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Oil Transparency at Risk From Major State Companies: Experts
World Bank
Although more countries are signing up to the Extractive Industries Transparency Initiative (EITI) — the UK-led attempt to make government and company oil payments more transparent — the lack of any serious engagement by leading state producers Saudi Arabia and Iran, or consumers China and India, is seriously threatening to undermine attempts to increase revenue transparency in the oil industry, campaigners and executives said Monday, writes The International Oil Daily.
“The challenge we face is huge. The world’s largest oil producer is probably the least transparent. The issue of their involvement has been barely breached,” the World Bank’s senior economist Michael Levitsky told delegates at the World Petroleum Congress in Johannesburg. …
The Financial Times further writes that delays of big oil projects are helping to drive oil prices higher as energy companies become increasingly unreliable at delivering production from new oilfields on time, a recent analysts’ report has warned. Oil production in 2007 will be 2m barrels a day less than expected because companies are increasingly having to delay the date at which their projects deliver their first barrels of oil, according to Sanford Bernstein, an international research group. …
Sadad Al-Husseini, former head of exploration and production at Saudi Aramco, the world’s largest oil producer, said there was no alternative but to pursue energy efficiency. … He said predictions of oil demand reaching 120m barrels a day in 20 years, or more than 40 per cent above current levels, were nonsense, as there was not enough oil to sustain these levels, as higher production required more oil to be found to replace reserves.
(27 September 2005)
Worth reading full text, various interesting pieces of industry news included.-LJ
UK: Firms could shut in gas shortage
Tim Shipman and Sean Poulter, Evening Standard
BRITISH industry is facing blackouts and thousands of job losses this winter because of gas shortages, it emerged yesterday. The harsh winter which is forecast by the Met Office could see gas and electricity to some major industries simply cut off.
The situation has been condemned by business leaders who yesterday accused the Government of failing to make proper plans to head off a gas crisis.
They believe there will not be enough to heat homes, provide fuel for power stations and ensure big business can operate.
North Sea supplies are fading and Britain will be reliant this winter on gas imported through a pipeline from Europe under the Channel, and on supplies held in storage tanks. There are fears that neither the pipeline nor the storage facilities will be able to cope with a cold winter. …
It claimed the country has just 11 days of gas held in storage, while most European nations have around 55 days. CBI director-general Sir Digby Jones said: ‘I saw the long range weather forecast this morning and it says it’s going to be a cold winter. …
The average household power bill has risen by more than a third – around £200. At the same time, the increases have been disastrous for UK business and public services.
(27 September 2005)
Rita’s Revelation
Christopher Dickey, Newsweek
As oil prices soar, so will demands for atomic energy. Iran knows this and Americans should, too. Why it’s time to rethink the global approach to nuclear proliferation.
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…The Iranians, for their part, say God doesn’t want them to have The Bomb, and they’re OK with that. “In accordance with our religious principles,” Ahmadinejad told the U.N., “pursuit of nuclear weapons is prohibited.” So they claim they’re focusing all their attention on the need for nuclear energy as a relatively cheap, efficient and reliable long-term source of electricity.
That’s why they’re conducting their research. That’s why they’re building their reactors. That’s why they’re enriching uranium. That’s why they are signatories to the Non-Proliferation Treaty (NPT), which is supposed to open the way for them to develop peaceful nuclear energy, and that’s why they are very careful to observe the letter (if not the spirit), of the treaty’s language.
Ah, but why does Iran, with all its oil, need nuclear power at all? The answer is straightforward: oil and gas are just too valuable to continue wasting on Iran’s internal consumption. Oil is also a finite resource; nuclear energy is not. Acts of God can make the lights go out, but they won’t make them go on. So over the long term Iran expects it will have to rely on atomic energy for its continued development, and it’s not alone. Eighty per cent of France’s electricity comes from nuclear power plants, for instance, and many countries are reaching the conclusion that the atom will be a key to their survival. In a generation or two, whoever controls the ability to make nuclear fuel could well control the world.
(23 September 2005)
The column ties together the themes of Iran’s nuclear capability and the energy crisis.
More pro-nuclear articles:
Malaysia needs to develop nuclear energy: MINT official (Xinhuanet, China)
The Hydrogen Economy (Uranium Information Centre Ltd, Australia)
France’s Breton Urges Nuclear Energy Investment as Oil Rises (Bloomberg)
Taking a turn for the better – or directional drilling again
Heading Out, The Oil Drum
Normally on Saturdays I post a technical topic on some of the basics of drilling for, and producing, oil. This week it has been delayed a day. Readers are asked to remember that it tries to convey the technology in a relatively simple, and thus easily understood, manner. For those in the oil patch who wince on occasion, feel free to chip with comments, and help convey the ideas. The series is starting to get fairly long, and so the list of earlier posts is attached at the end, and below the fold.
Does the phrase “gunboat diplomacy” ring a bell ? It was an old-fashioned term from the days of the British Empire. And now, apparently, it is making a reappearance in the Far East.
In a post a couple of weeks ago I had mentioned the problem of the “Rule of Capture” wherein the first person to draw oil/gas from a formation was entitled to as much as they could get from their wells, until their neighbors, in turn, sank their own wells.
