Falklands : Hydrocarbons Weekend Record (20 to 22 July 2997)
Submitted by Falkland Islands News Network (Juanita Brock) 22.07.2007 (Article Archived on 05.08.2007)
Global demand, especially from the US and China hass helped the price of crude to increase.
HYDROCARBONS WEEKEND RECORD (20 to 22 JULY 2007)
Compiled by J. Brock (FINN)
WEEKEND ANALYSIS:
Global Demand and supply worries have ratcheted the price of crude higher over the past few months.
In the Falklands higher crude prices mean increasing distillate, gasoline and diesel prices. These increases work their ways down into the food that we buy, electricity charges, freight and haulage, construction – anything that consumes fuel in its production will have a proportional increase tacked on it.
The only difference in the Southern Hemisphere is that we are using heating oil more and driving less in our winter. The population in the Southern Hemisphere is much less that that in the Northern Hemisphere, so gasoline is used more world-wide in our winter than is heating oil.
Prices for our heating fuel are higher in the winter than they are in our summer. We get a break on gasoline prices during our summer drive season.
WEEKEND DEVELOPMENTS:
(South America General)
In South America the winter heating fuel tends to be natural gas, which is in short supply, especially in Argentina at the moment. This drives the price higher and affects the economy much the same as the higher price of fuel does here in the Falklands.
Other South American countries are having problems in a tight rig market. Venezuela is especially affected with prospects ready to be explored and or exploited and few options in the rig market.
(Bolivia)
Bolivia’s state run oil firm, YPFB is negotiating with its Venezuela’s PVDSA and Russia’s counterparts Gazprom as well as other oil firms, to develop natural gas reserves in Bolivia, particularly in one of the four new blocks the Bolivian government is offering. The agreement under which PVDSA is to prospect oil and gas in Bolivia awaits the passage of an applicable law by the Bolivia’s Congress.
LAST WEEK’S CRUDE PRICES:
Monday, 16 July 2007 Light Sweet Crude was trading at $74.15 up 22 Cents on the New York Mercantile Exchange and Brent Crude was trading at $76.64 down 93 Cents on London’s Ice Futures Market.
Tuesday, 17 July 2007 Light Sweet Crude was trading at $74.02 down 13 Cents on the New York Mercantile Exchange and Brent Crude was trading at $75.53 down 76 Cents on London’s Ice Futures Market.
Wednesday, 18 July 2007 Light Sweet Crude was trading at $75.05 $1.03 on the New York Mercantile Exchange and Brent Crude was trading at $76.76 up $1.23 on London’s Ice Futures Market.
Thursday, 19 July 2007 Light Sweet Crude was trading at $75.92 up 87 Cents on the New York Mercantile Exchange and Brent Crude was trading at $77.67 up 91 Cents on London’s Ice Futures Market.
Friday, 20 July 2007 Light Sweet Crude was trading at $75.57 down 35 Cents on the New York Mercantile Exchange and Brent Crude was trading at $77.64 down 3 Cents on London’s Ice Futures Market.
LAST WEEK’S ANALYSIS:
Fears about the supply of gasoline for the summer drive season in the US have helped the price of crude to increase on Monday but by Tuesday those fears eased and prices declined. It seems as though geopolitics, while just in the background, is not being used as the reason for the artificially high price of crude but the supply of gasoline for the US summer drive season is. As stated last year when prices were artificially high, people are going to seek alternatives to economise on their transport costs.
Nervousness about the demand for gasoline by the United States and China helped to increase the price of crude over the past two days.
We are beginning to see scare stories of $80 to £100.00 oil just like we did last year at this time. Some headlines tout the fact that a geopolitical incident could spark a monumental price rise. It is thought that geopolitics prior to the summer drive season helped to spark this year’s round of crude price increases.
