Energy Watchblog: APAC

China: Technip and COOEC form joint venture to address the booming deepwater market in China

<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEijso1mfw-2wRxYmMr7kB56e4To58n0n5W6Rs6VRGg0fsrfH0iCPJfaJs4qB1d4hSLe1mBFtr2QKEdeskLzWXrjORVtYvmdqWnvgfunw0UeOPW_XKdAzjwXAc8JzOIQhuK1WcCIANhsqNOJ/s1600/china-map-6.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEijso1mfw-2wRxYmMr7kB56e4To58n0n5W6Rs6VRGg0fsrfH0iCPJfaJs4qB1d4hSLe1mBFtr2QKEdeskLzWXrjORVtYvmdqWnvgfunw0UeOPW_XKdAzjwXAc8JzOIQhuK1WcCIANhsqNOJ/s320/china-map-6.jpg" width="313" /></a></div><a href="http://www.technip.com/en"><i>Technip</i></a> and<i><b> China Offshore Oil Engineering Co (COOEC)</b></i>, the largest offshore engineering and construction company in China, have signed a joint-venture agreement in September.<br /><br />The five-year agreement, which builds on existing relationships,  combines the know-how, technical resources, complementary assets as well  as commercial and financial capabilities of both companies to target  deepwater engineering, procurement, construction and installation (EPCI)  Subsea Umbilicals, Risers and Flowlines (SURF) projects at a water  depth greater than 200 meters in China.<br /><br />This agreement follows the successful award, at the end of 2012, to the COOEC-Technip Consortium of the <i><b>CNOOC Panyu 34-1/2 development project</b></i>.

China: Technip and COOEC form joint venture to address the booming deepwater market in China

Technip and China Offshore Oil Engineering Co (COOEC) , the largest offshore engineering and construction company in China, have signed a ...

Singapore's Keppel FELS shipyard is claiming the record

<span class="itemImage" style="background-color: white; display: block; font-family: Tahoma, Geneva, sans-serif, Helvetica, Arial, sans-serif; font-size: 14px; line-height: 18px; margin: 0px;"></span><br /><div style="background-color: white; font-family: Tahoma, Geneva, sans-serif, Helvetica, Arial, sans-serif; font-size: 14px; line-height: 18px; margin-bottom: 15px; margin-top: 10px;"><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg3PiKvEntBTcWmi9Ag9dMqEOdmkNCI_NmIn4KYCZigKWaaTacOkCiJYh5BvUq35L71uHrwGyXUdRVBmg_OOHQHC3V2KYF-6lEjmmpg3LGyFFTGxjsFrWTBHRLsoawz8EVQI3wDFuxkqFEW/s1600/14ffaaa38a14891a22f6f4fd92eae7e2_L.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg3PiKvEntBTcWmi9Ag9dMqEOdmkNCI_NmIn4KYCZigKWaaTacOkCiJYh5BvUq35L71uHrwGyXUdRVBmg_OOHQHC3V2KYF-6lEjmmpg3LGyFFTGxjsFrWTBHRLsoawz8EVQI3wDFuxkqFEW/s320/14ffaaa38a14891a22f6f4fd92eae7e2_L.jpg" width="320" /></a></div>Singapore's Keppel FELS shipyard is claiming the record for the largest number of rig deliveries in a year with a total of 21 newbuild offshore rigs delivered in 2013. The latest delivery, ARABDRILL 60, a KFELS B Class jack-up rig, was delivered to Arabian Drilling Company (ADC) five days ahead of schedule, on budget and with a perfect safety record.</div><div style="background-color: white; font-family: Tahoma, Geneva, sans-serif, Helvetica, Arial, sans-serif; font-size: 14px; line-height: 18px; margin-bottom: 15px; margin-top: 10px;">The rig was named at a ceremony today in the presence of Mr. Mohamed Yousuf Rafie, Chairman, ADC's Board of Directors and Mr. Lawrence Wong, Singapore's Acting Minister for Culture, Community and Youth and Senior Minister of State for Communications and Information as the guests of honor.</div><div style="background-color: white; font-family: Tahoma, Geneva, sans-serif, Helvetica, Arial, sans-serif; font-size: 14px; line-height: 18px; margin-bottom: 15px; margin-top: 10px;">"Building a KFELS B class jack-up rig involves coordination among multiple parties and over a thousand workers," said Mr. Wong Kok Seng, Managing Director (Offshore), Keppel Offshore & Marine and Managing Director, Keppel FELS. "This year, we had some 45 projects going on at the same time. We streamlined the building process through new technology and equipment as well as having an innovative construction methodology. All our departments worked seamlessly together to set new benchmarks.</div><div style="background-color: white; font-family: Tahoma, Geneva, sans-serif, Helvetica, Arial, sans-serif; font-size: 14px; line-height: 18px; margin-bottom: 15px; margin-top: 10px;">"Even though we had so many deliveries, every customer, such as ADC, is important, and we worked closely with them to understand their needs. We set out to deliver 20 and ended up delivering 21 rigs on time or ahead of schedule and safely. Our previous record was 13 in 2009. That is the Keppel standard. We always challenge ourselves to do better."</div><div style="background-color: white; font-family: Tahoma, Geneva, sans-serif, Helvetica, Arial, sans-serif; font-size: 14px; line-height: 18px; margin-bottom: 15px; margin-top: 10px;">ARABDRILL 60 will be ADC's third jack-up rig from Keppel FELS and has been chartered to Saudi Arabia's national oil company, Saudi Aramco. The first of the two new rigs, ARABDRILL 50, was delivered earlier this year and is already working successfully for Saudi Aramco. ADC also owns ARABDRILL 30, another KFELS B Class rig since 2009 and the rig is operating for the Al-Khafji Joint Operations (AGOC/KGOC). A strong supporter of Saudi Arabia's offshore drilling program, Keppel FELS also previously delivered SAR 202, a KFELS Super B Class jack-up for Saudi Aramco. Three other rigs, AOD I, AOD II and AOD III delivered to Asia Offshore Drilling this year are also contracted to Saudi Aramco.</div><div style="background-color: white; font-family: Tahoma, Geneva, sans-serif, Helvetica, Arial, sans-serif; font-size: 14px; line-height: 18px; margin-bottom: 15px; margin-top: 10px;">ARABDRILL 60 is the 51st KFELS B Class rig delivered since 2002, and this class of rigs makes up more than 30% of the total jack-ups completed globally since 2000. This award-winning design has a proven track record of global operations, and has established itself as the benchmark in the industry. In 2013 alone, a total of 15 KFELS B Class rigs were delivered while another 18 were ordered.</div><div style="background-color: white; font-family: Tahoma, Geneva, sans-serif, Helvetica, Arial, sans-serif; font-size: 14px; line-height: 18px; margin-bottom: 15px; margin-top: 10px;">Developed by Keppel's technology arms, Offshore Technology Development (OTD) and Bennett Offshore, the KFELS B Class jack-up design is able to operate in water depths of up to 400 feet and drill to depths of 30,000 feet which is readily upgradeable to higher performance capabilities.</div><div style="background-color: white; font-family: Tahoma, Geneva, sans-serif, Helvetica, Arial, sans-serif; font-size: 14px; line-height: 18px; margin-bottom: 15px; margin-top: 10px;">The robust rig incorporates Keppel's advanced and fully-automated high capacity rack and pinion jacking system, and Self-Positioning Fixation System. Designed with industry-leading features for safety and environmental friendliness, the KFELS B Class provides maximum uptime with reduced emissions and discharges.</div>

Singapore's Keppel FELS shipyard is claiming the record

Singapore's Keppel FELS shipyard is claiming the record for the largest number of rig deliveries in a year with a total of 21 newbuild o...

Elk finalises carbon dioxide agreement

<div class="widget slideshow default widget-editable viziwyg-section-822 inpage-widget-1317835 in_article_slideshow" style="border: 0px; color: #1a1a1a; font-family: Arial, sans-serif; font-size: 12px; line-height: 15px; margin: 0px 0px 15px; outline: 0px; padding: 0px; vertical-align: baseline;"><div id="widget1317835-picture1347470" style="border: 0px; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;"><div class="wrapper" style="border: 0px; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline; width: 646px;"><div class="description" style="border: 0px; margin: 0px; opacity: 0; outline: 0px; padding: 0px; vertical-align: baseline; width: 646px;"><div class="description_content" style="border: 0px; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;"></div></div></div></div><div class="apple_overlay" id="widgetContent1317835-picture1347470-info" style="border: 0px; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;"><span style="color: #1b1b1b; font-size: 14px; font-weight: bold; line-height: 1.25em;"><br /></span></div><div class="apple_overlay" id="widgetContent1317835-picture1347470-info" style="border: 0px; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;"><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiXG9DNa43FrXz8YCtW2CZIcpou0EC2Rfp3H2a9q4UoXkDfNvox0wFLtCZdQD3f8CVG3O-ajisTPUsH0pxDIxbXizYHXo55-FXMhZWpifSAqodEHEzE5Z5Yy2W8c8m1I5dhVa5pzBktDfqz/s1600/bridgport.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="173" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiXG9DNa43FrXz8YCtW2CZIcpou0EC2Rfp3H2a9q4UoXkDfNvox0wFLtCZdQD3f8CVG3O-ajisTPUsH0pxDIxbXizYHXo55-FXMhZWpifSAqodEHEzE5Z5Yy2W8c8m1I5dhVa5pzBktDfqz/s320/bridgport.jpg" width="320" /></a></div><span style="color: #1b1b1b; font-size: 14px; font-weight: bold; line-height: 1.25em;">Australia-listed Elk Petroleum has finalised and executed a binding agreement with Bridgeport Ethanol to purchase carbon dioxide from Bridgeport’s ethanol processing plant in Nebraska.</span><a class="close" href="http://www.blogger.com/blogger.g?blogID=7291563859932161422" style="border: 0px; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;"></a></div></div><div class="widget storyContent article widget-editable viziwyg-section-12 inpage-widget-1000056 " style="border: 0px; color: #1a1a1a; font-family: Arial, sans-serif; font-size: 12px; line-height: 15px; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;"><div class="body" style="border: 0px; color: #474747; margin: 0px; outline: 0px; padding: 0px 0px 15px; vertical-align: baseline;"><div style="border: 0px; margin-bottom: 15px; outline: 0px; padding: 0px; vertical-align: baseline;">The agreement was originally announced in late November but after completing due diligence, the deal has been finalised. Elk will use the carbon dioxide for its enhanced oil recovering project at the Singleton and adjoining oil fields, close to the Bridgeport plan.</div><div style="border: 0px; margin-bottom: 15px; outline: 0px; padding: 0px; vertical-align: baseline;">The plant produced more than 150,000 US tons of carbon dioxide per year or about 7 million cubic feet per day. It is almost pure carbon dioxide and requires little processing other than compression and dehydration. The agreement will last for 10 years with potential for extension. Elk will have three years to build compression and pipeline facilities before the purchase agreements starts.</div><div style="border: 0px; margin-bottom: 15px; outline: 0px; padding: 0px; vertical-align: baseline;">The company said access to these supplies was key to building a carbon dioxide-based enhanced oil recovery strategy in Nebraska and the wider area. The Singleton oil field is the largest in the area and will act as an anchor project. Development could take less than two years and first oil production could occur as early as 2016, according to Elk.<br /><br /></div></div></div>

Elk finalises carbon dioxide agreement

Australia-listed Elk Petroleum has finalised and executed a binding agreement with Bridgeport Ethanol to purchase carbon dioxide from Bridge...

