OilVoice Magazine | April 2012

OilVoice MAGAZINE

Edition One - April 2012

Fending off a sea of troubles 2012 Budget pushes drilling to next level Kenya hits oil The Bakken success story

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OilVoice Magazine APRIL

Adam Marmaras Manager, Technical Director

Issue 1 – APRIL 2012

Welcome

OilVoice Acorn House 381 Midsummer Blvd Milton Keynes MK9 3HP

Magazine. We've taken the very best featured content from our online site, and assembled it in an easy to read electronic format. We hope you like it!

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to the first edition of the OilVoice

Thanks for reading!

Adam Marmaras OilVoice

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OilVoice Magazine APRIL

Contents April’s Featured Authors

3

Who will survive oil refinery competition from the Middle East?

5

Review: The Middle East: Still on top...

5

Recently Added Companies

7

North Sea caught in Scottish independence row

8

Insight: The US locomotive gets under way!

8

Exploration: The Bakken success story

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Biographies of this months featured authors.

By Hanife Mehmet

By Richard Etherington

An overview of the recent companies added to the OilVoice database.

By Hanife Mehmet

By David Bamford

By David Bamford

The price of safety in the spotlight again

10

Watching World Energy: Showdown in Sudan

11

Operational Energy: Fending off a sea of troubles

13

Exploration: What's happening in the Arctic?

16

2012 Budget pushes drilling to next level

16

Watching World Energy: Turmoil in the South China Sea

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Watching World Energy: Rattling the supply chain

19

By Hanife Mehmet

By Eric Watkins

By Eric Watkins

By David Bamford

By Hanife Mehmet

By Eric Watkins

By Eric Watkins

Exploration: Arctic Gas Hydrates - a stupendous gas resource!

By Halfdan Carstens

Review: Is the oil industry of Brazil progressing?

By Richard Etherington

20 21

Featured University of the Month

23

Review: Can Petrobras deliver?

24

Watching World Energy: Crossing swords in the Gulf

26

Kenya hits oil

28

Doing Business with Petrobras: How to score a goal

29

Watching World Energy: A double whammy on Iran

30

This month we are featuring Heriot-Watt University

By Richard Etherington

By Eric Watkins

By Hanife Mehmet

By Camilo MuĂąoz

By Eric Watkins

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OilVoice Magazine APRIL

April’s Featured Authors OilVoice is always on the lookout for quality, original content. We receive submissions from people in the industry on a regular basis, who in turn benefit from our large user base. You get a chance to broadcast to the industry and spread the word, and we get fantastic original content. Get in touch for more details!

Hanife Mehmet Contract Jobs Hanife Mehmet is a copywriter working for contractjobs.com, the contract only job board and news resource for freelance professionals. The site provides information for professional temporary workers from all leading industry sectors including the oil and gas sector.

Richard Etherington OilEdge Richard Etherington works as a freelance journalist. Richard, a BA Hons Political Science graduate, is also a fully trained sub-editor and reporter.

David Bamford OilEdge David Bamford is non-executive director of Tullow Oil, and a past head of exploration, West Africa and geophysics with BP.

Eric Watkins Oil Diplomacy Oil Diplomacy produces news, analyses, commentary and tailored research concerning the global oil and gas industry. Watching World Energy, which appears daily, comments on current events in the energy industry

Halfdan Carstens GEO ExPRO Halfdan obtained a M.Sc. in Geology from the University of Oslo and then worked for Saga Petroleim for five years including a year in the US. He also worked for Nopec and PGS, before becoming Founding Editor of GEO ExPro Magazine. He is Editor of the Norwegian geological magazine GEO.

Camilo MuĂąoz Translation Source Translation Source helps companies communicate worldwide by offering comprehensive multilingual solutions based upon client needs. Our solutions are developed in more than 140 languages and include a full range of language translation and localization services, international training and e-learning development, interpretation, instruction, bilingual staffing and other supporting linguistic services.

press@oilvoice.com |+44 208 123 2237

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OilVoice Magazine APRIL

Hanife Mehmet Contract Jobs

Richard Etherington OilEdge

Submitted March 01, 2012

Submitted March 05, 2012

Who will survive oil refinery competition from the Middle East?

Review: The Middle East: Still on top...

Indian Oil refinery Essar has put forth

region without mentioning its number

the notion that the UK may well see

one cash crop, oil, in the same breath.

refinery closures in the near future, due

More recently, however, the words

to stiff competition. While bigger

'political' and 'tension' have acquired

establishments in Cheshire may be able

similar status.

It is hard to talk about the Middle East

to handle the tough economic market,

While the Middle East may be continue

rivals may find the profitability balance

to be the 'bread basket' of the global oil

too difficult to achieve.

industry, the energy risks that come

Following a collapse of a refinery in

with it will never been far behind.

Coryton, which supplied 20% of the

Indeed, the risk of a damaging shock is

south-east's fuel, competition presented

always just around the corner, and the

by the middle-east and India has gained

same could be said for a potential spike

more momentum. The Petroplus owned

in prices.

site went into administration in January,

Although the popular political unrest

putting over 900 jobs on the line.

that spread rapidly across the MENA

Chief executive at Essar stated: 'There is

(Middle East & North Africa) region last

some sort of structural change in the

year hit the North African nations and

refining industry globally. Refineries that

subsequently the local oil industry the

were small-sized or low-complexity are

hardest, Middle Eastern operations did

being replaced by large, complex

not escape unscathed. Indeed, the

refineries mostly built in the Asia-Pacific

ongoing violence and uprisings in both

region ‌ Those refineries that are not

Syria and Yemen continue to grab

economically sustainable or of low

headlines and the attention of world

complexity will find it much harder to

leaders even today. The political tension

survive in this market‌We believe that

in these two nations also poses serious

there has to be some shake-up in the

questions of Middle East oil production

European refining industry and that

outside of the OPEC (Organisation of the

uneconomic capacity will move out."

Petroleum Exporting Countries)

So if this 'shake-up' never materialises,

grouping.

what will this mean for oil and gas

Despite the recent volatility, the Middle

contract jobs? Many of those working in

East's dominance of global oil supply is

smaller refineries may be questioning

unlikely to be challenged anytime soon.

their current vacancies.

After all, the Persian Gulf states are sat

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OilVoice Magazine APRIL

upon huge reserves and as such they

prices have already begun climbing. At

remain the key region for oil export.

the time of writing on February 23,

Among them, however, is a clear wild

Brent crude futures have risen by 11%

card: Iraq. Despite being a stellar

in the 2012 year-to-date to above $120

producer with strong potential for future

a barrel (up by around $12 from the

output growth, political agendas may

start of the year). Moreover, around 9%

serve to cloud the country's medium to

of that jump higher has come in the

long-term oil industry growth ambitions.

month of February alone, as the rhetoric

The escalation of the war of words

surrounding the Iran embargo hardened.

between Iran and some of the world's

Although prices are widely expected to

leading powers has stepped up a notch

continue trending higher in the near

this year, over the former's development

term, the likely scenario is that the likes

programme for nuclear energy. On the

of Saudi Arabia, Libya and Iraq will step

back of this earlier this month, Iran

in and increase their respective supplies,

announced that it would be stopping the

helping to normalising prices somewhat

sale of crude oil to British and French

and subsequently help cool nerves

firms, pledging to sell to new customers

surrounding Iran's role as an oil

instead. The pre-emptive move came in

exporter.

the wake of the US urging its allies to

In sum it appears that while the Middle

scale down on their purchases of Iranian

East may be continue to be the 'bread

crude as part of the foundations for a

basket' of the global oil industry, the

broader scheme of sanctions. In turn

energy risks that come with it will never

this prompted the European Union (EU)

been far behind. Indeed, the risk of a

to ban all oil purchases from Iran.

damaging shock is always just around

However, in knowledge of the fact that

the corner, and the same could be said

the ban would not take full effect before

for a potential spike in prices.

the end of 2012, Tehran acted first to send out a clear political message to the allies. And this message was only ever going to lead to one thing: a spike in prices. Indeed a halt of Iran's oil exports to Organization for Economic Cooperation and Development (OECD) nations could well trigger as much as a 20% to 30% spike in the price of a barrel of oil, according to the International Monetary Fund (IMF).

