NEWS

[UNITED STATES] Spectra to deliver natural gas to ConocoPhillips

2008-05-20T07:24:00.001+02:00

Spectra Energy Corp. has signed an agreement with Houston energy giant ConocoPhillips to deliver up to 395 million cubic feet per day of Rocky Mountain natural gas from the Clarington, Ohio, supply point to a location near in York County, Pa.

Houston-based Spectra (NYSE: SE) plans to transport the natural gas via an expansion of its Texas Eastern Transmission pipeline system, known as the Temax Project.

The expansion will include adding about 33 miles of pipe from Marietta, Pa. to a point near Station 195 on the Transcontinental Gas Pipeline Corp's pipeline system near Delta, Pa.

The delivery is expected to be at the Pennsylvania station by November of 2010.

Source: Houston Business Journal

[NORTH AMERICA] EnCana splitting into two companies

2008-05-15T17:18:00.002+02:00

Canadian oil and gas giant EnCana Corp. said Sunday it's splitting into two companies, but operations in Colorado are likely to remain "business as usual," a Denver-based spokesman said Monday.

EnCana is based in Calgary, Alberta, Canada. Its U.S. division is based in Denver.

"It's driven by shareholder value," said Doug Hock, spokesman for Denver's EnCana Oil & Gas (USA) Inc. "It shouldn't affect our operations at all. It's business as usual in terms of exploring for and producing natural gas."

EnCana is one of Colorado's largest natural gas producers, with operations in the rich Piceance Basin on Colorado's Western Slope and north of Denver in the Denver-Julesburg Basin.

The parent company announced Sunday that the board of directors had unanimously approved a proposal to split EnCana into two energy companies -- one a natural gas company with assets in Canada and the United States, and the second a fully integrated oil company focused on producing oil from oilsands in Canada and running refineries in a joint venture with ConocoPhillips in Texas and Illinois.

The natural gas company is expected to retain the EnCana name, while the oil company will operate under a new name, tentatively called "IntegratedOilCo." or IOCo.

The natural gas company represents about two-thirds of EnCana's current production and proved reserves.

Shares of EnCana rose in early trading Monday in response to the news.

Source: Denver Business Journal | By Cathy Proctor Denver

[EUROASIA] Vagit Alekperov, Leonid Fedun bought more of LUKOIL. Russia

2008-05-14T07:31:00.005+02:00

LUKOIL chief Vagit Alekperov and vice president Leonid Fedun spent $1.6 billion to widen their stakes in the company. As a result, Vagit Alekperov currently owns 20.4 percent, nearly as much as LUKOIL biggest holder ConocoPhillips of the United States of America. Top managers bought out the stakes at the price above the market one, but the implementation of plans of Russia’s new PM Vladimir Putin in part of introducing benefits in the oil sector will make the investment very profitable.

It was announced on LSE yesterday that LUKOIL chief Vagit Alekperov and vice president Leonid Fedun clinched deals May 6 to widen their ownership in the company. Vagit Alekperov acquired 11.13 million stocks (1.3 percent in LUKOIL), having paid 24.57 billion rubles ($1.03 billion) to widen the stake to 20.4 percent. Fedun bought 6.7 million stocks (0.8 percent) for 15.15 billion rubles ($637.4 million). The actual size of his stake is unknown, but Leonid Fedun owned 8.3 percent a year ago.

In ownership, Vagit Alekperov is currently the second to the company’s strategic holder ConocoPhillips that controls 20.6 percent in LUKOIL. The aggregate ownership of the management stood at 28 percent as of past May. If the stakes of other managers haven’t changed and Leonid Fedun has bought only those 6.7 million stocks during the year, LUKOIL chiefs own a third of the company now.

According to LSE, Gatecraft Limited sold the stocks to Vagit Alekperov and Leonid Fedun. But that firm is affiliated to IFD Kapital, where Leonid Fedun is the biggest holder and Vagit Alekperov owns a stake as well. In essence, top managers of LUKOIL bought stocks from themselves May 6. LUKOIL declined to comment on the deal yesterday, people in IFD Kapital acknowledged the affiliation with Gatecraft Limited but refused to elaborate on details of the deal.

