Texas 2014 Oil Output to Surpass Some OPEC Members

<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgDUYRkE7jYSI5SePtswtytLPGbfym4LyWAXuN-zRkuinlYsMu7fq5Xsux_ow8PzEMEqCV4pkfXsNCbIkaWKpccfkNhhB7L7WN77kLwauNwxIi7zwXFwZvQ00_IDoiqkjnMY66WuVD5VkjY/s1600/1001_indust.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="228" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgDUYRkE7jYSI5SePtswtytLPGbfym4LyWAXuN-zRkuinlYsMu7fq5Xsux_ow8PzEMEqCV4pkfXsNCbIkaWKpccfkNhhB7L7WN77kLwauNwxIi7zwXFwZvQ00_IDoiqkjnMY66WuVD5VkjY/s320/1001_indust.jpg" width="320" /></a></div>Texas oil production is surging, and estimates for 2014 predict that output of more than 2.7 million barrels per day will push the Lone Star State’s production above OPEC members Nigeria (2.524 bpd), Venezuela (2.489 bpd) and Algeria (1,875 million bpd.).<br /><br />The news comes as University of Texas at San Antonio Institute for Economic Development Research Director Thomas Tunstall, an expert on the Eagle Ford shale deposit, told the annual meeting of the South Texas Energy and Economic Roundtable that next year output from the Eagle Ford shale deposits and the Klein shale fields in the Permian Basin in west Texas would surpass 1 million barrels apiece per day, up from their current rate of 650,000 bpd, which will help Texas alone to produce more oil than several nations who are current OPEC members.<br /><br />Tunstall added that 25,000 wells are being drilled into the Eagle Ford shale in southern Texas over the course of its field life using fracking to liberate tight oil, a technique developed in the United States, but as the technology is fully developed in Mexico, Canada, China and elsewhere, all of which are known to have extensive tight oil reserves, pressure on OPEC will intensify.<br />Tunstall’s optimism is supported by statistics from the U.S. government’s Energy Information Administration, which reported that in September Texas pumped 2.7 million barrels of crude per day, an extraordinary 30 percent increase over September 2012 figures, the highest average oil production in Texas since monthly record-keeping began in January 1981.<br />According to the Federal Reserve Bank of Dallas, “oil and gas companies in Texas and nearby states are expecting continued growth next year.” Mark Perry of the conservative Washington DC American Enterprise Institute noted, “1.35 million bpd increase in oil output in only 29 months in one U.S. state is remarkable, and would have never been possible without the revolutionary drilling techniques that just recently started accessing vast oceans of Texas shale oil in the Eagle Ford Shale and Permian Basin oil fields.”<br />But if all that is good news for the Texan economy, concerns are growing that increased fracking injection well activity is producing regional surges in seismic activity, including around Eagle Ford. Researchers at the University of Texas found that underground injection of carbon dioxide to boost oil production "may have contributed to triggering" a series of earthquakes north of Snyder several years ago. Texas already has had some of the best-documented seismic activity around injection wells, causing some researchers to link injection to earthquakes in the Haynesville Shale in East Texas and the Barnett Shale in the Dallas area, and in 2009 Chesapeake Energy Corp. shut down two wells linked to quakes near the Dallas-Fort Worth Airport.<br /><br />What is leading to rising anxiety in small towns like Azle and Springtown northwest of Fort Worth, bracketed by numerous fracking sites, is last month’s swarm of 20 earthquakes, the biggest a magnitude 3.6.<br /><br />On 11 December the Dallas City Council passed new restrictions barring hydraulic fracturing within 1,500 feet of a home, school, church, and other protected areas, effectively barring the practice within the city. Dallas had previously outlawed fracking within 300 feet of protected areas.<br />The ordinance was approved by a 9-6 vote, with Mayor Mike Rawlings voting in favor.<br /><br />Not surprisingly, the natural gas industry was quick to react. Trinity East representative Dallas Cothrum, which had hoped to exploit the city’s location on the edge of the massive Barnett Shale region lamented, “You just can’t drill under these conditions. It’d require more than 250-acres of property and in an urban area it’s just not possible.” Dallas City Council Lee Kleinman, who opposed the new restrictions said, “We might as well save a lot of paper and write a one-line ordinance that says there will be no gas drilling in the city of Dallas. That would be a much easier ordinance to have.”<br /><br />As Texan oil and natural gas production continue to surge due to fracking, so do local concerns over the technique’s possible consequences, including increased seismic activity. With the U.S. Geological Survey and researchers from Texan universities all studying the phenomena, more data will inevitably be forthcoming, but whether a “smoking gun” will be found linking fracking and earthquakes remains to be seen. What is beyond debate is the increased rate of seismic activity.<br /><br />One oil major has decided that increased seismic activity risks are acceptable; ConocoPhillips (COP) “is planning to make $16.7 billion in capital expenditures to boost drilling in U.S. shale plays, including the Eagle Ford.”<br />So, while Texas has an obviously sunny hydrocarbon future, it appears to have significant potential environmental costs, many of which are presently poorly understood. The IEA reports that in 2010 Texas led the nation in wind-powered generation capacity and became the first state to reach 10,000 megawatts of wind capacity. Accordingly, while embracing the revenue stream from oil and natural gas produced by fracking, increasing state usage of renewables will at least spare the state from increased seismic activity and polluted subterranean water sources.<br /><br />By Oilprice.com,  December 16, 2013<br />Read the original article at OilPrice.com

