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Rising costs, shortages curb rush to cash in on oil boom

Andrew England, The Australian
RISING drilling and rig costs, combined with shortages of skilled staff and equipment, are affecting hydrocarbon projects throughout the Middle East, with some being delayed and other contracts being renegotiated.

Producers in the region, from Libya to Saudi Arabia, have embarked on ambitious plans to increase production and capacity to meet growing global demand and take advantage of record oil prices. But many will struggle to meet their schedules, experts say, and can expect to pay exorbitant prices if they are to ensure they have the material and personnel in a market suffering severe constraints.

“It’s having an impact and that impact is going to increase over the next few years. We are seeing projects being delayed simply because they can’t get the equipment delivered on the timescale they used to,” says Candida Scott, an analyst at Cambridge Energy Research Associates (Cera).

Experts say a critical bottleneck is the shortage of skilled staff, with an industry workforce dominated by people close to retirement and inexperienced graduates.

The problems affect producers worldwide, with the Middle East and Libya accounting for 20 per cent of world projects adding productive capacity between 2007 and 2011, according to Cera. Significantly, it is also the region requiring the most manpower over the same period, with 35 per cent of the world’s projected total, the institute says.
(5 October 2007)

Engineer shortage continues to hamper oil and gas production, report says

Associated Press
HOUSTON: Even as energy demand skyrockets, the global production of oil and natural gas will be hampered in the coming years because of a shortage of engineers and other project managers, a new report says.

By 2010, companies trying to produce hydrocarbons can expect to find between 10 percent and 15 percent fewer engineers than they need, according to a survey by Massachusetts-based Cambridge Energy Research Associates.

CERA’s report, being released this week, is based on an analysis of engineering and management needs for more than 400 projects expected to begin worldwide in the next five years.
(3 October 2007)

Big Oil not kidding about pulling out of Alberta

Jon Harding And Claudia Cattaneo, Financial Post
Canada’s largest oil companies warned yesterday they are not making idle threats in the aftermath of public-opinion surveys showing Albertans think the sector is posturing when it says it will shift billions if the government imposes higher taxes and royalties.

“We are trying to say, ‘Beware of the consequences,’ ” said Jim Buckee, former chief executive of Talisman Energy Inc., noting that Albertans don’t appear to understand the implications of such sweeping changes. “I think it will be quite devastating.”

The oil industry’s push to sway public opinion has escalated in the wake of polls showing 88% of Albertans believe they are not getting “a fair share” from oil and gas royalties and that 66% of those polled want Ed Stelmach,
(4 October 2007)

Doomsday: Alberta stands accused
A huge fight between East and West — over the oil sands — is just starting

NICHOLAS KÖHLER, Macleans (Canada)
Left unfettered, Alberta’s energy sector will, by the end of this century, transform the southern part of the province into a desert and its north into a treeless, toxic swamp. Driven both by global warming and oil and gas developments, temperatures in Alberta will soar by as much as eight degrees. The Athabasca River will slow to a trickle, parching the remainder of the province’s forests and encouraging them to burst into flame, generating vast quantities of CO2. “They’re going to be the architects of their own destruction,” says journalist William Marsden, whose new book outlines the environmental threats posed by Alberta’s energy industry.

Even now, fish pulled from the Athabasca downstream of the oil sands taste of gasoline and smell of burning galoshes in the fry pan. The landscape is perforated by more than 300,000 oil and gas wells. Water in some areas to the south can be set alight with a match, likely due to coal-bed methane developments. Doctors administering to Aboriginal communities not far from the oil sands report high rates of thyroid conditions and rare diseases such as cancer of the bile duct. Some from those communities have been employed at the oil sands raking in the carcasses of ducks floating on vast pools of rotten water, the by-product of the sands’ oil-extraction methods.

Such are the claims contained in Marsden’s upcoming Stupid to the Last Drop: How Alberta is Bringing Environmental Armageddon to Canada (And Doesn’t Seem to Care), which presents a scenario almost too frightening to contemplate and suggests Alberta may already be too far gone for redemption — indeed, that it is environmentally doomed. “When you start digging up an area equivalent to the state of Florida, when you start carpet-bombing your province with oil and gas wells, and at the same time, you’ve got global warming drying up the glaciers and your rivers — you’re kind of looking at a doomsday scenario,” he says. “It sounds bizarre, but it’s an absolute possibility that they could be literally destroying themselves.
(8 October 2007)