Falklands : Hydrocarbons Weekend Record (28 October 2007)
Submitted by Falkland Islands News Network (Juanita Brock) 28.10.2007 (Article Archived on 11.11.2007)
If crude goes too high there will be more alternative fuelled vehicles on the roads come next summer.
HYDROCARBONS WEEKEND RECORD (26 TO 28 OCTOBER 2007)
Compiled by J. Brock (FINN)
CRUDE PRICES Friday, 26 October 2007:
Light Sweet Crude traded at $91.34 up 88 Cents on the New York Mercantile Exchange. Brent Crude was trading at $88.21 up 73 Cents on London’s ICE Futures Market.
WEEKEND ANALYSIS:
Just when there was hope that prices would lower and make winter fuel prices bearable, the price of crude goes up. Most people on the margins will be assessing their fuel costs and finding ways to cut back. By drive season next northern summer, people will be figuring out how to cut back on gasoline consumption. One thing the extortionate prices will do is make people more economy conscious and give them inspiration to find alternatives to hydrocarbons products.
WEEKEND DEVELOPMENTS:
(Venezuela)
According to a company press release PDVSA has entered into a four-year service agreement with a Dutch company - Neptune Marine and Drilling. A drill-ship Neptune Discoverer is to drill 21 gas wells in waters off the eastern shore of Venezuela. The press release went on to say that the agreement, worth $785Million, comes as part of the Gran Mariscal de Ayacucho project. The vessel will leave Singapore in November and is arriving in Venezuela in February. PDVSA estimates revenues at $273Million.
(Colombia)
From a Press Release:
PetroSouth Energy Corp., an energy exploration and production company focused on high-impact energy prospects in Colombia, South America, is pleased to announce the acquisition of a 6% working interest in the 64,000-acre Carbonera Exploration and Exploitation Contract, and participation in three future exploration wells.
The 6% working interest was acquired for US $420,000 and other considerations from Omega Energy's exploration block located in Catatumbo Basin region of northeastern Colombia. The operator of the Carbonera Contract is Well Logging Ltda. Fulfillment of the first Phase contract commitments (Phase 1 re-entry of Cerro Gordo-1) was met prior to the Company acquiring the 6% working interest. Pursuant to the terms of the Contract the Company will participate with drilling one exploration well in each of Phase 2 (12 months - April 28, 2008), Phase 3 (12 months - April 29, 2009) and Phase 4 (12 months - April 28, 2010).
The Cerro Gordo-1 well was originally drilled and abandoned by Texaco in 1989. The well was re-initiated (re-entered) by Well Logging Ltda. in the southern part of the block in June 2007. It was proven productive after a one-week test. The Cerro Gordo-1 well flow tested a combination of gas and condensate at Gas: 4.0 MMCF/Day and Condensate: 60 BBL/Day.
The Carbonera Block
The Carbonera Block encompasses 64,000 acres located northeast of Bogota near the Venezuelan border in the Catatumbo Basin region of northern Colombia. The initial exploration well, Cerro Gordo-1 well, has tested combination of gas and condensate (Gas: 4.0 MMCF/Day and Condensate: 60 BBL/Day). The block hosts a probable reserve of 22 MMBLS.
Catatumbo Basin and Operators
The Catatumbo Basin is a 7350km/sq sub-basin forming the western extension of the Maracaibo Basin of Venezuela, which has produced billions of barrels of oil to date with an estimated total of 20 billion barrels remaining to be produced. In Venezuela this basin has already produced several billion barrels of oil, and individual producing fields there range in size up to more than 800 million barrels of oil recovered to date.
Immediately adjacent to the Carbonera Block lie fields such as Tibu, found in 1940 and with 260 million barrels produced to date, Petrolea, discovered in 1934 with 38 million barrels produced to date, and Rio Zulia, dating from 1962 and with 137 million barrels recovered to date.
Solana Resources Limited holds one block in the Catatumbo Basin, and Ecopetrol with Petrobras holds three licenses in the surrounding area. Solana Resources Limited says that the preliminary test results for the Tres Curvas-1 wildcat exploration well yielded a combined 180 barrels of oil per day (bopd) from 61 feet of perforations in two Catatumbo formation zones. With the application of appropriate artificial lift it is expected that rates will meet or exceed original expectations of 300 bopd.
Fred B. Zaziski, Chairman of PetroSouth Energy, states: "With this latest acquisition, PetroSouth currently has participation stakes in three separate Colombian blocks representing 197,333 acres and potential reserves of 244 million barrels of oil cumulatively."
Juan Carlos Robles, President and CEO of PetroSouth Energy, commented, "We are delighted to participate in the Carbonera Block, which will now add at least another three (3) exploration wells over the next few years to our existing drilling program. We believe that obtaining access to high-quality prospects is the most effective way to acquire new potential reserves and enhance Shareholder value."