In fact, helped in part by Iran's dispute with a number of Western nations,

press@oilvoice.com | +44 208 123 2237

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OilVoice Magazine APRIL

Recently Added Companies

Surmont Energy Oil Sands

The OilVoice database has a diverse selection of company profiles, covering new start-up companies through to multi-national groups. Each of these profiles feature key data that allows users to focus on specific information or a full company report that can be accessed online or printed and reviewed later. Start your search today!

Surmont Energy Ltd is a privately held oil sands company founded in 2011 and headquartered in Canada. Their philosophy was built on a foundation of integrity, honesty, scientific principle, creative applications and hard work. http://www.oilvoice.com/Description/caa9ede0.aspx

Grand Gulf Energy Conventional Oil and Gas

Cardinal Midstream Natural Gas

Cardinal Midstream, LLC is a natural gas midstream company focused on providing exceptional customer service in the areas of natural gas gathering, transportation, processing and treating. http://www.oilvoice.com/Description/c38d2148.aspx

Grand Gulf Energy is focused on low-risk, conventional oil and gas plays in Louisiana, Texas and Arkansas, close to existing infrastructure and close to or within existing oil and gas production. http://www.oilvoice.com/Description/1fbd4d90.aspx

Texas Energy Group Crude oil and natural gas

Hawk Exploration Crude Oil and Natural Gas

Hawk is a company engaged in the exploration, development and production of conventional crude oil and natural gas in western Canada and is based in Calgary, Alberta. http://www.oilvoice.com/Description/6d30d596.aspx

Texas Energy Group, LLC (TEG) is an Austin, Texas based oil and gas exploration and development company specializing in bringing industry prospects to the private investor. http://www.oilvoice.com/Description/ad42ced0.aspx

NAL Energy Corp.

Oil and Gas

North Atlantic Drilling Offshore Drilling

North Atlantic Drilling is a leading offshore harsh environment drilling company, aiming to be their customers' most important partner in making oil and gas available in a safe and cost-effective manner. http://www.oilvoice.com/Description/6da6d4b1.aspx

NAL Energy Corporation’s strategy is to deliver total return to its investors which combines income with modest growth in the Canadian upstream oil and gas industry. http://www.oilvoice.com/Description/bc8328cd.aspx

List your business free of charge on OilVoice in a few simple steps.

Oil Refineries Ltd. Oil Refinery

Oil Refineries Ltd. (ORL), located in the bay area of Haifa, is Israel's largest Oil refinery. http://www.oilvoice.com/Description/d47a9540.aspx

press@oilvoice.com | +44 208 123 2237

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OilVoice Magazine APRIL

Hanife Mehmet Contract Jobs Submitted March 01, 2012

increase among local workers. But before this is even considered, oppositional opinion shows that greater

North Sea caught in Scottish independence row

emphasis needs to be given to the

While Independence is very much still on

both propositions are too risky for a

the political agenda concerning Scotland,

decision to be decided upon straight

new fuel to the fire has been added in

away.

Scotland's apparent dependency on separate UK spending. Whatever the outcome, possible consequences from

the form of North Sea Oil. According to claims, Scotland would have been in a much better position compared to the

David Bamford OilEdge

rest of the UK if it's entire North Sea Oil revenue was included in the Scottish government's annual analysis report.

Although the opposition have expressed that this in fact shows that Scotland is too heavily dependent on North Sea oil revenue, many also believe that this could hold the key to exposing Scotland as far more financially sound than the rest of the UK. If Scotland were to gain full control of its share of North Sea oil, it would be worth around 81% of the rest of the UK's North Sea income. Scottish finance secretary, John Swinney stated on the matter: "With responsibility for our own finances and our own vast natural resources, we will be able to make choices in our own best interests…With independence, we would control the fiscal levers we need to suit our own economic circumstances and maximise Scotland's potential to secure new investment and jobs."

If 'full control' was eventually granted to the Scottish Government, it is possible that oil and gas contract jobs could

Submitted March 12, 2012

Insight: The US locomotive gets under way!

A recently released report states that, in total, an estimated 26 billion to 61 billion barrels of economically recoverable oil could be produced in the United States using currently available CO2-EOR technologies and practices, or potentially more than twice the country's proved reserves.

Expanded use of CO2-EOR also can advance the development of infrastructure needed for long-term capture, transportation and storage of carbon emissions.

The US National Enhanced Oil Recovery Initiative (NEORI) was formed to help realize CO2-EOR's full potential as a national energy security, economic and environmental strategy. Organized and staffed by the Center for Climate and Energy Solutions (C2ES) and the Great Plains Institute (GPI), the Initiative

press@oilvoice.com | +44 208 123 2237

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brought together a broad and unusual

way to sustain oil production in

coalition of executives from the electric

otherwise declining oil fields. It works by

power, coal, ethanol, chemical, and oil

injecting CO2 obtained from natural or

and gas industries; state officials,

man-made sources into existing oil fields

legislators and regulators; and

to free up additional crude oil trapped in

environmental and labor

rock formations. In this way, CO2-EOR

representatives.

can significantly extend the lifespan and

A great report is available - I offer just one extract:

revitalize production of mature oil fields in the United States." Exactly!!

'Amidst economic uncertainty, fiscal crisis and political division over energy policy, carbon dioxide enhanced oil

David Bamford OilEdge

recovery (CO2-EOR) offers a safe and

Submitted March 13, 2012

commercially proven method of domestic oil production that can help the United States simultaneously address three urgent national priorities: 

Bakken Formation oil production was

security by reducing dependence

just 1,500 bpd in 2004.

Today, it exceeds 440,000 bpd and is

from unstable and hostile

expected to be 700,000 bpd within the

regimes;

next few years.

Supporting job creation,

Just what is going on there? The longer

increasing tax revenue, and

version of this article is by Tom Smith

reducing our trade deficit by

and can be found in Geoexpro. (Page 52

keeping dollars now spent on oil

or page 50 in the pdf!).

imports here at home and at 

Discovered in the 1950s, North Dakota's

Increasing our nation's energy on foreign oil, often imported



Exploration: The Bakken success story

The Bakken is one of a growing number

work in the U.S. economy; and

of shale formation success stories,

Protecting the environment by

thanks to new, innovative technologies

capturing and storing CO2 from

that make unconventional plays

industrial facilities and power

possible, as well as to the constant quest

plants, while getting more

of the oil and gas companies to find new

American crude from areas

reserves.

already developed for oil and gas production.

A largely unheralded example of American ingenuity, CO2-EOR was pioneered in West Texas in 1972 as a

The increase of Bakken oil production in North Dakota has come within the past five years. In the beginning of 2007, North Dakota had 303 wells producing 12,000 bopd. By early 2009, that number had risen to 904 wells producing

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OilVoice Magazine APRIL

106,000 bopd.

