Falklands : Hydrocarbons Weekend Record 26 to 28 January 2007
Submitted by Falkland Islands News Network (Juanita Brock) 28.01.2007 (Article Archived on 11.02.2007)
Besides commenting on cuts in production, Saudi officials have made it clear that they want to put a lid on crude prices.
HYDROCARBONS WEEKEND RECORD: 26 TO 28 JANUARY 2007
By J. Brock (FINN)
WEEKEND DEVELOPMENTS:
Besides commenting on OPEC Supplies, Saudi Officials have stated that they want to keep crude prices at a reasonable price – around £50.00 per barrel. At a high of $78.40 reached on 14 July last year, Saudi Arabia claimed high profits for its crude. However, they are determined to keep the price at a reasonable level. Recent trends indicate that $50.00 is a comfortable benchmark for now.
WEEKLY TRENDS IN CRUDE PRICES:
Friday, 26: Light Sweet Crude gained $1.19 Cents to settle at $55.42 on the New York Mercantile Exchange and Brent Crude increased by $1.17 Cents to settle at $55.29 on London’s ICE Futures Market.
Thursday, 25: Light Sweet Crude lost$1.14 Cents to settle at $54.23 on the New York Mercantile Exchange and Brent Crude decreased $1.31 Cents to settle at $54.12 on London’s ICE Futures Market.
Wednesday, 24: Light Sweet Crude gained .33 Cents to settle at $55.37 on the New York Mercantile Exchange and Brent Crude increased .33 Cents to settle at $55.43 on London’s ICE Futures Market.
Tuesday, 23: Light Sweet Crude gained $2.48 to settle at $55.04 on the New York Mercantile Exchange and Brent Crude increased $2.65 Cents to settle at $54.95 on London’s ICE Futures Market.
Monday, 22: Light Sweet Crude gained $1.04 to settle at $53.03 on the New York Mercantile Exchange and Brent Crude increased .85 Cents to settle at $54.29 on London’s ICE Futures Market
TRENDS:
26 to 28 January: Over the weekend cold weather dominated the US and there was a corresponding drain on inventories. OPEC, however, has rubbished speculation that it will be cutting production. It is important to note here that Saudi Arabia spoke for the organisation and said that the cuts thus far initiated were sufficient to stem any over-supply. Monday is another week, and like a week in politics, time and trends will run quickly indeed.
Thursday, 25: Fears that OPEC would cut production have been allayed for the third time this month. In addition there are forecasts for warmer weather in the United States with a corresponding decrease in demand. Combined with better inventory reports the current trends indicate lower crude prices today.
Wednesday, 24: A clearer view of inventories in the US shows that gasoline is up by 4 million Barrels to 220.8 million barrels and in the US crude supplies are up by 700,000 barrels to 322.2 million barrels. This news was offset by the pledge by President Bush in last night’s State of the Union message to double the size of US reserves. Also colder weather in the US as well as renewed fears that OPEC will cut production helped to increase the price of crude today.
Tuesday, 23: The US Department of Energy released an alarming report about inventories that caused by 4.7% in respect of Light Sweet Crude and 4.3% in respect of Brent Crude. Colder winter weather and a run on supplies also helped the price of crude to increase today.
Monday, 22: Colder winter weather and a run on supplies was the combination to increase the price of crude today.
THE MARKETS: Friday, 26 January 2007
FTSE 100 closed at 6,228.00 down -41.26
FTSE 250 closed at 11,118.60 down -52.51
FTSE Small Cap closed at 3.950.20 down –10.73
DJI closed at 12,487.02 down -15.54
NASDAQ closed at 2,435.39 down +1.25
S&P500 closed at 1,422.18 down -1.72
LAST WEEK’S REGIONAL DEVELOPMENTS:
(Cuba)
Cupet, Cuba's state oil company, and its Venezuelan counterpart PDVSA, have signed agreements to carry out joint hydrocarbons exploration and certification work. The two companies will explore and certify deposits in the Orinoco oil belt in Venezuela as well as offshore Cuba in the Gulf of Mexico. It is expected that the work will focus on the Boyacá Norte block in the Orinoco and blocks N53, N54, N58 and N59 in Cuban waters. According to the US Energy Information Administration (EIA), estimates of the recoverable reserves from the Orinoco belt range from 100B-270Bb, Analysts report that there could be at least1.6Bb barrels of crude oil reserves in Cuba's offshore basins in the Gulf of Mexico.
