Falklands : Hydrocarbons Weekend Record (21/22 October 2006)
Submitted by Falkland Islands News Network (Juanita Brock) 23.10.2006 (Article Archived on 06.11.2006)
OPEC's decision to cut production did not cause prices to rise this week. The good supply of crude and other hydrocarbons products in the US helped to keep crude prices down.
HYDROCARBONS WEEKEND RECORD: 21 AND 22 OCTOBER 2006
By J. Brock (FINN)
CRUDE PRICES LAST WEEK:
Monday, 16 October 2006 Light Sweet Crude gained $1.39 Cents to stand at $59.56 on the New York Mercantile Exchange and Brent Crude gained 1.39 Cents to stand at $59.60 on London’s ICE Futures Exchange.
Tuesday, 17 October 2006 Light Sweet Crude dropped $1.01 Cents to stand at $58.93 on the New York Mercantile Exchange and Brent Crude gained .06 Cents to stand at $61.72 on London’s ICE Futures Exchange.
Wednesday, 18 October 2006 Light Sweet Crude dropped $1.19 Cents to stand at $57.50 on the New York Mercantile Exchange and Brent Crude lost .16 Cents to stand at $60.78 on London’s ICE Futures Exchange.
Thursday, 19 October 2006 Light Sweet Crude gained .90 Cents to stand at $58.55 on the New York Mercantile Exchange and Brent Crude gained .41 Cents to stand at $59.99 on London’s ICE Futures Exchange.
Friday, 20 October 2006 Light Sweet Crude lost $1.58 Cents to stand at $56.82 on the New York Mercantile Exchange and Brent Crude lost $1.19 Cents to stand at $59.68 on London’s ICE Futures Exchange.
TRENDS
Monday, 16: The scheduling of a meeting of OPEC to discuss a proposed cut in production has lead to the rise in crude prices today. There are also still worries about the supply of winter heating oil.
Tuesday, 17: There is nervousness due to the up and coming cut in production by OPEC. However it wasn’t enough to realise a downward trend in Light Sweet Crude and it only put 6 cents on Brent Crude. The major factor seems to be better inventories of heating oil in the United States than previously announced
Wednesday, 18: Crude prices dropped today because the US has reported a larger than expected rise in crude inventories.
Thursday, 19: Another report coming from the United States said that demand for hydrocarbons products was outstripping supply. The OPEC meeting in Doha also added to nervousness that caused crude prices to rise today.
Friday, 20: Crude prices dropped sharply today regardless of OPEC’s agreeing to cut production by 1.2Million barrels a day.
Note: It looks as if pain at the pump won’t be as bad because the OPEC cut of 1.2 Million barrels a day did not achieve the goal it was intended to produce. Excellent supplies of crude as well as other hydrocarbons products have kept prices down.
DEVELOPING REGIONAL FACTORS
(Bolivia)
Monday, 16: In a major development Bolivia is slated to nationalise its mining industry. FINN feels that if anything was going to be nationalised, it should have been the mining industry first so it could be used as a test case. As yet it is unclear how nationalisation of the hydrocarbons industry will work. It is thought that it will take time to have the benefits of nationalisation trickle down to the people. Some of the people may be too impatient for profits that do not yet exist.
(Bolivia and Argentina)
Tuesday, 17: In El Alto on Monday Bolivia’s President Evo Morales announced that talks about energy with Argentina recently should encourage investments from other foreign oil companies operating in the nation. President Morales and Argentine President Nestor Kirchner will sign a protocol agreement in Santa Cruz province between Juan Carlos Ortiz, head of state-run firm Yacimientos Petroliferos Fiscales Bolivianos, and Exequiel Espinoza, president of Energia Argentina Sociedad Anonima. Besides purchasing the Bolivian gas, Argentina will finance the construction of a refinery in eastern Bolivia’s Yacuiba province. President Morales stressed that such co-operation is possible thanks to the ongoing process of change (presumably nationalisation) led by his government, which will enable Bolivia to increase its international reserves.