Jump to November of 2011 (the most

While the middle member is the primary reservoir target, all the units shown are

recent date published for North Dakota)

potential reservoir targets, with oil

where 3,118 wells were producing

production from the Three Forks

443,425 bopd.

Formation growing rapidly.

The North Dakota Department of Mineral Resources predicts that oil production from the Bakken and Three

Hanife Mehmet Contract Jobs Submitted March 15, 2012

Forks Formations will exceed 700,000 bpd in the next four to seven years.

North Dakota is not the only area currently with Bakken production.

Neighbouring Montana, where the present oil boom originated (see GEO ExPro Vol. 7, No. 2), has been producing a steady 64,000 boepd. Further north in Canada, production is 75,000 boepd. In total, there are around 5,700 producing wells, with about 2,000 new wells to be drilled this year.

The price of safety in the spotlight again Since the oil spill in the Gulf of Mexico, health and safety has been on every oil and gas professional's lips when engaging with new projects. But perhaps it's a case of lesson not learnt for some UK oil and gas companies according to Green MP, Caroline Lucas.

While UK companies are putting all their efforts into projects concerning Artic Water resources, Lucas has suggested that financial and environmental factors have been put in the side lines. She stated: "There is no reason to believe that that any lessons have been learned from the Deepwater Horizon blowout.

They seem to be shutting their eyes and crossing their fingers that they will not have a spill and it beggars belief that they are not able to tell shareholders how much it would cost to deal with a worst case scenario. Either it has not been done or we were not being told," Shell and Cairn energy have been put in

The Bakken Formation is divided into three informal members and lies between the Three Forks and Lodgepole formations. The upper and lower shale members are world class source rocks.

the firing line for not putting forth pollution information and safety procedures to investors, leaving many in the dark. It may be a case of too little too late, as Cairn have already started

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OilVoice Magazine APRIL

drilling off the coast of Greenland and

were asked by police to leave. When

Shell have proposed to start their drilling

they refused, officers swooped in for the

expedition this coming summer.

arrests.

Shell have defended their lack of safety

The protestors included Martin Luther

information by stating that they had not

King III, NAACP President Ben Jealous,

attached fixed prices to spill clear ups

Enough Project Co-Founder John

due to the fact that the risk was 'very

Prendergast, President of United to End

small'. While the area in question could

Genocide Tom Andrews and four US

open up hundreds of oil and gas contract

Congressmen: Jim McGovern, D-Mass.,

jobs, the battle between safety and

Al Green, D-Texas, Jim Moran, D-Va.,

diving straight in continues between

and John Olver, D-Mass.

green MP's and oil and gas companies continues.

CLOONEY'S EXPERTISE CITED If anyone doubts Clooney's sincerity in protesting on behalf of the beleaguered

Eric Watkins Oil Diplomacy Submitted March 19, 2012

Sudanese people, they need to think again.

The Hollywood actor, nominated for an

Watching World Energy: Showdown in Sudan

Oscar this year, has long been on this

Actor George Clooney, fresh off a visit to

Sorrow, a documentary depicting the

the White House last week, found

horrors perpetrated in the region by al-

himself a guest of another branch of

Bashir's regime.

government a few days later: the US

issue as underscored by his role as producer and narrator of Sand and

Clooney certainly has the respect of US

Secret Service. Along with Clooney, at

leaders, too. Just days before his protest

least eight others were given similar

at the Sudanese embassy, he testified

accommodations, including his father

before the Senate Committee on Foreign

Nick Clooney.

Relations which held a hearing on

They were all arrested after staging a protest at the Sudanese embassy in Washington D.C. Their demand? That

independence and insecurity in Sudan and South Sudan.

Committee Chairman Sen. John Kerry

Sudanese President Omar al-Bashir

introduced Clooney as an actor, but

immediately end his government's

underlined his credentials by referring to

blockade of food and humanitarian aid

him as co-founder - along with John

intended for people in the Nuba

Prendergast - of an important means to

Mountains and Blue Nile regions.

understand events in the region.

After speaking on the steps of the

'They represent the Satellite Sentinel

embassy to hundreds of activists,

Project, which has given us a window in

Clooney along with other activist leaders

to events in Southern Kordofan and Blue

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Nile and elsewhere,' Kerry said, adding that the two had just returned from Sudan. 'So I think today we will have a good opportunity to really get some insights, and we welcome it,' he said.

IT'S ABOUT OIL 'Over the past 20 years, the regime in Khartoum has armed and politicized the northern communities that border Abyei, using them as a battering ram to drive

SUDAN'S SHUTDOWN RAISES US GAS

out residents and ensure control of the

PRICES

area's valuable oilfields,' Clooney and

Quite apart from the humanitarian crisis now brewing in Sudan, Ranking Committee Member Sen. Richard Lugar noted that the impact of the 'bloody fighting' has been brought home to the US in the form of higher gas prices.

'When the comprehensive peace agreement, signed in 2005, finally achieved the separation of South Sudan from the north last July, it was hoped that the petroleum wealth that they share, oil from the south exported through pipelines in the north, would be deemed too precious for either side to forego,' Lugar said.

'Instead, however, oil exports have stopped, putting upward pressures on oil prices globally. Even though the United States imported no oil from Sudan, oil is traded on a world market. So in today's tight oil market, any major loss of supply affects all prices,' he said.

Clooney and Prendergast are highly aware of the role played by oil in the current crisis. Indeed, two years ago, in an Op-Ed for The Washington Post, they were explicit in linking Khartoum's policy of terror to its drive to secure the country's oil.

Prendergast wrote.

They went on to quote Dinka inhabitants of Abyei on their need for the oil that lies underneath their lands: 'We have suffered so much for so long. The oil is a gift for our suffering. We cannot give it away. We just want to feel the winds of freedom.'

The repercussions of the situation in Sudan go far beyond the Dinka, now stretching all the way into the highest levels of international politics as Sudan's oil is mostly exported to China, thirsty for every drop it can find.

Apart from higher gas prices, though, the shutdown of oil production in South Sudan also makes a problem for Washington D.C., given its efforts to get Beijing on board with sanctions against Iran. In the Kerry hearing, Prendergast recognized that point and drew it to everyone's attention.

HIGH ON THE INTERNATIONAL RADAR SCREEN 'To put a fine point on what this moment does present with the cut off of the oil, is that President Obama and President Hu are going to meet very soon,' he said. 'This is a chance to put the issue high on the radar screen of the two leaders.'

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The D.C. protest that saw the arrest of

reduced manning problems, and oil also

one of Hollywood's most famous actors,

enabled refueling at sea - something

along with a host of other activists was

hard to imagine with coal.

not a stunt. Clooney, Prendergast, and

Still, Churchill also knew that there was

all of the others know exactly what is at

something about oil that would make it a

stake.

hard sell with his defense chiefs. 'To

Yes, it's about oil, but oil that will

change the foundation of the navy from

enable the Dinka and other South

British coal to foreign oil was a

Sudanese to feel the winds of freedom.

formidable decision in itself,' he said.

It's also about oil that could spell the difference between war and peace in the Middle East.

VAST OIL TRUSTS 'The oil supplies of the world were in the hands of vast oil trusts under foreign control,' he said. 'To commit the navy

Eric Watkins Oil Diplomacy Submitted March 20, 2012

irrevocably to oil was indeed to take arms against a sea of troubles‌' Nearly a hundred years later, the U.S.

