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Windsor Energy Group News Update: May 2008 WEG Newsletter May 2008 May 2008
WEG Newsletter May 2008
Dear Reader,
Herewith is the latest edition of the WEG newsletters. Oil prices keep moving higher, despite some warnings of commodity bubbles and concerns about the impact of economic slowdown. Predictions of $150 or even $200 oil are no longer treated as posturing after long-term prices recently passed $140 a barrel. If you would like to know more about the WEG forthcoming programme or to suggest events or articles to us, we would be very pleased to hear from you on projects@meconsult.co.uk
Kind regards,
Laura H. Sandoval Editor WEG newsletter MEC International Ltd. Fax: 0044 (0)20 7591 4801
Democrats Battle Over Gas Tax and Iran. Senators Barack Obama and Hillary Rodham Clinton bickered over the airwaves on gasoline taxes, foreign policy and the state of the race for the Democratic nomination Monday morning as they began their final furious day of campaigning before the North Carolina and Indiana primaries set for Tuesday. 7th May 2008
Petrobras to Start Long-Term Test at Tupi in March 2009. Brazil’s state-run oil firm Petroleo Brasileiro SA (PBR), or Petrobras, will start a long-term production test at its giant Tupi field in March 2009, Chief Financial Officer Almir Barbassa said in a conference call Tuesday. 13th May 2008
U.S. Senate Rejects GOP Oil Drilling Plan. The Senate has rejected a Republican energy plan that calls for opening an Alaska wildlife refuge and some offshore waters to oil development. 13th May 2008
Australian Govt to Tax Condensate; Reaps A$2.5B in 4 Years. The Australian government will start taxing some condensate production by removing the fuel’s current exemption from a crude oil excise, Treasurer Wayne Swan announced Tuesday. 13th May 2008
Exxon: Alaska Should Pay $800M Over Point Thomson. Oil companies say Alaska breached a deal when it revoked gas and oil leases on a North Slope oil field and should pay $800 million in damages. 13th May 2008
Ecuador Wary of World Bank Arbitration in Occidental Case. President Rafael Correa said Saturday he has "no confidence" in the World Bank arbitration branch that is hearing U.S. oil company Occidental’s lawsuit against Ecuador. 12th May 2008
Libya to Reassess Italy Oil Deals Amid Government Row. Libya is reassessing some of its oil deals with Italian energy company Eni SpA (E) as tensions mount between the two nations following the new Italian government’s high-level appointment of a right-wing politician who has angered the North African country in recent years. 9th May 2008
Apache to Increase WA Domestic Gas Prices, Start Halyard 2010. U.S oil and gas producer Apache Corp. (APA) has flagged big rises for Western Australia state domestic gas prices as it readies to unveil the first sales contract for its A$840 million Reindeer offshore field. 5th May 2008
First Gas Starts to Flow from Caravel Field. Shell UK and Esso have brought the first gas ashore from the new Caravel field in the North Sea through a wind and solar-powered platform which has zero CO2 emissions. 5th May 2008
US senators threaten Saudi arms deal over oil prices. A group of US senators Tuesday threatened to block a billion dollar US arms deal with Saudi Arabia unless the kingdom ups oil production and helps cut soaring gasoline prices. 13th May 2008
The 1m b/d production goal. Upstream investment in Colombia should set a new record this year, helping the country build towards 1m barrels a day of oil production by 2020, says the upstream regulator. Tom Nicholls writes. 16th May 2008
Repsol, Shell renegotiating Iran gas deal: Repsol company source. Spain’s biggest oil group, Repsol, and British-Dutch peer Royal Dutch Shell are renegotiating their participation in a multi-billion dollar natural gas project in Iran but still want to take part, a Repsol internal source said Monday. 23rd May 2008
Sudan: Between Reform and Conflict. Haydar Ibrahim Ali Sudanese Studies Center 29 April 2008 Political thought in Sudan generally avoids the issue of reform, since the very notion falls short of the political and developmental ambitions the country has harboured since independence, in 1956. The Sudanese people believe that they are more advanced democratically than other Arab and African countries, since they have known party pluralism, even a Communist Party, and the two popular intifadas (uprisings) against dictatorial regimes had been victorious, and had succeeded in reinstating democracy. They also prefer, whenever their democracy is in regression, to use terms like “democratic transformation” or “reinstitution of democracy”, though the situation this time around is entirely different, given the nature of the regime, the major political parties’ lack of vitality and political imagination, diverse makeup of the population, the impact of armed conflicts and recurrent foreign interventions. Moreover, due to the ensuing interwoven problems and failure to fulfil the general aspiration of the Sudanese people, the present authority has set up a “secucracy” that today controls the course of Sudanese politics. It is a governance system, which does not necessarily use crude repressive methods, but rather a well-measured carrot and stick approach that helps them do both, manage and entrench the current political vacuum in the country. Undoubtedly, the security services are the most modern and well-run institution in the country, as well as the richest, given its open-ended budget that knows no parliamentary or legal accountability. It is therefore able, more than any other government or partisan institution in the country, to control every aspect of civil service and society and thus play, to a certain extent, the traditional role that armies usually play in Arab politics.
