Friday, December 31, 2010

Happy New Year 2011!

Here's wishing all my readers all the Best and a Happy New Year. See You in the New Year 2011.



An oil rig near Takoradi Port in Ghana, about 40 miles (65 km) from Jubilee field, which has just begun producing oil. [See also my post, here -- D.R.] Like many in Ghana, port officials hope to share in an economic boom from new oil, but challenges are ahead. Photograph by Max Milligan via National Geographic, here

Wednesday, December 29, 2010

Noble Energy Announces Significant Discovery at Leviathan Offshore Israel

CNNMoney.com December 29, 2010
Noble Energy, Inc. (NYSE: NBL) announced today a significant natural gas discovery at the Leviathan exploration prospect offshore Israel. Drilled in the Rachel license, the well encountered a minimum of 220 feet (67 meters) of net natural gas pay in several subsalt Miocene intervals. [See photo below -- D.R.] Apparent reservoir quality is very good, and the intervals discovered are geologically similar to those intersected at Tamar.

Leviathan-1, located in approximately 5,400 feet (1,645 meters) of water, is about 80 miles (130 kilometers) offshore of Haifa and 29 miles (47 kilometers) southwest of the Tamar discovery. The results from the well confirm the pre-drill estimated resource range, with a gross mean for Leviathan of 16 trillion cubic feet (450 billion cubic meters). The Leviathan field is estimated to cover approximately 125 square miles (325 square kilometers) and, as a result of its size, will require two or more appraisal wells to further define total gas resources.

Charles D. Davidson, Noble Energy's Chairman and CEO, said, "Leviathan is the latest major discovery for Noble Energy and is easily the largest exploration discovery in our history. In the past two years, we and our partners have made three significant natural gas discoveries in the Levantine basin. ..."

David L. Stover, the Company's President and COO, added, "Our exploration program continues to deliver outstanding results. This discovery has the potential to position Israel as a natural gas exporting nation. For nearly a year now, we have had a team evaluating market possibilities, which includes various pipeline and LNG options. It's our belief that the natural gas resources at Leviathan are sufficient to support one or more of the options being studied. We are excited to be leading the exploration and development in this new basin and look forward to determining the best development option."

Drilling at Leviathan-1 will continue to a planned total depth of 23,600 feet (7,200 meters) to evaluate two additional intervals. Current well depth is 16,960 feet (5,170 meters). Results from the deeper tests, which have a low chance of success, are expected over the next couple of months. The Company's second contracted rig will arrive in the Eastern Mediterranean in early 2011 to spud a Leviathan appraisal well located 8 miles (13 kilometers) northeast of the discovery well.

Noble Energy operates Leviathan, offshore Israel, with a 39.66 percent working interest. Other interest owners are Delek Drilling and Avner Oil Exploration with 22.67 percent each and Ratio Oil Exploration with the remaining 15 percent. The Company also operates Tamar in the Matan license and Dalit in the Michal licenses with 36 percent working interests.

Noble Energy is a leading independent energy company engaged in worldwide oil and gas exploration and production. The Company has core operations onshore in the U.S., primarily in the DJ Basin, in the deepwater Gulf of Mexico, offshore Eastern Mediterranean, and offshore West Africa. Noble Energy is listed on the New York Stock Exchange and is traded under the ticker symbol NBL. Further information is available at www.nobleenergyinc.com.
Read Full

(16 trillion cubic feet [tcf] = c. 453 billion cubic meters [bcm]. Leviathan is almost double the size of the Tamar field off Israel's Mediterranean coast discovered in 2009 by Noble and its partners. Tamar is estimated to hold 8.4 tcf of natural gas. See also map below. Israel's proved gas reserves are estimated to be 7 tcf, up some 6 tcf from the previous year, due to the discovery of Tamar field in the Levant basin in the eastern Mediterranean, according to the latest Oil & Gas Journal's annual survey of proved reserves---Dec. 6, 2010. Houston-based Noble Energy ranks 74th among the world's top 100 oil companies, according to the latest PIW rankings.--See here. While Israel celebrates its anticipated emergence as a fuel-producing nation, record offshore gas discoveries are creating an unwanted side effect for the export-reliant country. Bank of Israel Governor Stanley Fischer is among the leaders and economists expressing concern that the finds may lead to a stronger currency, making the country’s goods more expensive abroad---please see "Israel Risks `Dutch Disease' as Gas Finds Help Strengthen Shekel," Bloomberg, Nov 2, 2010. -- D.R.)
                                                     
                                     Map: Israel's Gas Bonanza

Source: Noble via The Wall Street Journal (WSJ), December 30, 2010 ("Big Gas Find Sparks a Frenzy in Israel," by Charles Levinson and Guy Chazan) 

       Leviathan Rig (Transocean's Semi-Sub Sedco Express)

Source: Albatross via Ynet, December 29, 2010 ("Leviathan Gas Well Estimated at $45B," by Tani Goldstein, here.) 

What is Beijing Willing to Do to Secure Oil and Gas Supplies?

by Michael Richardson, The Japan Times online, December 27, 2010
China's dependence on increasing amounts of oil imported from potentially unstable areas of the Middle East and Africa through vulnerable shipping channels has become an uncomfortable fact of life for the government in Beijing.

Chinese policymakers have called it their "Malacca dilemma," a reference to fears that the Straits of Malacca and Singapore in Southeast Asia, the channel used by most ships steaming between East Asia and the Middle East-Africa region, could be disrupted or even closed in a crisis.

Countries flanking the straits, chiefly Indonesia, Malaysia and Singapore, have sought to reassure China that this key artery for international shipping is secure.

Indeed, the bigger risk to oil supplies today is the possibility that a confrontation between the West and Iran could threaten the flow of oil from the Persian Gulf through the narrow Hormuz Strait, the only way into and out of the gulf by sea. China gets about half its imported oil from this energy-rich but volatile zone.

From being a net oil exporter in the early 1990s, China now imports just over half the oil it uses. Last year, it surpassed Japan to become the world's second-largest oil importer after the United States. The U.S. Defense Department reckons that China will import almost two-thirds of its oil by 2015 and four-fifths by 2030.

As if that was not set to create a perfect storm of energy supply worries, China in 2007 became a net importer of natural gas as well, after almost two decades of self-sufficiency.

While oil meets nearly 20 percent of China's total energy consumption, gas accounts for just 3 percent. But this is rapidly changing, as the government tries to move electricity generators, heavy industry, and home-heating and cooking away from polluting coal to gas, the cleanest of the fossil fuels.