JX granted licensing in Greenland

<div style="background-color: white; color: #333333; font-family: Arial, Helvetica, sans-serif; font-size: 14px; line-height: 22px;"><div class="separator" style="clear: both; text-align: left;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjeMIRSPv-d62WpPVvDP5cS5mhxnswnO9X0R7RnaviDSQH6pgCyF78xeW77ygu-_5u30qASA7eve_wmw_66lWZVVBHZ63N6Y2fryvrXrizf0ApnC3VOwsO04ZNVDKqW9SF8nP9s9l5yenWr/s1600/JX-Nippon-Wins-Exploration-Licences-for-Kanumas-Greenland-Sea-Areas.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="223" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjeMIRSPv-d62WpPVvDP5cS5mhxnswnO9X0R7RnaviDSQH6pgCyF78xeW77ygu-_5u30qASA7eve_wmw_66lWZVVBHZ63N6Y2fryvrXrizf0ApnC3VOwsO04ZNVDKqW9SF8nP9s9l5yenWr/s320/JX-Nippon-Wins-Exploration-Licences-for-Kanumas-Greenland-Sea-Areas.jpg" width="320" /></a></div><b>JX Nippon Oil & Gas Exploration Corp</b>. announced in a press release that through Greenland Petroleum Exploration Co., Ltd. (“GreenPeX”), it was successful in the 2012/2013 licensing round in Greenland Sea area and the Greenland Self-Government, and the company also won the two offshore exploration licenses, Block 9 and Block 14, in Kanumas area, northeastern part of offshore Greenland, jointly withChevron and Shell. The joint venture also has entered into the licensing contracts for Block 9 and Block 14 and concluded as 2013/45 license and 2013/46 license, respectively, with the Ministry of Industry and Mineral Resources of Greenland, according to the press release.</div><div style="background-color: white; color: #333333; font-family: Arial, Helvetica, sans-serif; font-size: 14px; line-height: 22px;"><br /></div><div style="background-color: white; color: #333333; font-family: Arial, Helvetica, sans-serif; font-size: 14px; line-height: 22px;">2013/45 license and 2013/46 license are located in the Kanumas area, approximately 60 km to 200 km (37 miles to 124 miles) northeastern part of offshore Greenland with a water depth of approximately 150 m to 450 m (492 ft to 1,476 ft) and span area of 2,220 sq km (857 sq miles) and 2,634 sq km (1,017 sq miles), respectively. Kanumas area is a frontier area where no well has been drilled for oil and gas exploration, and many E&P companies expect major oil and gas discoveries.</div><div style="background-color: white; color: #333333; font-family: Arial, Helvetica, sans-serif; font-size: 14px; line-height: 22px;">In these exploration licenses, Chevron as the operator, Shell and GreenPeX each holds 29.1667% participating interest while Greenland national oil company, Nunaoil, holds 12.5% participating interest, according to the press release. The aforesaid participants will conduct exploration activities including seismic acquisition, etc. in these licenses for the new discovery of oil and natural gas, according to JX Nippon.</div><div style="background-color: white; color: #333333; font-family: Arial, Helvetica, sans-serif; font-size: 14px; line-height: 22px;"><br /></div><div style="background-color: white; color: #333333; font-family: Arial, Helvetica, sans-serif; font-size: 14px; line-height: 22px;">In addition, this exploration project has been financially supported by Japan Oil, Gas and Metals National Corp. (JOGMEC), according to JX Nippon.</div>

JX granted licensing in Greenland

JX Nippon Oil & Gas Exploration Corp . announced in a press release that through Greenland Petroleum Exploration Co., Ltd. (“GreenPeX”),...

ANALYST TIP: Royal Dutch Shell to drop stake in Woodside

<div class="widget storyContent article widget-editable viziwyg-section-12 inpage-widget-1000057 " style="border: 0px; color: #1a1a1a; font-family: Arial, sans-serif; font-size: 12px; line-height: 15px; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;"><div class="lead_text" style="border: 0px; clear: left; color: #1b1b1b; font-size: 14px; font-weight: bold; line-height: 1.25em; margin: 0px 0px 15px; outline: 0px; padding: 0px; vertical-align: baseline;">Royal Dutch Shell's 23.1% stake in Australia-based Woodside Petroleum is seen as more likely to be split up and/or sold to institutional shareholders than to go in one piece to a strategic buyer, bankers said.</div></div><div class="widget storyContent article widget-editable viziwyg-section-12 inpage-widget-1000056 " style="border: 0px; color: #1a1a1a; font-family: Arial, sans-serif; font-size: 12px; line-height: 15px; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;"><div class="body" style="border: 0px; color: #474747; margin: 0px; outline: 0px; padding: 0px 0px 15px; vertical-align: baseline;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEihhITwGsObBQQU7P4an6fbHaeFdXl7bBfeskLalEpX24HI5rr6Ow9-XgJ5Ll0RL4eqtml_Ukz31OomK8SrXS2OAo_RjwmaA_zTEpNaVXTzHSt7f4HM-2-OdaLSp2UOsUhTure23WP1r06G/s1600/shell.jpeg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="216" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEihhITwGsObBQQU7P4an6fbHaeFdXl7bBfeskLalEpX24HI5rr6Ow9-XgJ5Ll0RL4eqtml_Ukz31OomK8SrXS2OAo_RjwmaA_zTEpNaVXTzHSt7f4HM-2-OdaLSp2UOsUhTure23WP1r06G/s400/shell.jpeg" width="400" /></a><div style="border: 0px; margin-bottom: 15px; outline: 0px; padding: 0px; vertical-align: baseline;">Media speculation has tipped Shell would move to sell down its interest in Woodside as part of a wider asset sell-down.</div><div style="border: 0px; margin-bottom: 15px; outline: 0px; padding: 0px; vertical-align: baseline;">According to Reuters, the holding, worth about $6.4 billion and left over from Shell's abortive attempt to acquire Woodside in 2001, has long been viewed as non-core to Shell.</div><div style="border: 0px; margin-bottom: 15px; outline: 0px; padding: 0px; vertical-align: baseline;">This year, the Anglo-Dutch company promised to accelerate asset sales to reflate a narrowing cushion between cash inflow and investment spending.</div><div style="border: 0px; margin-bottom: 15px; outline: 0px; padding: 0px; vertical-align: baseline;">Reuters was unable to verify Shell's intentions for the stake. Shell and Woodside declined to comment on its future.</div><div style="border: 0px; margin-bottom: 15px; outline: 0px; padding: 0px; vertical-align: baseline;">Bankers say the holding is an obvious sell-off candidate for incoming chief executive<a href="" style="border: 0px; color: #192273; margin: 0px; outline: 0px; padding: 0px; text-decoration: underline; vertical-align: baseline;">Ben van Beurden</a>, who takes the job on 1 January and will offer strategy pointers on 30 January along with fourth-quarter results.</div><div style="border: 0px; margin-bottom: 15px; outline: 0px; padding: 0px; vertical-align: baseline;">However, they say, other investor-owned international oil companies big enough to buy it are also in sell-off mode.</div><div style="border: 0px; margin-bottom: 15px; outline: 0px; padding: 0px; vertical-align: baseline;">Meanwhile, a strategic buyer such as one of China's top oil companies or the national oil companies of gas-hungry countries such as India or Thailand might be put off by Shell's experience with the Australian government when it tried to take full control of Woodside in 2001.</div><div style="border: 0px; margin-bottom: 15px; outline: 0px; padding: 0px; vertical-align: baseline;">"Bidder-wise, it's a tricky one," one banker told Reuters.</div><div style="border: 0px; margin-bottom: 15px; outline: 0px; padding: 0px; vertical-align: baseline;">"The deal is big enough to require a review by the government, and although Woodside is not as important as it was at the time when Shell's bid was blocked, it is still the largest independent oil company in Australia, so I don't think the Chinese NOCs would be welcome."</div><div style="border: 0px; margin-bottom: 15px; outline: 0px; padding: 0px; vertical-align: baseline;">The banker suggested Middle Eastern or Southeast Asian sovereign wealth funds might be interested, but said Shell probably would not find a buyer among them for the entire stake and would have to sell in small blocks.</div><div style="border: 0px; margin-bottom: 15px; outline: 0px; padding: 0px; vertical-align: baseline;">The banker predicted Shell would exit via a combination of strategic sales, market placements and probably a share buyback by Woodside.</div><div style="border: 0px; margin-bottom: 15px; outline: 0px; padding: 0px; vertical-align: baseline;">A second banker said the stake as a single block had been "shopped" to a number of potential strategic buyers without result, and predicted the shares would be spread in the market among institutional investors.</div><div style="border: 0px; margin-bottom: 15px; outline: 0px; padding: 0px; vertical-align: baseline;">Shell's interest in the plentiful offshore gas under Australia's northwest shelf dates back decades and remains strong through its Prelude floating liquefied natural gas project, which will draw gas from below the seabed and process it on board the world's largest vessel.</div><div style="border: 0px; margin-bottom: 15px; outline: 0px; padding: 0px; vertical-align: baseline;">The company built a 34% holding in Woodside as part of that interest. Shell also became, and remains, a partner in the Woodside-operated Browse LNG project, which is set to use Prelude FLNG technology.</div><div style="border: 0px; margin-bottom: 15px; outline: 0px; padding: 0px; vertical-align: baseline;">In 2001, Shell's attempt to increase its Woodside holding to a majority was blocked by the Australian government on the grounds that the move might slow gas development in Australia.</div><div style="border: 0px; margin-bottom: 15px; outline: 0px; padding: 0px; vertical-align: baseline;">The country is set to become the world's biggest LNG exporter later in the decade, overtaking Qatar, as a number of major LNG projects come to fruition.</div><div style="border: 0px; margin-bottom: 15px; outline: 0px; padding: 0px; vertical-align: baseline;">Shell sold a third of its Woodside holding in 2010, reducing that 34% stake to the 23.1% it holds now.</div></div></div>

ANALYST TIP: Royal Dutch Shell to drop stake in Woodside

Royal Dutch Shell's 23.1% stake in Australia-based Woodside Petroleum is seen as more likely to be split up and/or sold to institutional...

