Explosion at Saudi Arabia gas pipeline
Central America: Energy profile
Study: US natural gas won't bring self-sufficiency
Indonesia: Energy profile
Goldman says currency impact on oil prices minimal
State approvals sought for new US nuclear
Russia takes 2nd place in Siemens bribery scandal
Australian uranium resources boost
On culture in America
Pakistan: Islam, dictatorship, corruption
OPEC: Riyadh Declaration
The urban warfare dilemma
Nabucco realities - Gazprom still controls
Refinery construction costs reach new high
BP begins Mango production offshore Trindad
Israel's state-Druze rift
And of course there is a whole lot more to read at EnerPub
Thursday, November 22, 2007
Top EnerPub Stories
London's 'Controlled Chaos' - Old tripe repackaged
There are forests in Brazil that are vanishing to print this tiresome twaddle. So give the environment a break and write something original. Or better yet, do it for Al Gore.
By Robert Duncan
One of the duties of being an editor is wading through spam each day. Besides the countless adverts for sexual enhancers - (Do they know something about me that I don't?) - there are the desperate pleas from self-published authors.
Today, in an act of kindness, I decided to browse one of these emails - if for no other reason that it promised "Why Hillary Is Assured the Presidency: The Answer May Lie in Novel."
Funny linguistics that: "I didn't say that the answer was there, just that it might be," claimed the defendant to the judge.
I was intrigued to see if self-published Michael S. London's debut novel - "Controlled Chaos" - might be above the normal toss-in-the-bin-without-reading level. Unfortunately, the press release reveals that London - like many other struggling authors - lacks original ideas and instead resorts to the Dan Brown method of weirdly mixing End of the Time theology with Conspiracy Theories, and a heavy helping of anti-Catholicism to boot. And did I mention pseudo-history?
Maybe this is another problem with self-publishing - getting decent feedback from an editor.
While "Controlled Chaos" promises to be a "political thriller that will enthrall fans of the genre as it weaves historical events into a tale of a global conspiracy," without even reading the book - and I admit I probably never will read it even if it were the last thing on earth (okay, maybe out of pure boredom I would succumb) - one gets the feeling that London is just trying to rehash old New Age ideas under a not too disguised cover.
"In "Controlled Chaos" (AuthorHouse, September 2007, $23.95), CIA agent Steven Michaels is assigned to the Bible Code Research team at the National Security Agency. Mysterious foes begin to hound Michaels, killing his ex-wife and child in a car accident meant for him. Later, a friend and colleague from the Vatican is murdered as well, but not before he sends Michaels evidence exposing the impending New World Order," reads the press statement.
"The evidence centers on the document plagiarized into "The Protocols of the Elders of Zion." The novel reveals the history of this literary forgery, both the elements taken from a nineteenth-century French satire as well as its more sinister roots in the Priory of Sion."
After reading that I am so excited that I have to light up another cigar and take my blood pressure.
Lesson Number One for budding authors: If all else fails don't believe any of your drinking buddies at the local bar when they tell you that "You got some great material." Chances are after that fifth pint their perception of marketing and sales, not to mention story line, are clouded in alcoholic fumes. Besides, if you are in the bar with them for five pints maybe its time to give up the Hemingway persona and stick to your day job.
Unfortunately, I wasn't in the bar to offer my advice.
And should I even mention Lesson Number Two? The world has already seen too many New World Order - slash - Vatican - slash - Bible Code novels. There are forests in Brazil that are vanishing to print this tiresome twaddle. So give the environment a break and write something original.
Or better yet, do it for Al Gore.
"The name of the novel relates to the secret cabal's practice of keeping everyone fighting among themselves while the cabal gains more control. Everything seems chaotic, but there's really a great deal of control over events, including some major elections," said London.
"This novel is basically two books in one," London is quoted in the press statement as saying. "There's the fiction story about Steven Michaels and then there are non-fiction facts about the world that very few people know - for example: who the modern-day Knights of the Round Table are; the disappearance of 11 nuclear bombs in the 1950s; and much more."
Unfortunately London's more is "more of the same" - and there is still the question about his validity as a non-fiction source.
""Controlled Chaos" features little-known information about the Bible Code prophecies, the Roman Catholic Church and the Bildebergers. London also writes about a trio of secret societies termed "The Brotherhood of Death," consisting of The Skull and Bones at Yale, The All Souls Society at Oxford and The Thule Society, which was in Berlin," promises the email.
At this stage I am wondering what is left to throw into this novel.
"Some people are going to call me just another conspiracy theorist, but I encourage them to do their own research," London said. "If they opt not to, then I hope they enjoy the novel for itself."
Ok, I’ll bite: "Just another conspiracy theorist."
Personally, I think much of this may be explained by the author's own biography.
"Michael S. London was a history major and political science minor in college. He spent years trying to make sense of what was happening in the world. Then in 1969, during a visit to Yale University, someone drew his attention to a small ivy-covered, windowless building and explained that the building was known as the Tomb, the home of Skull and Bones. Being the inquisitive type, London asked his host about Skull and Bones. The reply, in a hushed tone of fear, was that London did not want to know about what went on in the Tomb. That was exactly the wrong thing to say to him, and a 34-year journey began."
After wannabe authors maybe there should be a limit on wannabe historians.
Click here to return to homepage
Robert Duncan, who is Editor-In-Chief of EnerPub, is a journalist and ombudsman for foreign press in Spain. He is Vice-President of the Spanish energy and telecommunications association, APCSE. Besides covering energy markets for years as journalist, Duncan has worked in the energy sector as the Head of International Communications for a major multinational oil and gas company, and most recently as a consultant at the Spanish firm GRCOM.
Duncan is an Executive Board Member and Vice-President for the Ibero-American Press and Communication Organization, a former board member of Spain's oldest and largest press club, the Club Internacional de Prensa, and is a member of the U.S. National Press Club, as well as of the US Navy League.
Duncan was the bureau chief in Madrid for the international news agency Dow Jones for many years, and was published regularly in Dow Jones Newswires, with articles appearing in The Wall Street Journal. He has also been published in World Catholic News and the National Catholic Register, as well as many online websites including, Renew America, Lifesite.net, Capital Hill Coffee House, Common Conservative, The Conservative Voice, Enter Stage Right, News By Us, Conservative Crusader, World Net Daily, Mens News Daily amongst others.
Duncan is also the editor of Spero News.
Read More......
By Robert Duncan
One of the duties of being an editor is wading through spam each day. Besides the countless adverts for sexual enhancers - (Do they know something about me that I don't?) - there are the desperate pleas from self-published authors.
Today, in an act of kindness, I decided to browse one of these emails - if for no other reason that it promised "Why Hillary Is Assured the Presidency: The Answer May Lie in Novel."
Funny linguistics that: "I didn't say that the answer was there, just that it might be," claimed the defendant to the judge.
I was intrigued to see if self-published Michael S. London's debut novel - "Controlled Chaos" - might be above the normal toss-in-the-bin-without-reading level. Unfortunately, the press release reveals that London - like many other struggling authors - lacks original ideas and instead resorts to the Dan Brown method of weirdly mixing End of the Time theology with Conspiracy Theories, and a heavy helping of anti-Catholicism to boot. And did I mention pseudo-history?
Maybe this is another problem with self-publishing - getting decent feedback from an editor.
While "Controlled Chaos" promises to be a "political thriller that will enthrall fans of the genre as it weaves historical events into a tale of a global conspiracy," without even reading the book - and I admit I probably never will read it even if it were the last thing on earth (okay, maybe out of pure boredom I would succumb) - one gets the feeling that London is just trying to rehash old New Age ideas under a not too disguised cover.
"In "Controlled Chaos" (AuthorHouse, September 2007, $23.95), CIA agent Steven Michaels is assigned to the Bible Code Research team at the National Security Agency. Mysterious foes begin to hound Michaels, killing his ex-wife and child in a car accident meant for him. Later, a friend and colleague from the Vatican is murdered as well, but not before he sends Michaels evidence exposing the impending New World Order," reads the press statement.
"The evidence centers on the document plagiarized into "The Protocols of the Elders of Zion." The novel reveals the history of this literary forgery, both the elements taken from a nineteenth-century French satire as well as its more sinister roots in the Priory of Sion."
After reading that I am so excited that I have to light up another cigar and take my blood pressure.
Lesson Number One for budding authors: If all else fails don't believe any of your drinking buddies at the local bar when they tell you that "You got some great material." Chances are after that fifth pint their perception of marketing and sales, not to mention story line, are clouded in alcoholic fumes. Besides, if you are in the bar with them for five pints maybe its time to give up the Hemingway persona and stick to your day job.