China's gas consumption has tripled in the past decade and is expected to make a similar leap over the next 10 years, driven by growing industrial production and expanding urbanization in the world's second-biggest economy. By 2020, gas is projected to have a 10 percent share of energy use.

Where will all this extra oil and gas come from and how will China seek to secure its foreign energy sources and supply lines? More

(According to the U.S. Energy Information Administration's--EIA--China Country Analysis Brief, November 2010, here: " China consumed an estimated 8.3 million barrels per day (bbl/d) of oil in 2009, up nearly 500 million bbl/d from year earlier levels. During that same year, China produced an estimated 4.0 million bbl/d of total oil liquids, of which 96 percent was crude oil. China’s net oil imports reached about 4.3 million bbl/d in 2009, making it the second-largest net oil importer in the world behind the United States and for the first time surpassing Japan’s imports. " - See EIA graphic below, sorry for the blurriness, D.R.)

Notes: EIA graphic accessed via China Country Analysis Brief, Nov 2010. Top 10 includes UK (not indicated). Also, Dutch net oil imports were larger than Taiwan's imports. -- D.R.

Tuesday, December 28, 2010

Iraq Lauds Licensing Auction After Awarding Three Fields

by Hassan Hafidh, The Wall Street Journal (WSJ) , October 20, 2010
The Iraq Oil Ministry Wednesday touted the results of its natural gas licensing round, after it named winning bidders for three natural gas projects. ...

The three natural gas fields—Akkas, Siba and Mansouriya—were won by energy consortia led by respectively, Korea Gas Corp., or KOGAS, Kuwait Energy and Turkish Petroleum International Co., or TPAO.

The Iraqi natural gas bidding, however, didn't draw anywhere near the same fierce competition as the two previous petroleum rounds held ... last year. ...

Some 13 international companies registered for the auction including Russia's TNK-BP, Italy's Eni and Norway's Statoil, but only five submitted bids.

The three fields have estimated combined proven reserves of 11.2 trillion cubic feet, about 10% of Iraq's total 112 trillion cubic feet of proven natural gas reserves. [See my remarks, below - D.R.]

Gas fields are less sought-after than oil fields because the process of gas extracting is more difficult, with crude being easier to market and transport, according to petroleum industry analysts.

KOGAS and [Kazakhstan's] KazMunaiGas, who bid against a consortium of Total SA and TPAO, set a remuneration fee of $5.50 a barrel of oil equivalent for Akkas and proposed a production plateau target of 400 million standard cubic feet a day [MMSCFD]. South Korea's government said total investment in the project would reach $4.4 billion.

Kuwait Energy in partner with TPAO proposed a remuneration fee of $7.50 a barrel of oil equivalent for Siba and its plateau output target was 100 million cubic feet a day of gas. TPAO said the group would invest $1 billion in the project.

TPAO and its partner Kuwait Energy [and KOGAS - D.R.] also won the Mansouriya gas field with estimated proven reserves of 4.5 trillion cubic feet after the group agreed to lower its fee. ...

Siba project is the first large Kuwaiti investment in Iraq after the two Arab countries became enemies following Saddam Hussein's invasion of the tiny emirate in 1990. "We hope that our work (in Siba field) will help to bring the Iraqi-Kuwaiti relationship back to where it used to be," said Mansour Aboukhamseen, chairman of Kuwait Energy.

Iraq, which this month raised its figure for proven oil reserves by nearly a quarter to 143.1 billion barrels [See Platts article in this blog, here]—the world's third largest, aims to use its three fields to fuel its power stations, generating much needed electricity.

The prime minister's adviser, Thamer Al- Ghadhban, said on the sideline of the auction, that his country wouldn't rule out exporting gas once domestic needs, which he put at 5 billion cubic feet a day, were met. ...

(See the two previous licensing rounds: David Rachovich, Iraq's Oil Sector: Present, Past and Future, pp. 26, 39-40, 41, here. For gas exports see, idem, pp. 24-25. Akkas, discovered in the western Anbar province in 1998, holds 5.6 trillion cubic feet of gas and has six wells. Mansuriya, discovered in the eastern Diyala district in 1979, potentially holds 4.5 trillion cubic feet of gas and has four wells, while Siba, found in 1968/1969 in Basra, has 1.1 trillion cubic feet of gas and three wells. All three fields are non-associated gas fields. Akkas and Mansuriya were among the fields offered in the first international bidding round last year. No investors bid for Mansuriya then, and the oil ministry rejected the sole offer for Akkas made by a group of five companies led by Italy’s Edison SpA. Baghdad initially included Siba in the second round then withdrew it because the oil ministry decided that “Siba was small enough for Iraq to develop on its own.” Iraq's third bid round, held on October 20, 2010 attracted mainly smaller oil companies. A relative lack of interest on the part of the majors reflects reluctance to invest in riskier Iraqi gas when a world is awash in natural gas, as well as other concerns. - D.R. See also "Iraq's Anbar Authorities OK Kogas Group To Upgrade Akkas Field," Dow Jones Newswires, December 27, 2010, here. - D.R.)

Monday, December 27, 2010

ANP: Libra Find Could Double Brazil's Oil Reserves

by Eric Watkins, Oil & Gas Journal (OGJ) online, November 5, 2010
Brazil’s National Petroleum Agency (ANP) said the country’s offshore Libra subsalt oil discovery could hold as much as 15 billion bbl of oil—a figure 2.4 billion bbl [sic] greater than the country’s existing reserves [please see remarks below -- D.R.].

“The volume of recoverable oil belonging to the nation could vary from 3.7-15 billion bbl, with the most likely estimate being 7.9 billion bbl," ANP said, citing a study carried out by certification firm Gaffney, Cline & Associates.

"It's important to stress that the Libra prospect alone could hold recoverable oil volumes that exceed Brazil's current proven reserves,” ANP’s statement said. According to OGJ figures, Brazil had 12.6 billion bbl of proved oil reserves in 2009 [as of Jan 1, 2009 and please see the Jan 1, 2010 figure below -- D.R.], second-largest in South America after Venezuela.

