PEAK OIL AND ENERGY CRISIS NEWSBITES
http://www.nlpwessex.org/docs/energycrisisnews.htm
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| April 2008 |
"The
US and its allies are worried that the sanctions regime against Tehran is under threat
from a possible new wave of European investment in Iran's
strategically important gas sector. Tehran has
already concluded gas deals with Chinese
and Malaysian companies - ending a protracted lull in investment in its energy sector
- and has alarmed Washington by reaching an agreement with a Swiss group. The dilemma
threatens to expose the limited US influence over foreign companies strategic
decisions....the US fears that a 25-year supply agreement concluded in March between
Elektrizitäts-Gesellschaft Laufenburg (EGL)
of Switzerland
and Iran could encourage other deals, particularly in the gas sector, despite American
calls for tougher sanctions against Tehran over its controversial nuclear programme. The
Swiss government says the deal could be worth up to €27bn ($42bn, £21bn).... Flynt
Leverett, a former US
National Security Council adviser on the Middle
East, says pressure is growing on non-US companies to conclude supply contracts with
Iran in the wake of the deals already signed between Tehran and Sinopec
of China and SKS of Malaysia. So angry is Washington about the Swiss deal that it has
suggested that Switzerland's role as the US representative in Cuba
and Iran could be at risk. Swiss officials reply that no international sanctions
prohibit investment in the Iranian energy sector, and that the
gas supply contract signed by EGL is intended to alleviate energy shortages in Italy....Flynt Leverett, a former US
National Security Council adviser on the Middle
East, says pressure is growing on non-US companies to conclude supply contracts with
Iran in the wake of the deals already signed between Tehran and Sinopec
of China and SKS of Malaysia. So angry is Washington about the Swiss deal that it has
suggested that Switzerland's role as the US representative in Cuba
and Iran could be at risk. Swiss officials reply that no international sanctions
prohibit investment in the Iranian energy sector, and that the gas supply contract signed
by EGL is intended to alleviate energy shortages in Italy."
Iran-Europe gas deals anger Washington
Financial
Times, 30 April 2008 |
"In my official mandate I don't
often speak about wars and such. But what I can tell
you is, that energy issues and geopolitics are interwoven too much. The energy supply is
becoming less and less an economic enterprise, but instead an economic enterprise plus
geopolitics! That's bad news, and I don't like that at all. We need a dialogue between the
producers and consumers."
IEA Chief Economist
Fatih Birol interview: 'Leave oil before it leaves us'
International Politik, April 2008 |
"Royal Dutch Shell Plc, Europe's largest
oil company, said it's examining a carbon capture project at its Scotford refinery and
upgrader in the Canadian province of Alberta.....Alberta, Canada's biggest carbon
dioxide-emitting province, passed regulations last year forcing companies like Shell to
cut greenhouse emissions per unit of output. Shell, Exxon Mobil Corp. and the rest of the
oil industry may face higher costs to exploit Canada's tar sands, the biggest deposit
outside of Saudi Arabia, because of efforts to curb climate change."
Shell Examines Carbon Capture Project at Its Canadian
Refinery
Bloomberg,
29 April 2008 |
"Members of the Rockefeller
family are calling on Exxon Mobil Corp to make governance changes and increase spending on
alternative fuels, sharpening the focus on the
company's practices as oil soars close to $120. John D. Rockefeller founded the
Standard Oil Co in 1870 and it became a precursor to Exxon Mobil. Exxon Mobil is the
world's largest publicly traded oil company based on market capitalization and is a
favorite target of consumer advocate groups and politicians unhappy with record prices for
oil and gas and their effect on the environment. Fifteen descendants of the oil baron
are involved in four shareholder resolutions seeking changes at Exxon, including dividing
the CEO and chairmanship positions held by Rex Tillerson. Peter O'Neill,
great-great-grandson of Rockefeller, said 66 of the 78 adult Rockefellers currently
supported their stance. Exxon posted the largest ever annual profit by a U.S. company
last year and its first-quarter results, scheduled for Thursday morning, are expected to
be at or near record levels.But the Rockefeller's said the company was too focused on
short-term windfalls. They said the company's reluctance to invest in alternative energy
could result in lost profits down the road. Neva Rockefeller Goodwin, great
granddaughter of John D. Rockefeller and a Tufts University economist, called on Exxon to
reconnect with the forward-looking vision of her great grandfather."
Rockefellers call for change at Exxon Mobil
Reuters, 30 April 2008 |
"A multi-billion-dollar gas pipeline project linking Iran, Pakistan
and India that is bitterly opposed by Washington is set to go ahead after Iran's President
Mahmoud Ahmadinejad made a historic first visit to meet leaders of the new coalition
government in Islamabad. Mr Ahmadinejad's arrival to finalise the ambitious
Iran-Pakistan-India project, known as the 'Peace Pipeline', came just days after India's
Petroleum and Natural Gas Minister Murli Deora affirmed New Delhi's support for the
pipeline during a visit to Pakistan. Indian participation in the IPI project is seen as a
major snub to Washington and a measure of New Delhi's and Islamabad's unwillingness to
allow the US todictate the terms of relations with Iran. Pakistan, both under the former
dictatorship of President Pervez Musharraf and its new democratic Government, has made
plain that it intends to maintain close relations with Tehran.....The pipeline, estimated
to cost $7.8 billion and to be completed by 2011, is to traverse 2775km stretching from
Iran to Pakistan and then into India. It was first proposed in 1989 by Indian economist
and environmental scientist Rajendra Pachauri....Last
week, as part of its overall drive for energy security, India signed an agreement covering
the US-backed, $3.5 billion Turkmen-istan-Afghanistan-Pakistan-India gas pipeline project
to be financed by the Asian Development Bank. US assurances that gas delivered through
that 1680km pipeline would fulfil India's needs have fallen on deaf ears."
India and Pakistan snub US
The
Australian, 29 April 2008 |
"As oil prices soared to
record levels in recent years, basic economics suggested that consumption would fall and
supplies would rise as producers drilled for more oil.
But as prices flirt with $120 a barrel, many energy experts are becoming worried that
neither seems to be happening. Higher prices have done little to suppress global demand or
attract new production, and the resulting mismatch has sent oil prices ever higher. A central reason that oil supplies are not rising much is that
major producers outside the OPEC
cartel, like Russia,
Mexico
and Norway,
are showing troubling signs of sluggishness. Unlike
OPEC, whose explicit goal is to regulate the supply of oil to keep prices up, these
countries are the free traders of the oil market, with every incentive to produce flat-out
at a time of high prices....' According to normal economic theory, and the history of oil,
rising prices have two major effects,' said Fatih Birol, the chief economist at the
International Energy Agency in Paris. 'They reduce demand and they induce oil supplies.