Texas 2014 Oil Output to Surpass Some OPEC Members

Texas oil production is surging, and estimates for 2014 predict that output of more than 2.7 million barrels per day will push the Lone Star...

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Mexico Earns Upgrade, Outlook Could Support Bonds

<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhYwLb_K26AmXNKcJtoyCbUfhUsgtn2Td-1HxmllGSuoRYLstROxefCE06vkgKtIaRrM9uAGO0YfoMb9A4yhgLE_IYgPC4NG6tc0IRg_J9hw2x54S9tYXukTjEuC0CfriQOAL7TR33Cjk_8/s1600/arrow-graph-by-flickr-user-ndeviltv-find-link-to-pic.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhYwLb_K26AmXNKcJtoyCbUfhUsgtn2Td-1HxmllGSuoRYLstROxefCE06vkgKtIaRrM9uAGO0YfoMb9A4yhgLE_IYgPC4NG6tc0IRg_J9hw2x54S9tYXukTjEuC0CfriQOAL7TR33Cjk_8/s320/arrow-graph-by-flickr-user-ndeviltv-find-link-to-pic.jpg" width="320" /></a></div><div><br /></div><span style="background-color: white;">Mexico earned a higher debt rating from Standard & Poor's on Thursday and expectations of more upgrades to come could help support Mexican assets in the coming months even as the government borrows more.</span><br /><div class="separator" style="clear: both; text-align: center;"><a href="http://s1.reutersmedia.net/resources/r/?m=02&d=20131220&t=2&i=822923868&w=580&fh=&fw=&ll=&pl=&r=CBRE9BJ06MF00" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="237" src="http://s1.reutersmedia.net/resources/r/?m=02&d=20131220&t=2&i=822923868&w=580&fh=&fw=&ll=&pl=&r=CBRE9BJ06MF00" width="320" /></a></div><span style="background-color: white;"><br /></span>Standard & Poor's raised its main credit rating for Mexico by one notch in the latest sign of growing confidence in this month's move by the government to open the state-run energy sector to private investment.<br /><br />S&P had lagged the other two main agencies, Moody's Investors Service and Fitch Ratings, which both have Mexico just one notch shy of an "A" rating. Chile is the only Latin American nation that has an "A."<br /><br />Analysts, fund managers and Mexico's government think the country could earn another upgrade by at least one of the agencies as soon as early next year.<br />"We are closer today than we have ever been to an 'A' category," Alejandro Diaz de Leon, head of Mexico's debt office, told Reuters in a telephone interview.<br /><br />"There is a lot of upside in the near future if the implementation of the energy reform continues as planned."<br /><br />The approval of President Enrique Pena Nieto's energy reform bill by a divided Congress this month caps a year of major economic legislation, including bills to boost lending, lower telecommunications costs and improve tax collection.<br />But lawmakers still need to flesh out the energy overhaul with legislation that will determine whether Mexico will offer tax rates that are lucrative enough to spur an investment boom.<br /><br /><b>MEXICO BONDS</b><br />S&P's upgrade was largely expected by the market, and the country's peso only briefly pared losses amid concerns that less U.S. monetary stimulus will sap demand for emerging market assets in the coming year.<br /><br />Expectations the U.S. Federal Reserve could keep cutting back its monthly bond purchases are seen driving yields on emerging market debt higher next year. But Mexico's peso and its local-currency bonds have already suffered less than other emerging markets and optimism about Mexico could help bond yields continue to perform better than other riskier assets.<br /><br />Analysts said strong progress once Mexican lawmakers resume work in February on the energy reform's secondary legislation could spur the next ratings upgrade.<br /><br />Alonso Cervera, an economist at Credit Suisse in Mexico City, said Moody's would likely put Mexico into the "A" category next year and that bond yields would likely fall.<br /><br />"I think the curve is way too steep and we are likely to see a flattening trend in the next few months, even if the Fed continues to taper," Cervera said in an emailed response to questions.<br /><br />The yield on Mexico's benchmark 10-year peso bond has spiked more than 80 basis points higher since late October to 6.40 on Thursday, near a three-month high.<br /><br />The flurry of reforms this year has made Mexico stand out from other emerging markets, such as Brazil, which have been raising concerns among investors for more interventionist and protectionist economic policies.<br />"It is very important that an economy like ours, which is a small open economy, does what we can to improve the perception about the resilience of the economy," Diaz de Leon said.<br /><br />Meanwhile, Pena Nieto's government is milking international optimism by boosting the amount of debt it will issue next year. On Thursday, the finance ministry released its latest capital market issuance plan, which foresees increasing shorter-term debt sales in the first quarter of next year.<br />After originally promising to stick to a balanced budget this year, the government got lawmakers to support a deficit of 0.4 percent of gross domestic product this year and an even wider 1.5 percent deficit next year.<br />The government is seeking more debt to help fuel stronger growth. Mexico's economy slumped this year to around a 1.3 percent annual expansion from a 3.8 percent rate in 2012.<br /><br />Analysts in a central bank poll issued on Thursday lifted their outlook for growth next year to 3.41 percent, up 7 basis points from a poll late last month before the energy reform bill was approved.<br /><br />In the latest sign of stronger growth, a separate report on Thursday showed Mexican retail sales rose in October at the fastest pace in nine months, following two months of declines.

