Falklands : Hydrocarbons Weekend Record (04 and 05 November 2006)
Submitted by Falkland Islands News Network (Juanita Brock) 06.11.2006 (Article Archived on 20.11.2006)
Despite cutting production by 1.2 Million bpd last month, OPEC is considering another cut.
HYDROCARBONS WEEKEND RECORD: 04 AND 05 NOVEMBER 2006
By J. Brock (FINN)
WEEKEND DEVELOPMENTS
OPEC
Despite the cuts, OF 1.2 Million bpd crude prices remain below $60 a barrel, due to doubts over members complying with the decision made last month to cut production. Regardless of threats of vandalism and terrorism the prices hover around $60.00 but not on all days. This has lead to speculation that OPEC will, yet again, take a decision to make further cuts on the daily production rate.
CRUDE PRICES
Monday, 30: Light Sweet Crude: $58.50 and Brent Crude: $58.75
Tuesday, 31: $57.45 $58.30
Wednesday, 01: $58.03 $58.71
Thursday, 02: $57.88 $57.87
Friday, 03: $58.95 $59.05
TRENDS
Monday, 30: A good report on higher inventories in the US and a diminished threat to Saudi infrastructure and international shipping in the mid east has caused crude prices to drop significantly today.
Tuesday, 31: Crude prices dropped again today on rising inventory figures and doubts that OPEC will make good on its decision to cut production by 1.2 million bpd. Even if it does cut production there will be minimal damages as OPEC has increased its output to 30.18 million bpd from its September levels. Generally there is a release of tension across global markets, helping to keep crude prices low.
Wednesday, 01: Crude prices fluctuated today on rising inventory figures. Heating oil, however, is not in the best levels and this caused nervousness in the market. Doubts that OPEC will make good on its decision to cut production by 1.2 million bpd abated a little today. OPEC, however, has increased its output to 30.18 million bpd from its September levels. Generally there is a release of tension across global markets, helping to keep crude prices low but entities who want higher crude prices could use the geopolitics issue to force prices higher.
Thursday, 02: A climb in US inventories as well as a decrease in demand has brought crude lower today.
Friday, 03: Threats, later turning out to be a hoax - and terrorism in Nigeria were two factors that caused a significant rise in the price of crude today.
DEVELOPING FACTORS
(BP)
(30) According to the Chemical Safety and Hazard Investigation Board (CSB) released internal BP documents written between 2002 and 2005 reveal that Company management had knowledge of major safety problems at the Texas City, Texas, refinery, and at 34 other BP businesses around the world, prior to the March 2005 explosion. The reason given for non maintenance of infrastructure, including that at Prudhoe Bay, Alaska, was budgetary constraints.
(31) Press today catalogue a history of poor maintenance and neglect of BP’s assets all over the world. The Chemical Safety and Hazard Investigation Board (CSB) read released internal BP documents written between 2002 and 2005 that reveal the Company management had knowledge of major safety problems at the Texas City, Texas, refinery, and at 34 other BP businesses around the world, prior to the March 2005 explosion. The reason given for non maintenance of infrastructure, including that at Prudhoe Bay, Alaska, was budgetary constraints. It is thought inexcusable for this to happen when oil profits soared over the northern summer. This intriguing story will not go away and FINN will keep readers updated as developments arise.
(Spain)
Repsol, a Spanish oil company, said on Sunday that it welcomed agreements between the Bolivian government and foreign oil and gas companies. The announcement went on to say these agreements will allow the administration of President Evo Morales to move forward with its plans for the gas industry that are expected to bring in billions of dollars in revenue to fight poverty. Money raised from the new contracts should allow development and new investment projects in the country as well as guaranteeing legal security for investments.
(France)
A spokesman for French oil firm Total SA on Tuesday refused to confirm Brazil’s press reports that it would invest $1.882 billion for exploration and development of three gas fields in Bolivia. Earlier on Tuesday Brazil’s daily, “Valor” reported the investment, attributing it to comments by Bolivian Hydrocarbons Minister Carlos Villegas. This is a developing story that will be watched as well as analysed in due course.
(Timor Sea)
Petroleum Nasional Berhad (Petronas) along with South Korean exploration firms are exploring for hydrocarbons in the Timor Sea. Gold Point Energy Provides Update on Capricorn Licence Farm-out in Argentina GeoGlobal Resources to Test KG#15 Well E.ON to Build Power Station of the Future RWE Dea Announces First Oil Discovery in Libya DNO ASA Provides an Update on Operations in Block 32 & 53, Republic of Yemen Petrobras Reaches a Gas Exploration and Production Agreement in Bolivia
(Nigeria)
An investigation headed by the Nigerian Economic Crimes Commission (EFCC) will be carried out into why the sale of oil acreage that was offered in the open was sold under the table. Mallam Nuhu Ribadu, the Commission’s Chairman, has vowed to find out why the acreage was sold off without being declared by Nigeria's petroleum ministry, despite open bidding procedures designed to bring a measure of credibility to Nigerian oil licence awards.
