market Indicators 1 Week 2 Weeks 4 Weeks Spot Crude Ago Ago Ago Opec Basket $73.22 $71.37 $67.18 UK Brent (Dtd.) 76.04 74.76 68.45 UK...

28th Oil&Money: shifting power in the global oil industry.(London October 30-31, 2007)(Calendar)
September 17, 2007... The InterContinental London Park Lane * An exclusive forum for senior executives to assess current and future trends in the global energy industry * Top executives, policy makers, traders, and thought leaders from over 50 countries ...

2007 Petroleum Executive of the Year.
September 17, 2007... One of the highlights of the Oil & Money conference is the presentation of the prestigious Petroleum Executive of the Year Award. This year, H.E. Abdullah Bin Hamad Al-Attiyah, Deputy Prime Minister and Minister of Energy and Industry for the...

Exxon extends heavy hand into Kuwait.
September 24, 2007... Having secured the Upper Zakum heavy oil deal last year in Abu Dhabi, Exxon Mobil is now on the verge of something equally weighty in Kuwait. The US supermajor has signed a heads of agreement with Kuwait Oil Co. (KOC) that would involve joint...

Analysts see oil price strength persisting.
September 24, 2007... Crude price forecasts are heading north, with pundits struggling to keep pace with the apparently inexorable rise in the futures market. Speculative cash has been fingered as the main culprit behind recent record crude prices, but a PIW poll of...

Back to the future at Pertamina.
September 24, 2007... Indonesia's state Pertamina is not alone among national oil companies in aspiring to inject some dynamism into an enterprise burdened by bureaucracy, history and decades of government meddling. The key to its strategy is a rash of recent...

Costs, reserves hold the balance off Shetland.
September 24, 2007... Total's Tormore find to the west of the Shetland Isles and Chevron's successful well test of the deepwater Rosebank discovery in July have refocused attention on the prospects for commercializing oil and gas reserves in one of the final...

Niche refiners flex growing market muscle.
September 24, 2007... It's the large independent refiners such as Valero that hog the headlines with their billiondollar earnings but their smaller siblings are also performing nicely, with some seeing stellar gains in their stock price this year. In the US, small...