Mexico Earns Upgrade, Outlook Could Support Bonds

Mexico earned a higher debt rating from Standard & Poor's on Thursday and expectations of more upgrades to come could help support M...

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OPEC Cut Not Needed in 2014

<div class="entry_wrap" style="box-sizing: border-box; font-family: akzidenz-grotesk-std-bloom; font-size: 20px; padding: 0px 1.25em 1.25em; position: relative;"><div class="entry_content" style="box-sizing: border-box; color: #2d2b2c; margin-left: 54px; overflow: hidden; padding-right: 20px; position: static;"><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg-sEeTzoRsE3GH4lyvO5NhK7t6UMsEG-BDEsw6ClYYV7H1KeCi5-rBajpvysFlMUbyW9e6fB_gOGRhFqfqgkvATVttKn1UyXxqfpD78WX0fqHRUU4hyYtwWAfISXOnos3F1glIMsgsCoY9/s1600/1.gif" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="138" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg-sEeTzoRsE3GH4lyvO5NhK7t6UMsEG-BDEsw6ClYYV7H1KeCi5-rBajpvysFlMUbyW9e6fB_gOGRhFqfqgkvATVttKn1UyXxqfpD78WX0fqHRUU4hyYtwWAfISXOnos3F1glIMsgsCoY9/s320/1.gif" width="320" /></a></div><div style="box-sizing: border-box; font-size: 1.1em; line-height: 1.3125em; margin-bottom: 28px;">Ministers from <a density="full" href="http://topics.bloomberg.com/saudi-arabia/" style="box-sizing: border-box; color: #003399; cursor: pointer; font-weight: 700; outline: none; text-decoration: none;">Saudi Arabia</a>, Kuwait and <a density="full" href="http://topics.bloomberg.com/iraq/" style="box-sizing: border-box; color: #003399; cursor: pointer; font-weight: 700; outline: none; text-decoration: none;">Iraq</a> said OPEC needn’t cut production next year to make room for additional supplies from Iran, <a density="full" href="http://topics.bloomberg.com/libya/" style="box-sizing: border-box; color: #003399; cursor: pointer; font-weight: 700; outline: none; text-decoration: none;">Libya</a> and U.S. shale oil.</div><div style="box-sizing: border-box; font-size: 1.1em; line-height: 1.3125em; margin-bottom: 28px;">“I am optimistic the market will stay balanced and stable next year,” Saudi Oil Minister <a density="sparse" href="http://topics.bloomberg.com/ali-al--naimi/" style="box-sizing: border-box; color: #003399; cursor: pointer; font-weight: 700; outline: none; text-decoration: none;">Ali Al-Naimi</a> said today in a speech at a meeting of Arab oil exporters in Doha, Qatar. “Shale oil is not posing any threat to Saudi Arabia and OPEC,” he told reporters.</div><div style="box-sizing: border-box; font-size: 1.1em; line-height: 1.3125em; margin-bottom: 28px;">Commerzbank AG said in a Dec. 10 report that the Organization of Petroleum Exporting Countries would need to cut output should Iranian and Libyan production return to the market. OPEC, content with current oil price levels, agreed at a Dec. 4 meeting to keep the group’s crude output ceiling unchanged at least until June.</div><div style="box-sizing: border-box; font-size: 1.1em; line-height: 1.3125em; margin-bottom: 28px;">Iran is seeking to raise oil output to 4 million barrels a day, the country’s oil minister, Bijan Namdar Zanganeh, said at the OPEC meeting, after a Nov. 24 agreement over its nuclear program opened the door to an easing of sanctions.</div><div style="box-sizing: border-box; font-size: 1.1em; line-height: 1.3125em; margin-bottom: 28px;"><a density="sparse" href="http://topics.bloomberg.com/iran/" style="box-sizing: border-box; color: #003399; cursor: pointer; font-weight: 700; outline: none; text-decoration: none;">Iran</a> and world powers last month struck an initial accord that broke a decade-long diplomatic stalemate, setting limits on the country’s nuclear program in exchange for about $7 billion in relief from sanctions over six months.</div><div style="box-sizing: border-box; font-size: 1.1em; line-height: 1.3125em; margin-bottom: 28px;">U.S. shale oil is poised to increase the country’s crude production to 9.6 million barrels a day in 2016, a level it last reached in 1970, the U.S. Energy Information Administration said Dec. 16.</div><div style="box-sizing: border-box; font-size: 1.1em; line-height: 1.3125em; margin-bottom: 28px;">“OPEC can meet demand for years to come, so don’t make shale oil a scarecrow for OPEC and other producers,” Kuwaiti Oil Minister Mustafa Al-Shemali told reporters today.</div><h2 style="box-sizing: border-box; font-family: proxima-nova; font-size: 1.875em; letter-spacing: -0.03em; margin: 29px 0px;">Use Force</h2><div style="box-sizing: border-box; font-size: 1.1em; line-height: 1.3125em; margin-bottom: 28px;">Libya is prepared to use force to reopen oil export ports that have been closed by rebel groups for the past five months, Oil Minister Abdulbari Al-Arusi said today. The shutdown has reduced Libyan output to 250,000 barrels a day from 1.4 million barrels a day in March.</div><div style="box-sizing: border-box; font-size: 1.1em; line-height: 1.3125em; margin-bottom: 28px;">“Supplies are in balance with demand so in reality there are no fears” over a surplus in the market, Iraqi Oil Minister Abdul Kareem al-Luaibi said to reporters today.</div><div style="box-sizing: border-box; font-size: 1.1em; line-height: 1.3125em; margin-bottom: 28px;">West Texas Intermediate crude climbed to a two-month high yesterday after a report showed the <a density="full" href="http://topics.bloomberg.com/u.s.-economy/" style="box-sizing: border-box; color: #003399; cursor: pointer; font-weight: 700; outline: none; text-decoration: none;">U.S. economy</a> expanded in the third quarter at a faster rate than previously estimated. WTI for February delivery rose 28 cents to $99.32 a barrel on the <a density="sparse" href="http://topics.bloomberg.com/new-york/" style="box-sizing: border-box; color: #003399; cursor: pointer; font-weight: 700; outline: none; text-decoration: none;">New York</a> Mercantile Exchange. It was the highest settlement for a contract closest to expiration since Oct. 18.</div><div style="box-sizing: border-box; font-size: 1.1em; line-height: 1.3125em; margin-bottom: 28px;"><br /></div></div></div>

OPEC Cut Not Needed in 2014

Ministers from  Saudi Arabia , Kuwait and  Iraq  said OPEC needn’t cut production next year to make room for additional supplies from Iran, ...

