Showing posts with label ExxonMobil. Show all posts
Showing posts with label ExxonMobil. Show all posts
[OIL MAJORS] Total Sees Gazprom as `Key' Partner for Russian Energy Projects
Published | 11-Sep-2008
Total SA, Europe's third-largest oil company, sees a partnership with OAO Gazprom as ``key'' to developing energy projects in Russia.
``If we consider new projects there, it will be with Gazprom,'' Total Chief Financial Officer Patrick de la Chevardiere said in an interview with Bloomberg Television yesterday in London. ``We want to maintain our relationship. Gazprom is a key partner in Russia.''
Total and Norway's StatoilHydro ASA hold stakes of 25 percent and 24 percent respectively in a unit working on the Arctic field of Shtokman, while Gazprom holds the rest. Total counts the project among 15 ``building blocks'' to provide 12 billion barrels of oil equivalent in reserves and says it will make an investment decision at the end of 2009 or early 2010. Gazprom has said the field holds enough natural gas to supply the world for one year.
Total, based in Paris, also plans to make bigger purchases among exploration and production companies internationally than in the past three years to boost output.
``The acquisition market has changed dramatically this summer,'' de la Chevardiere said. ``Some small companies share prices dropped 30 percent.'' Total is ``looking at possible targets'' around the world, and hasn't yet decided to approach one in particular, he said.
Canadian Assets
Total bought Synenco Energy Inc., the Calgary-based energy company developing an oil-sands project, at a cost of C$541 million ($505 million) to expand heavy oil operations. The French company bought Canada's Deer Creek Energy Ltd. for C$1.67 billion in 2005.
``We might make a bigger acquisition in the near future,'' Chief Executive Officer Christophe de Margerie said at an analyst conference in London yesterday on the company's outlook, referring to the Synenco deal. ``If we want to keep a strong upside in our portfolio we need to make acquisitions.''
Future acquisitions will be in sectors Total is missing in its exploration and production portfolio and will adhere to profitability requirements, de la Chevardiere said.
Total yesterday cut its annual production growth target because higher crude prices will prompt partners to demand a greater share of output.
Average output growth over the next decade will be 2 percent to 3 percent, de Margerie said. The estimate, based on crude prices of $100 a barrel, is lower than the 4 percent predicted a year ago for the five years through 2010, which was based on oil at $60.
Production Growth
The producer is relying on projects in Angola and Canada's oil sands to raise output as Kazakhstan and Venezuela restrict access to reserves.
Total said almost a fifth of production will come from LNG ventures by the middle of the next decade, with growth led by nine liquefaction projects already operating or under construction. A further five are being studied, it said.
Total plans to triple LNG output to 30 million tons a year by 2016, surpassing ExxonMobil Corp. and remaining behind Royal Dutch Shell Plc, it said.
The company's LNG assets include stakes in projects in Yemen, Qatar and Angola, as well as Shtokman.
Total, Eni SpA and their partners in Kazakhstan's Kashagan field agreed to cede a greater stake in the development to the government in January. The project is at least seven years behind schedule.
``Our estimate for first oil is 2012,'' de la Chevardiere said. ``I am confident the new contract framework will be able to achieve this.''
Kazakhstan Energy Minister Sauat Mynbayev said Sept. 5 the field is on target to meet an October 2013 deadline for starting production.
Source: Bloomberg| by Tara Patel and Ryan Chilcote
``If we consider new projects there, it will be with Gazprom,'' Total Chief Financial Officer Patrick de la Chevardiere said in an interview with Bloomberg Television yesterday in London. ``We want to maintain our relationship. Gazprom is a key partner in Russia.''
Total and Norway's StatoilHydro ASA hold stakes of 25 percent and 24 percent respectively in a unit working on the Arctic field of Shtokman, while Gazprom holds the rest. Total counts the project among 15 ``building blocks'' to provide 12 billion barrels of oil equivalent in reserves and says it will make an investment decision at the end of 2009 or early 2010. Gazprom has said the field holds enough natural gas to supply the world for one year.
Total, based in Paris, also plans to make bigger purchases among exploration and production companies internationally than in the past three years to boost output.
``The acquisition market has changed dramatically this summer,'' de la Chevardiere said. ``Some small companies share prices dropped 30 percent.'' Total is ``looking at possible targets'' around the world, and hasn't yet decided to approach one in particular, he said.
Canadian Assets
Total bought Synenco Energy Inc., the Calgary-based energy company developing an oil-sands project, at a cost of C$541 million ($505 million) to expand heavy oil operations. The French company bought Canada's Deer Creek Energy Ltd. for C$1.67 billion in 2005.
``We might make a bigger acquisition in the near future,'' Chief Executive Officer Christophe de Margerie said at an analyst conference in London yesterday on the company's outlook, referring to the Synenco deal. ``If we want to keep a strong upside in our portfolio we need to make acquisitions.''
Future acquisitions will be in sectors Total is missing in its exploration and production portfolio and will adhere to profitability requirements, de la Chevardiere said.
Total yesterday cut its annual production growth target because higher crude prices will prompt partners to demand a greater share of output.
Average output growth over the next decade will be 2 percent to 3 percent, de Margerie said. The estimate, based on crude prices of $100 a barrel, is lower than the 4 percent predicted a year ago for the five years through 2010, which was based on oil at $60.
Production Growth
The producer is relying on projects in Angola and Canada's oil sands to raise output as Kazakhstan and Venezuela restrict access to reserves.
Total said almost a fifth of production will come from LNG ventures by the middle of the next decade, with growth led by nine liquefaction projects already operating or under construction. A further five are being studied, it said.
Total plans to triple LNG output to 30 million tons a year by 2016, surpassing ExxonMobil Corp. and remaining behind Royal Dutch Shell Plc, it said.
The company's LNG assets include stakes in projects in Yemen, Qatar and Angola, as well as Shtokman.
Total, Eni SpA and their partners in Kazakhstan's Kashagan field agreed to cede a greater stake in the development to the government in January. The project is at least seven years behind schedule.
``Our estimate for first oil is 2012,'' de la Chevardiere said. ``I am confident the new contract framework will be able to achieve this.''
Kazakhstan Energy Minister Sauat Mynbayev said Sept. 5 the field is on target to meet an October 2013 deadline for starting production.