ANP further said the well currently being drilled in Libra has reached a depth of 5,410 m [17,749 feet], of which 22 m is in the presalt layer. According to ANP, the well is eventually expected to reach a total depth of 6,500 m [21,325 feet] before it is completed. More

(The Libra exploratory well known as 2-ANP-2A-RJS is located in the offshore Santos Basin-see map below, some 183 kilometers (114 miles) from the coast of Rio de Janeiro. If the 15 billion barrel figure were confirmed it would be the biggest oil field discovered in the Americas since 1976, when Mexico found the giant Cantarell field in the Gulf of Mexico. A deposit of 15 billion barrels would also be almost twice the size of state-controlled Petroleo Brasileiro SA’s nearby Tupi field. According to OGJ, Brazil contained an estimated 12.8 billion barrels of proven oil reserves as of January 1, 2010. -- D.R.)

Source: Rigzone: Map: Santos Basin, Campos Basin, Espirito Santo [Basin] (notice the map: Espirito instead of Espirto - D.R.)

Saturday, December 25, 2010

Gulf of Mexico Oil Leak: US Sues BP over Oil Disaster

by BBC News, US & Canada, December 16, 2010 01:39 GMT
The US is suing BP and eight other firms for allegedly violating federal safety regulations in connection with the Gulf of Mexico oil spill.

The lawsuit asks that they be held liable without limitation for all clean-up and damage costs.

The Deepwater Horizon drilling rig explosion in April killed 11 workers and spilled millions of barrels of oil over several months.

The oil leak was described as the worst environmental disaster in US history.

   The Deepwater Horizon rig explosion led to what was described as the worst environmental catastrophe in US history

The lawsuit charges the companies under the US Clean Water Act and Oil Pollution Act.

US Attorney General Eric Holder said the complaint alleged that "violations of safety and operational regulations" caused the 20 April explosion.

The companies named in the lawsuit are BP Exploration and Production Inc, Anadarko Exploration & Production LP, Anadarko Petroleum Corporation, MOEX Offshore 2007 LLC, Triton Asset Leasing GMBH, Transocean Holdings LLC, Transocean Offshore Deepwater Drilling Inc, Transocean Deepwater Inc and insurer QBE Underwriting Ltd/Lloyd's Syndicate 1036.

The key accusations are:
  • Failing to take necessary precautions to keep the Macondo well under control in the period leading up to the 20 April explosion
  • Failing to use the best available and safest drilling technology to monitor the well's conditions
  • Failing to maintain continuous surveillance
  • Failing to use and maintain equipment and material that were available and necessary to ensure the safety and protection of personnel, equipment, natural resources and the environment
"We intend to prove that these defendants are responsible for government removal costs, economic losses and environmental damages without limitation," Mr Holder said. ...

Before the White House's announcement on Wednesday, more than 300 lawsuits had been filed related to the spill and consolidated in federal courts in New Orleans.

People working in the fishing and tourism industries, as well as the owners of restaurants and various properties along the Gulf of Mexico, were among those involved in the suits.

The latest news on the BP oil spill follows the federal government's decision not to open new areas of the coast along the eastern Gulf and Atlantic to drilling.

Eleven workers on the Deepwater Horizon drilling rig were killed by the explosion on 20 April, and hundreds of miles of coast were polluted before the leaking well was closed off in July. Read Full

Petroleum Intelligence Weekly Ranks World's Top 50 Oil Companies

Accessed through http://www.energyintel.com/
Petroleum Intelligence Weekly's annual ranking of the world's 50 largest oil companies is a perennial benchmark survey recognized industry-wide and the leading source of comparative corporate performance assessments. The rankings are based on six operational criteria that allow the comparison of private sector and state-owned oil companies. This survey is the precursor to the more comprehensive Energy Intelligence Top 100: Ranking The World's Oil Companies.

Key findings from the PIW Top 50 [published in late 2009 -- D.R.]:
  • Oil firms collectively weather a volatile year to keep rankings stable
  • Natural gas’ contribution to reserves and production growth continues to gain traction
  • France’s Total ties Chevron for No. 9 spot ...

Firms are compared in six different operational areas, with companies assigned a separate rank within each category. These criteria include:
  • Liquids — Output ('000 b/d), Reserves (Million Bbl)
  • Gas — Output (MMcf/d), Reserves (Bcf)
  • Product Sales ('000 b/d) and Distillation Capacity ('000 b/d)
Financial and other measures of size include:
  • Revenue (US$ million), Net Income (US$ million), Total Assets (US$ million), # of Employees ... 

To view the PIW Top 50 rankings, click here

(PIW's ranking is based on operational data for 2008. PIW measures government-controlled national oil companies -- NOCs, side by side with privately controlled international oil companies -- IOCs. Saudi Aramco maintains its hold on the top spot. It has achieved the top spot in the PIW rankings for 21 consecutive years. Rounding out the Top 10 are, in order, Iran's NIOC, Exxon Mobil, Venezuela's PDV, China's CNPC, the U.K.'s BP, Royal Dutch Shell of the Netherlands/UK, ConocoPhillips, Chevron and Total of France (Total ties Chevron for No. 9 spot). Petróleos Mexicanos/Pemex ranked at No. 11 in the 2010 Petroleum Intelligence Weekly's/PIW's ranking for 2008. Pemex retained its spot as the No. 11, in the 2011 PIW's ranking for 2009. Petróleo Brasileiro S.A./Petrobras ranked at No. 15 in the 2010 Petroleum Intelligence Weekly's/PIW's ranking for 2008. Petrobras retained its spot as the No. 15, in the 2011 PIW's ranking for 2009. Compare the PIW's rankings for 2008 with the 2009 Platts rankings for 2008, here and here. Furthermore, compare the PIW's rankings for 2008, to the PIW's rankings for 2009, here. BP, which faces huge costs associated with Deepwater Horizon disaster - see here - may be adversely affected in the future rankings. See also Christopher Helman, "The World's Biggest Oil Companies," Forbes, here. Also, please see PIW's Dec 2011 company rankings for 2010, here. - D.R.)

Friday, December 24, 2010

Oil Jumps to Highest since 2008 Crisis, $100 Eyed

With crude reaching back-to-back 26-month highs, ultra-cold weather stoking demand and depleting U.S. stockpiles at the fastest pace in 12 years, traders are now looking for the Organization of the Petroleum Exporting Countries to signal when it might begin pumping more crude.

But Libya's top oil official, one of OPEC's most hawkish members toward oil prices, appeared unconcerned by the gains, which have lifted prices more than 20 percent in three months as fundamentals turn more positive and investors factor in an improving economic outlook for next year.