Unfortunately, I wasn't in the bar to offer my advice.
And should I even mention Lesson Number Two? The world has already seen too many New World Order - slash - Vatican - slash - Bible Code novels. There are forests in Brazil that are vanishing to print this tiresome twaddle. So give the environment a break and write something original.
Or better yet, do it for Al Gore.
"The name of the novel relates to the secret cabal's practice of keeping everyone fighting among themselves while the cabal gains more control. Everything seems chaotic, but there's really a great deal of control over events, including some major elections," said London.
"This novel is basically two books in one," London is quoted in the press statement as saying. "There's the fiction story about Steven Michaels and then there are non-fiction facts about the world that very few people know - for example: who the modern-day Knights of the Round Table are; the disappearance of 11 nuclear bombs in the 1950s; and much more."
Unfortunately London's more is "more of the same" - and there is still the question about his validity as a non-fiction source.
""Controlled Chaos" features little-known information about the Bible Code prophecies, the Roman Catholic Church and the Bildebergers. London also writes about a trio of secret societies termed "The Brotherhood of Death," consisting of The Skull and Bones at Yale, The All Souls Society at Oxford and The Thule Society, which was in Berlin," promises the email.
At this stage I am wondering what is left to throw into this novel.
"Some people are going to call me just another conspiracy theorist, but I encourage them to do their own research," London said. "If they opt not to, then I hope they enjoy the novel for itself."
Ok, I’ll bite: "Just another conspiracy theorist."
Personally, I think much of this may be explained by the author's own biography.
"Michael S. London was a history major and political science minor in college. He spent years trying to make sense of what was happening in the world. Then in 1969, during a visit to Yale University, someone drew his attention to a small ivy-covered, windowless building and explained that the building was known as the Tomb, the home of Skull and Bones. Being the inquisitive type, London asked his host about Skull and Bones. The reply, in a hushed tone of fear, was that London did not want to know about what went on in the Tomb. That was exactly the wrong thing to say to him, and a 34-year journey began."
After wannabe authors maybe there should be a limit on wannabe historians.
Click here to return to homepage
Robert Duncan, who is Editor-In-Chief of EnerPub, is a journalist and ombudsman for foreign press in Spain. He is Vice-President of the Spanish energy and telecommunications association, APCSE. Besides covering energy markets for years as journalist, Duncan has worked in the energy sector as the Head of International Communications for a major multinational oil and gas company, and most recently as a consultant at the Spanish firm GRCOM.
Duncan is an Executive Board Member and Vice-President for the Ibero-American Press and Communication Organization, a former board member of Spain's oldest and largest press club, the Club Internacional de Prensa, and is a member of the U.S. National Press Club, as well as of the US Navy League.
Duncan was the bureau chief in Madrid for the international news agency Dow Jones for many years, and was published regularly in Dow Jones Newswires, with articles appearing in The Wall Street Journal. He has also been published in World Catholic News and the National Catholic Register, as well as many online websites including, Renew America, Lifesite.net, Capital Hill Coffee House, Common Conservative, The Conservative Voice, Enter Stage Right, News By Us, Conservative Crusader, World Net Daily, Mens News Daily amongst others.
Duncan is also the editor of Spero News.
Energy View: Oil breaks $99 - Currency link?
In early Wednesday trade oil prices broke the $99 per barrel barrier on renewed supply concerns as the Northern Hemisphere enters the winter season and two refineries announced temporary cuts in production.
By Robert Duncan
In early Wednesday trade oil prices broke the $99 per barrel barrier on renewed supply concerns as the Northern Hemisphere enters the winter season and two refineries announced temporary cuts in production. Valero Energy's refinery in Tennessee has shut down for 10-days for unplanned maintenance, while Shell's oil sands plant in Canada was also temporairly shut down following a fire. The loss in production from the two shut-downs represents around 335,000 barrels of oil per day.
Oil hit $99.29 a barrel in electronic trading. Using an inflation-adjusted price, according to Cambridge Energy Research Associates, the previous record high was $99.04 per barrel seen in 1980 ($39.50 in 1980 dollars). Relatedly, the price of OPEC basket of twelve crudes stood at 90.04 dollars a barrel on Tuesday, compared with $88.71 the previous day, according to OPEC Secretariat calculations.
Don't expect OPEC to jump in to ease supply concerns. According to OPEC, US weekly inventory data do not support the view that the market is especially tight. The latest information shows US commercial stocks are still around 16 mb above the five-year average, with crude at 312 mb and products at 702 mb. In terms of days of forward cover, US crude stocks are currently at 20.7 days, a level which is broadly in line with the five-year average, according to OPEC.
"It is worth noting that the US crude stock cover has fallen below this level in recent years, even reaching 17.6 days in December 2003, without triggering excessive concern about market tightness. On the product side, the picture is mixed with seasonally-important distillate stocks currently above their five-year average in terms of days of forward cover, while gasoline inventories remain below the five-year average," OPEC said.
Oil Price Currency Link
As oil and commodity prices continue higher there has been a rash of subsequent articles linking the recent rise to further weakness in the dollar. That view, however, is not shared by Goldman Sachs, which this week said that current dollar weakness is not a driver behind higher oil prices, and if anything may be serving as a stabilizer.
While Goldman Sachs agreed that "at first glance, this correlation between currency prices and crude oil prices seems intuitive as the purchasing power for oil outside of US dollar-based economies increases and as producer margins are squeezed in response to US dollar depreciation, assuming that production costs are priced in a local currency against dollar-denominated revenues," that upon a closer analysis fails to materialize. "We continue to believe that the recent strength in the oil price is primarily the result of tight cyclical and structural fundamentals driven by declining inventories and escalating cost inflation in the industry,and that these fundamentals will continue to drive the price of oil," said Goldman Sachs.
In general, while currency fluctuations may be lending some secondary support to long-dated oil prices, the instances where currency prices are the main driver on commodity prices are those where the commodity trades largely based on its characteristics as "a store of value and medium of exchange." The best example of this, according to Goldman Sachs, is the gold price, which has historically traded in close correlation to the US dollar.
Similarily, according to a recent note from CERA, "growing tension over Iran ’s nuclear program--along with instability and uncertainty in Iraq --is casting a long shadow of anxiety and fear over the oil market, which is reflected in today’s high prices."
“Breaking the historical high of $99.04 per barrel will be a landmark in itself,” said James Burkhard, managing director of the Global Oil Group at CERA. “It will certainly have psychological impact since it will intensify momentum for the market to hit $100 per barrel. And it will have a concrete effect since it pushes the world economy deeper into uncharted territory—the oil price range which can contribute to an economic slowdown.”
Industry News
Russia's Gazprom is reported to be close to finally picking a foreign partner to build that country's first LNG terminal on the Baltic Sea. Companies that have expressed an interest in the project include Petro-Canada, BP, BG, Mitsubishi Corp. and Repsol YPF.
Reuters is reporting that Seoul's energy ministry said state-run KOGAS and that country's No.2 refiner, GS Caltex, are seeking LNG supplies from Woodside's Browse and Chevron's Gorgon projects.
"The Indian government is to hold talks with the UN nuclear watchdog, the IAEA, in Vienna on the controversial India-US civil nuclear deal," according to the BBC. Relatedely, the Hindustan Times is reporting that China indicated on Wednesday it will back India when it approaches the Nuclear Suppliers Group (NSG) to conduct nuclear commerce.
Sticking to China, French power giant is EDF is reported to be interested in taking a 30 percent stake in a nuclear joint venture in China, the deal could happen when France's President Nicolas Sarkozy visits China next week. That article said EDF would invest alongside China Guangdong Nuclear Power Corp (CGNPC) to run two EPR nuclear reactors that are to be delivered by Areva.
The Indiana Utility Regulatory Commission granted Duke Energy permission to construct a technologically advanced clean coal power plant in Edwardsport, Ind.
Click here to return to homepage
Robert Duncan is a journalist and ombudsman for foreign press in Spain. He is an Executive Board Member and Vice-President for the Organización de Periodismo y Comunicación Ibero-Americana, and Vice-President of the energy and telecommunications association, APSCE. He is News Editor for Spero News, and Editor-In-Chief of EnerPub and Santificarnos.
He has also been published in World Catholic News, National Catholic Register, Renew America, Lifesite.net, as well as Capital Hill Coffee House, Common Conservative, The Conservative Voice, Enter Stage Right, News By Us, Conservative Crusader, World Net Daily, Mens News Daily and others. Robert was the bureau chief for an international news agency in Madrid for many years, and was published regularly in Dow Jones Newswires, with articles appearing in The Wall Street Journal.
