Some randomly selected articles from around the world on the current state of the oil industry.
1. Omani oil revenues in the first four months of 2009 are down about 50% from the same time last year, according to Reuters.
2. Expect a downward oil price correction shortly, according analysts quoted in the Edmonton Journal. They put the drop to the low 60s or high 50s a barrel. [Hint; they’re conservative; think lower still] Among the factors cited: weak demand, new production coming on stream and tons of oil currently in storage onshore and offshore that doesn’t have a market yet.
3. Of course,the peak oil cultists are still predicting the opposite so they see any lowering as just a temporary calm before the Apocalypse hits.
4. Scan to the bottom of this article on a recent meeting of PetroCaribe and you’ll see reference to Cuban oil potential:
In the case of Cuba, Venezuela's financial and energy support is critical to supporting the Castro regime. Energy dependence has long been Cuba's Achilles' heel.
Havana used to depend on the east bloc for cut-rate oil, and plunged into economic chaos and blackouts when it was cut off after 1989. Now it depends on crude from ally Venezuela.
Cuba is negotiating oil exploration and production deals with Russia, China and Angola, with Moscow shaping up as the partner that could make the communist island energy self-sufficient, if its untapped offshore reserves pan out.
If it can achieve energy independence, Cuba may in the blink of an eye turn from a cash-strapped developing nation into a flush oil exporter, possibly projecting its current regime years into the future.
Cuban authorities in October announced that the Caribbean nation's crude reserves were more than double what had been thought, and now were estimated to be about 20 billion barrels.
5. OPEC oil production rose slightly in May, up again from a slight rise in April. Compliance with the OPEC production quota dropped again in May with Venezuela, Iran and Angola exceeding their quotas. Go back to the article on PetroCaribe and you’ll see Venezuela is in the middle of a little local power play involving oil. Venezuela runs an oil rent-to-own scheme in which countries in the region can buy Venezuelan crude on credit.
6. Still, OPEC lowered its oil demand forecast for 2009, which only makes sense in the current real market.
7. While there may be some dispute as to whether Cuban oil potential is 20 billion barrels or five billion barrels, there’s no doubt interest is growing in developing the Caribbean nation’s offshore resources.
Either way, Cuba’s oil is attracting the attention of oil companies from around the globe. At the moment, Spain’s Repsol, Brazil’s Petrobras, and Norway’s StatoilHydro are overseeing exploratory drilling in the Gulf of Mexico. India, Malaysia, Vietnam, and Venezuela also have signed deals with Cuba.
Maybe Cuban oil potential is behind signs of a thaw in American-Cuban relations.
8. Closer to home, there’s the NOIA oil and gas conference next week and with it, the annual speculation that Premier Danny Williams might say something earth-shattering despite the fact that making an announcement there would involve sharing the spotlight with NOIA.
He hasn’t done anything like it before but people still like to stoke the hype. Last year CBC got suckered into the whole thing in a big way; this year it’s the Telly’s turn on a smaller scale and focusing on Hibernia South.
Now if the Hebron thing is anything to go by, what comes out the end could be a whole lot less than the hype suggested and some of the details have some really disturbing implications. Of course, hype is more fun than details.
9. Speaking of the NOIA conference, the theme this year focuses on the potential for the Arctic.
There’s the global perspective:
SESSION 2: TECHNOLOGIES FOR ARCTIC ENVIRONMENTS 2:30 p.m.
Russia’s Shtokman Project: an Update
Sergey Smityushenko, First Deputy Governor of Murmansk Oblast, Russia
Exploration and Production Options for the Alaskan Offshore
Mike Paulin, President, IMV Projects Atlantic
Pushing the Envelopment: R&D Advances for Arctic Oil and Gas Development
Jim Bruce, Deputy Director Ice Engineering, C-CORE
Canadian Frontiers Operating in Harsh Environments
Peter Haverson, General Manager, Global Drilling, International and Offshore, Petro-Canada
And the local one:
SESSION 4: FARTHER, DEEPER, COLDER 2:30 p.m.
Chevron's Growth Strategy for Atlantic Canada
Mark MacLeod, Atlantic Canada Manager, Chevron Canada Limited
Greenland - A Steppingstone to Arctic Exploration
Gregors Dam, Chief Geologist, Dong Energy
Playing to our Strengths
Mark Shrimpton, Principal and Practice Director, Socio-Economic Services, Jacques Whitford Stantec
Defining the Outer Limits of Canada's Continental Shelf in the Atlantic and Arctic Oceans Under the Law of the Sea
Jacob Verhoef, Director, UNCLOS Program, Natural Resources Canada
That last session is one to watch since the issue of oil development at and beyond the edge of the continental shelf has implications for any developments in the Orphan Basin offshore Newfoundland.
And for those who are missing their fix of the government’s favourite economist, don’t worry. NOIA is doing it’s bit to keep on good terms with government.
Not only is there a reception at The Rooms, but Wade Locke is the lead speaker in the last session. He’ll be talking up “Offshore Oil & Gas, the Economic Crisis & the Local Economy”.
If he sticks to his more recent lines, this should be fun. Prediction: He won’t be hyping non-existent aluminum smelter projects just as the demand for aluminum collapsed. He might talk about the current economic situation but he might have to be more cautious about undermining the provincial government’s “we live in a bubble, all is well” talking point since the last time Locke’s comments were reported accurately, he got upset.
Right after Wade will be the provincial energy corporation’s Jim Keating who will, in all likelihood, be talking about the Lower Churchill.
Of course, that’s pretty much all there has been about the project:
- Project sanction was supposed to take place in 2009. Then that got slid back by a mere six months. Now we don’t hear much talk of LC start dates at all.
- The land claims agreement with the Innu Nation – crucial to any development – seems to be deader than a doornail despite the initial hype about it.
- We do hear talk of slinging power lines through a UNESCO World Heritage site, something once described as the “most serious threat” to the park.
- There have also been contradictory statements about the future of the Holyrood generating plant.
And that’s just some of the stuff that hasn’t really been covered in any great detail in local media on the most talked about paper project in history.
Even if the Premier doesn’t lead off with anything Earth-shattering, there’s a prospect Jim and Wade can finish the NOIA conference with something really newsworthy.