Well this is not just a historical note – it is now one of the issues between China and Japan. Since the Chinese are tapping into a formation ahead of the Japanese, and thus, potentially “acquiring” some of the Japanese resource.
It was the same concerns that led Iraq into Kuwait back in the term of the first President Bush. Except here there was a concern that the wells in Kuwait had sort of “meandered” into Iraqi territory.
So what is with this meandering business?
(25 September 2005)
Iraqi oil output forecast is bleak, ex-official says
Alison Smale, International Herald Tribune via Rigzone
Big oil companies have no concrete plans to develop the oil industry in Iraq, meaning that it will be several years before the country can hope to return to its 1979 peak in production and probably a decade before Iraq can pump the 5.5 million to 6 million barrels a day suggested by its reserves, according to a former Iraqi oil minister.
The Bush administration and other supporters of the 2003 invasion
of Iraq pointed to the prospect of increasing the country’s oil production to improve the lives of its people.
But much equipment was looted from pipelines, pumping stations and other facilities in the immediate aftermath of the invasion, and continuing extreme insecurity has kept foreign oil companies away.
In addition, there has been a lack of clear institutions and laws to manage the oil industry.
The former official, Issam al-Chalabi, who led the Iraqi Oil Ministry in the late 1980s, told a conference here on Wednesday, “There is no plan to develop the Iraqi oil industry.”
(23 September 2005)
Baghdad in the dark as power cuts continue to blight the city
Patrick Cockburn, The Independent via Common Dreams
Surveying an abandoned, night-time street in Baghdad, Nadum Ali Jawad is one of the many Iraqis who are fed up with being left in the dark.
“I don’t believe sabotage is the main reason for the electricity blackout, I think officials just steal the money meant for new power stations,” was the student’s verdict on yet another power cut.
Few failures in Iraq 30 months after the fall of Saddam Hussein infuriate Iraqis more than the continuing shortage of electricity.
Baghdad’s power now works in maddening shifts – two hours on, four hours off, then two hours on again. The throb of small generators, enough for a television and a few feeble lights, provides a background buzz in every house.
…Problems in Iraq never come alone. There are in fact power stations standing idle but they need diesel fuel of which there is a shortage in Iraq. It has to be purchased at high prices from abroad. “We need seven million litres of diesel but we only get 3.5 -4 million litres,” said Mr Shalash.
A further difficulty is that Iraqi consumers do not pay for electricity, and are therefore lavish in using it when it is available. They are invariably dismissive of official excuses, refusing to believe that the US could not restore electricity to its pre-war levels.
They repeatedly point out that after the 1991 Gulf War, Saddam Hussein took only six months to patch up the power stations and the national grid, though both had been severely damaged by missiles and bombs
(27 September 2005)
Cheap As Chips: the Other Oil
Adrian Bathgate , Dominion Post (NZ) via RedNova
There is an explosion of interest in biodiesel, with the prospect of a nationwide network for the alternative fuel. Thirty years after the first oil crisis, biofuels’ time may have finally arrived. But there are risks.
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… The Automobile Association also says there are questions about blending the fuel and how it will affect motorists. Like the Motor Industry Association, the AA is keen to know who will take the blame if ethanol proves destructive to Kiwi cars. “If there are significant issues, the motorist doesn’t want to be the guinea pig,” policy manager Jayne Gayle says. The AA wants to see a widespread and controlled trial for up to a year to assess the impacts on cars.
The Energy Efficiency and Conservation Authority’s Ms Staley says: “The key thing is that all motorists who choose to use biofuels have a good experience with it.” Other issues include how and when ethanol will be added to fuel, and how to ensure fuel quality is maintained throughout New Zealand.
But she says having a sales target, and not a compulsory blending target, will give the oil companies greater flexibility about offering biofuels.
There is plenty of interest, but no one is willing to take the big commercial risk by moving first, she says.
Professor Sims says that with investment, New Zealand could easily become a major biofuel producer, but it comes down to the commercial realities. “If it’s cheaper to grow all our own fuels on the land, than import the oil, then we can do so. But the cost of that is that we produce fewer sheep and dairy products.
“Technically, we have the land and the technology to grow all our own oil. Economically, it doesn’t make sense. If oil goes to over US$100, then perhaps we can think about it.” But both Professor Sims and Ms Staley believe that in light of the Government’s decision to support a sales target, biofuels are imminent.
(26 September 2005 ?)
Volvo launches world’s first CO2-free automotive plant
Volvo [press release]
AB Volvo has decided to make Volvo Trucks’ plant in Tuve the world’s first CO2-free automotive plant. As a result of investments in wind power and biofuel, the plant’s electricity and heat will come from sources that do not emit any carbon dioxide into the atmosphere.
“The Greenhouse Effect is a reality and the automotive industry has a specific responsibility for coping with emissions of carbon dioxide,” says Volvo’s Chief Executive Officer Leif Johansson. …
Combined with efforts to achieve energy savings of up to 20%, Volvo, in cooperation with Göteborg Energi is currently building five large wind power plants and a new biofuel plant adjacent to the Tuve plant. The five wind power plants alone will increase the amount of wind-power generated electricity in Sweden by 4%. When the plant does not fully utilize the produced electricity and heat, the surplus energy will be distributed to other customers via the district heating and electricity network. The wind power plants and the new biofuel plant are scheduled for completion during 2007. …
(27 September 2005)