"It's fair to say it (the price) is about right, but still I think that it needs to improve a little bit more. About $100 would be a fair price for the time being," Libya's National Oil Corp Chairman Shokri Ghanem told Reuters in Cairo ahead of a meeting of Arab oil exporting countries. ...

U.S. crude for February rose $1.03 to settle at $91.51 a barrel, the highest price since October 7, 2008 when oil prices were crashing from their $147 record as the world's financial industry reeled and investors fled risky assets. Prices hit an intraday peak of $91.63 a barrel. [Last electronic quote for NYMEX Light Crude for February delivery was $91.41 a barrel -- See the oil price dashboard on my blog - D.R.]

ICE Brent crude settled at $94.25, up 60 cents from Wednesday after a midsession burst of gains triggered by buy-stops and as the dollar fell.

Although some said low trading volume on the last day before Christmas likely exaggerated gains, few expected to see a correction as traders looked forward to a fresh infusion of institutional investment in the booming commodities sector. U.S. crude traded about 220,000 contracts, one-third the norm. ...

So far economic news is supporting the gains too. Data on Thursday showed new U.S. claims for jobless benefits dipped last week and consumer spending increased in November for a fifth straight month, reinforcing views of a solid economic growth pace in the fourth quarter.

And while gasoline prices now back above $3 a gallon could begin to erode spending in the still fragile U.S. economy, the fact that they remain far below their $4 peak two years ago suggests they will not pack the same psychological punch.

NOT THE SAME MARKET AS 2008

Nearly three years after oil first traded at $100, demand is again rising swiftly, but one key factor has changed significantly. Unlike the start of 2008, when OPEC was already pumping flat out, the group now has a sizable amount of idle capacity it could use to douse the rally -- if it chooses.

A series of comments in recent months suggest the cartel is now ready to tolerate a price higher than the $70-to-$80 band it has publicly supported for the past two years, and analysts say that means it may wait too long before pumping more oil. ...

Oil traders will be looking for comments this weekend from other core Gulf OPEC ministers to see if they are more concerned than they were two weeks ago when the group decided at its meeting in Quito, Ecuador, to maintain supply quotas. [See OPEC meeting, in this blog, here - D.R.]

The meeting of the Organization of Arab Petroleum Exporting Countries (OAPEC) in Cairo will not set policy, and OPEC's next formal meeting is not scheduled until June. ...

FASTEST DRAW IN THE WEST

Unusually cold weather in the United States and Europe has helped to spur the latest leg of a more than 30 percent rally from this year's low struck in May. More

Wednesday, December 22, 2010

Iraq Achieves Oil Production of 2.5 million b/d: Minister

Platts, December 22, 2010
Iraq's newly appointed oil minister, Abdul Karim al-Luaibi, said Wednesday that oil output had risen to an average 2.5 million b/d from just under 2.4 million as a result of a production increase from the giant Zubair and Rumaila oilfields being developed by foreign consortia in joint ventures with state-run Iraqi oil companies. ...

BP and China's CNPC are developing the super giant Rumaila oil field, Iraq's biggest producing field, in partnership with the State Oil Marketing Organization (SOMO). BP and CNPC offered to raise production from Rumaila in southern Iraq to a plateau of 2.85 million b/d from 1 million b/d within seven years. At plateau production, Rumaila would be the world's second largest oil field after Saudi Arabia's Ghawar.

A consortium of Eni, Kogas [i.e. Korea Gas Corp.] and Occidental are developing Zubair, ...

Zubair was among ... oil fields awarded by Iraq's oil ministry at two separate auctions in 2009 with the aim of raising the country's oil production capacity to over 12 million b/d from around 2.5 million b/d currently.

OPEC member Iraq in October raised its oil reserves estimate from 115 billion barrels to 143 billion barrels, mostly due to increases in reserves for the West Qurna and Zubair fields. [See also my concluding remarks in this blog, here - D.R.]

Luaibi said the oil ministry would now focus on improving energy infrastructure to absorb the additional crude oil with a particular emphasis on upgrading export facilities in the south to allow for an expansion of export capacity to 4.5 million b/d in line with anticipated production increases. Current exports are running at just over 1.9 million b/d. ...

Luaibi, who has led negotiations with the Kurdistan Regional Government to try to resolve an impasse over the resumption of oil exports from the semi-autonomous province, also said in his statement that dialog "with our Kurdish brothers will continue in order to reach a resolution that is in the general interest."

(Iraq's parliament approved deputy oil minister Abdul Kareem Luaibi as oil minister after confirming previous Oil Minister Hussain al-Shahristani as the new deputy prime minister for energy. - D.R.)

Transneft Finishes Crude Trial Runs on ESPO Pipe Spur to China

Platts, December 21, 2010
Russian pipeline operator Transneft's new 300,000 b/d pipeline spur for ESPO crude shipments to China is ready to begin commercial shipments on January 1 following the completion of trial runs Sunday, it said in a statement said late Monday.

Transneft pumped the first trial shipment of crude on November 1, shipping a total of 250,000 mt (61,000 b/d) in November and 300,000 mt in December, the statement said.

The spur travels from Skovorodino, currently the end point of the East Siberia-Pacific Ocean (ESPO) pipeline, to Daqing in China. [See the map below, provided by Reuters - My addition, D.R.]

The main ESPO route was launched in December 2009, and consists of a 600,000 b/d pipeline from oil fields near Taishet in East Siberia to Skovorodino in Russia's Far East, near the border with China.

From there, around 300,000 b/d is currently shipped by rail from Skovorodino to an export terminal at Kozmino on the Pacific coast.