Source: Bloomberg| by Tara Patel and Ryan Chilcote
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[UNITED STATES] With little damage to oil patch, prices dip
Published | 02-Sep-2008The oil and gas industry breathed a tentative sigh of relief Monday after preliminary reports suggested Hurricane Gustav did little damage to energy facilities both onshore and off, helping send oil prices sharply downward.
Early updates from Gulf of Mexico drillers and oil and natural gas producers were "very promising," with no major damage reported, said Lars Herbst, regional director for Minerals Management Service, the Interior Department office that regulates the offshore oil and gas industry.
Refiners were beginning to send crews Monday to assess facilities in Louisiana, meanwhile, and hoped to resume operations quickly. But Herbst and energy companies cautioned it could be days before a full assessment of Gustav's impact is known. Until then, offshore oil and gas installations and refineries could remain closed.
The weaker storm coupled with a stronger dollar helped send light, sweet crude for October delivery down $4.34 to $111.12 by Monday evening on the New York Mercantile Exchange. U.S. markets were closed for Labor Day, but traders had after-hours access electronically.
President Bush said Monday he would allow purchases of crude oil from the nation's Strategic Petroleum Reserve, the emergency stockpile that now holds roughly 700 million barrels of oil, if refineries needed the stock because of Gustav-related outages. It was not clear late Monday if any company had taken him up on the offer.
Gustav, which roared across western Cuba as a massive Category 5 storm, barely registered major hurricane status as it spun through the offshore Louisiana oil patch early Monday morning, with 115 mph winds near its eye. By the time it made landfall later Monday morning, it was a Category 2 storm with 110 mph maximum sustained winds.
The storm's center appeared to pass close to several major offshore installations, including Shell's Mars platform, whose drilling rig was crumpled by Katrina three years ago.
Planes to look for damage
Major producers with offshore installations, including ConocoPhillips and ExxonMobil, said they would inspect their facilities from the air as soon as it was safe.
Two major offshore drillers said the storm did not appear to do major damage to rigs in its path.
"So far, so good," said Guy Cantwell, spokesman for Houston-based Transocean, the world's largest offshore drilling contractor. The company moved eight self-propelled rigs out of the way ahead of Gustav, leaving three moored rigs in its path.
Based on satellite tracking, the three rigs appear to have remained in place, but the company was hoping to confirm assessments after doing flyovers.
"If they stay in place, that will be a big success for the industry," Cantwell said, noting improvements in hurricane preparedness by offshore oil and gas companies since devastating storms in 2005.
Les Van Dyke, spokesman for Diamond Offshore, another major Houston driller, also said its four to six rigs affected by the storm appear to have withstood Gustav's impact. Workers could be back on rigs as early as Wednesday, Van Dyke said.
The upbeat reports came after forecasters had said Gustav could move into the Gulf Coast as a much fiercer storm.
"If Gustav had been a Category 4 hurricane (minimum 131 mph winds), we would have expected losses on the nature of $25 billion plus," said Tom Larsen, senior vice president of EQECAT, an Oakland, Calif.-based firm that does risk modeling.
Instead, the firm predicts insured losses from Gustav would be in the $6 billion-to-$10 billion range, including damage to energy infrastructure.
Workers evacuated rigs
By Monday, companies had shut down 100 percent of Gulf of Mexico oil production and 95.4 percent of natural gas output, the Minerals Management Service said. That meant about 1.3 million barrels of daily oil production and 7.4 billion cubic feet a day of gas was offline.
Workers from 100 rigs and 626 production platforms evacuated.
But offshore facilities were seen as better able to withstand strong storms after making improvements since hurricanes Katrina and Rita in 2005, which brought massive damage.
In anticipation of the storm, many companies, including Valero Energy, ExxonMobil and Shell Oil, had either halted production or reduced output at several major refineries in Texas and Louisiana.
As of late Monday, those facilities remained closed. Once given the all-clear, the plants could take as long as two weeks to return to full production.
Effect on fuel prices
Because the Gulf Coast is home to 42 percent of the nation's refining capacity, even minor outages can tighten fuel supplies nationwide and send gasoline and diesel fuel prices higher. On Monday, the national average for regular gasoline held at $3.69 per gallon, while diesel fell one penny to $4.26 per gallon, according to AAA's Daily Fuel Gauge Report.
After Katrina, gasoline prices spiked 18 percent nationwide as Gulf Coast refineries struggled to resume operation. The same jump today would push U.S. pump prices to about $4.35 a gallon, said Tom Kloza, an oil analyst with the Oil Price Information Service said in a report before the storm.
But given current weakness in U.S. gasoline demand, he predicted a more modest increase of 10 cents to 30 cents per gallon at worst.
Early updates from Gulf of Mexico drillers and oil and natural gas producers were "very promising," with no major damage reported, said Lars Herbst, regional director for Minerals Management Service, the Interior Department office that regulates the offshore oil and gas industry.
Refiners were beginning to send crews Monday to assess facilities in Louisiana, meanwhile, and hoped to resume operations quickly. But Herbst and energy companies cautioned it could be days before a full assessment of Gustav's impact is known. Until then, offshore oil and gas installations and refineries could remain closed.
The weaker storm coupled with a stronger dollar helped send light, sweet crude for October delivery down $4.34 to $111.12 by Monday evening on the New York Mercantile Exchange. U.S. markets were closed for Labor Day, but traders had after-hours access electronically.
President Bush said Monday he would allow purchases of crude oil from the nation's Strategic Petroleum Reserve, the emergency stockpile that now holds roughly 700 million barrels of oil, if refineries needed the stock because of Gustav-related outages. It was not clear late Monday if any company had taken him up on the offer.
Gustav, which roared across western Cuba as a massive Category 5 storm, barely registered major hurricane status as it spun through the offshore Louisiana oil patch early Monday morning, with 115 mph winds near its eye. By the time it made landfall later Monday morning, it was a Category 2 storm with 110 mph maximum sustained winds.
The storm's center appeared to pass close to several major offshore installations, including Shell's Mars platform, whose drilling rig was crumpled by Katrina three years ago.
Planes to look for damage
Major producers with offshore installations, including ConocoPhillips and ExxonMobil, said they would inspect their facilities from the air as soon as it was safe.