Not this time.'....Countries
outside the Organization of the Petroleum Exporting Countries have been the main source of
production growth in the past three decades, as new fields were discovered in Alaska, the
North Sea and the Caspian region. But analysts at Barclays
Capital said last week that non-OPEC supplies were 'seemingly dead in the water.' Goldman
Sachs raised similar concerns last month, saying that growth in non-OPEC supplies 'can
no longer be taken for granted.'....'What is disturbing here is that things seem to get
worse, not better,' said David Greely, an analyst at Goldman Sachs. 'These high prices are
not attracting meaningful new supplies.' The outlook for oil supplies 'signals a period of
unprecedented scarcity,' Jeff Rubin, an analyst at CIBC World Markets, said last week. Oil prices might exceed $200 a barrel by 2012, he said, a level that
would very likely mean $7-a-gallon gasoline in the United States. Some regions are simply running out of reserves. Norway’s production
has slumped by 25 percent since its peak in 2001, and in Britain, output has dropped 43
percent in eight years. Production from the giant Prudhoe Bay field in Alaska has dropped
by 65 percent from its peak two decades ago. At the same time, oil consumption keeps
expanding. Global consumption is forecast to increase by 1.2
million barrels a day this year, to 87.2 million barrels a day, with much of the growth in
demand coming from China, India and the Middle East, according to the International Energy
Agency, a group that advises industrialized countries....Mexico, the second-biggest exporter to the United States, seems
increasingly helpless to find new supplies to offset the collapse of its largest oil
field, Cantarell. A combination of falling production and rising domestic consumption
could wipe out Mexico’s exports within five years..... Russian energy officials
warned recently that the days of stunning growth that followed the collapse of the Soviet
Union were over, as the country focuses on stabilizing its output. Russia today produces
about 10 million barrels of oil a day, up from a low of 6 million barrels in 1996....As
countries like Russia slow output, analysts say OPEC will have to pick up the slack. The
oil cartel accounts for 40 percent of the world’s oil exports and owns more than 75
percent of global reserves. But there are serious concerns that OPEC will also find it
tough to increase production. Saudi Arabia, the world’s top oil exporter, is
completing a $50 billion plan to increase capacity to 12.5 million barrels a day, but it
signaled recently that it would not go beyond that.
That means Saudi Arabia could fall short of the 15 million barrels a day that most experts
had expected it to produce in the long run. OPEC’s 13 members plan to spend $150
billion to expand their capacity by five million barrels a day by 2012. But OPEC will need to pump 60 million barrels a day by 2030, up from
around 36 million barrels a day today, to meet the projected growth in demand. Analysts say that without Iran and
Iraq — where nearly 30 years of wars and sanctions have crippled oil production
— reaching that level will be impossible."
Oil Price Rise Fails to Open Tap
New
York Times, 29 April 2008 |
"Brazil's plan to become one of
the world's biggest oil exporters hinges on exploiting crude 6 miles below the ocean
surface in deposits so hot they can melt the metal used to carry uranium to nuclear
plants. Tapping what may be the biggest oil finds in the Western Hemisphere in three
decades will require equipment that can withstand 18,000 pounds per square inch of
pressure, enough to crush a pickup truck, pipes that can carry oil at temperatures above
500 degrees Fahrenheit (260 Celsius) and drill bits that can penetrate layers of salt more
than one mile thick. Petroleo Brasileiro SA, the
state-controlled oil company, is betting on the Tupi and Carioca fields to become one of
the world's seven biggest crude exporters. Until the
tools needed to exploit the reservoirs are invented, the crude will remain locked under
the sea, said Matt Cline, a U.S. Energy Department
economist.... Brazil's oil will be harder to develop than the Gulf of Mexico, where the
deepest wells are now in production, Cline said. Exxon Mobil Corp. and Chevron Corp., the two biggest U.S. oil companies, saw diamond-crusted
drill bits disintegrate and steel pipes crumple when they attempted to tap deposits
beneath the Gulf's seafloor two years ago.... Pumping oil from the Brazilian finds, parts
of which are 32,000 feet (10,000 meters) below the ocean's surface, will require boring
almost twice as far down as the world's deepest producing offshore well.... 'A big find
might not be a good find if it costs so much to develop that it's not commercially
viable,' S&P's Vital said. 'We don't have any idea at all yet of all the costs that
are going to be involved. Those costs are going to set the floor for oil prices.'.....Chevron, which has the deepest Gulf of Mexico exploration well, including
distance below the seafloor, destroyed as many as a dozen $50,000 drill bits at each of
the 14 wells in its $4.7 billion Tahiti project. Exxon Mobil abandoned a Gulf project that would have been the deepest
well after pressure and heat shut down the venture in August 2006.....'These challenges in the Brazilian offshore area are too great for
any one company or even country to be able to digest themselves,' Vital said."
Brazil Oil Trapped by 500-Degree Heat, Salt Barrier
Bloomberg,
28 April 2008 |
"Last summer, as Americans
focused on the surge in Iraq, most ignored a military exercise with a potentially more
far-reaching impact. In a remote location in the Ural Mountains, Russia, China, and
several Central Asian nations gathered for a massive war game, ironically dubbed 'Peace
Mission 2007.'.... the exercise highlighted an
alarming new reality. With much less fanfare than the early days of the Cold War, the
world is entering a new arms race, and with it, a dangerous new web of military
relationships. According to the Stockholm International Peace Research Institute, which
tracks international armed forces spending, between 1997 and 2006 global military
expenditures jumped by nearly 40 percent. Driven
mainly by anxiety over oil and natural resources, countries are building their arsenals of
conventional weapons at a rate not seen in decades,
beefing up their armies and navies, and forging potential new alliances that could divide
up the world in unpredictable ways.... As easily accessible global stocks of oil dwindle,
the world supply of oil and gas has been concentrated in a smaller and smaller number of
hands over just the past decade. Some 80 percent of all reserves now are concentrated in
fewer than 10 nations. The biggest consumers desperately want to protect their secure
flows of oil and gas from this handful of key suppliers, while simultaneously preventing
their rivals from inking deals with resource-rich nations....The biggest of these nations
is China, which will surpass the United States in its petroleum use within the next two
decades. And, fittingly, it is China that is driving a great deal of the current arms
race....the United States is building its own military-energy ties."
Rearming the world
Boston
Globe, 27 April 2008 |
"Energy will be a leading priority when France assumes its half-year
turn to preside over the European Union, beginning July 1. French Prime Minister Francois
Fillon recently asked Claude Mandil, former executive director of the International Energy
Agency, what France should do to enhance EU energy security....Mandil said relations with
Russia remain too confrontational, with the EU giving the impression of 'having its back
to the wall.' Instead of trying to 'reform' Russia, and insisting that it join the Energy
Charter, 'which it will never do,' he said, the EU
should reduce its dependence on Russia through energy efficiency, LNG development,
renewables, and nuclear power. Heavy gas users such
as Germany and the Baltic countries should develop LNG import capability to lessen their
reliance on piped gas from Russia, although Mandil insists Russia has always been a
reliable supplier to them. The Nabucco gasline is the typical example of how confrontation with Russia can be
counterproductive, explained Mandil. The project was to carry Caspian Sea gas through
Turkey to EU countries as an alternative to gas transported from Russia and was described
as a means of countering Russia's 'domination' over the gas market. The result was
contrary to expectations as Russia reacted swiftly, depriving Nabucco of its gas by
setting up its own long-term contracts with East Caspian gas producers, and launching the
South Stream gasline, thus dividing Nabucco supporters. Mandil's conclusion is that Nabucco will now only be built if it is supplied with either Russian or Iranian
gas or both. Iranian gas is out of the question
until international tensions over its nuclear program are eased. But Mandil suggests that
one day Nabucco could benefit from Iranian exports and should stand by to take advantage
of such a possibility. He also advises that if Nabucco is built, Russian gas must be
accepted, and the gasline must be built not against Gazprom but with Gazprom."
France's EU presidency to highlight energy
Oil
and Gas Journal, 25 April 2008 |
"A top foreign affairs official with the Russian
government says the country needs investment in new oil fields amid recent
reports that Russian oil production has peaked.... The latest data on Russian oil production showed that for the first
time in a decade, output fell in the first three months of this year. Merrill Lynch
analyst Francisco Blanch said in a recent report to investors that Russia surpassed Saudi
Arabia as the world's largest oil producer in 2007 with an average daily output of 9.84
million barrels. But first-quarter production this year fell to an average 9.75 million
barrels per day.... Barring change, Blanch said, Russian oil and gas production growth
likely will slow dramatically over the next several years."