Starting January 1 [2011], Russia's largest oil producer Rosneft is to start to supply China with 15 million mt/year (300,000 b/d) of ESPO crude. The exports are in line with a contract signed in 2009 to supply 300,000 b/d of oil over 20 years to China [i.e., cash-for-oil or loan-for-oil deal -- D.R.]. [Full story]

--Jake Rudnitsky, jake_rudnitsky@platts.com

Similar stories appear in Oilgram News. See more information at http://bit.ly/OilgramNews

For related news, please see Platts Russian Crude Oil Exports feature at http://www.platts.com/newsfeature/2010/espo/index
                                                            
  Сlick on map to enlarge                                                             

     Source: UK. Reuters, RPT-UPDATE 3-Russia Prepares to Open Oil Pipeline to China, Sep 27, 2010 

(The second phase of the pipeline will involve the construction of a 2,046 km (1,271 miles) section from Skovorodino to the Pacific Ocean terminal at Kozmino, and will replace the rail line -- see map above. It would be commissioned by 2013 or 2014. The first phase of ESPO, running some 2,700 km from Taishet to Skovorodino, was completed in late 2009. See also Takeo Kumagai article in my blog , here. Update 1: In early November 2012, Transneft announced that ESPO-2 has been filled with technological oil and start-up works have started. The filling of the 2,046-km ESPO-2 with oil took about 4 months. The company plans to launch the oil line by the end of the year---please see here. Also, please see another map of the 4,700 km or 2,900 miles ESPO pipeline, the combined ESPO-1 and ESPO-2, here. Update 2: On December 25, 2012, Transneft JSC put into operation the second line of the East Siberia – Pacific Ocean pipeline (ESPO-2) [ ... ]. According to N. Tokarev, the Head of Transneft, “the American market gets about 35 per cent of oil through Koz’mino port, the final destination point of ESPO; Japan gets about 30 per cent; China gets 25-28 per cent. And the rest part goes to Singapore, Malaysia and South Korea”. “I believe such proportions shall be preserved”, he noted. [...]. During the second stage of the project, an oil pipeline sector from Skovorodino to Koz’mino port was built and the capacity of the marine terminal was increased. ESPO-2’s putting into operation will allow increase of the volume of oil dispatched from Koz’mino twice, up to 30 million tons per year [ i.e., 600,000 b/d -- D.R.]. The volume of oil exported from Koz’mino port may reach 15.6-16 million tons [i.e., 312,000-320,000 b/d -- D.R.] in the year 2012, and 21 million tons [i.e., 420,000 b/d -- D.R.] in the year 2013. Considering the route to China (15 million tons of oil per year or 300,000 b/d), 36 million tons [720,000 b/d -- D.R.]  are to be pumped in 2013. Handling through Koz’mino may amount 24-25 million tons [i.e., 480,000-500,000 b/d -- D.R.] in 2014, and 30 million tons [i.e., 600,000 b/d -- D.R.] in 2015. N. Tokarev reported that oil delivery to Koz’mino by railway still remain in the near term and shall amount about 3-4 million tons [i.e., 60,000-80,000 b/d --D.R.] per year. [ ... ] Also, N. Tokarev informed that Khabarovsky oil processing plant [i.e., refinery] would get oil from the ESPO system in the year 2014, and Komsomol’sk [-on-Amur] oil processing plant – in the year 2015---please read Transneft website, Dec 25, 2012 (in English).  -- D.R.)

Monday, December 20, 2010

Platts Report: China's November Oil Demand Surges to All-Time High of 9.3 mil b/d

Platts Media Center: Press Releases via Platts, December 20, 2010
China's apparent oil demand* in November surged to an all-time high of 38.09 million metric tons (mt), or an average 9.3 million barrels per day (b/d), according to a just-released Platts analysis of official data from the People’s Republic of China. This analysis is based on a data series of Chinese oil demand which Platts has been reporting since 2005.

Oil demand in November was 13.1% higher than November 2009 and was marginally higher than October's apparent oil demand at 37.88 million mt, or 8.96 million b/d.

China's apparent oil demand from January to November totaled 393.67 million mt, or an average of 8.64 million b/d, which was a 10.7% gain from the same period of 2009. This 2010 figure surpasses the total apparent oil demand last year, Platts data showed.

Crude throughput by Chinese state-owned refiners in November was at 36.65 million mt or an average of 8.96 million b/d, which was an increase of 9.86% above the throughput in November 2009, data released by the National Bureau of Statistics showed.

Most domestic refiners continued to operate at full or near full capacity in November as they tried to optimize output of middle distillates to meet a diesel shortage that has gripped the country since late September.

"Sinopec and PetroChina kept refinery run rates high in November after being told by Beijing to ensure sufficient supplies of diesel," said Calvin Lee, Platts senior writer, China.

"Additionally, Chinese state-controlled companies imported more diesel in November to meet demand, although the volume was less than most industry sources had expected," said Lee.

In November, China's diesel imports rose 50.1% year-on-year to 150,000 mt. Diesel imports in November were also 275% more than imports of 40,000 mt in October.

The imported volume in November was significantly lower than earlier indicative volumes provided by state-owned companies.

Sinopec had announced in November that it would import 200,000 mt of diesel during the month, while PetroChina said that it planned to import 200,000 mt of diesel last month.

Meanwhile, total refined product imports reached 3.52 million mt, which was a gain of 34.3% from the volume imported in November 2009. ...

(*Platts calculates China's apparent or implied oil demand on the basis of crude throughput volumes at the domestic refineries and net oil product imports, as reported by the National Bureau of Statistics and Chinese customs.
China is the world's second largest oil consuming country. U.S. is the number one, while Japan ranks third. - D.R.)

Statoil Reports Oil Discovery Offshore Brazil

Scandinavian Oil-Gas Magazine, December 20, 2010
Statoil and the Petrobras of Brazil have struck oil on the Indra prospect in the Espirito Santo basin off the coast of Brazil. [See also map, here - D.R.]

Petrobras is operator for licence BM-ES-32, where the discovery was made and where Statoil holds a 40% stake.

The exploration well was drilled at a depth of 2,130 metres [6,988 feet] and both oil and reservoir quality is good. ...

The location is situated 140 kilometres [87 miles] from land and some 400 kilometres [245 miles] north of the Peregrino field. More

(The Peregrino field is located in the prolific Campos Basin, which has been Brazil's main production base for years. Peregrino is norwegian Statoil's most important project in Brazil. - D.R.)

Don't Mess with the Big Boys; Saudi Arabia is still King of OPEC



When Iraq recently raised its oil reserve estimates by 25% to 143 billion barrels, the initial assessment by analysts was that the Iraqis were drawing battle lines with Iran, their former enemy and the country which had hitherto held second place as holder of the second largest conventional oil reserves after Saudi Arabia.

But the numbers game being played by Iraq and Iran, which shortly afterwards announced its own reserve hike to reclaim the second slot from the Iraqis, albeit with little scientific backing, has raised heckles in another Middle Eastern country.

Enter Saudi Arabia, the undisputed leader of the OPEC pack with its hefty 260 billion barrels of crude oil reserves.

Listening to Saudi Arabian oil minister Ali Naimi speak at a symposium celebrating OPEC's 50th anniversary, the message was clear and it was directed at Baghdad. "Saudi Arabia is a founding member of OPEC and it holds the world's largest crude oil reserves, has the biggest production capacity and is the largest oil exporting nation," Naimi said in a presentation at the start of the ceremony on October 18.

