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Growing costs ‘put Shetland oilfield plans in jeopardy’
Carl Mortishead, Times Online
The accelerating cost of producing oil and gas from new frontiers is hindering the development of vital reserves west of Shetland, one of the world’s top oil barons claims.
Christophe de Margerie, the chief executive of Total, France’s largest company, has also questioned whether it is possible to raise global oil output from today’s 85 million barrels per day to 100 million barrels per day, given the cost and logistical challenge. Addressing the Scottish Oil Clubs on Friday night, Mr de Margerie said that he had warned Gordon Brown, the Chancellor, that the development of high-pressure and high-temperature oil and gasfields in the North Sea was in doubt without tax incentives.
He said: “These fields are extremely difficult to produce. The cost of developing fields is so high that, given existing gas prices, these new fields are marginal.”
The recent and sudden collapse in the UK wholesale gas price has created a consumer price war between gas retailers. This has been welcomed by householders hit by rising bills but is forcing North Sea gas producers to question the economics of future developments, putting in jeopardy the supply of gas in the future. ..
Further warnings about the impact of rising costs on the oil and gas industry came last week from the Centre for Global Energy Studies (CGES), which revealed that nonOpec oil production last year rose by only 450,000 barrels per day, a fraction of the 1.5 million bpd predicted by forecasters.
“The oil industry is finding it harder and harder to expand upstream capacity,” the CGES writes in its Global Oil Report. “Development costs are up sharply, essential equipment and skilled labour are in short supply and governments want a bigger share of the proceeds. As a result, projects take longer to complete and output is growing more slowly than predicted.” ..
(12 Mar 2007)
The new Seven Sisters: oil and gas giants dwarf western rivals
Carola Hoyos, Financial Times
When an angry Enrico Mattei coined the phrase “the seven sisters” to describe the Anglo-Saxon companies that controlled the Middle East’s oil after the second world war, the founder of Italy’s modern energy industry could not have imagined the profound shift in power that would occur barely half a century later.
As oil prices have trebled over the past four years, a new group of oil and gas companies has risen to prominence. They have consolidated their power as aggressive resource holders and seekers and pushed the world’s biggest listed energy groups, which emerged out of the original seven sisters – ExxonMobil and Chevron of the US and Europe’s BP and Royal Dutch Shell – on to the sidelines and into an existential crisis. ..
(11 Mar 2007)
UK in ‘murky Iraq oil deal’
Al Jazeera
A social justice group has obtained documents showing that the British government tried to influence a new Iraqi oil law in favour of UK businesses.
The London-based Platform group said on Friday that the documents showed British diplomats tried to exclude Iraqi oil firms in favour of firms such as BP and Shell.
Greg Muttitt, an oil campaigner with Platform, told People and Power programme aired on Al Jazeera on Friday, that the British government was “using their position as a military occupier to influence and shape the future of the country’s economy in the interests of powerful companies”.
British diplomats have been involved in “extensive efforts since at least 2004 to push for companies such as BP and Shell to receive long-term contracts, which would give them exclusive rights to extract Iraq’s huge oilfields”, Platform said in a press release on Friday.
The group said they were able to prove this using documents obtained under Britain’s freedom of information act.
Muttitt said Iraqis have been “excluded” from the oil law while the British foreign office played a “central role in supporting the efforts of the oil companies to lobby the Iraqi government”. ..
(9 Mar 2007)
Halliburton to move headquarters from Texas to Dubai
Mohammed Abbas and Anna Driver, Reuters
Halliburton, the U.S. oilfield service giant, said on Sunday it will move its corporate headquarters and its chief executive officer to Dubai in the United Arab Emirates in an effort to expand business in the Eastern Hemisphere.
Halliburton chief executive David Lesar said Halliburton was considering listing its shares on one of the Middle East bourses. It is currently listed on the New York Stock Exchange. ..
KBR has so far booked more than $20 billion in revenues from its work in Iraq and has been the target of several investigations into the company’s billing practices. It has also faced complaints from some U.S. lawmakers about the company’s close ties to the Bush administration. ..
Many new supply projects are in the oil-producing countries of the Middle East, while Asia accounts for most of the rising demand. In contrast, a slide in natural gas prices in the United States has prompted investor concerns that oil and gas companies might cut back on spending in North America. Lesar also said he expected the price of oil to stay above $40 a barrel, providing good conditions for future investment in the oil and gas industry. ..
(11 Mar 2007)
Halliburton’s move has sparked an outcry in the US and media coverage globally, see also Raw Story with this call by U.S. Senator Frank R. Lautenberg to make sure Halliburton’s move is not an attempt to evade current U.S. sanctions laws prohibiting any U.S. company from doing business with terrorist states, namely Iran, and Atlantic Free Press for a sample of US sentiment.-LJ
Kuwait determined to expand capacity to 4 million b/d: official
Platts
OPEC producer Kuwait is determined to proceed with an $8 billion project to raise the crude oil production capacity of its northern fields to 900,000 b/d with the help of foreign oil companies as part of a plan to raise overall capacity to 4 million b/d by 2010, a senior Kuwaiti oil official said Monday.
“We recognize that worldwide energy consumption is projected to increase by almost 50% in the next quarter century, and most of these additional barrels of oil are to come from the Gulf producers,” Nawaf al-Sabah, deputy managing director and general counsel of the Kuwait Petroleum Corporation, told an energy conference.
“To meet this challenge, we are implementing a business strategy that will take us to the year 2020 and beyond,” he said, adding that this strategy was made up of four components, including the expansion of state-owned KPC’s international operations. ..
Three consortia led by BP, ExxonMobil and Chevron have been waiting for some word on the fate of Project Kuwait, which has been held up for years by parliament asking questions about the laws that will govern the role of the
international oil companies. The project was delayed further following the death of Kuwaiti emir Sheikh Jaber al-Sabah last year and changes in the cabinet. ..
(12 Mar 2007)
WA oil, gas operations back to normal
Australian Associated Press
OIL and gas producing facilities off the coast of Western Australia are resuming production after being shut-down in preparation for cyclone’s George and Jacob. Woodside Petroleum Ltd, Santos Ltd and BHP Billiton Ltd had all shut down respective operations off the WA coast.
The Santos-operated Mutineer-Exeter project, which produces about 50,000 barrels per day, has been shut-in for the past seven days. ..
The WA coast has been battered by three cyclones since January, which have disrupted several oil, gas and mining operations and claimed the lives of three people. ..
(13 Mar 2007)
Other oil industry news in Australia is Petrol price jumping 17c a litre, the biggest single hike in many years. There may be an entirely innocent explanation for the consumer price hike but the chances of anyone believing it are nil, particularly when no-one can explain it.-LJ