Kissing cartoon not only offensive, it's bad art
I just found this older article I had written regarding a silly cartoon drawn for a Canadian student newspaper. It appears it got a few reactions - including one from the artistic staff who upset that I dragged their alcholic grandmother into the story.
By Robert Duncan
I should have studied art, or at least learned how to doodle better. Word on the street is that there is a killing to be made right now in cartoon art, especially if it's offensive and religious in overtone.
That at least is what they are teaching at Canada's University of Toronto, where the student newspaper The Strand came up with the original idea of running a cartoon originally commissioned by another student newspaper, and rejected, The Varsity - with Christ kissing Mohammed, and which would be supported on the grounds of defending freedom of expression. I note they don't seem to be teaching students at the UoT the value of original thinking.
Perhaps that's too strong, because the truth is the newspaper did have the original idea of not offending just the followers of one religion, but two.
So here's the deal. I've seen the The Strand cartoon - and I have to admit I debated posting a copy of that cartoon here at Spero News. But I decided to hold off, after co-publisher Clint Gillespie said: "You don't need to show a Hustler pinup, to tell what the photo is about."
The cartoon shows a frontal view of a figure we are to understand is Christ, since on his right hand there is a tattoo of a cross. This bearded man is kissing a turbaned man on the mouth in a loving embrace like I give my wife - but not in front of the kids, if you know what I mean.
Such is the embrace that the Christ figure appears to be disrobing the Mohammed figure to expose a Crescent tattoo on his back.
Oh, and all of this is happening in a large dark-heart shape, with a white swan, under a "Tunnel of Love" heading suggesting this is a Disneyland "Love Boat" ride. At this stage the audience is supposed to say "wow man, that's deep," and then start to giggle - or barf.
Yes, the cartoon is offensive. And it is extremely poorly drawn.
In fact, at first I was offended because The Strand obviously didn't care enough to employ a better artist when it set about on this excerise in offending Christians and Muslims.
My anger quickly changed to sympathy, however, when I learned due to the recent cold spell the regular cartoonist couldn't be used. Instead, it appears a gin-soaked blind-90-year-old grandmother of one of the student editors was pulled out of bed, and she insisted on drawing the cartoon in question with her mittens on.
In this juvenile exercise of freedom of expression you would expect that the parent - in this case the University of Toronto - to take responsibility. But The Strand's parent is a modern-day dad, who incidentally just like its sibling also appears to not have an original thought.
The UoT admits that the editorial could be offensive, but claims that "the administration's initial assessment is that the editorial cartoon, however offensive to some members of our community, could not be characterized as a violation of the Human Rights Code, the Criminal Code, or the applicable University policies at Vic or U of T."
UoT doesn't say if the cartoon passes the Stupidity Code or any Lack-Of-An-Original-Idea Policy, but I guess that doesn't really matter.
All I know is that I think this cartoon backfired, since I now find bad cartoon art offensive.
Click here to return to homepage
Robert Duncan is a journalist and ombudsman for foreign press in Spain. He is an Executive Board Member and Vice-President for the Organización de Periodismo y Comunicación Ibero-Americana, and Vice-President of the energy and telecommunications association, APSCE. He is News Editor for Spero News, and Editor-In-Chief of EnerPub and Santificarnos.
He has also been published in World Catholic News, National Catholic Register, Renew America, Lifesite.net, as well as Capital Hill Coffee House, Common Conservative, The Conservative Voice, Enter Stage Right, News By Us, Conservative Crusader, World Net Daily, Mens News Daily and others. Robert was the bureau chief for an international news agency in Madrid for many years, and was published regularly in Dow Jones Newswires, with articles appearing in The Wall Street Journal.
Thursday, November 8, 2007
Excellent reading at EnerPub
Following are some of the recent top stories at EnerPub.
How close are China and Russia? by Robert Amsterdam
Gabon: Energy profile by EnerPub
US natural gas proved reserves hit 30-year high by EnerPub
TransCanada evaluating nuclear for Alberta by World Nuclear News
Europe's strategic dependence on Russian energy by Ariel Cohen
Anonymous User
And some other excellent readings
:
EIA sees pressure on OPEC to bridge supply gap
Russia: Running against the West
Retreat of Democracy in Europe and Eurasia?
So Europe wants to be a superpower
Nuclear power in UK: Is it necessary and viable?
Al-Qaeda's obsessive fixation on the Maghreb
Africa's unfolding desert war
Why Europe needs a hard power reality check
A nuclear deal with some unanswered questions
A new space order
Nuclear energy the only possibility, says Czech PM
Week in Petroleum: Why are oil prices so high?
The origins of the Caspian Basin energy game
Pakistan: Did Islamism really provoke martial law?
Spinning the Kremlin
Russia makes good on threat to suspend arms treaty
Eastern Mediterranean: Energy profile
Russia's nuclear propaganda targets Australia
Towards a new strategic concept for NATO
China fears social instability due to oil hike
Disabling of N Korea nuclear weapons plants starts
Zapatero in Disneyland
Fools and roads
Robert Duncan is a journalist and ombudsman for foreign press in Spain. He is an Executive Board Member and Vice-President for the Organización de Periodismo y Comunicación Ibero-Americana, and Vice-President of the energy and telecommunications association, APSCE. He is News Editor for Spero News, and Editor-In-Chief of EnerPub and Santificarnos.
He has also been published in World Catholic News, National Catholic Register, Renew America, Lifesite.net, as well as Capital Hill Coffee House, Common Conservative, The Conservative Voice, Enter Stage Right, News By Us, Conservative Crusader, World Net Daily, Mens News Daily and others. Robert was the bureau chief for an international news agency in Madrid for many years, and was published regularly in Dow Jones Newswires, with articles appearing in The Wall Street Journal.
Goldman Sachs sees less risk of oil hitting $95
Goldman Sachs said the risk of a barrel of oil hitting $95 that they foresaw back in July has been mostly realized and as a result the price-risk profile is now more balanced
By Robert Duncan
Goldman Sachs said the risk of oil hitting $95 a barrel - that they foresaw back in July - has been mostly realized and as a result the price-risk profile is now more balanced. At the same time, Goldman Sachs said in its Energy Weekly report that it remains extremely positive on the long-term outlook, with royalties on the rise once again.
“As we have emphasized in the past, one of the remarkable features of the current price rally has been that both long-dated oil prices and time-spreads have strengthened considerably. While the strengthening time-spreads have followed the declining inventory and possibly embedded some geopolitical risk, we believe that the rally in long-dated oil prices is the result of continuing industry cost inflation and the need to incentivize investments in one of the most difficult investment environments that oil companies have seen in years. Even at the current high oil prices, the production capacity expansion is lagging behind and project delays and disappointments in reserves expansion continue to characterize the oil industry,” Goldman Sachs said.
Goldman Sachs said that it has long held the view that the primary driver of the sharp rise in long-dated oil prices that pulled up spot prices was increasing costs due to the need to build long-term production capacity following the depletion of excess capacity across the supply chain earlier this decade.
Once capacity was exhausted, the resulting physical shortages in 2000 - 2003 forced the market to shift from a two-decade-long “exploitation” phase to an “investment” phase in which new investments were required to grow capacity and the supply base. During the exploitation phase, supply was increased by simply increasing utilization rates or “exploiting” the existing capacity, which is very low cost. In contrast, growing supply through investment is a substantially more expensive, time-consuming and risky endeavour, which has historically created upward pressure on prices
“We are now six years into the current investment phase and very little spare capacity or new greenfield production capacity has been added, which underscores how much longer this investment phase will likely last,” Goldman Sachs said, adding “We believe that the investment phase has at least another five to ten years left, and has run into significant road blocks in 2007, resulting in substantial supply disappointments. One of the key factors that have helped to drive up costs over the past several years has been regional government taxes on oil production profits.”
Specifically, West Africa, Russia, the UK, Canada, and various Latin American countries have pursued very aggressive tax regimes on oil production profits, with Venezuela even shifting to the extreme of the nationalization of its assets. These policies substantially increase the costs of production and the price of oil required to incentivize investment. Over the past few weeks, Canada, Nigeria, and Kazakhstan have all suggested higher government royalities on production.
Goldman Sachs noted that “although we remain structurally positive on the market as industry cost inflation continues to support long-dated oil prices and the expansion in production capacity is still lagging, we are now more cautious on the near-term upside potential for oil prices.”
Accordingly, Goldman Sachs said in its Energy Weekly report that it is now recommending to take profits and close long WTI and long agriculture and gold positions.
“We are not trying to call a top here, just take profits from a tactical perspective, as prices could continue to rise in the coming weeks, but the recent strong rally will likely bring forward the short-term rebalancing of the market that we expected for the first quarter of next year,” Goldman Sachs said.