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Petrobras declares commerciality in presalt fields in Brazil

<div class="PromoBoxHeadLeft" style="border: 0px; color: #333333; font-family: inherit; font-size: 12px; font-style: inherit; font-weight: inherit; height: auto; margin: 0px; outline: 0px; padding: 0px;"><div class="PromoBoxHeadRight" style="border: 0px; font-family: inherit; font-style: inherit; font-weight: inherit; height: auto; margin: 0px; outline: 0px; padding: 0px;"><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgycK-HxRmW8ipM9Qrh6pyYx2NPv4bM8_1OVvNmRvMfbv-hx-EJauMj0JZxQA_suitt6m5Hws5MhMTfs8pyVcFaBBYOthp-8xvq1OoNB6n1AjRXuUoQRWp2zL_2NvNa9M694sw_AfcxVUHY/s1600/brazil_ft_diagram.gif" imageanchor="1" style="clear: left; float: left; font-family: inherit; font-style: inherit; font-weight: inherit; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="243" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgycK-HxRmW8ipM9Qrh6pyYx2NPv4bM8_1OVvNmRvMfbv-hx-EJauMj0JZxQA_suitt6m5Hws5MhMTfs8pyVcFaBBYOthp-8xvq1OoNB6n1AjRXuUoQRWp2zL_2NvNa9M694sw_AfcxVUHY/s400/brazil_ft_diagram.gif" width="400" /></a></div><b style="color: #37302b; font-size: 12px; font-style: inherit;">RIO DE JANIERO</b><span style="background-color: white; color: #37302b; font-size: 12px; font-style: inherit; font-weight: inherit;"> </span><span style="background-color: white; color: #37302b; font-size: 12px; font-style: inherit; font-weight: inherit;">–</span><span style="background-color: white; color: #37302b; font-size: 12px; font-style: inherit; font-weight: inherit;"> </span>Petrobras<span style="background-color: white; color: #37302b; font-size: 12px; font-style: inherit; font-weight: inherit;"> </span><span style="background-color: white; color: #37302b; font-size: 12px; font-style: inherit; font-weight: inherit;">has submitted its declaration of commerciality of the oil and gas accumulations of Franco and Sul de Tupi to Brazil’s National Petroleum, Natural Gas and Biofuels Agency (ANP). These areas are part of the transfer of rights agreement and are located in the</span><span style="background-color: white; color: #37302b; font-size: 12px; font-style: inherit; font-weight: inherit;"> </span>Santos basin<span style="background-color: white; color: #37302b; font-size: 12px; font-style: inherit; font-weight: inherit;"> </span><span style="background-color: white; color: #37302b; font-size: 12px; font-style: inherit; font-weight: inherit;">presalt area. In the proposal sent to the ANP, the names suggested for the new fields were Búzios and Sul de Lula (South of Lula) for Franco and Sul de Tupi, respectively.</span></div></div><div class="compBody" style="border: 0px; font-family: inherit; font-size: 12px; font-style: inherit; font-weight: inherit; margin: 0px; outline: 0px; padding: 5px;"><div class="article-content-wrapper" itemprop="articleBody" style="border: 0px; font-family: inherit; font-style: inherit; font-weight: inherit; margin: 0px; outline: 0px; padding: 0px;"><div id="ContentBody" style="border: 0px; font-family: inherit; font-style: inherit; font-weight: inherit; margin: 0px; outline: 0px; padding: 0px;"><div style="background-color: white; border: 0px; color: #37302b; font-family: Arial, Helvetica, sans-serif; outline: 0px; padding: 10px 0px;">The volume contracted through the transfer of rights agreement for Franco area of 3.058 Bboe was confirmed in the exploratory phase. The presalt reservoirs in this field contain good-quality oil (26º to 28º API). During the execution of the Franco Mandatory Exploratory Plan, Petrobras acquired 3D seismic data for the entire area, drilled two mandatory wells and six additional ones, with the objective of delimiting and characterizing reservoirs. An extended formation test also was performed.