(Bolivia)
Wednesday, 18: Bolivia's vice president, Alvaro Garcia Linera, announced on Tuesday that the government was still committed to a target date of Oct. 28 to complete nationalising its petroleum reserves. Talks with foreign energy firms on transferring control have not yet produced a single new contract. The Vice President remains confident that negotiations are advancing quickly. None of the foreign energy companies working in Bolivia have signed new contracts.
(Argentina and Bolivia)
As reported in the Daily Record Bolivia and Argentina have signed a major natural gas agreement expected raise US$17 billion in Bolivian gas exports over twenty years. The agreement was signed before 10,000 people in a sports coliseum in Santa Cruz by Bolivia’s President Evo Morales and Argentine President Nestor Kirchner. The agreement is part of a “bilateral energy strategy” that includes a joint venture of the partners' state-owned energy companies, Yacimientos Petroliferos Fiscales Bolivianos (YPF) of Bolivia and Enarsa of Argentina, for the transport and exportation of hydrocarbons and hydrocarbons products. ENARSA will explore and exploit gas, oil and other hydrocarbons in Bolivia. According to reports in the Latin American Press, the agreement was finalised less than month ahead of Bolivia's deadline to nationalise its energy sector. It is thought to be the first such agreement signed.
(Argentina)
YPF, has offered US$6.12(mn) for exploration in the Tamberías area in San Juan province over six years.
(Falkland Islands)
18th October 2006
Exploration Activity Update
Integration of data provides greatly improved clarity on prospects
• CSEM and 2D seismic data give direct hydrocarbon indicators
• Ernest Prospect (formerly J1) significantly de-risked, potentially c. 100 million barrels of recoverable reserves
• Potential discovered NPV10 over $1,000 million at $50 oil for prospect Ernest
Rockhopper Exploration plc (“Rockhopper” or “the Company”) has today announced that data from the two Controlled Source Electromagnetic Surveys (CSEM) carried out on its behalf by Offshore Hydrocarbon Mapping plc earlier in 2006, when co-rendered (superimposed) with recently acquired 2D seismic data, provides greater clarity of the structures surveyed and significantly de-risks the acreage.
Executive Chairman, Dr. Pierre Jungels, said:
“This is great news, we took a bold step utilising CSEM and have substantially de-risked our prospects. We now have a drillable prospect, Ernest, which if successful could contain over 100 million barrels of recoverable oil.
In little more than a year since listing on AIM, we have significantly increased our understanding of and confidence in the prospectivity our North Falkland Basin acreage. We now have a highly de-risked drillable prospect and a number of encouraging leads in licences PL023 and PL024.
We intend making further progress in our understanding with a 3D seismic survey starting later this month in licences PL032 and PL033 and conducting further evaluation of the 2006 2D seismic data on licences PL023 and PL024 with the aim of identifying a number of additional drillable targets for any drilling programme.”
The full press release can be found at:
http://www.rockhopperexploration.co.uk.
RELEVANT EXPLORATION SHARE PRICES
Desire Petroleum:
Monday, 16: Unchanged – 33.00, Tuesday, 17: Down 0.50 – 32.50, Wednesday, 18: Up 1.25 – 33.75, Thursday, 19: Up 0.50 – 34.25, Friday, 20: Down 0.25 – 34.00
FOGL:
Monday, 16: Unchanged – 85.00, Tuesday, 17: Down 2.00 – 83.00, Wednesday, 18: Down 1.50 – 81.50, Thursday, 19: Down 3.00 – 78.50, Friday, 20: Up 1.00 – 79.50
Rockhopper Exploration:
Monday, 16: Unchanged – 39.50, Tuesday, 17: Unchanged – 39.50, Wednesday, 18: Up 5.00 – 44.50, Thursday, 19: Unchanged – 44.50, Friday, 20: Down 1.50 – 43
Borders & Southern:
Monday, 16: Up 0.50 – 40.00, Tuesday, 17: Down 0.50 – 39.50, Wednesday, 18: Unchanged 39.50, Thursday, 19: Up 0.25 – 39.75, Friday, 20: Unchanged – 39.75
Tullow Oil:
Monday, 16: Up 2.75 – 394.75, Tuesday, 17: Down 1.75 – 393.00, Wednesday, 18: Up 6.50 – 399.50, Thursday, 19: Up 3.00 – 402.50, Friday, 20: Up 5.50 – 408.00
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