Daily Archives: March 17, 2010

Carola Hoyos

PetroChina, the Chinese state-owned  energy group, is building new liquefied natural gas import terminals even though it has yet to secure the long-term supply for them, writes World Gas Intelligence today . This relatively new development illustrates the company’s confidence that supplies will be there when it needs them and its unwillingness to pay today’s high prices for long-term contracts when spot prices are at $4.30 per million British thermal units (mbtu) in the US, the most liquid spot gas market.

Kate Mackenzie

On FT Energy Source:

- Opec keeps quotas unchanged

- Is a gas cartel really possible?

- DRC: The next Uganda of oil?

- Those volatile energy prices - and far less volatile consumption

- The Dodd bill and commodities regulation

- UN climate division and more in Energy headlines

Further reading:

- Coming soon: economic growth without oil

- Will oil hit $200 a barrel after all?

- Coal beats solar while subsidies drop

- Community solar arrays for renters

- Breaking the ice on clean tech opportunities

- Damage done by Nigeria’s oil bill may be tough to undo

- Richard Heinberg talks to Lester Brown

- Plenty of gas, but no simple solution for US energy

Carola Hoyos

Updated: Opec oil ministers have agreed to maintain the status quo and keep the group’s production quota unchanged. The decision was widely expected, but moved oil prices slightly higher.

The agreement has now been confirmed by Opec’s secretary-general Abdalla Salem El-Badri and Ali Naimi, Saudi Arabia’s energy minister and the group’s de-facto leader.

Oil prices moved slightly higher on the news. April West Texas Intermediate crude, the US benchmark futures contract, was up 61c at $82.31 a barrel, approaching a level it has not seen – other than once this January – since October 2008. The European benchmark Brent price was up 68c to $81.21.

Opec agreed to next meet in in Vienna in October, a month later than had been expected, because several ministers have other prior commitments in September.

As a rush of journalists entered the domed meeting room in Opec’s new headquarters building this morning, ministers from Libya to Saudi Arabia said they saw no reason to change tac. The oil price – at around $80 a barrel – is where they want it to be and the economy is showing good signs of recovery, they reasoned.

The most definitive quote came from Ali Naimi, Saudi Arabia’s powerful oil minister, who told a gaggle of journalists, including AFP, which had the quote up on line within seconds:

“There is no question: there is agreement, yes,” he said. When asked what Opec would decide at its meeting, he said: “To keep things as they are. We are very happy with the situation as it is.”

So unless ministers have been telling bald-faced lies, this meeting is over even before it has officially begun.

Carola Hoyos

Every time the topic of a gas cartel comes up, so does the question: Could they really do it? With more and more gas traded on the spot market, rather than tied up in long-term supply contracts, the answer is increasingly yes. That doesn’t mean it will be easy, or likely to be a quick success.

Nevertheless, three big things have changed in the past year to make it worth a closer look:

- The gas price has collapsed under the weight of over-supply

- More gas is being traded on the spot market

- Spot gas price-linked agreements are nibbling into the dominance of long-term contracts linked purely to oil prices

Carola Hoyos

It’s not easy to hide a French man in the (formerly Belgian) Democratic Republic of Congo. At least that has been the recent experience of Total, the French oil company.

Phillippe Hergaux, who is in charge of Total’s new ventures in that part of the world, was tracked down by local television crews and then by Reuters.

“What are you doing here, pray tell?” was the thrust of the questions.

It turns out Hergaux was scouting out new oil fields on the Democratic Republic of Congo’s side of Lake Alberta, where Total has just formed a partnership with UK-lised Tullow Oil and Cnooc, the Chinese state oil company.

Kate Mackenzie

The EIA every year publishes a review of how its long-term forecasts dating back to 1982 have held up against actual developments in US energy production, consumption and pricing.

So, what does this year’s review say?

It’s a very mixed picture – on GDP, rather well, on supply and demand, reasonably well. And on energy prices: not well. Not at all.

By Izabella Kaminska

If you were wondering how Senate Banking Committee chairman Chris Dodd’s proposed bill on financial regulation might affect commodity trading, John Kemp at Reuters has done much of the hard work for us.

In a note sent out on Tuesday, the tenacious former Sempra economist explains how the rules appear to echo and enforce many of the CFTC’s own recommendations, while adding more clarification on matters like OTC swap regulation.

Key proposals on that latter subject include obligatory clearing submissions for swap dealers, depository registration as well as minimum capital and margining requirements.

Kate Mackenzie

Algeria calls for united action from gas producers (FT)

UN divided over climate policy (FT)

Shell’s strategy seems set to pay dividends (FT)

Shell freezes pay-out despite forecast (FT)

Rosneft says Russian oil spat may threaten record output (Bloomberg)

Reliance in talks to buy into Marcellus Shale (Dow Jones)

Oil traders look to James bond-style data collection (FT)

Siemens joins China bid for Saudi rail link (FT)

Oil-rich Kirkuk grows in importance for Iraq (FT)

Chile backs $3.2bn Endesa dam after quake damages grid (Bloomberg)

Crude oil poised to test $90 a barrel: Technical analysis (Bloomberg)

EPA unlikely to issue GHG NAAQs (Argus)

Petrol to his 120p a litre as motorists ‘mugged’ by oil companies (Telegraph)

Poland moves to end dispute with EC on carbon (Reuters)

First Solar is first PV company to join Desertec group (Reuters)

Governors call for national renewable target (Argus)

Salmond hails wave of Scottish energy deals (FT)

UK hung parliament a threat to UK nuclear plans (Reuters)

Qatar plans to sell more LNG to India (Reuters)

Bidders circle EDF’s critical UK network (The Times)

Underwater cable an alternative to electrical towers (NY Times)

Gulf Keystone placing raises 16m (FT)

Offshore wind a boon to shipping industry (NY Times)

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