Operational Energy: Fending off a sea of troubles

Department of Defense has come to

Winston Churchill knew what he was

called Operational Energy.

doing when he took the decision to

recognize the same risk in the use of oil that is under foreign control, and it has come to fight it with a new concept 'The newest area of focus for the DoD is

transform Britain's Royal Navy from a

energy - more specifically, renewable

coal-burning fleet to an oil-burning force

energy, and even more specifically,

in the early 1900s. But he also knew the

advanced biofuels,' said Raymond James

risks.

analyst Pavel Molchanov in a note to

'The advantages conferred by liquid fuel were inestimable,' he said, knowing that

investors this week.

'The DoD, however, is actually putting

oil had double the thermal content of

its money where its mouth is in terms of

coal so that boilers could be smaller and

providing tangible support - not just

ships could travel twice as far.

rhetoric - for companies that could

Then, too, oil enabled greater speed and burned with less smoke than coal so that the fleet would not reveal its presence as quickly. Oil also could be

eventually be significant fuel suppliers for the armed forces,' Molchanov said.

STRAIT OF HORMUZ

stored in tanks anywhere, allowing more

'This comes at a time when geopolitical

efficient design of ships.

threats to oil supply abound - including,

Oil could also be transferred through pipes without reliance on stokers, which

but by no means limited to, Iran's threat to shut down the Strait of Hormuz,' he

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OilVoice Magazine APRIL

said, echoing an idea Churchill would

from the ship's homeport in Everett,

have understood.

Wash., to San Diego, Calif., using

If anyone would know about Churchill's

'25,000 gallons of a 50/50 algae-

sea of troubles, it would be the U.S.

derived, hydro-processed algal oil and

Navy, which reaches around the globe to

petroleum F-76 blend in the ships LM

every hotspot imaginable. It certainly

2500 gas turbines.'

has accepted the idea that energy is a strategic resource and that energy security is fundamental to its mission.

'From a strategic perspective, the

THUMBS UP TO F-76 According to Richard Leung, Naval Sea Systems Command Navy Fuels

objective is to reduce reliance on fossil

engineering manager, the biofuel was

fuels,' the Navy says. 'Tactically, the

virtually indistinguishable from ordinary

objective is to use energy sources

marine diesel.

available on location and increase

'The crew reported no change in their

energy efficiency to reduce the volatility

typical procedures when receiving,

that is often associated with long fuel

handling, or processing the biofuel, and

supply transport lines.'

said operational performance of the fuel

As far as renewables go, the US Navy

system and gas turbine engines on the

has a clear plan in mind: By 2020, 50%

blend was almost identical to operations

of its total energy consumption will come

on traditional F-76,' Leung said.

from alternative sources.

According to Molchanov, several firms

For the U.S. Navy, the tide is turning.

Its transition away from petroleum

are involved in the effort to step up

marks the end of an era, but one that

production of biofuels for the Navy,

makes sense - especially with demand

including Solazyme, which produces

rising and supplies concentrated in the

algae-based oils, and Syntroleum, which

hands of ever fewer producers. Where's

produces biodiesel.

the security in that?

ORDERING BIOFUELS In 2009, the Navy ordered 20,000 gallons of Solazyme's HRF-76 Naval Distillate, the renewable equivalent of the Navy's main shipboard fuel, and another 150,000 gallons a year later.

The June 2011 test flight of the MH-60S Seahawk helicopter, using a 50% biofuel blend, involved the first-ever military aircraft to fly with algae-based jet fuel.

Earlier this month, the Navy announced that the USS Ford successfully transited

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16

OilVoice Magazine APRIL

David Bamford OilEdge Submitted March 20, 2012

Exploration: What's happening in the Arctic?

Spring and summer approaches and

challenging frontier the oil & gas industry has faced whether we consider how to explore and develop in the ice, the costs involved, the environmental risks, the rights and needs of indigenous peoples.

I recommend a couple of Geoexpro

the shoots of oil & gas activity in the

articles to you: one by myself and

Arctic are showing through! How

another by Jane Whaley

'green' are they?

As mentioned in an earlier article, the Norwegian sector of the Barents Sea is attracting a lot of interest and just

Hanife Mehmet Contract Jobs

recently it was reported that

Submitted March 22, 2012

development drilling is scheduled to begin this month from the first permanent offshore platform in the Russian Arctic. Over 500 workers are currently preparing the platform, towed from Murmansk in August of last year, for drilling, deferred from last September. The platform is located in the eastern Pechora Sea, and is 90% surrounded by ice.

Shell is putting into place plans for exploration drilling in the Alaskan Arctic including taking what many regard as 'pre-emptive' legal action to prevent their operations being disrupted by protests.

And Cairn Energy is attempting to farmdown its circa 80,000 sq km net West Greenland acreage position after a disappointing 2011 drilling campaign which has resulted in them writing off just shy of US$950m.

So the Arctic is beginning to acquire the characteristics of routine exploration activity - and yet the area is far from routine, indeed is probably the most

2012 Budget pushes drilling to next level Many things were expected to come from the 2012 budget announcement yesterday thanks to circulating rumours and hints from Government officials.

However, one factor that came of the Budget run-down has come as a shock to some people, mainly green campaigners.

This is due to an announcement that will see a ÂŁ3bn tax break from George Osborne to assist BP and other major companies commence new drilling off the north shore of Scotland. Although this has the potential to spark fresh investment into the area, creating hundreds of oil and gas jobs, campaigners argue that new expeditions are too risky, especially following the Gulf of Mexico spill two years ago.

The Chancellor stated on the issue: "We will end the uncertainty over decommissioning tax relief that has hung over the industry for years by

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17

OilVoice Magazine APRIL

entering into a contractual approach ...

inhibit the ability to produce some of it,'

We are also introducing new allowances

said Robert Hormats, U.S.

including a ÂŁ3bn new field allowance for

undersecretary of state for economic

large and deep fields to open up west of

growth, energy and the environment.

Shetland, the last area of the basin left to be developed."

The voice of campaigners is likely to be

Hormats' remarks came after the Philippines said that it has the right to invite foreign companies to explore for

drowned out by the Government and the

oil and gas in waters located between its

UK oil and gas industry alike, who both

western coast and the South China Sea -

view the tax break as the beginning of a

remarks dismissive of China's own

more sustainable oil and gas industry in

claims.

Britain. Derek Leith from Ernst & Young

'It is illegal for any country, government

in Aberdeen commented following the

or company, without the Chinese

2012 Budget announcement: "We see

government's permission, to develop oil

today's action by the Treasury as a

and natural gas in waters under Chinese

turning point for the UK's oil and gas

jurisdiction,' said Chinese foreign

industry - towards a more stable future

ministry spokesman Hong Lei.

fostered by constructive collaboration between the government and industry to

EXPLORATION ANNOUNCED

ensure that the recovery of the country's

The dispute arose after the Philippines'

oil and gas resource is maximised."

Energy Secretary Jose Almendras announced that his country had invited international oil companies to explore for oil and gas offshore Palawan province in

Eric Watkins Oil Diplomacy Submitted March 22, 2012

Watching World Energy: Turmoil in the South China Sea Even as world attention is mesmerized with the Strait of Hormuz, worrisome problems are now arising in the South China Sea, a region along the allimportant energy sea lane of communication out to Asia Pacific.