Source: Kommersant

[OiL FUTURES] High energy prices lift earnings for BP and Royal Dutch Shell

2008-05-11T14:11:00.005+02:00

Higher oil and natural gas prices helped Royal Dutch Shell and BP report record first-quarter profits Tuesday, beating analysts' expectations and prompting share gains across the industry.

The two biggest oil companies in Europe more than offset declining refining margins as crude oil nears $120 a barrel. A move by investors to commodities as an alternative to the shrinking dollar, combined with a spate of supply disruptions, helped to push U.S. crude futures to a record $119.93 on Monday.

Shell's net income in the first three months of the year rose 25 percent to $9.08 billion. BP reported its profit increased 63 percent to $7.62 billion. Shares of Shell and BP trading in London rose more Tuesday than they had in at least two years, leading other oil companies, like ConocoPhillips and ExxonMobil, higher.

"The results are very good because of the high oil price but also without it because we had expected the refining margins, which collapsed, to affect earnings," said Christine Tiscareno, an oil analyst at Standard & Poor's in London. "Both companies did an excellent job controlling costs."

Tiscareno and other analysts warned that while a rising oil price might for now benefit Shell and its rivals, it would at some point start to hurt demand for gasoline, as customers became unable to afford the higher prices. Peter Voser, chief financial officer at Shell, told analysts during a conference call that it was "too early" to say how and when the higher oil price would affect demand.

Despite recent disruptions at BP, oil and natural gas production was unchanged at 3.9 million barrels of oil-equivalent a day, while output at Shell remained unchanged at 3.5 million barrels of oil-equivalent a day. BP closed a pipeline system Sunday after a strike at a refinery in Scotland cut supplies. Some investors are particularly worried about supplies from Nigeria, which produces the higher quality crude needed in the United States to meet the demand that is expected to increase during the upcoming summer driving season. This month, five police officers guarding an oil terminal in Nigeria were killed by armed militants, who aim to damage exports from the oil-rich Niger Delta.

Shell said attacks in Nigeria had halted 164,000 barrels of oil-equivalent a day of production in the country. Voser said Shell planned to invest up to $27 billion to add one million barrels a day of production.

To improve earnings, Tony Hayward, who succeeded John Browne as chief executive of BP last year, is focusing on restoring production capacity and finding new projects. BP began oil production at the Deep Water Gunashli field in the in the Azerbaijan section of the Caspian Sea this month and expects its Thunder Horse production platform in the Gulf of Mexico, which cost more than $1 billion to build, to start production this year following a three-year delay. The company also completed some repairs at its plant in Whiting, Indiana, and the Texas City refinery, where an explosion killed 15 people in 2005.

Edward Westlake, an analyst at Credit Suisse in London, said that the earnings were "strong" and that the "results have captured increases in oil and gas pricing, while keeping costs increases muted."

BP and Shell are both trying to regain investor confidence damaged by delays and higher costs associated with new projects last year. In the case of BP, a lack in safety measures led to the Texas explosion. Hayward pledged to remove layers of bureaucracy to make managers more accountable for their businesses and improve efficiency.

Oil companies are also under pressure to find new projects to grow as its traditional fields age. They are also facing competition with state-run oil companies in Russia and the Middle East.

Other oil companies that profited from higher prices included ConocoPhillips, whose first-quarter profit rose 17 percent to $4.14 billion. ExxonMobil, the world's largest oil company, is set to report its figures May 1, followed the next day by Chevron.

Source: International Herald Tribune| by By Julia Werdigier

[OIL MAJORS] Big companies amid allegations of MTBE water contamination. Suit over additive settled

2008-05-09T07:28:00.004+02:00

Some of the nation's largest oil companies have agreed to pay about $423 million in cash to settle a lawsuit brought by more than a hundred public water providers, claiming water contamination from a gasoline additive. The terms of the settlement were submitted for approval in the federal court for the Southern District of New York. Under the terms, the companies also agreed to pay 70 percent of the future cleanup costs over the next 30 years.

The defendants that agreed to the settlement included BP, Royal Dutch Shell, ConocoPhillips, Chevron, Marathon Oil, Valero Energy, Citgo and Sunoco. Six other companies named in the lawsuit, including Exxon Mobil, did not agree to the deal, said Scott Summy, a lawyer at Baron & Budd and a counsel for the plaintiffs.

