Category Archives: big oil

2006: The year of renewable energy?

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from… oil-rig225.jpg to… solar-panels225.jpg

In September Chevron announced the discovery of a field containing up to 15 billion barrels of oil beneath the Gulf of Mexico, touting it as “a platform for growth for years to come.” Read the fine print, though, and you get a different story. To recover the first samples of oil there in 2004, engineers floating 175 miles off the Louisiana coast had to send drill gear into 7,000-foot-deep water and penetrate four miles of rock. The company spent tens of millions of dollars on computer modeling, cutting-edge seismological tools, and exploratory drilling; just renting the drill rig cost Chevron and its partners more than $200,000 a day. The results suggest that oil from the new reservoir, called Jack 2, could cost three to four times as much to extract as oil from traditional locations

The upside of stratospheric oil prices is reflected in what is happening on the other side of the balance sheet. The past year looks like the turning point when alternatives to fossil fuels—everything from solar energy, wind turbines, ethanol, and the hybrid car—finally hit the mainstream. “We’ll look back and say this is the year where people rallied together to start down the irreversible path of becoming less dependent on oil,” says Samir Kaul, a partner in venture capital firm Khosla Ventures, which invests in energy and other tech startups.

Meanwhile, the markets are voting with their dollars. By the summer, the stock market value of all renewable energy firms larger than $40 million doubled, to total $50 billion. Venture capitalists, big banks, and even old-school bond peddlers jumped in. This past year, 39 French and German wind farms bought nearly $600 million in bonds in May from Italian Bank UniCredit’s HVB Group—a deal that would have been unheard of even two years ago…

Even Big Oil is jumping headlong into the renewables market.

More at the link below:
[DiscoverMagazine]

The new Seven Sisters: oil and gas giants dwarf western rivals

The “new seven sisters”, or the most influential energy companies from countries outside the Organisation for Economic Co-operation and Development, have been identified by the Financial Times in consultation with numerous industry executives. They are Saudi Aramco, Russia’s Gazprom, CNPC of China, NIOC of Iran, Venezuela’s PDVSA, Brazil’s Petrobras and Petronas of Malaysia.

Overwhelmingly state-owned, they control almost one-third of the world’s oil and gas production and more than one-third of its total oil and gas reserves. In contrast, the old seven sisters – which shrank to four in the industry consolidation of the 1990s – produce about 10 per cent of the world’s oil and gas and hold just 3 per cent of reserves. Even so, their integrated status – which means they sell not only oil and gas, but also gasoline, diesel and petrochemicals – push their revenues notably higher than those of the newcomers.

[FinancialTimes]

Oil Innovations Pump New Life Into Old Wells

Are Reports of Oil’s Demise Greatly Exaggerated?

In Indonesia, Chevron has applied the same technology to the giant Duri oil field, discovered in 1941, boosting production there to more than 200,000 barrels a day, up from 65,000 barrels in the mid-1980s.

And in Texas, Exxon Mobil expects to double the amount of oil it extracts from its Means field, which dates back to the 1930s. Exxon, like Chevron, will use three-dimensional imaging of the underground field and the injection of a gas — in this case, carbon dioxide — to flush out the oil.

Within the last decade, technology advances have made it possible to unlock more oil from old fields, and, at the same time, higher oil prices have made it economical for companies to go after reserves that are harder to reach. With plenty of oil still left in familiar locations, forecasts that the world’s reserves are drying out have given way to predictions that more oil can be found than ever before.

“It’s the fifth time to my count that we’ve gone through a period when it seemed the end of oil was near and people were talking about the exhaustion of resources,” said Daniel Yergin, the chairman of Cambridge Energy and author of a Pulitzer Prize-winning history of oil, who cited similar concerns in the 1880s, after both world wars and in the 1970s. “Back then we were going to fly off the oil mountain. Instead we had a boom and oil went to $10 instead of $100.”

There is still a minority view, held largely by a small band of retired petroleum geologists and some members of Congress, that oil production has peaked, but the theory has been fading. Equally contentious for the oil companies is the growing voice of environmentalists, who do not think that pumping and consuming an ever-increasing amount of fossil fuel is in any way desirable…

[NYTimes]

Study sees harmful hunt for extra oil

All the world’s extra oil supply is likely to come from expensive and environmentally damaging unconventional sources within 15 years, according to a detailed study.

This will mean increasing reliance on hard-to-develop sources of energy such as the Canadian oil sands and Venezuela’s Orinoco tar belt.

