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! At OilVoice we've always experimented with different ways to deliver oil and gas news. Back in 2002 when the term 'RSS' was relatively unknown, we rolled out dozens of feeds for our users to subscribe to. That service is now used on a daily basis by thousands of people. When Twitter was still a baby we signed up and started delivering all our headlines out to the world , not knowing if the service would take off or not. Today, 2000 people receive our 40+ tweets a day. And finally, with the PC losing ground to tablets, we recently announced OilEarth.com - an iPad friendly site that presents headlines in a whole new way. We never stop innovating, and keeping abreast of all the latest technologies is something we enjoy doing. Our latest contribution to the industry is the magazine you are reading now. Available in electronic format only, we hope you find it a great read. By analysing the pageview statistics on OilVoice we can see what articles are drawing interest from the oil and gas community. Those are then harvested for the magazine. All killer, no filler - as they say. Special thanks must be made to the authors who have contributed the fantastic content inside OilVoice Magazine. We're lucky enough to have contributions from the top writers in the business, and it goes without saying that if you like what you read, then please visit their website and see what else they have to say. We'd love to hear from you too, so if you'd like to have an article appear in the next edition, then please get in touch.
Tel: +44 208 123 2237 Email: press@oilvoice.com Skype: oilvoicetalk Editor James Allen Email: james@oilvoice.com Advertising/Sponsorship Adam Marmaras Email: adam@oilvoice.com Tel: +44 208 123 2237 Social Network Facebook: https://www.facebook.com/oilvoice
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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
9
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
17
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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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.
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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,
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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
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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
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OilVoice Magazine APRIL
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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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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Health, Safety, Environment and Risk Management RPS Energy is a global multi-disciplinary consultancy, providing integrated technical, commercial and project management support services in the fields of geoscience, engineering and HS&E.
Contact James Blanchard T +44 (0) 20 7280 3200 E BlanchardJ@rpsgroup.com
rpsgroup.com/energy
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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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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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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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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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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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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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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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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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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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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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OilVoice Magazine APRIL
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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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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