Two major offshore drillers said the storm did not appear to do major damage to rigs in its path.
"So far, so good," said Guy Cantwell, spokesman for Houston-based Transocean, the world's largest offshore drilling contractor. The company moved eight self-propelled rigs out of the way ahead of Gustav, leaving three moored rigs in its path.
Based on satellite tracking, the three rigs appear to have remained in place, but the company was hoping to confirm assessments after doing flyovers.
"If they stay in place, that will be a big success for the industry," Cantwell said, noting improvements in hurricane preparedness by offshore oil and gas companies since devastating storms in 2005.
Les Van Dyke, spokesman for Diamond Offshore, another major Houston driller, also said its four to six rigs affected by the storm appear to have withstood Gustav's impact. Workers could be back on rigs as early as Wednesday, Van Dyke said.
The upbeat reports came after forecasters had said Gustav could move into the Gulf Coast as a much fiercer storm.
"If Gustav had been a Category 4 hurricane (minimum 131 mph winds), we would have expected losses on the nature of $25 billion plus," said Tom Larsen, senior vice president of EQECAT, an Oakland, Calif.-based firm that does risk modeling.
Instead, the firm predicts insured losses from Gustav would be in the $6 billion-to-$10 billion range, including damage to energy infrastructure.
Workers evacuated rigs
By Monday, companies had shut down 100 percent of Gulf of Mexico oil production and 95.4 percent of natural gas output, the Minerals Management Service said. That meant about 1.3 million barrels of daily oil production and 7.4 billion cubic feet a day of gas was offline.
Workers from 100 rigs and 626 production platforms evacuated.
But offshore facilities were seen as better able to withstand strong storms after making improvements since hurricanes Katrina and Rita in 2005, which brought massive damage.
In anticipation of the storm, many companies, including Valero Energy, ExxonMobil and Shell Oil, had either halted production or reduced output at several major refineries in Texas and Louisiana.
As of late Monday, those facilities remained closed. Once given the all-clear, the plants could take as long as two weeks to return to full production.
Effect on fuel prices
Because the Gulf Coast is home to 42 percent of the nation's refining capacity, even minor outages can tighten fuel supplies nationwide and send gasoline and diesel fuel prices higher. On Monday, the national average for regular gasoline held at $3.69 per gallon, while diesel fell one penny to $4.26 per gallon, according to AAA's Daily Fuel Gauge Report.
After Katrina, gasoline prices spiked 18 percent nationwide as Gulf Coast refineries struggled to resume operation. The same jump today would push U.S. pump prices to about $4.35 a gallon, said Tom Kloza, an oil analyst with the Oil Price Information Service said in a report before the storm.
But given current weakness in U.S. gasoline demand, he predicted a more modest increase of 10 cents to 30 cents per gallon at worst.
Source: Houston Chronicle | By BRETT CLANTON
(Associated Press contributed to this report.)
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[SOUTH AMERICA] Venezuela moves to nationalize fuel distribution
Published | 28-Aug-2008Presidente Hugo Chávez said Wednesday that wholesale gasoline sales by private companies in Venezuela will soon disappear after his congressional allies pass a bill nationalizing the business.
Under the measure, which received initial approval in the National Assembly on Wednesday, the state-run oil company Petróleos de Venezuela, or PDVSA, will control Venezuela's fuel distribution network but will not nationalize privately owned gas stations.
Dominated by Chávez allies, the National Assembly is expected to give its final approval to the legislation later this week.
Distributors, including subsidiaries of British Petroleum, Exxon Mobil and Chevron, had hoped to persuade the government not to seize total control of their businesses. But Chavez ruled out allowing private minority stakes, accusing operators of making money at the country's expense. "This was an old scheme through which some private sectors seized the nation's wealth without a drop of sweat," Chávez said. "That's what they defend."
The law gives distributors 60 days to negotiate the sale of their businesses to the government or face expropriation. It also forces distributors to sell storage tanks and gasoline pumps to PDVSA and to relinquish their brand names.
Congressman Luis Tascon, a former Chávez ally, said the pending legislation could cause shortages at gas stations because the government is not prepared to take full control over distribution.
"I'm warning the population that if this law is approved, we are going to see shortages in the short term," said Tascon, one of a handful of lawmakers who voted against the bill.
A PDVSA subsidiary controls 49 percent of fuel distribution in Venezuela, with the rest controlled by private companies, according to industry representatives.
Under Chávez, the government has nationalized Venezuela's largest telephone, electricity, steel and cement companies and has assumed majority control over four major oil projects.
Also Wednesday, the president said in talks with the Mexican ambassador, the government negotiated a deal that will let the Venezuelan authorities take full control of the local plants of the Mexican cement company Cemex.
He gave no details on what his government might pay for a majority stake in Cemex's three Venezuelan cement plants, 30 smaller concrete plants and shipping terminals.
Venezuela seized the facilities on Aug. 19 after compensation talks failed.
Jorge Pérez, a spokesman at Cemex headquarters in Monterrey, Mexico, confirmed the agreement with Venezuela but said compensation must still be determined in talks with the government.
Chávez also said that "time has run out" for an agreement on compensating the country's largest steel maker, Sidor, and that Venezuela will determine on its own what parent company's Ternium's shares in the company are worth.
Ternium is a subsidiary of the Argentine-Italian conglomerate Techint. It owned 60 percent of Sidor until it was nationalized in May.
Chavez added that the two sides disagree over a Ternium request that the government guarantee immunity from future claims by workers or others in Venezuela. Ternium officials were not available for comment.
Source: Associated Press| by Fabiola Sanchez and Christopher Toothaker
Under the measure, which received initial approval in the National Assembly on Wednesday, the state-run oil company Petróleos de Venezuela, or PDVSA, will control Venezuela's fuel distribution network but will not nationalize privately owned gas stations.
Dominated by Chávez allies, the National Assembly is expected to give its final approval to the legislation later this week.
Distributors, including subsidiaries of British Petroleum, Exxon Mobil and Chevron, had hoped to persuade the government not to seize total control of their businesses. But Chavez ruled out allowing private minority stakes, accusing operators of making money at the country's expense. "This was an old scheme through which some private sectors seized the nation's wealth without a drop of sweat," Chávez said. "That's what they defend."