"This is a position that the kingdom will continue to hold for some time," he added, in what appeared to be a veiled message to other OPEC members such as Iraq and Iran not to challenge the oil giant.

Perhaps due to a scheduling problem or by design, none of the other 11 OPEC ministers attended the ceremony in Riyadh, where the organization was represented by its secretary-general, Abdalla el-Badri. This led some observers to note that it was unusual for invitations by the kingdom to be turned down by lesser members of the producers' club.

The seeds of what appears to be an attempt by some to position themselves for a realignment of power within an organization that has long been dominated by Saudi Arabia began last December.

That was when Iraqi oil minister Hussein al-Shahristani appeared to be laying down the gauntlet when he said that Iraq's oil production capacity would exceed 12 million b/d within six to seven years once the 11 oil fields offered up for development under long-term service contracts by foreign oil companies reached plateau production.

That 12 million number matches Saudi Arabia's current production capacity -- excluding the neutral zone shared with Kuwait which would take it up to 12.5 million b/d.

Yet Saudi Arabia, which has often stated as policy a desire to maintain oil market balance, retains some 4.5 million b/d of idle capacity with production running at around 8.1 million b/d, in line with OPEC production quotas from which Iraq is excluded.

Iraq, a founding member of OPEC -- which makes its absence from Riyadh more intriguing -- has been exempt from output restrictions as it rebuilds its energy infrastructure, which was decimated by decades of wars, first against Iran in 1980, the invasion of Kuwait in 1990 and the ensuing sanctions that hindered investment in its energy sector.

Now the sleeping giant awakes and the two largest Arab oil producing states appear to be heading for a showdown. [Read more]

(New estimates at West Qurna-1 and Zubair oil fields helped push the Iraq's total to 143 billion barrels, i.e. 24% upward revision of the country's 115 billion barrels of proved oil reserves. Concerning Saudi Arabia -- EIA estimates that the kingdom produced some 8.5 million barrels of crude per day in September 2010, including lease condensate and about one-half of the production in the Kuwait-Saudi Arabia Neutral Zone. In September 2010, Neutral Zone production by both Kuwait and Saudi Arabia totaled about 538,000 barrels per day - D.R.)

Saturday, December 18, 2010

Ghana Oil Begins Pumping for First Time

by BBC News, Africa, December 15, 2010 13:08 GMT
The West African nation of Ghana has begun to pump its first commercial oil after the discovery of the offshore Jubilee Field three years ago.

President John Atta Mills turned on the valve at an offshore platform.

A consortium led by UK-based Tullow Oil [Its partners include U.S.-producer Anadarko Petroleum, U.S.-based Kosmos Energy, Ghana National Petroleum Corp, Sabre Oil and Gas and E.O. Group - D.R.] hopes to produce 55,000 barrels per day, increasing to 120,000 barrels in six months. ...


               Ghana's offshore oil fields are estimated to contain about 3bn barrels

The BBC's David Amanor in the capital, Accra, says there a positive mood about the pumping of the country's first oil - and plenty of advice about how the revenue should be spent. More

(Notice in the picture above, Kwame Nkrumah, the Jubilee Floating Production Storage and Offtake-i.e. FPSO-vessel. The first oil from the field is expected to be exported in January 2011. Ghana has produced oil in the past, but only in very small quantities by industry standards. -- D.R. It is worth stressing that Ghana is already a major producer of cocoa and gold, as pointed out in the article.)

Friday, December 17, 2010

Platts Top 250 Global Energy Company Rankings 2010

Platts, November 2, 2010
2010 marks the ninth year Platts has produced the Top 250 Energy Companies list. The report measures financial performance by examining each company’s assets, revenue, profits and return on invested capital. The Rankings call attention to the continued leadership of the international oil companies, the rapid advance of the BRICs (Brazil, Russia, India, China) and the resurgence of the global power sector. Here are some of the highlights [my order of selected issues, D.R.] of the Platts report:
  • Top Ten - Reigning supreme at the top of the rankings for the sixth consecutive year is US major ExxonMobil. ... While ExxonMobil’s European gas production declined, the coming on stream of its giant LNG production facilities in Qatar have helped it retain a strong grip on European markets. Second in the running is the now troubled UK major BP, which improved its position from fourth in the rankings in 2008. ... Chevron Corporation and Royal Dutch Shell plc each saw their profits decline more than 50 percent which resulted in a drop in the rankings to ninth and tenth place from second and third, respectively. France's Total SA remained at fifth place. While the top ten rankings remain the preserve of the integrated oil and gas (IOG) companies, one intruder is evident: German electric utility E.ON AG moved from 45th in last year’s rankings to 6th this year, the only non-IOG company in the top ten, although it is a sizeable gas producer. ... 
  • Asia on the Ascendant - It is clear that Asia as a whole has substantially improved its position in the global energy firmament over the course of 2009. Of the top ten Asian companies regionally, nine improved their global ranking; of the top 20, 15 improved their global position; while if new entrants are included, out of the top 50 Asian companies, as many as 40 of the top 50 gained a higher global ranking this year to the detriment of other regions. There are now 68 Asian companies in the Platts top 250, compared with 55 last year. The Asian top ten remains dominated by Chinese and Indian companies. PetroChina Co Ltd retains the top spot, while the China Petroleum & Chemical Corp comes in second, ousting CNOOC Ltd, which falls to sixth place. India’s Reliance Industries Ltd moved from fourth to third, while India’s Oil and Natural Gas Corp Ltd [ONGC] rises from fifth to fourth. ... ONGC has been ranked 18th in the top 250 rankings. This ranking of ONGC has taken it to eight steps higher as against its 26th rank in the same list last year in 2009. This is the highest ever ranking of ONGC in the list of Platts Top 250 Global Energy Companies, ahead of global leaders like Conoco Phillips, Statoil, CNOOC, BG and others. ...  
  • BRICs to the Fore - Within the global top 20, eleven companies are from the BRICs -- Brazil, Russia, India and China -- compared with just six the year before. Moreover, while BRICs still account for four of the top ten, all are rising; Russia’s Gazprom jumped to third place from eighth the year before and was also ranked as the world’s most profitable listed energy company. Brazil’s Petrobras claimed fourth place from sixth in the previous year’s global ranking. [My emphasis -- D.R., and please read below 2009 rankings]. PetroChina rose to seventh from ninth place and the China Petroleum and Chemical Corp jumped from 23rd place to eighth in the global rankings this year. [Read full report] 
(Platts 2010 rankings recognize the 2009 financial performance of publicly-held energy companies. For Platts 2009 rankings, which are based on financial reports from 2008, please see Platts Insight, November 2009, pp. 50-54---2009 Platts Top 250 Global Energy Companies or, alternatively, here -- D.R.)