In the lawsuit, the plaintiffs, which include 153 public water systems in New York, California and 15 other states, claimed that the additive, a chemical called methyl tertiary butyl ether, or MTBE, was a defective product that led to widespread contamination of groundwater. The suit contended that the chemical was used by oil companies, even though they knew of the environmental and health risks that it posed.

Low levels of MTBE can make drinking water supplies unpalatable because of its "offensive taste and odor," according to the U.S. Environmental Protection Agency.

The agency has also found that the compound caused cancer in laboratory rats that were exposed to high doses.

Since the mid-1990s, hundreds of lawsuits have been brought against oil companies for their use of the chemical. This deal, if approved, would be the largest settlement to date. MTBE has been used since 1979 to increase octane levels in gasoline but its use became more widespread after the 1990 Clean Air Act mandated the use of an oxygenate in certain cities to reduce smog and other pollutants.

When mixed with gasoline, the additive ensured that the fuel burned more thoroughly, thereby reducing air pollution.

But after being widely adopted, it was found to corrupt groundwater. Even in small amounts, the additive makes water smell and taste like turpentine.

In 2005, some 130,000 barrels a day of MTBE were produced, involving about 1 percent of the nation's gasoline. Oil companies stopped using it in 2006.

The oil industry has fought hard to avoid penalties related to its use of the additive, arguing that it should not be forced to pay for the cleanup of a product that it was mandated to use. Estimates of the cost of a total cleanup of MTBE have run to the tens of billions of dollars.

"No court has ruled that gasoline with MTBE is a defective product," said Rick Wallace, a lawyer at Wallace King Domike & Reiskin in Washington, who represents Chevron and Shell. "This settlement does not concede the point. Quite the contrary, the settling companies are prepared to vigorously defend the product."

The risk has prompted the oil industry to stop using it and look for another additive. That eventually led to the development and use of ethanol.

Source: The New York Times| By JAD MOUAWAD

UNITED STATES: Refiners cutting production to boost profit margins

2008-04-05T00:17:00.000+02:00

Retail gas prices surged to a new record above $3.30 a gallon today and appear poised to rise further in coming weeks as gasoline supplies tighten.

Oil prices, meanwhile, supported the gas price rally by jumping more than $2 a barrel after a dismal employment report sent the dollar lower. At the pump, gas prices rose 1.4 cents overnight to a national average of $3.303 a gallon, according to AAA and the Oil Price Information Service. That's the latest in a series of records, and about 60 cents higher than a year ago.

While oil's surge above $100 over the last month has boosted gas prices so far this year, analysts now expect gas prices to continue rising regardless of what direction crude takes. The Energy Department expects prices to peak near $3.50 a gallon later in the spring, but many analysts predict the spike could approach $4.

That's because gasoline supplies are falling, in part because producers are cutting back on output of the fuel due to the high cost of crude — the more expensive crude is, the more refiners have to pay and the lower their profits are. They're also in the process of switching over from producing winter grades of gasoline to the less polluting but more expensive grade of fuel they're required to sell in the summer.

"That cuts back on some of the supply and helps to pump up the price," said Mike Pina, a spokesman for AAA.

The margin between the price refiners pay for crude and receive for selling the products they make from it is around $11 to $12 a barrel right now, according to the Oil Price Information Service. However, that margin has occasionally slipped into negative territory in recent weeks and is well below margins of $37 a barrel refiners earned last spring.

On Thursday, ConocoPhillips said high crude prices were significantly hurting its refining margins. Last week, Valero Energy Corp. cut output at its Corpus Christi, Texas, refinery due to high supplies and falling demand. Analysts believe many other refiners are adopting similar tactics.

Today's price spike is a sign those cutbacks may be working, giving everyone in the supply chain, from refiners to retailers, the ability to raise prices to try to boost margins. Many gas retailers say they make more on the sale of coffee and sundries in their convenience stores than from selling gasoline.

Of course, that's not good news for consumers also paying higher food prices and watching their home values slide. Food prices are high due in part to diesel prices, which held steady overnight at a national average of $4.023 a gallon, near recent records.

High oil prices are also hurting airlines. Aloha Airlines shut down and ATA Airlines filed for bankruptcy protection in recent weeks, citing high fuel prices as a cause of their failures.

