Daily Archives: February 3, 2010

Kate Mackenzie

The Ugandan government appears to have agreed to back Tullow’s purchase of Heritage’s oil fields in the country, ending a bitter dispute with Eni of Italy.

Peter Lokeris, the Minister of State for Mineral Development, tonight told Uganda’s New Vision news website - where official news is often leaked:

“We met on Wednesday and considered the pre-emption right of Tullow and approved it. The decision is final,” he said in a phone interview yesterday.

“We appreciate what Tullow has done in finding the oil and we respect the sanctity of the law,” Lokeris said.

The FT has independently verified that his statements are correct. It appears Tullow has come out on top, however, Uganda has in the past sent mixed signals and no official statement has yet been made.

Fiona Harvey

The ongoing storm over climate change science is cheering up climate change sceptics no end. What with last November’s email scandal (in which emails sent among climate scientists were hacked and exposed on the web), the chaotic scenes at Copenhagen in December, and last month’s revelations about shortcomings on the part of the Intergovernmental Panel on Climate Change, it’s been a heady few months for the sceptics.

But before we get carried away, let’s examine some of the claims against climate science more closely.

Kate Mackenzie

On FT Energy Source:

- Oil services make a comeback

- CNOOC‘s big ramp-up is small beer

- Superbowl and fuel prices

- More East Anglia science and BP analysis in Energy headlines

Further reading:

- Obama goes nuclear

- Japan leads race for hydrogen fuel-cell car

- Alternative energy moves from boutique to industrial scale

- Is BYD the Suntech of 2010?

- Texas’ power supply could run out

- Why senators don’t see the clean energy boom

- ‘Green’ coal and Dr Suess’s The Lorax

- Some good news for refiners in Asia

Barclays Capital has a bullish report on the global oil service industry, which it says will grow this year after passing the low point for activity in the fourth quarter of 2009. The reports predicts an 11 per cent rebound in worldwide spending on exploration and production this year.

James West of Barclays expects E&P spending to accelerate in 2011 as the cycle gains momentum:

The global oil markets remain supply challenged, decline rates are increasing and the resource base is depleting. These trends argue for higher oil prices to increase drilling activity and this is a clear positive for the oil service companies.
This cycle will likely be characterized by continued strong investment in the Eastern Hemisphere, a significant expansion in Brazil, the emergence of deepwater as the central theme and a rebirth in exploration activity.

Barclays said prospects for North America were less constructive over the next one to two years as there were considerable changes underway in this market that would keep growth at bay and increase spending volatility.

Kate Mackenzie

Stephen Schork of the Schork Report oil newsletter has been writing quite a lot lately about gasoline consumption in the US – namely, how it is declining (see here and here).

But we won’t begrudge him that, because it’s an important subject. Plus, he pursues an interesting line of thought in today’s missive: comparing how much Superbowl tickets have risen since 1966, compared to rises in the price of gasoline.

Gasoline as a percentage of personal consumption expenditure, versus Superbowl ticket prices:

Schork Report

Source: Schork Report

He writes:

After all, for the price of admission to the first Super Bowl, you could purchase 31 gallons of gasoline. Today, one Super Bowl ticket (face value) buys you nearly 400 gallons! Absurd indeed, but then again, in 1966 the notion of paying $1.50 for a pint of “spring water” would have been considered absurd.

What’s more, who is to say your typical football fan can actually afford these prices… more than 17% of the U.S. workforce is either unemployed or underemployed.

Schork continues that, while the value of football hasn’t really improved at all in that time, keeping gasoline flowing has required huge investments, risky exploration, technological advancements and all kinds of other efforts, including operating in “dodgy” areas. (Though we’d point out that, from the consumer’s point of view, gasoline is still pretty much the same commodity it was several decades ago.)

His argument is that, while paying $1,000 for a Superbowl ticket is the height of stupidity, it makes criticism of oil and gas industry subsidies, which has made relatively huge efforts in the past few decades, look a bit weak.

Related links:

Bad signs for oil from personal consumption data so far (FT Energy Source)
President’s energy budget short-sighted (FT Energy Source)

Kate Mackenzie

CNOOC, China’s offshore oil producer, has raised its capital expenditure and production targets substantially. Chief financial officer Yang Hua even went so far as to declare 2010 will be a ‘splendid year’ for the company. The company is targeting net production of 275m – 290m barrels of oil-equivalent for the year, compared with 226m – 228m in 2009. It is basing its target on an average price for WTI of $75.

CNOOC is also raising capital expenditure quite a bit:

In 2010, concentrating on production growth and intensive exploration program, the Company will budget a total capital expenditure of US $7.93 billion, representing an increase of 29.5% over the estimated capital expenditure of 2009. During the year, the Company’s capital expenditures for exploration, development and production are expected to reach US $1.47 billion, US $4.81 billion, and US $1.50 billion, respectively.

It’s a drop in the ocean compared to the country’s oil consumption.

Kate Mackenzie

East Anglia climate scientist calls for more transparency (FT)

BP offers downbeat outlook for 2010; Refining BP’s weak point; BP sets sights on Exxon’s crown (FT)

Steelmakers buy coking coal at peak prices (FT)

Falklands plan angers Argentina (FT)

Siemens targets Indian renewable energy industry (FT)

EU carbon slips further ahead of auctions (Reuters)

Exxon deep dives into high-risk exploration (WSJ)

CNOOC rises most in eight months on higher production targets (Bloomberg)

Oil, trucking industries launch lawsuit against Californian fuel rules (LA Times)

Missouri representatives propose blocking EPA rules (AP)

South Korea seeks 52% rise in renewable spending in 2010 (Bloomberg)

Australian opposition’s climate plan fails to win over key senator (AAP)

Anadarko CEO: Obama meeting favourable for gas producers (Dow Jones)

White House completes indirect biofuels emissions review (Greenwire)

Energy Source is no longer updated but it remains open as an archive.

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