Russian calls for boost in oil field investment
Houston Chronicle, 24
April 2008 |
".....the Saudis, who after spending $100 billion or so on new oil
wells in recent years, say they will soon have the capacity to produce 12.5 million
barrels a day. However, the King of Saudi Arabia announced last week that he has decided
to leave some of their oil in the ground for the grandchildren. Somebody passed the word
the Saudi production was going down to 9 million
barrels a day from 9.2 million ...The most important
factor, however, may be the Chinese who insist on growing their economy at 10 or 11
percent a year. Chinese oil imports are up 14 percent over last year in the first quarter
and by almost 25 percent in March as domestic production stagnates and Beijing prepares
for the Olympics. Chinese imports for May are already looking to be above
normal.....Despite the weakening U.S. economy, the Department of Energy still shows U.S.
oil and gasoline consumption up by nearly one percent over last year. Thus far in 2008 our
crude imports are down 1.7 percent over last year and our net imports of refined products
are down by 5.2 percent."
The Peak Oil Crisis: The Case for 2008
Falls
Church News-Press, 24 April 2008 |
"As in the Seventies, a driving force behind the inflation threat is
soaring oil prices. But just as four decades ago, a
drastic surge in energy costs is coupled with huge increases in prices for an even more
basic necessity: food. The fallout has been as startling as the upward spike in the prices
of oil and foodstuffs. Across the world, a popular
backlash has erupted....Western efforts to promote biofuels have meant tracts of land once
used for food being given over to crops for this purpose. Droughts in Australia and other
disruptions have exacerbated food shortages. Worldwide stocks of wheat and rice have
dropped from about 30 per cent of annual consumption in 2000 to only 15 per cent.
Oil prices are, meantime, kept at record levels by a combination of scant spare capacity
for extracting and refining crude, strong global demand and Middle Eastern unrest, as well
as speculation. A growing number of economists
believe that the fundamental forces now at work will keep food and fuel prices high for
years to come."
Inflation: vengeful return of the dragon that we thought had died
London
Times, 24 April 2008 |
"The United States hopes to sign a cooperation agreement with Estonia
on oil shale in
the summer, a top U.S. official said. 'High oil prices have raised the interest of
countries having oil shale deposits toward the exploitation of these deposits,' said Jeff
Kupfer, deputy secretary at the U.S. Department of Energy. 'Estonia's longtime experience
in this field makes us a good partner for cooperation in research and business alike.' The
comments, which came after a meeting with Estonian Minister of Economy and Communications
Juhan Parts on Friday, were reported by BNS. According to the report, the United States
could and should be involved in the work of the Estonian center for oil shale research.
Kupfer said he promised to support Estonia's aspiration to join the 21 countries that are
members of the Global Nuclear Energy Partnership."
Estonia, U.S. to research oil shale
UPI
Energy Watch, 23 April 2008 |
"Oil output in Russia, the
world's biggest supplier after Saudi Arabia, has 'peaked' and may decline in the coming years, said billionaire Viktor Vekselberg, an owner of BP Plc's
venture TNK-BP. Russian companies need tax breaks to spur exploration and development of
new fields to revive growth, Vekselberg told an American Chamber of Commerce conference in
Moscow today. Oil output is falling for the first time in a decade as Soviet-era wells dry
up and the costs of developing harder-to- reach
deposits surge. Russia pumped 9.76 million barrels a
day in March, down from 9.83 million in December, according to CDU TEK, the Energy
Ministry's central dispatch unit. 'The output level we have today is a plateau,
stagnation,' Energy Minister Viktor Khristenko said in an interview
April 10...The sector that has helped us all these years now deserves support,' Finance
Minister Alexei Kudrin told Economy Ministry
officials on March 25. Kudrin said one proposal, a cut in the crude-extraction tax, would
save companies a combined 100 billion rubles ($4.3 billion) a year. That's not enough to spur development in the Arctic and other
remote areas, Vekselberg said today."
Russian Oil Has `Peaked,' Billionaire Vekselberg Says
Bloomberg,
23 April 2008 |
"The era of natural gas selling at a discount to oil in North America
in terms of relative heat content is about to end, an energy industry consulting firm
predicted Tuesday. In a study released at the American Association of Petroleum Geologists
convention, Wood Mackenzie forecasts gas returning to
its historic one to seven price relationship with oil by about 2012, a shift the firm calls price re-linkage. 'Under current market
conditions, with oil pricing over $100 a barrel, a re-linkage would mean gas prices of as
much as $13 or $14,' Ed Kelly, Wood Mackenzie's vice president of North American gas and
power, said in a news release.....Gas has been knocked out of its historic relationship to
oil by soaring oil prices coupled with pressure on natural gas prices due to increased
North American supply, due largely to the success of
recent shale gas plays, Wood Mackenzie said. More
equivalent pricing will come when demand for natural
gas exceeds domestic supply in about 2012 and the gap has to be closed by importing
liquefied natural gas (LNG), which much of the world
prices in relationship to oil, experts said. 'Relying on LNG will tie gas prices more
tightly to oil. Hence, in the long term, if oil prices remain high, we could see gas
prices following suit,' Kelly said in the release."
Natgas headed back to price parity with oil - firm
Reuters, 22 April
2008 |
"Navy Adm. Mike Mullen told noncommissioned officers here today that
this is the most dangerous period he has seen in his more than 40 years in uniform.
Mullen, the chairman of the Joint Chiefs of Staff, said the threats of extremism and changes happening around the world associated with energy and
resources make the present day 'the most uncertain and potentially the most dangerous time
since I’ve been serving,' he said at a
noncommissioned officer quarterly breakfast."
NCOs’ Service Vital to Nation During Dangerous Time, Mullen Says
American Forces, 22
April 2008 |
"Looking out to the year 2050, Shell strategist Jeremy Bentham says
demand will go up, while oil supplies will be harder to find. But how nations and
companies react is harder to predict. 'We anticipate that you'll begin to see a plateauing
of easily accessible conventional oil and gas around
about the 2015, 2020 type of period,' Bentham tells
Steve Inskeep."
Oil Has Two Potential Futures, Shell Strategist Says
National Public
Radio (US), 22 April 2008 |
"Most people believe oil is running out and governments need to find
another fuel, but Americans are alone in thinking their leaders are out of touch with
reality on this issue, an international poll said on Sunday. On
average, 70 percent of respondents in 15 countries and the Palestinian territories said
they thought oil supplies had peaked. Only 22
percent of the nearly 15,000 respondents in nations ranging from China to Mexico believed
enough new oil would be found to keep it a primary fuel source. 'What's most striking is there's such a widespread consensus
around the world that oil is running out and governments need to make a real effort to
find new sources of energy,' said Steven Kull,
director of WorldPublicOpinion.org,
a global research organization that conducted the poll....The current tightening of the
oil market is not temporary but will continue and the price of oil will rise
substantially, most respondents said. 'They think it's just going to keep going higher and
a fundamental adaptation is necessary,' Kull said in a telephone interview. In the United
States, the world's biggest oil consumer and among the biggest emitters of climate-warming
pollution from fossil fuel use, 76 percent of respondents said oil is running out, but
most believed the U.S. government mistakenly assumes there would be enough to keep oil a
main source of fuel. 'Americans perceive that the government is not facing reality,' Kull
said.... Only in Nigeria did a majority - 53 percent - believe enough new oil would be
found to keep it a primary energy source, a reflection of its status as a major oil
exporter and member of OPEC. The poll was conducted in China, India, the United States,
Indonesia, Nigeria, Russia, Mexico, Britain, France, Iran, Azerbaijan, Ukraine, Egypt,
Turkey, South Korea and the Palestinian territories. The margin of error varied from
country to country, ranging from plus or minus 3 percentage points to plus or minus 4.5
percentage points, Kull said. WorldPublicOpinion.org involves research centers around the
world, and the locations of these centers determined which countries were included in the
poll. Kull noted that the poll included countries that make up 58 percent of the global
population. The project is managed by the Program on International Policy Attitudes at the
University of Maryland."