Pan Orient Energy Corp. provide operations update

<h1 style="background-color: white; clear: both; color: #333333; font-family: 'trebuchet ms', arial, sans-serif; font-size: 26px; font-weight: normal; margin: 0px 0px 0.5em; padding: 0px;"><span style="font-family: verdana, arial, sans-serif; font-size: 15px;">Pan Orient Energy Corp. ("Pan Orient" or the "Corporation") (TSX VENTURE:POE) is pleased to provide an update on operations in Thailand, Indonesia and Canada. </span><span style="font-family: verdana, arial, sans-serif; font-size: 15px;">Concession L53 Onshore Thailand (Pan Orient Operator and 100% Working Interest)</span></h1><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiIj3kQIY1Mv2i1qSIXrHXg65ckzMRZPBSTJ33vxOq74jD05k1tVrAIdqvKx6Mq7HZQl_RZUoYDKCcHKRA_IOvzfOHNb6vkDC0mOji_fx96j-bWxx0LiiH4oW4dJZjYZDwDNzCrSAVJLAhl/s1600/118114_b2667b2f74a143049dc5.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="209" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiIj3kQIY1Mv2i1qSIXrHXg65ckzMRZPBSTJ33vxOq74jD05k1tVrAIdqvKx6Mq7HZQl_RZUoYDKCcHKRA_IOvzfOHNb6vkDC0mOji_fx96j-bWxx0LiiH4oW4dJZjYZDwDNzCrSAVJLAhl/s320/118114_b2667b2f74a143049dc5.jpg" width="320" /></a><span style="background-color: white; font-family: verdana, arial, sans-serif; font-size: 15px;">Thailand Oil Production</span><br /><br style="background-color: white; font-family: verdana, arial, sans-serif; font-size: 15px; margin: 0px; padding: 0px;" /><span style="background-color: white; font-family: verdana, arial, sans-serif; font-size: 15px;">Oil sales averaged 1,058 BOPD in November and 883 BOPD over the past 30 days reflecting the shut-in of the 410 BOPD L53-G2 well on December 6 at the end of the expired 90 day production test period. Current production is 690 BOPD with an additional approximately 530 BOPD shut-in (total current production capacity of 1,220 BOPD) until the approval of the L53-G production Environmental Impact Assessment ("EIA") anticipated in mid-January 2014. Two additional well work overs are planned between now and year-end 2013.</span><br /><br style="background-color: white; font-family: verdana, arial, sans-serif; font-size: 15px; margin: 0px; padding: 0px;" /><span style="background-color: white; font-family: verdana, arial, sans-serif; font-size: 15px;">Concession L53 Operations</span><br /><br style="background-color: white; font-family: verdana, arial, sans-serif; font-size: 15px; margin: 0px; padding: 0px;" /><span style="background-color: white; font-family: verdana, arial, sans-serif; font-size: 15px;">On September 27, EIA approval was received for eight surface locations with four wells per surface location (thirty-two wells total). Three of these approved surface locations are over the high impact L53 "A" Central prospect with construction on one surface location to commence prior to year end with drilling anticipated to commence in February 2014.</span><br /><br style="background-color: white; font-family: verdana, arial, sans-serif; font-size: 15px; margin: 0px; padding: 0px;" /><span style="background-color: white; font-family: verdana, arial, sans-serif; font-size: 15px;">On September 9 the L53-G production EIA was submitted with approval now anticipated in mid-January 2014. On August 13 the production license application for the L53-G discovery was submitted with approval also anticipated in January 2014. Both production EIA and production license approvals are required to commence long term production that is not subject to 90 day test periods.</span><br /><br style="background-color: white; font-family: verdana, arial, sans-serif; font-size: 15px; margin: 0px; padding: 0px;" /><span style="background-color: white; font-family: verdana, arial, sans-serif; font-size: 15px;">EIA applications for an additional six surface locations on Concession L53 and two surface locations on Concession L45 were submitted in early December 2013 with an approximately one month delay due to a number of the locations being covered by water, not allowing the collection of soil samples. Two of the Concession L53 surface locations are over the highly prospective L53-A North prospect located in the northern portion of Concession L53 that was identified on the new 3D seismic acquired in 2013. Tentative plans are for the drilling of the L53-A North prospect and one exploration well in Concession L45 in late Q2 2014 after the drilling of the L53 "A" Central well in February 2014.</span><br /><br style="background-color: white; font-family: verdana, arial, sans-serif; font-size: 15px; margin: 0px; padding: 0px;" /><span style="background-color: white; font-family: verdana, arial, sans-serif; font-size: 15px;">Source: </span><a href="http://www.marketwire.com/" style="background-color: white; color: #9c9875; font-family: verdana, arial, sans-serif; font-size: 15px; font-weight: bold; margin: 0px; padding: 0px; text-decoration: none;">Market  wire</a>

Pan Orient Energy Corp. provide operations update

Pan Orient Energy Corp. ("Pan Orient" or the "Corporation") (TSX VENTURE:POE) is pleased to provide an update on operati...

Bushy Eyebrows and Climate Change..

<div class="content clearfix" style="background-color: white; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 20.15625px; margin: 0.5em 0px;"><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"><strong>Keith Bailey </strong>states the first real sign of advancing age is when one's barber asks if you want the ears, nose and eyebrows trimmed.  The second may be when two friends suggest that because of your "experience in the industry" that you might like to do a periodic blog on their internet energy website. Well it was a truly <a href="http://en.wikipedia.org/wiki/Andy_Rooney" style="color: #005a8c; text-decoration: none;">Andy Rooney</a> moment for me to be asked to be part of this publication and, just as Andy obviously did, I continue to tell my barber to keep his hands off my eyebrows.<br /><br />Assuming this first attempt doesn't hit the cutting room floor, my goal is to periodically choose a subject that strikes my fancy and which doesn't, at least in my judgment, appear to be getting either enough or balanced attention in the media.  And occasionally, just like Andy, there are things I will just wonder about.<br />For example, one thing I’ve been thinking about is the weather this past year.  If you look at the numbers, 2013 is going to turn out to be one of the coldest years in the U.S. in the last 20 years. [Among other publications, The Standard-Examiner had an article on this a couple of weeks back.  <a href="http://www.standard.net/stories/2013/12/03/global-warming-2013-pace-be-coldest-20-years" style="color: #005a8c; text-decoration: none;">Click here</a> to see it.)  <br /><br />Let’s look at some of the numbers.  The blue line on the graph below shows how cold it has been relative to 20 year average temperatures.  What is particularly fascinating is that this cold weather comes just after 2012, which was one of the warmest years on record (red line on the graph).  These temperature differences may look small on the graph, but just a few degrees in average temperature makes a big difference in how it feels when you walk outside, and also the impact of the weather on our environment. [Source: <a href="http://www.ncdc.noaa.gov/cag/" style="color: #005a8c; text-decoration: none;">http://www.ncdc.noaa.gov/cag/</a>]<br /><br /><div style="text-align: center;"></div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiNnmxU2eDqycALmFWPJ4MNgvyR0MeIl5O2Bnz7_MZx4CxdAK569PUj1UdLvLdR5E3mTB7yc_Ngu6zfzn8L0B3njfflwRuUTXOIHQM64JOyRZt9BFhaUTKuJ9mHQ2_ITujv5dlxH2TaYjEB/s1600/chart_20.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiNnmxU2eDqycALmFWPJ4MNgvyR0MeIl5O2Bnz7_MZx4CxdAK569PUj1UdLvLdR5E3mTB7yc_Ngu6zfzn8L0B3njfflwRuUTXOIHQM64JOyRZt9BFhaUTKuJ9mHQ2_ITujv5dlxH2TaYjEB/s1600/chart_20.png" /></a></div><div style="text-align: center;"><br /></div><div style="text-align: center;">Source: NOAA </div><div style="text-align: center;"><br /></div>This year’s colder weather has been responsible for a number of interesting developments.  One that I find particularly intriguing is that the arctic ice cap grew by 553,000 sq miles or 29% over the past year.  (See: <a href="http://www.dailymail.co.uk/news/article-2415191/And-global-COOLING-Return-Arctic-ice-cap-grows-29-year.html" style="color: #005a8c; text-decoration: none;">The Gazette: And now it is Global Cooling</a>).   Of course that’s what the ice cap does. It shrinks in warm years like 2012 and grows in cold years like 2013.  It doesn’t seem like that should be a big surprise.  But apparently it was for some forecasters who according to the Gazette article have been predicting the impending demise of the ice cap. Some ‘experts’ had the ice cap gone in 2013.  Oops.<br /><br /><a name="more"></a><br /><br />Of course, just because they were wrong doesn’t prove anything.  Except that it might be a bit of evidence that forecasting the weather – or the results of the weather is still far from an exact science.  But that doesn’t stop ‘experts’ from making predictions or assigning causality.  In fact, there are countless studies out there to support just about any opinion you might want to have about global warming.  <a href="http://en.wikipedia.org/wiki/Global_cooling" style="color: #005a8c; text-decoration: none;">Many years ago</a>, some scientist suggested that an earlier long term cooling trend was attenuated because we started using cleaner burning fuels.  Supposedly this reduced the cloud layer which in turn allowed more sun to reach the earth and you can figure out the rest.  Just this year, following the recent record flooding in Colorado, ‘experts’ said that the cooler weather is somehow a result of a long term trend of shrinking ice caps shifting the jet stream and pushing colder air south. (Source: <a href="http://www.npr.org/2013/09/25/225754902/wild-weather-tied-to-unusual-jet-stream-activity" style="color: #005a8c; text-decoration: none;">Wild Weather Tied to Jet Stream</a>) I just don’t buy that weather models can be that precise about the cause-and-effect of weather phenomena.<br /><br />Please don’t misunderstand my point.  While I have no doubt that human activity is one of the factors that affects our weather and that domestic temperatures in a single year do not disaffirm the decades long global warming trend, <strong>I am just much less convinced than some prognosticators that it is "settled science" that hydrocarbons are the determinative factor in any particular outcome.</strong>  And that goes both ways.  As I learn more about the complicated net effects of global warming, I keep coming up with more questions than answers.<br />What I do know, however, from my now 50 plus years in the hydrocarbon industry is that the United States’ abundance of reliable, affordable energy has been a primary driver of our economic success as a nation.  In past decades, our energy resources helped drive the development of our country. Now, with the newfound abundance of shale hydrocarbons, it has the potential to further expand our role as the leader of the global economy. <br />We have over 100 years of supply of both coal and natural gas and we are rapidly increasing our domestic oil production thus lessening our demand for imported oil.  Over my career, I have seen our home furnace go from coal, to oil, to natural gas as technology and distribution capability changed.  I firmly believe that if we continue to use these traditional hydrocarbon fuels our international competitive advantage will be maintained and I also believe that we have steadily reduced the environmental impact of our use of these fuels and would expect those technological improvements to continue.<br /><br />It just makes one wonder if those suggesting we abandon these fuels altogether are so certain of their view of climate science that they are willing to put our national economy at risk based on those convictions.<br /><br />Humorist and commentator Andy Rooney was a frequent contributor to 60 Minutes until his death in 2011.  As noted above, he had bushy eyebrows. </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-above"><br /></div></div>

Bushy Eyebrows and Climate Change..