In all of this, OPEC’s decision to hold production, while used to frighten crude prices higher earlier this year, has proven to be correct in that there is enough supply to meet demand. If anything it is refinery capacity that drives prices higher, with the ideal capacity being 94. At the end of last week it was 91%.
BRIEF INVENTORY REPORT FOR THE WEEK ENDING 13 JULY 2007:
Crude: down 500,000 barrels to 352.1 Million Barrels
Gasoline: down 2.3 Million barrels to 203.3 Million Barrels
Natural Gas: down 65 Billion Cubic feet to 2.69 Trillion Cubic Feet
Refinery Capacity: up 0.8% to 91%
LAST WEEK’S REGIONAL DEVELOPMENTS:
(Venezuela)
Venezuela is raising oil taxes and royalties after ConocoPhillips and Exxon Mobil Corp. pulled out of their heavy oil projects in Venezuela's Orinoco River basin. Venezuela’s President, Hugo Chavez, is leading his country toward socialism and state-run energy companies from Iran, China and elsewhere want to replace the American companies. They promise to help Venezuela double its oil production within five years. Several experts say that the atmosphere for investment in Venezuela has been polluted and the new investors may not have the same expertise as ConocoPhillips and Exxon/Mobil.
(Brazil)
When it comes to seeking alternatives to gasoline Brazil is leading the race with ethanol consumption and production. This means that a growing segment of Brazil’s investors and scientists will focus on developing the alternatives. In Brazil’s case it is sugarcane that is the basic ingredient in its bio-fuel production.
(Argentina)
Argentina's President Nestor Kirchner is to meet executives from oil companies operating in Argentina later Thursday at 7:00 p.m. local time to discuss the on-going energy crisis
It is expected that the Argentine President will talk to representatives of oil companies operating in Argentina - Brazil's Petroleo Brasileiro (PBR), Spanish-Argentine Repsol YPF SA, Anglo-Dutch Royal Dutch Shell PLC, U.S. Chevron Corp. and French Total SA .
From a Press Release from Pan Andean Resources Plc
17/07/07
Acquisition of new exploration blocks
* Two new exploration blocks awarded in Peru in competitive bidding round
* Pan Andean 100% ownership in both blocks
Pan Andean Resources PLC ('Pan Andean' or 'the Company') the AIM listed oil And gas producer (AIM:PRE) is very pleased to announce that it has been awarded two new exploration blocks in Peru in a competitive tender process. Pan Andean's new blocks are Block 131 in the central Ucayali basin, and Block 141 located in the Titicaca basin.
Block 131 has a total area of approximately 40 000 square km and is located West of Pan Andean's Block 114 in which exploration activities have been on-going since 2006. The directors consider the block which has approximately 750kilometers of 2D seismic, four wells, and three known oil seeps, to be highly prospective. The minimum work program for this block includes the reprocessing of 500 km of 2D seismic and the presentation of a geological and geo-physical evaluation report in a period of 12 months. Commercial terms are world class.
The Ucayali basin has become one of the most attractive under explored basins In Peru among international oil companies and is also the host of the world class giant Camisea gas condensate field.
Block 141 has approximately 22 000 square km and is northwest of Lake Titicacain the high plains of Peru. The block is in a frontier basin. However, the basin has a working petroleum system having seen successful exploration activities as early as 1875 when the Pirin oil field was discovered. The work program for this block includes regional geological studies, the surveying and processing of aeromagnetic and aero-gravimetric data in a period of 18 months. Commercial terms
are world class.
Managing Director, David Horgan said:
"We are pleased with the important new acreage which has been awarded to Pan Andean. We have identified numerous potentially valuable plays in both blocks and look forward to executing in the near future.
Block 131 is of particular interest, with a recent discovery adjacent to our block and previous drilling resulting in hydrocarbons shows. We believe that our management experience and utilizing modern technologies will allow us to develop the project successfully.
These acquisitions are very much in line with Pan Andean's growth strategy of focusing on prospects with high exploration potential in both Colombia and Peru".