The law gives distributors 60 days to negotiate the sale of their businesses to the government or face expropriation. It also forces distributors to sell storage tanks and gasoline pumps to PDVSA and to relinquish their brand names.
Congressman Luis Tascon, a former Chávez ally, said the pending legislation could cause shortages at gas stations because the government is not prepared to take full control over distribution.
"I'm warning the population that if this law is approved, we are going to see shortages in the short term," said Tascon, one of a handful of lawmakers who voted against the bill.
A PDVSA subsidiary controls 49 percent of fuel distribution in Venezuela, with the rest controlled by private companies, according to industry representatives.
Under Chávez, the government has nationalized Venezuela's largest telephone, electricity, steel and cement companies and has assumed majority control over four major oil projects.
Also Wednesday, the president said in talks with the Mexican ambassador, the government negotiated a deal that will let the Venezuelan authorities take full control of the local plants of the Mexican cement company Cemex.
He gave no details on what his government might pay for a majority stake in Cemex's three Venezuelan cement plants, 30 smaller concrete plants and shipping terminals.
Venezuela seized the facilities on Aug. 19 after compensation talks failed.
Jorge Pérez, a spokesman at Cemex headquarters in Monterrey, Mexico, confirmed the agreement with Venezuela but said compensation must still be determined in talks with the government.
Chávez also said that "time has run out" for an agreement on compensating the country's largest steel maker, Sidor, and that Venezuela will determine on its own what parent company's Ternium's shares in the company are worth.
Ternium is a subsidiary of the Argentine-Italian conglomerate Techint. It owned 60 percent of Sidor until it was nationalized in May.
Chavez added that the two sides disagree over a Ternium request that the government guarantee immunity from future claims by workers or others in Venezuela. Ternium officials were not available for comment.
Source: Associated Press| by Fabiola Sanchez and Christopher Toothaker
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[SPAIN] Oil leaders meet again after Jeddah failure
Published | 30-Jun-2008A week after failing to deflate record oil prices at a summit in Saudi Arabia, the world's biggest crude producers and consumers will get another chance to tackle the problem at a meeting this week.
More than 3,000 delegates, including leading corporate and political figures, are to meet at the 19th World Petroleum Congress (WPC) in Madrid, which runs from Monday to Thursday after an official opening reception on Sunday.
"It's the Olympics of the oil and gas industry," director of the World Petroleum Congress, Pierce Riemer, told a press conference last week.
The gathering follows a surge in oil prices Friday that took both New York light sweet crude and Brent North Sea crude to record levels beyond 142 dollars a barrel.
The president of the Organization of Petroleum Exporting Countries, the head of the International Energy Agency and ministers from Nigeria, Russia, Venezuela, India, France and the Netherlands are expected to be present.
They are to be joined by the bosses of major international oil groups ExxonMobil of the United States, CNOOC of China, Britain's BP and Shell, Rosneft of Russia and Total of France.
Saudi Arabia convened a hastily arranged meeting of consumers and producers in Jeddah last weekend to tackle the problem of record oil prices, which are forecast by Organization of Petroleum Exporting Countries,'s president to touch 150-170 in the coming months.
Most experts agreed afterwards that the only concrete result was Saudi Arabia's announcement that it would increase daily production by more than 200,000 barrels to 9.7 million -- and that it could significantly step this up if necessary.
The gathering pitted consumer nations, which are calling for an increase in production, against producers.
Most OPEC members remain firmly against any increase in their production and blame speculators and the fall in the dollar for the remarkable run up in prices, which have doubled in the last 12 months.
Jorge Segrelles, the head of the organising committee of the WPC, says the meeting is intended to be "a forum for actively finding solutions."
Given the differences in assessment of the situation between consumer and producer countries, the head of energy at consultancy Capgemini, Colette Lewiner, sees little chance of an agreement.
"There might be declarations of intent, but there will not be a consensus in the short term," she said.
The main event, which will take place in Madrid's Ifema conference centre, also faces competition from a rival meeting of environmentalists called to promote alternatives to crude oil as an energy source. The main event, which will take place in Madrid's Ifema conference centre, also faces competition from a rival meeting of environmentalists called to promote alternatives to crude oil as an energy source.
More than 3,000 delegates, including leading corporate and political figures, are to meet at the 19th World Petroleum Congress (WPC) in Madrid, which runs from Monday to Thursday after an official opening reception on Sunday.
"It's the Olympics of the oil and gas industry," director of the World Petroleum Congress, Pierce Riemer, told a press conference last week.
The gathering follows a surge in oil prices Friday that took both New York light sweet crude and Brent North Sea crude to record levels beyond 142 dollars a barrel.
The president of the Organization of Petroleum Exporting Countries, the head of the International Energy Agency and ministers from Nigeria, Russia, Venezuela, India, France and the Netherlands are expected to be present.
They are to be joined by the bosses of major international oil groups ExxonMobil of the United States, CNOOC of China, Britain's BP and Shell, Rosneft of Russia and Total of France.
Saudi Arabia convened a hastily arranged meeting of consumers and producers in Jeddah last weekend to tackle the problem of record oil prices, which are forecast by Organization of Petroleum Exporting Countries,'s president to touch 150-170 in the coming months.
Most experts agreed afterwards that the only concrete result was Saudi Arabia's announcement that it would increase daily production by more than 200,000 barrels to 9.7 million -- and that it could significantly step this up if necessary.
The gathering pitted consumer nations, which are calling for an increase in production, against producers.
Most OPEC members remain firmly against any increase in their production and blame speculators and the fall in the dollar for the remarkable run up in prices, which have doubled in the last 12 months.
Jorge Segrelles, the head of the organising committee of the WPC, says the meeting is intended to be "a forum for actively finding solutions."
Given the differences in assessment of the situation between consumer and producer countries, the head of energy at consultancy Capgemini, Colette Lewiner, sees little chance of an agreement.
"There might be declarations of intent, but there will not be a consensus in the short term," she said.
The main event, which will take place in Madrid's Ifema conference centre, also faces competition from a rival meeting of environmentalists called to promote alternatives to crude oil as an energy source. The main event, which will take place in Madrid's Ifema conference centre, also faces competition from a rival meeting of environmentalists called to promote alternatives to crude oil as an energy source.