(Bolivia)
Bolivia’s government is facing a familiar obstacle – opposition. In its program of change, the opposition party Poder Democratico Social (PODEMOS), is pushing an unconstitutional resource against recently approved laws. PODEMOS has presented a request of nullity for the new agrarian reform law and the nationalization of hydrocarbons, both ratified by the country’s Senate. PODEMOS also is opposed to the designation of four judges to the Supreme Court. Bolivia’s socialist government reacted and told PODEMOS that their attitude is "obstructionist, and damaging for the country".
(Peru)
Peru’s Mines and Energy Ministry has announced bidding for onshore blocks primarily located in the Marañón and Ucayali basins. Blocks 130, 134, 135, 136 and 137 are in the Marañón basin, while blocks 131, 132, 138 and 139 are in the Ucayali basin. Other onshore blocks include block 25 in the Talara basin, block 140 in the Huallaga basin, and block 141 in the Titicaca basin. Offshore blocks include in the tender are the Salaverry basin's Z-48 and Z-49 blocks, the Trujillo basin's Z-46 and Z-47 blocks as well as block Z-45 in the Talara-Sechura basin. Rules for submitting bids are available on the Ministry’s website today.
(Venezuela)
Petróleos de Venezuela, a State-run oil holding Petróleos will dispatch to Guyana up to 5,200 bpd of hydrocarbons through subsidiary PDV Caribe. An agreement struck on Tuesday by Pdvsa marketing and supply manager Asdrúbal Chávez and Guyana's Energy Agency CEO Joseph O'Lall will ensure that it is, executed in the context of the “Agreement for Energy Cooperation (Petrocaribe).” The supply of by-products based on the nation requirements is also included in the agreement. Provisions in the agreement accounts for 50 percent of Guyana's daily consumption of 10,000 bpd.
(Chile)
The South American press announced that there are new hydrocarbons indicators below lake Mercedes in Tierra Del Fuego as well as other areas offshore near Punta Arenas. It is hoped that there are hydrocarbons in commercial quantities in the region to help make up for the gas supply cut off from Bolivia via Argentina.
(Argentina and Bolivia)
Bolivia's state-run energy firm YPFB has awarded contracts to supply natural gas to Argentina. Eight energy companies submitted offers to YPFB that met the company’s standards. On Monday YPFB accepted bids submitted by BP, Chaco, South Korea's Dong Won Corporation, U.S. Vintage, and Argentine Pluspetrol. The supply contracts are geared to meet the requirements of an agreement forged in October by officials from YPFB and Argentina's state-run energy company Enarsa. Spanish-Argentine Repsol YPF (REP) and Brazil's state-run oil company Petroleo Brasileiro (PBR), or Petrobras are left out of the group. Repsol and Petrobras were rejected, according to a YPFB spokesman, because the Bolivia’s government isn't satisfied with their plans to carry out promised investment and production in Bolivia. The contract bid for states that supply will remain at up to 7.7 million cubic meters a day (mcm/d) in 2007, increasing to between 7.7 mcm/d and 16 mcm/d during 2008 to 2009, and reach 27.7 mcm/d between 2010 and 2026.
(Russia and Venezuela)
The Latin American press reports that global markets have opened to Hugo Chavez and Vladimir Putin but analyst claim they are now closing them by reasserting state control over their economies. Venezuela and Russia appear to be chopping and changing capitalism in their countries as well as irritating markets that increased their oil-producing in the first place by delivering record energy prices and the strongest global growth in a generation.
(Peru)
From Hunt Oil
The Peru LNG project, the largest industrial project ever to be undertaken in the history of Peru, officially launched today by awarding to Chicago Bridge & Iron Company N.V. (CB&I) the engineering, procurement and construction (EPC) contract for a natural gas liquefaction plant valued in excess of US $1.5 billion. The Notice To Proceed authorization represents a commitment by the international project consortium (consisting of Hunt Oil Company of the United States, SK Corporation of Korea and Repsol YPF of Spain) to move forward with their direct investments to develop the Peru LNG gas export project. Hunt Oil Company will serve as operator of the project. Peru LNG is a key component in Peru's overall energy plan. Natural gas resources in excess of local demand will be exported as a sustainable commodity for more than two decades with exports expected to commence in mid 2010.