</div><div style="background-color: white; border: 0px; color: #37302b; font-family: Arial, Helvetica, sans-serif; outline: 0px; padding: 10px 0px;">Búzios field is nearly 200 km (124 mi) off the coast of Rio de Janeiro state, wtih water depths from 1,600 m (5,249 ft) to 2,100 m (6,890 ft). The volume contracted through the transfer of rights agreement for the Sul de Tupi area, of 128 MMboe was confirmed during the exploratory phase. The presalt reservoirs in this field contain good-quality oil (27º API).</div><div style="background-color: white; border: 0px; color: #37302b; font-family: Arial, Helvetica, sans-serif; outline: 0px; padding: 10px 0px;">The Sul de Lula field is nearly 300 km (187 mi) off the coast of Rio de Janeiro state, at a water depth of approximately 2,200 m (7,218 ft). The production of Sul de Lula field will be made by the same production system planned for the Extreme South module of Lula field. The company forecasts the first oil of this system in 1Q 2017.</div><div style="background-color: white; border: 0px; color: #37302b; font-family: Arial, Helvetica, sans-serif; outline: 0px; padding: 10px 0px;">With the declarations of commerciality for the Franco and Sul de Tupi areas, the formal process to review the transfer of rights agreement starts. The review will take place on a block-per-block basis, taking into consideration the technical and economic premises of each area.</div><div style="background-color: white; border: 0px; color: #37302b; font-family: Arial, Helvetica, sans-serif; outline: 0px; padding: 10px 0px;">Petrobras has also submitted to ANP a declaration of commerciality for the Carioca oil accumulation, located in the Santos basin pre-salt. In the proposal sent to the regulatory agency, the consortium recommends that the new field, which is formed by reservoirs containing good-quality oil (of approximately 26º API), should be named as Lapa. With a total estimated recoverable volume of 459 MMboe, Lapa is one more large-size field discovered in Brazil’s presalt layer. The Lapa field is 270 km (167 mi) off the coast of the state of São Paulo at a water depth of 2,140 m (7,021 ft).</div><div style="background-color: white; border: 0px; color: #37302b; font-family: Arial, Helvetica, sans-serif; outline: 0px; padding: 10px 0px;">Along with the declaration of commerciality, the consortium submitted to the ANP the final report of its discovery evaluation plan, which was prepared as of the first well drilled in 2007. The 3D seismic data was gathered, five wells drilled, plus three formation tests and an extended well test were carried out in Carioca area.</div><div style="background-color: white; border: 0px; color: #37302b; font-family: Arial, Helvetica, sans-serif; outline: 0px; padding: 10px 0px;">Consortium BM-S-9 is operated by Petrobras (45%), in partnership with BG E&P Brasil (30%), and Repsol Sinopec Brasil (25%). After the declaration of commerciality, the Lapa Field Development Plan will be submitted to the ANP within 180 days. The company forecasts first oil for this field in 3Q 2016.</div><div><br /></div></div></div></div>