Source: Agence France Presse
[MIDDLE EAST] Negotiations under way for no-bid contracts. Oil majors may return to Iraq after 36 years
Published | 19-Jun-2008Four Western oil companies are in the final stages of negotiations this month on contracts that will return them to Iraq, 36 years after losing their oil concession to nationalization as Saddam Hussein consolidated his power.
Exxon Mobil, Shell, Total and BP, the original partners in the Iraq Petroleum Co., along with Chevron and a number of smaller oil companies, are in talks with Iraq's Oil Ministry for no-bid contracts to service Iraq's largest fields, according to ministry officials, oil company officials and a U.S. diplomat.
The deals, expected to be announced on June 30, lay the foundation for the first commercial work for the major companies in Iraq since the U.S. invasion, and open a new and potentially lucrative country for their operations.
The no-bid contracts are unusual for the industry, and the offers prevailed over others by more than 40 companies, including companies in Russia, China and India. The contracts, which would run for one to two years and are relatively small by industry standards, would nonetheless give the companies an advantage in bidding on future contracts in a country that many experts consider to be the best hope for a large-scale increase in oil production.
There was suspicion among many in the Arab world and among parts of the American public that the United States had gone to war in Iraq precisely to secure the oil wealth these contracts seek to extract. The Bush administration has said that the war was necessary to combat terrorism. It is not clear what role the United States played in awarding the contracts; there are still American advisers to Iraq's Oil Ministry.
For an industry being frozen out of new ventures in the world's dominant oil-producing countries, from Russia to Venezuela, Iraq offers a rare and prized opportunity.
While enriched by escalating prices, the oil majors are also struggling to replace their reserves as more of the world's oil patch becomes off limits.
The Iraqi government's stated goal in inviting back the major companies is to increase oil production by half a million barrels per day by attracting modern technology and expertise to oil fields now desperately short of both. The revenue would be used for reconstruction, although the Iraqi government has had trouble spending the oil revenues it now has, in part because of bureaucratic inefficiency.
The Iraqi Oil Ministry, through a spokesman, said the no-bid contracts were a stopgap measure to bring modern skills into the fields while the oil law was pending in Parliament.
Exxon Mobil, Shell, Total and BP, the original partners in the Iraq Petroleum Co., along with Chevron and a number of smaller oil companies, are in talks with Iraq's Oil Ministry for no-bid contracts to service Iraq's largest fields, according to ministry officials, oil company officials and a U.S. diplomat.
The deals, expected to be announced on June 30, lay the foundation for the first commercial work for the major companies in Iraq since the U.S. invasion, and open a new and potentially lucrative country for their operations.
The no-bid contracts are unusual for the industry, and the offers prevailed over others by more than 40 companies, including companies in Russia, China and India. The contracts, which would run for one to two years and are relatively small by industry standards, would nonetheless give the companies an advantage in bidding on future contracts in a country that many experts consider to be the best hope for a large-scale increase in oil production.
There was suspicion among many in the Arab world and among parts of the American public that the United States had gone to war in Iraq precisely to secure the oil wealth these contracts seek to extract. The Bush administration has said that the war was necessary to combat terrorism. It is not clear what role the United States played in awarding the contracts; there are still American advisers to Iraq's Oil Ministry.
For an industry being frozen out of new ventures in the world's dominant oil-producing countries, from Russia to Venezuela, Iraq offers a rare and prized opportunity.
While enriched by escalating prices, the oil majors are also struggling to replace their reserves as more of the world's oil patch becomes off limits.
The Iraqi government's stated goal in inviting back the major companies is to increase oil production by half a million barrels per day by attracting modern technology and expertise to oil fields now desperately short of both. The revenue would be used for reconstruction, although the Iraqi government has had trouble spending the oil revenues it now has, in part because of bureaucratic inefficiency.
The Iraqi Oil Ministry, through a spokesman, said the no-bid contracts were a stopgap measure to bring modern skills into the fields while the oil law was pending in Parliament.
Source: The New York Times|By ANDREW E. KRAMER
[WESTERN HEMISPHERE] Cuban oil production could be a catalyst for a change in relations with U.S.
Published | 13-Jun-2008Sometime next year, Cuba plans to begin drilling a major oil field off its northern coast that might do what little else has done - bring change to U.S-Cuba relations. In a rare confluence of circumstances - including a new leader in Havana and a new one coming to the United States, as well as record-high crude oil prices - a new petroleum source could grease the wheels for the two longtime foes to reunite out of mutual need, experts say.
Getting there would require a sea change in U.S. policy, namely altering the U.S. trade embargo imposed against Cuba in 1962 to try to topple Fidel Castro's Communist government.
If the embargo remains as is, a nearby source of oil will be off limits to the United States, and the American oil industry will miss out on billions of dollars of business.
Opponents of the embargo rule out any change until President George W. Bush, who has toughened the embargo, leaves office next year. Even then they can expect a fight from influential Cuban-American leaders, who argue that helping Cuba produce oil will aid the Cuban government and undermine the 46-year-old embargo's reason for being.
"We think what really needs to happen in Cuba is for that system to change," U.S. Commerce Secretary Carlos Gutierrez, who was born in Cuba, told Reuters.
But opponents of the embargo say the combination of economics, energy needs and environmental concerns, as well as new leaders in the two countries, make easing the embargo possible.
"The pro-embargo status quo is really threatened right now," said Sarah Stephens, director of the Center for Democracy in the Americas. "The sands are running out of the clock on the policy and I think that has the pro-embargo folks worried."
The U.S. Geological Survey has estimated the Cuban field holds at least five billion barrels of recoverable oil and 10 trillion cubic feet, or 280 billion cubic meters, of natural gas.
In a few years, Cuba could be producing 525,000 barrels of oil a day, enough to make it energy independent and perhaps even an oil exporter, said Jorge Piñón, a former oil company executive who is now a researcher at the University of Miami. Cuba currently consumes 145,000 barrels of oil daily, of which 92,000 barrels come from Venezuela, though that would most certainly rise if the embargo were lifted.
The government has sold oil concessions to seven companies and has said a consortium of Spanish, Indian and Norwegian companies will drill the first production well in the first half of 2009.
Drilling was supposed to begin this year and has been put off twice because of undisclosed factors that U.S. experts said most likely included difficulty getting a rig because global drilling activity was high, the need for more facilities to handle the oil and possible effects of the U.S. embargo.