The total cost for the project, including the liquefaction plant, related marine and pipeline facilities and development and financing costs, aggregates approximately $3.8 billion and is the largest foreign direct investment in Peru's history. It has the strong support of the Peruvian government, as it will be an important engine of economic growth and jobs in Peru. Once in operation, Peru LNG is expected to generate roughly $800 million annually of hard currency export revenues. During the construction phase, 35,000 direct and indirect jobs will be generated. Financing for the project is expected to come from a variety of sources, including the Inter-American Development Bank, with which Peru LNG signed an $800 million mandate letter in July 2006.
For further information: Peru LNG SRL
AV Victor Andres Belainde 47
Via Principal 140
Torre Rial Seis 503
San Isidro, Lima 27 Peru
Tel: +51(01)611-5100
Fax: +51(01)611-5102
(Falkland Islands)
(From a Press Release)
For immediate release 24 January 2007 Desire Petroleum ('Desire' or 'the Company') Company Update
Desire Petroleum plc (AIM: DES), the oil and gas exploration company wholly focused on the North Falkland basin, today announces an update on its activities.
The Company has taken delivery, in Aberdeen, of long lead time items, including the casing, tubulars and wellheads required for the planned 3 well drilling programme in the Falkland Islands. This equipment, valued at around £2.75 million, represents a significant part of the down-hole materials required for the drilling operation. The equipment will be stored near Aberdeen until required for the drilling campaign. It should be noted that since the order was placed in early 2006 the cost of this equipment has risen significantly.
The Company continues to pursue a number of avenues in seeking to obtain a rig for drilling in the North Falkland Basin. In addition to continuing discussions with rig owners and potential farm-in partners, Desire is investigating the option of joining with the other operators in the Falklands to conduct a joint drilling campaign along the lines of the 1998 drilling campaign. The Directors believe that a multi-well joint campaign is likely to be of much greater interest to rig owners than a Desire stand-alone 3 well programme.
In December 2006 Dr Colin Phipps the Chairman of Desire underwent a successful operation and is currently convalescing prior to commencing a further course of treatment. Dr Phipps continues to keep up-to-date with the Company's progress but, pending his full recovery, his duties as Chairman will be undertaken by Stephen Phipps who has been appointed Acting Chairman by the Board. For further information please contact:
Desire Petroleum plc 020 7436 0423
Stephen Phipps, Acting Chairman
Dr Ian Duncan, Chief Executive Officer
Buchanan Communications 020 7466 5000
Ben Willey
Tim Thompson
Ben Romney
Relevant Share Prices for Friday, 26 January 2007:
Tullow Oil down 3.00 to settle at 402.75, Desire Petroleum down -0.50 at 29.50, FOGL down -0.50 to 92.00, Rockhopper Exploration up 0.25 at 38.25, Borders & Southern unchanged at 34.00
Relevant Share Prices for Thursday, 25 January 2007:
Tullow Oil unchanged to settle at 405.75, Desire Petroleum down -1.00 at 30.00, FOGL Up 2.50 to 92.50, Rockhopper Exploration unchanged at 38.00, Borders & Southern unchanged at 34.00
Relevant Share Prices for Wednesday, 24 January 2007:
Tullow Oil up 3.50 to settle at 405.75, Desire Petroleum down -2.50 at 31.00, FOGL Up 1.50 to 90.00, Rockhopper Exploration unchanged at 38.00, Borders & Southern unchanged at 34.00
Relevant Share Prices for Tuesday, 23 January 2007:
Tullow Oil down -2.75 to settle at 402.25, Desire Petroleum unchanged at 33.50, FOGL Unchanged at 88.50, Rockhopper Exploration down -0.50 to settle at 38.00, Borders & Southern unchanged at 34.00
Relevant Share Prices for Monday, 22 January 2007:
Tullow Oil up +7.25 to settle at 405.00, Desire Petroleum down -0.50 to settle at 33.50, FOGL Unchanged at 88.50, Rockhopper Exploration unchanged at 38.50, Borders & Southern unchanged at 34.00
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