Contacts:
David Horgan, Managing Director + 353 87 292 3500
John Teeling, Chairman + 353 1 8332833
College Hill
Paddy Blewer + 44 (0)20 7457 2074
Nick Elwes
Blue Oar Securities
John Wakefield + 44 (0) 1179 330011
LOCAL DEVELOPMENTS:
(Falkland Islands)
From a press release by Borders and Southern Petroleum:
Preliminary Results for the 18 months ended 31 December
2006
17/04/2007
Borders & Southern Petroleum plc (or “the Company”) (AIM: BOR) is pleased to announce its preliminary results for the 18 months to 31 December 2006.
Highlights
Borders & Southern has completed the processing an interpretation of its Falkland Islands 2D seismic data
The Company has commissioned and completed a number of technical studies aimed at technical risk reduction
A new fold belt play located to the south of the Falkland Islands has been defined, the heart of which is contained within the Company’s 100% owned licensed area
The size of the Company’s lead inventory has increased significantly, and contains numerous structures capable of holding giant oil or gas accumulations
The Company is currently assessing the design and cost of a focused 3D seismic acquisition programme aimed at further risk reduction prior to drilling
The management team is actively seeking to add new projects to its portfolio that are consistent with its strategy and meet its stringent screening criteria Cash balance as at 31 December 2006 was £9.47 million
Harry Dobson, Chairman of Borders & Southern, commented:
“The Company is continuing to make great progress towards its objective of building a successful exploration and production business. The evaluation of the Falkland Islands licences has delivered really exciting results. The 2D seismic programme has produced some spectacular images of large structures within an undrilled fold belt and the subsequent mapping has defined numerous leads with the potential to hold substantial volumes of hydrocarbons.
Earlier last year we invited a small number of companies to review the data with the aim of becoming a joint venture partner. Discussions with some of these companies are ongoing. In the interim, we are continuing to maintain the pace of exploration, looking at ways to further reduce the technical risk with the clear intention of drilling the first well as soon as practical.
In addition to our Falkland Islands work we are currently reviewing additional frontier opportunities with large upside potential with the goal of building the Company’s portfolio consistent with our strategy.”
For further information please contact: Howard Obee – Chief Executive Borders & Southern Petroleum plc Tel: 020 7661 9348
Simon Hudson / Clemmie Carr Tavistock Communications Tel: 020 7920 3150
Telephone: 020 7661 9348 | Email: info@bordersandsouthern.com
RELEVANT SHARE PRICES (Monday, 16 July 2007):
TLW: 523.50 down 12.00, DES: 29.00 unchanged, FOGL: 75.50 down 0.50, RKH: 40.00 unchanged, BOR: 29.50 unchanged
RELEVANT SHARE PRICES (Tuesday, 17 July 2007):
TLW: 511.50 down 12.00, DES: 29.00 unchanged, FOGL: 74.50 down 1.00, RKH: 40.00 unchanged, BOR: 29.50 unchanged
RELEVANT SHARE PRICES (Wednesday, 18 July 2007):
TLW: 508.50 down 3.00, DES: 28.75 down 0.25, FOGL: 72.50 down 2.00, RKH: 40.00 unchanged, BOR: 28.50 down 1.00, PRE: 15.25 (New Addition)
RELEVANT SHARE PRICES (Thursday, 19 July 2007):
TLW: 523.50 up 15.00, DES: 27.50 down 1.25, FOGL: 75.50 up 3.00, RKH: 40.50 up 0.50, BOR: 28.50 unchanged, PRE: 15.25 Unchanged
RELEVANT SHARE PRICES (Friday, 20 July 2007):
TLW: 521.00 down 2.50, DES: 28.25 up 0.75, FOGL: 75.50 up 3.00, RKH: 40.00 down 0.50, BOR: 27.75 down 0.75, PRE: 15.25 Unchanged
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