Information – Oil Gas Future Energy
UAE details Nov oil export cut due to maintenance
UAE details Nov oil export cut due to maintenance
(Reuters)26 September 2007
TOKYO/SINGAPORE – Abu Dhabi National Oil Co (ADNOC) told at least one customer on Wednesday it would halve term November exports of its three offshore crudes due to field work, blunting the impact of OPEC’s planned output rise.
ANDOC, the main oil producer in OPEC-member the United Arab Emirates (UAE), notified at least one refiner in Japan that it was reducing supplies of its Umm Shaif, Lower Zakum and Upper Zakum crudes by about half, a trading source told Reuters.
The notice was the first to confirm the extent to which planned maintenance would affect exports from the emirate, which pumped about 2.6 million barrels per day (bpd) last month. Two other Japanese refiners and one in Southeast Asia had yet to receive the note.
ADNOC had said on Sunday that oilfield maintenance would reduce oil production by 600,000 bpd in November.
Oil traders had earlier said as much as 810,000 bpd of output could be shut in for two to three weeks during the peak of the maintenance.
The three fields, in which Exxon Mobil Corp, Total and BP hold equity stakes, produce a total of just over 1 million bpd, according to recent estimates.
Production at the UAE’s biggest field, onshore Murban, will not be affected, the oil trader said. BP, Royal Dutch Shell, Total and Exxon Mobil are partners there.
The trader added that ADNOC had been selling extra supplies to help its customers build up stocks ahead of the maintenance, which comes just as refiners are bracing for peak winter demand, particularly in Japan, the world’s second-biggest importer, which relies on UAE crude for nearly a quarter of its supplies.
“ADNOC’s commitments to its term clients are all met by advancing the majority of liftings, and some deferments that have been re-scheduled by mutual agreement,” the state oil company said on Sunday in a statement.
Maintenance at the country’s Ruwais refinery from late December through February may also allow the UAE to free up more supplies for export following the November work.
The supply reduction in the three grades had been expected for months and traders had earlier identified the three fields as the 530,000-bpd Upper Zakum, the 250,000-bpd Lower Zakum and the 280,000-bpd Umm Shaif.
Saudi Arabia persuaded the Organization of the Petroleum Exporting Countries to raise output by 500,000 bpd at a meeting earlier this month in a gesture to consumer nations worried by the economic impact of record-high oil prices.
U.S. crude for November delivery was up 23 cents at $79.76 a barrel by 0723 GMT, off a record high of $83.90 hit last Thursday.
Adnoc notifies on supply cut
Adnoc notifies on supply cut
(Reuters) 27 September 2007
TOKYO/SINGAPORE — Abu Dhabi National Oil Co (Adnoc) told at least one customer yesterday it would halve term November exports of its three offshore crudes due to field work, blunting the impact of Opec’s planned output rise.
Adnoc, the main oil producer in Opec-member the United Arab Emirates (UAE), notified at least one refiner in Japan that it was reducing supplies of its Umm Shaif, Lower Zakum and Upper Zakum crudes by about half, a trading source said.
The notice was the first to confirm the extent to which planned maintenance would affect exports from the emirate, which pumped about 2.6 million barrels per day (bpd) last month. Two other Japanese refiners and one in Southeast Asia had yet to receive the note.
Adnoc had said on Sunday that oilfield maintenance would reduce oil production by 600,000 bpd in November.
Oil traders had earlier said as much as 810,000 bpd of output could be shut in for two to three weeks during the peak of the maintenance.
The three fields, in which Exxon Mobil Corp, Total and BP hold equity stakes, produce a total of just over 1 million bpd, according to recent estimates.
Production at the UAE’s biggest field, onshore Murban, will not be affected, the oil trader said. BP, Royal Dutch Shell, Total and Exxon Mobil are partners there.
The trader added that Adnoc had been selling extra supplies to help its customers build up stocks ahead of the maintenance, which comes just as refiners are bracing for peak winter demand, particularly in Japan, the world’s second-biggest importer, which relies on UAE crude for nearly a quarter of its supplies.
“Adnoc’s commitments to its term clients are all met by advancing the majority of liftings, and some deferments that have been re-scheduled by mutual agreement,” the state oil company said on Sunday in a statement.
Maintenance at the country’s Ruwais refinery from late December through February may also allow the UAE to free up more supplies for export following the November work.