Royal Dutch Shell and Total of Europe and ExxonMobil and Chevron, the US-based energy groups, have already begun to invest heavily in Canada and Venezuela.  Others – including Chinese energy groups – are looking at the possibility of extracting heavy oil from Madagascar.

But the challenge is huge, said Matthew Simmons, an industry banker who sent shock waves through the oil world when he questioned whether Saudi Arabia, the most important oil source, would be able to continue to expand production.

“The ability to extract this heavy oil in significant volumes is still non-existent,” he said in a recent speech.  “Worse, it takes vast quantities of scarce and valuable potable water and natural gas to turn unusable oil into heavy low-quality oil.”

“In a sense, this exercise is like turning gold into lead,” Mr Simmons said.

[Financial Times]

More Problems for Oil Workers in the Niger Delta

Gunmen have kidnapped a Filipino oil worker and killed his police escort in Nigeria’s main oil region, police say.

The Filipino was travelling south from the south-eastern city of Owerri to Port Harcourt when the gunmen attacked.

The latest kidnapping brings to 25 the number of Filipino workers being held by militant groups in the oil-rich Niger Delta creeks.

[BBC News]

BP to fund biofuel research institute

Petroleum giant BP announced Thursday that it’s setting up an institute with the University of California, Berkeley, and the University of Illinois dedicated to creating renewable energy.

The Energy Biosciences Institute will be funded by a $500 million grant from BP over a 10-year period as well as smaller matching grants from California. Scientists at EBI will explore such issues as carbon dioxide sequestration, transportation fuels produced out of or by microbes and crops that can be turned into transportation fuel.

[CNET News]

Shell defies US pressure and signs £5bn Iranian gas deal

Shell has signed an important deal to help Iran develop a major gas field, ignoring growing pressure from George Bush to isolate the country for being part of what he alleges is an “axis of evil”.

The Anglo-Dutch group, which is struggling to bring more momentum to its business after being forced to hand over vital Russian reserves at Sakhalin island to the Kremlin, confirmed it had finally reached agreement on various aspects of its “Persian LNG” – liquefied natural gas – project centred on the South Pars gas field.

[The Guardian (UK)]

Gazprom: rising star of new Kremlin capitalism – blurring the lines between business and politics

In the first nine months of last year, Gazprom’s net profits leapt 80 percent. Roaring past industry behemoths Shell and BP last year, the state-owned natural gas monopoly is now the world’s second-largest energy company after Exxon-Mobil.

But critics say the conglomerate, which owns a bank, soccer team, and media wing, is much more than the successful new kid on the global energy block. They describe the company as the Kremlin’s flagship – and chief battering ram – in a strategy to restore state control of Russia’s booming but petroleum-dependent economy, and use that accumulated power to further Moscow’s agenda at home and abroad.

Since 2004, state control of Russia’s oil industry has jumped from around 7 percent to over 35 percent, and is set to grow further this year, experts say. Gazprom and the state oil company Rosneft, headed by Kremlin-appointed officials, have been the key agents in takeovers of private oil companies such as Yukos, Sibneft, and, late last year, the Shell-run Sakhalin-2 project on Russia’s Pacific coast.

via::CSMonitor

[Ed. note: green.mnp is going to start bringing you more posts like this to help shed light on international and national events, business dealings, and geo-politics that relate to energy issues. We hope that these posts will help our readers have a better understanding of present and future energy challenges]

Related:

Russia Pressuring Neighbors with Gas Prices and Belarus Blocks Transit of Russian Oil

(via politricks.mnp)

House Rolls Back Oil Company Subsidies

WASHINGTON (AP) – The House rolled back billions of dollars in oil industry subsidies Thursday in what supporters hailed as a new direction in energy policy toward more renewable fuels. Critics said the action would reduce domestic oil production and increase reliance on imports.

The energy legislation was the last of six high-priority issues that House Speaker Nancy Pelosi had pledged to push through during the first 100 hours of Democratic control. The bill passed by a 264-163 vote.

via::AP News/Guardian (UK)

ExxonMobil softens its stance on climate change, distances itself from global warming skeptics

Now, Exxon has cut off funding to a handful of those outside groups. It says climate-science models that link greenhouse-gas concentrations to global warming are getting more reliable. And it is meeting in Washington with officials of other large corporations to discuss what form the companies would prefer a possible U.S. carbon regulation to take.

…the company’s subtle softening is significant and reflects a gathering trend among much of U.S. industry, from utilities to auto makers. While many continue to oppose caps, these companies expect the country will impose mandatory global-warming-emission constraints at some point, so they are lining up to try to shape any mandate so they escape with minimum economic pain.

via Wall Street Journal, MSNBC