In futures trading, meanwhile, oil futures rose today after the Labor Department said employers cut payrolls by 80,000 jobs last month, much more than analysts had expected. The unemployment rate rose to 5.1 percent. That news sent the dollar lower and pushed light, sweet crude for May delivery up $2.40 to settle at $106.23 a barrel on the New York Mercantile Exchange. Gasoline futures for May delivery rose 3.24 cents to settle at $2.7567 a gallon.

Gasoline futures were also boosted today by a fire that shut down part of a Los Angeles refinery.

Much of crude's price moves in recent months have been tied to the dollar. Many investors view crude, gold and other hard commodities as hedges against a falling dollar and rising prices. Also, crude becomes less expensive for overseas investors when the dollar is falling.

In other Nymex trading today, May heating oil futures rose 6.93 cents to settle at $2.9921 a gallon, while May natural gas futures fell 9.5 cents to settle at $9.322 per 1,000 cubic feet.

In London, May Brent crude futures rose $2.38 to settle at $104.90 a barrel on the ICE Futures exchange.

Source: Associted Press

|By JOHN WILEN

CLIMATE CHANGE: Big Oil tackles climate change

2008-02-26T00:18:00.004+01:00

Climate change was on the agenda at an influential oil industry meeting in Houston with repeated calls for a nationwide regime.

"We want to be at the table, want to be an active participant as the U.S. government addresses this issue and comes up with a regime," Red Cavaney, president and chief executive officer of the American Petroleum Institute, the industry's lobby group, told United Press International in an interview on the sidelines of the CERAWeek energy confab. "We have certain views as individual companies within the industry but we concluded that the best thing to do was go to the table without any preconditions."

The theme was one repeated several times by top industry officials who have in the past shied away from government regulation on emissions-related issues.

James Mulva, chairman and CEO of ConocoPhillips, called Tuesday for the industry to play an active role in forming legislation that regulates greenhouse gases, which are believed to cause climate change, or risk "the train ¿¿ leaving the station." He said without a coordinated U.S. policy, the industry was unlikely to be allowed to invest in major expansions because of concerns over carbon emissions.

"The U.S. needs a strong, consistent and mandatory national framework to manage carbon emissions," he said, "one that is unencumbered by diverging state and regional initiatives. Without this framework, rising public concern over climate change threatens our energy security by contributing to further access restrictions."

Similar calls for energy efficiency and a reduction in carbon emissions were made by Abdallah Jumah, president and CEO of Saudi Aramco, and Nobuo Tanaka, head of the Paris-based International Energy Agency, the energy arm of the Organization for Economic Cooperation and Development.

Linda Cook, executive director for gas and power for Shell, said she's looking for a government policy with "clarity and certainty," especially in programs like carbon taxes or a cap-and-trade system "that may impact the profitability of our investments."

She'd like alignment within the United States and globally, with "similar rules and level playing field around the world."

Cavaney acknowledged that the industry's embrace of the climate-change debate was slow in coming, and said the turning point came when Democrats took control of both houses of Congress and it became clear some sort of climate-change initiative was on the way.

"It's very clear the day for something having being exclusively voluntary -- it had passed," he said. "So the industry recognizes that if we're going to get something that's going to have the broadest possible participation it shouldn't disadvantage voluntary efforts, they should be part of it -- but it recognizes there should be some mandatory portion.

"(There) was the recognition that there was actually going to be a congressional effort under way. In the past, there wasn't sufficient critical mass intellectually, but when the Democrats took control of both houses of Congress and they made a strong commitment to moving this ¿¿ we wanted to be participant in that."

Cavaney warned, however, that it was important for any legislative effort to tackle emissions to include the world's emerging economies -- especially China and India, two countries whose emissions have been at the center of the argument in the United States against signing on to the Kyoto Protocol, which sets binding emissions-reduction targets on its signatories.

"I don't think you can get something through the U.S. Congress without some conditions -- maybe not binding -- but some commitment ¿¿ that we try to get the broadest participation possible," he said.