The Cuban field lies as much as six miles, or 9.7 kilometers, below the sea surface, depths at which U.S. production technology is superior, said a Cuban oil expert, Jonathan Benjamin-Alvarado, at the University of Nebraska-Omaha.
"Cuba and none of the present partners have that capability without accessing American technology, and therein lies the rub," he said. "U.S. export controls forbid them to transfer that technology to Cuba."
Cuba, looking past the United States, has been in talks with Petrobras of Brazil, which has deep-water expertise, about getting involved.
The embargo has withstood repeated legislative attempts to loosen its terms, including unsuccessful bills in the U.S. Congress in 2006 to exempt oil companies.
But Kirby Jones, a consultant on Cuban business and founder of the U.S.-Cuba Trade Association in Washington, and who is against the embargo, said a big Cuba oil find would change the political equation.
"This is the first time that maintaining the embargo actually costs the United States something," he said. "And we need oil. We need it from wherever we can get it, and in this case it's 50 miles off our coast."
An odd fact is that Cuba will be drilling 50 miles from the Florida Keys, or more than twice as close as U.S. companies can get because of regulations protecting Florida's coast.
Representative Jeff Flake, an Arizona Republican who has introduced bills in Congress to lift the embargo for oil companies, said the environmental argument might be crucial because there was much concern in Florida about potential oil spills.
"If there are going to be oil rigs off of Florida, I think most Americans would be more comfortable if they were U.S. oil rigs, rather than Chinese for example," Flake said.
He said U.S. companies were definitely interested in Cuba, but have not publicly pushed for embargo change. During interviews, industry executives emphasized they did not oppose the embargo because it was U.S. national policy and were pushing instead for access to U.S. areas that were currently prohibited, like offshore western Florida.
"When U.S. companies are not even allowed to drill in the eastern half of the Gulf of Mexico, we have a long way to go before we can think about international waters off the coast of Cuba," said J.Larry Nichols, chairman of Devon Energy, an independent U.S. oil and natural gas producer.
Cuba has said it would welcome U.S. companies to its offshore field and showed its interest by sending Cubapetroleo representatives to a 2006 conference in Mexico City that included companies like the U.S. oil giant ExxonMobil and the top independent U.S. refiner, Valero Energy.
The conference became the center of international controversy when the Sheraton Hotel kicked out the Cuban representatives after the Bush administration told the U.S.-based hotel chain it was violating the embargo by having paying Cuban guests.
The incident may have persuaded the oil industry to lie low on Cuban oil.
"Nobody wants to rankle the Bush administration and get them in a tizzy about what may occur," said Benjamin-Alvarado.
Flake said that the political landscape for the embargo already had changed with Raúl Castro taking over in February as Cuba's president, succeeding his ailing brother, Fidel.
Raúl Castro has made small openings in Cuba's state-run economy, but perhaps more important, he is not the anti-American firebrand and lightning rod his brother was for 49 years.
Getting there would require a sea change in U.S. policy, namely altering the U.S. trade embargo imposed against Cuba in 1962 to try to topple Fidel Castro's Communist government.
If the embargo remains as is, a nearby source of oil will be off limits to the United States, and the American oil industry will miss out on billions of dollars of business.
Opponents of the embargo rule out any change until President George W. Bush, who has toughened the embargo, leaves office next year. Even then they can expect a fight from influential Cuban-American leaders, who argue that helping Cuba produce oil will aid the Cuban government and undermine the 46-year-old embargo's reason for being.
"We think what really needs to happen in Cuba is for that system to change," U.S. Commerce Secretary Carlos Gutierrez, who was born in Cuba, told Reuters.
But opponents of the embargo say the combination of economics, energy needs and environmental concerns, as well as new leaders in the two countries, make easing the embargo possible.
"The pro-embargo status quo is really threatened right now," said Sarah Stephens, director of the Center for Democracy in the Americas. "The sands are running out of the clock on the policy and I think that has the pro-embargo folks worried."
The U.S. Geological Survey has estimated the Cuban field holds at least five billion barrels of recoverable oil and 10 trillion cubic feet, or 280 billion cubic meters, of natural gas.
In a few years, Cuba could be producing 525,000 barrels of oil a day, enough to make it energy independent and perhaps even an oil exporter, said Jorge Piñón, a former oil company executive who is now a researcher at the University of Miami. Cuba currently consumes 145,000 barrels of oil daily, of which 92,000 barrels come from Venezuela, though that would most certainly rise if the embargo were lifted.
The government has sold oil concessions to seven companies and has said a consortium of Spanish, Indian and Norwegian companies will drill the first production well in the first half of 2009.
Drilling was supposed to begin this year and has been put off twice because of undisclosed factors that U.S. experts said most likely included difficulty getting a rig because global drilling activity was high, the need for more facilities to handle the oil and possible effects of the U.S. embargo.
The Cuban field lies as much as six miles, or 9.7 kilometers, below the sea surface, depths at which U.S. production technology is superior, said a Cuban oil expert, Jonathan Benjamin-Alvarado, at the University of Nebraska-Omaha.
"Cuba and none of the present partners have that capability without accessing American technology, and therein lies the rub," he said. "U.S. export controls forbid them to transfer that technology to Cuba."
Cuba, looking past the United States, has been in talks with Petrobras of Brazil, which has deep-water expertise, about getting involved.
The embargo has withstood repeated legislative attempts to loosen its terms, including unsuccessful bills in the U.S. Congress in 2006 to exempt oil companies.
But Kirby Jones, a consultant on Cuban business and founder of the U.S.-Cuba Trade Association in Washington, and who is against the embargo, said a big Cuba oil find would change the political equation.
"This is the first time that maintaining the embargo actually costs the United States something," he said. "And we need oil. We need it from wherever we can get it, and in this case it's 50 miles off our coast."
An odd fact is that Cuba will be drilling 50 miles from the Florida Keys, or more than twice as close as U.S. companies can get because of regulations protecting Florida's coast.
Representative Jeff Flake, an Arizona Republican who has introduced bills in Congress to lift the embargo for oil companies, said the environmental argument might be crucial because there was much concern in Florida about potential oil spills.