Oil Running Out as Prime Energy Source: World Poll
Reuters, 21 April 2008 |
"Saudi Arabia, the world’s biggest oil producer, has put on hold plans to increase long-term production capacity
from its vast oil fields beyond existing proposals,
its most powerful policymakers have said. In a series of statements, including one by the
king himself, the kingdom has warned consumers it does not reckon there is a need for
further expansion beyond 12.5m barrels a day, an assumption disputed by the world’s
biggest developed countries."
Saudis put off longer-term oil capacity rise
Financial
Times, 20 April 2008 |
"Oil players like Royal Dutch Shell and Exxon Mobil may have to spend
more- between $2 and $13 a barrel- to exploit Canada's tar sands. The increase in costs
follows a requirement by the government for oil
producers to store carbon dioxide underground,
Bloomberg reported yesterday. The report said the anti-climate change initiative the
additional cost would have to be passed on to consumers through higher energy bills."
Oil Production In Canada's Tar Sands To Cost More
AHN, 20 April 2008 |
"Fifty years ago the decolonisation of Africa began. The next
half-century may see the continent recolonised. But the new imperialism will be less
benign. Great powers aren't interested in administering wild places any more, still less
in settling them: just raping them. Black gangster governments sponsored by
self-interested Asian or Western powers could become the central story in 21st-century
African history..... Zimbabwe is not Iraq. Any great power could pick a leader in Zimbabwe
today, send in a modest military support force to sustain him in power, and follow this up
with ten jumbo jets filled with economic, technical and political advisers and
half-a-billion-pound's-worth of reconstruction aid. Within a couple of years the
intervening power would be sponsoring something tantamount to a puppet government there.
In modern management-speak, there exist bunches of low-hanging fruit, overlooked, on the
African continent....Meanwhile, China's support for a vicious Sudanese regime in Khartoum
has been too widely commented on to need rehearsing. Hydrocarbons
are the prize.... The American neocons were unlucky
in the pilot projects they chose. For those seeking the creation of biddable states, Iraq
and Afghanistan proved among the least amenable places to pick....Why then did the great
(and lesser) powers of the day turn their backs on empire in Africa in the 20th century,
and why in the 21st might their successors return to an interest in acquiring political
grip? European imperial powers lost the will rather than the capacity to own and govern
overseas resources. A world in which all could buy
and sell on the global market was arriving. It is a world, however, which is now feeling
the pinch in the natural resources with which Africa is richly endowed.... it is when China, then America, and perhaps even Russia or India
follow, that the scramble for Africa will truly be resumed. Hypocrisy, they say, is the
homage that vice pays to virtue. During the last scramble for Africa, colonial
administration was the homage greed paid to responsibility. But greed may be less
sentimental during the next. From a resource-starved industrialised world in the 21st
Century, reponsibility for Africa will get no more than a passing nod."
The new scramble for Africa begins
London
Times, 19 April 2008 |
"Russia has agreed to cancel $4.5bn
(£2.3bn) of Libyan debt in exchange for major contracts for Russian firms. The
announcement came during a visit to Tripoli on Thursday by the Russian President, Vladimir
Putin. The two countries signed deals on energy
co-operation, military assistance and construction
of a 500km (310-mile) railway line in Libya. Libya was a big importer of Soviet weaponry
during the Cold War, when it accumulated large debts. Russia's state gas monopoly Gazprom
plans large-scale exploration and production projects with Libya's national energy
company. They will include liquefied natural gas
installations and gas-fired electricity plants in
Libya."
Russia swaps Libya debt for deals
BBC Online, 18 April 2008 |
"A group of American and British shareholders in BP joined forces
yesterday to protest over the oil company's decision to start extracting oil from Canadian
tar sands. Eleven fund managers, which together manage total assets worth more than $10
billion (£5 billion), said that BP's move into tar sands last year was 'deeply
disappointing' and represented a 'disturbing step backwards' for the company. In a
reversal of the group's former stance on oil sands, BP entered the business last December
when it announced a joint venture with Canada's Husky Energy to co-develop the Sunrise
project in Alberta, with a joint investment worth $3 billion. The first oil is expected to
be produced in 2012, with output likely to rise to 200,000 barrels per day within a
decade. The fund managers, who together hold about $40 million of BP stock, include Boston
Common Asset Management, Trillium Asset Management, Rathbone Greenbank Investments and
NorthStar Asset Management, and used BP's annual meeting in London yesterday to issue a
joint declaration emphasising the environmental damage caused by extracting oil from the
bitumen-rich sands. Miles Litvinoff, of the Ecumenical Council for Social Responsibility,
said: 'Oil sands development offers some of the worst
life-cycle environmental impacts of any fossil fuel - emitting nearly triple the
greenhouse gas emissions of traditional oil extraction. He said: 'Prior to BP's announcement in December, we had understood that
our company would not pursue tar sands development due to the heavy carbon footprint of
both the operations and the end product. We fear the implication that BP is retreating
from an excellent strategic position designed to exploit the long-term shift away from
high-carbon fuel sources and question whether this may undermine BP's future
competitiveness.' Sir Peter Sutherland, BP's chairman, responded by saying that BP was
taking steps to mitigate the negative environmental impacts of the project and remained
committed to renewable energy. Mr Hayward also expressed optimism that the company would
exceed the production goals it promised to deliver through to 2020."
Fund managers attack BP over tar sands plan
London
Times, 18 April 2008 |
"Russia's vast oil and gas reserves
were seen not so long ago as the best hope of meeting growing world energy demand. No
more. This week a top Russian oil executive echoed earlier official warnings that oil
production could fall for the first time in a decade....Much can be done in the short term
to stabilise falling output and ensure that a managed
decline does not become a precipitous one."
Preparing for the age of peak oil
Financial
Times, 16 April 2008 |
"Brazil's Carioca prospect may
have 98 percent less crude than a figure cited by the country's oil agency, Credit Suisse
Group said, challenging claims that the field is the
biggest-ever discovery outside the Middle East. Haroldo Lima, director of Brazil's
National Oil Agency, sent shares of Petroleo Brasileiro SA and other Carioca stakeholders
higher when he said April 14 that the offshore field may hold 33 billion barrels of oil.
That figure is 'way off the mark,' Mark Flannery, a Credit Suisse analyst
in New York, said today on a conference call with clients. An estimate of about 600
million barrels 'sounds reasonable,' Flannery said, adding that the firm isn't yet giving
an official assessment of its own. The estimate cited by Lima was probably intended for
the entire subsea geological formation known as Sugar Loaf, which encompasses multiple
fields, Credit Suisse said....Flannery and other Credit Suisse analysts convened today's
call in response to Lima's comment after returning from a trip to Brazil. The analysts met
with Petroleo Brasileiro executives during their visit.... Lima told Brazilian lawmakers
yesterday that he obtained the estimate of 33 billion barrels from a publication called
World Oil. Petrobras, as state-controlled Petroleo Brasileiro is known, said it needs at
least three months to determine how much oil can be recovered from Carioca. Brazilian
prosecutors said they will investigate Lima's comments and whether other officials had
information about the oil field, Globo newswire reported yesterday. Lima and Gabrielli
face a hearing over Lima's claims in Brazil's lower house, Agencia Estado said
today."