Costs of such participation are unlikely to be low, but within manageable limits. The IEA's Tanaka said at least $50 trillion would be needed to make a 50-percent reduction in emissions by 2050 -- or 1 percent of total gross domestic product from 2005-50. Other challenges include technical shortfalls, public perception and government involvement.

"It would essentially require a third industrial revolution, or an energy revolution, which would completely transform the way we produce and use energy and entail painful adjustment," Tanaka said.

Source: United Press International|by Krishnadev Calamur

CANADA: As companies flock to abundant resources, groups raise concerns about environment

2008-02-25T03:31:00.003+01:00

More and more oil companies are diving into Canada's oil-soaked sands, eager to capitalize on vast resources in a stable country that welcomes outsiders. In 2007 alone, Royal Dutch Shell, Marathon Oil Corp. and BP increased or established positions in the sands, either to extract the thick, tarlike oil or work with a Canadian producer to refine it in the United States.

They joined the slew of Canadian producers as well as ConocoPhillips, Chevron Corp., Exxon Mobil Corp., Devon Energy and others that have sands operations or joint ventures.

Moratorium suggested

But environmental concerns about increases in emissions and possible toxic chemical releases into waterways are growing along with the oil action.

Some environmental groups advocate a pullback or a moratorium on new projects to address those concerns, while others are pushing for the industry to take the lead in a greener approach.

"We know that the tar sands are an important part of the oil supply to the United States, but it needs to be done responsibly," said Gary Stewart, a senior adviser to the International Boreal Conservation Campaign.

Earlier this month, a report from Toronto-based advocacy group Environmental Defence charged that oil sands operations have turned Canada into "the world's dirty energy superpower."

"It's time to clean it up or shut it down," Rick Smith, the group's executive director, said in the report, which calls for government to crack down on polluters.

Plan to cut emissions

Jim Law, a spokesman for Alberta Environment, an agency of the province's government, said monitoring and enforcement are extensive, although officials are well aware that increased production means more potential for pollution.

Reducing emissions during such a growth spurt is far from easy, he said. But the government last month unveiled the beginnings of a plan to cut emissions in half by 2050 through increased efficiency, capturing carbon dioxide emissions and permanently injecting them underground and requiring that all new operations incorporate that technology into their building plans.

"We understand the importance of the oil sands, and the international attention that's being focused on them," Law said. "In the short term, we are honest enough to admit that our emissions will rise as we bring more operations on stream. But we will see a turning point."

Expensive operations

Canada's oil sands industry is at least 40 years old. But growth was slow until recent years when high oil prices justified the expensive operations.

At a recent conference in Houston, ConocoPhillips Canada President Kevin Meyers compared the tarlike bitumen far underground to a hockey puck at room temperature. It must be melted by injected steam before it can be pumped to the surface, an energy-intensive process that consumes a lot of natural gas.

Once retrieved, it must be diluted to be transported by pipeline. Then it requires much processing to convert the heavy oil into usable refined products, so production costs can be four to five times as high as conventional light oil production.

But Canada has 179 billion barrels of proven oil reserves — second only to Saudi Arabia. And though Alberta increased its royalties last year, the country's "come on in" attitude has encouraged an influx as access shrinks in other resource-rich countries less willing to allow outsiders to control operations, such as Russia and Venezuela.

Of the 9.9 million barrels a day in total crude imports to the United States as of November, 1.9 million came from Canada. Saudi Arabia was second at 1.5 million barrels.

Canada's oil sands now produce about 1.3 million barrels a day, and that could ramp up to 3 million barrels a day by 2015, according to the Canadian Association of Petroleum Producers.

"This is a strategic resource not just for North America, not just for Canada, but for meeting global oil demand," Meyers said.

Stewart, the conservationist, acknowledged that Canada's current and potential output clearly illustrate that the boom will continue. But he hopes the U.S. players, many of whom are already involved in other environmental initiatives, will reduce emissions and police possible water contamination without waiting for Canadian government orders to do so.

"We're not trying to exclude the industry. That's not what we're talking about at all," said Stewart, who lives about 275 miles south of Fort McMurray, Alberta, the hub of much of the oil sands activity. "We're talking about doing it right. "

Going the extra mile

Greg Stringham, vice president of CAPP, said regulations governing sands operations are fairly strict. "But they're not necessarily enough," he said, adding that some companies do the minimum they think they can. Others, though, are stepping beyond those regulations to do more, he said.