Before the rebalancing takes place, prices could well trade above US$100/bbl as near-term upside risk factors persist; cold winter weather exacerbating supply shortages, a potentially larger-than-expected federal reserve rate cut, an increasingly weaker dollar, rising costs and royalties, negative gamma effects, and ongoing geopolitical turmoil - although Goldman Sachs said that it believes a lot of this has already been priced into the market).
“In our view these and other fundamental factors that we first highlighted in July are the main drivers behind the recent price rally,” Goldman Sachs said, adding that “the rally was not strictly the result of increased speculative interest and geopolitical uncertainties. In fact, speculative money is at the same level it was in August when we were at US$72/bbl and, more importantly, this rally was accompanied by a decline in open interest, not a rise, which would have indicated new buying as opposed to short covering.”
Nonetheless, Goldman Sachs said the risks are now becoming more balanced and that the downside risks is embedded in their nd of first quarter 2008 oil price target of $80/bbl which are already gaining momentum.
These include rising freight rates signalling an increase in Middle Eastern and West African exports, a slowing US economy, net speculative positions at near record length, an adequate level of heating oil inventories, rising Asian crude inventories, wide open transatlantic arbs, the end of field maintenance in the Arab Gulf, the potential for refinery run declines in China due to price caps that have squeezed margins, tightening monetary policy outside of the US, and already heightened geopolitical tensions, which could worsen.
These geopolitical concerns that have helped to push oil above $90/bbl have also helped gold prices to more quickly close the gap with our underlying currency-based, near-term price target of US$790/toz and accordingly Goldman Sachs said they would also recommend closing this long position, but again more from a profit-taking perspective than from trying to call a peak.
Furthermore, the recent sharp rise in oil prices has also helped push bio-fuel related oilseed prices higher, with soybeans nearing their $11/bu target. “As a result, we are closing our long soybean and corn positions to take profits. It is important to emphasize that we remain longer-term positive on oil, agriculture and gold and would view price dips as opportunities to re-establish long positions.”
While there are still positive factors that could continue to provide support to the market, the sharp rise in prices over the past several months has begun to generate fundamental shifts that Goldman Sachs said it believes will likely shift the price risks to the downside. “Though we don’t expect these shifts to create a significant pull-back in prices until after the winter, they are beginning to reduce some of the upside risks in the market despite very supportive current fundamentals.”
Some of those factors include:
• New supplies from West Africa and Gulf of Mexico. The Greater Plutonio oil field in Angola and the Genghis Khan field in the US Gulf of Mexico, which started in October, will likely ramp up production in the coming weeks, and the start-up of the Atlantis field is reported on schedule for year-end. This was embedded in Goldman Sachs forecasts, but evidence of rising West African freight rates suggests that this process is beginning quite early. The strength in freight rates from West Africa to the US Gulf Coast suggests that US refineries may be preparing to receive more of the new Angolan low-sulfur medium grade Plutonio for the end of the turnaround period. Furthermore, Nigerian supplies have continued to come back online, though spotty, with Shell increasing supplies last quarter by 15,000 b/d. The risks here are for more rather than fewer supplies.
• Increased exports from the Arab Gulf. Another reason for the strong freight rates in the Atlantic is the increased availability of Iraqi Kirkuk tenders. Although these tenders are at risk should the PKK try to stop the recent flows down the Kirkuk pipeline, Goldman Sachs believes that it is not in either sides’ interest to lose these oil revenues (Turkey also benefits from these oil flows). Furthermore, freight rates from the Arab Gulf have likely bottomed, suggesting that exports from the Arab Gulf region are also beginning to rise. While the freight rate rise looks so far in line with the announced 500 thousand b/d increase in November OPEC production, the risk is that the recent strong price rally induces Arab-Gulf OPEC producers to further expand production.
• Physical arbs to the US are wide open. Although Goldman believes that the recent rally has been driven by fundamentals and the supply-side shortages have impacted the price of the crude oil traded on the physical markets, more recently, WTI has outpaced West African and Dated Brent physical oil prices, opening up the arbitrage window across the Atlantic.
• Physical shortages in China. The regime of price caps for oil products in China, rather than supporting demand for end-use products, has the potential to motivate reduced refinery utilization as margins are squeezed. In fact, the impact of price caps on refiners can lead to more severe product shortages and lower demand for crude oil than in the absence of price controls.
• Emerging markets are pursuing tighter monetary policies. Because of these inflationary pressures, unlike the United States, which is pursuing an accommodative monetary policy, the emerging markets are pursuing tightening monetary policies. This week alone, the Mexico Central Bank raised its target interest rate by a quarter of a percentage point to 7.5%. This may have the impact of slowing demand growth outside of the United States, which accounts for nearly three quarters of the expected demand growth.
• Seasonal product inventories are adequate. Heating oil inventories are adequate in Europe and the United States. While motor gasoline inventories in the United States are low, 1.0 mb/d of refinery capacity is scheduled to come back on line over the next several weeks, which is seasonal and planned, so the impact on crude oil prices should be minimal. Furthermore, the higher RVP winter requirements are allowing more of the very low cost ethanol to be re-injected back into the gasoline pool, which has induced a rebound in ethanol prices in the past weeks. This will likely take some of the sting out of the low product inventories in gasoline.
• Investors’ activity is back near peak levels. Speculative length and open interest last week were roughly at the same levels as the peak reached in mid-July. However, in mid-July the oil price was almost US$20 lower at $72/bbl, which underscores the fundamental nature of this recent rally. Nonetheless, both open interest and the speculative length remain at historical high levels, creating a more balanced risk profile from investor interest.
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Robert Duncan is a journalist and ombudsman for foreign press in Spain. He is an Executive Board Member and Vice-President for the Organización de Periodismo y Comunicación Ibero-Americana, and Vice-President of the energy and telecommunications association, APSCE. He is News Editor for Spero News, and Editor-In-Chief of EnerPub and Santificarnos.
He has also been published in World Catholic News, National Catholic Register, Renew America, Lifesite.net, as well as Capital Hill Coffee House, Common Conservative, The Conservative Voice, Enter Stage Right, News By Us, Conservative Crusader, World Net Daily, Mens News Daily and others. Robert was the bureau chief for an international news agency in Madrid for many years, and was published regularly in Dow Jones Newswires, with articles appearing in The Wall Street Journal.
Putin eyes inking of Gazprom's deal with Gasunie
Nederlandse Gasunie will receive a 9 percent share in the Nord Stream AG share capital, coming from Wintershall and E.ON Ruhrgas that will each cede 4.5 percent of their shares. Gazprom will have an option to acquire 9 percent in BBL.
By Robert Duncan
The Nord Stream project continues to march along, getting Tuesday a further kiss of official approval as company officials signed cooperation agreements under the approving look of Russia's President Vladimir Putin and his counterpart Jan Peter Balkenende, Prime Minister of the Netherlands.
The agreement is for the involvement of both companies in the Nord Stream and BBL gas pipeline projects, as well as on the use of Gasunie's gas transportation capacities in the Netherlands. In 2000 the European Commission gave Nord Stream Project a special status of the Trans-European Network (TEN). The actual inking Tuesday of the so-called "Umbrella Agreement" - that envisions the joint participation of Russia's natural gas giant Gazprom and Nederlandse Gasunie - was signed by Alexey Miller, Chairman of the Gazprom and Marcel Kramer, CEO of Nederlandse Gasunie.
According to the forecasts, gas import by the EU will increase 200 bcm or more than 50 per cent in the nearest 10 years. "Thanks to the integration of the world’s largest gas reserves located in Russia and Europe’s gas transportation system, Nord Stream will enable to satisfy nearly 25 per cent of said additional needs in gas imports," said Gazprom.
Critics claim Gazprom's dominant position makes Europe's energy security precarious.
Nord Stream was established in December 2005 to provide engineering, construction and operation of the Nord Stream 1,200 km gas pipeline. Nord Stream’s first line with the throughput of 27.5 bcm per year will be commissioned in 2010. The construction of the second line will double the throughput to 55 bcm per year. Nord Stream will be fed with gas from UGSS.The Dutch BBL Company is responsible for constructing and operating the BBL interconnector between the Netherlands and the Great Britain. The shareholders of BBL Company are Gasunie (60 per cent), E.ON Ruhrgas (20 per cent) and Fluxys (20 per cent).
Tuesday's agreement is at the expense of Germany's E.ON's unit E.ON Ruhrgas, which is lowering its stake in the project - the decision coming after Gazprom's own strong entry into Russia's power sector after the German energy giant became the largest foreign investor in that country.