'You have this conundrum of a region that needs energy and yet has a lot of territorial disputes or gray areas that

two areas that fall within the country's 200-mile exclusive economic zone.

Palawan province faces the South China Sea, which is claimed entirely by China.

But other nations in the region, including the Philippines, Brunei, Malaysia, Taiwan and Vietnam, have competing claims of their own.

Claims over portions of the sea can have immense bearing on ownership of any oil or gas that lies under the region's waters, according to the U.S. Energy Information Administration. But no one knows for sure just how much oil and gas is actually there.

According to EIA, one Chinese estimate

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OilVoice Magazine APRIL

suggests potential oil resources as high

region, with President Barack Obama

as 213 billion barrels of oil (bbl), but EIA

announcing in January that Asia Pacific is

also mentions a 1993/1994 estimate by

now his country's top priority in terms of

the U.S. Geological Survey which put

global defence.

reserves at just 28 billion bbl.

EVIDENCE QUESTIONED

That view was underlined in early March

by Admiral Robert Willard, head of the U.S. Pacific Command, who said that the

EIA notes speculation that the Spratly

America's military must be present in

Islands could be an untapped oil-bearing

the South China Sea.

province, but it said that, 'There is little

China was less confrontational in 2011

evidence outside of Chinese claims to

in asserting its claims in the South China

support the view that the region

Sea than it was in 2010, Willard told the

contains substantial oil resources.'

Senate Armed Services Committee.

Of course, there is only one way to find

But Willard also noted that China

out and that is to explore, explore,

continues to challenge vessels

explore. The problem, though, is that

conducting oil and gas exploration within

overlapping claims to the region are

space that it claims as its own. In a

hindering exploration.

word, he said, 'They remain aggressive.'

That was certainly true a year ago when two Chinese vessels threatened to ram

LITMUS TEST

the Veritas Voyager, a survey ship hired

Just how aggressive they will remain is

by U.K.-based Forum Energy PLC.

yet to be determined, perhaps by U.S.

The Philippines government dispatched

plans for war games in April with the

a surveillance plane, patrol ships and

Philippine navy near Reed Bank - war

light attack aircraft to the disputed area,

games that one analyst suggests will be

known as Reed Bank. By then, though,

viewed by China as provocative.

the Chinese vessels had vanished and

'This will be a litmus test of where China

Forum decided to suspend its exploration

stands on the South China Sea issue,'

activities.

said Ian Storey, a fellow at the

Now, a year on, Forum Energy apparently is planning to return to Reed Bank, aiming to drill its first well for oil

Singapore Institute of Southeast Asian Studies.

According to Storey, the Chinese 'could

and natural gas, an event that some

adopt the same tactics as they did last

analysts say could spark a military crisis

year and harass the drilling vessels, or

if China responds more aggressively

they might even take a stronger line

than it did last year.

against them and send in warships.'

TOP PRIORITY Still, that year has seen a significant change in the posture of the U.S. in the

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OilVoice Magazine APRIL

Eric Watkins Oil Diplomacy Submitted March 23, 2012

East Asia's markets - including Japan.

No less important, Okinawa lies near the trajectory of North Korea's planned

Watching World Energy: Rattling the supply chain

missile launch next month. Indeed, on

Does North Korea's threat to launch a

would be heading in a southerly

ballistic missile next month have

direction so as to avoid the Japanese

anything to do the global oil industry? If

mainland.

you believe not, I'll sell you the Empire State Building or the Egyptian pyramids.

Does that phrase ring a bell? It should.

announcing the launch, the North Koreans pointedly said their rocket

'A safe flight orbit has been chosen so that carrier rocket debris to be generated during the flight would not

It was uttered just a few days ago by

have any impact on neighboring

Saudi Arabia's indefatigable Oil Minister

countries,' the North's news agency said.

Ali I. Al-Naimi who was dismissing Iran's

The Kwangmyongsong-3, designed as a

threats to close the Strait of Hormuz as

'polar-orbiting earth observation

bluster.

satellite,' will be launched from a station

Along the way, though, the minister

in the northwestern corner of the

also mentioned an interesting point

country, bordering China, and blasted in

about Saudi oil storage tanks: 'Our

a southern direction, North Korea said.

inventories both in Saudi Arabia and

However, the Japanese are so

worldwide are full. Our Rotterdam

concerned about the trajectory crossing

inventory is full, Sidi Kerir is full,

Okinawa that they have plans to shoot

Okinawa is full. 100% full. 10 million

down the North Korean missile, if

barrels in total, I think.'

necessary.

'The reason we have them there, is that they are near the market. And I will give

JAPAN DEPLOYS INTERCEPTORS

you an example,' Al-Naimi said. 'Two

'I have ordered officials to prepare to

weeks ago the Chinese needed about 1.5

deploy the PAC-3 and Aegis warships,'

million barrels on a rush basis. It is the

said Japan's Defense Minister Naoki

first cargo we sold from Okinawa,

Tanaka, referring to surface-to-air

because it is near the market.'

missiles and destroyers carrying

NEAR THE MARKET

missiles.

'We are talking to relevant local

Okinawa is indeed near the oil market,

governments about the deployment,' he

and it is also a terminus for the very

added, as the surface-to-air interceptors

large crude carriers that ply the supply

are likely to be deployed on Okinawa

chain that stretches from the Persian

and its island chain.

Gulf, across the Indian Ocean, through

The North Korean missile launch also is

the Strait of Malacca and northward to

Pyongyang's way of thumbing its nose at

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OilVoice Magazine APRIL

the March 26-27 Nuclear Security

Halfdan Carstens GeoExpro

Summit to be held across the 38th

Submitted March 23, 2012

Parallel in South Korea.

Leaders and representatives from 57 countries and international organizations are scheduled to attend the summit, where protection of nuclear facilities and

Exploration: Arctic Gas Hydrates - a stupendous gas resource!

steps to tackle nuclear terrorist threats

The Arctic contains huge volumes of

are high on the agenda.

conventional oil and gas, but if we also

What else can North Korea's planned

include non-conventional hydrocarbons -

launch be called except a nuclear

such as gas hydrate - the Arctic may be

terrorist threat? And it is a threat aimed

a source of energy for centuries to

at the world's main oil supply line, with

come.

its terminus in Japan.

POINT-COUNTER-POINT Does this have anything to do with the Iranian situation?

Call it point-counter-point: as the U.S.

Arctic Alaska and Arctic Russia are two established petroleum provinces that have already produced vast volumes of oil and gas.

In addition, the USGS has concluded that some 400 Bboe, including 90 Bb of

and its allies apply pressure to Iran at

oil, have yet to be discovered in the

one end of the supply chain, North Korea

Arctic. That amounts to 25% of the

is rattling its nuclear capability at the

undiscovered resources worldwide as

other end. And nothing could make the

judged by the same experts. The

need to encourage Iran to abandon its

Russians, on the other hand, claim that

nuclear ambitions more clear.

as much as 58% of the world's

Who wishes to see both ends of the

undiscovered oil and gas belong to the

world's main oil supply line in the hands

Arctic. As a comparison, the annual

of enemies holding nuclear weapons

world oil production is about 30Bbo.

along with the ability to deliver them

For oil, five basins stand out in the

thousands of miles? If you think oil

USGS assessment: Arctic Alaska, the

prices are high now, just imagine how

Amerasia Basin, East Greenland Rift

much higher they'd go then.

