Daily Archives: March 11, 2010

Sheila McNulty

ExxonMobil continues to exhibit the confidence befitting the world’s biggest western publicly listed oil company. It committed today to $28bn in capital spending in 2010 and $25bn – $30bn in investment per year, on average, through the year 2014. Read more

Kate Mackenzie

The shale gas industry won’t like this one: a university study has found that a shale gas saltwater disposal well in the Barnett Shale may have caused some earthquakes there. Read more

Kate Mackenzie

On FT Energy Source:

- BP’s $7bn Devon assets purchase – and a Canadian oil sands deal, too

- The water-energy nexus

- Is Saudi Aramco laughing off clean tech?

- The IPCC review might be too late for some

- More BP/Devon, Tullow in Uganda and the Czech grid problem in Energy headlines

Further reading:

- Is East Africa the next frontier for oil?

- Looking for oil demand in all the wrong places

- Californian utilities not quite ready for fuel cells

- New generation of nuclear is in doubt

- Brazil, India and California: Petroleum consumption comparison

- Will the anaconda or the oyster rule wave power?

- Retired nukes may power Tennessee homes Read more

Kate Mackenzie

Matt Simmons, energy investment banker and author of a leading peak oil book, gave a speech in Dubai last month about the role of water in energy. Oil is priceless, Simmons said, but water is even more priceless:

– Without water, we cannot create modern energy
– Without water, we have no food

It is similar to oil in that we may will never run out of it, but good (sweet light, in the case of oil, or potable in the case of water) supplies are becoming scarce.

The problem is, as both supplies become more scarce, both are demanded more by the other – and of course, by the world’s growing population. Available water, says Simmons, is increasingly is brackish or saline, which is energy-intensive to convert to drinkable water. Read more

Ed Crooks

BP has announced its deal with Devon Energy that it hopes will take it into the oil reserves of Brazil’s deep water for the first time, and some of the details are slightly different from what we thought when word first started circulating about the deal last night.

BP is paying $7bn, not $6bn, and is acquiring Devon’s assets in Azerbaijan – a country where BP is already very strong, and growing – as well as Brazil and the Gulf of Mexico.

Perhaps the most intriguing point – although a sideshow to the main event in Brazil and the Gulf of Mexico – is what is going on with its Canadian heavy oil assets. Read more

Kate Mackenzie

The UN has appointed a third party, the InterAcademy Council, to review the IPCC’s procedures after the error over Himalayan glaciers was published.

The Washington Post leads with the angle that the review will not look at the report itself:

U.N. officials defended their decision, saying that there is still no reason to doubt the most important conclusions of the Intergovernmental Panel on Climate Change. In a landmark report in 2007, the panel found “unequivocal” evidence that the climate was warming.

Ban Ki-Moon also asserted at Wednesday’s press conference that the errors identified did not disprove the overall findings of the report. The IAC, which describes how it will carry out the review here, may not have to look too hard to find procedural problems. After all the IPCC barely has a secretariat; it is mostly a network of senior scientists who are not paid for their contribution to the report, but are only reimbursed for costs such as travel.  Read more

Kate Mackenzie

Natural gas looks like being the undisputed hero of this year’s CERA Week conference in Houston – CERA even confirmed it by launching a big report declaring US shale gas a “game changer”.

But attendees at the oil and gas industry shindig can’t ignore the fact that demand for fossil fuels, particularly oil, has effectively peaked in the US and other western countries. And despite the troubled progress towards a global climate agreement, the push to support renewables, clean energy and efficiency is only strengthening in both the developed and developing world.

Of course whether this poses a big threat to the hydrocarbons sector is debatable – after all, global energy demand as a whole is expected to rise quickly over the next 20 years thanks to emerging economy growth, and fossil fuels have the massive advantage of the built environment.

So perhaps it’s not surprising that E&E News reported talk of renewable energy was “generating snickers” at the conference. Read more

Kate Mackenzie

BP in talks to buy Devon assets for $6bn (FT)

UN orders review of climate change report (FT)

Tullow names investors for Ugandan assets (FT)

Glencore forecasts bumpy year as profits fall (FT)

Shell halts supplies to Iran (FT)

Eon tones down outlook for 2010 (FT)

Putin seeks to bolster links with New Dehli (FT)

IHS study backs shale gas ’100 years’ claims (Reuters)

Sinopec to forge 1,660km LNG pipeline (China Daily)

India still seeking coal deals in Australia, Indonesia (Bloomberg)

Century-low in solar activity may slow warming ‘slightly’ (Bloomberg)

Ghana Jubilee field to reach plateu early (Argus)

Gulf Keystone on cash hunt (UpstreamOnline)

German subsidy cuts muddy 2010 outlook (Reuters)

Czech renewable energy exceeds grid safety limit (Reuters)

Senate approves biodiesel credit bill (Bloomberg)

Missing energy executive’s body found in Mississippi River (AP) Read more

Ed Crooks

Update: More recent details of the $7bn Devon deal, and its Canadian oil sands side-deal.

BP plans to pay about $6bn for oil and gas assets put up for sale by Devon Energy of the US, particularly offshore acreage in the Gulf of Mexico and Brazil, taking advantage of its financial strength to make an important strategic move.

As of midnight London time, a deal was close, according to people with knowledge of the negotiations, and could come on Thursday.

For Devon, the deal looks pretty good. It has moved sharply on the sale, which had been expected to take until the end of the year. The price is hard to assess without the full details, but it does not look bad: BP is paying the mid-point of the $4.5bn-$7.5bn price that Devon hoped to raise, and it is not yet clear whether it is taking all of the assets that have been put up for sale. The disposal will free up capital to enable Devon to invest in its onshore US and Canadian business, particularly its position in the booming unconventional gas industry.

However, it is probably more significant for BP. Read more