The supply reduction in the three grades had been expected for months and traders had earlier identified the three fields as the 530,000-bpd Upper Zakum, the 250,000-bpd Lower Zakum and the 280,000-bpd Umm Shaif.
Saudi Arabia persuaded the Organisation of the Petroleum Exporting Countries to raise output by 500,000 bpd at a meeting earlier this month in a gesture to consumer nations worried by the economic impact of record-high oil prices.
U.S. crude for November delivery was up 23 cents at $79.76 a barrel by 0723 GMT, off a record high of $83.90 hit last Thursday.
Indonesia’s talks with ExxonMobil hit a hurdle
Indonesia’s talks with ExxonMobil hit a hurdle
Reuters Published: September 25, 2007, 23:45
Jakarta: Indonesia and ExxonMobil have halted negotiations on the disputed Natuna D-Alpha gas block, now controlled by the US company, an official at energy watchdog BPMIGAS said yesterday.
Talks on the offshore gas project, estimated to require investment of about $40 billion, have run into several problems, attracting the attention of foreign investors who are already wary of committing money to Southeast Asia’s biggest economy because of its weak legal system, bureaucracy and corruption.
The most recent setback over Natuna has arisen because the two parties involved cannot agree on how to split the gas produced, the official said, but other unresolved issues include the length of Exxon’s contract.
The Indonesian side is waiting for the government to issue new instructions before talks can resume.
Controlling issues
Exxon controls a 76 per cent stake in the Natuna block while Indonesian state oil and gas firm, Pertamina, owns 24 per cent and would like to increase its stake to half.
Indonesia also says that Exxon’s contract giving it that 76 per cent share has expired, whereas the energy major has said the contract is valid until 2009.
The BPMIGAS official said the two sides stopped talking recently because they could not agree on how to split the gas produced from the block.
“Indonesia wants a 65 per cent split for the government and 35 per cent for the contractor. Exxon has rejected the proposal because it wants more,” the official said.
Kuwait favours BP ahead of Shell as partner in China refinery plan
Kuwait favours BP ahead of Shell as partner in China refinery plan
Reuters / Published: September 25, 2007, 23:45
Kuwait City: Kuwait wants to drop Royal Dutch Shell as a partner and is instead considering BP in a project to build a $5 billion oil refinery in Guangdong in China, Kuwait’s state news agency Kuna reported yesterday.
Shell had hoped to gain a foothold in the domestic fuel market of the world’s second-largest energy consumer through the Guangdong plant, after an attempt to take a share in another refining project failed last year.
The refinery would be one of the largest joint venture investments in China, similar in size to the $5 billion refinery to be built by Exxon Mobil and Saudi Aramco in Fujian.
State-owned Kuwait Petroleum Corp (KPC) and China’s largest refinery Sinopec received preliminary Chinese government approval for the Guangdong plant last year.
In August, Sinopec said Shell and US Dow Chemical Co were also in talks to participate. There were several reasons KPC no longer wanted Shell involved, including objections from China’s National Development and Reform Commission, Kuna reported, citing Chinese sources. KPC was in talks on the project with BP, which had previously expressed interest, it said.
It was unclear why BP would be a better fit than Shell for the project. Analysts say Beijing is showing a preference toward teaming up with state-owned firms that can offer oil supply guarantees such as KPC, with less need for the technology or financing offered by oil majors such as Shell or BP.
“The issue has been dragging on for months,” said Kuwaiti energy analyst Kamel Al Harmi.
Energy for sustainable growth
Energy for sustainable growth
By Francis Matthew, Editor at Large Published: September 19, 2007, 23:21
The Gulf states’ profligate use of energy will have to stop if plans for larger populations and expanded economies are going to work.
Their energy reserves are some of the largest in the world, but they are not infinite, and they will certainly not support the planned growth for ever. Even if growth eventually slows to a more stable total population, the region will be much larger than at present and will finish its reserves rapidly.
The planned scale of growth is awe inspiring. The population of the Arabian Peninsula is set to double from the present 59 million in 2007 to reach 124 million by 2050, according to the Population Reference Bureau’s June 2007 Bulletin.
This will be a combination of natural growth from the national populations, as well as continuing immigration from expatriates into the region.
This massive increase will have to be matched by very careful planning of water and power resources. Till now most Gulf Cooperation Council (GCC) states have not done well at this since growth so far has not seriously challenged their capacity to produce energy for domestic and industrial use.
