Opinion & Commentary
Will OPEC collapse - Libyan P.M. flees to Europe
Wednesday, March 12, 2014
Inevitable Break-up of Libya Presaged by months of political infighting, and street fighting outside parliament, former Libyan prime minister Ali Zeidan fled from Libya, 12 March, according to newswires. Reuters explained his flight to Europe as due to parliament voting him out of office on Tuesday March 11, following his inability to stop rebels exporting oil independently. Reuters and other newswires added that the rebel forces set a 'brazen challenge to the nation's fragile unity', and had actively threatened Ali Zeidan with assassination, several times. Zeidan stopped over in Malta for two hours late Tues... Read more
From exploration to development; the shift in Aberdeen-based skills demand...
Wednesday, March 12, 2014
At this crucial juncture in the story of UK North Sea oil and gas exploration and production, we are seeing an interesting alignment in the skills requirements and investment focus of operators in Aberdeen. Exploration activity in the UK North Sea is at a worrying low, with only five exploration and appraisal wells spudded so far in 2014 and only one drilling permit request received by DECC. The demand for subsurface and geoscience professionals in Aberdeen has begun to move away from explorationists and more towards those with field development and production experience. The reason for this is not just because of the lac... Read more
Ukrainian crisis highlights political risk in long term gas sales
Tuesday, March 11, 2014
Russia supplies around one third of Europe's gas, and around half of that gas passes through Ukrainian territory. The political crisis in Ukraine, not least Russia's recent involvement, has therefore highlighted the issue of political risk in gas sales, with some nervous price movements seen in European gas trading markets and importers rushing to reassure markets and customers that supply interruptions are unlikely. But long term gas sales to Europe have shown surprising resilience against political risk in the past, perhaps due to the particular level of mutual dependence between the parties to long term gas sale... Read more
Ukraine, Russia and the nonexistent U.S. oil and natural gas "weapon"
Monday, March 10, 2014
Commentators were falling all over themselves last week to announce that far from being impotent in the Ukraine crisis, the United States had a very important weapon: growing oil and natural gas production which could compete on the world market and challenge Russian dominance over Ukrainian and European energy supplies--if only the U.S. government would change the laws and allow this bounty to be exported. But, there's one very big problem with this view. The United States is still a net importer of both oil and natural gas. The economics of natural gas exports beyond Mexico and Canada--which are both integrated in... Read more
Skills and capability challenges facing upstream
Thursday, March 06, 2014
Purpose This report aims to explore and explain the capability challenges now facing the Upstream Oil & Gas industry. A product of detailed discussions with numerous industry leaders, it highlights the principal approaches the industry is taking to tackle these problems and suggests further required changes. Method Practicus's research function has contacted over 350 senior leaders from across Upstream, including Operational, HR and C-Suite professionals. We have taken a holistic view of the global Upstream industry and our research engagements have included IOCs, mid and smaller operators, Oil Field Services co... Read more
Ukraine: Russia holds all the aces
Tuesday, March 04, 2014
This post provides a perspective on Ukraine’s energy status and economy in 8 charts. Figure 1 The Ukrainian economy is dependent upon imports of oil and gas from Russia. Ukraine gained independence from The Soviet Union in 1990 and since then energy consumption, production and imports have all fallen steadily (Figures 2 and 3). Figure 2 Ukraine is not energy rich which underpins poor economic performance and dependency on Russia. Sufficient coal is produced to satisfy domestic demand (Figure 1) and Ukraine has a significant nuclear power industry. There is a small amount of natural gas production with future hope... Read more
Beginning of the end? Oil companies cut back on spending
Tuesday, March 04, 2014
Steve Kopits recently gave a presentation explaining our current predicament: the cost of oil extraction has been rising rapidly (10.9% per year) but oil prices have been flat. Major oil companies are finding their profits squeezed, and have recently announced plans to sell off part of their assets in order to have funds to pay their dividends. Such an approach is likely to lead to an eventual drop in oil production. I have talked about similar points previously (here and here), but Kopits adds some additional perspectives which he has given me permission to share with my readers. I encourage readers to watch the original... Read more
Ghana's Jubilee oil field - stable or stagnating?
Thursday, February 27, 2014
In December 2010, the first oil was produced from Ghana’s Jubilee field, breaking a record for major deepwater development, as this was only 3.5 years after the field’s first discovery well. Tullow Oil (the unit operator – see note 1) led the celebrations, along with its major partners Kosmos Energy and Anadarko Petroleum, and the future for the field looked really bright. But although production now averages at around 100,000 barrels of oil equivalent per day (boe/d), issues are beginning to pile up and progress has been virtually non-existent since first oil. The field’s performance looks stable b... Read more
Why Shell needs this junior's big play
Thursday, February 27, 2014
Elephant hunting for huge international oil plays usually means going into (very) politically risky areas. That’s what makes junior Petromanas (PMI-TSXv) stand out from the crowd. They’re chasing a potential 500-800 million barrel target in Europe—Albania to be exact. Lots of energy investors are familiar with Bankers Petroleum and their heavy oil play there—it’s the largest onshore oilfield in all of Europe. But few people know about Petromanas. I expect that to change in a hurry in Q3 2014 if their next well hits. They already have one success under their belt. But even better, they&r... Read more
East Africa oil & gas outlook: Global export hub by 2020?
Wednesday, February 26, 2014
East Africa could become the world’s next oil and gas export hub by 2020, according to a new report by Evaluate Energy. There are three countries with ambitions to make this a reality; Kenya, Mozambique and Tanzania. If even one of these countries achieves its goals, the impact on the global oil and gas industry would be very significant indeed. The landscape of African oil and gas has changed very little in the last 20+ years. Historically, it has been the more economically developed Western and Northern countries that have produced the most oil and gas. Only Angola has stepped out of relative obscurity since 199... Read more
The hidden risks of development decisions
Tuesday, February 25, 2014
The pre-decision process is increasingly important as production risks and costs escalate for both large and small plays, says Hiren Sanghrajka of Upstream Advisors The commercial landscape for oil and gas production has never been straightforward. Early stage planning has always been of paramount importance but today it has become increasingly vital to get it right as a range of factors continually transform the risk picture. A study published late last year, into project execution and budget overruns by the Norwegian Petroleum Directorate (NPD), pinpointed insufficient planning at the front-end engineering and design (... Read more
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