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Why is gas expensive?
Janis Mara, Contra Costa Times
When Anne Siglin moved to Alameda from Chicago in 2005, she was shocked by the price of gas in the Bay Area.
“There are refineries right here,” she said. “Why does gas cost so much more?”
As gas prices continue to soar and Californians are paying 60 cents more for a gallon of unleaded than the national average, many Bay Area residents are wondering the same thing.
The cost of gas in California — which on March 27 averaged $3.19 per gallon statewide, compared with $2.59 nationally — has been higher than in most other states for at least five years. And it is more expensive in the Bay Area.
Consumer advocates, oil associations and academics agree the problem is supply and demand. California’s refineries are stretched to capacity, so any additional stress on the system drives supply down and prices up.
But consumer watchdogs say the oil companies manipulate supplies to make them run low and use refinery downtime as an excuse to increase prices. Oil industry representatives disagree, however.
Though experts agree supply and demand is the primary issue, other factors enter in as well, such as the state’s cleaner-burning gasoline
(4 April 2007)
None of the sources quoted mentioned the possibility of oil depletion. -BA
Judge Tosses $7.6M Kerr-McGee Verdict
AFX News
A federal judge has overturned a jury’s verdict that Kerr-McGee Corp. knowingly underpaid federal oil royalties by nearly $7.6 million, saying the government auditor who accused the company did not have the legal standing to file a lawsuit.
The verdict earlier this year determined that Kerr-McGee, which is owned by Houston-based Anadarko Petroleum Corp., sold oil produced from the Gulf of Mexico at below-market prices to Houston-based Texon Corp. from 1999 to 2002.
In exchange, Texon provided marketing services to Kerr-McGee and paid more for other crude oil, according to a lawsuit filed by Bobby Maxwell, a former auditor for the U.S. Minerals Management Service. ..
The government had declined to intervene in the case. In a statement issued the day after the jury reached its verdict, the Minerals Management Service said Maxwell chose not to follow the agency’s required procedures to report alleged fraud because if he won his lawsuit, he would be awarded part of the damages Kerr-McGee would have to pay.
(2 Apr 2007)
The US governments disinterest in collecting royalties is hard to explain, but corruption seems more commonplace than complete incompetence.-LJ
Beijing explores sea beds, in search of oil
Staff, Asia News
Beijing (AsiaNews/Agencies) – The China National Petroleum Corp (Cnpc), announced today that it will ramp up its exploration of offshore gas and oil reserves this year. The biggest oil discovery in China in 10 years was recently confirmed in the Bohai Sea.
Shi Lin, president of the China National Petroleum Offshore Engineering, a subsidiary of the Cnpc, said that “the area of Bohai Bay is our top priority”. “We plan to roll out an annual 4 to 5 million tonnes of oil equivalent from Bohai offshore exploration and production in three years”.
As part of the investment, the company intends to build a multi purpose ocean engineering vessel for its operations in Bohai. Meanwhile in the Nanpu area of Bohai Bay am oil field has recently been discovered with an estimated 2.2 billion barrels of oil (297.3 million tonnes), the largest single discovery in China in over 10 years. Over three years the reverse daily out put will reach 200,800 barrels. Over 80% of China’s under sea reserves are located in Bohai Bay. ..
Zhang Weiping, deputy chief economist of the China National Offshore Oil Corp CNOOC, said that 70 percent of oil reserves in the South China Sea are in deep water, which require deep-sea drilling capacity. Both Cnpc and Cnooc are developing deep-water drilling platforms with a 3,000-meter extraction capacity.
(3 Apr 2007)
UAE awards Hormuz bypass oil pipeline contract
Staff, Reuters via Iranoilgas.com
Abu Dhabi’s government-owned International Petroleum Investment Company (IPIC) has awarded Germany’s ILF a contract to build a pipeline that would allow more than half of UAE’s crude exports to bypass the Strait of Hormuz.
Some 16-17mn barrels per day, around 20% of global oil supply, flow from Persian Gulf producers through the shipping chokepoint, and analysts fear Iran could seek to impede trade through the route if threatened or attacked.
The UAE is the world’s sixth largest oil exporters, shipping 2.3-2.4mn barrels per day through the strait.
The new 1.5mn-bpd, 320km pipeline would link state oil firm Abu Dhabi National Oil Company’s Habshan oilfields to the port of Fujairah, a major ship bunkering hub for vessels entering and leaving the Strait.
The new pipeline will also lower shipping costs for the UAE’s oil exports, as shippers charge a premium for entering the strategic channel.
Germany’s ILF will manage the project and is tendering for bids for the design and engineering of the project, Wam said in a report on an IPIC board meeting. It gave no details on the cost of the project. ..
(3 Apr 2007)
Toughening Up in the Gulf
Kristen Hays, Houston Chronicle via RigZone
Royal Dutch Shell’s Mars oil platform is whole again, with two months to spare before hurricane season begins in June.
A new 250-foot latticework derrick atop a repaired 1,000-ton drilling rig substructure is back on the Gulf of Mexico’s largest producing platform about 130 miles southeast of New Orleans. That reunion was the biggest step in the platform’s last major repair after Hurricane Katrina’s destructive wrath in August 2005.
But this time, revamped clamps give the substructure a much stronger grip on the platform, said Charlie Williams, chief scientist of well engineering and production technology for Shell.
…Shell is far from the only Gulf player to strengthen structures and operations in light of 2005’s one-two punch of hurricanes Katrina and Rita. Many drillers and producers, last year and this year, shored up mooring lines that came loose, implemented more backup systems for communications and added portable generators, among other steps.
(2 Apr 2007)