LAST WEEK’S STATISTICS
CRUDE PRICES: Monday, 22 October 2007
(1800 LMT)
Light Sweet Crude traded at $$87.90 down 70 Cents on the New York Mercantile Exchange. Brent Crude was trading at $82.48 down $1.31 on London’s ICE Futures Market.
CRUDE PRICES Tuesday, 23 October 2007:
Light Sweet Crude traded at $85.27 down 75 Cents on the New York Mercantile Exchange. Brent Crude was trading at $82.74 down 53 Cents on London’s ICE Futures Market.
CRUDE PRICES Wednesday, 24 October 2007:
Light Sweet Crude traded at $87.10 up $1.83 on the New York Mercantile Exchange. Brent Crude was trading at $84.37 up $1.52 on London’s ICE Futures Market.
CRUDE PRICES Thursday, 25 October 2007:
Light Sweet Crude traded at $87.10 up $1.83 on the New York Mercantile Exchange. Brent Crude was trading at $84.37 up $1.52 on London’s ICE Futures Market.
ANALYSIS Monday, 22 October 2007:
Fears over global growth have helped the price of crude to decline today. The real scary thing could still happen and that is a loss of confidence in hydrocarbons products. People who paid over $90.00 a barrel last week will want to recover their costs. This means that the majority will suffer increases in price not only in hydrocarbons products but on everything that fuel costs can be added to. It’s not only freight and air tickets but food – even poor people’s rations – will suffer increased costs to produce and transport.
ANALYSIS Tuesday, 23 October 2007:
Crude prices are staying artificially high due to strong quarterly results in the US as well as demand concerns. People who have to struggle to keep fuel costs paid are not going to splash out on extra journeys but they are finding cost-cutting measures so they can realise some month at the end of the money.
ANALYSIS Wednesday, 24 October 2007:
A disappointing inventory report for the week ending 19 October has fuelled the latest price increase today. Prices are artificially high and they won’t come down until demand decreases.
ANALYSIS Thursday, 25 October 2007:
Factors leading to the increase in crude prices include supply fears, the weak dollar and sanctions against Iran. Hydrogen vehicles anyone?
A BRIEF INVENTORY REPORT FOR THE WEEK ENDING 19 OCTOBER 2007:
Crude: down 5.3 million barrels to 316.6 million barrels
Gasoline: down 2 million barrels to 193.8 million barrels
Distillates: down 1.8 million barrels to 134.5 million barrels
Refinery Capacity: down 0.2% to 87.1%
REGIONAL DEVELOPMENTS:
(Colombia)
Several Latin American newspapers report that BP and Total are set to lose operating contracts in two fields, Cusiana and Cupiagua, in Colombia when the 20-year deals expire in 2010. Colombia’s Minister of Mines and Energy, Hernan Martinez said his country’s state owned energy, Ecopetrol will take over the contracts. Both wells produce one-fifth of Colombia’s crude - 100,000 barrels per day
(Ecuador)
Petroecuador, Ecuador’s state run energy company, has announced that protests in that country’s Amazon region have cut crude production this week by 26,227 barrels. The Latin American press said that the protests, ended Thursday. According to the reports cuts in production affected the Shushufindi field and Block 15. Locals began their protest on Monday demanding jobs and other benefits.
SANTIAGO REGIONAL ENERGY OPERATOR’S CONFERENCE
(Chile)
“ENAP is studying NatGas exports to Argentina,” CEO Enrique Dávila said during a conference with industry leaders in Santiago. Traditionally Chile depends on Argentina for natural gas imports but Argentina stopped exporting to Chile, causing an increasing dependence on diesel imports to fuel power generation.
(100X Translation Service)
(Argentina)
Argentina, will soon become an energy importer. Natural gas reserves are declining and government price controls are causing new investment to dry up. Argentina has looked to Bolivia for new sources of gas but Bolivia's production has not increased even though the prices are increasing.
(100X Translation Service)
(Brazil)
CERA energy consultant Sophie Aldebert told the conference that Brazil will receive most of Bolivia's exports. Intra-regional exports are going to stabilise and most will go to Brazil. While various LNG plants have been touted for Argentina, most notably in coordination with Venezuela's state oil company PDVSA, only Chile and Brazil are capable of paying the higher cost of LNG imports. Argentina is in no condition to buy LNG.
(100X Translation Service)
(Venezuela)
Prensa Latina reports that Venezuela plans to extract the estimated four billion barrels of oil in the Lake Maracaibo vicinity is part of a government oil strategy - Oil Sowing Plan - aimed at producing 5.8 million barrels daily by 2012. The report goes on to say that an assessment of the project will be made by INTEVEP, a subsidiary of PDVSA state oil company. Related investment is estimated at about 420 million dollars, for exploration of an area of 12,600 square kilometres, and another of 1,200 square kilometres, presumably in the same vicinity. The project also aims to design mechanisms for the better recovery of existing inventories in the zone.
