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Statoil says oil reserves at Snoehvit gas field in Arctic not profitable to produce
International Herald Tribune, Associated Press
OSLO, Norway: Statoil ASA said Thursday that it has abandoned hope of producing oil from its Snoehvit natural gas field in the Arctic Barents Sea, saying it would be too costly.
Snoehvit, which is due to begin production in December, had originally been planned as a pure natural gas field. However, last year Statoil and its project partners decided to study whether new technology, more information about the reservoirs and high crude prices could make it viable to also produce oil.
“The studies we have undertaken show that it still isn’t possible to develop the oil reserves in a commercially viable manner,” said Geir Pettersen, a Statoil senior vice president.
The Norwegian Petroleum Directorate has estimated that Snoehvit, which means Snow White, could have recoverable oil reserves of between 50 million and 100 million barrels.
(18 Jan 2007)
Contributor Mark writes: A recent article in our local newspaper pointing to the potentially enormous untapped reserves in the Barents Sea prompted me to do some research of my own and this is what I found. Other articles I came across described the huge costs of drilling in these arctic waters where weather is hostile and gargantuan icebergs are encountered.
Indonesia sees delay to 2010 for Cepu oil output
Muklis Ali, Reuters
JAKARTA – Oil production from the $2.6 billion Cepu oil and gas project in Indonesia will be delayed again and is now expected to begin in 2010, instead of the first quarter of 2009, energy watchdog BPMIGAS said on Monday.
State oil firm Pertamina and oil giant Exxon Mobil Corp. (XOM.N: Quote, Profile , Research) signed a joint-operation deal for the oilfield last March after a five-year deadlock, spurring hopes for speedy development of Indonesia’s biggest untapped discovery to help reverse the country’s shrinking oil output.
“There are many areas that are residential and also farms which are difficult to clear for upstream activities. We now expect output from the Cepu (field) to begin in 2010,” Kardaya Warnika, BPMIGAS chief, told reporters. ..
In December, another BPMIGAS official said production from Cepu, expected to boost Indonesia’s output by nearly a fifth, would start in the first quarter of 2009, with an initial output of around 25,000 barrels per day (bpd), itself a delay from an end-2008 target. ..
Officials had said that the local community wanted a very high price for its land.
Cepu is estimated to have recoverable reserves of up to 600 million barrels — equivalent to about 6.7 percent of Indonesia’s total — and is expected to produce up to 180,000 barrels daily at its peak. Plans to build a refinery to process crude from Cepu have yet to make much progress. ..
Indonesia’s crude oil production fell 0.58 percent to 857,000 barrels per day (bpd) in December from 862,000 bpd in November due to ageing fields, an official at BPMIGAS has said. ..
(22 Jan 2007)
Newfoundland locks horns with oil giants over Hibernia
David Ebner, Globe and Mail
The government of Newfoundland and Labrador is once again going head to head with some of the world’s biggest oil companies, rejecting a proposal yesterday to expand Hibernia as it campaigns for a better deal from offshore developments for the province’s citizens.
Taking on a group that includes Exxon Mobil Corp., Chevron Corp., Petro-Canada and Norsk Hydro ASA, Newfoundland cited what it called a lack of key information in their application to expand Hibernia, which sits about 300 kilometres offshore Newfoundland and is Canada’s largest oil field.
It is the second time in less than a year that the province has played hardball on an offshore proposal, looking for a bigger take from oil with crude prices trading at roughly triple the average rate of the 1990s. Last year, the province bargained aggressively with the same group of oil companies and in April the firms walked away after extensive talks, shelving a $5-billion proposal to develop the Hebron field. ..
Exxon — the company that wouldn’t accept Premier Danny Williams’ demands on taxes, royalties and an equity stake for Hebron — holds the biggest stake in Hibernia. The project is operated by Hibernia Management and Development Co., which wants to develop a discovery made in 2005 called Hibernia South to extend the life of the project by roughly a decade.
Development plans and the cost of the expansion weren’t disclosed. It would likely involve a number of new wells and a connection to the existing production platform, potentially costing a couple hundred of million dollars, though the price tag could rise or fall depending on the plans. ..
The federal government, in a letter to the offshore board from Natural Resources Minister Gary Lunn, supported the regulator’s approval but Ms. Dunderdale said the final decision rests with the province.
While Hebron was shelved and Hibernia’s expansion is in question, Chevron and Exxon, along with Imperial Oil Ltd. and Shell Canada Ltd., are making major new investments in Newfoundland. Last summer, they started drilling a $140-million well — the most expensive in Canadian history — in another offshore region called the Orphan Basin. The well is close to complete and results are as yet unknown but two more wells are expected to be drilled this year. ..
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(18 Jan 2007)
Presidential associate named new head of Bolivia’s state oil company
Associated Press
LA PAZ, Bolivia: A close associate of President Evo Morales was named president of Bolivia’s state oil company on Monday despite opposition claims he was unqualified and engaged in misdealings as a company adviser.
Manuel Morales Olivera, who is not related to the president, replaces Juan Carlos Ortiz, who resigned Friday from Yacimientos Petroleos Fiscales Bolivianos, or YPFB, following disagreements with the government over how to run the company.
Hydrocarbons Minister Carlos Villegas said Morales Olivera’s jobs will include finishing the state’s recovery of four oil companies that were partially privatised in the 1990s.
Morales Olivera will also be charged with seeking a higher price for natural gas sales to Brazil, which is Bolivia’s largest customer, and boosting gas exports to Argentina in 2010 via a pipeline set for construction, Villegas said. ..
(29 Jan 2007)