Petrobras declares commerciality in presalt fields in Brazil

RIO DE JANIERO   –   Petrobras   has submitted its declaration of commerciality of the oil and gas accumulations of Franco and Sul de Tupi t...

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Ecopetrol details US$10.6bn 2014 investment plan

<br /><br /><header class="clearfix" style="background-color: white; color: #222222; font-family: Arial, Helvetica, 'Helvetica Neue'; font-size: 12px; line-height: 16px; position: relative;"><h3 class="top-sector" style="color: #58595b; font-size: 16px; margin: 7px 0px 0.5em;"><div class="separator" style="clear: both; text-align: center;"></div><br /><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiRYsq49ylRQy2irYKSpoka3LkN9VNUDnjXbxpLYanqvk0A07hdLAOxM0GAbooPObfl53spbgpX8giAQK3Tmu6TO6KhIxImROdqx5YtWf1FomXsR6_sBEYgdbQLBOu5JiNYioQXzF-L4Hya/s1600/earth_lights-bw.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="161" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiRYsq49ylRQy2irYKSpoka3LkN9VNUDnjXbxpLYanqvk0A07hdLAOxM0GAbooPObfl53spbgpX8giAQK3Tmu6TO6KhIxImROdqx5YtWf1FomXsR6_sBEYgdbQLBOu5JiNYioQXzF-L4Hya/s320/earth_lights-bw.jpg" width="320" /></a></div>Oil & Gas - <a href="http://web6.bnamericas.com/country-profile/colombia" style="color: #58595b; text-decoration: none;">Colombia</a></h3><span itemprop="image"></span><b><span style="color: #414042; font-size: 13px; line-height: 16px;">Colombia state oil firm </span>Ecopetrol<span style="color: #414042; font-size: 13px; line-height: 16px;"> </span><span style="color: #414042; font-size: 13px; line-height: 16px;">(NYSE: EC) approved US$10.6bn of investment for next year, with 61% (US$6.46bn) to be directly invested by Ecopetrol and 39% (US$4.13bn) through its affiliates and subsidiaries, the company said in a press release.</span></b><br /> </header><br /><div class="content" itemprop="articleBody" style="background-color: white; color: #222222; font-family: Arial, Helvetica, 'Helvetica Neue'; font-size: 12px; line-height: 16px;"><div style="color: #414042; font-size: 13px; margin-bottom: 13px; margin-top: 0.5em;"></div><div style="color: #414042; font-size: 13px; margin-bottom: 13px; margin-top: 0.5em;"></div><div style="color: #414042; font-size: 13px; margin-bottom: 13px; margin-top: 0.5em;"><strong>DIRECT INVESTMENT</strong></div><div style="color: #414042; font-size: 13px; margin-bottom: 13px; margin-top: 0.5em;"></div><div style="color: #414042; font-size: 13px; margin-bottom: 13px; margin-top: 0.5em;"></div><div style="color: #414042; font-size: 13px; margin-bottom: 13px; margin-top: 0.5em;">The majority (US$4.65bn) of Ecopetrol's direct investment next year is marked for crude and natural gas production development. The firm's East Llanos project is slated to receive 64% of direct production development investment, with 17% going to the Middle Magdalena project and 11% to the Orinoquía project.</div><div style="color: #414042; font-size: 13px; margin-bottom: 13px; margin-top: 0.5em;"></div><div style="color: #414042; font-size: 13px; margin-bottom: 13px; margin-top: 0.5em;"></div><div style="color: #414042; font-size: 13px; margin-bottom: 13px; margin-top: 0.5em;">Ecopetrol also expects to invest US$928mn in exploration next year. In Colombia the firm plans to drill 20 exploration wells, six delineation wells and eight stratigraphic wells. The East Llanos project is marked for 13 exploration wells, with another two planned in offshore Colombia, two in southern Huila province and three in northern departments Cesar, Antioquia and Norte de Santander.