"If there are going to be oil rigs off of Florida, I think most Americans would be more comfortable if they were U.S. oil rigs, rather than Chinese for example," Flake said.
He said U.S. companies were definitely interested in Cuba, but have not publicly pushed for embargo change. During interviews, industry executives emphasized they did not oppose the embargo because it was U.S. national policy and were pushing instead for access to U.S. areas that were currently prohibited, like offshore western Florida.
"When U.S. companies are not even allowed to drill in the eastern half of the Gulf of Mexico, we have a long way to go before we can think about international waters off the coast of Cuba," said J.Larry Nichols, chairman of Devon Energy, an independent U.S. oil and natural gas producer.
Cuba has said it would welcome U.S. companies to its offshore field and showed its interest by sending Cubapetroleo representatives to a 2006 conference in Mexico City that included companies like the U.S. oil giant ExxonMobil and the top independent U.S. refiner, Valero Energy.
The conference became the center of international controversy when the Sheraton Hotel kicked out the Cuban representatives after the Bush administration told the U.S.-based hotel chain it was violating the embargo by having paying Cuban guests.
The incident may have persuaded the oil industry to lie low on Cuban oil.
"Nobody wants to rankle the Bush administration and get them in a tizzy about what may occur," said Benjamin-Alvarado.
Flake said that the political landscape for the embargo already had changed with Raúl Castro taking over in February as Cuba's president, succeeding his ailing brother, Fidel.
Raúl Castro has made small openings in Cuba's state-run economy, but perhaps more important, he is not the anti-American firebrand and lightning rod his brother was for 49 years.
Source: Reuters|By Jeff Franks
[ENERGY STOCKS] ExxonMobil shareholders meet
Published | 28-May-2008Energy stocks dipped on Wednesday as oil prices cooled off, with petroleum and natural gas shares extending losses for the second straight day this week.
The Amex Oil Index (XOI: 1,562.75, -2.98, -0.2%) subtracted 0.8% to 1,553, with Hess Corp. (HES: 121.79, -4.21, -3.3%) down 3% to $122.10 and Valero Energy (VLO: 49.00, +1.53, +3.2%) gaining 3.5% to $49.14.
The Amex Natural Gas Index (XNG: 705.71, -0.64, -0.1%) fell 0.8% to 701. Component Chesapeake Energy (CHK: 51.99, -1.20, -2.3%) dropped 2.5% to $51.85. Southwestern Energy (SWN: 44.18, +0.35, +0.8%) rose nearly 2% to $44.69.
The Philadelphia Oil Service Index ($OSX: 337.84, +0.89, +0.3%) dropped 0.9% to 334, falling back from gains in the previous session. Component Halliburton (HAL: 47.88, -0.24, -0.5%) dropped 1.5% to $47.38. Schlumberger (SLB: 100.69, -0.34, -0.3%) fell 1.7% to $99.34. Crude oil prices subtracted $1.48 to $127.37 on the heels of a slack Memorial Day driving weekend in the U.S. See Futures Movers. Even so, gasoline prices remained at the record level of $3.94 a gallon for the second day, according to the AAA Daily Fuel Gauge Report.
Among stocks in the spotlight, ExxonMobil (XOM: 89.65, -0.15, -0.2%) fell 31 cents to $89.49 ahead of its annual shareholders meeting. Some shareholders are calling for the separation of its chairman and chief executive officer and for the oil giant to spend more of its billions on alternative energy research.
Chairman and CEO Rex Tillerson currently holds both jobs. The company's management opposes the measures, which are non-binding. Descendants of John D. Rockefeller, the founder of ExxonMobil predecessor Standard Oil Corp., and a variety of institutional investors in the U.S. and abroad have lined up behind the separation proposal, which drew the support of 40% of shareholders at last year's meeting.
PEMEX's E&P subsidiary has awarded Baker Hughes' (BHI: 87.94, +0.46, +0.5%) a $469 million contract to drill and complete wells, according to federal procurement Website cited by a research note Wednesday by Pritchard Capital Partners. The fields are all in the Gulf of Mexico off the coast of Tabasco state. Work is due to begin on June 30 and run nearly two years. Baker Hughes fell 0.8% to $86.70.
Frontier Oil (FTO: 29.83, +0.89, +3.1%) rose nearly 5% to $30.30. The company drew an upgrade to peer perform from underperform at Bear Stearns. Basic Energy Services (BAS: 28.12, -0.55, -1.9%) dropped 2.4% to $27.97. The company was downgraded to neutral from buy at UBS.
In the alternative energy arena, Verenium Corp. (VRNM: 2.40, +0.03, +1.3%) said it'll hold a dedication ceremony on Thursday for its demonstration plant in Jennings, La. The demonstration plant is rated to produce 1.4 million gallons of ethanol per year using enzymes to convert non-food biomass into fuel. The Cambridge, Mass. company said it's on track to begin construction in the middle of next year on a 30 million gallon per year commercial plant, which will be the first of its kind. Shares rose 2% to $2.42.
The Amex Oil Index (XOI: 1,562.75, -2.98, -0.2%) subtracted 0.8% to 1,553, with Hess Corp. (HES: 121.79, -4.21, -3.3%) down 3% to $122.10 and Valero Energy (VLO: 49.00, +1.53, +3.2%) gaining 3.5% to $49.14.
The Amex Natural Gas Index (XNG: 705.71, -0.64, -0.1%) fell 0.8% to 701. Component Chesapeake Energy (CHK: 51.99, -1.20, -2.3%) dropped 2.5% to $51.85. Southwestern Energy (SWN: 44.18, +0.35, +0.8%) rose nearly 2% to $44.69.
The Philadelphia Oil Service Index ($OSX: 337.84, +0.89, +0.3%) dropped 0.9% to 334, falling back from gains in the previous session. Component Halliburton (HAL: 47.88, -0.24, -0.5%) dropped 1.5% to $47.38. Schlumberger (SLB: 100.69, -0.34, -0.3%) fell 1.7% to $99.34. Crude oil prices subtracted $1.48 to $127.37 on the heels of a slack Memorial Day driving weekend in the U.S. See Futures Movers. Even so, gasoline prices remained at the record level of $3.94 a gallon for the second day, according to the AAA Daily Fuel Gauge Report.
