Daily Archives: January 4, 2011

Russia’s plan to reorient its energy trade towards the east has taken a leap forward with the start of oil exports through a new pipeline to China.

The pipeline, running from Skovorodino in east Siberia to Daqing in north China, is an offshoot of a new oil export route Russia is building to the Pacific Ocean, providing the world’s top oil producer with a strategic window on the energy-hungry markets of Asia. When it is completed in 2013, the 4,070km pipeline can carry up to 1.6m barrels a day of oil, about one third of Russia’s current exports.

Kiran Stacey

Oil prices neared 27-month highs yesterday, and analysts are expecting the run to go on and on. A survey of analysts yesterday by Bloomberg found they expected 2011′s average price to be the second highest ever.

Today, Barclays Capital has added to that sentiment, producing its list of five predictions for the oil price for 2011. Not one of them reads well for consumers.

Here are the bank’s five expectations for this year.

Sylvia Pfeifer

Shares in BP hit a 6-month high this morning after a report that rival Royal Dutch Shell considered an opportunistic takeover bid for the UK oil group in the summer during the Gulf of Mexico oil spill.

BP’s shares were up 5 per cent to 488.85p at 10am this morning in London trading.

According to the report in the Daily Mail Shell weighed a bid while oil was still flowing into the waters of the gulf but decided against it because of the potentially uncapped legal liabilities facing BP. The paper says Shell might still bid for BP if another suitor emerges over the coming months but is unlikely to be the “first mover”.

Kiran Stacey

The first London trading day of 2011 is proving to be a volatile one for oil explorers.

Cairn Energy is having a very good morning, its shares trading up 4.5 per cent after the company announced it had secured two rigs for its exploration off Greenland’s coast. The new rigs mean the company now forecasts it will drill up to four wells this year. Gordon Gray at Collins Stewart is quoted in the Guardian saying:

With rigs now contracted, we expect net asset value estimates for Cairn to rise as it gives details on target prospectivity in the coming weeks.

FT Energy Source

- US eases barriers to deepwater drilling – FT

- Spill’s long-term impact keeps heat on BP – FT

- China claims new nuclear technology – The Guardian

- Sinopec trading unit halts diesel imports – Bloomberg

- Vallar eyes acquisitions to follow Asian deal – FT

- Killing Iran’s energy industry – Mark Dubowitz, WSJ (£)

- Ecuador’s novel plan to save rainforest – FT

- House promises early action on emissions rules – Argus

- Vestas says wins Italian and German orders – Reuters

- Siemens invests in expanding wind power – NY Times

- Huhne promises faster green energy switch – The Guardian

- Cold and floods send fuel prices to new highs – FT

- Argentina threatens to fine electric companies for blackouts – WSJ (£)

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