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OPEC President: Many Oil Projects Hit By Banks Crisis
Benoit Faucon, Dow Jones via Nasdaq
The global banking crisis will hurt new oil development projects and is already forcing many companies to drop oil projects, OPEC President Chakib Khelil said Thursday.
The banking crisis is crimping project financing for foreign oil companies operating in OPEC and non-OPEC nations, Khelil said. Even if oil prices return to $90 a barrel, that wouldn’t be enough in some cases to secure adequate financing for projects, he said, speaking at a Vienna press conference.
By contrast, Algerian state-owned oil projects haven’t been hit hard by the crisis so far because they rely on local banks, which are still able to finance oil projects, said Khelil, who is also Algeria’s oil minister.
The Organization of Petroleum Exporting Countries is concerned about the sharp fall in oil prices from an all-time high in July of around $147 a barrel. OPEC ministers will hold an emergency meeting Friday to review the group’s output policy.
Around 1030 GMT Thursday, New York Mercantile Exchange oil futures were trading around $67.70 a barrel – less than half the level reached in July.
(22? October 2008)
Oil companies take steady, careful approach to ’09
Braden Reddall, Reuters
Energy companies put on a brave face in response to rapidly deteriorating pricing on Wednesday, keeping 2009 spending plans largely steady, even as crude oil prices tumbled to a 16-month low.
Executives plan to wait for cues from clients before altering capital budgets because, even if oil prices are half that of three months ago, a $70-a-barrel range still represents a historically healthy level for production.
They will be closely watching OPEC’s meeting on Friday, although a U.S. fuel inventory build-up indicated weak demand may matter more than any cartel supply cuts.
(22 October 2008)
Shell Goes for Carbon Sequestration
Peter McKenzie-Brown, Language Matters
… For many environmental groups the problem [of climate change] seems critical, and they call for urgent action.
Increasingly, so do many corporations. For example, Royal Dutch Shell’s position on climate change is unequivocal. According to Jeroen van der Veer, the corporation’s CEO, “For us, as a company, the scientific debate about climate change is over. The debate now is about what we can do about it. Businesses, like ours, should turn CO2 management into a business opportunity and lead the search for responsible ways to manage CO2, use energy more efficiently and provide the extra energy the world needs to grow. But that also requires concerted action by governments to create the long-term, market-based policies needed to make it worthwhile to invest in energy efficiency, CO2 mitigation and lower carbon fuels. With fossil fuel use and CO2 levels continuing to grow fast, there is no time to lose.”
Carbon Capture and Sequestration
So what’s a company to do? Over the last decade, global think tanks have increasingly focused on CCS – the common abbreviation for carbon dioxide capture and sequestration (more colloquially, “storage”) as a technologically simple way to remove CO2 at some large processing plants. The most prospective targets for this technology include coal-fired electricity generators and oil sands upgraders.
Problem is, such ventures are not profit-driven enterprises. They are climate-driven – initiated in response to concerns about climate change and related regulation. On its own, CCS doesn’t make sense. It requires government intervention. In that context, the CCS climate changed profoundly last July when Alberta premier Ed Stelmach announced that his government would provide $2 billion to advance these technologies in the province. That is the biggest sum available for CCS anywhere.
Often (unfairly) derided elsewhere in Canada as a Johnny-come-lately to the environmental table, Alberta’s involvement follows a gestation period of deep study. Last January a provincial policy paper observed that “Alberta has a unique opportunity to implement carbon capture and storage to substantially reduce our greenhouse gas emissions. CO2 emissions can be captured where they are produced, transported and stored in geological formations (such as depleted oil and gas reservoirs, coal beds, and deep saline aquifers) that may be located hundreds of kilometres away…. Ultimately, CO2 capture and storage technologies provide the province with the greatest potential to substantially reduce greenhouse gas emissions while, at the same time, retaining our ability to produce and provide energy to the rest of the world.” Alberta is counting on CCS to meet 70% of its long-term GHG reduction targets.
… The earnestness with which Rob Seeley [Shell’s general manager of sustainable development] describes the issue of GHG emissions seems to reflect corporate culture at Royal Dutch Shell. The corporation has identified “six pathways” toward reducing carbon emissions. For the record, here they are: Increase energy efficiency within the corporation. Create technologies that increase efficiency and reduce emissions. Develop low-carbon fuels. Help customers use less energy. Work with governments on effective regulation. Implement carbon capture and sequestration.
This seems like a map other oilsands producers should study.
(22 October 2008)
Peter McKenzie-Brown is a resource company vice president (communications) in Alberta. He writes:
I have written several volumes of history, and I have worked in the corporate, consulting and academic worlds. British by birth, I was American by upbringing but I am Canadian by choice.