According to the agreement, Gasunie will receive a 9 percent share in the Nord Stream AG share capital, coming from Wintershall and E.ON Ruhrgas that will each cede 4.5 percent of their shares.
In turn, Gazprom will have an option to acquire 9 percent in BBL.
Upon execution of the deal, the shareholding structure in Nord Stream AG will be as follows: Gazprom (51 percent), Wintershall Holding and E.ON Ruhrgas (20 per cent each), N.V. Nederlandse Gasunie (9 percent).
According to Gazprom, "The agreement signed signifies the beginning of a new phase of cooperation with Gasunie."
"By implementing large-scale projects aimed at secure supply of European consumers we will significantly contribute to ensuring the energy security of the continent,” said Alexey Miller.
According to Marcel Kramer, “The cooperation between Gasunie and Gazprom has been over many years very fruitful and fully supported by the authorities of both countries."
As if looking to fend off some of the criticism being launched at Gazprom that Russia is seeking to gain control of Europe's gas supply, Kramer highlighted that "The participation of Gasunie in the Nord Stream project as a fourth partner points to a broad European scope of this project."
"This project is of great importance for European supply security, especially due to the fact that domestic production in Europe is declining while demand for gas as the most environmentally safe fossil fuel is steadily high,” Kramer stressed.
Nederlandse Gasunie is a gas infrastructure and transmission company based in the Netherlands. The company owns one of the largest gas distribution networks in Europe, which is some 12,000 km in overall length, and annually supplies a total of some 100 bcm of gas, which is a significant part of the total European gas consumption.
Wintershall Holding AG – is a BASF AG 100 per cent subsidiary, which specializes in oil & gas prospecting and production, natural gas marketing. Wintershall Holding AG is the largest oil and gas condensate enterprise in Germany.
Part of E.ON Group from February 2003, E.ON Ruhrgas AG (Ruhrgas AG until July 1, 2004) is responsible for gas business in Europe including natural gas production, marketing, transportation and storage.
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Robert Duncan is a journalist and ombudsman for foreign press in Spain. He is an Executive Board Member and Vice-President for the Organización de Periodismo y Comunicación Ibero-Americana, and Vice-President of the energy and telecommunications association, APSCE. He is News Editor for Spero News, and Editor-In-Chief of EnerPub and Santificarnos.
He has also been published in World Catholic News, National Catholic Register, Renew America, Lifesite.net, as well as Capital Hill Coffee House, Common Conservative, The Conservative Voice, Enter Stage Right, News By Us, Conservative Crusader, World Net Daily, Mens News Daily and others. Robert was the bureau chief for an international news agency in Madrid for many years, and was published regularly in Dow Jones Newswires, with articles appearing in The Wall Street Journal.
Tuesday, November 6, 2007
Putin eyes inking of Gazprom's deal with Gasunie
Nederlandse Gasunie will receive a 9 percent share in the Nord Stream AG share capital, coming from Wintershall and E.ON Ruhrgas that will each cede 4.5 percent of their shares. Gazprom will have an option to acquire 9 percent in BBL.
By Robert Duncan
The Nord Stream project continues to march along, getting Tuesday a further kiss of official approval as company officials signed cooperation agreements under the approving look of Russia's President Vladimir Putin and his counterpart Jan Peter Balkenende, Prime Minister of the Netherlands.
The agreement is for the involvement of both companies in the Nord Stream and BBL gas pipeline projects, as well as on the use of Gasunie's gas transportation capacities in the Netherlands. In 2000 the European Commission gave Nord Stream Project a special status of the Trans-European Network (TEN). The actual inking Tuesday of the so-called "Umbrella Agreement" - that envisions the joint participation of Russia's natural gas giant Gazprom and Nederlandse Gasunie - was signed by Alexey Miller, Chairman of the Gazprom and Marcel Kramer, CEO of Nederlandse Gasunie.
According to the forecasts, gas import by the EU will increase 200 bcm or more than 50 per cent in the nearest 10 years. "Thanks to the integration of the world’s largest gas reserves located in Russia and Europe’s gas transportation system, Nord Stream will enable to satisfy nearly 25 per cent of said additional needs in gas imports," said Gazprom.
Critics claim Gazprom's dominant position makes Europe's energy security precarious.
Nord Stream was established in December 2005 to provide engineering, construction and operation of the Nord Stream 1,200 km gas pipeline. Nord Stream’s first line with the throughput of 27.5 bcm per year will be commissioned in 2010. The construction of the second line will double the throughput to 55 bcm per year. Nord Stream will be fed with gas from UGSS.The Dutch BBL Company is responsible for constructing and operating the BBL interconnector between the Netherlands and the Great Britain. The shareholders of BBL Company are Gasunie (60 per cent), E.ON Ruhrgas (20 per cent) and Fluxys (20 per cent).
Tuesday's agreement is at the expense of Germany's E.ON's unit E.ON Ruhrgas, which is lowering its stake in the project - the decision coming after Gazprom's own strong entry into Russia's power sector after the German energy giant became the largest foreign investor in that country.
According to the agreement, Gasunie will receive a 9 percent share in the Nord Stream AG share capital, coming from Wintershall and E.ON Ruhrgas that will each cede 4.5 percent of their shares.
In turn, Gazprom will have an option to acquire 9 percent in BBL.
Upon execution of the deal, the shareholding structure in Nord Stream AG will be as follows: Gazprom (51 percent), Wintershall Holding and E.ON Ruhrgas (20 per cent each), N.V. Nederlandse Gasunie (9 percent).
According to Gazprom, "The agreement signed signifies the beginning of a new phase of cooperation with Gasunie."
"By implementing large-scale projects aimed at secure supply of European consumers we will significantly contribute to ensuring the energy security of the continent,” said Alexey Miller.
According to Marcel Kramer, “The cooperation between Gasunie and Gazprom has been over many years very fruitful and fully supported by the authorities of both countries."
As if looking to fend off some of the criticism being launched at Gazprom that Russia is seeking to gain control of Europe's gas supply, Kramer highlighted that "The participation of Gasunie in the Nord Stream project as a fourth partner points to a broad European scope of this project."
"This project is of great importance for European supply security, especially due to the fact that domestic production in Europe is declining while demand for gas as the most environmentally safe fossil fuel is steadily high,” Kramer stressed.
Nederlandse Gasunie is a gas infrastructure and transmission company based in the Netherlands. The company owns one of the largest gas distribution networks in Europe, which is some 12,000 km in overall length, and annually supplies a total of some 100 bcm of gas, which is a significant part of the total European gas consumption.
Wintershall Holding AG – is a BASF AG 100 per cent subsidiary, which specializes in oil & gas prospecting and production, natural gas marketing. Wintershall Holding AG is the largest oil and gas condensate enterprise in Germany.
Part of E.ON Group from February 2003, E.ON Ruhrgas AG (Ruhrgas AG until July 1, 2004) is responsible for gas business in Europe including natural gas production, marketing, transportation and storage.
Click here to return to homepage
Robert Duncan is a journalist and ombudsman for foreign press in Spain. He is an Executive Board Member and Vice-President for the Organización de Periodismo y Comunicación Ibero-Americana, and Vice-President of the energy and telecommunications association, APSCE. He is News Editor for Spero News, and Editor-In-Chief of EnerPub and Santificarnos.
He has also been published in World Catholic News, National Catholic Register, Renew America, Lifesite.net, as well as Capital Hill Coffee House, Common Conservative, The Conservative Voice, Enter Stage Right, News By Us, Conservative Crusader, World Net Daily, Mens News Daily and others. Robert was the bureau chief for an international news agency in Madrid for many years, and was published regularly in Dow Jones Newswires, with articles appearing in The Wall Street Journal.
Wednesday, October 31, 2007
Halloween in Spain
In almost twenty years living here I have witnessed the arrival of Halloween to Spain. When I first arrived to Spain in the late 80s Halloween was an event celebrated by a few crazy US ex-pats - I still remember the looks of amused passengers in the subway as a load of strange Americans boarded, one dressed as a genie, another as a table and myself as a six-foot plus Ratoncito Perez.
With the continued influx of immigrants Halloween in Spain twenty years later is now becoming quite common place - at least in the major cities.
But even then, don't expect it to be a celebration similar to what happens in the US. True, many an Irish bar will have dressed up staff, but the real change can be seen in the center of town where tiny tots dressed in costumes run from bar to bar shouting in broken English "Trick or Treat." Even at my youngest son's daycare the children are now asked to come to class in costume for a party - to which my two-year old, 20-kilo son, went as an overstuffed cat.