Brazil Field Smaller Than Claimed, Credit Suisse Says
Bloomberg,
16 April 2008 |
"The EU has struggled over recent
years to break free from its heavy reliance on Russian oil and gas supplies. Iraq and former Soviet republics like Turkmenistan have been aggressively courted in recent months with the aim of securing
energy supply pacts. Last week, Turkmen authorities promised EU officials to supply 353
billion cubic feet of gas starting next year. Early this year, the Iraqi Oil Ministry said
it was negotiating with Royal Dutch Shell PLC to conduct output tests on Akkas gas field,
a prized natural gas field in western Iraq. The field, located in the former Sunni
insurgent stronghold of Anbar province, has estimated reserves of more than 2.15 trillion
cubic feet. The European Commission added that Iraq was also committed to increasing its
oil production to reach 3 million barrels per day by the end of this year and that it
aimed for 4.5 million by 2012. 'This should be a favorable contribution toward decreasing
oil prices,' the commission statement said. 'Iraq confirms it is exploring new areas for
production.'"
EU: Iraq offers to increase gas supplies to Europe
Associated Press, 16 April 2008 |
"The European Union said on
Wednesday it was close to clinching a preliminary energy pact with Iraq as part of the
bloc's efforts to reduce its heavy dependence on Russian oil and gas. European Commission President Jose Manuel Barroso said after talks with
Iraqi Prime Minister Nuri al-Maliki he hoped a memorandum of understanding could be signed
within weeks, and that the country's oil minister had been invited back to Brussels in May
with the aim of concluding negotiations.....Separately, a Commission statement issued
after talks between European Energy Commissioner Andris Piebalgs and Oil Minister Hussain
al-Shahristani in Brussels said Iraq had pledged an initial 5 billion cubic metres (bcm)
of gas to the EU per year, with the likelihood of more in the future. Earlier, the Iraqi
prime minister said the two-day visit by an Iraqi delegation to the headquarters of the EU and NATO was aimed at
deepening ties, and held out the prospect of enhanced
energy cooperation and business openings for
European companies....EU officials said ahead of al-Maliki's visit they hoped to reach an
outline agreement with Iraq to import Iraqi gas via the planned Nabucco pipeline across
Turkey to central Europe...The EU wants to diversify
gas supplies away from Russia, which provides a
quarter of its needs. Connecting fields in western Iraq to a planned Arab Gas Pipeline
would enable Baghdad to supply gas to Nabucco, which is due to come on line in 2013. 'Iraq made a political gesture of
goodwill from Iraq to the EU and promised at least 5 bcm of gas in a first stage from the
Akkas field, and indicated that probably there would be more in the future for the
European Union,' the Commission said. 'Iraq confirmed that part of their gas will flow to
Europe through various routes and potentially from various fields.' A Commission official
said that of the 35 companies granted access to the Akkas field near the Syrian border, 11
were from the EU. Gas was due to flow from the field
in two to three years, the official added. The
European Commission said on Monday it had secured a guarantee last week of 10 billion cubic metres a year of natural gas from Turkmenistan
from 2009 as part of the drive to ensure sufficient supplies to make Nabucco commercially
viable....Earlier, al-Maliki gave a European
Parliament committee an upbeat assessment of Iraq's efforts to get its war-ravaged society
and economy back on track. He said Iraq was 'close to agreeing a final version' of a
long-awaited oil and gas law, delay over which has held back investment in the
sector."
EU says close to Iraq energy pact, wins gas pledge
Reuters, 16 April
2008 |
"A deal to supply the EU with 10bn cubic metres of Turkmen
gas per year from 2009 has been hailed by officials as 'an important step'. The
agreement will boost the EU-backed Nabucco pipeline - planned to reduce reliance on
Russian gas, which accounts for a quarter of EU supplies. The
Turkmen gas will only make up a small percentage of EU demands and it is not clear how it
will reach Europe. Nabucco is due to be built
in 2010 and the first gas will flow in 2013."
EU secures Turkmenistan gas deal
BBC Online, 14 April 2008 |
"Namibia's electricity supplier asked consumers whether they wanted
higher rates or less power — and the result, based on responses sent by cell phone
text message: rates will rise by 18.3 percent. The Electricity Control Board and power
utility NamPower announced the increase Tuesday. The country has been grappling with
shortfalls from South Africa, from which it imports the bulk of its supplies. Namibia, Africa's second-biggest uranium producer, imports about 50 percent of its electricity, mainly from neighboring
South Africa, which has been experiencing a shortage of power due to increased
demand."
Namibia hikes electricity prices by nearly 20 percent
Associated
Press, 15 April 2008 |
"Russian oil production, for years a vital source of new supplies for
world markets, is showing signs of a slump, adding to uncertainties that have helped push
oil prices to record highs. Russian output fell for the first time in a decade in the
first three months of this year, according to the International Energy Agency, which
represents industrialized oil-consuming countries. It
said Russian production averaged about 10 million barrels a day, a 1% drop from the
first-quarter of 2007.... New developments so far are failing to offset the decline. Sakhalin 1, a huge project off Russia's east coast led by Exxon Mobil
Corp., accounted for much of Russia's production growth in 2007. But output there will
drop by more than 25% this year, according to OAO Rosneft, the state-run oil giant that is
a partner in the project.....Most forecasts predict
that liquid-fuel demand world-wide will hit 100 million barrels a day by 2015. To meet
that, producers will first have to make up for steep declines in existing fields. That
decline rate now subtracts an estimated 4.5 million barrels a day from annual output. Former big producers like the U.K., Norway and Mexico are also fighting
to squeeze oil from once mighty but now increasingly old and tired fields. In Canada,
where output is increasing thanks to massive investments in Alberta's oil sands,
production costs now top $65 a barrel by some estimates. Mexico last week pushed a plan to
allow its state oil company to enter into service agreements with foreign oil companies,
but observers said it may not be enough to attract big investment."
Russian Oil Slump Stirs Supply Jitters
Wall St Journal, 15 April
2008 |
"The future supply of Russian oil is
threatened by a likely decline in production levels, one of the country's top oil
executives has warned. Lukoil's Leonid Fedun said $1
trillion would have to be spent on developing new reserves if current output levels were
to be maintained. Recent figures show Russian output
fell 1% in the first quarter of 2008. The possibility of less oil from one of the
world's key suppliers will add more pressure to prices now at record highs. The surprise fall in Russian oil output in the first part of the
year has raised fears about the ability of global supply to keep pace with demand over the
next decade. Russian production averaged 10 million
barrels a day in the first three months of 2008, according to the International Energy
Agency, down 1% on the same period last year. Blamed on supply problems in western Siberia and weather conditions
making it harder to move drilling equipment, the fall contrasts with substantial output
rises in recent years. Once highly-productive fields in Siberia are slowly being exhausted
and the huge cost of searching for oil in the untapped but remote region of eastern
Siberia has deterred firms. 'When the well's productivity falls, you have to keep drilling
more and more,' Mr Fedun said, referring to the steady depletion of older fields. 'You have seen it in Alaska and the Gulf of Mexico and now you are
seeing it in Siberia.' Analysts at Citigroup
recently said annual increases in Russian output could 'no longer be taken for granted'
but argued that production was expected to rise until 2012. One energy expert said the Russian industry was now acknowledging
a crisis which had been evident to independent observers for several years. 'We now see production peaked last year,' Mikhail Kroutikhin, editor in
chief of the Russian Petroleum Investor told the BBC. 'I believe the decline will continue
for quite a number of years.'... Russian worries underline longstanding concerns about
whether there is enough oil to meet the needs of the global economy, particularly
fast-growing China and India. They are also a particular cause of concern for several of
Europe's largest economies, such as Germany, which buy a large share of their oil from
Russia. 'Russia is not going to be a very reliable supplier of energy in a few years,' Mr
Kroutikhin warned."