Exxon Ups Oil Target for Iraq's West Qurna Phase 1

The original plateau target when the contract was signed in January was 2.325 million bpd in six to seven years time, but the Exxon-led consortium agreed with Iraq to add four undeveloped reservoirs, Madhi Swadi, a member of the joint management committee that runs the field, told Reuters. ...

Under a rehabilitation plan for the field, the consortium plans to boost output from the giant field to around 750,000 bpd in three years from between 230,000 to 240,000 bpd now, by drilling new wells, overhauling existing wells and a series of water injection projects, Swadi said.

ExxonMobil and Royal Dutch Shell (RDSa.L) won the contract to develop the 8.7-billion-barrel West Qurna Phase One field in an auction held by Iraq last year for oilfield development contracts. [See David Rachovich, Iraq's Oil Sector: Present, Past and Future, p. 41]

During the early months of next year, Exxon and its partners plan to start a water injection project to help boost the output rate and help overcome production decline in the field, which started production in the late 1990s. More

Thursday, December 16, 2010

OPEC Rolls Over Production Targets, Oil Prices Inch Higher

by the Editorial Team, Middle East Economic Survey (MEES), December 13, 2010
As expected, OPEC maintained its production targets at the ministerial meeting in Quito on 11 December. While both the IEA and the EIA had before the meeting raised their forecasts for demand growth this year and next, OPEC’s post-meeting communiqué said: “Having reviewed the oil market outlook, including the overall demand/supply projections for the year 2011, the conference observed that the increase in the annual average oil demand in 2011 is likely to be lower than in 2010.” Although some OPEC ministers have touted $100/B as a suitable oil price of late, Saudi oil minister Ali Naimi told reporters at the OPEC meeting: “$70-80/B is a good price.” ...

(OPEC's output ceiling of 24.845 million barrels per day for 11 of its members, thus, hasn't changed since it was agreed at the December 2008 Oran meeting. Iraq has been exempt from the quota system since late 1990, because of the U.N. sanctions up to the 2003 war, and due to the exemption given to it by the organization, thereafter. Currently, OPEC has a total of 12 member countries: Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela. OPEC set its next meeting for June 2, 2011 in Vienna. - D.R.)

Wednesday, December 15, 2010

EMG, Israel Corp in Deal on 1.4 Bcm-2.9 Bcm/year Gas Supplies

by Platts, December 13, 2010
[Egypt's] East Mediterranean Gas Supply Corp has signed agreements to supply 1.4 billion cubic meters of natural gas to three companies controlled by the Israel Corp., according to a statement Monday by Ampal-American Israel Corp.

The statement said that the agreements are for a total of 1.4 Bcm a year for 20 years with an option to increase the total to 2.9 Bcm/year. The total value of the five contracts with Oil Refineries Ltd, Israel Chemicals and OPC Rotem was put at $5 billion-$10 billion.

Gas supplies are scheduled to commence in the second quarter of 2011. The agreement was seen as a setback for the Tamar consortium which was hoping to clinch the entire deal. The Tamar consortium comprises Noble Energy Inc., Delek Drilling, Avner Oil and Gas, Isramco and Dor Gas. A source close to the Israel Corp said that it had left open the remaining 1.5 Bcm of purchases. Israeli energy industry sources said that this could eventually go to the Tamar consortium. Israeli energy industry sources said Monday's announcement could have a detrimental impact on the development of the Tamar field which was scheduled to begin commercial deliveries in 2013. ...

(EMG is a joint company owned by Egyptian businessman Hussein Salem, Egypt Natural Gas Company, Thailand's PTT, Israel's Merhav Group, Ampal-American Israel Corp, American businessman Sam Zell and Israeli institutional investors. -- D.R.)

Adira Commences Seismic Operations in Israel

Scandinavian Oil-Gas Magazine, December 15, 2010
Adira Energy Ltd. has commenced drilling and workover operations on its onshore "Eitan" unconventional gas license in the Hula Valley and has commenced 3D geophysical survey operations on its "Gabriella" and "Yitzhak" licenses offshore Israel. ...

The Company has contracted WesternGeco, a Schlumberger company, to complete a state of the art geophysical survey on its Yitzhak and Gabriella licenses directly offshore of central Israel on a 530 square kilometre 3D survey. The company is focused specifically on oil targets in this region. ... More 

Russia and Croatia Resurrect Druzhba-Adria Oil Transport Scheme

by Vladimir Socor, The Jamestown Foundation, Vol. 7, Iss. 45, March 8, 2010
Prime Minister Vladimir Putin of Russia and Jadranka Kosor of Croatia discussed the oil transportation scheme known as Druzhba-Adria integration during Kosor’s recent visit to Moscow. The trip marked Croatia’s accession to Gazprom’s South Stream project and opened the way for Russian energy companies’ expansion to the Adriatic coast... .

Druzhba-Adria integration is a decade-old proposal to pump Russian oil volumes from the Druzhba pipeline southward, via Hungarian and Croatian pipelines, to the port of Omisalj on Croatia’s Adriatic coast, for onward shipment by tankers. The proposal entails using Croatia’s transit pipeline, known as Adria Oil Pipeline (Jadranski Naftovod – Janaf), in a reverse mode. Rather than transporting oil from the world market to land-locked Central Europe, as originally intended, the Adria Pipeline would be reverse-used to carry Russian oil for export. More

(Compare this to, D.R.)

Tuesday, December 14, 2010

Japan Sees Russia as 500,000 b/d Oil Supplier by 2015

by Takeo Kumagai, Platts, December 13, 2010
The startup this year of East Siberia-Pacific Ocean (ESPO) shipments from Siberia has positioned Russia to add to its established role of LNG provider and become an increasingly important supplier of crude oil to Japan, which has traditionally depended on the Middle East for most of its imports... .