All the governments have had to do is turn the taps on a bit more and they have kept pace. This cannot continue.
It is true that water has been a topic of government concern for the last decade, mainly due to the warnings sounded by the failure of traditional artesian wells which forced governments to plan alternatives and thus raised the whole question of actively planning how to allocate water resources to meet demand across the whole economy.
But this planning has remained at government level, with most solutions revolving around increased use of recycled water, and increasing desalination capacity. But wider awareness of the importance of water conservation has not happened and the population at large remains uncaring.
This is dangerous since the supply of new water depends on desalination, which uses a lot of gas to boil the sea water. All electricity in the GCC comes from generating stations which also use gas.
Both the supply of water and electricity ultimately depend on the same resource, which is gas, and as with all hydrocarbons, gas supplies are ultimately limited. They may be around for some decades or even centuries in a few areas, but they will eventually be used up.
It is startling how much the region’s future plans are linked to continued and plentiful gas supplies. There is a major long term crisis in the making unless steps are taken today to address how to conserve this large but ultimately limited resource, and the answers lie in both supply and demand.
On the demand side, it lies with all authorities to enforce more rigorous standards in all spheres of life. For example it should be mandatory that new buildings meet tough energy standards.
For example, all the glass walls we see around us require large air conditioning units on the roofs of buildings, chewing up vast amounts of energy.
On the supply side, it is important that all GCC states develop effective national power grids, and link them in a future GCC grid. This involves commitment from all governments, and it also means developing a pricing mechanism within the grid so that the power hungry parts of the GCC are able to buy power from the resource rich countries.
Any pricing mechanism will have to take into account the subsidies that most GCC governments continue to offer their populations, since very few individuals or companies are able to bear the true commercial cost of a unit a power.
Power grid
Unfortunately the GCC has not been able to implement its plans for a GCC power grid, but it is exactly the kind of project that the GCC should be able to manage. It is largely technical in nature, focusing on infrastructure, and the benefits are overwhelming. All that is required is some political commitment to achieve a solution to the pricing issue.
But there another important supply of power which the GCC states have to take more seriously. It is ridiculous that in an area which has so much sun, there is so little solar energy.
For example, all buildings should have solar panels on their flat roofs, all new projects should have their solar farms, and solar energy should become part of every planner and government official’s thinking.
The absence of solar energy in the GCC cannot remain a matter of concern to a few environmentalist lobbies. It has to become part of mainstream government thinking, otherwise the 54 million people due to be living in the region in 40 years time will not have enough power or water to keep going.
The continued success of the GCC states depends on getting this right.
Khalifa issues decree setting up energy firm
Khalifa issues decree setting up energy firm
WAM Last updated: September 19, 2007, 23:24
Abu Dhabi: President His Highness Shaikh Khalifa Bin Zayed Al Nahyan, in his capacity as Ruler of Abu Dhabi, issued a law setting up the Abu Dhabi Future Energy Company with a capital of Dh10 million.
Law No. 22 of 2007 sets up the Abu Dhabi Future Energy company as a private joint stock company specialised in the commercialisation of alternative energies through emissions reduction, and clean development mechanism solutions as provided by the UN agreement on climate change as explained in the Kyoto Protocol.
Research
It also sets up the Masdar Science and Technology Institute with the aim of developing and supporting scientific research and technology in the emirate.
According to the law, the company will be a corporate body that enjoys full financial and administrative independence to practice its activities and achieve its targets.
The institute, a corporate body, will also enjoy complete financial and administrative with legal capacity to practice its activities.
It will be offering specialised educational programs in renewable energy and sustainability. Based in Abu Dhabi, the energy company will have a capital of Dh10 million distributed as equity shares at a value of Dh1 per share.
Shares
The new company’s shares are wholly owned by the Mubadala Development, which has the right to restructure the capital. Mubadala is also permitted to sell its shares in the newly established company.
The company may set up, invest in or enter into partnerships with others in the areas of agriculture, industry, water and electricity abiding by the principles of sustainable energy.
It will also have wide ranging business activities in Abu Dhabi and outside the emirate.