(Russia)
Gazprom, Russian natural gas monopoly announced on Thursday that it would double prices for Georgia in 2007, raising concerns the country is being used as a political tool at a time Moscow-Tbilisi relations are difficult. Georgia will be charged 230 US dollars per 1,000 cubic metres of the fuel next year, up from this year's 110 dollars. The deal is not signed yet. It is thought the price Georgia now pays is half that what western Europe pays.
(The People’s Republic of China)
This week the People’s Republic of China is playing host to officials from several African Countries to help build trade links and confidence. There has been criticism of China for hosting officials from Sudan but analysts feel it is more important for China to have dialogue with African nations rather than cut off communications when they don’t like what a country is doing. They have proven that point with their philosophy regarding Iran’s enriching nuclear fuel for energy generation. It is hoped that the dialogue will be successful. This is a developing story and it will be monitored to see the progress of these talks.
DEVELOPING REGIONAL FACTORS
(Bolivia)
(30) All eyes are on Bolivia today in hopes that Evo Morales will make good on his promise to the people of his country to invest newly found natural gas revenues in projects that will help them directly. At the 180 day deadline several international investors signed new contracts that would give Bolivia up to 82% of profits from its natural gas.
(31) Bolivia’s government has postponed nationalising that country’s mining industry. It is hoped that they will wait and see how the hydrocarbons nationalisation is going before trying to nationalise other businesses. As for the companies signing new contracts: BG Group Plc, Occidental, Petrobras, Repsol-YPF and Total SA, they can expect a 15% profit margin from Bolivian production, according to Bolivia’s Energy Minister, Carlos Villegas. The contents of the contracts are not yet public because they must have congressional scrutiny prior to their release. Brazil’s Petrobras, with refineries in Bolivia worth $150Million, wants compensation for relinquishing control to Bolivia’s state run energy company, Yacimientos Petroliferos Fiscales Bolivianos. There are no reports about if or when or how much compensation will be paid.
(01) Time will tell whether international investors can live with 18% profits from Bolivia’s natural gas. Bolivia is expected to claw back 82% and it is hoped that the people will benefit with new roads, hospitals and schools, etc.
(02) In an interview with the south American press on Tuesday, Bolivia’s Hydrocarbon Minister, Carlos Villegas, stressed that the state oil company’s executives have a high professional standard, and they proved it in the recent negotiations international investors operating in the country. Denying a supposed promotion of government Movement Towards Socialism (MAS), members to lead the Bolivian State Oil Company.
(03)
(Latin America)
Generally there are concerns about Daniel Ortega becoming President of Nicaragua as his last stint as president nearly 20 years ago did not work well, with the economy suffering severely. However, it is hoped that lessons learned during his last unsuccessful presidency will be applied and things will be better the second time around. Bolivia’s Evo Morales, Cuba’s Fidel Castro and Venezuela’s Hugo Chavez endorse the candidacy.
(Paraguay)
Press Release
Third Area in Paraguay (Canindeyu) Awarded to Chaco Resourses Thursday, November 02, 2006. St. Mary Announces Agreement For Acquisition Of Oil & Gas Assets In The Permian Basin Ikon Science Reports Major Interest in RokDoc® Software and Announces New Appointments Third Area in Paraguay (Canindeyu) Awarded to Chaco Resourses Aurelian Oil & Gas Signs Contracts For Drilling in Poland and Bulgaria Afren plc Announces Appointment of Dr Rilwanu Lukman as Non-Executive Chairman Talisman Energy Reports $1.1 Billion in Cash Flow $524 Million in Net Income
(Cuba and Brazil)
Trade between Cuba and Brazil has grown by about 352 million dollars in 2006, Minister Pedro Luis Padron, Brazil’s Trade Minister announced on Wednesday at Havana Cuba’s International Trade Fair. Now that Venezuela is a member of MERCOSUR, it is expected that the trading bloc will have more global influence. A focus on hydrocarbons industries is expected to produce stronger ties between members of MERCOSUR.
(Peru)
Native Indians shut down some of Peru’s hydrocarbons operations for nearly two weeks in October, because the company (Perupetro) hasn’t addressed environmental concerns. Peru produced an average of 106,619 barrels of oil and other hydrocarbon products a day in October, 9.43% lower than in the previous month. October's production was 3,305,178 barrels and was down because of protests in northern Peru at Pluspetrol Norte's block 8 and block 1-AB.
EXPLORATION SHARE PRICES
Desire Petroleum: (30) 32.75 (31) 34.00 (01) 34.00 (02) 35.25 (03) 35.75
FOGL: (30) 78.50 (31) 87.50 (01) 87.50 (02) 85.00 (03) 84.50
Rockhopper Exploration: (30) 43.00 (31) 43.00 (01) 43.00 (02) 43.00 (03) 43.00
Borders & Southern: (30) 37.50 (31) 37.00 (01) 37.50 (02) 37.50 (03) 37.50
Tullow Oil: (30) 393.75 (31) 389.50 (01) 399.75 (02) 400.00 (03) 397.00
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