Falklands : Hydrocarbons Daily Record Thursday, 20 March 2008
Submitted by Falkland Islands News Network (Juanita Brock) 20.03.2008 (Article Archived on 03.04.2008)
Crude prices have declined sharply yesterday and today due to a fear of decreasing demand and reaction from a strengthening US Dollar. Prices are still extortionately high and won’t come down until investors stop profit taking on a commodity that all of us use.
HYDROCARBONS DAILY RECORD THURSDAY, 20 MARCH 2008
By J. Brock (FINN)
At 1000hrs LMT on 20 March 2008 Light Sweet Crude was trading at $100.40 down $2.14 on the New York Mercantile Exchange. Brent Crude was trading at $99.47 down $1.10 on London’s ICE Futures Market.
ANALYSIS:
Crude prices have declined sharply yesterday and today due to a fear of decreasing demand and reaction from a strengthening US Dollar. Prices are still extortionately high and won’t come down until investors stop profit taking on a commodity that all of us use.
SHARE PRICES AND THE MARKETS:
SHARE PRICES ON THE ALTERNATIVE INVESTMENT MARKET: Thursday, 20 March 2008.
TLW: 634.00 down 24.50, DES: 66.50 down 3.50, FOGL: 120.00 down 3.00 RKH: 73.50 down 4.00, BOR: 56.00 down 0.50 PRE: 12.00 unchanged, GBP: 7.13 down 0.25 GPK: 388.00 down 1.50, BLT 1383.00 down 58.00 RDSA: 1659.00 down 30.00 RDSB: 1627.00 down 30.00
New York Stock Exchange:
XOM: 84.43 down 4.04 (USD)
THE MARKETS (20/03/08)
FTSE100: 5,506.00 down 39.63, FTSE250: 9,472.80 down 78.35 SmallCap: 2,973.40 down 43.79
Note, these prices were recorded at 1000hrs on 20 March 2008
DJI: 12,099.66 down 293.00 NASDAQ: 2,209.96 down 58.30 S&P500: 1,298.42 down 32.32
Note: These are quotes as of the end of play on 19 March 2008
INTERNATIONAL DEVELOPMENTS
(Mexico)
MEXICO CITY, March 19 (Reuters) - Sempra Energy's (SRE.N: Quote, Profile, Research) new liquefied natural gas (LNG) import terminal on Mexico's Pacific coast should be up and running during the second quarter, the California-based company said on Wednesday.
http://uk.reuters.com/article/oilRpt/idUKN1930425920080319
Mexico has marked the 70th anniversary of the nationalisation of its oil industry amid a fierce debate over the future of state oil monopoly Pemex.
http://news.bbc.co.uk/2/hi/americas/7304412.stm
(Russia)
The winner of the auction on Western- Povkhovskoe deposit of hydrocarbons in the Khanty-Mansiysk autonomous region became the Open Company "LUKOIL-Western Siberia" (the subsidiary of the Open Society "OC "LUKOIL"). Final payment made 240mln rbl. at the starting price of the lot in 200mln rbl..
http://www.akm.ru/eng/news/2008/march/19/ns2251376.htm
(Spain)
Foster Wheeler Iberia has won a Repsol YPF contract for the detailed engineering, procurement and construction management of a new delayed coker complex at its refinery at Cartagena in southeast Spain
http://www.processingtalk.com/news/fol/fol140.html
(United States)
LAS VEGAS, NV--(Marketwire - March 19, 2008) - Arctic Oil & Gas Corp. (PINKSHEETS: AOAG), a petroleum exploration company, expects its success in locating hydrocarbons to focus on Marine Magneto-Tellurics (MMT), a form of electromagnetic (EM) data acquisition technology, which should fit the criteria of the "Arctic Commons." The MMT data will be combined with seismic data to produce a hydrocarbon map or model of the targeted region.
