TPT March 2009

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Oil & Gas News
77 March 2009 ›
the sharp drop in crude oil prices – from midsummer highs of nearly
$150 per barrel to under $40 in late December – has made Kuwaitis
skeptical of expensive speculative undertakings.
The project, in which Kuwait was to hold a $7.5 billion stake,
had been criticized in the country as a waste of public funds,
and lawmakers threatened to challenge it in parliament if it were
launched. This could have meant new trouble for the prime minister,
Sheik Nasser Al Mohammed Al Sabah, who had been reappointed
only recently after surviving another political crisis.
■ The cancellation of K-Dow Petrochemicals, which was to
be headquartered in the Detroit area, dealt a blow to Dow
Chemical, which earlier in December had announced it was
cutting some 11 per cent of its work force, closing 20 plants, and
selling off several businesses to reduce costs in the US financial
downturn. The largest US chemicals company had depended
on the deal to help it repay some $13 billion in debt and assist
in the acquisition of Philadelphia-based rival Rohm & Haas, a
deal that has now fallen through with both companies headed
to court over breach of agreement. In a brief statement on 28
December 28, an ‘extremely disappointed’ Dow said it was
evaluating its options under the provisions of the joint-venture
agreement with Kuwait. The company also said. “Dow remains
committed to its Middle East strategy.”
China’s ambitious CNOOC Limited
is expecting a busy year
China National Offshore Oil Co Limited (CNOOC Ltd) has said it
expects its crude oil and natural gas production this year to rise 16
per cent to 18 per cent over 2008. The Hong Kong-listed unit of
China National Offshore Oil Corp, China’s largest offshore oil and
gas producer, CNOOC Ltd also said it plans to boost its capital
expenditure for 2009 by 19 per cent. On its website 20 January, the
company posted these budget allocations: for development, $4.38
billion; production, $1.12 billion; exploration, $1.11 billion.
CNOOC Ltd estimated that its net production will reach 225 million
to 231 million barrels of oil equivalent (BOE) in 2009, compared with
an estimated 194 million to 196 million BOE for 2008. As reported
in People’s Daily (Beijing), Fu Chengyu, chairman and CEO of
CNOOC Ltd, said that the company has kept up a stable pace of
business despite the decline in oil prices in the second half of 2008.
If its projections materialize, CNOOC Ltd will achieve a reserve
replacement ratio of over 100 per cent in 2009. Eight of the ten new
company projects expected to come onstream in 2009 are offshore
China. The two overseas are OML130, in Nigeria, and the Tangguh
liquefied national gas (LNG) project in Indonesia.
Elsewhere in oil and gas . . .
■ According to the Wall Street Journal (20 January), experts say
Israel’s offensive in Gaza will ‘certainly have an effect’ on that
country’s status as an energy corridor, without construing what
that effect might be. A 158-mile Israeli pipeline runs from the
Mediterranean port of Ashkelon to the Red Sea port of Eilat, and
holds potential as an alternate to the Suez Canal for oil transport
between former Soviet Union producers and customers in
Asia. The pipeline’s capacity of 400,000 barrels a day is not