Basins, the East Barents Basins and

That would really make the markets go ballistic.

West Greenland-East Canada, while three basins account for most of the undiscovered gas: the West Siberian Basin, the East Barents Basins and Arctic Alaska. If we combine oil and gas and convert to oil equivalents, it turns out that the West Siberian Basin alone may contain 30% of the Arctic oil and gas to

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21

OilVoice Magazine APRIL

be found. It is worthwhile to keep in

spatially associated with petroleum,'

mind that almost all of the Arctic

according to Michael Max of Hydrate

resources (84%) are expected to found

Energy International speaking at the

offshore and in water depths less than

Arctic Frontiers conference. 'What

500m.

matters is the volume of gas hydrates

These numbers, however, are dwarfed

accumulated in sand sediments. Even if

when we include gas hydrates. While the

a small fraction of the energy contained

figures for unconventional resources

in natural gas hydrates can be

definitely are more speculative than for

commercially produced, it could

conventional oil and gas, there is reason

substantially increase the volume of

to believe that there may be enough gas

clean-burning natural gas and improve

around the Arctic to keep the

global energy security by reducing

hydrocarbon economy going for several

imports,' said Andersen.

centuries.

While the US consumes about 125 Tcfg

'Peak oil' takes a different meaning

a year, the Arctic may on its own contain

when we look at resources from that

some 6,000 Tcf, according Michael Max.

perspective.

'The energy content of methane

But, beware, that is not to be looked upon as 'reserves'! We are talking about

occurring in hydrate form is immense,

highly speculative, undiscovered

possibly exceeding the combined energy

resources.

content of all other known fossil fuels,' said Espen Andersen of Statoil at the Arctic Frontiers conference in Tromsø, Norway, in January. Gas hydrate is a

Richard Etherington OilEdge

solid, crystalline material formed from

Submitted March 28, 2012

natural gas (mainly methane) and water. 1 m3 of hydrate contains about 164 m3 gas (at STP). Gas hydrate occurs on land in permafrost regions and

Review: Is the oil industry of Brazil progressing?

in oceanic sediments in Gas Hydrate

When you think of the Latin American oil

Stability Zones (GHSZ), ocean

industry, you immediately think of

continental slopes and deep continental

Brazil. And rightfully so.

shelves. Gas hydrate will be stable in the

The nation already leads the pack in the

very cold Arctic Ocean sediments from

region and it will only continue to

depths as shallow about 350m.

cement its position at the top over the

'Gas hydrate is an environmentally

coming years. Indeed thanks to the

secure resource in an environmentally

industry's strong fundamentals in Brazil,

fragile area like the Arctic region. It is a

it is very easy to be bullish on the

thermodynamically stable solid in its

outlook for the industry. So much so in

natural environment and is unlikely to be

fact that upon his visit to Brazil last

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22

OilVoice Magazine APRIL

year, US premier Barack Obama paid

Petrobras remains the undisputed leader

homage to the country's strong offshore

of Brazil's lucrative oil sector.

potential and made moves to put the US

So if the country's strong fundamentals

at the front of the queue for exports

were not enough to convince you, then

stating that 'when you are ready to start

this will be: Brazil is rich in subsalt, and

selling, we want to be one of your best

the rush for it has only just begun. The

customers.'

discovery of billions of barrels of oil in

On a macroeconomic level, the BRIC

the subsalt oil province in Brazil's

nation has enjoyed rapid economic

offshore territory has the potential to

growth over recent years and this is

take Brazil's domestic oil industry to a

appears unlikely to change anytime

whole new level - and the local

soon. This year-on-year growth will

government has already realised this.

likely serve to continue to push demand

Former president Lula de Silva made

for oil from domestic consumers higher

several regulatory reforms that placed

still. The likely result? Rising demand for

the responsibility for developing these

fuel will force Brazil's hand to expand its

untold reserves at the door of the state-

refining base further still.

backed operator. Foreign operators will,

Simultaneously, the continued growth in

however, have the opportunity to play

production output is widely forecast to

their part. In fact Statoil - Norway's

continue over the near, medium and

national oil firm - has already shown

long-term, as a combination of new

interest on muscling its way into the

projects come on stream and production

equation, via the potential takeover of

levels at existing projects are sent rising

the assets of a firm with a strong subsalt

higher.

portfolio, independent player Anadarko

Although the outlook is largely positive,

Petroleum. The US-based firm is

this is not to say that there will not be

presently in the process of withdrawing

bumps along the way. A poor 2011 for

from the upstream segment of South

state-run giant Petrobras has already

America's leading economy.

brought some concerns to the forefront

The potential of the subsalt sector is

of the industry's consciousness. Last

vast, but nobody yet knows to quite

month, the industry behemoth

what degree. Importantly for the local oil

announced its results for the fourth

industry, however, the government and

quarter of 2011 and they were not

Petrobras appear to have a good handle

pretty: profits were down by 52% year-

of things from the outset - which bodes

on-year and production levels were

well for the nation's rising role as a

depleted also. The firm's problems were

global energy and oil industry leader in

then compounded by leading Brazilian

the coming years.

lender Banco Bradesco downgraded its rating for the firm. All that said,

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OilVoice Magazine APRIL

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OilVoice Magazine APRIL

Richard Etherington OilEdge Submitted March 28, 2012

expenditure programme, valued at around US$225 billion over five years.

The recent change at the helm, which

Review: Can Petrobras deliver?

saw Maria das Graca Foster become the

Acting Local But Thinking Global?

consistency to Petrobras. Indeed in her

State-run Petr贸leo Brasileiro - or

company's new Chief Executive Officer, should serve to bring in an era of first press conference, the new CEO

Petrobras as it is more commonly known

stressed a policy of continuity, with the

- is widely regarded as a world leader in

firm's investment plans and production

deepwater exploration. The industry

targets for 2012 likely to remain

giant controls virtually all upstream oil

unchanged.

and gas production in Brazil, as well as

Without doubt, the Petrobras story is

dominating exploration activity.

one of continued growth. This is not to

Furthermore, the Rio de Janeiro-based

say, however, that the energy giant has

firm owns most of Brazil's refining

not encountered problems along the

capacity. Quite simply, the South

way. More recently, the firm has begun

American company is a giant.

struggling on a financial level. 2011 saw

Already a leading player in Latin

the firm's shares slump by 17% during

America, Petrobras has big aspirations:

the twelve-month period,

by the end of the decade, the firm hopes

underperforming the 1.2% drop in the

to have become one of the world's five

Bovespa benchmark index - according to

largest energy players - and with the

Bloomberg. At the same time, the

right management and strategy, this is

company posted worse-than-expected

not an unrealistic possibility. This will,

fourth quarter results in 2011, with net

however, require plenty of hard work:

profit more than halved from a year

the company has forecast that it will

earlier as a result of the firm's

more than double production to 6.4

downstream operations weighing on its

million barrels of oil per day (bpd) by the

performance.

year 2020.

Although the firm is 54% government

Perhaps even more concerning however, is the fact that Petrobras has

owned (including voting rights) and is

failed to meet its own production targets

decreed to adhere to state energy policy,

for the best part of three years now. At

Petrobras remains autonomous in many

the end of last year, the firm's global

ways. Most notably the firm is keen to

production level stood at 2.72 million

remind investors that it maintains

bpd - lower than it was twelve months

control over a large share of its

prior. This certainly does not bode well

operations and its finances - which is

for the company's ability to lift its global

significant given that Petrobras boasts

production levels in the near-term.

the world's largest corporate capital

But there is some hope: back in

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OilVoice Magazine APRIL

October, the company was pleased to report the successful drilling of six wildcat wells in the Espirito Santo Basin.

