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Gulf oil and gas production damage worse than reported?
Dave Forest, Casey Energy Speculator via FreeMarketNews.com
Reading the major financial newspapers over the last few weeks, you’d think petroleum markets are returning to normal. With the price of oil dipping to the low $60 range, traders told Bloomberg, “We should see prices continue to fall.”
But a closer look at the numbers reveals that not all is rosy for U.S. oil and gas. In fact, it looks as if the impact of twin-sister hurricanes Katrina and Rita may be the worst we’ve ever seen. As the chart below, from the U.S. Energy Information Administration, shows the two storms have shut in a higher percentage of both oil and gas production from the Gulf of Mexico for a longer period of time than the last major hurricane, Ivan, in 2004. …
The overlaid effect of Rita is even worse. For one, the peak of maximum shut-in lasted much longer in Rita’s wake than for either Katrina or Ivan-nearly 10 days, as opposed to only 1 or 2 for the previous storms. But perhaps most notable is the slow pace of production recovery since. Following peak shut-ins for both Ivan and Katrina, 50% of shut-in production came back online within a week. At this writing-over 4 weeks following Rita’s landing onshore-only 30-40% of peak shut-in production has resumed. …
(28 October 2005)
Worth looking at if only for the charts, worth a thousand words.-LJ
Mexican Reserve replacement at 57%
Minister Says PEMEX Must Invest US$40bn in Exploration by 2015
Business News Americas Ltda via Schlumberger
MEXICO CITY – Mexico’s state-owned oil company Pemex needs to invest US$40bn in exploration over the next 10 years to reach a reserve replacement rate of 100% by 2015, energy minister Fernando Canales told businesspeople at an industry event in Veracruz. Mexico’s reserve replacement rate is currently about 57% compared to only 27% at the beginning of President Fox’s administration in 2000, Canales said.
The annual incorporation of new proven reserves increased to 916 million barrels (Mb) in 2004 from 216Mb in 2001 due to Pemex’s E&P investments of US$11bn in 2004, Pemex CEO Luis Ramírez Corzo said in a separate statement. However, former energy minister Fernando Elizondo said in May that Mexico needs to invest US$15bn a year in oil E&P to maintain its level of reserves and avoid becoming a net oil importer in the next 20 years.
Pemex investments have identified total potential reserves of 54 billion barrels (Bb) of crude compared to the current level of 47Bb of proven reserves, “which substantially strengthens the outlook for Pemex in terms of production and transformation of hydrocarbons in the long term,” according to Ramírez. Of Pemex’s current proved crude reserves, almost 30Bb are in the Gulf of Mexico and 18Bb in the country’s southeastern region, he said. …
The main issue for Pemex is finding new financing sources for its investments as it has overused the Pidiregas public infrastructure-financing scheme and its tax burden remains high, the analyst said.
(28 October 2005)
Nuclear irony finds French power company ads in Nevada
Benjamin Grove, Las Vegas Sun
A French nuclear power company’s flashy new advertising campaign promoting new U.S. nuclear power plants has popped up, strangely, in Nevada.
Nevermind that the state would not likely be home to any of Areva’s “cleaner, safer, more efficient” power plants of the future and all that bountiful new electricity. But Nevada could be home to the waste.
(17 October 2005)
US to transfer nuclear reactor tech to China
People’s Daily Online
A senior US official Tuesday expressed repeated commitment to transferring nuclear reactor technologies to China. China has drafted ambitious plans to use nuclear power to alleviate growing energy shortages.
Administrator of the US National Nuclear Security Administration, Linton Brooks, told China Daily: “There is no reason why the (reactor) technology should not be transferred to a country like China.”
Industry insiders said the commitment from Brooks, who is also undersecretary of the US Department of Energy, is expected to boost US nuclear power company Westinghouse’s attempts to win a US$8-billion contract to build four nuclear reactors at Sanmen in Zhejiang Province and Guangdong Province’s Yangjiang.
So far, the Chinese Government has been busy reviewing bid application from the US company, France’s Areva and Russia’s AtomStroyExport.
(26 October 2005)
France in nuclear sell-off U-turn
Dominique de Villepin, BBC News
The French government has cancelled plans to part-privatise nuclear power group Areva, claiming strategic and safety concerns for its U-turn.
The announcement by Prime Minister Dominique de Villepin comes as privatisation plans continue for other state firms.
He said ongoing state control of Areva would ensure the necessary assurances.
Shares in Areva were due to be issued next year, with the sale set to raise up to 3.6bn euros ($4.4bn; £2.4bn).
Areva is the world’s largest maker of nuclear power stations, operating all France’s plants and other facilities around the globe.
(27 October 2005)
Appalachian crude makes comeback
Roger Alford, Associated Press
SOMERSET, Ky. — Steam rises. Valves hiss. And the flame atop a smokestack flickers like a candle in the breeze as one of the nation’s smallest refineries tries to stay ahead of crude production in central Appalachia.
New wells are going in every day throughout the region thanks to an oil rush powered by record high prices. With crude selling for $60 a barrel, even the traditionally slow-producing oil fields in the mountains of Kentucky and Tennessee, where most wells churn out one to two barrels a day, have become lucrative. “No one expected oil prices to do what they’ve done,” said Frank Lynch, president of Somerset Oil in this southern Kentucky town 80 miles south of Lexington. “With the high-dollar crude, all of a sudden we were thrown into the big game.”
Somerset Oil had gone about its business almost unnoticed for decades. That changed last year when crude jumped beyond $20 a barrel and kept on rising. Now Lynch said he expects the supply of crude from local wells to his refinery to increase from 2,800 barrels to 5,500 barrels within the next month and to 7,500 by the end of March. Not huge numbers by Texas standards, but respectable enough to catch the attention of investors. …
“For years and years and years, they’ve suffered,” Lynch said of independent producers in central Appalachia. “Now, they’re getting their dues. If they keep drilling and keep hitting the way they are, the sky is the limit. I have no idea how far we could go.”
(29 October 2005)