Keith Bailey states the first real sign of advancing age is when one's barber asks if you want the ears, nose and eyebrows trimmed. The...

Pressure on the configuration of oil and gas markets

<div id="article-body" style="border-top-color: rgb(230, 230, 230); border-top-style: solid; border-width: 1px 0px 0px; clear: both; color: #333333; font-family: inherit; font-size: 15px; font-style: inherit; font-variant: inherit; line-height: 20px; margin: 0px; outline: 0px; overflow: hidden; padding: 10px 20px; vertical-align: baseline;"><div class="left" style="border: 0px; font-family: inherit; font-size: 15.555556297302246px; font-style: inherit; font-variant: inherit; font-weight: inherit; line-height: inherit; margin-bottom: 1em; margin-top: 1em; outline: 0px; padding: 0px; vertical-align: baseline;"><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgJveD9C_5mLS5IR0w0IGK7iWayMUrH6oXZOxKa6wt6HOwZhRliiYeg8hdGIyVi-jx0v9AMs8ezrFy1ylkvZT74joDuSWg7oBj-_gQiXTuB2jpyMYmcVx-hGjzo3-MrbAvNMfJciYgVpvO8/s1600/0a4af9a.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="295" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgJveD9C_5mLS5IR0w0IGK7iWayMUrH6oXZOxKa6wt6HOwZhRliiYeg8hdGIyVi-jx0v9AMs8ezrFy1ylkvZT74joDuSWg7oBj-_gQiXTuB2jpyMYmcVx-hGjzo3-MrbAvNMfJciYgVpvO8/s400/0a4af9a.jpg" width="400" /></a></div><i style="border: 0px; font-family: inherit; font-size: 15.555556297302246px; font-variant: inherit; font-weight: inherit; line-height: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;">(the two chief negotiators, Jamshid Amouzegar for OPEC and Lord Strathalmond for the oil companies, shaking hands after signing the Tehran Agreement in February 1971. Courtesy BP Archive)</i><br /><i style="border: 0px; font-family: inherit; font-size: 15.555556297302246px; font-variant: inherit; font-weight: inherit; line-height: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;"><br /></i></div><div style="border: 0px; font-family: inherit; font-size: 15.555556297302246px; font-style: inherit; font-variant: inherit; font-weight: inherit; line-height: inherit; margin-bottom: 1em; margin-top: 1em; outline: 0px; padding: 0px; vertical-align: baseline;"><span class="underline" style="border: 0px; font-family: inherit; font-size: 15.555556297302246px; font-style: inherit; font-variant: inherit; font-weight: inherit; line-height: inherit; margin: 0px; outline: 0px; padding: 0px; text-decoration: underline; vertical-align: baseline;"><b style="border: 0px; font-family: inherit; font-size: 15.555556297302246px; font-style: inherit; font-variant: inherit; line-height: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;">Pressure on the configuration of oil and gas markets</b></span></div><div style="border: 0px; font-family: inherit; font-size: 15.555556297302246px; font-style: inherit; font-variant: inherit; font-weight: inherit; line-height: inherit; margin-bottom: 1em; margin-top: 1em; outline: 0px; padding: 0px; vertical-align: baseline;">One of the first questions raised by the shale “revolution” will be about the impact of rising shale oil (and gas) production on markets and prices. Let’s concentrate on oil. In a normal market, prices should fall and the only issue for an economist would be to calculate how fast and by how much. But the oil market is not exactly ‘normal’: It features a producer cartel with a long history of trying to manage prices and production. In oil markets, the question of the consequences of higher (shale) oil supplies seamlessly translates into the question of how OPEC is likely to react.</div><div style="border: 0px; font-family: inherit; font-size: 15.555556297302246px; font-style: inherit; font-variant: inherit; font-weight: inherit; line-height: inherit; margin-bottom: 1em; margin-top: 1em; outline: 0px; padding: 0px; vertical-align: baseline;">There are good reasons to presume that OPEC members are willing and capable to react with production cuts to rising non-OPEC supplies.</div><div style="border: 0px; font-family: inherit; font-size: 15.555556297302246px; font-style: inherit; font-variant: inherit; font-weight: inherit; line-height: inherit; margin-bottom: 1em; margin-top: 1em; outline: 0px; padding: 0px; vertical-align: baseline;">Production cuts, in turn, lead to spare capacity. The build-up of spare capacity in OPEC countries required to neutralize the additional supplies (including biofuels and oil sand production) is substantial indeed: Taking our conservative production profile as a guide, spare capacity to accommodate the new supplies will have to exceed 6 million barrels per day (Mb/d) within this decade - the highest since the late 1980s, as shown on the right hand chart below;</div><div style="border: 0px; font-family: inherit; font-size: 15.555556297302246px; font-style: inherit; font-variant: inherit; font-weight: inherit; line-height: inherit; margin-bottom: 1em; margin-top: 1em; outline: 0px; padding: 0px; vertical-align: baseline;"><img alt="" class="center" src="http://m.c.lnkd.licdn.com/mpr/mpr/p/4/005/02c/37a/1fbec1c.jpg" style="border: 0px; display: block; font-family: inherit; font-size: 15.555556297302246px; font-style: inherit; font-variant: inherit; font-weight: inherit; line-height: inherit; margin: 0px auto 1em; max-width: 606px; outline: 0px; padding: 0px; text-align: center; vertical-align: baseline; width: auto;" /></div><div style="border: 0px; font-family: inherit; font-size: 15.555556297302246px; font-style: inherit; font-variant: inherit; font-weight: inherit; line-height: inherit; margin-bottom: 1em; margin-top: 1em; outline: 0px; padding: 0px; vertical-align: baseline;">This will be no easy task for OPEC. The cohesion of the organisation is the key uncertainty, especially in the current decade. It will be a world in which Russia, the US and Saudi Arabia account for a third of global production. Of the three, only OPEC member Saudi Arabia is likely to incur the cost of maintaining large amounts of spare production capacity. And Saudi Arabia is situated between Iraq, an OPEC member with steadily rising output but without a quota agreement, and Iran, for which no one can predict how long the current sanctions will limit production.</div><div style="border: 0px; font-family: inherit; font-size: 15.555556297302246px; font-style: inherit; font-variant: inherit; font-weight: inherit; line-height: inherit; margin-bottom: 1em; margin-top: 1em; outline: 0px; padding: 0px; vertical-align: baseline;">On the other hand, we are unlikely to witness the return of the very low oil prices last seen in the 1990 or 1980s (assuming OPEC stays put). Tight oil production is not only relatively expensive; with its high well density, it is also eminently scalable (different from the conventional supplies in Alaska or the North Sea added in the 1980s). Supplies will react if prices fall substantially.</div><div style="border: 0px; font-family: inherit; font-size: 15.555556297302246px; font-style: inherit; font-variant: inherit; font-weight: inherit; line-height: inherit; margin-bottom: 1em; margin-top: 1em; outline: 0px; padding: 0px; vertical-align: baseline;">In the first instance, the advent of shale oil (and gas) is likely to put pressure on prices by stressing the configuration of markets as we know them. In the case of oil, OPEC is the lynch pin of these markets. In the case of gas, it is the oil indexation of gas prices.</div><div style="border: 0px; font-family: inherit; font-size: 15.555556297302246px; font-style: inherit; font-variant: inherit; font-weight: inherit; line-height: inherit; margin-bottom: 1em; margin-top: 1em; outline: 0px; padding: 0px; vertical-align: baseline;"><br /></div></div><div class="module-box" id="author-header" style="-webkit-box-shadow: rgba(0, 0, 0, 0.247059) 0px 1px 2px; background-color: white; border: 0px; box-shadow: rgba(0, 0, 0, 0.247059) 0px 1px 2px; font-family: Helvetica, Arial, sans-serif; font-size: 15.555556297302246px; line-height: 17.77777862548828px; margin: 0px 0px 12px; outline: 0px; overflow: visible; padding: 0px; vertical-align: baseline;"><div class="articles-header-bar" style="border: 0px; font-family: inherit; font-size: 15.555556297302246px; font-style: inherit; font-variant: inherit; font-weight: inherit; line-height: inherit; margin: 0px; outline: 0px; padding: 0px; position: relative; vertical-align: baseline;"><img alt="Christof Rühl" class="member-photo" height="80" src="http://m.c.lnkd.licdn.com/mpr/mpr/shrink_80_80/p/5/000/26f/17d/071a24f.jpg" style="border: none; font-family: inherit; font-size: 15.555556297302246px; font-style: inherit; font-variant: inherit; font-weight: inherit; left: 0px; line-height: inherit; margin: 0px 20px; outline: 0px; padding: 0px; position: absolute; top: -10px; vertical-align: baseline;" width="80" /><br /><div class="author-info" style="border: 0px; font-family: inherit; font-size: 15.555556297302246px; font-style: inherit; font-variant: inherit; font-weight: inherit; line-height: inherit; margin: 0px; outline: 0px; padding: 10px 0px 10px 120px; vertical-align: baseline;"><h2 class="author-name" style="border: 0px; font-family: inherit; font-size: 15.555556297302246px; font-style: inherit; font-variant: inherit; font-weight: inherit; line-height: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;">Christof Rühl</h2><h3 class="author-headline" style="border: 0px; font-family: inherit; font-size: 13px; font-style: inherit; font-variant: inherit; font-weight: normal; line-height: 17px; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;">Chief Economist at BP</h3></div></div></div>

Pressure on the configuration of oil and gas markets

(the two chief negotiators, Jamshid Amouzegar for OPEC and Lord Strathalmond for the oil companies, shaking hands after signing the Tehran A...