Where just a few years ago there were the ex-pats and few decorations in shops, now the evening has children - as if out of an American film - running throughout the neighborhood dressed in costume. True the majority of these children are from immigrant families - but not all. Tonight, for example, I saw plenty of Spanish children dressed up - and even a few boys mysteriously wearing undersized costumes (could it be they were in search for free treats?).
In past years our four children scampered up and down the building where we live pestering bewildered neighbors, before descending upon the plaza and local terraces making their way eventually to the homes of their aunts and uncles living nearby shouting "Trick or Treat" at the tops of their lungs - and in turn receiving a strange assortment of "treats," from sandwiches, Spanish tortilla to sweets and even money. All, mind you, accompanied by strange and laughing gestures from bemused givers. This year I saw many other families doing the same and the children in general were having a blast, and the givers were more into the rol. As an aside note, this year I noticed our children still received small change from some people - roughly $15 dollars worth.
I know there are theological arguments about if one should celebrate Halloween, but personally in my family it is just another chance to dress up and act silly and eat a few treats. And that is what we have instilled in our children: A chance to play, followed by mass tomorrow and Friday, where we will remember those Saints who went ahead of us and are examples in the here and now.
Following is something I wrote a few years ago that I'd like to share once again that deals with children and their wonderful sense of imagination. The following slightly-edited item originally ran November 20, 2002 on my old Ibidem blog. I trust you find the story enjoyable and which takes a look at childlike innocence.
Walking with my seven-year old son this morning to his school bus stop he informed me that he was awake, "Because yesterday, I was terribly sleepy," he said with his mixed English-American accent.
Obviously that wasn't too much of a surprise, if for no other reason than he was walking - and talking a thousand words a minute. He continued by telling me that his arms were awake, and his legs were just waking up, and that his heart was always awake.
And then in that sideways logic that often only a child can have, my son began to expound upon skeletons. I suppose that in his way he was still thinking about the recent celebration of Halloween.
He told me that when we die, the first thing that happens is that our soul goes to heaven, and then our body begins to decay, "leaving only a skeleton of bones." I though that was pretty profound for a seven-year old, especially at 7:30 in the morning.
But it's the next part that surprised me.
He said, "But papi, you know if the heart begins to beat again, when the skeleton is just bones, then he'll come to life again."
I let him talk for a while, because the truth is I didn't quite know what tack I should take. Should I try to shoot down his childhood beliefs with my adult wisdom, or should I indulge him.
After another 5 minutes listening to him rattling off his theory, about how the blood could begin to circulate through the skeleton's body, and how it would be able to walk - although of course it wouldn't have a soul - I finally had to ask him a question, if anything to gain a bit of peace.
"Do you really believe all this?" I asked.
To which, without skipping a beat, he replied, "I know it's not true, but let's just pretend for now."
And that got me thinking, if not a little bit sad.
Because I know it won't be long before other adult beliefs begin crowding out that little bit of mystery that we are born with as children. I imagine this will be the last Christmas that he won't believe in Santa Claus, and by Easter, the Easter Bunny will be a thing of the past as well.
I know that for his own good he needs to learn the difference between fantasy and the real world, but still it pains me to know that my son is growing up, and that this is yet another stage in his becoming independent.
I just hope that in that growing up he always keeps a special spot stored for all that is mysterious, and sacred.
Maybe that's because I think all of us adults need to be able to just once in awhile answer as my son did, "I know it's not true, but lets just pretend for now."
Incidentally, my son is now 12. I walked into the house this evening and he was dressed up and had been out with his younger brother and sisters. I didn't say anything, but just looked at him and laughed.
He responded, "I wasn't going to go with them, but it was just so much fun playing around."
And then he kissed his little brother and they walked down the hall hand-in-hand.
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Robert Duncan is a journalist and ombudsman for foreign press in Spain. He is an Executive Board Member and Vice-President for the Organización de Periodismo y Comunicación Ibero-Americana, and Vice-President of the energy and telecommunications association, APSCE. He is News Editor for Spero News, and Editor-In-Chief of EnerPub and Santificarnos.
He has also been published in World Catholic News, National Catholic Register, Renew America, Lifesite.net, as well as Capital Hill Coffee House, Common Conservative, The Conservative Voice, Enter Stage Right, News By Us, Conservative Crusader, World Net Daily, Mens News Daily and others. Robert was the bureau chief for an international news agency in Madrid for many years, and was published regularly in Dow Jones Newswires, with articles appearing in The Wall Street Journal.
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Thursday, October 18, 2007
Peak oil production 'decades away' - Lukoil chief
According to Vagit Alekperov, the president of Russia's Lukoil petroleum company, the production peak "is unlikely to take place in the next few decades."
By Robert Duncan
Peak oil production is still decades away, according to Lukoil's top executive. According to Vagit Alekperov, the president of Russia's Lukoil petroleum company, the production peak "is unlikely to take place in the next few decades."
The peak oil production theory suggest that at some time the maximum global petroleum production rate is reached - or has been already reached, according to some supporters of the theory. "The only reliable way to identify the timing of peak oil will be in retrospect. M. King Hubbert, who devised the peak theory, predicted in 1974 that peak oil would occur in 1995 at 12 gigabarrels per year 'if current trends continue'. However, in the late 1970s and early 1980s, global oil consumption actually dropped (due to the shift to energy-efficient cars, the shift to electricity and natural gas for heating, etc.), then rebounded to a lower level of growth in the mid 1980s. The shift to reduced consumption in these areas meant that the projection assumptions were not realized and, hence, oil production did not peak in 1995, and has climbed to more than double the rate initially projected," according to Wikipedia.
At the same time, Alekperov said the share of the so-called costly crude oil (offshore, high-viscosity and oil produced from gas and coal) will be on the rise.
Alekperov said that only continental shelf fields can ensure a tangible production increment, adding that this is the reason why Russia is involved in the Arctic shelf border alignment and is establishing international consortia for its development.
Alekperov said that Lukoil intends to take an active part in the development of Russia’s Arctic and Far Eastern shelf, now that the company has experience in similar operations in the Baltic and the Caspian regions.
Lukoil's strategic plan targets considerable growth of key performance and financial indicators, with the share of gas in in the company's overall production to rise from 10 percent to 30 percent in the next decade.
Lukoil's foreign subsidiaries will account for one fifth of the production and half of the refining.
Besides Russia, key roles in production activities of Lukoil will be in the Caspian region, the Middle East, Africa and Latin America. The company also intends to strengthen its positions on the mainstream markets of Europe, Asia-Pacific region and North America.
The next step in the company's plan is to organize direct supplies of Russian oil to the US. At present, Lukoil is completing construction of a unique transportation system in the north of Russia, which will allow to supply up to 240 thousand barrels of oil to the United States daily.
Lukoil can also deliver oil to the US from its Latin America fields. A trial oil consignment (from Condor Field in Columbia) was exported to the US earlier this year.The company continues to appraise the heavy-oil fields in Venezuela.
Alekperov made the comments while speaking before students at Colombia University.
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Robert Duncan is a journalist and ombudsman for foreign press in Spain. He is an Executive Board Member and Vice-President for the Organización de Periodismo y Comunicación Ibero-Americana, and Vice-President of the energy and telecommunications association, APSCE. He is News Editor for Spero News, and Editor-In-Chief of EnerPub and Santificarnos.
He has also been published in World Catholic News, National Catholic Register, Renew America, Lifesite.net, as well as Capital Hill Coffee House, Common Conservative, The Conservative Voice, Enter Stage Right, News By Us, Conservative Crusader, World Net Daily, Mens News Daily and others. Robert was the bureau chief for an international news agency in Madrid for many years, and was published regularly in Dow Jones Newswires, with articles appearing in The Wall Street Journal.
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By Robert Duncan
Peak oil production is still decades away, according to Lukoil's top executive. According to Vagit Alekperov, the president of Russia's Lukoil petroleum company, the production peak "is unlikely to take place in the next few decades."
The peak oil production theory suggest that at some time the maximum global petroleum production rate is reached - or has been already reached, according to some supporters of the theory. "The only reliable way to identify the timing of peak oil will be in retrospect. M. King Hubbert, who devised the peak theory, predicted in 1974 that peak oil would occur in 1995 at 12 gigabarrels per year 'if current trends continue'. However, in the late 1970s and early 1980s, global oil consumption actually dropped (due to the shift to energy-efficient cars, the shift to electricity and natural gas for heating, etc.), then rebounded to a lower level of growth in the mid 1980s. The shift to reduced consumption in these areas meant that the projection assumptions were not realized and, hence, oil production did not peak in 1995, and has climbed to more than double the rate initially projected," according to Wikipedia.