For example, Oklahoma City-based Devon Energy satisfies the need for water in its bitumen operation by drilling into a deep underground aquifer that contains saltwater, much like brine, rather than siphoning freshwater supplies. Once the water is used to heat and melt bitumen, it is treated and returned to the aquifer.

Devon spokesman Chip Minty said that when the company was drilling for water sources, it initially hit a reservoir that contained borderline drinkable water.

"Instead of using that, we spent another $1 million or $2 million to drill another well and go farther to get the stuff that was really bad. We wanted to ensure we were not tapping into water that could have any use for any other purpose," Minty said.

Stringham said other Canadian companies, including Syncrude and Suncor, have sought to increase efficiency by finding ways to get bitumen out of the ground using less natural gas to heat steam. Techniques they are studying in newer developments include using water that isn't superheated, and perhaps as cool as room temperature, to melt and move bitumen.

"The lower the temperature of the water, the less amount of fuel has to go into it," Stringham said. "It saves them money and saves on emissions."

Meyers, of ConocoPhillips, said at the recent conference that oil sands operations clearly "have a significant environmental footprint" with emissions, water use and intense use of natural gas. "We have to do more" to decrease emissions per barrel of production, he said.

"How are we going to do that? Technology," Meyers said.

The Alberta government has a similar view, and is relying heavily on encouraging study and implementation of carbon capture and storage technology.

Carbon capture

The oil industry is well-acquainted with injecting CO₂ into the ground to force oil and natural gas out of underground formations. But the concept of capturing millions of tons of the greenhouse gas to combat climate change and then transporting it to distant oil and gas reservoirs or brine formations is in its infancy.

Law, of the Alberta government agency, said the industry has dedicated $500 million to carbon capture and storage research. In addition, the province will assemble a council of government and industry representatives to develop a plan to use that technology to cut emissions in half.

First they need the technology and infrastructure to make it work. "We expect to have a strategy after the fall of this year," Law said.

Source: Houston Chronicle|By KRISTEN HAYS

eNergy STOCKS: Oil and gas stocks notched solid gains Tuesday, sustaining a rally built on crude-oil futures' run back above the $100 mark

2008-02-20T13:21:00.007+01:00

At the close, the Amex Oil Index (XOI:1,414.11, +37.24, +2.7%) was up 2.7% at 1,414 points, backing down slightly from an intraday high of 1,425, with all 13 components finishing in the plus column. The Amex Natural Gas Index (XNG:587.77, +13.48, +2.4%) rose 2.4% to 587.8 points and the Philadelphia Oil Service Index advanced 2.4% to 277.

Big independent oil companies were the top beneficiaries of the rally. Occidental Petroleum Corp. (OXY:75.06, +3.34, +4.7%) led percentage gainers in the Amex Oil group, up 4.7% to close at $75.06 a share while Hess Corp. (HES:94.09, +3.44, +3.8%) rose 3.8% to $94.09.

Refiners, typically hurt by surging oil prices, were also among the top performers as investors bet that the volume of gasoline being stored ahead of the summer driving season might not match actual demand. In such a scenario, refining margins might be able to outpace the rising price refiners have to pay for crude. Shares of Valero Energy Corp. (VLO:60.66, +2.29, +3.9%) , the country's biggest independent refiner, rose 3.9% to $60.66. Sunoco Inc. (SUN:63.14, +1.83, +3.0%) shares rose 3% to $63.14.

ExxonMobil Corp. (XOM:87.01, +1.64, +1.9%) , one of the 30 companies making up the Dow Jones Industrial Average, added 1.9% to end at $87.01 after touching an intraday high of $87.97. Chevron Corp. (CVX:84.83, +1.23, +1.5%) , the No. 2 U.S. oil company after ExxonMobil, rose 1.5% to $84.83 a share while No. 3 ConocoPhillips (COP:80.64, +1.59, +2.0%) rose 2% to $80.64.

Baker Hughes Inc. (BHI:69.67, +2.78, +4.2%) and Cameron International Corp. (CAM:43.08, +1.72, +4.2%) led gainers in the oil services group, both up 4.2% to close at $69.67 and $43.08 a share, respectively. XTO Energy (XTO: 57.72, +2.43, +4.4%) led the charge in the natural gas index, up 4.4% to $57.72.

