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Pemex May Drill Outside Mexico for First Time If Reforms Fail
Andres R. Martinez and Thomas Black, Bloomberg
Petroleos Mexicanos, struggling as oil production declines, may drill for crude outside Mexico for the first time unless lawmakers approve hiring foreign partners for domestic offshore projects.
Chief Executive Officer Jesus Reyes Heroles said the company, known as Pemex, may court partners on the U.S. side of the Gulf of Mexico, off the coast of Cuba and in Latin America unless Congress adopts oil reforms proposed by President Felipe Calderon. Pemex needs foreign help because it doesn’t have the technology to drill in water deeper than 500 meters (1,640 feet), he said.
“If we can’t learn it here, we have to learn somewhere else,” Reyes Heroles, 56, said in an interview in Mexico City. “We could partner with other companies.”
(22 July 2008)
Contributor Jersey Goff writes:
Really scary now is the degree to which the very bad news is buried- and where and how will they get the already contracted rigs and hardware to drill abroad?
Record Iranian output belies oil sector travails
Oxford Analytica, Globe and Mail
EVENT: Oil output is officially said to be running at 4.2 million barrels per day, a post-revolutionary record.
SIGNIFICANCE: This disguises the fact that there are major problems in the Iranian oil sector which if not addressed soon will have very serious implications for the broader economy.
ANALYSIS: Iran is struggling to maintain oil exports despite the claimed record production levels. The official target is to produce 4.3 million barrels per day (b/d) during the current fiscal year (which began in March). Further out, the target is a more ambitious 8.5 million b/d by 2015 at an estimated capital cost of $50-billion (U.S.). Given that pre-revolutionary production was 6 million b/d, this appears to be realistic.
Production obstacles. However, there are many difficulties with maintaining production, let alone reaching these targets:1. Decline rates. The majority of the Iranian fields are mature, and the natural decline rate loses some 350,000 b/d each year. To offset this and increase capacity requires very considerable investment in secondary recovery. It also requires access to gas for reinjection to maintain field pressure:
(22 July 2008)
Contributor Scott Chisholm Lamont writes:
Very interesting, detailed look at some of Iran’s production and export challenges. It mentions threats to production levels, but doesn’t mention where they are in relation to peak production, locally or globally.
Russia’s Gazprom Agrees to Develop Iranian Oil, Gas Fields
Voice of America
Russian state energy company Gazprom has agreed to help Iran further develop its oil and natural gas fields.
The two sides signed the agreement Sunday during a visit to Tehran by a Gazprom delegation, led by chief executive Alexei Miller…
…Iranian President Mahmoud Ahmadinejad said Sunday that Iran wants to expand ties with Russia in oil and gas as much as possible. Under Sunday’s agreement,
Gazprom and Iran will form working groups to implement the proposed joint projects.
Western governments have urged their companies to cut ties with Iran because of its controversial nuclear program. Western nations accuse Iran of seeking to
develop nuclear weapons under cover of a civilian energy program, a charge Tehran denies.
(14 July 2008)
You say crisis. I say opportunity
Gwyn Morgan, The Globe and Mail
… If retired Calgary geologist and Canadian Hunter Exploration co-founder Jim Gray is correct, and I believe he is, increasing oil production will be a lot harder than G8 leaders expect, making the much-trumpeted goal of lowering global emissions a little easier. Mr. Gray is a legend in the oil and gas exploration industry, a champion of charitable works to improve the human condition from Canada to Africa to Pakistan, and a thoughtful observer of world affairs. In a recent Washington speech, he explains why “global peak oil production” may not be far off:
… In the face of these sobering supply realities, rising incomes and subsidized fuel prices, combined with population growth, continue to drive increased consumption in developing countries. China alone is putting nine million new cars a year on the road. The International Energy Agency predicts developing country oil-demand growth will drive world demand to over 100 million barrels a day in the next 20 years. Jim Gray says peak oil will occur well before that: “I believe that achieving … 100,000 barrels per day will be extremely difficult.” He’s not alone in this assessment. I share his view, and so do many of my colleagues who also spent careers working to find and develop energy supplies.
Mr. Gray also points out that for the first time since the dawn of the hydrocarbon age: “We now live in a very different world … a supply constrained world” and “higher prices will alter historic trade patterns and competitiveness, resulting in a new set of winners and losers globally. At $130 [U.S.] per barrel, global oil trade is over $11-billion per day, or almost $4-trillion annually, $3-trillion of which goes directly to producing-state treasuries.” Needless to say, this means an enormous transfer of wealth and power to these oil-exporting states.
All this leads a man who spent his career successfully finding new oil and gas fields to his most startling conclusion: “An energy crisis will soon be upon us.” But his next words echo the sign he still keeps on his desk after all these years: “Crisis means opportunity.” Mr. Gray’s energy-opportunity recipe for Canada calls for continued investment in development of our vast hydrocarbon resources, including natural gas, the oil sands and clean coal, as we work to increase nuclear, hydro and wind power production.
(21 July 2008)
Contributor daniel writes:
Gwyn Morgan is the former CEO of Encana Corporation – North America’s largest unconventional natural gas and integrated oil development company.