Falklands : Hydrocarbons Weekend Record (22 to 24 June 2007)
Submitted by Falkland Islands News Network (Juanita Brock) 24.06.2007 (Article Archived on 10.07.2007)
A great bottleneck has occurred in the gasoline supply at the refineries as capacity continued its slip last week. This added to general financial worries in the United States added to pressure to increase the price of crude. Crude prices are fluctuating upwards and are expected to continue rising until summer drive season and the hurricane season are over.
HYDROCARBONS WEEKEND RECORD 22 TO 24 JUNE 2007
By J. Brock (FINN)
WEEKEND ANALYSIS:
A great bottleneck has occurred in the gasoline supply at the refineries as capacity continued its slip last week. This added to general financial worries in the United States added to pressure to increase the price of crude. Crude prices are fluctuating upwards and are expected to continue rising until summer drive season and the hurricane season are over.
OPEC also has been pressured into producing more crude but thus far they refuse saying that the world has adequate supply to meet demand. It appears, though, that crude inventories will rise as refinery capacity diminishes. It is worry over supplies of gasoline in the US that helps to ratchet prices to an artificially high level as was the case last year.
WEEKEND DEVELOPMENTS:
(Poland)
Two Polish-owned companies and a third party will deal with the exploitation of hydrocarbons in Poland. Petrobaltic SA, and Polish Oil and Gas Company (PGNiG SA) as well as FX Energy are involved in the project. Exploitation of Poland’s hydrocarbons accounts for 7% per cent of the total volume of oil. Some 30% of the total volume of natural gas is consumed in Poland. Meanwhile, Szczecin and Swinoujicie have bid to become the location for Poland’s LNG terminal. The first bid was made ten years ago and the second came five years later. On December 15, 2006 Vice-President of the Polish Oil and Gas Company (PGNiG SA) Tadeusz Swierzyñski announced that the terminal for liquefied natural gas will be built in Swinoujicie.
(Venezuela)
President Hugo Chavez has said, that Exxon Mobil, Conoco-Phillips, Chevron Corp, Norway's Statoil, Britain's BP Plc and France's Total can leave the country if they don’t accept the nationalisation deal being offered to them. Targeted companies in these projects are valued above $30 billion and capable of producing 600,000 barrels per day.
LAST WEEK’S CRUDE PRICES:
Monday, 18 June 2007 Light Sweet Crude was trading at $69.09 up $1.09 on the New York Mercantile Exchange and Brent Crude was trading at $72.18 up 71 Cents on London’s Ice Futures Market.
Tuesday, 19 June 2007 Light Sweet Crude was trading at $69.0910 up 10 Cents on the New York Mercantile Exchange and Brent Crude was trading at $71.84 down 34 Cents on London’s Ice Futures Market.
Wednesday, 20 June 2007 Light Sweet Crude was trading at $67.44 down $1.66 on the New York Mercantile Exchange and Brent Crude was trading at $69.76 down $2.08 on London’s Ice Futures Market.
Thursday, 21 June 2007 Light Sweet Crude was trading at $68.56 down 30 Cents on the New York Mercantile Exchange and Brent Crude was trading at $70.22 down 20 Cents on London’s Ice Futures Market.
Friday, 22 June 2007 Light Sweet Crude was trading at $69.14 up 49 Cents on the New York Mercantile Exchange and Brent Crude was trading at $71.18 up 96 Cents on London’s Ice Futures Market.
ANALYSIS:
Monday, 18 June 2007: Many analysts think that the threat of an oil industry strike in Nigeria caused the increase in crude prices today but underlying the regional geopolitics are fears about supply and reserves. OPEC is adamant that they are pumping enough crude to meet demand. However, the bottleneck seems to be at the refinery side, with capacity slipping from 91.1% at the end of May to 89.2% at the end of last week. Fears about the supply of gasoline in the summer drive season help crude prices to rise.
Also figuring in is the cost of crude when it is bought in bulk for reserves. It is hoped that crude had been purchased at the lower prices available at the beginning of this year, rather than purchased in a panic when prices are higher.
Tuesday, 19 June 2007: An oil industry strike over a rise in oil taxes in Nigeria on the horizon has caused a mixed result in the price of crude today, with NYMEX Crude trading up one cent and Brent Crude trading down 34 Cents. What should be dictating the price is calm prudence instead of fears about supply and nervousness about geopolitics. The bottleneck is refinery capacity, and until we get that right there will still be concerns about the supply of gasoline in the United States.