'Threat' to future of Russia oil
BBC Online, 15 April 2008 |
"Russian oil production, for years a vital source of new supplies for
world markets, is showing signs of a slump, adding to uncertainties that have helped push
oil prices to record highs. Russian output fell for the first time in a decade in the
first three months of this year, according to the International Energy Agency, which
represents industrialized oil-consuming countries. It said Russian production averaged
about 10 million barrels a day, a 1% drop from the first-quarter of 2007. Declining production from the world's largest oil producer and one
of its largest exporters puts further pressures on an already strained market and adds to
the potential for higher prices for a global economy coping with a slowdown. Global production constraints -- along with surging demand, rising
oil-field expenses and political instability in petroleum-rich regions -- already have
sent oil to more than $110 a barrel from $30 in about four years. In New York futures
markets Monday, oil reached another new high on the falling dollar and other supply
constraints. It settled at $111.76 a barrel, up $1.62, or 1.5%. Industry watchers and
Russian officials generally blame the country's production slowdown on a combination of
weather and tight electricity supplies in some parts of the country. In a longer-term worry, they also point to aging Siberian fields
that once fueled its production growth. Many Russian
oil officials say the industry could still resume growth. Some Western analysts point to
more optimistic data and forecasts. Citigroup said in a report late last month that it
expects Russian oil volumes to increase by 1.5 million barrels a day between now and 2012,
largely thanks to new projects in eastern Siberia. Still, it cautioned: 'Russian oil
production growth is no longer to be taken for granted.' The IEA predicts Russian oil
production will resume growth this year. But it estimates an annual increase of only 0.8%
over 2007, compared with an average 2.5% in the past three years and much faster growth
before that. Russia's energy ministry expects a rise of 1.8%. But earlier this month, Yuri Trutnev, the nation's natural-resources
minister, said on Russian television that the country's full-year production may be lower
than last year's. Russia's stumbling production growth highlights a troubling reality:
Despite soaring oil prices in the past five years, crude output from nations outside the
Organization for Petroleum Exporting Countries has remained essentially flat since 2005,
defying the normal link between high prices and increased production....Russia's rising affluence, leading to greater domestic consumption, is
also reducing the amount it can export to the rest of the world. Driven by Russia, demand
from the former Soviet Union is expected to rise 1.6% this year to 4.2 million barrels a
day. In an interview, Leonid Fedun, vice president of OAO Lukoil, one of Russia's biggest
oil companies, said a mild winter and higher temperatures mean Siberia's icy ground is
less stable, making it harder to move drilling rigs between oil wells. He acknowledged
that the fall also reflects a longer-term trend --
the depletion of Siberia's older fields. 'Western
Siberia is repeating the fate of Prudhoe Bay, with a time lag of five to six years,' he
said. 'When the well's productivity falls, you have to keep drilling more and more. You've
seen it in Alaska and the Gulf of Mexico, and now you're seeing it in Siberia.'...Most forecasts predict that liquid-fuel demand world-wide will hit
100 million barrels a day by 2015. To meet that, producers will first have to make up for
steep declines in existing fields. That decline rate now subtracts an estimated 4.5
million barrels a day from annual output. Former big
producers like the U.K., Norway and Mexico are also fighting to squeeze oil from once
mighty but now increasingly old and tired fields. In Canada, where output is increasing
thanks to massive investments in Alberta's oil sands, production costs now top $65 a
barrel by some estimates. Mexico last week pushed a plan to allow its state oil company to
enter into service agreements with foreign oil companies, but observers said it may not be
enough to attract big investment."
Russian Oil Slump Stirs Supply Jitters
Wall
St Journal, 15 April 2008 |
"ARC Energy Trust said on Monday it's backing a plan to capture and
store carbon-dioxide emissions from the burgeoning oil sands upgrading hub near Edmonton,
Alberta, that could boost output at its nearby oil field. ARC,
Canada's fourth-biggest energy trust, will study injecting carbon dioxide from upgraders,
facilities that convert tar-like bitumen from the oil sands into refinery-ready crude,
into its Redwater oil field. ARC, which has partnered with the Alberta Research Council,
said the Redwater area could store one billion tonnes of carbon dioxide, or 20 years of
output of gas from the Heartland upgrading hub, and boost production from the field. 'We
think the potential for enhanced oil recovery (from the field) is upwards of 15,000
barrels per day,' John Dielwart, ARC's chief executive, told reporters."
ARC Energy Trust to study oil sands CO2 burial
Reuters, 14 April
2008 |
"A deep-water exploration area could contain as much as 33 billion
barrels of oil, an amount that would nearly triple Brazil's reserves and make the offshore
bloc the world's third-largest known oil reserve, a top oil official said
Monday.....National Petroleum Agency President Haroldo Lima cautioned that his information
on the field off the coast of Rio de Janeiro is unofficial and needs to be confirmed.
While the potential Brazil find could add significant supplies to a global oil market many
see as tight, it would likely take the better part of
a decade before any of oil finds its way to market.
The site will need to be studied further, and drilling platforms must be designed, built
and transported before it can start producing oil."
Brazil oil field could be huge find
Associated
Press, 14 April 2008 |
"Proximity and possession of energy may even better than access to
cheap capital in coming years. Energy is a kind of capital, isn't it? If that's the case,
Australia has a huge capital base, with its reserves of coal, natural gas, and uranium. Thermal coal prices are set to double from US$55 to US$125. That's based on the agreement between Japan's Chubu electric power and
Xstrata which should be come the benchmark for 2000-09 contract prices. Spot prices for
thermal coal have tripled in the last year. Spot
coking coal (steel marking) prices have quadrupled in the last 12 months, and in the last
two months they've doubled. Notice a pattern? 'The value of announced cross-border acquisitions by China so far
this calendar year is now US$24.5 billion from 56 deals according to Thomson
Financial-already almost equaling the record of $US29.8 billion for all of 2007,' according to Colleen Ryan in the Financial Review. As usual in the
financial world, the easiest way to find where asset prices are headed is to follow the
money. 'China's acquisitions of foreign targets reached US$15 billion in the mining
sector-the most active sector, largely comprising companies engaged in metals, mining, and
chemicals-rising from just US$243 million in the same period last year,' Ryan
writes."
Chinese Foreign Mining Acquisition Equal to All of 2007
Daily Reckoning
(Australia), 14 April 2008 |
"Saudi Arabia's King Abdullah
said he had ordered some new oil discoveries left untapped to preserve oil wealth in the world's top exporter for future generations, the official Saudi
Press Agency (SPA) reported. 'I keep no secret from
you that when there were some new finds, I told them, 'no, leave it in the ground, with
grace from god, our children need it',' King Abdullah said in remarks made late on
Saturday, SPA said. The U.S. President George W. Bush in January urged the Saudi king to
help tame soaring prices by encouraging OPEC to pump more oil. On separate trips to Saudi
Arabia this year, the U.S. energy secretary also asked for more oil, while the vice
president discussed high prices with the king. The kingdom has spent billions on building
over 2 million bpd of spare crude capacity and is the only country in the world able to
bring online large volumes of crude supply quickly to deal with unexpected supply
shortages.... Saudi Arabia has trimmed its output to around 9 million bpd to reflect lower
customer demand, a Saudi oil source said on Friday. The kingdom had in previous months
pumped around 9.2 million bpd. Crude demand traditionally dips at this time of year after
the end of winter as refiners carry out maintenance and prepare to meet summer demand. Saudi production capacity stands at around 11.3 million bpd, and
is scheduled to rise to 12. 5 million bpd next year."