The future of energy featuring Christof Rühl

<div class="no-download-summary" style="background-color: white; border: 0px; font-family: 'Helvetica Neue', HelveticaNeue, Helvetica, Arial, 'Lucida Grande', sans-serif; font-size: 10px; line-height: 18px; margin: 0px; padding: 0px; vertical-align: baseline;"><div class="nvc-page-title" style="border: 0px; font-family: inherit; font-size: inherit; font-style: inherit; font-variant: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"><h1 style="border: 0px; color: #007f00; font-family: Univers-lt-45, Arial, Helvetica, sans-serif; font-size: 3.4em; font-style: inherit; font-variant: inherit; font-weight: normal; line-height: 1em; margin: 35px 0px 20px; padding: 0px; vertical-align: baseline;">The future of energy</h1></div><div class="parsys article-header" style="border: 0px; font-family: inherit; font-size: inherit; font-style: inherit; font-variant: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"></div></div><div class="par parsys" style="background-color: white; border: 0px; font-family: 'Helvetica Neue', HelveticaNeue, Helvetica, Arial, 'Lucida Grande', sans-serif; font-size: 10px; line-height: 18px; margin: 0px; padding: 0px; vertical-align: baseline;"><div class="nv-text section" style="border: 0px; font-family: inherit; font-size: inherit; font-style: inherit; font-variant: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"><h6 style="border: 0px; color: #006600; font-family: Univers-lt-45, Arial, Helvetica, sans-serif; font-size: 2.2em; font-style: inherit; font-variant: inherit; font-weight: normal; line-height: 1.25; margin: -6px 0px 24px; padding: 0px; vertical-align: baseline;">How much more energy will the world need in the future? Are there enough energy resources to meet growing demand? What role will different forms of energy play? And which countries will produce and consume the most energy? These are the kinds of questions BP's economics team sets out to answer in the company's annual Energy Outlook publication. Here, we review some of the highlights of the 2013 edition and ask BP's chief economist Christof Rühl for his thoughts.</h6></div><div class="nvc-large-image section nv-caption" style="-webkit-box-shadow: rgb(196, 196, 196) 0px 3px 8px; border: 0px; box-shadow: rgb(196, 196, 196) 0px 3px 8px; clear: left; font-family: inherit; font-size: inherit; font-style: inherit; font-variant: inherit; font-weight: inherit; line-height: inherit; margin: 0px 0px 30px; overflow: hidden; padding: 5px; position: relative; vertical-align: baseline; width: 684px;"><img alt="Global Energy use" src="http://www.bp.com/content/dam/bp/images/large-images/global_energy_use.jpg/_jcr_content/renditions/original" style="border: 0px; float: left; font-family: inherit; font-size: inherit; font-style: inherit; font-variant: inherit; font-weight: inherit; height: 327px; line-height: inherit; margin: 0px; padding: 0px; position: relative; vertical-align: baseline; width: 684px;" title="Global Energy use" /></div><div class="nv-text section" style="border: 0px; font-family: inherit; font-size: inherit; font-style: inherit; font-variant: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"><div style="border: 0px; color: #666666; font-family: Arial, Helvetica, sans-serif; font-size: 1.3em; font-style: inherit; font-variant: inherit; line-height: 1.25; margin-bottom: 25px; padding: 0px; vertical-align: baseline;">More people, more wealth, more energy demand - that has been the story of the world's civilisation over the past 250 years. And that is how BP's economists expect it to continue - at least for the next 20 years. Around 1820 the world population reached 1 billion. Since then, it has soared to more than 7 billion and it is set to exceed 8 billion by 2030. This demographic growth has been accompanied by even more spectacular economic growth. The world economy has almost doubled in size over the past 20 years and it's expected to double again over the next 20. Energy has been a contributing factor as the number of people living on less than $1 a day has halved since 2000, from approximately 2 billion to around 1 billion, achieving the first of the Millennium Goals set by world leaders in 2000. </div><div style="border: 0px; color: #666666; font-family: Arial, Helvetica, sans-serif; font-size: 1.3em; font-style: inherit; font-variant: inherit; line-height: 1.25; margin-bottom: 25px; padding: 0px; vertical-align: baseline;">Note: the following text refers to OECD [Organization for Economic Co-operation and Development] and non-OECD. OECD brings together countries such as those of Europe, North America and Australasia, which have generally had industrial economies for a century or more. Non-OECD stands for developing or emerging market economies. Growth rates quoted in text refer to the period 2011-2030.</div><h3 style="border: 0px; color: #009900; font-family: Univers-lt-55, Arial, Helvetica, sans-serif; font-size: 2em; font-style: inherit; font-variant: inherit; font-weight: normal; line-height: 1.25; margin: -3px 0px 12px; padding: 0px; vertical-align: baseline;">Demand - who is using the energy? </h3></div><div class="nvc-freesizeimage section" style="border: 0px; clear: left; font-family: inherit; font-size: inherit; font-style: inherit; font-variant: inherit; font-weight: inherit; line-height: inherit; margin: 0px 0px 30px; padding: 0px; vertical-align: baseline;"></div><div class="nvc-texthighlight section" style="-webkit-box-shadow: rgb(196, 196, 196) 0px 2px 8px; background-color: #ffffe5; border: 5px solid rgb(255, 255, 255); box-shadow: rgb(196, 196, 196) 0px 2px 8px; clear: left; font-family: inherit; font-size: inherit; font-style: inherit; font-variant: inherit; font-weight: inherit; height: auto; line-height: inherit; margin: 0px 0px 30px; overflow: hidden; padding: 15px; vertical-align: baseline; width: 654px;"><div class="nvc-highlighted-text" style="border: 0px; font-family: inherit; font-size: inherit; font-style: inherit; font-variant: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"><h3 style="border: 0px; color: #666666; font-family: Univers-lt-45, Arial, Helvetica, sans-serif; font-size: 2em; font-style: inherit; font-variant: inherit; font-weight: normal; line-height: 1.25; margin: 0px 0px 9px; padding: 0px; vertical-align: baseline;"><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhGEsb7dO5B2-9B-SYWboDcZPVQtJoit1mhF1w1wMkLoFSoSh7yMsuQht8XAsU8EbJZqzIJoIZaTiMznko37gYdptjiWTb16P4FNofd6x92ehUutjBrzSkAXI3VB1g3NDktUDxKzpxDwxAr/s1600/demand_who_is_using_energy.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhGEsb7dO5B2-9B-SYWboDcZPVQtJoit1mhF1w1wMkLoFSoSh7yMsuQht8XAsU8EbJZqzIJoIZaTiMznko37gYdptjiWTb16P4FNofd6x92ehUutjBrzSkAXI3VB1g3NDktUDxKzpxDwxAr/s1600/demand_who_is_using_energy.jpg" /></a></div>Christof Rühl says</h3><div style="border: 0px; color: #666666; font-family: Arial, Helvetica, sans-serif; font-size: 1.3em; font-style: inherit; font-variant: inherit; line-height: 20px; padding: 0px; vertical-align: baseline; word-wrap: break-word;">"This projection is what we think is most likely to happen, not necessarily what we would most like to happen. It is based on current and anticipated trends in energy supply and demand, as well as what we see as the most likely path of policy and technological development. Things may not turn out this way if unexpected developments or game-changing technologies come along. As economies develop, their energy intensity falls - that is the amount of energy you need to generate every unit of income. For example, in the OECD countries, where ownership of energy-using appliances is already high, vehicles continue to cover more miles for every litre of fuel, homes will still become better insulated and industrial processes continue to become more energy efficient, often propelled by government regulations. Together with relatively slow population and economic growth, this explains why there already is so little growth in energy demand now coming from the industrialised countries. "</div></div></div><div class="nvc-freesizeimage section" style="border: 0px; clear: left; font-family: inherit; font-size: inherit; font-style: inherit; font-variant: inherit; font-weight: inherit; line-height: inherit; margin: 0px 0px 30px; padding: 0px; vertical-align: baseline;"><img alt="Consumption of primary energy by sector" src="http://www.bp.com/content/dam/bp/images/large-images/consumption_primary_energy.jpg" style="border: 0px; display: block; font-family: inherit; font-size: inherit; font-style: inherit; font-variant: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;" title="Consumption of primary energy by sector" /></div><div class="nvc-texthighlight section" style="-webkit-box-shadow: rgb(196, 196, 196) 0px 2px 8px; background-color: #ffffe5; border: 5px solid rgb(255, 255, 255); box-shadow: rgb(196, 196, 196) 0px 2px 8px; clear: left; font-family: inherit; font-size: inherit; font-style: inherit; font-variant: inherit; font-weight: inherit; height: auto; line-height: inherit; margin: 0px 0px 30px; overflow: hidden; padding: 15px; vertical-align: baseline; width: 654px;"><div class="nvc-highlighted-text" style="border: 0px; font-family: inherit; font-size: inherit; font-style: inherit; font-variant: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"><h3 style="border: 0px; color: #666666; font-family: Univers-lt-45, Arial, Helvetica, sans-serif; font-size: 2em; font-style: inherit; font-variant: inherit; font-weight: normal; line-height: 1.25; margin: 0px 0px 9px; padding: 0px; vertical-align: baseline;">Christof Rühl says</h3><div style="border: 0px; color: #666666; font-family: Arial, Helvetica, sans-serif; font-size: 1.3em; font-style: inherit; font-variant: inherit; line-height: 20px; padding: 0px; vertical-align: baseline; word-wrap: break-word;">"Electricity is the biggest growth area, with power generation expected to account for almost 60% of the rise in energy consumption to 2030, followed by energy used in industry. This, first and foremost, shows the scale of energy needed in emerging economies as they continue to build their industrial sectors and cities. Transport accounts for much less growth around 10% with vehicles becoming more efficient. BP expects the efficiency of the internal combustion engine to double by 2030, largely driven by continued hybridisation of the car fleet."</div></div></div><div class="nvc-freesizeimage section" style="border: 0px; clear: left; font-family: inherit; font-size: inherit; font-style: inherit; font-variant: inherit; font-weight: inherit; line-height: inherit; margin: 0px 0px 30px; padding: 0px; vertical-align: baseline;"><img alt="Table of leaders in oil and gas reserves in 2011" src="http://www.bp.com/content/dam/bp/images/large-images/supply_reserves.jpg" style="border: 0px; display: block; font-family: inherit; font-size: inherit; font-style: inherit; font-variant: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;" title="Table of leaders in oil and gas reserves in 2011" /></div><div class="nvc-freesizeimage section" style="border: 0px; clear: left; font-family: inherit; font-size: inherit; font-style: inherit; font-variant: inherit; font-weight: inherit; line-height: inherit; margin: 0px 0px 30px; padding: 0px; vertical-align: baseline;"><img alt="table_of_leaders" src="http://www.bp.com/content/dam/bp/images/other/table_of_leaders.jpg" style="border: 0px; display: block; font-family: inherit; font-size: inherit; font-style: inherit; font-variant: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;" title="table_of_leaders" /></div><div class="nvc-texthighlight section" style="-webkit-box-shadow: rgb(196, 196, 196) 0px 2px 8px; background-color: #ffffe5; border: 5px solid rgb(255, 255, 255); box-shadow: rgb(196, 196, 196) 0px 2px 8px; clear: left; font-family: inherit; font-size: inherit; font-style: inherit; font-variant: inherit; font-weight: inherit; height: auto; line-height: inherit; margin: 0px 0px 30px; overflow: hidden; padding: 15px; vertical-align: baseline; width: 654px;"><div class="nvc-highlighted-text" style="border: 0px; font-family: inherit; font-size: inherit; font-style: inherit; font-variant: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"><h3 style="border: 0px; color: #666666; font-family: Univers-lt-45, Arial, Helvetica, sans-serif; font-size: 2em; font-style: inherit; font-variant: inherit; font-weight: normal; line-height: 1.25; margin: 0px 0px 9px; padding: 0px; vertical-align: baseline;">Christof Rühl says</h3><div style="border: 0px; color: #666666; font-family: Arial, Helvetica, sans-serif; font-size: 1.3em; font-style: inherit; font-variant: inherit; line-height: 20px; padding: 0px; vertical-align: baseline; word-wrap: break-word;">"Given the scale of demand, a perennial question has been whether the world has enough supply to meet it. The data collated by BP suggests it does - with the industry consistently finding more oil and gas than it produces over time. As a result, total reserves continue to go up, not down. In 1980, companies and governments collectively had proved reserves of just under 700 billion barrels of oil. Today, there are more than 1,600 billion, despite massive consumption over this period. "</div></div></div><div class="nvc-freesizeimage section" style="border: 0px; clear: left; font-family: inherit; font-size: inherit; font-style: inherit; font-variant: inherit; font-weight: inherit; line-height: inherit; margin: 0px 0px 30px; padding: 0px; vertical-align: baseline;"><img alt="Total energy production" src="http://www.bp.com/content/dam/bp/images/other/BP-Magazine/total_energy_production.jpg" style="border: 0px; display: block; font-family: inherit; font-size: inherit; font-style: inherit; font-variant: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;" title="Total energy production" /></div><div class="nvc-texthighlight section" style="-webkit-box-shadow: rgb(196, 196, 196) 0px 2px 8px; background-color: #ffffe5; border: 5px solid rgb(255, 255, 255); box-shadow: rgb(196, 196, 196) 0px 2px 8px; clear: left; font-family: inherit; font-size: inherit; font-style: inherit; font-variant: inherit; font-weight: inherit; height: auto; line-height: inherit; margin: 0px 0px 30px; overflow: hidden; padding: 15px; vertical-align: baseline; width: 654px;"><div class="nvc-highlighted-text" style="border: 0px; font-family: inherit; font-size: inherit; font-style: inherit; font-variant: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"><h3 style="border: 0px; color: #666666; font-family: Univers-lt-45, Arial, Helvetica, sans-serif; font-size: 2em; font-style: inherit; font-variant: inherit; font-weight: normal; line-height: 1.25; margin: 0px 0px 9px; padding: 0px; vertical-align: baseline;">Total energy production - Christof Rühl says</h3><div style="border: 0px; color: #666666; font-family: Arial, Helvetica, sans-serif; font-size: 1.3em; font-style: inherit; font-variant: inherit; line-height: 20px; padding: 0px; vertical-align: baseline; word-wrap: break-word;">"Growth in production will be dominated by the non-OECD economies, which are likely to account for almost 80% of the increase in global production. We expect that non-OECD countries will supply 71% of global energy production in 2030, up from 58% in 1990. The dominance of the non-OECD group in growth of production is not as great as it is in consumption because several OECD countries, led by the US and others, continue to be significant producers."</div></div></div><div class="nvc-texthighlight section" style="-webkit-box-shadow: rgb(196, 196, 196) 0px 2px 8px; background-color: #ffffe5; border: 5px solid rgb(255, 255, 255); box-shadow: rgb(196, 196, 196) 0px 2px 8px; clear: left; font-family: inherit; font-size: inherit; font-style: inherit; font-variant: inherit; font-weight: inherit; height: auto; line-height: inherit; margin: 0px 0px 30px; overflow: hidden; padding: 15px; vertical-align: baseline; width: 654px;"><div class="nvc-highlighted-text" style="border: 0px; font-family: inherit; font-size: inherit; font-style: inherit; font-variant: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"><h3 style="border: 0px; color: #666666; font-family: Univers-lt-45, Arial, Helvetica, sans-serif; font-size: 2em; font-style: inherit; font-variant: inherit; font-weight: normal; line-height: 1.25; margin: 0px 0px 9px; padding: 0px; vertical-align: baseline;">Liquid fuel production - Christof Rühl says</h3><div style="border: 0px; color: #666666; font-family: Arial, Helvetica, sans-serif; font-size: 1.3em; font-style: inherit; font-variant: inherit; line-height: 20px; padding: 0px; vertical-align: baseline; word-wrap: break-word;">"One of the most dramatic developments in the global energy landscape recently has been the renaissance of oil production in North America, largely thanks to unlocking massive reserves of 'tight oil' or oil contained in shale formations (see page 23). We have also seen growth in biofuels in both the US and Brazil, as well as the emergence of Canadian heavy oil. These developments mean North and South America together are set to overtake the Middle East as the world's largest source of liquid fuels during the current decade and retain that position up to 2030 when we expect the Middle East to catch up again. The speed of these developments, especially in the US and Canada would have been unthinkable only a few years ago<a class=" nv-new-window-warning-icon" href="http://www.bp.com/content/dam/bp/pdf/bpmagazine/bp_magazine_2013_issue_2_4_link.pdf" style="background-color: transparent; background-image: url(http://www.bp.com/etc/designs/bp/images/furniture/bp-new-window-warning-icon.gif); background-position: 100% 2px; background-repeat: no-repeat no-repeat; border: 0px; color: #007f00; font-family: inherit; font-size: inherit; font-style: inherit; font-variant: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px 20px 0px 0px; text-decoration: none; vertical-align: baseline;" target="_blank" title=""><span class="nv-new-window-warning-text" style="border: 0px; display: inline !important; font-family: inherit; font-size: inherit; font-style: inherit; font-variant: inherit; font-weight: inherit; height: 1px; line-height: inherit; margin: 0px; overflow: hidden; padding: 0px; position: absolute; top: -10px; vertical-align: baseline; width: 1px;">null</span></a></div></div></div></div>