Wednesday, 20 June 2007: Inventory reports showing a dramatic increase in stocks of crude, gasoline and distillates have helped the price of crude to lower today.
Thursday, 21 June 2007: Crude prices remained largely flat today due to the easing of supply worries from Nigeria. Refinery capacity remains the bottleneck, with the decline of capacity from 91.1% at the end of May to 87.6% in mid June. This isn’t good news for road users during the summer drive season.
Friday, 22 June 2007: The up and down situation regarding the Nigerian oil workers strike as well as supply worries have caused the price of crude to increase today.
A BRIEF INVENTORY REPORT FOR THE WEEK ENDING 15 JUNE 2007:
Gasoline: Up 1.8 Million Barrels to 203 Million Barrels
US Gasoline Imports: Up 127,000 to 1.3 Million Barrels per day.
Crude: Up 6.9 Million Barrels to 349.3 Million Barrels
US Crude Imports: Up 650,000 Barrels to 10.8 Million Barrels per day.
Distillates: Up 100,000 Barrels to 122.7 Million Barrels
Refinery Capacity: Down 1.6% to 87.6%
INTERNATIONAL DEVELOPMENTS:
(Ghana)
From a Tullow Oil Website Press Release:
18 June 2007 – Tullow Oil plc has announced that the high impact Mahogany-1 exploration well drilled on the West Cape Three Points licence offshore the Republic of Ghana has discovered a significant light oil accumulation based on the results of drilling, wireline logs and samples of reservoir fluid.
The well, which is drilling in water depths of 1,320m, has been drilled to a depth of 3,683m and has to date, encountered a gross hydrocarbon column of 270m with 95m of net stacked pay. It is planned to drill to a total depth of approximately 4,200m to test further prospective horizons. Upon reaching the target depth, the well will be suspended pending further evaluation and additional appraisal drilling will be required. The Mahogany-1 well will be tested at a later date as part of the appraisal programme.
The Mahogany discovery, a Santonian turbidite stratigraphic trap, opens a new play fairway in the Tano Basin. The structure straddles both the West Cape Three Points and Deepwater Tano licences in which Tullow has interests of 22.9% and
49.95% respectively. Tullow is also the operator of the Deepwater Tano licence. The Mahogany-1 well was drilled using the “Belford Dolphin” - a dynamically positioned fifth-generation deepwater drillship. This is the first exploration well to be drilled under the West Cape Three Points seven-year exploration agreement and follows a 1,076 sq km 3D seismic survey on the block in 2005.Commenting today, Aidan Heavey, Chief Executive of Tullow said:
"The discovery of oil in the Mahogany well represents a major event for the Republic of Ghana and for Tullow. Based on evidence to date, ultimate reserves are likely to be materially in excess of previous estimates, with some high-potential zones still to be drilled. We look forward to working with our partners to realise the full potential of Mahogany and our additional prospects in the region."
(People’s Republic of China)
Petrochina has replaced Royal Dutch Shell as No. 2. in the list of oil companies by market capital after the discovery and up coming exploitation of its 3.6 Billion Barrel discovery – the largest ever inside China. It is hoped that this prospect will help to wean China off of oil imports and the cash raised is expected to ploughed back into the infrastructure and for development.
Leading oil companies are, No. 1 Exxon/Mobile, No. 2 Petrochina, and No. 3 Royal Dutch Shell
(Algeria)
Sonatrach, an Algerian oil and gas company, has announced the discovery of 4 new hydrocarbons deposits in the basins of Berkine and Gourara located in the southern region of the country. Thus far 12 hydrocarbons deposits have been discovered in Algeria since the start of the year 2007. Eighteen hydrocarbons discoveries were recorded in Algeria in 2006.
(Russia)
Exxon/Mobil announced today that it expects the Russian government to continue to honour a contract for the development of hydrocarbons reserves off Russia's Pacific coast. Royal Dutch Shell Plc earlier this year relinquished its stake in a similar project off Sakhalin Island to Gasprom. Shell apparently agreed to ramp up its compensation to the Russian government in a bid to salvage the multibillion-dollar venture.