Among stocks in the spotlight, ExxonMobil (XOM: 89.65, -0.15, -0.2%) fell 31 cents to $89.49 ahead of its annual shareholders meeting. Some shareholders are calling for the separation of its chairman and chief executive officer and for the oil giant to spend more of its billions on alternative energy research.
Chairman and CEO Rex Tillerson currently holds both jobs. The company's management opposes the measures, which are non-binding. Descendants of John D. Rockefeller, the founder of ExxonMobil predecessor Standard Oil Corp., and a variety of institutional investors in the U.S. and abroad have lined up behind the separation proposal, which drew the support of 40% of shareholders at last year's meeting.
PEMEX's E&P subsidiary has awarded Baker Hughes' (BHI: 87.94, +0.46, +0.5%) a $469 million contract to drill and complete wells, according to federal procurement Website cited by a research note Wednesday by Pritchard Capital Partners. The fields are all in the Gulf of Mexico off the coast of Tabasco state. Work is due to begin on June 30 and run nearly two years. Baker Hughes fell 0.8% to $86.70.
Frontier Oil (FTO: 29.83, +0.89, +3.1%) rose nearly 5% to $30.30. The company drew an upgrade to peer perform from underperform at Bear Stearns. Basic Energy Services (BAS: 28.12, -0.55, -1.9%) dropped 2.4% to $27.97. The company was downgraded to neutral from buy at UBS.
In the alternative energy arena, Verenium Corp. (VRNM: 2.40, +0.03, +1.3%) said it'll hold a dedication ceremony on Thursday for its demonstration plant in Jennings, La. The demonstration plant is rated to produce 1.4 million gallons of ethanol per year using enzymes to convert non-food biomass into fuel. The Cambridge, Mass. company said it's on track to begin construction in the middle of next year on a 30 million gallon per year commercial plant, which will be the first of its kind. Shares rose 2% to $2.42.
Source: MarketWatch|by Steve Gelsi
[ENERGY STOCKS] The stocks rise with broad market
Published | 22-May-2008Shares of natural gas, oil producers and oil services companies rose Thursday, with oil prices falling back from a fresh record above $135 a barrel and the broad market advancing.
The Amex Oil Index (XOI: 1,626.49, +1.20, +0.1%) rose 0.4% to 1,632. The Amex Natural Gas Index (XNG: 729.15, -2.73, -0.4%) rose 0.4% to 735. The Philadelphia Oil Services Index ($OSX: 341.43, -3.68, -1.1%) rose 0.5% to 347. Sector leader ExxonMobil (XOM: 93.04, -0.63, -0.7%) rose 22 cents to $93.89.
Crude prices rose 65 cents to $133.82, but traded lower than the new record of $135.09 set earlier in the day. See Futures Movers. The Wall Street Journal reported the IEA is attempting to assess the condition of the world's top 400 oil fields. Its findings won't be released until November, but it is clear that future crude supplies could be far tighter than previously thought, the report notes.
The IEA has predicted previously that supplies of crude and other liquid fuels will keep pace with rising demand, topping 116 million barrels a day by 2030, up from around 87 million barrels a day currently, according to the report, which added that the agency now is concerned that aging oil fields and diminished investment mean that companies could struggle to surpass 100 million barrels a day over the next two decades.
Royal Dutch Shell (RDSA: 87.11, -0.21, -0.2%) was upgraded to buy from hold at ING, which also lifted its oil price estimates to $115 a barrel this year and next, up 21% and 44% from an earlier view, and its oil view for the long term by 50% to $90 a barrel.
StatoilHydro (STO: 42.70, +1.60, +3.9%) was upped to hold from sell. "The market continues to ignore fundamentals," the broker said. "Instead, forward curves assume straight-line demand growth with no substitution, efficiency gain or high price economic offsets. The market also sees only a limited supply-side response at best. While we remain cautious of the speculative support in prices, and the daily trading of up to six times daily oil demand, our view on oil industry cycles or medium-term supply/demand elasticity is unlikely to affect momentum."
Shares of Royal Dutch Shell fell 23 cents to $87.09. Statoil rose 4.5% to $42.94. Among coal shares, Alpha Natural (ANR: 73.00, +1.33, +1.9%) rose 3% to $73.82. Merrill Lynch upgrad
The Amex Oil Index (XOI: 1,626.49, +1.20, +0.1%) rose 0.4% to 1,632. The Amex Natural Gas Index (XNG: 729.15, -2.73, -0.4%) rose 0.4% to 735. The Philadelphia Oil Services Index ($OSX: 341.43, -3.68, -1.1%) rose 0.5% to 347. Sector leader ExxonMobil (XOM: 93.04, -0.63, -0.7%) rose 22 cents to $93.89.
Crude prices rose 65 cents to $133.82, but traded lower than the new record of $135.09 set earlier in the day. See Futures Movers. The Wall Street Journal reported the IEA is attempting to assess the condition of the world's top 400 oil fields. Its findings won't be released until November, but it is clear that future crude supplies could be far tighter than previously thought, the report notes.
The IEA has predicted previously that supplies of crude and other liquid fuels will keep pace with rising demand, topping 116 million barrels a day by 2030, up from around 87 million barrels a day currently, according to the report, which added that the agency now is concerned that aging oil fields and diminished investment mean that companies could struggle to surpass 100 million barrels a day over the next two decades.
Royal Dutch Shell (RDSA: 87.11, -0.21, -0.2%) was upgraded to buy from hold at ING, which also lifted its oil price estimates to $115 a barrel this year and next, up 21% and 44% from an earlier view, and its oil view for the long term by 50% to $90 a barrel.
StatoilHydro (STO: 42.70, +1.60, +3.9%) was upped to hold from sell. "The market continues to ignore fundamentals," the broker said. "Instead, forward curves assume straight-line demand growth with no substitution, efficiency gain or high price economic offsets. The market also sees only a limited supply-side response at best. While we remain cautious of the speculative support in prices, and the daily trading of up to six times daily oil demand, our view on oil industry cycles or medium-term supply/demand elasticity is unlikely to affect momentum."
Shares of Royal Dutch Shell fell 23 cents to $87.09. Statoil rose 4.5% to $42.94. Among coal shares, Alpha Natural (ANR: 73.00, +1.33, +1.9%) rose 3% to $73.82. Merrill Lynch upgrad