Saudi King says keeping some oil finds for future
Reuters, 13 April 2008 |
"World oil demand will rise much less than expected in 2008 because
of slower economic growth in the United States and elsewhere, the International Energy
Agency (IEA) said on Friday. The cut to demand growth is the IEA's biggest since 2001 and
follows the release of lower economic growth forecasts by the International Monetary Fund
(IMF) this week, and the impact of high oil prices
above $110 a barrel....The cut in demand growth
brings the IEA's view closer to that of OPEC, which expects an expansion of 1.2 million
bpd this year and has rebuffed calls from consumer countries for more oil to lower
prices.....The IEA said weaker demand might not translate into lower oil prices given
supply risks in countries such as Nigeria and Iraq. Oil rose in the second half of 2007
even though inventories were also climbing, it noted. 'That perhaps explains why, in the
face of weakening economic growth, prices continue to remain high: there is concern that projected stockbuilds may not materialise,
or may not be high enough.'"
IEA cuts world oil demand growth by most in 7 years
Reuters, 11 April 2008 |
"Russia will cut taxes on oil companies to overcome production
'stagnation' after a decade of growth, Energy and Industry Minister Viktor Khristenko said. 'The output level we have today is a plateau, stagnation,' Khristenko said in an interview with Bloomberg Television in
Moscow.'... Output may fall for the first time in a decade this year as producers struggle
with soaring costs and aging fields. Finance Minister Alexei Kudrin said last month that the
government may cut its crude-extraction tax by 100 billion rubles to spur development of
harder-to-reach deposits.....Production in Russia, the largest oil supplier after Saudi
Arabia, declined
1.3 percent in March to 9.76 million barrels a day, compared with the same month last
year. Natural Resources Minister Yuri Trutnev warned last month that
there may be a drop in output this year for the first time since 1998."
Russia to Cut Oil Taxes as Production 'Stagnates'
Bloomberg,
10 April 2008 |
"Tough environmental regulations that will
increase significantly the costs faced by two British companies, BP and Royal Dutch Shell,
in exploiting Canada's huge oil sands reserves were
yesterday backed by Malcolm Wicks, the energy minister....Speaking during a visit to
Canada, the minister lauded the 'very far-sighted' move by Canada’s federal
government to force new oil sands projects to capture and store their carbon dioxide emissions after 2012. 'Canada’s
oils sands could provide up to 5 per cent of global supply ... [but] I understand the
concerns about the environmental impact,' he said. Canada’s stringent carbon
capture requirements will add to the costs of the projects planned by BP and Shell in the
sands, an environmentally sensitive reserve that is the largest outside Saudi Arabia. Mr
Wicks admitted the regulations had commercial consequences, saying: 'if you look at it
very narrowly, it will impact on the costs of the companies.' But he stressed the
'prohibitive' long-term cost of failing to address climate change, including a failure to
find sustainable ways of exploiting fossil fuels."
Canada oil sands rules get minister's backing
Financial
Times, 9 April 2008 |
"Demand for liquefied natural
gas in the US and Europe will surpass Asian consumption by as early as 2015, while global
LNG demand is set to triple between now and 2030, US
giant ExxonMobil said today. ExxonMobil said overall energy demand was expected to grow at
1.3% per year and gas consumption was expected to account for about a quarter of global
energy consumption by 2030, up from about 20% now. 'From our projections, no fossil fuel
will grow faster than natural gas,' Alan Hirshberg, vice president of Established Areas
Project at ExxonMobil, said at an oil and gas conference in Perth. 'By 2030, overall LNG
demand will more than triple from where it is today and the regional distribution will
significantly change.' The global LNG business has so far been driven by Asia, underpinned
by consumption in Japan, South Korea and Taiwan. Asian demand currently accounts for about
two-thirds of global LNG consumption. But growing
dependence on gas imports in the US and Europe will result in Western demand surpassing
Asian consumption by as early as 2015, changing demand patterns for the first time in 30
years, Hirshberg said."
ExxonMobil 'LNG demand set to triple'
Upstream Online, 8 April
2008 |
"China Hydraulic and Hydroelectric Construction Group Corp.
(Sinohydro Corp.) announce yesterday that it had t eamed up with China Nuclear
International Uranium Corporation (Sino-Uranium) to sign a
uranium mining and metallurgy turn-key project in Azelik, Niger. Under the contract valued at USD 139.92 million, the two state-owned
companies will jointly establish a 600,000-ton uranium mine project as well as purchase
and install two 6MW power generation sets in a gas-fired power plant and a metal
hydrometallurgy plant in the African country....At the end of 2006, Sino-Uranium was
inaugurated in Beijing, and then it started building up a presence in foreign markets, in line with the strategy of 'go abroad'. Being a wholly-owned affiliate of China National Nuclear Corporation
(CNNC), the company always helps its parent exploit overseas uranium reserves and achieve
project financing."
2 China State-Owned Firms Ink Niger Uranium Project
Trading
Markets, 9 April 2009 |
"China National Nuclear Corp., the
nation's largest nuclear power plant builder, said it is looking for Canadian acquisitions
or partners to help boost uranium reserves and its plans to sell reactors in North
America. The state-owned company is considering options including takeovers and supply
agreements that range in value from 'several hundred million dollars to more than a
billion,' Cui Jianchun, general manager of subsidiary CNNC Finance Co., said in an
interview in Toronto. ...'Canada is a large country with proven reserves and our
governments have signed a cooperation agreement to make this easier,' Cui said yesterday.
'China has plans for as many as 30 new nuclear plants between now and 2020, so our need for uranium is great.'
China National Nuclear executives have met counterparts from Saskatoon, Saskatchewan-based
Cameco Corp., the world's largest uranium producer. The two
companies aren't in 'direct' talks on an agreement, Cui said, declining to identify any
other parties the company is interested in. Cameco spokeswoman Alice Wong wasn't immediately available
to comment.... China, the world's largest energy consumer after the U.S., will increase spending on
nuclear power plants by 13 percent to 450 billion yuan ($64 billion) during the 15 years
ending 2020, the National Development and Reform Commission, the country's top economic
planner, said Nov. 2. China needs to add two reactors a year to meet a target of
generating 4 percent of its power from nuclear plants by 2020, from about 2.3 percent
now."
China Nuclear Seeks Canadian Acquisition for Uranium Reserves
Bloomberg,
9 April 2008 |
"Blackmont Capital analyst George Topping expects that uranium will
make gains in the second half of 2008 due to the depletion of inventories built up by
nuclear power plants during the panic buying of the second half of 2007. Permitting problems in Australia, North America, Europe and Asia, with names like Aurora
Energy Resources Inc., Tournigan
Gold Corp., Khan
Resources Inc. and Laramide
Resources Ltd. all affected, will lead to limited
growth in new mine supply, he told clients in a
note. 'Furthermore, China plans to create strategic stockpiles of other energy sources,
not just oil,' Mr. Topping added. He expects Cameco Corp., the world’s largest and
most liquid uranium company with more than 600 million pounds of U308 resources, to boost
production from 21 million pounds in 2007 to 32 million by 2015."
Uranium expected to rise on falling inventories and limited mine supply
National
Post, 8 April 2008 |
"Kazakhstan may impose an oil export duty as soon as mid-2008 to stabilise domestic supplies, a senior government official said on Monday, in a development likely to
worry potential newcomers to its oil business. Kiinov said the measure would apply to 27
million tonnes of oil exports, or about 40 percent of last year's production."