Sudan’s oil industry. Oil in Sudan accounts for 92,6% of the country’s export revenues and with most of its producing oil- fields located in the South of the country, the management of the oil industry is a key factor that will determine the future of the country. The oil industry is poorly supervised and highly politicised, and as such, rather than contributing to an enabling environment for peace and equitable development, a source of strife and division.
Oil below $127 as Opec stands firm. Oil was below $127 a barrel on Monday, after Opec’s president said the producer group would not call an early meeting and was unlikely even at its September gathering to boost supply as the world had enough oil. 20th May 2008
Energy costs hit German factories. Rising energy costs meant German producer prices were 5.2% higher in April than a year earlier, official figures have shown. 20th May 2008
Oil cools after vaulting to $135. Oil prices were well off their peak of $135 a barrel on Friday as investors cashed in on five sessions of rises. 23rd May 2008
Nigeria demands $2bn oil arrears. President Umaru Yar’Adua has ordered Nigeria’s state-run oil company to demand nearly $2bn in arrears from two major oil companies. 21st May 2008
Carbon market could be worth 2 trillion euros in 2020: study. The global market in CO2 emission rights could be worth two trillion euros (3.14 trillion dollars) by 2020 if the United States joins the scheme, analysis group Point Carbon said on Thursday. 23rd May 2008
Spain’s Iberdrola to invest 8 billion dollars in US renewable energy. Spanish power company Iberdrola, the world’s largest renewable energy operator, said Sunday it plans to invest eight billion dollars (5.1 billion euros) in the United States between 2008 and 2010. 23rd May 2008
Shortage fears push oil futures near $140 By Carola Hoyos and Javier Blas in London Published: May 20 2008 19:06 |
Fears of a shortage within five years propelled long-term oil futures prices to almost $140 a barrel on Tuesday, further stoking inflationary pressures in the global economy. Investors rushed to buy oil futures contracts as far forward as December 2016, pushing their prices as high as $139.50 a barrel, up more than $9.50 on the day. The spot price hit a record $129.60 a barrel. Veteran traders said they had never seen such a jump and said investors were increasingly betting that oil production would soon peak because of geopolitical and geological constraints. Neil McMahon, of Sanford Bernstein, said: “Peak oil views – regardless of whether right or wrong – are seeping into the market and supporting high prices.” Anne-Louise Hittle, of Wood Mackenzie, added that investors were shifting their focus from the short-term to the medium-term, where supply fears played a bigger role. Since January, long-term futures oil contracts, such as those for delivery in 2016, have jumped almost 60 per cent, while near-term prices have gone up 35 per cent. That trend was exacerbated by T. Boone Pickens, the influential investor who believes world oil production is about to peak as aging fields run dry. He warned that oil prices would hit $150 a barrel by the end of the year. “Eighty-five million barrels of oil a day is all the world can produce, and the demand is 87m,” Mr Pickens told CNBC. “It’s just that simple.” Mr Pickens’s view is still in the minority in the oil industry. But concerns over future oil supplies are fast moving into the mainstream and influencing investors. Politicians have expressed concern that speculators are forcing prices higher and Joseph Lieberman, the influential senator, said he was considering legislation to limit big institutional investors in commodities markets. Some energy executives have warned that geopolitical supply constraints will mean production will not be able to match demand as early as 2012 to 2015. This comes as demand, especially from China, is set to continue to grow, while that of the US slows. Adam Sieminski, chief energy economist at Deutsche Bank, said: “The price is going to go up until governments that subsidise oil consumption in Asia and the Middle East can no longer afford it.” So far China is doing the opposite, having recently retrenched subsidies. Analysts say Chinese demand could surge further as the country faces shortages of coal and hydropower. Nervousness about Chinese energy demand was exacerbated on Tuesday when officials said 32 power plants had been forced to close because of coal shortages. PetroChina and Sinopec, the two biggest domestic oil groups, also have diverted fuel supplies to the quake-hit Sichuan region.
Analysts foresee ’new world energy order’. A leading global energy monitor fears there may not be enough oil out there to slake the world’s thirst -- and is preparing a landmark forecast that could reverberate through the global economy even as major companies announce fuel-related cutbacks. 23rd May 2008
Time to do something about oil. The oil price rise of more than US$50 per barrel since the US Federal Reserve started cutting interest rates in September is beginning to get serious. Since the rise of oil import prices alone removes $170 billion from the US economy, more than 1% of gross domestic product, it is both inflationary and highly recession-producing, especially since it has been accompanied by similar rises in other commodity prices. Its full effects have not been seen yet but they’re coming - don’t worry! At some point we are probably going to have to do something about it. The question is: what?. 28th May 2008
Shipping costs soar. The high price of energy is undercutting the advantages of globalization by raising transportation costs so much that they could force businesses to look closer to home, says a CIBC World Markets report. 28th May 2008
Gordon Brown landed North Sea oil in choppy water. The Treasury is enjoying a windfall as oil soars but taxation policy may have knock-on effects, writes Edmund Conway The rest of us may have been too busy partying like it was 1999, but on the eve of the millennium Britain was quietly, unwittingly, selling off the family silver on the cheap. 29th May 2008
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