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CERA: High Rig Costs, Tight Labor Markets to Support Gas Prices

Jeanine Prezioso , Dow Jones Newswires via Rigzone
Rising rig costs and a tight pool of qualified labor are likely to support natural gas prices over the next two years, according to Michael Zenker, head of global gas for Cambridge Energy Research Associates.

“Rig rates climbed 30% per year in 2003, 2004 and 2005,” Zenker said in an interview at CERA’s annual energy conference here.

Industry watchers are also eagerly awaiting any sign of OAO Gazprom moving to form a gas cartel with Algeria and Qatar, Europe’s third largest supplier and the nation with the third largest gas reserves respectively.

But Zenker said at this point such an idea doesn’t make economic sense. “Cartels are usually formed during periods of low prices and oversupply,” he said. “What would you get in a cartel now?”
(19 Feb 2007)

The world’s newest petrol-state

Abdullah Al Madani, The Brunei Times
Reports from Phnom Penh say that oil companies from Japan, South Korea, China, Malaysia, Singapore, Kuwait, Australia and France have been lining up for licences to tap Cambodia’s gigantic oil wealth.

According to several studies conducted by the United Nations, World Bank, Harvard University and other reliable institutions, Cambodian reserves could contain as many as two billion barrels of oil and 10 trillion cubic feet of gas.

Based on the current world price of oil and gas, this may provide Cambodia with annual revenues of US$6 billion a year over the next two decades, an amount more than the country’s gross domestic product, which is only about US$5 billion a year, and several times greater than its current level of domestic revenue and overseas development aid combined.

In fact, Prime Minister Hun Sen’s regime has already circumvented law by creating a Cambodian National Petroleum Authority under his full direct control.
So far, international donors have relatively succeeded in using their aid and grants to force Hun Sen’s regime to launch some reforms and commit itself to respecting international standards on human rights and other issues.
But with oil revenues flowing, the Cambodian government will be free from its reliance on foreign aid and consequently may ignore reforms and the adherence to the rules of international institutions such as the World Bank. It may become even more autocratic and less responsive to the people’s needs. ..

On the other hand, full-scale production of oil, which is not expected earlier than 2009, may make Thai-Cambodian relations tense, unless an agreement is reached on an overlapping area claimed by the two neighbouring countries in the Gulf of Thailand, wherein lie oil and gas reserves. ..
(19 Feb 2007)

Analysis: Increasing oil sands production

Kristyn Ecochard, Earth Times
Over the next 10 years, oil production from Canadian oil sands is expected to just about double to nearly 3 million barrels per day.

Sustained investment and continuing advances in technology are indicators of exponential growth in the market, said Jeff Collins, director of exploration and production strategies for Cambridge Energy Research Associates, at CERA Week in Houston Tuesday.

The need for energy supply security has also driven the oil sands market in Canada despite soaring capital, labor shortages and stress on local communities in Western Canada, Collins said. A 30 percent increase in average capital costs over the last year has challenged the growing market along with major infrastructure issues.

It’s the single-most restrictive step impeding the progress of the oil sands industry, Collins said. New oil sand projects put heavy demand on the local communities in Canada for manpower, housing and schools, among other resources. Major projects in small communities have led to changes in immigration policy.
(14 Feb 2007)

Coal Plant in Subic Bay Opposed

Seoul Times
SUBIC BAY – Opposition is growing to the construction of a 300 megawatt coal power plant on the pristine beaches of Subic Bay, one of the Philippines’ top tourist destinations.

The power plant, being built by Taiwan Cogen, a subsidiary of Taiwan Power Corp., primarily to serve the needs of Korean shipbuilder Hanjin, will bring the controversial form of power generation to one of the country’s most diverse environments.

Subic Bay is home to more than 70 species of fish, including important varieties of reef fish. The world’s rare and endangered Olive Ridley turtle and Hawksbill dwell still survive in Subic Bay . The area is also blanketed by a 9,000 hectare virgin triple-canopy rainforest that provides the area with some of the highest air quality in the region. ..
(17 Feb 2007)