At the same time, Alekperov said the share of the so-called costly crude oil (offshore, high-viscosity and oil produced from gas and coal) will be on the rise.
Alekperov said that only continental shelf fields can ensure a tangible production increment, adding that this is the reason why Russia is involved in the Arctic shelf border alignment and is establishing international consortia for its development.
Alekperov said that Lukoil intends to take an active part in the development of Russia’s Arctic and Far Eastern shelf, now that the company has experience in similar operations in the Baltic and the Caspian regions.
Lukoil's strategic plan targets considerable growth of key performance and financial indicators, with the share of gas in in the company's overall production to rise from 10 percent to 30 percent in the next decade.
Lukoil's foreign subsidiaries will account for one fifth of the production and half of the refining.
Besides Russia, key roles in production activities of Lukoil will be in the Caspian region, the Middle East, Africa and Latin America. The company also intends to strengthen its positions on the mainstream markets of Europe, Asia-Pacific region and North America.
The next step in the company's plan is to organize direct supplies of Russian oil to the US. At present, Lukoil is completing construction of a unique transportation system in the north of Russia, which will allow to supply up to 240 thousand barrels of oil to the United States daily.
Lukoil can also deliver oil to the US from its Latin America fields. A trial oil consignment (from Condor Field in Columbia) was exported to the US earlier this year.The company continues to appraise the heavy-oil fields in Venezuela.
Alekperov made the comments while speaking before students at Colombia University.
Click here to return to homepage
Robert Duncan is a journalist and ombudsman for foreign press in Spain. He is an Executive Board Member and Vice-President for the Organización de Periodismo y Comunicación Ibero-Americana, and Vice-President of the energy and telecommunications association, APSCE. He is News Editor for Spero News, and Editor-In-Chief of EnerPub and Santificarnos.
He has also been published in World Catholic News, National Catholic Register, Renew America, Lifesite.net, as well as Capital Hill Coffee House, Common Conservative, The Conservative Voice, Enter Stage Right, News By Us, Conservative Crusader, World Net Daily, Mens News Daily and others. Robert was the bureau chief for an international news agency in Madrid for many years, and was published regularly in Dow Jones Newswires, with articles appearing in The Wall Street Journal.
Wednesday, October 17, 2007
Latest Headlines From EnerPub
Following are some of the latest headlines appearing at EnerPub - quality news and analysis that moves the world.
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Is Sol Melia Running Out Of Excuses
This article was originally published in a column by Dow Jones & Inc., in 2002, but I find it interesting how news sometimes just keeps repeating itself.
By Robert Duncan
The Spanish hotel and resort company is just the latest in an already long list to find its bottom line hurt by a downturn in the global economy since September 11.
Sol Melia said Tuesday its net profit in the first half of this year was EUR3.81 million, abysmally below the EUR52.70 million for the same period a year ago. Sol Melia also issued a profit warning, and said it now expects EBITDA growth of between zero and 4% this year, down from its previous forecast of 15%.
And to hear the company tell it, there are plenty of reasons for the sharp decline:
Blame it on all about those wealthy Americans who aren't coming over to Europe this year for vacation.
Blame it on swooning Latin American currencies.
And blame it on extraordinary gains in 2001 earnings that distorted comparisons.
There is a kernel of truth in each of the above, of course, but they still sound a bit like "the dog ate my homework."
For example, Sol Melia already used the extraordinary gains excuse: last year, in its 2001 first-half report, the company argued its net profit of EUR52.7 million fell 11% from first-half 2000 because of "extraordinary capital gains" in the previous period.
Maybe there's another issue that really needs to be addressed here: the hotelier's risky strategy of only going after a select clientele, and focusing on markets outside of Spain.
Fact is, Sol Melia's desire to be a top-line hotel chain means they've never really taken advantage of the cash-crop growing in their own backyard.
Spain is a popular tourist destination, and tourism contributes between 10% to 12% of the country's gross domestic product. According to the most recent government data on the sector, total revenue from overseas tourists rose to EUR33.6 billion in 1999 from EUR23.3 billion in 1996, while revenue from Spaniards traveling domestically was only slightly lower.
And while the latest tourism figures show that numbers are indeed down a bit from last year, it's worth noting Sol Melia's net profit in the first half of 2001 fell 11% - at the same time tourism rose 3.2% to 21.3 million tourists.
In other words, Sol Melia's net profit was already falling last year, prior to September 11, while a tourism boom was lapping at its headquarters' shores.
Investors might want to find out what Sol Melia's excuse for that is....
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Robert Duncan is a journalist and ombudsman for foreign press in Spain. He is an Executive Board Member and Vice-President for the Organización de Periodismo y Comunicación Ibero-Americana, and Vice-President of the energy and telecommunications association, APSCE. He is News Editor for Spero News, and Editor-In-Chief of EnerPub and Santificarnos.
He has also been published in World Catholic News, National Catholic Register, Renew America, Lifesite.net, as well as Capital Hill Coffee House, Common Conservative, The Conservative Voice, Enter Stage Right, News By Us, Conservative Crusader, World Net Daily, Mens News Daily and others. Robert was the bureau chief for an international news agency in Madrid for many years, and was published regularly in Dow Jones Newswires, with articles appearing in The Wall Street Journal.
Gazprom meets with TNK-BP to prepare stake sell
Gazprom officials met this week with representatives of TNK-BP to lay the groundwork for the Russian giant's purchase of major stakes held by the consortium
By Robert Duncan
Gazprom officials met this week with representatives from TNK-BP to prepare the Russian natural gas giant's purchase of a major stakes in the BP-led consortium's assets.
As agreed in June, TNK-BP will sell Gazprom a 62.8 per cent stake in Rusia Petroleum, which is the license holder for the Kovykta field, as well as a 50 per cent stake in East Siberian Gas Company(ESGCo), which is in the midst of a regional gasification project for the Irkutsk Oblast.
"The Kovytka gas field in Russia's Irkutsk Oblast contains proven reserves of nearly 2 trillion cubic meters of gas - enough to supply the world's needs for one year," according to an article by Roman Kupchinsky. That article also notes that TNK-BP was formed in a $6.7 billion operation that united BP, the Renova Group, the Alfa Group, Access Industries and Interros, with shares being split 50-50 between BP and their Russian partners. "The deal was heralded as a new era for Russian business. But, at the time, a few eyebrows were raised at BP's inclusion of Alfa Group ... Alfa Group had been investigated by the Russian Audit Chamber for numerous violations after it had purchased in 1997 a 40 percent stake in the privatization of the then state owned oil company TNK. Alfa Group bought TNK using a closed shareholding company it had created, Novy Holding."
The June agreement was viewed as a likely outcome following tough statements by Russian government officials directed at the BP consortium.
In particular, the consortium was criticized by the government for not moving rapidly enough with its production plans.
TNK-BP stressed, however, that plans and licenses to construct pipelines to China needed to be buillt so the ventures could move forward.
Critics claim that Gazprom had effectively blocked the consortiums bida to build the pipelines that were crucial to its success.
In June the companies said Gazprom will pay between $700-$900 million, subject to adjustments, for TNK-BP's interests in Rusia and ESGCo.
However, now Gazprom merely is saying that "the deal value will be fixed at a current market price within a 90 day period, Gazprom said. Gazprom and TNK-BP also agreed on a call-option for TNK-BP to buy back a 25 per cent plus one share stake in the Kovykta project. The option could be exercised after the parties to the Agreement have agreed on a project to be executed within the alliance, or have approved an asset swap."
The agreement signed between Gazprom, BP and TNK-BP also held a golden carrot and establishes "a strategic alliance between the companies for long-term investment in joint energy projects as well as asset swaps both in Russia and third countries," according to Gazprom.
BP and TNK have said their decision to agree to the sale was "designed to extend Gazprom's access to international markets and deepen BP and TNK-BP involvement in Russian oil and gas, the companies will establish a joint team to identify strategic opportunities for investment both overseas and inside Russia."
BP Chief Executive Officer Tony Hayward said at the time that they would "initially be looking for projects of at least $3 billion, but the potential for further growth could be very significant."
Gazprom and Italy
In other news, Gazprom Chairman Alexey Miller met Tuesday with Vittorio Claudio Surdo, the Ambassador of Italy to the Russian Federation.
According to Gazprom, "the parties discussed issues related to Russian gas deliveries to Italy, possibilities for cooperation development in the oil and gas sector as well as to the progress with the South Stream project execution. The parties emphasized that Gazprom would provide secure gas supply to European consumers during the forthcoming autumn-winter period."