Kazakhstan may impose oil duty from 2008
Reuters,
7 April 2009 |
"The water requirements of at least 12 new uranium mines by 2015 will
come to about 53 million cubic metres, compared to a
total water supply of 67 million cubic metres presently provided by NamWater to all its
customers countrywide. According to NamWater Chief
Executive Dr Vaino Shivute, an envisaged water desalination plant at the coast was
imperative and would be constructed in order to supply 25 million cubic metres from
seawater by January 2010....Responding to questions, Shivute admitted that the scenic
Namib Desert in the Namib-Naukluft Park, where most of the new mines would be situated,
would be scarred by many new pipelines....Once all the uranium was depleted - around 2030
- mining companies would have to rehabilitate the mined areas."
Namibia: The Price of Uranium Mining - a Namib Desert Scarred By Pipelines
The Namibian, 7 April 2007 |
"Though the Organization of the
Petroleum Exporting Countries (OPEC) tries mightily to suggest a disconnect exists
between the current price and supply of oil -- pegging crude's strength mostly to
geopolitics, US refinery woes and speculators while insisting the market is adequately
supplied -- the numbers, as it is said, do not lie. And those numbers show that while
world oil demand is on the rise, production from across the globe, be it from OPEC, Organisation for
Economic Co-operation and Development (OECD) states, or non-OECD sources, was lower in
2007 than it was the previous year. Indeed, $100/barrel oil has only served to highlight
just how tight the global supply/demand balance is at present. The mythic dollar figure,
begs the question: If oil is so valuable, why isn't more of it being pulled from the
ground? The International Energy Agency (IEA), in
its December 2007 monthly report, forecast oil production from the OECD states at 19.8
million barrels per day (b/d) in 2007, down from 20 million b/d in 2006. OECD output in
2008 is expected to decline further, to 19.5 million b/d, said IEA. Non-OECD production
was pegged by the IEA at 27.9 million b/d in 2007, down 900,000 b/d from 2006, before
rebounding to 29 million b/d in 2008. The IEA last fall cautioned that project delays and
cost overruns 'remain a key downside risk' to its supply forecast, noting some 735,000 b/d
of future output was affected by those factors as of the fall of 2007....The IEA numbers are an eye-opener, according to Stuart Staniford,
an independent oil analyst based in California. 'It tells you that the new capacity being
brought on has already been canceled out by declines in the existing production base,'
Staniford said, citing the North Sea and its maturing fields in particular. 'There just
aren't enough new projects being brought on to offset the depletion.' Moves made a year ago by OPEC to trim supply contributed to the
tightness; the cartel slashed a combined 1.7 million b/d of production in November 2006
and February 2007 in a bid to thin what it believed were ample stocks in consuming
nations. But even OPEC, despite the invariable calls from the West to 'open the spigots,'
can be of limited help, at least in the short term. Data published in March by the US
Energy Information Administration put OPEC's spare production capacity in February at 1.4
million b/d, every barrel of it held by Saudi Arabia. Staniford
cautions against looking to the OPEC kingpin for comfort, saying the Saudis have not been
able to keep up with their own reserve depletion.
'They still have some undeveloped reserves, but they were slow to bring them on stream,'
he said."
Depletion of oil reserves outpaces new production
Platts,
3 April 2008 |
"Opec's disappearing excess
capacity is the root cause of oil above $100 a barrel. The decrease in excess capacity started last summer after power shortages
in the Gulf region. As the summer heat receded and some excess capacity again became
available, it quickly vanished again. Political and technical factors have reduced oil
production in some Opec members. Others with excess capacity compensated by increasing
their own production above their quota. Either way, excess
production capacity has vanished...the way that some
organisations and analysts have interpreted market fundamentals is flawed, because they
exclude the role of excess capacity. Their picture of the historical relationship between
oil prices and inventory levels is a case in point. Why are oil prices breaking records
while inventories are rising? The historical relationship between total oil stocks and oil
prices has an embedded assumption in it that analysts are now ignoring: excess capacity
should not decline below a certain level. In fact it is total stocks, which include
inventories in the industrial countries and excess capacity in the oil producing
countries, which are the main determinant of oil prices. In spite of rising inventories, vanishing capacity makes current total stocks so small that the
increase in oil prices is the necessary result of market fundamentals.... Our focus this year should be on exports
from the oil producing countries, especially from
the Gulf region, not on production or capacity increases. Capacity
might increase, but exports could well decline. Why?
Economic growth, population growth, and urbanisation in the Gulf have increased demand for
electricity to the extent that power shortages will be the norm in the next few years. Power shortages and inadequate generation capacity have delayed
several development projects, industrial plants, and other construction projects in
several Gulf cities. A large number of housing
towers stand empty in some Gulf cities for lack of electricity. It is not 'peak oil' that
is fuelling the current increase in oil prices, it is 'peak power'. Sadly, the whole world
will pay for these power shortages in the form of higher oil and gas prices. A heat wave this summer would force countries in the Gulf region
to divert natural gas from use in the oil fields to power plants during peak demand. This, in turn, will reduce oil production and crimp exports. Countries that use water injection will divert crude oil from
exports and burn it directly in power plants. The
result is a decrease in exports - and an environmental disaster. Let us remember that
there is no additional natural gas in the region. All
natural gas, including gas from unfinished projects, has been allocated. Let us also note that these
countries have started importing fuel oil for power plants. Such imports have become expensive and put strains on the world refining
markets. In short, even building more power plants will not solve the problem. There is no gas for these plants. One final complication: diverting crude from exports will lower
government revenues, which are used in part to finance these plants! One fact is clear: If
Opec had excess capacity, it could flush out speculators, lower oil prices, and help the
ailing dollar, thereby helping itself by increasing production. To conclude: Let us forget
about 'peak oil' for now and focus on the more immediate crisis: 'peak power'."
Forget about 'peak oil' and instead focus on 'peak power'
Financial
Times, 2 April 2008 |
"LNG supplies have failed to
arrive in the UK, despite wholesale prices signaling
attractive returns. UK wholesale gas prices have been at a premium to the US market;
however, this has failed to encourage LNG shippers, which have diverted tankers away from
the UK. Cargo needs, capacity planning and concerns about the security of supply should be
raised, given that market fundamentals are not at work.... Given that LNG imports have
been widely publicized to mitigate gas supply bottlenecks and volatility, it is apparent
that economics is not the only driver behind LNG deliveries. The
UK's vulnerability as a major player on the LNG buy-side has been exposed; moreover, the long-term risk management of the UK's future gas and power
generation needs have been questioned. Strength in overseas demand, ironically with less
transparent indicators, and exchange rate differentials, have clearly come into play from
competing LNG consumers such as Japan, Turkey, France and Spain."
UK LNG: foreign suppliers are failing to deliver
Energy
Business Review, 1 April 2008 |
"Royal Dutch Shell CEO Jeroen van der Veer said Tuesday he expected
easy-to-produce oil and gas would likely peak in the next 10
years. Van der Veer said while depletion of maturing
conventional resources would certainly play a key role in peak production, lack of access
to remaining large reserves, such as in Saudi Arabia, was also a central component in his
forecast. Remaining resources, such as gas trapped in difficult-to-tap reservoirs or oil
sands and shales, will require increasingly costly investments per barrel to produce.
'It's becoming technologically expensive, capital intensive and lead times are growing
longer,' van der Veer said at an energy supply scenario seminar at the Center for
Strategic International Studies. Van der Veer said that while several countries would
maintain large remaining conventional oil and gas reserves — such as Saudi Arabia,
Venezuela and Iran — they would likely constrain remaining supplies. For other
resources, such as in the Arctic, cost would restrict production growth."
Shell CEO: Easy-to-produce oil, gas to peak in next decade
Associated
Press, 1 April 2008 |