(100X Translation Service)
(Ecuador)
According to a press release Ecuador has again been accepted as an active member of OPEC after 15 years of being inactive. Ecuador stopped paying OPEC membership fees in 1992, though it never formally left the organisation. The press release went on to say that Ecuador and OPEC agreed on a three-year payment plan to pay back a 5.7 million U.S. dollar debt accrued while the country was an inactive OPEC member. Ecuador is re-negotiating contracts with overseas oil companies, following a change in law that gives the state a 99 percent excess oil profits.
(100X Translation Service)
(Argentina and Bolivia)
The Latin American press reports that Repsol YPF plans to announce in the next month the results of exploration work at what could be a major natural gas field in southern Bolivia. Since February 2006, the Spanish – Argentine oil company has been exploring for hydrocarbons in Chuquisaca province, not far from the natural gas-rich Tarija region. Press reports go on to say that after meeting with Repsol/YPF officials on Wednesday, the governor of Chuquisaca province, David Sanchez said that he had great expectations that drilling could lead eventually to the development of a field bigger than Repsol/YPF’s Margarita field. In August government officials announced that Repsol YPF had agreed to invest some $900 million in Bolivia by 2010.
(Venezuela)
The 3rd discussion of the constitutional reform project proposed by the president, Hugo Chávez reports eleven more articles approved, completing sixty-one of the sections approved during the six sessions held by the National Assembly. with just seven regulations to be approved, articles sanctioned by the two-thirds of the N.A., this Tuesday and early in the morning of Wednesday 24th, were 300, 301, 302, 303, 305, 307, 318, 320, 321, 328 and 329. The national Law will establish the conditions for the creation of regional companies or entities, the promotion and realization of economic or social activities under the principle of the socialist economy.
(100X Translation Service)
(Chile)
Chile state oil company ENAP has announced its Aconcagua refinery was again operating at near normal levels and increasing capacity after a fire earlier in the month affected its (naphtha hydrotreater un-translated). The press release went on to say that the Aconcagua refinery has been processing around 15,000 cubic meters per day (95,000 bpd) since last week and that during the partial shut-down output had fallen to as low as 7,000 cubic meters/day after the Oct. 9 fire. The refinery has an average capacity of around 16,000 cubic meters per day.
(100X Translation Service)
RELEVANT SHARE PRICES Monday, 22 October 2007:
(1800 LMT)
London Stock Exchange:
TLW: 585.50 down 36.00, DES: 27.75 down 0.75, FOGL: 139.00 down 6.50, RKH: 48.50 unchanged, BOR: 37.00 unchanged, PRE: 14.25 up 0.25, GBP: 10.25 down 0.25, GPK: 425.00 unchanged, BLT 1764.00 down 71.00 RDSA: 2032 down 23.00, RDSB: 2021.00 down 30.00, RDSD: 29.83 down 10.11
New York Stock Exchange:
XOM: 90.91 down 1.23
RELEVANT SHARE PRICES Tuesday, 23 October 2007:
(1800 LMT)
London Stock Exchange:
TLW: 597.00 up 12.00, DES: 28.00 up 0.25, FOGL: 142.00 up 3.00, RKH: 46.75 down 1.75, BOR: 37.00 unchanged, PRE: 14.25 unchanged, GBP: 10.25 down 0.25, GPK: 425.00 unchanged, BLT 1805.00 up 41.00 RDSA: 2032 unchanged, RDSB: 2016.00 down 6.00, RDSD: 29.16 down 10.05
New York Stock Exchange:
XOM: 91.35 up 0.44
RELEVANT SHARE PRICES Wednesday, 24 October 2007:
(1800 LMT)
London Stock Exchange:
TLW: 610.00 up 12.50, DES: 28.25 up 0.25, FOGL: 142.50 up 0.50, RKH: 46.00 down 0.75, BOR: 37.00 unchanged, PRE: 14.00 down 0.25, GBP: 10.25 down 0.25, GPK: 426.00 up 1.00, BLT 1744 down 61.00 RDSA: 2056 up 24.00, RDSB: 2046.00 up 28.00, RDSD: 29.63 down 9.58.
New York Stock Exchange:
XOM: 92.13 up 0.78
RELEVANT SHARE PRICES Thursday, 25 October 2007:
(1800 LMT)
London Stock Exchange:
TLW: 616.50 up 6.50, DES: 28.25 unchanged, FOGL: 140.50 down 2.00, RKH: 46.00 unchanged, BOR: 37.00 unchanged, PRE: 14.00 unchanged, GBP: 10.25 unchanged, GPK: 425.00 down 1.00, BLT 1798.00 up 57.00 RDSA: 2067 up 11.00, RDSB: 2059.00 up 13.00, RDSD: 29.50 down 9.71.
New York Stock Exchange:
XOM: 91.57 down 0.56
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