The future of energy featuring Christof Rühl

The future of energy How much more energy will the world need in the future? Are there enough energy resources to meet growing demand? What ...

Geopolitics of energy - the big unknown

<div class="center" style="background-color: white; border: 0px; color: #333333; font-family: Helvetica, Arial, sans-serif; font-size: 15.555556297302246px; line-height: 20px; margin-bottom: 1em; margin-top: 1em; outline: 0px; padding: 0px; text-align: center; vertical-align: baseline;"></div><br /><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh6vx6zCffdRuZyCPymIRN04MB1HgOhBSSjj9wfxu9aUr1BttORYFxy0zU0u5Tn8Ar0PoO0cbKZqpu3qQuEeDXfLHzLrPh7ORKjni8FkESOmlw4gUzVKMoETXjjImGZa_3msCG0_Z_RwA8u/s1600/2b9bcec.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh6vx6zCffdRuZyCPymIRN04MB1HgOhBSSjj9wfxu9aUr1BttORYFxy0zU0u5Tn8Ar0PoO0cbKZqpu3qQuEeDXfLHzLrPh7ORKjni8FkESOmlw4gUzVKMoETXjjImGZa_3msCG0_Z_RwA8u/s1600/2b9bcec.jpg" /></a></div><div style="background-color: white; border: 0px; color: #333333; font-family: Helvetica, Arial, sans-serif; font-size: 15.555556297302246px; line-height: 20px; margin-bottom: 1em; margin-top: 1em; outline: 0px; padding: 0px; vertical-align: baseline;"><br /></div><div style="background-color: white; border: 0px; color: #333333; font-family: Helvetica, Arial, sans-serif; font-size: 15.555556297302246px; line-height: 20px; margin-bottom: 1em; margin-top: 1em; outline: 0px; padding: 0px; vertical-align: baseline;"><span class="underline" style="border: 0px; font-family: inherit; font-size: 15.555556297302246px; font-style: inherit; font-variant: inherit; font-weight: inherit; line-height: inherit; margin: 0px; outline: 0px; padding: 0px; text-decoration: underline; vertical-align: baseline;"><strong style="border: 0px; font-family: inherit; font-size: 15.555556297302246px; font-style: inherit; font-variant: inherit; line-height: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;">Geopolitics of energy - the big unknown</strong></span></div><div style="background-color: white; border: 0px; color: #333333; font-family: Helvetica, Arial, sans-serif; font-size: 15.555556297302246px; line-height: 20px; margin-bottom: 1em; margin-top: 1em; outline: 0px; padding: 0px; vertical-align: baseline;">Having to make local decisions does not mean that the geopolitics of energy become less important. In fact, the third implication has been most widely recognized: It concerns the geopolitical consequences of shifts in the established centres of production and consumption. Nowhere is this better exemplified than by looking at the role of the Middle East.</div><div style="background-color: white; border: 0px; color: #333333; font-family: Helvetica, Arial, sans-serif; font-size: 15.555556297302246px; line-height: 20px; margin-bottom: 1em; margin-top: 1em; outline: 0px; padding: 0px; vertical-align: baseline;">We all have grown up in a world in which oil is the central fuel, and the Middle East is the world’s central oil supplier. For better or worse, the ensuing relations between the world’s largest oil consumer and this regional supply centre always had huge political consequences: there is no denying that a special two-way relationship has developed over time between the US (and the OECD more broadly) and small Middle Eastern economies which happen to be large oil producers.</div><div style="background-color: white; border: 0px; color: #333333; font-family: Helvetica, Arial, sans-serif; font-size: 15.555556297302246px; line-height: 20px; margin-bottom: 1em; margin-top: 1em; outline: 0px; padding: 0px; vertical-align: baseline;">These relations may be about to change, and in rather unpredictable ways.</div><div style="background-color: white; border: 0px; color: #333333; font-family: Helvetica, Arial, sans-serif; font-size: 15.555556297302246px; line-height: 20px; margin-bottom: 1em; margin-top: 1em; outline: 0px; padding: 0px; vertical-align: baseline;">Implausible as it may sound, twenty years ago, China was a net <em style="border: 0px; font-family: inherit; font-size: 15.555556297302246px; font-variant: inherit; font-weight: inherit; line-height: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;">exporter</em> of energy. By 2030 it is likely to become the world’s single largest oil (and natural gas, and coal) importer, relying on imports for almost 80% of its oil and more than 40% of its gas. Europe, over the same period, is likely to remain a large importer of fossil fuels - this is shown in the left hand chart below;</div><div style="background-color: white; border: 0px; color: #333333; font-family: Helvetica, Arial, sans-serif; font-size: 15.555556297302246px; line-height: 20px; margin-bottom: 1em; margin-top: 1em; outline: 0px; padding: 0px; vertical-align: baseline;"><img alt="" class="center" src="http://m.c.lnkd.licdn.com/mpr/mpr/p/2/005/02d/19c/35739a6.jpg" style="border: 0px; display: block; font-family: inherit; font-size: 15.555556297302246px; font-style: inherit; font-variant: inherit; font-weight: inherit; line-height: inherit; margin: 0px auto 1em; max-width: 606px; outline: 0px; padding: 0px; text-align: center; vertical-align: baseline; width: auto;" /></div><div style="background-color: white; border: 0px; color: #333333; font-family: Helvetica, Arial, sans-serif; font-size: 15.555556297302246px; line-height: 20px; margin-bottom: 1em; margin-top: 1em; outline: 0px; padding: 0px; vertical-align: baseline;">The US faces different prospects. Taking again the conservative production profile as our guide, the country will be nearly self-sufficient in energy by 2030. North America as a region (Mexico, the US and Canada) is likely to achieve this landmark even earlier. The US is a net coal exporter already and there is little doubt that it will become a net natural gas exporter soon. And while, in our conservative profile, it will remain a net importer of oil by 2030, these imports will have fallen drastically.</div><div style="background-color: white; border: 0px; color: #333333; font-family: Helvetica, Arial, sans-serif; font-size: 15.555556297302246px; line-height: 20px; margin-bottom: 1em; margin-top: 1em; outline: 0px; padding: 0px; vertical-align: baseline;">What are the consequences? Is it conceivable (and this is most definitely <span style="border: 0px; font-family: inherit; font-size: 15.555556297302246px; font-style: inherit; font-variant: inherit; font-weight: inherit; line-height: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;">not</span> a prediction) that a future American administration looks at this troubled region, wondering whether this is really skin of their nose because they need only very little oil – and the little they need, they can get from Canada and Mexico? We cannot know. The point is, it is unpredictable.</div><div style="background-color: white; border: 0px; color: #333333; font-family: Helvetica, Arial, sans-serif; font-size: 15.555556297302246px; line-height: 20px; margin-bottom: 1em; margin-top: 1em; outline: 0px; padding: 0px; vertical-align: baseline;">What is clear is that nature, markets, and presumably politics are not known to be fond of a vacuum. We cannot know how this one will be filled. But the geopolitics of energy relations as we have known them, are shifting.</div><div style="background-color: white; border: 0px; margin-bottom: 1em; margin-top: 1em; outline: 0px; padding: 0px; vertical-align: baseline;"><span style="color: #333333; font-family: Helvetica, Arial, sans-serif;"><span style="line-height: 20px;">-----------</span></span></div><a name="more"></a><br /><div style="background-color: white; border: 0px; margin-bottom: 1em; margin-top: 1em; outline: 0px; padding: 0px; vertical-align: baseline;"><span style="color: #333333; font-family: Helvetica, Arial, sans-serif;"><span style="line-height: 20px;"><br /></span></span></div><div style="background-color: white; border: 0px; margin-bottom: 1em; margin-top: 1em; outline: 0px; padding: 0px; vertical-align: baseline;"><span style="color: #333333; font-family: Helvetica, Arial, sans-serif;"><span style="line-height: 20px;"><br /></span></span></div><div style="background-color: white; border: 0px; margin-bottom: 1em; margin-top: 1em; outline: 0px; padding: 0px; vertical-align: baseline;"><span style="color: #333333; font-family: Helvetica, Arial, sans-serif;"><span style="line-height: 20px;"><a href="http://www.linkedin.com/today/post/article/20131209164436-259060403-on-the-global-implications-of-shale-geopolitics-of-energy?trk=mp-reader-card" target="_blank">LINK</a></span></span></div><div style="background-color: white; border: 0px; margin-bottom: 1em; margin-top: 1em; outline: 0px; padding: 0px; vertical-align: baseline;"><br /></div><div style="background-color: white; border: 0px; color: #333333; font-family: Helvetica, Arial, sans-serif; font-size: 15.555556297302246px; line-height: 20px; margin-bottom: 1em; margin-top: 1em; outline: 0px; padding: 0px; vertical-align: baseline;"><br /></div>

