TPT March 2009

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Oil & Gas News
March 2009 78 ›
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.