Japan's total crude imports from Russia could rise to 500,000 b/d by 2015, after the commissioning of the second stage of the 30 million mt/year (600,000 b/d) ESPO pipeline, which will extend the line from Skovorodino in Russia's Far Eastern Amur region to the Pacific port of Kozmino. [See map in this blog, here - D.R.] ...

Over the April-October period of this year, an 85% year-on-year increase in Japan's Russian crude import volumes to 271,000 b/d was recorded, due mainly to the startup in supplies of ESPO... . Read more

Monday, December 13, 2010

IEA's WEO-2010 - Iraq to Match Iran's Crude Oil Production by around 2015

by David Rachovich
According to the International Energy Agency's recent World Energy Outlook 2010 - Executive Summary, "Iraq accounts for a large share of the increase in OPEC output, commensurate with its large resource base, its crude oil output catching up with Iran's by around 2015 and its total output reaching 7 [million barrels per day] mb/d by 2035." Since the creation of OPEC in 1960, Iraq's crude oil production has only overtaken that of Iran during the years 1979-80 and 1987-88, according to OPEC's data, or during the years 1979-80 and 1988-89, according to Energy Information Administration (EIA) data. (See David Rachovich, Iraq's Oil Sector: Present, Past and Future, p.4 and fn 12). Iraq now (Sept. 2010 data) produces about 2.4 mb/d, compared with Iran's c. 4 mb/d (crude including lease condensate).

The IEA's 25-year forecast for Iraq (7 mb/d), stands in stark contrast to Baghdad's ambitious plans to boost production to 12 mb/d in seven years. To this end, Baghdad has signed 12 Technical Service Contracts (TSCs) with most of the world's top oil companies.    

Saturday, December 11, 2010

World Energy Outlook 2010 (Presentation to the Press)

by the International Energy Agency (IEA), London, November 9, 2010
WEO-2010 projects global energy production and consumption out to 2035. Here are some of the highlights [my emphases, D.R.] of the IEA report/forecast:
  • Oil production becomes less crude - Global oil production reaches 96 mb/d in 2035 on the back of rising output of natural gas liquids & unconventional oil, as crude oil production plateaus.
  • More oil from fewer producers - Production rises most in Saudi Arabia & Iraq, helping to push OPEC's market share from 41% today to 52% by 2035, a level last seen prior to the first oil shock of 1973-1974.
  • Caspian energy riches could enhance global energy security - Kazakhstan drives an increase in Caspian oil production to 5.2 mb/d by 2035, while Turkmenistan & Azerbaijan push up gas production to over 310 bcm.
  • International oil price assumptions - The age of cheap oil is over, though policy action could bring lower international prices than would otherwise be the case. More

Video: Canada's Oil Sands - Come see for yourself

by the Canadian Association of Petroleum Producers (CAPP), January 2010
Learn what the oil sands are and how they’re developed as well as what’s being done to protect the environment, pioneer technology, reclaim land, engage communities, and provide economic opportunities... Watch Canada's Oil Sands - Come see for yourself... (Part 1 of 2)



Canada's Oil Sands - Come see for yourself... (Part 2  of 2)

Friday, December 10, 2010

Iraq's Oil Sector between the Kuwait Crisis & the Post-Ba'thi Era (1990-2006)

by David Rachovich, International Conference on Iraq - Past & Present (HTML, PDF), University of Haifa, March 11-14, 2007
Watch

Canadian Oil Sands More Important Than Ever

by Jane Van Ryan, Energy Tomorrow, December 8, 2010
In recent years, Canada has become the largest supplier of oil to the United States. An estimated 2 million barrels of Canadian oil comes over the U.S. border every day, and about half of it is derived from Canada's abundant oil sands. "Full oil sands development could double that," API's Cindy Schild told reporters today in a conference call. She added, "Every barrel imported from Canada could replace one from a less secure source, adding to our energy security and benefiting our economy." More

WoodMac: Third-Quarter Oil Demand Sets All-Time Record

Oil & Gas Journal Online, December 8, 2010
Worldwide oil demand for this year’s third quarter will set a record at 88.3 million barrels per day (b/d), said Wood Mackenzie Ltd., Edinburgh, in its latest analysis...Leading the recovery in oil demand are China and the rest of Asia. WoodMac’s provisional data through September shows that gasoline, diesel, and gas oil demand in China are growing at a rate of about 8%/year. In India, diesel and gas oil are growing at 7%/year and gasoline at 11%/year. As a comparison, this year the Asian market will be 3 million b/d larger than the North American market; in 2008 it was 1.4 million b/d larger. More

Thursday, December 9, 2010

OPEC Share of World Crude Oil Reserves 2009

OPEC Annual Statistical Bulletin 2009 via OPEC website
Nearly 80% of the world's proven oil reserves are located in OPEC Member Countries. More

(For OPEC share of world's proven oil reserves, as of Jan 1, 2011, please see my post "World's Top 22 Proven Oil Reserves Holders, Jan 1, 2011 -- OGJ," here. For OPEC share of world's crude oil production, please see my post here. -- D.R.)

Oil Production in Russia to Hit Record High

Moscow, December 8, 2010 (Xinhua) via Xinhuanet
Russia currently produces 1.4 million tons of oil per day, which is the highest daily production in the past 20 years. By the end of 2010, its total oil output for the year is expected to reach 504.8 million tons (some 10.1 million barrels per day). More

Pump Jacks, Ector County, Texas, 2008

by Derek Zivney, Derek's Oilfield Photography 

Iraq - Awakening a Sleeping Giant

by Andy Jarosc, BP Magazine, Issue 1, 2010.
BP's contract will aim to almost triple Rumaila's production, to 2.85 million barrels per day, making it the world's second-largest producing oilfield. More

Pump Jacks in front of the Permian Basin Petroleum Museum, Midland, Texas, 2008

by Derek Zivney, Derek's Oilfield Photography

Wednesday, December 8, 2010

Eni Achieves Key Production Milestone in the Zubair Field, in Iraq

Scandinavian Oil-Gas Magazine, December 7, 2010
The production rate from the field has increased from approximately 183,000 barrels of oil per day, the initial production rate on the Technical Service Contract (TSC) effective date of 18 February 2010, to a sustained rate of appreciably over 201,000 barrels of oil per day (the minimum required production rate to trigger cost recovery). With this successful increase in production, the consortium's contract cost recovery commences, with the group additionally earning a Remuneration Fee of $2 per barrel on incremental oil production...The consortium plans to increase production from the Zubair field to 1.2 million barrels of oil a day. More

Sunday, December 5, 2010