Geopolitics of energy - the big unknown

Geopolitics of energy - the big unknown Having to make local decisions does not mean that the geopolitics of energy become less important. I...

On the Global Implications of Shale: Setting the Scene pt1

<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjYrdPnBpgurqS-hlBhS_h5t_xc5u8wo3MItRMQ6xLfO7Fz1a64CnzkSnz8Kp41RMCocP_B-WEeLomOtqpDYr3KHicvwJEY5jFnwJA5A0RxWWhvCBJosfTfNFjsUX3H5ZFtrbDKrMdagja-/s1600/215d08f.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="392" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjYrdPnBpgurqS-hlBhS_h5t_xc5u8wo3MItRMQ6xLfO7Fz1a64CnzkSnz8Kp41RMCocP_B-WEeLomOtqpDYr3KHicvwJEY5jFnwJA5A0RxWWhvCBJosfTfNFjsUX3H5ZFtrbDKrMdagja-/s640/215d08f.jpg" width="640" /></a></div><div class="left" style="background-color: white; border: 0px; color: #333333; font-family: Helvetica, Arial, sans-serif; font-size: 15.555556297302246px; line-height: 20px; margin-bottom: 1em; margin-top: 1em; outline: 0px; padding: 0px; vertical-align: baseline;"><br /></div><div style="background-color: white; border: 0px; color: #333333; font-family: Helvetica, Arial, sans-serif; font-size: 15.555556297302246px; line-height: 20px; margin-bottom: 1em; margin-top: 1em; outline: 0px; padding: 0px; vertical-align: baseline;"><strong style="border: 0px; font-family: inherit; font-size: 15.555556297302246px; font-style: inherit; font-variant: inherit; line-height: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;"><span class="underline" style="border: 0px; font-family: inherit; font-size: 15.555556297302246px; font-style: inherit; font-variant: inherit; font-weight: inherit; line-height: inherit; margin: 0px; outline: 0px; padding: 0px; text-decoration: underline; vertical-align: baseline;">Setting the scene</span></strong></div><div style="background-color: white; border: 0px; color: #333333; font-family: Helvetica, Arial, sans-serif; font-size: 15.555556297302246px; line-height: 20px; margin-bottom: 1em; margin-top: 1em; outline: 0px; padding: 0px; vertical-align: baseline;">In a <a href="http://www.linkedin.com/today/post/article/20130730080645-259060403-oil-boom-2-0-an-american-dream-updated" style="border: 0px; color: #006699; font-family: inherit; font-size: 15.555556297302246px; font-style: inherit; font-variant: inherit; font-weight: inherit; line-height: inherit; margin: 0px; outline: 0px; padding: 0px; text-decoration: none; vertical-align: baseline;" target="_blank">previous blog post</a>, I addressed some of the reasons for why the shale oil and gas “revolution” happened in the US and Canada, and not elsewhere, in countries with equally ample resources. The short explanation was - it is all about competition.</div><div style="background-color: white; border: 0px; color: #333333; font-family: Helvetica, Arial, sans-serif; font-size: 15.555556297302246px; line-height: 20px; margin-bottom: 1em; margin-top: 1em; outline: 0px; padding: 0px; vertical-align: baseline;">Innovation is involved in unlocking these resources, and so it will take time to bring them to market in countries that lock themselves out of the free flow of investment and ideas, or that do not allow for competition at home. The large scale commercial production of oil and natural gas from shale itself may be new, but there is nothing new about this principle in the history of our industry – or, if one thinks about it, the history of any industry.</div><div style="background-color: white; border: 0px; color: #333333; font-family: Helvetica, Arial, sans-serif; font-size: 15.555556297302246px; line-height: 20px; margin-bottom: 1em; margin-top: 1em; outline: 0px; padding: 0px; vertical-align: baseline;">Meanwhile, production in North America keeps rising. And shale is changing the broader landscape: No one doubts anymore that the country will become a natural gas exporter in the not-so-distant future. Total oil imports have been cut by almost half. With crude exports still legally constrained, the US now reaps the benefits of cheaper domestic crude by exporting refined products instead: The country has switched from net imports of 2 million barrels per day (Mb/d) of refined products as recently as 2007 to net exports of 1.2 Mb/d most recently. Not only is energy security benefitting: of all the countries in the world, the US last year had the biggest increase in oil as well as gas production – it also had by far the largest decline in CO2 emissions, courtesy of the unprecedented replacement of coal with natural gas in power generation, enabled by shale gas. (Natural gas fired power generation has about half the emissions of coal fired generation).</div><div style="background-color: white; border: 0px; color: #333333; font-family: Helvetica, Arial, sans-serif; font-size: 15.555556297302246px; line-height: 20px; margin-bottom: 1em; margin-top: 1em; outline: 0px; padding: 0px; vertical-align: baseline;">Small wonder that the “shale revolution”, or unconventional oil and gas in North America more broadly, is slowly becoming recognized as consequential beyond this region, beyond energy markets, and for years to come. And yet, the assessment of global strategic implications – for energy security, geopolitics, the global economy, or for the environment - is still trailing actual developments; and perhaps unsurprisingly so, given the uncertainty around future production growth.</div><div style="background-color: white; border: 0px; color: #333333; font-family: Helvetica, Arial, sans-serif; font-size: 15.555556297302246px; line-height: 20px; margin-bottom: 1em; margin-top: 1em; outline: 0px; padding: 0px; vertical-align: baseline;">What are some of these likely strategic, global implications? To discuss this, one needs a sensible benchmark.</div><div style="background-color: white; border: 0px; color: #333333; font-family: Helvetica, Arial, sans-serif; font-size: 15.555556297302246px; line-height: 20px; margin-bottom: 1em; margin-top: 1em; outline: 0px; padding: 0px; vertical-align: baseline;"><em style="border: 0px; font-family: inherit; font-size: 15.555556297302246px; font-variant: inherit; font-weight: inherit; line-height: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;">What to expect?</em></div><div style="background-color: white; border: 0px; color: #333333; font-family: Helvetica, Arial, sans-serif; font-size: 15.555556297302246px; line-height: 20px; margin-bottom: 1em; margin-top: 1em; outline: 0px; padding: 0px; vertical-align: baseline;">There are two aspects that make shale resources different from conventional oil. First, they appear to be widely distributed across regions. Assessments are still in their infancy, but all available tallies show technically recoverable oil and gas shale resources spread across Asia, Australia, Africa, South America, Europe and Eurasia –closer to consumption centres than conventional oil. Mind you, we know preciously little about the economic recoverability of these resources.</div><div style="background-color: white; border: 0px; color: #333333; font-family: Helvetica, Arial, sans-serif; font-size: 15.555556297302246px; line-height: 20px; margin-bottom: 1em; margin-top: 1em; outline: 0px; padding: 0px; vertical-align: baseline;">Second, most forecasters - ourselves included - predict production growth to remain concentrated in North America for the foreseeable future, despite the relatively even spatial distribution. The reasons are the lack of access, competition and thus innovative fire-power in other countries; and, related, a lack of infrastructure, which will take time to build.</div><div class="center" style="background-color: white; border: 0px; color: #333333; font-family: Helvetica, Arial, sans-serif; font-size: 15.555556297302246px; line-height: 20px; margin-bottom: 1em; margin-top: 1em; outline: 0px; padding: 0px; text-align: center; vertical-align: baseline;"><img alt="" class="left" src="http://m.c.lnkd.licdn.com/mpr/mpr/p/1/005/02c/26f/2d4a382.jpg" style="border: 0px; float: left; font-family: inherit; font-size: 15.555556297302246px; font-style: inherit; font-variant: inherit; font-weight: inherit; line-height: inherit; margin: 0px 1em 1em 0px; max-width: 606px; outline: 0px; padding: 0px; text-align: left; vertical-align: baseline; width: auto;" /></div><div class="left" style="background-color: white; border: 0px; color: #333333; font-family: Helvetica, Arial, sans-serif; font-size: 15.555556297302246px; line-height: 20px; margin-bottom: 1em; margin-top: 1em; outline: 0px; padding: 0px; vertical-align: baseline;"></div><div style="background-color: white; border: 0px; color: #333333; font-family: Helvetica, Arial, sans-serif; font-size: 15.555556297302246px; line-height: 20px; margin-bottom: 1em; margin-top: 1em; outline: 0px; padding: 0px; vertical-align: baseline;">The figure above illustrates both points. The left hand side shows a production profile, taken from BP’s Energy Outlook 2030, published in January this year. Based on our view of geology, infrastructure requirements, drilling activity as well as the speed with which shale resources are likely to be accessed in various locations, it shows global production from shale oil rising to about 9% of global oil production by 2030 - from virtually nothing just a few years ago.</div><div style="background-color: white; border: 0px; color: #333333; font-family: Helvetica, Arial, sans-serif; font-size: 15.555556297302246px; line-height: 20px; margin-bottom: 1em; margin-top: 1em; outline: 0px; padding: 0px; vertical-align: baseline;">Three characteristics are worth mentioning: (a) Production growth continues to be driven by North America; (b) growth will remain positive but slow down after about 2030 from the very high rates today; and (c), other countries will enter the game – notably Russia, China, Argentina and Columbia – but their contribution will not grow fast enough to reverse the general pattern of slower growth after 2020.</div><div style="background-color: white; border: 0px; color: #333333; font-family: Helvetica, Arial, sans-serif; font-size: 15.555556297302246px; line-height: 20px; margin-bottom: 1em; margin-top: 1em; outline: 0px; padding: 0px; vertical-align: baseline;">Next, we compared this freshly minted forecast to those of others, shown by the shaded areas on the right hand side of the figure above. It turns out (and at the time came as a surprise to us) that BP’s forecast is conservative indeed. It lies at the very low end of the range of all other forecasts. In fact, we had trouble finding lower estimates.</div><div style="background-color: white; border: 0px; color: #333333; font-family: Helvetica, Arial, sans-serif; font-size: 15.555556297302246px; line-height: 20px; margin-bottom: 1em; margin-top: 1em; outline: 0px; padding: 0px; vertical-align: baseline;">Our forecast is not only lower; the slowdown of global tight oil growth after 2020 is also not widely shared. Many others predict steady growth, or even an acceleration out to 2030.</div><div style="background-color: white; border: 0px; color: #333333; font-family: Helvetica, Arial, sans-serif; font-size: 15.555556297302246px; line-height: 20px; margin-bottom: 1em; margin-top: 1em; outline: 0px; padding: 0px; vertical-align: baseline;">The conservative nature of this forecast matters. Obviously, given the current range of uncertainty, any discussion of global implications is - explicitly or not – based on a production outlook. Ours implies that the consequences discussed below have to be amplified, should the more optimistic predictions have it right.</div><div><br /></div>