ALTERNATIVE ENERGY – ‘Wind Stands Out As Most Competitive’
ALTERNATIVE ENERGY – ‘Wind Stands Out As Most Competitive’
Distant peak or near peak. That is one big bone energy optimists and pessimists around the world scuffle about, especially when oil prices are rising. Some say the ‘peak’ of production is not yet in sight. Others believe the terminal decline in energy resources is nearing. Daniel Yergin, one of the world’s most respected authorities on energy and its economics, dislikes the word ‘peak’ when he talks about energy.
But that does not stop the Pulitzer Prize winning author of The Prize: The Epic Quest for Oil, Money and Power from assessing the potential of renewable forms of energy. Yergin is the chairman of Cambridge Energy Research Associates (CERA), one of the world’s leading energy consulting firms. In an e-mail interview with BW’s Vatsala Kamat, Yergin talks about the gains and gambles in alternative energy. Excerpts:
How does the current state of energy technology appear to you?
I call it ‘the great bubbling’. We have never seen so much growth in research and innovation as now across the energy spectrum — covering both the conventional and the renewable forms. That is stimulating a good amount of growth in the latter area. But remember, as nations prosper, the consumption of conventional energy will shoot up.
Of the two, how big do you think has the sector of alternative energy grown?
Take a look at wind energy. You will see it has already become a big business across the world. The growth rate for renewable forms is high and will continue to be so. But let’s also consider the wider perspective. In terms of the overall energy mix, renewable forms are still small. CERA’s base long-term scenario, which we call the ‘Asian Phoenix’, shows the demand in world energy will grow about 50 per cent over the next 25 years. Much of that will be met with conventional energy or increased efficiency. But renewable forms will become more prevalent. Breakthroughs in renewable energy could significantly increase their market share.
Indeed, the interest and investments in renewable energy are going up. What could be the reasons?
One reason is the strong growth in energy demand, which the renewable forms can help meet. A strong global economic performance requires energy supplies to fuel it. Another reason is a drive for diversification as part of energy security. Of course, price too is a big factor. Concerns on climate changes and environmental damages loom larger every day. And the public wants renewable forms as part of the energy mix. All these are shaping policies intended to encourage renewable development. Renewable forms have particular importance in a country like India, where demand keeps growing, where supplies are inadequate and where millions are poorly served with commercial energy, or not at all.
How critical are government subsidies to renewable energy? What other kinds of government support will be required?
Call them subsidies or incentives, they have been crucial to the development of alternatives. No less important are mandates and regulations that you see in Europe and North America and elsewhere, which stipulate that a certain percentage of electric power or motor fuel or total energy be ‘renewable’ in nature. You also need infrastructure to support renewable forms. In short, development of renewable forms depends on government policies. Of course, in countries where power prices are high or where there is a shortage, renewable energy can be much more competitive.
Do you think this segment could some day become an economically viable option without subsidies?
A lot of efforts have been made to make renewable energy more competitive. Last year, $2 billion (Rs 8,000 crore) worth of venture capital in North America was invested in ‘clean energy’, which is four times what it was just two years earlier. Investors are looking for alternatives that are economically competitive. Standalone economic viability depends on factors such as the pace of technical advance, competitive economics and the pricing or shadow pricing of carbon. Remember, after 30 years of hard work, Brazilian ethanol has become competitive without subsidies.
Will alternative forms of energy become more viable if oil and coal prices increase?
In the analysis for ‘Crossing the Divide’, our study on clean energy, we found that for the most part, alternative energy is priced above conventional energy. In other words, its growth still depends upon supportive government policies. That will continue to be the case for a long time. However, costs are being reduced and competitive economics will be changed when the price of energy includes a price tag for carbon.
Which renewable energy segments would you say have the highest economic viability when adopted on a larger, commercial scale?
We looked at that question very closely in ‘Crossing the Divide’ and found that wind stands out as the most competitive. There has been a lot of advance in wind technology over the past two decades and in some locations, wind, along with biomass and geothermal, are competitive without subsidies.
Are biofuels carbon-neutral? Or can they too become worse than fossil fuels?
There is no single answer to that. Ethanol produced from sugarcane in Brazil can have a very positive energy balance. That is because the bagasse, the waste from the sugar plant, is used to generate the energy necessary for ethanol production and even to generate surplus electricity. On the other hand, the corn-based ethanol in the United States has only a modest positive energy balance.
What could be done to make biofuels environmentally acceptable?