</div><div style="color: #414042; font-size: 13px; margin-bottom: 13px; margin-top: 0.5em;"></div><div style="color: #414042; font-size: 13px; margin-bottom: 13px; margin-top: 0.5em;"></div><div style="color: #414042; font-size: 13px; margin-bottom: 13px; margin-top: 0.5em;">The firm also plans to spend US$240mn on developing nonconventional resources. Activity will include nine stratigraphic wells, three exploration wells and three pilot production tests - mainly on blocks in the Catatumbo and Middle Magdalena projects, Ecopetrol said.</div><div style="color: #414042; font-size: 13px; margin-bottom: 13px; margin-top: 0.5em;"></div><div style="color: #414042; font-size: 13px; margin-bottom: 13px; margin-top: 0.5em;"></div><div style="color: #414042; font-size: 13px; margin-bottom: 13px; margin-top: 0.5em;">Next year's direct investment plan includes US$339mn for refining and petrochemical spending, with 26% slated for modernizing the Barrancabermeja-PMRB refinery.</div><div style="color: #414042; font-size: 13px; margin-bottom: 13px; margin-top: 0.5em;"></div><div style="color: #414042; font-size: 13px; margin-bottom: 13px; margin-top: 0.5em;"></div><div style="color: #414042; font-size: 13px; margin-bottom: 13px; margin-top: 0.5em;"><strong>AFFILIATE AND SUBSIDIARY INVESTMENT</strong></div><div style="color: #414042; font-size: 13px; margin-bottom: 13px; margin-top: 0.5em;"></div><div style="color: #414042; font-size: 13px; margin-bottom: 13px; margin-top: 0.5em;"></div><div style="color: #414042; font-size: 13px; margin-bottom: 13px; margin-top: 0.5em;">Through its affiliates and subsidiaries Ecopetrol plans to invest US$1.76bn in refining and petrochemical projects, including US$1.63bn to modernize the Cartagena refinery, Ecopetrol said.</div><div style="color: #414042; font-size: 13px; margin-bottom: 13px; margin-top: 0.5em;"></div><div style="color: #414042; font-size: 13px; margin-bottom: 13px; margin-top: 0.5em;"></div><div style="color: #414042; font-size: 13px; margin-bottom: 13px; margin-top: 0.5em;">Next year's subunit spending includes US$1.34bn in transport investment. Ecopetrol expects crude oil pipeline capacity to increase by an additional 40,000b/d in 2014 and total crude and natural gas pipeline capacity to grow by another 70,000boe/d.</div><div style="color: #414042; font-size: 13px; margin-bottom: 13px; margin-top: 0.5em;"></div><div style="color: #414042; font-size: 13px; margin-bottom: 13px; margin-top: 0.5em;"></div><div style="color: #414042; font-size: 13px; margin-bottom: 13px; margin-top: 0.5em;">Affiliate and subsidiary 2014 exploration investment is set at US$632mn and includes five exploration wells on the US-side of the Gulf of Mexico and six in Colombia, Ecopetrol said.</div><div style="color: #414042; font-size: 13px; margin-bottom: 13px; margin-top: 0.5em;"></div><div style="color: #414042; font-size: 13px; margin-bottom: 13px; margin-top: 0.5em;"></div><div style="color: #414042; font-size: 13px; margin-bottom: 13px; margin-top: 0.5em;">The firm also plans to spend US$392mn on developing affiliate and subsidiary oil and gas production in 2014.</div><div style="color: #414042; font-size: 13px; margin-bottom: 13px; margin-top: 0.5em;"></div><div style="color: #414042; font-size: 13px; margin-bottom: 13px; margin-top: 0.5em;"></div><div style="color: #414042; font-size: 13px; margin-bottom: 13px; margin-top: 0.5em;">Ecopetrol forecasts total group oil and gas production at 819,000boe/d next year.</div></div>

