Falklands : Hydrocarbons Daily Record 10 to 12 July 2007
Submitted by Falkland Islands News Network (Juanita Brock) 13.07.2007 (Article Archived on 27.07.2007)
Gasoline demand and the ability to produce it have helped to increase the overall price of crude today.
HYDROCARBONS DAILY RECORD: THURSDAY, 12 JULY 2007
By J. Brock (FINN)
At 1800LMT on Thursday, 12 July 2007 Light Sweet Crude was trading at $72.50 down 6 Cents on the New York Mercantile Exchange and Brent Crude was trading at $76.38 up 94 Cents on London’s Ice Futures Market.
ANALYSIS:
A major reason for crude price increases is gasoline demand, reported to be 9.6 Million Barrels a day - 1.4% higher than it was during the same period last year. Our ability to produce the gasoline from crude also has helped prices to increase lately. Though capacity now stands at 90.2% it is ideal for the figure to be closer to 95%. With proper maintenance and replacement this could be done. BP, Exxon/Mobil and Shell are among the top profit making companies and some of the cash could be spent on refineries to help boost capacity. We take the point that new builds are a problem with the “not in my back yard” syndrome alive and well in the US. The best scenario tends to be refinery extensions as well as maintenance. The refinery at Coffeyville, Kansas is still closed, helping to cut gasoline supplies in the US.
A BRIEF INVENTORY REPORT FOR THE WEEK ENDING 06 JULY 2007:
Gasoline: up 1.2 million barrels to 205.6 million barrels
Crude: down 1.4 million barrels to 351.3 million barrels
Distillates: up 800,000 barrels to 122.4 million barrels
Natural Gas: up106 billion cubic feet to 2.63 trillion cubic feet
Refinery Capacity: 90.2% up from 90%
THE MARKETS:
FTSE 100: 6,697.70 up 82.57
FTSE 250: 11,809.00 up 142.22
SmallCap: 4,023.20 down 2.20
DJI: 13,861.73 up 283.86
NASDAQ: 2,701.73 up 49.94
S&P500: 1,547.70 up 28.94
INTERNATIONAL DEVELOPMENTS:
A company press release on Wednesday says that Tullow Oil has a rig to drill into a Uganda block that seismic data indicates might be bigger than June’s discovery of up to 600 million barrels in Ghana. It is expected that the more advanced rig will be able to drill down 7km in Tullow’s concession adjoining Lake Albert. Tullow, wants to export the Lake Albert oil to Mombassa if enough oil in commercial quantities is found. First, Tullow hopes to develop the Ugandan fields to supply the domestic market with 4,000 barrels per day due in 2009.
OPEC
On 11 July OPEC announced that oil production increased moderately in June, though the cartel is pressured to increase production as global energy demands grow. The 12 Members of the Petroleum Exporting Countries pumped an average of 30.22 million barrels per day in June and 30.10 million barrels per day in May, Angola, Iran, Nigeria and the United Arab Emirates increased production by 80,000 barrels per day, while Iraq, Indonesia and Venezuela decreased production by 70,000 barrels per day.
REGIONAL DEVELOPMENTS:
(Chile)
Extract from a press release
Chile’s Ministry of Mining website says that in view of the great interest generated internationally in the tender for hydrocarbons exploration and production (E&P) in Chile's Magallanes Region, the government has decided to grant an extension of the period for obtaining the term sheets. This will now close on Thursday, August 9, instead of Tuesday, July 10, as originally stipulated. The press release goes on to say that parties interested in participating in the bidding round must obtain the term sheets, either personally or through a representative, from the offices of the Ministry of Mining in Santiago (Teatinos 120, 9th floor).
In line with this modification of the tender calendar, the period for obtaining the corresponding technical information - comprising the geological characteristics of each of the ten blocks included in the tender - has also been extended. This will still open, as originally envisaged, on Wednesday, July 11, but will now close on Thursday, August 9 (instead of Monday, July 30).
The ten blocks put out to tender cover a total area of 32,356 km(2). In three of the blocks (Coiron, Caupolican and Lenga), the winning company or consortium will be partnered in the project by ENAP, the state oil company. In the remaining seven blocks (Tranquilo, Russfin, Porvenir, Brotula, Isla Magdalena, Bahia Inutil and Otway), the private company or companies will hold 100% of the block's exploration and exploitation rights. In all ten cases, the winning bidder will act as the block's operator.
The companies to which the blocks are awarded will sign a Special Operating Contract (CEOP) with the State of Chile. These contracts have a maximum Duration of 35 years, divided into an Exploration Phase and a Production Phase.
RELEVANT SHARE PRICES:
TLW: 533.00 up 10.50
DES: 29.50 unchanged
FOGL: 75.50 down 0.50
RKH: 40.00 unchanged
BOR: 30.50 unchanged
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