http://www.marketwire.com/mw/release.do?id=834100
REGIONAL DEVELOPMENTS:
(Argentina)
Benchmark Energy Corp. ("Benchmark" or the "Company"), (TSXV:BEE) is pleased to announce that it has entered into an arms-length agreement (the "Agreement") with Central Argentina Corporation ("CAC") dated March 10, 2008, by which Benchmark will acquire, subject to certain conditions, all of the issued and outstanding shares (the "CIC Shares") of Central International Corporation ("CIC"), a Nevada corporation, for total consideration of approximately $57.1 million (USD) before closing adjustments (the "Transaction"), including the assumption of approximately $23.5 million (USD) of debt with an effective date of January 1, 2008. CIC holds 100% of the producing Catriel Oeste concession in the Neuquen Basin of Argentina which is currently producing approximately 1,300 barrels of oil per day ("bopd") with current productive capacity of over 1,400 bopd. CAC is a private company controlled by Paul J. Zecchi who holds 70% of CAC's shares, Richard F. Kral, Sr., who holds 25% of CAC's shares, and a charitable foundation which holds 5% of CAC's shares. The Transaction is the acquisition of the asset in Argentina that the Company had previously announced in a press release dated December 10, 2007 that it was actively working to acquire.
http://www.newswire.ca/en/releases/archive/March2008/18/c5306.html
(Bolivia)
La Paz, Mar 19 (Prensa Latina) The Brazilian Petrobras oil company announced on Wednesday it will invest another 123 million dollars in the Bolivian hydrocarbon sector this year, as part of the agreements signed with the government.
http://www.plenglish.com/article.asp?ID=%7BCD64CD15-B93A-480D-8340-3F701372AEBB%7D)&language=EN
Russia and Bolivia signed a joint venture deal that would allow the exploration of South America's largest natural gas reserves located in the land-locked Latin American country.
http://www.allheadlinenews.com/articles/7010379212
(Brazil)
Petrobras was the highest bidder for 22 blocks in Lease Sale 206, offered by the Minerals Management Service (MMS), the United States’ regulatory agency that manages offshore activities, on March 19 2008. Petrobras was well positioned among the main bidders and made a total investment in the order of $178.9 million.
http://www.oilvoice.com/n/Petrobras_is_Highest_Bidder_For_22_Blocks_in_the_US_Gulf_of_Mexico_Lease_Sale/7dc26e9a.aspx
Brazil will supply energy to Argentina during the winter season so as to relieve the neighbor from the energy crisis, Brazilian Minister of Mining and Energy Edison Lobao confirmed Tuesday.
http://english.people.com.cn/90001/90778/90858/90864/6376577.html
(Uruguay)
Montevideo, Mar 17 (Prensa Latina) Iran is showing interest in building a cement plant in Uruguay and signing an agreement with that South American nation based on the exchange of oil for rice, reported El Pais daily on Monday.
http://www.plenglish.com/article.asp?ID=%7B04CC8576-B7A4-4BAC-A247-6797BAE2B5F5%7D)&language=EN
(Venezuela)
'We are trialing billing in euros for some deliveries,' said Ramirez, who is also head of the state oil company PDVSA. He stressed, however, that 'this does ...
http://www.thomsonimnews.com/subsAccessInfo.asp
LOCAL DEVELOPMENTS:
Shares in Aim-quoted Desire Petroleum took off recently on news that it has recruited a farm-in partner to help fund the considerable cost of mobilising a drilling rig to explore three oil prospects offshore of the Falkland Islands. Shares in fellow Falklands explorers Rockhopper Exploration and Borders & Southern Petroleum also rose strongly, on hopes that all will benefit from having a rig in the remote South Atlantic region. But the reality is not that simple.
http://www.investorschronicle.co.uk/MarketsAndSectors/Sectors/article/20080318/9a11e20e-f427-11dc-96a0-0015171400aa/Rigging-the-Falklands-oil-race.jsp
Rockhopper Exploration PLC ("the Company")
Notifiable Interest
A form TR-1 containing the following information has been received by the
Company.
TR-1 notification of major interests in shares
1. Identity of the issuer or the underlying issuer of existing shares to which
voting rights are attached:
Rockhopper Exploration PLC
2. Reason for the notification
An acquisition or disposal of voting rights
3. Full name of person(s) subject to the notification obligation:
MF Global UK Limited
Note: The full press release is on Rockhopper’s website.