This has effectively served to unlock a new oil province, with a resource base reported to be up to 5.4 billion barrels, with further upside potential from two

Eric Watkins Oil Diplomacy Submitted March 29, 2012

Watching World Energy: Crossing swords in the Gulf

nearing exploration areas in the same

Saudi Arabia's Oil Minister Ali I. Al-Naimi

basin. It remains to be seen, however, if

has been at pains in recent weeks to

even such projects will help to stem the

underline his country's desire to see

rot and see Petrobras' global production

lower oil prices, this week in an editorial

return back to being positive anytime

for the Financial Times.

soon.

Significantly, Petrobras' poor

'High international oil prices are bad news. Bad for Europe, bad for the US,

performance on both an economic and

bad for emerging economies and bad for

production front have come at a crucial

the world's poorest nations,' Al-Naimi

time for the fast-growing Brazilian

said, and few would take issue with that.

economy. As a result, demand for petrol

But he also insists that 'a period of

is soaring. So at a time when Petrobras'

prolonged high prices is bad for all oil

domestic refining capacity is strained,

producing nations, including Saudi

the government has thrown in the towel

Arabia, and they are bad news for the

to some extent and has started

energy industry more widely.'

importing fuel at higher global market

Behind that remark is much of Saudi

rates to meet the heightened level of

Arabia's philosophy when it comes to oil

demand.

- its most precious commodity. Indeed,

To cut a long story short, Brazil, with

with upwards of 260 billion barrels of oil

Petrobras as its vehicle for reaching its

still in the ground, Saudi Arabia has the

energy goals, remains a long way off

world's largest reserves.

energy self-sufficiency.

MONEY SPINNER As a result, the Saudis are looking to have their oil be a money spinner for years to come. Assuming they produced 10 million barrels per day, 365 days a year, the Saudis would produce about 3.65 billion barrels a year.

At that hypothetical rate, they have around 80 years of production left assuming they discover no new reserves

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27

OilVoice Magazine APRIL

and assuming they stay at 10 million

balanced,' he says. 'It is the perceived

barrels a day. Does anything sound

potential shortage of oil keeping prices

more like money in the ground than

high - not the reality on the ground.

that? Wouldn't anyone like to keep it

There is no lack of supply. There is no

that way?

demand which cannot be met. Total

Keeping it that way is exactly what the

commercial stocks for OECD nations are

Saudis want and that is why they always

within target, and there is at least 57

aim for moderation in pricing. They

days forward cover, enough to handle

know, and know only too well, that high

almost any eventuality.'

prices are an invitation for consumers to

Can the Iranians close Hormuz? No. Can

seek cheaper sources of supply or, for

the Saudis make up for Iran's sanctioned

that matter, cheaper forms of energy.

oil? Yes.

That's why Al-Naimi says that, 'The

Here is a man who knows the score,

bottom line is that Saudi Arabia would

and it is summed up in that wonderful

like to see a lower price.' And his

distinction he makes between a

explanation makes perfect sense, too.

perceived shortage and a real one. That

'It would like to see a fair and

is the distinction on which so much of

reasonable price that will not hurt the

today's trading turns: not on whether

global economic recovery, especially in

there is an actual disruption of supply

emerging and developing countries, that

but on whether there could be one.

will generate a good return for producing nations, and that will attract greater investment in the oil industry.'

SLIGHT UNCERTAINTY Al-Naimi acknowledges that there is enough oil on hand and in storage to

FINANCIAL INCENTIVE In a word, a moderate price keeps everyone happy, and productive. Most of all, it is in the interest of oil producers such as Saudi Arabia to keep exploring and producing oil: they have a financial incentive to keep their industry going.

Doesn't that make sense, too?

So, what's with high prices these days?

Al-Naimi concedes that, 'geopolitical tensions in the region, and concerns over supply, are helping to keep prices high.' That's short-hand for what we all know: the current troubles with Iran.

'Yet fundamentally the market remains

handle 'almost any eventuality.' And it is that slight uncertainty which is driving the market: what if‌ what if‌ what if?

People are betting, and they do not want to bet the wrong way. Too much is at stake.

But the bet is still on a perception, a possibility.

Against that, Al-Naimi offers a lifetime of experience in his country's oil industry. He started out as an Aramco office boy, don't forget, and he has risen in its ranks over the course of a lifetime.

If there's something about the oil business he doesn't know, then it probably is not worth knowing.

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OilVoice Magazine APRIL

In a word, Al-Naimi is letting us know

excellence, too diplomatic perhaps to be

that those who bet on the possibility of

so pointedly clear in the purpose of

something going wrong - of some

pumping more oil to achieve lower

hypothetical demand not being met - are

prices. In the long run, it is certainly to

betting against the proven realities of

preserve his country's market share. But

the oil trade over decades.

for the immediate future, it is to support

As he says: 'We want to correct the myth that there is, or could be, a shortage. It is an irrational fear, a fear without basis.' And so it is.

the international effort to thwart Iran's nuclear ambitions.

The Saudis know how to use the oil weapon, too.

But there is something else that AlNaimi is not disclosing: that it is in the interest of Iran to create and play on the possibility of supply shortages precisely in order to drive prices higher and

Hanife Mehmet Contract Jobs Submitted March 29, 2012

higher. This is a new use of the oil weapon, and the Iranians are adept at it.

Kenya hits oil

CROSSING SWORDS WITH IRAN

This week, Kenyan officials reported that

In their efforts to keep world oil prices reasonable, the Saudis are crossing swords with Iran or, if you will, oil weapons. And why should they not? A nuclear Iran standing just across the Gulf is the last thing the Saudis want to see - and they are not alone in that.

Saudi Arabia is doing its level best to keep oil prices low as part of the international effort to thwart Iran's nuclear ambitions. Lower oil prices means less income for Iran and its effort to acquire nuclear weapons.

Saudi Arabia is also pumping more oil than it has in decades. The reason for that is clear, too. More Saudi oil means a diversity of supply, and that means more choice for countries that want to stop buying Iran's oil in support of the sanctions regime.

Al-Naimi is an oil diplomatist par

oil had been found in the country for the first time. Tullow Oil Plc came across the find in the North Kenya and is now in the process of discovering the commercial value and validity of the discovery.

President Mwai Kibaki stated: "This is the first time Kenya has made such a discovery and it is very good news‌It is, however, the beginning of a long journey to make our country an oil producer, which typically takes in excess of three years."

Although establishing Kenya as a progressive oil provider to the world may be a tedious journey, the opportunities and oil and gas contract jobs it could open are undeniably bountiful.

Kenyan energy officials and Tullow Oil Plc have both adamantly expressed that the find is to benefit the Kenyan public.

This may be in order to deter fears

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OilVoice Magazine APRIL

realised in other countries where oil has

technology. In the meantime, the

been found but not used to help the

company remains committed to

home economy.

investment in research and development

Kenya's energy minister Kiraitu Murungi

in order to maintain their competitive

stated:'We will make sure that the oil in

advantage. No matter what your game

Kenya is a blessing for the people of

is, the prospects for doing business with

Kenya and not a curse"

Petrobras have never been better.

