Falklands : Hydrocarbons Daily Record (17 October 2007)
Submitted by Falkland Islands News Network (Juanita Brock) 18.10.2007 (Article Archived on 01.11.2007)
Thanks to Turkey's parliament approving a hot pursuit policy the price of crude has increased today.
HYDROCARBONS DAILY RECORD (17 OCTOBER 2007)
By J. Brock (FINN)
TODAY’S TOP STORY:
OIL MAJORS PULLING OUT OF NORTH SEA AS WELL AS LATIN AMERICA
By J. Brock (FINN)
South America has now become a very difficult place for oil majors to work. ESSO and Royal Dutch Shell plc want to get out of Argentina and have put assets in Argentina up for sale. Both Shell, Exxon/Mobil and Esso consider Latin America among their smaller business areas and with additional political and economic pressure have decided to cut their losses and pull out. Royal Dutch Shell Plc and Exxon Mobil have also put some Dutch North Sea fields up for sale, in addition to its plans to sell UK North Sea assets. It is well known and speculated that the oil majors are focusing on oil provinces with more potential.
Royal Dutch Shell plc announced on Wednesday that its NAM joint venture with Exxon was selling a number of producing fields in the NOGAT area on the Dutch continental shelf. The press release went on to say that the fields being offered for sale produced around 5.4 million cubic metres of gas and 1,700 barrels of oil per day.
Politics play an important part in the decision to sell assets. Nationalisations like those taking place in Venezuela and Bolivia are not new. The North Sea was a vital production area for oil majors like Shell after they lost rich fields in the Middle East through nationalisations in the 1970s. It is believed that the North Sea is running out of huge commercial reserves and that the fields on offer would suit smaller oil companies.
It is hoped that more oil majors like BHP Billiton will focus on the North, East and South Falklands Basins as the Falklands offer a stable government and economic growth.
CRUDE PRICES: Wednesday, 17 October 2007
Light Sweet Crude traded at $$87.81 up 20 Cents on the New York Mercantile Exchange. Brent Crude was trading at $84.16 up $1.41 on London’s ICE Futures Market.
ANALYSIS:
Turkey’s parliament has approved a hot pursuit policy along the country’s border with Iraq and this helped to increase the price of crude today. Another trend to look for is the production of nations not in OPEC. It is understood that it is falling off. OPEC’s increase in production of 500,000 barrels a day had nil affect on crude prices.
A BRIEF INVENTORY REPORT FOR WEEK ENDING 12 OCTOBER 2007:
Crude: 321.9 million barrels up 1.78 million barrels
Gasoline: 195.8 million barrels up 2.77 million barrels
Distillates: 136.3 million barrels up 994,000 barrels
Refinery Capacity: 87.3% down 0.5%
THE MARKETS:
FTSE 100: 6,677.70 up 67.41, FTSE250: 11,538.00 up 171.79, SmallCap: 3,865.50 up 13.30
DJI: 13,892.54 down 20.40, NASDAQ: 2,792.61 up 28.76, S&P500: 1,541.24 up 2.71
INTERNATIONAL DEVELOPMENTS:
(Azerbaijan)
The VI Azerbaijan international conference focusing on Geophysics at the service of petroleum industry has opened in the country’s capital, Baku. N. Berezovsky “AIS” Association’s president stated that it has a 40% chance of confirming hydrocarbons reserves. He went on to say that annual production of 60 million tons these reserves will be sufficient for Azerbaijan for 80 or 90 years. There are claims that in 2007 Azerbaijan will produce 32 million tons of oil and next year 43 million tons.
Azerbaijan has discovered 36 oil and gas fields, including 17 onshore ones. 28 international agreements have been signed to develop those resources.
(100X Translation Service)
REGIONAL DEVELOPMENTS:
(Ecuador)
Repsol YPF SA is in talks with Ecuador's government over a recent tax hike which it considers "unreasonable," the head of the Spanish-Argentine oil company said Wednesday. Repsol Chairman Antonio Brufau in talks with Ecuador's government, said it must decide if it wants his company to continue operations. It is known that the Spanish/Argentine company wants to stay in Ecuador. The higher tax bracket for foreign companies - taxing income from hydrocarbon sales at rates up to 99% when prices exceed those set in contracts - threatens the profitability of oil companies. Repsol's current oil production in Ecuador amounts to only about 15,000 barrels a day, out of a company total of some 1.1 million barrels a day. This information was obtained from the company website.
(100X Translation Service)
LOCAL DEVELOPMENTS:
Desire Petroleum plc Additional listing and TVR Application has been made for the admission to trading on AIM of 813595 new ordinary shares in Desire following the exercise of an equivalent number of options on 16 October 2007. 478,239 options were exercised at 20.11p per share and 335,356 options were exercised at 21.74p per share. Admission is expected to occur on 22 October 2007. Following the exercise of these options, Desire has 227,128,012 ordinary shares in issue with an equivalent number of voting rights.
RELEVANT SHARE PRICES:
TLW: 638.00 up 14.00, DES: 29.25 unchanged, FOGL: 1401.50 up 1.50, RKH: 49.50 unchanged, BOR: 36.50 down 1.50, PRE: 14.50 down 0.25, GBP: 10.25 unchanged, GPK: 425.00 up 1.50, BLT 1846.00 up 23.00
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