TPT March 2009

Oil & Gas News

inconsiderable, but its utility as a shipment route depends on stability in the region and the repair of strained Turkish-Israeli relations. ■ President Hugo Chávez, of Venezuela, has quietly reversed course and is once again courting some of the large Western oil companies that he all but ousted from his country: nationalizing their oil fields, raiding their offices for alleged tax irregularities, and raising their royalty rates. According to energy executives and industry consultants in Venezuela, Mr Chávez, confronted by a plunge in oil prices and a decline in domestic production, has recently sent senior officials to solicit bids from companies including Royal Dutch/Shell; Total, of France; and Chevron, of the US. The inducement is, of course, access to some of the world’s largest petroleum reserves. The return of the industry giants would help Mr Chávez to shore up Petróleos de Venezuela, the state-owned oil company that contributes heavily to the national budget and to the many social welfare programs that are a strong factor in the president’s popular support. For their part – given the scarcity of projects open to foreign companies in other top oil-producing nations – the Western firms may be willing to overlook the past unpleasantness and take another chance with the inconstant Mr Chávez. ■ Nippon Oil Corp, subsidiary Nippon Oil Exploration Ltd, has acquired from Oil Search Ltd, of Australia, stakes in four exploration licenses for potential natural gas and oil fields in Papua New Guinea. As reported by Eric Watkins, oil diplomacy editor of Oil & Gas Journal (20 January), the Nippon unit, which will hold a 10 per cent or 20 per cent interest in each of the four licenses, envisions joint exploration with OSL over the period 2009-11, with production at some of the fields commencing as early as 2010. The fields to be explored could help generate feedstock for a proposed liquid natural gas (LNG) facility, to be constructed near Port Moresby. The first such plant in Papua New Guinea is projected to export 6.3 million metric tons per year of LNG

starting in third-quarter 2013. According to an earlier report by OGJ Online (5 December), parent Nippon Oil and Nippon Mining Holdings Inc, faced with sluggish demand for gasoline in Japan, announced plans to merge their operations under a single holding company to be established in October 2009. ■ As noted on peakoil.net, output by Petróleos Mexicanos (PEMEX), is declining at the fastest rate since World War II. The website of Swedish-based ASPO (Association for the Study of Peak Oil & Gas), reported that, as of late January, Mexico’s state oil company was poised to announce its greatest drop in production since 1942. Pemex in 2008 extracted oil at a probable rate of 2.8 million barrels per day (bpd), down about 9 per cent from the 3.08 bpd pumped in 2007 and representing some $20 billion in lost sales. For further erosion of revenue as plunging crude prices limit the cash available for exploration, costs are rising at the Cantarell field, Pemex’s largest, after declining pressure reduced output over the past five years. Mexico relies on Pemex, the world’s tenth-largest oil company, for 40 per cent of its budget. The falling-off in output also threatens the supply of Pemex oil to the US, which gets more oil from Mexico than from any other country except Canada and Saudi Arabia. ■ Norwegian communities and conservationists on 17 January launched a campaign to ban oil exploration and development from parts of their Arctic coast, linking up with coordinated environmental campaigns underway in Alaska and Russia. As reported by the Swiss-based WWF (World Wide Fund For Nature), the petitioners in Norway have called upon the government to protect the Lofoten and Vesteralen areas in that country. In Alaska, WWF is part of a coalition of local people and organizations opposing oil and gas exploration and development in Bristol Bay, where drilling would bring in an estimated $7.7 billion over the 25- to 40-years’ estimated life of the petroleum reserves. Working with a similar coalition in Russia, WWF is urging Moscow to suspend oil exploration and development on the west Kamchatka shelf until the most important specially protected natural areas (SPNA’s) have been designated.

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M arch 2009

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