The broad-based rally in energy stocks was spurred by sharply higher crude-oil prices. Crude for March delivery briefly shot as high as $100.06 a barrel on the New York Mercantile Exchange, finishing the session at $100.01, the first time the front month closed above the century mark. Energy traders' concerns that the Organization of Petroleum Exporting Countries might trim output levels at its March 5 meeting, cold weather in much of the country and an emergency shutdown at a small refinery in Texas all contributed to the strongly bullish sentiment on the Nymex.

Alon USA Energy (ALJ:17.26, -0.98, -5.4%) reported an explosion shut its 70,000 barrel-per-day Big Spring refinery in western Texas. Alon, majority owned by Alon Israel, Oil Co., markets gasoline and diesel under the Fina brand.

North American Energy Partners (NOA:15.55, +1.26, +8.8%) saw its shares jump 8.8% to $15.55 on strong fiscal third-quarter earnings and a positive research note from Credit Suisse. The brokerage said the company's latest results reflected "strong operational execution across all ... segments."

Credit Suisse kept an outperform rating on the Canadian company, which has a strong presence in the country's oil sands sector - a corner of the market that looks increasingly attractive in the face of soaring global crude prices.

Source: MarketWatch|by Jim Jelter

INDONESIA: Transocean to lead Karama campaign

2008-02-16T02:15:00.003+01:00

A consortium of oil companies calling themselves the Makassar Strait Explorers have hired Transocean's deepwater drill ship GSF Explorer to a two-year contract to develop test the Karama block off West Sulawesi, Indonesia for hydrocarbons.

The contract starts late in 2009, when operator StatoilHydro begins drilling three wells. The Norwegian energy champ holds a 51 percent and Pertamina 49 percent in the wells, which will spud late in 2010.

“The consortium is now in the process of planning procurement of additional products and services for the drilling campaign," a statement said.

The Makassar oil companies also include Marathon, Anadarko, ConocoPhillips, ENI and Talisman, and they'll combine for 12 exploration wells. Each company will pay for its own area wells.

A similar "rig club" was formed in Norway two years ago to help keep rigs in Norway, after drilling contractors complained too few promised exploration wells were being followed through.

Source: Scandoil

STOCKS: Energy stocks rose Wednesday as the sector took its cue from an upswing in oil prices on lower-than-expected petroleum inventories

2008-02-14T06:25:00.002+01:00

Strong results from Coca-Cola (KO:59.39, -0.53, -0.9%) and healthy retail sales, boosted by the gasoline business, stoked buying in the energy patch. ExxonMobil (XOM:85.49, +1.11, +1.3%) accelerated earlier gains, rising 1.3% to $85.49 as Wall Street shrugged off a move by Venezuela to cut off oil sales to the company, except to a jointly owned refinery in Louisiana.

The Amex Oil Index (XOI:1,378.61, +25.78, +1.9%) rose nearly 2% to 1,365, with Marathon Oil (MRO:50.61, +1.26, +2.6%) , Valero (VLO:59.20, +1.51, +2.6%) , Occidental Petroleum (OXY:70.13, +1.92, +2.8%) , and ConocoPhillips (COP:78.65, +2.25, +3.0%) all up about 3%.

The Amex Natural Gas Index (XNG:582.15, +10.03, +1.8%) advanced 1.8% to 582, with Apache (APA:108.22, +3.42, +3.3%) and Southwestern (SWN:63.40, +2.43, +4.0%) each up more than 3%. The Philadelphia Oil Service Index rallied 4.2% to 273, with Smith International (SII:61.27, +3.45, +6.0%) up 6% and National Oilwell Varco (NOV:63.90, +3.08, +5.1%) up 5%.

Crude prices changed course and rose 0.5% to $93.27 a barrel. U.S. crude inventories rose less than expected, up 1.1 million barrels to 301.1 million barrels in the week ending Feb. 8, U.S. Energy Information Administration reported.

Analysts surveyed by Platts expected a rise of 3.2 million barrels. Meanwhile, world crude supplies have been growing as economies slow down, according to the latest data from the International Energy Agency.

by Steve Gelsi
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