Oil

Libyan oil production will take years, not months, to return to full capacity once a political solution to the conflict is found, according to Barclays Capital.

“The reincorporation of Libyan oil into the world market increasingly seems a distant possibility” according to the study, which warns of a lasting political vacuum after the potential fall of the Gaddafi regime.

BP, solar, De Beers, Centrica

In this week’s podcast: Interim results from BP fail to please investors; solar power – how economic is it? We ask CEO of Canadian Solar, Dr Shawn Qu; diamond company De Beers gets a new chief executive; and, Centrica – what should we expect from its results?

Presented by Sylvia Pfeifer with Vincent Boland, Pilita Clark, William MacNamara and David Blair.

Produced by LJ Filotrani

Uganda is planning to build only the second oil refinery in East Africa by 2015.

Following the recent discovery of 2.5 billion barrels of oil, Uganda aims to develop a refinery in Hoima, according to Fred Kabagame Kaliisa, permanent secretary at the energy ministry.

Greenland, mining costs, disintegrating oil companies

In this week’s podcast: Greenland – is oil exploration the key to economic independence? High oil and gas prices push up costs for global mining; and, we ask whether integrated oil companies have a future or will others follow ConocoPhillips, and split in two?

Presented by David Blair with William MacNamara and Vincent Boland in the studio in London and Sylvia Pfeifer in Greenland. Produced by LJ Filotrani

Chevron, the US energy company, will carry out oil exploration off the Liberian coast later this year, giving the west African country the possible chance to join its neighbours as an oil-producing nation.

Sheila McNulty

Jim Mulva, chief executive of ConocoPhillips, has been in a hurry to establish his legacy. In the beginning, it was going to be as the head of one of the world’s biggest international oil and gas companies. And he got there, boosting Conoco into 5th place, in terms of production.

But then the economic downturn hit, and the weaknesses in his grow-through-acquisition strategy were exposed. It was no longer enough to be big, and Conoco was forced to slash capital spending, lay off staff and sell billions of dollars in assets.

Sheila McNulty

Several years ago, analysts covering the oil industry were raising alarm bells about how the major oil groups would be making money in the decades to come. With conventional oilfields maturing and no sign of the shale gas revolution at that point, there was pressure from shareholders for them to get into renewables. The majors responded by delving into projects to extract biofuels from chicken fat and soybeans. But that phase is over.

The major oil groups found salvation in unconventional oil and gas production. By unconventional, I mean new ways of getting to oil and gas. In conventional production, drilling a hole into the ground is enough to get oil and gas to flow to the surface. And over the years, as that flow slowed, the industry turned to technology to help the fuel along, for example, by pumping in water and carbon dioxide. But it did not seem that alone was going to produce enough to sustain the majors decades down the road.

When the Republic of South Sudan becomes the world’s newest state on Saturday, the new government in Juba will begin to assess how it can establish an independent export route for its vast oil reserves.

India seems to hold the upper-hand over Iran in a dispute over payments for crude oil shipments that has been rumbling for over six months.

Iran supplies India with 12-14 per cent of its total imports, making it India’s second biggest provider after Saudi Arabia. But a payments dispute has left India owing debts estimated at anywhere between $2-6 billion. In effect, this means India has been importing Iranian oil on credit since December 2010.

Sheila McNulty

The weekend oil spill by ExxonMobil  into Yellowstone River gives environmentalists more ammunition in their long-running battle against granting the oil industry increased access to US oil resources.

While only the final investigation will prove whether Exxon failed to do some maintenance or take other measures that could have prevented the spill, one thing is certain: the US continues to have an unacceptable number of spills on both oil and natural gas pipelines.

Indeed, one of the key reasons raised by environmentalists to block the Keystone XL pipeline from bringing oil sands fuel from Canada’s tar sands across the US to Texas is the high number of spills on the first stage of that pipeline – the Keystone - in its first year of operation. The company says they are not significant. And Exxon might well be able to contain this spill so that it is not a massive environmental disaster.

But why does it seem regulators tend to wait until disaster strikes before taking appropriate action? There had long been signs that the Gulf of Mexico offshore was not being sufficiently regulated, yet the issue of permits continued at a rapid pace until Macondo struck.

The bottom line is that the US has had a number of red flags this past year on the need to improve pipeline safety. Perhaps the biggest of these was the fatal explosion of a gas pipeline in a California residential area.

But, less than a year later, Exxon is the latest to suffer a spill. Its reaction:

No cause has been identified for the release of oil from the pipeline, which met all regulatory requirements and has undergone inspection most recently in December. A field audit of the pipeline’s integrity management program was undertaken by US Department of Transportation Pipeline and Hazardous Materials Safety Administration in June.

So if regulators just inspected the pipeline, the question is whether they missed something? 

Ray LaHood, US secretary of transportation, late last year sent Congress proposed legislation to provide stronger oversight of the nation’s pipelines and increased  penalties for violations of pipeline safety rules.

Congressman Fred Upton, chairman of the House Energy and Commerce Committee, in June signalled his committment to updating and improving US pipeline safety:

Pipeline safety is a serious matter of protecting human life and our environment.  Our nation’s nearly half a million miles of pipeline infrastructure play a critical role in delivering vital energy supplies to southwest Michigan and the rest of the country.  Disasters like last summer’s Enbridge pipeline rupture underscore the unacceptable costs of failure and the need for meaningful updates to our current pipeline safety laws.

Representative Ed Markey, the top Democrat on the Natural Resources Committee and a senior member of the Energy and Commerce Committee, called on Tuesday for investigative hearings to be held into the Exxon spill and related safety and environmental issues:

 

ExxonMobil has turned parts of the Yellowstone River black with their spilled oil. Just as BP was held to account for their accident in the Gulf of Mexico, ExxonMobil should appear before Congress so that we can examine the holes in oil pipeline safety that led to this incident and how we might prevent another spill in the future. Several aspects of pipeline safety regulations may need review based on this disaster.

Mr Markey noted that Exxon had said that the pipeline had been examined within the five-year increments as required by law. He said that timeline may need to be reduced, in light of this accident and the others over the last few years. 

On top of that, higher penalties would help pay for better enforcement.  Surely, given all its budget issues, Congress can see the benefit of this?

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