REGIONAL DEVELOPMENTS:
(Argentina)
Over the weekend the South American press have said that Argentine banking magnate Enrique Eskenazi is negotiating with Spain's Repsol to buy a 25 percent stake in its local energy arm YPF. The figure of $3 billion has been touted as the expected worth of the deal. According to several newspapers the banker is willing to pay between $300 million and $500 million for YPf. This is an on-going story and will be updated.
Enrique Eskenazi, an Argentine businessman, is buying 25 percent of Repsol YPF's stake in YPF, an Argentine energy company. This move is aimed to bring YPF under Argentine control, with a more rational energy policy taking shape in the country that faces energy shortages.
(Bolivia)
Guillermo Aruquipa, the president of YPFB, announced on Tuesday that Bolivia’s government has put off the acquisition of two refineries run by the Brazilian firm Petrobras, due to the lack of insurance cover. The new state-owned company, set up to administer the refineries, Cochabamba, and Guillermo Elder Bell, in Santa Cruz, cannot operate without insurance cover.
Workers at Bolivia's state-owned oil company, YPFB, have planned a strike today to protest the management of the company The union announced that Aruquipa and other YPFB administrators' actions have led to shortages of liquefied petroleum gas (LPG) for internal distribution. Arguments about the level of LPG imports and rationing of natural gas to the internal and external markets have caused the work stoppage.
(Falkland Islands and Uruguay)
Desire Plc has announced that Wavefiels InSeis has acquired the necessary high resolution data needed to explore for hydrocarbons in the Ann Prospect in the North Falklands Basin. Prior to the Bergen Surveyor coming to the Falklands, it will shoot seismic off the coast of Uruguay. The vessel has already set sail for Montevideo.
(Ecuador)
OPEC Secretary-General Abdullah al-Badri has announced that he expected Ecuador to join the Organisation of Petroleum Exporting Countries (OPEC). Ecuador has officially requested to become a member of the organisation. The country would become the OPEC’s 13th member, with Algeria, Angola, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the UAE and Venezuela.
(Brazil)
Brazil’s state owned energy company, Petrobras is seeking a foot-hold to become a global operator in the liquefied natural gas. Petrobras has begun negotiations for partnerships with companies and governments in the Middle East and Africa. The company announced on a visit to Qatar that they are interested in developing and guaranteeing supplies to Brazil. Qatar is the main world producer of LNG.
Petrobras announced today that it attained a new record high in daily oil production at the Espírito Santo Basin, in the south-east. The new record at the Espírito Santo Basin occurred on Friday, 15 June 2007 when 141,700 barrels were extracted from the field. According to Petrobras, this is an expressive volume when compared with the average for the month of May at 99,100 barrels per day.
(Venezuela)
The Government of Venezuela is negotiating with private oil companies over the takeover of four multibillion projects focused on future policy about joint ventures. Venezuela’s President Hugo Chavez has ordered oil companies, like Exxon Mobil to give the government a majority stake in the Orinoco Belt projects as part of his country’s nationalisation of the hydrocarbons industry.
RELEVANT SHARE PRICES MONDAY, 18 JUNE 2007:
TLW: 460.25 up 51.25 , DES: 30.25 down 0.25, FOGL: 82.00 unchanged, RKH: 44.00 down 0.50, BOR: 24.75 unchanged
RELEVANT SHARE PRICES TUESDAY, 19 JUNE 2007:
TLW: 447.00 down 13.25, DES: 30.25 unchanged, FOGL: 81.50 down 0.50, RKH: 44.00 unchanged, BOR: 24.00 down 0.75
RELEVANT SHARE PRICES WEDNESDAY, 20 JUNE 2007:
TLW: 504.50 up 57.50, DES: 30.25 unchanged, FOGL: 79.50 down 2.00, RKH: 44.00 unchanged, BOR: 24.00 unchanged
RELEVANT SHARE PRICES THURSDAY, 21 JUNE 2007:
TLW: 488.00 down 16.50, DES: 30.00 down 0.25, FOGL: 79.50 unchanged, RKH: 44.00 unchanged, BOR: 24.00 unchanged
RELEVANT SHARE PRICES FRIDAY, 22 JUNE 2007:
TLW: 479.00 down 9,00, DES: 31.00 up 1.00, FOGL: 79.50 unchanged, RKH: 43.00 down1.00, BOR: 24.00 unchanged
|