Natural gas market of Italy is the third-largest market in Europe after Great Britain and Germany. The share of natural gas in Italy’s primary energy mix makes up more than 30 per cent. The main gas suppliers to Italy are Algeria and Russia.
Italy is the second-largest importer of Russian gas in Europe. In 2006 the Gazprom Group supplied 22.1 bcm of gas to Italy
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Robert Duncan is a journalist and ombudsman for foreign press in Spain. He is an Executive Board Member and Vice-President for the Organización de Periodismo y Comunicación Ibero-Americana, and Vice-President of the energy and telecommunications association, APSCE. He is News Editor for Spero News, and Editor-In-Chief of EnerPub and Santificarnos.
He has also been published in World Catholic News, National Catholic Register, Renew America, Lifesite.net, as well as Capital Hill Coffee House, Common Conservative, The Conservative Voice, Enter Stage Right, News By Us, Conservative Crusader, World Net Daily, Mens News Daily and others. Robert was the bureau chief for an international news agency in Madrid for many years, and was published regularly in Dow Jones Newswires, with articles appearing in The Wall Street Journal.
Tuesday, October 16, 2007
Eni signs new agreement for ventures in Libya
The overall investment associated with the agreed work programs is in the range of $28 billion over 10 years.
By Robert Duncan
Italian energy conglomerate Eni and Libya's National Oil Company, or NOC, signed Tuesday a wide-ranging agreement for future joint ventures in the development of oil and gas operations in the North African country.
The overall investment associated with the agreed work programs is in the range of $28 billion over 10 years.
Eni, which has had a strategic partnership with NOC since 1959, said the agreement "will boost its growth in gas and oil production in Libya, ensuring greater energy security for Italy and enabling Eni to develop some of Libya’s most prolific basins in the long term."
Economic growth in Libya is dependent on the hydrocarbon industry, with companies using enhanced oil recovery (EOR) techniques to increase production at maturing fields. Libya, with largest proven oil reserves in Africa, still remains highly unexplored. Over the next six years, Libya would like to see oil production capacity increase by 40 percent from 1.8 million barrels per day (bbl/d) to 3 million bbl/d by 2013.
NOC has been reported as wanting to raise oil production from 1.80 million bbl/d in 2006 to 2 million bbl/d by 2008 and to 3 million bbl/d by 2010-2013.
"Future foreign investment into the oil sector is likely, especially with the improved investment climate that stems from the United Nations and United States lifting sanctions," according to a Libya Energy Profile report, that notes, "Previously, sanctions had caused delays in a number of field development and EOR projects and had deterred foreign capital investment. Overall, Libya is considered a highly attractive oil province due to its low cost of oil recovery (as low as $1 per barrel at some fields), the high quality of its oil, and its proximity to European markets.
Other foreign operators in Libya - working with NOC - include: Repsol YPF (Spain), OMV (Austria) and Total (France).
Eni said Tuesday's agreement confirms the Italian company as the leading foreign operator in Libya "and further consolidates the good relationship between Italy and Libya."
At various stages in the past century, Libya was a colony of Italy.
Specifically, "in 1929 Tripoli and Cyrenaica were united as one colonial province, then in 1934, as Italy struggled to retain colonial power, the classical name "Libya" was revived as the official name of the colony, which was split into four provinces, Tripoli, Misurata, Bengasi, and Derna," according to Wikipedia.
As part of the terms of the agreement, NOC and Eni will convert the existing petroleum contracts to the most recent contractual model (EPSA IV), with a renewed duration of 25 years from January 2008, well beyond the present expiry dates. The new expiry dates set by the agreement are 2042 for production of oil and 2047 for gas.
Having recently completed two major hydrocarbon developments in the country, El Feel (Elephant) and Western Libya Gas Project, Eni and NOC will now define a new plan of strategic initiatives aimed at exploiting the significant oil and gas potential in Libya.
"In October 1997, an international consortium led by British company Lasmo, along with Eni and a group of five South Korean companies, announced that it had discovered large recoverable crude reserves (around 700 million barrels) at the NC-174 Block, 465 miles south of Tripoli. Lasmo, which was purchased by Eni in 2001, estimated that production from the field would cost around $1 per barrel. Elephant began production in February 2004 at around 10,000 bbl/d.
In 2006, Eni indicated that Elephant was producing at around 125,000 bbl/d, and the company was hoping to see the field reach full capacity of 150,000 bbl/d by 2008," according to the Libya Energy Profile report. In particular, the parties will focus their efforts on maximising the recovery of their existing oil fields through enhanced programs by applying the most advanced technology for the assisted recovery of hydrocarbons (Co2 injection and water alternate gas).
They will also implement a new drilling campaign at nearby fields.
NOC and Eni will continue to explore the prolific NC41 offshore area, and strengthen the hub of Mellitah by expanding gas export capacity from 8 to 16 billion cubic meters/year. The expansion will be achieved through the upgrading of the Greenstream export line by 3 billion cubic meters/year, which will increase export capacity to Italy, and by the construction of a new LNG plant of 5 billion cubic meters/year for worldwide marketing. Further additional gas production will be made available for industrial use in Libya.
Eni has a total average daily operated production in excess of 550,000 boepd (Eni equity of around 250,000 boepd) in Libya. Eni is operator in some of the country’s biggest fields: the oil fields of Abu-Attifel, El Feel and Bouri, and the gas and condensate fields of Bahr Essalam and Wafa which supply the Mellitah treatment plant and the Greenstream export line.
Eni's activities in Libya
Eni's production activity in Libya is in the Mediterranean offshore Tripoli and in the Libyan desert area, over a total acreage of approximately 39,569 square kilometres (34,113 square kilometres net to Eni). The main production blocks in which Eni holds interests are: onshore NC169A (Eni’s interest 50%) and offshore NC41 (Eni’s interest 30% for oil and 50% for gas); onshore NC 174 (Eni’s interest 33.3%); and onshore concessions 82 and 100 (Eni’s interest 50%).
Eni also holds a 50% interest in the NC118 block where, after a declaration of commercial discovery, it is developing the A-NC118 field. In the exploration phase, Eni is operator of four onshore blocks in the Muzurk basin (161/1, 161/2&4, 176/3) an in the Kufra area (186/1, 2, 3 & 4). Exploration and production activities in Libya are regulated by concessions and PSAs. Despite production declines at mature fields, Eni’s production in Libya is expected to increase in the medium term owing to the expected ramp up of new structures near the Western Libyan Gas Project fields. This confirms Libya as one of Eni’s largest oil and gas producing countries.
The Wafa and Bahr Essalam fields, containing recoverable reserves of approximately 1.6 bboe were developed as part of the upstream-midstream integrated Western Libyan Gas Project aimed also at exporting natural gas to Europe through the underwater Greenstream pipeline. The gas is supplied to third parties in the Italian natural gas market under long term contracts.
A further 71 bcf of gas will be delivered to the Libyan market once these two fields have achieved their production plateau. Production from these two fields is treated at the Mellitah plant on the Libyan coast, made up of three trains for the treatment of gas from Bahr Essalam, while the gas produced at Wafa is ready for sale. Mellitah also includes facilities for the compression of natural gas that is carried to Sicily, as well as facilities for the storage and loading of oil and LPG.
In 2006 a total of 26 offshore producing wells were drilled and linked to the Sabratha platform as foreseen by phase 1 of the project. The Bouri field produces through two platforms linked to an FPSO unit with a storage capacity of approximately 1.5 mmbbl. In 2006 the Bouri East Development project was completed with the start-up of 4 underwater wells.
The Greenstream pipeline
The Greenstream pipeline for the import of Libyan gas has a transit capacity of 8 bcm/y and crosses under the Mediterranean Sea from Mellitah to Gela in Sicily, the point of entry into the Italian natural gas transport system.
The pipeline started operations in October 2004 and in 2006 transported 7.7 bcm of natural gas, of which (i) 6.6 bcm was sold to Italian importers under long-term supply contracts; (ii) 1.1 bcm
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Robert Duncan is a journalist and ombudsman for foreign press in Spain. He is an Executive Board Member and Vice-President for the Organización de Periodismo y Comunicación Ibero-Americana, and Vice-President of the energy and telecommunications association, APSCE. He is News Editor for Spero News, and Editor-In-Chief of EnerPub and Santificarnos.
He has also been published in World Catholic News, National Catholic Register, Renew America, Lifesite.net, as well as Capital Hill Coffee House, Common Conservative, The Conservative Voice, Enter Stage Right, News By Us, Conservative Crusader, World Net Daily, Mens News Daily and others. Robert was the bureau chief for an international news agency in Madrid for many years, and was published regularly in Dow Jones Newswires, with articles appearing in The Wall Street Journal.