As biofuel usage increases, it faces trade-off with food, water, fertiliser, land use as well as with logistical issues. Europeans were surprised when they learned that their biodiesel demand was causing in South-east Asia, the opening up of more land to cultivation, burning of forests, and consequently an increased production of CO2. Also, conventional biofuels are much leveraged to the costs of the agricultural products from which they are made.
Emerging nations such as India and China have to straddle between renewable energy and food security…
As I said, the advance of biofuels poses a trade-off between food and fuel. Biofuels can raise rural incomes, which is one reason for their political popularity. But over the past six months, the fuel-versus-food issue has come to the fore due to the impact of ethanol production on food availability and prices. That trade-off will put a definite limit on the market share of conventional ethanol, and that is why there is so much interest in what are called ‘second-generation’ biofuels such as cellulosic ethanol made from agricultural waste or specially-grown energy crop. But the debate is quite fierce as to when cellulosic ethanol could be made available on a commercial scale.
Is there any sector within renewable energy that India could leap ahead?
India has competitive strengths in wind energy, solar energy, and biofuels. It has advantage in terms of human capital and scientific and engineering capabilities. India also has an advantage because it has urgent needs. Need generates urgency, which generates demand, which, in turn, generates innovation. These factors create conditions for India to move ahead both at home and abroad.
And what are the bottlenecks?
Like in the rest of the energy sectors, renewable forms too face the bottlenecks arising from growth. Silicon is in short supply for solar photovoltaics. In many parts of the world, there is shortage of equipment for wind farms. Shortage of human capital also affects the whole energy industry worldwide. I think India can make a great contribution to the human capital needs of the energy industry globally. In our ‘Asian Phoenix’ scenario, we even posit that an Indian will become the CEO of one of the super major international oil companies in a decade or two!
Halliburton to expand Dubai hub
Halliburton to expand Dubai hub
By Ivan GaleStaff Reporter GULF NEWS Published: September 18, 2007, 23:50
Dubai: Halliburton said it would commit additional resources to its Dubai headquarters to target the more than $8 billion in oil services contracts expected in the eastern hemisphere over the next few years.
The US firm believes oil companies will award some 80 contracts in oil drilling services valued at $100 million or higher over the next three to four years in the Middle East, Africa, Asia-Pacific and Europe/Eurasia.
Houston-based Halliburton set up a second headquarters in Dubai last March to focus its efforts on the region. In April it also sold off its KBR subsidiary, which operated government contracts in Iraq.
“More and more and year after year, our investments are heading towards the eastern hemisphere,” said Ahmad Lofty, regional senior vice-president, who recently relocated to Dubai.
“We have an extreme focus on the Middle East. Now we want to take on a bigger scope for the eastern hemisphere,” he said during a tour of Halliburton’s Jebel Ali facility yesterday.
To capitalise on the emerging opportunities, Lofty said the company was investing in a technology centre in India as well as manufacturing facilities in Malaysia and Singapore.
High oil prices have benefitted services firms like Halliburton. The rising prices have prompted oil companies to invest in once-unviable exploration techniques to secure more reserves of oil and gas, Halliburton officials said.
“We’re always dreaming up the next biggest tool, and these tools become commercially viable when it’s time,” said Chip Miller, Middle East manager for the company’s drilling services unit. “With oil prices at this level, it’s time.”
Halliburton’s Jebel Ali facility, established in 1994, contains several repair stations that have cut down its regional response time by 35 per cent, according to the company. Earlier, damaged drilling equipment had to be sent to the UK, the US and Canada.
Now, 80 per cent of its product portfolio of drilling pulsers, sensors and other equipment can be repaired out of Dubai, and US repairs are often outsourced to Jebel Ali for completion, the company said.
Crude prices leap to new record on supply worries
Crude prices leap to new record on supply worries
By Himendra Mohan KumarStaff Reporter GULF NEWS Published: September 18, 2007, 23:50
Abu Dhabi: Crude oil futures in the United States, the world’s largest oil importer, surged to a new record high of $81.24 a barrel yesterday amid concerns of tightening supply in the market and fears that prices could well be in sight of touching $100 a barrel when the winter demand sets in.
An official at the Organisation of Petroleum Exporting Countries (Opec), the group that supplies more than a third of the world’s oil, told Gulf News that while the Opec is keeping a close eye on the developments, the situation doesn’t immediately warrant another increase in supplies to water down prices.
“If the current situation persists for several days and if prices continue to rise, I don’t rule out Opec ministers trying to find a solution,” said the source.
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