On the Global Implications of Shale: Setting the Scene pt1

Setting the scene In a previous blog post , I addressed some of the reasons for why the shale oil and gas “revolution” happened in the US a...

Playing the Natural Gas Revolution with MLPs

<h2 style="background-color: #fcfcfc; color: #333333; font-family: 'Open Sans', Arial, Helvetica, sans-serif; font-size: 34px; line-height: 36px; margin: 20px 40px; text-rendering: optimizelegibility;"><span style="font-size: 16px; line-height: 21px;">Investors have different strategies and time horizons: While some are seeking stable dividend paying stocks, others enjoy the excitement of growth companies -- or perhaps something in between.</span></h2><div style="background-color: #fcfcfc; color: #333333; font-family: 'Open Sans', Arial, Helvetica, sans-serif; font-size: 16px; line-height: 21px; margin: 20px 40px;">If you fall in the latter category and are looking for a home-run hitter with a dependable batting average, <strong>Boardwalk Pipeline Partners</strong> (NYSE: BWP) could be a perfect fit. Here is a solid company that offers an outsized, stable distribution with the potential for stock appreciation as well. </div><div style="background-color: #fcfcfc; color: #333333; font-family: 'Open Sans', Arial, Helvetica, sans-serif; font-size: 16px; line-height: 21px; margin: 20px 40px;">As the natural gas production boom continues, Boardwalk, with enough natural gas pipelines to span the United States more than 5 times, is primed to take advantage of transporting the fuel.</div><div style="background-color: #fcfcfc; color: #333333; font-family: 'Open Sans', Arial, Helvetica, sans-serif; font-size: 16px; line-height: 21px; margin: 20px 40px;">In addition to owning natural gas pipelines in some of the top gas plays in North America, the company also controls underground storage caverns with approximately 201 billion cubic feet of working gas capacity and approximately 18 million barrels of liquids capacity.</div><div style="background-color: #fcfcfc; color: #333333; font-family: 'Open Sans', Arial, Helvetica, sans-serif; font-size: 16px; line-height: 21px; margin: 20px 40px;"></div><div style="background-color: #fcfcfc; color: #333333; font-family: 'Open Sans', Arial, Helvetica, sans-serif; font-size: 16px; line-height: 21px; margin: 20px 40px;">The real win for investors is the fact that over 80% of revenues are backed by long-term, fixed-fee contracts with creditworthy customers. This "tollbooth" style of contract (where customers pay regardless of use) protects Boardwalk's cash flows, while sheltering the company from fluctuations in commodity prices.</div><div style="background-color: #fcfcfc; color: #333333; font-family: 'Open Sans', Arial, Helvetica, sans-serif; font-size: 16px; line-height: 21px; margin: 20px 40px;">Which means investors can sleep soundly and count on receiving regular distributions every quarter. In fact, Boardwalk Pipeline Partners has consistently increased its dividend every year since its IPO.</div><div style="background-color: #fcfcfc; color: #333333; font-family: 'Open Sans', Arial, Helvetica, sans-serif; font-size: 16px; line-height: 21px; margin: 20px 40px;"><strong>Why buy into an MLP?</strong></div><div style="background-color: #fcfcfc; color: #333333; font-family: 'Open Sans', Arial, Helvetica, sans-serif; font-size: 16px; line-height: 21px; margin: 20px 40px;">Boardwalk Pipeline Partners is a master limited partnership (MLP) which means the company avoids paying taxes on its profits like a corporation, and instead distributes profits to unitholders who are then taxed on an individual basis. By skipping double taxation, MLPs offer a tax-advantaged income stream and are thus able to lower the cost of capital.</div><div style="background-color: #fcfcfc; color: #333333; font-family: 'Open Sans', Arial, Helvetica, sans-serif; font-size: 16px; line-height: 21px; margin: 20px 40px;">MLPs are strong investments, especially in low-interest-rate environments, due to the sturdy distribution yields they offer. However, expanding the business either organically or through acquisition is virtually the only way to increase yields. Having a lower cost of capital makes financing expansions possible without cutting distributions. With a suitable 5.5% cost of capital, Boardwalk has never decreased a quarterly distribution and most recently maintained a healthy distribution coverage ratio of 1.2 times.</div><div style="background-color: #fcfcfc; color: #333333; font-family: 'Open Sans', Arial, Helvetica, sans-serif; font-size: 16px; line-height: 21px; margin: 20px 40px;">Boardwalk's high yield is also insulated by a fortress-like competitive moat since constructing new pipelines is incredibly capital intensive and requires regulatory approval contingent on demand. Equally important, natural gas storage is located in underground caverns and naturally occurring salt domes which limit storage capacity.</div><div style="background-color: #fcfcfc; color: #333333; font-family: 'Open Sans', Arial, Helvetica, sans-serif; font-size: 16px; line-height: 21px; margin: 20px 40px;"><strong>Industry tailwinds</strong></div><div style="background-color: #fcfcfc; color: #333333; font-family: 'Open Sans', Arial, Helvetica, sans-serif; font-size: 16px; line-height: 21px; margin: 20px 40px;">Natural gas is a cleaner burning fuel than coal, emitting less than half as much carbon dioxide during combustion per unit of electricity output.  In addition, after natural gas prices reached record lows last spring, natural gas has been rapidly replacing coal-fired power generation. Since 2005, power generation from natural gas has increased more than 60%, supplying over 30% of all power generation in the United States in 2012.</div><div class="separator" style="clear: both; text-align: center;"><span style="background-color: #fcfcfc; color: #333333; font-family: 'Open Sans', Arial, Helvetica, sans-serif; font-size: 16px; line-height: 21px;"><br />In addition to power generation, natural gas usage could further benefit from LNG exportation. With an estimated 6.8 billion cubic feet per day of LNG exports expected in the next decade, Boardwalk, which controls 11% of the nation’s natural gas, stands to benefit. With natural gas expected to be the fastest growing fuel through 2040, investors interested in safe yields should benefit from Boardwalk gaining the upper hand when negotiating long-term, fixed-fee contracts. </span><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgIjPTpJWUHfuAQII5VhKHXISawKmVm8lvrFy3_dKBGMhIm0xy6Htdstn3K7s_dBJ8E9g9hlACE9ZTXGd-JuN7AYZdubSSyvc_yiCdDVc6JqABslOB0wP20f3bo6PZNo7G_R5-c9zAJhS6c/s1600/us-electricitybyfuel-graph-sfr-3.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="169" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgIjPTpJWUHfuAQII5VhKHXISawKmVm8lvrFy3_dKBGMhIm0xy6Htdstn3K7s_dBJ8E9g9hlACE9ZTXGd-JuN7AYZdubSSyvc_yiCdDVc6JqABslOB0wP20f3bo6PZNo7G_R5-c9zAJhS6c/s320/us-electricitybyfuel-graph-sfr-3.png" width="320" /></a></div><div style="background-color: #fcfcfc; color: #333333; font-family: 'Open Sans', Arial, Helvetica, sans-serif; font-size: 16px; line-height: 21px; margin: 20px 40px;"><strong>bottom line</strong></div><div style="background-color: #fcfcfc; color: #333333; font-family: 'Open Sans', Arial, Helvetica, sans-serif; font-size: 16px; line-height: 21px; margin: 20px 40px;">A rare gem in the investing universe, Boardwalk Pipeline Partners offers quality natural gas assets at an incredible price. With the United States gearing up to be a net natural gas exporter, Boardwalk Pipeline Partners is prepared for growth through continued asset add-ons organically as well as through value-adding acquisitions. Also, in an unusually low interest rate environment, investors should be able to collect a steady stream from this 7% yielding natural gas juggernaut.</div>

Playing the Natural Gas Revolution with MLPs

Investors have different strategies and time horizons: While some are seeking stable dividend paying stocks, others enjoy the excitement of ...