Legislative Council
Question for Written Answer
Number 01/2008 by the Honourable Richard Cockwell
In view of escalating fuel prices and the need to reduce consumption, coupled with the success of the first stage of the wind farm; can the Honourable John Birmingham assure me that the enlargement of the output of the wind farm is being treated as an urgent issue? Can he also assure me that a figure will be put into the budget for 2008/9 in order that this project can go ahead without delay?
ANSWER
The enlargement of the wind farm has been actively considered not only since the first stage has been in operation, but in parallel with the development of that first phase, when consideration needed to be given to the level of output that could be successfully incorporated into the existing system.
It is considered that phase 2 is a desirable step, but it is also apparent that there will not necessarily be a doubling in either yield or savings if a further three turbines are installed.
During average or better wind speeds the three existing turbines can already input at a level that is unlikely to be exceeded even if additional units are installed.
The greatest difference in input will be made during periods of low or less than average wind speed, particularly the former and it is necessary for analysis of that impact to be carried out in order to determine yield and therefore payback.
Increases in fuel costs mean that the value of the fuel displaced is higher than originally allowed for and the payback period for Phase 1 will therefore be shorter, but it must be highlighted that the payback period for Phase 2 is likely to be much longer than that for Phase 1. A doubling of capacity will not necessarily mean a doubling of yield or savings.
In January 2008, the first phase of the Sand Bay Wind Farm reached its designed level of energy contribution (20% per week/annum). The highest weekly contribution to Stanley’s electrical energy needs is at present 22% (57,000 units from the Wind Farm, 198,000 from the diesels). The highest hourly contribution to date is 40% (810 kW from the Wind Farm, 1215 kW from the diesels).
For phase 2 to approach equal success, works elsewhere will need to take place. The single objective of these works would be the eradication of transient faults on Stanley’s High Voltage overhead lines caused by bird strikes (30-40 strikes are recorded per annum).
These transient events cause the loss of the Wind Farm’s contribution for up to five minutes. With an expanded wind farm and greater wind power contribution, these 30-40 transient events would result in 30-40 total power outages per annum. This is because if there is sudden loss of output from the turbines then the conventional generators may not be able to respond sufficiently rapidly as to take up the additional load, unless they are run such that their spinning reserve can take all of that load.
The system is being operated in fuel saver mode, with a close balance being maintained between the combined wind/diesel output and demand and the ratio between these. Increasing the spinning reserve would reduce efficiency and therefore fuel savings significantly.
In recent weeks, the wind farms output has been limited to 600 kW per hour for this reason. There is no evidence to date of any “bird strikes” on the turbines themselves.
Achieving the desired objectives for Phase 1 has triggered preliminary enquiries with Enercon for the supply and installation of a further three E33 Wind turbines, as part of the project development and appraisal process. Lead times are currently12 to 18 months from placement of order. Enercon are to revert with supply and installation costs, based on Phase 1 but indicate that there will be an increase in price per turbine.
Phase 2 is a desirable next step but must be entered into with all being aware that it is not simply a repetition of phase 1.
The most effective and cost effective method of reconfiguring the overhead lines to remove or at least minimise the risk of bird strikes is being actively pursued, as this would have to be done before a consistent increased ratio of input from the wind farm would be viable and a proposal for the funding of this will be made as soon as is practical. A first stage though will be the reconfiguration of a trial section to ensure that this will be fully effective.
A timescale cannot be given at this stage, but there is a sum provisionally entered in the Capital Programme for year 2008/09 for refinements to the system that will improve overall fuel displacement and it is considered that this should be sufficient for immediate needs.
Given the lead in times indicated for further turbines, the funding for these would in all probability not be needed until 2009/10 even if a decision to proceed were to be made almost immediately.
LOCAL LINKS:
http://www.fogl.com
http://www.desireplc.co.uk
http://www.bordersandsouthern.com
http://www.rockhopperexploration.co.uk.
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