2. Know who you're dealing with: Petrobras is Brazil's pride and joy as

Camilo MuĂąoz Translation Source Submitted March 29, 2012

Doing Business with Petrobras: How to score a goal Doing business with Petrobras, Brazil's largest oil company, may seem intimidating but opportunities abound in this ever-expanding company. Before you throw yourself in the game, take a look at our 7 unknown tips to optimize your relationship with Petrobras.

proved by former Brazilian President Lula who once said 'If Petrobras were a woman, it would be the one that all mothers would like their sons to be married to.' Boasting $70billion in the last five years, business is booming and the company has a lot to be optimistic about as the newly appointed CEO Maria das Graças Foster brings a new perspective to the company. Nicknamed 'the Iron Lady of Oil' this self-made woman rose from one Rio's favelas to become the first woman to head Petrobras, the largest company in South

1. Know the prospects:

America.

Petrobras' made history in 2006 with

3. Learn what they're looking for:

their huge discovery of pre-salt and a conservative estimate projects that reserves will double thanks to broad access to new reserves. Exploration in Brazilian sedimentary basins show incredible hydrocarbon potential and deep-water discoveries in Brazil make up 1/3 of global discoveries from 20052010. This planned expansion means many new refineries as well as critical resources and equipment will be required and US$4.6 billion has been set aside for investment in cutting-edge

Petrobras employees are loyal to their company and applaud the many professional development and learning opportunities offered at Brazil's oil giant.

Petrobras prides itself in its constant search for improvement, excellence, and profitability allied with social and environmental responsibility. If you want to do business with Petrobras, you will need to show that you are playing the same game, which brings us to our next tip.

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4. Avoid Foul Play: Many of our oil and gas translation clients have found that Petrobras is truly committed to social and environmental responsibility; this is reflected in their long-term business strategy. Terms such as 'corporate citizenship' and 'sustainable development' have been prevalent in Brazilian consumer society for years and Brazil is on the cutting edge of innovating and implementing new procedures that keep up with global environmental protection standards.

Petrobras states explicitly that it works towards 'managing the potential impacts of its activities and projects geared to the protection of endangered areas and species'. They've set the bar high so if you have hopes of doing business with Petrobras, you'll need to show them that are able to keep up in areas of environmental protection.

5. Develop an entry strategy: It is said that business in Brazil is based on personal relationships but when it

or bid package to even be considered.

Petrobras establishes a straightforward but complex bidding process and invitations aren't always broadcast so it can be difficult to spot the upcoming opportunities. Experts such as oil and gas translators may make the process run smoother for you and a partnership with a local company will also help you score the bid.

7. Move Forward: After you've landed the contract with this multi-billion dollar oil company, you'll have much to celebrate but before you sit back and enjoy the caipirinhas, you'll first want to ensure that your partnership is successful and will lead to future collaborations. The best advice out there is 'don't go it alone.' Pair up with local experts that can help you with international staffing, local tax and labour laws, as well as Portuguese language services to assure that your business with Petrobras is communicated effectively.

comes to doing business with Petrobras, it's going to take more than a contact to get your foot in the door. An organized, clear cut business plan is a must since the company has strict requirements on procurement and procedures.

Eric Watkins Oil Diplomacy Submitted March 30, 2012

6. Play by Their Rules:

Watching World Energy: A double whammy on Iran

If you want to be successful in doing

If Tehran thought it was going to evade

business with Petrobras, you can't ignore

U.S. and E.U. sanctions by using its own

their ground rules. Your product or

Islamic Republic of Iran Shipping Lines

service must be fully qualified and you

(IRISL) or Yas Air cargo lines, it has

will need to develop a complete proposal

been sadly disappointed.

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Washington imposed more sanctions on IRISL this week due to its connections

around the globe under a variety of guises all aimed at bypassing sanctions.

with the Islamic Revolutionary Guard Corps. It said IRISL has 'played a key

'Despite the sanctions 130 of the 144

role' in Iran's efforts to advance its

banned ships in IRISL's fleet continue to

missile programs and transport other

call at many of the world's major ports

military cargoes.

hidden behind a web of shell companies

'The IRGC has continued to expand its

and diverse ownership,' the report said,

control over the Iranian economy - in

naming Malta as a place where the

particular in the defense production,

Iranians can play those shell games.

construction, and oil and gas industries,' it said - a reminder that Iran's Oil

'Despite being a member of the

Minister Rostam Qasemi is a Brigadier

European Union, Malta not only supplies

General in the IRGC.

flagging services to IRISL ships, but is

The US Department of the Treasury also

also home to 24 shell companies that

designated two IRISL front companies

help conceal Iran's ownership of

based in Malta: Modality Limited and

vessels,' the report said.

Malship Shipping Agency Ltd. It said that the companies are owned by Mansour

PAPER TRAIL

Eslami, an IRISL executive.

In the Grand Harbor of Malta, Transport PRIOR DESIGNATION

Malta earns around 300,000 euros annually from registering IRISL ships,

It said that Eslami had already been

according to an estimate by Reuters

designated in October 2010 for his role

based on a table of tariffs on the

as director of an IRISL subsidiary, IRISL

agency's website.

(Malta) Ltd., and for his co-management

Transport Malta also is home to the

of several IRISL-affiliated holding

country's public shipping register, the

companies.

location of the paper trail of Iran's shell games, as well as evidence of those who

Two IRISL employees were also designated this week including a senior

have worked for the country.

As sanctions have tightened, the

IRISL legal advisor, Seyed Alaeddin

Maltese register shows that Iran's ships

Sadat Rasool, and Ali Ezati, IRISL's

have regularly switched not just flags,

Strategic Planning and Public Affairs

but names, registered owners,

Manager.

registered agents, and the addresses of owners and agents.

The announcement of new sanctions

The IRISL announcement came just a

follows a media report last month that

day after another one designating the

claimed IRISL has continued to operate

Iranian cargo airline, Yas Air; Behineh

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OilVoice Magazine APRIL

Trading; three Iranian Islamic

Behineh Trading, the shipping company,

Revolutionary Guard Corps-Qods Force

and the Nigerian agent designated today

(IRGC-QF) officials; and one Nigerian

were involved in a weapons shipment

shipping agent for acting for or on behalf

seized in Nigeria in late October 2010.

of, or providing support to, the IRGC-QF. 'The airline, the trading company and

'This weapons shipment - orchestrated by the IRGC-QF and intended for The

the IRGC-QF officials were involved,

Gambia - is part of a larger pattern of

respectively, in shipments of weapons to

Iranian lethal aid shipments to clients in

the Levant and Africa, further

Africa and around the world,' the

demonstrating Iran's determination to

announcement said.

evade international sanctions and export violence and instability throughout the Middle East and beyond,' the Treasury said.

COVERT ARMS TRADE It said the Tehran-based Yas Air is an Iranian cargo airline that acts for or on behalf of the IRGC-QF to transport illicit cargo - including weapons - to Iran's clients in the Levant. In particular, it said, Yas Air has moved IRGC-QF personnel and weapons 'under the cover of humanitarian aid.'

According to the announcement, IRGCQF officials oversaw and authorized actions taken by Yas Air that involved a series of flights carrying weapons destined for Syria and worked with Hizballah and Syrian officials to ensure passage of the illicit cargo.

It said that a Turkish inspection of one of the Yas Air flights bound for Syria which listed 'auto spare parts' on its cargo manifest - found weapons including Kalashnikov AK-47 assault rifles, machine guns, nearly 8,000 rounds of ammunition, and an assortment of mortar shells.

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