Ecopetrol details US$10.6bn 2014 investment plan

Oil & Gas -  Colombia Colombia state oil firm  Ecopetrol   (NYSE: EC) approved US$10.6bn of investment for next year, with 61% (US$6.46b...

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APAC 2013 Oil and Gas reality check (PDF Report)

<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhIMGGuz_uktyMftTmsHJug7WOM-1k7SWUDtRYwRH2Jhf2uMQmZ26OSzHHlm1T8Aqxmzn-9jiNtFLOkMUWP1s9uLDabVVVN0XdPwJDVvWLEjECRpG_FQo32Y6NHcjKFXx0EZ-CGOkMN9iwc/s1600/me_er_o&g-reality-Check-2013_200_052013.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhIMGGuz_uktyMftTmsHJug7WOM-1k7SWUDtRYwRH2Jhf2uMQmZ26OSzHHlm1T8Aqxmzn-9jiNtFLOkMUWP1s9uLDabVVVN0XdPwJDVvWLEjECRpG_FQo32Y6NHcjKFXx0EZ-CGOkMN9iwc/s1600/me_er_o&g-reality-Check-2013_200_052013.jpg" /></a></div><br /><br /><br /><a href="http://www.deloitte.com/assets/Dcom-BruneiDarussalam/Local%20Assets/Documents/oil_gas_reality_check_2013.pdf" target="_blank">DOWNLOAD: APAC 2013 Reality Check : Deloitte</a><br /><br /><br /><br />

APAC 2013 Oil and Gas reality check (PDF Report)

DOWNLOAD: APAC 2013 Reality Check : Deloitte

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Mexico: Energy reform clears final hurdle of state approval

MEXICO CITY -- Mexico’s sweeping energy reform cleared its final legal hurdle Monday when San Luis Potosi became the 17th state legislature to give rapid-fire approval to constitutional changes that will allow foreign investment into what has been a 75-year-old state monopoly.<br /><div class="p402_premium">The ambitious energy bill, opening up Mexico’s promising but poorly performing oil and gas industry, was <a href="http://lat.ms/1hX34Y7">approved solidly</a> in both houses of <a class="taxInlineTagLink" href="http://www.latimes.com/topic/politics/government/u.s.-congress-ORGOV0000131.topic" id="ORGOV0000131" title="U.S. Congress">Congress</a> last week, amid bitter opposition by leftist parties.<br /><br /><div class="separator" style="clear: both; text-align: center;"></div><div class="separator" style="clear: both; text-align: center;"><span style="font-size: x-small;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgWCWn4bN_A0fW3tGwa3ZTUlsJWCBwgj0WGLY-Cw7ZgKUF5e4WOS76hdAC3pNnOcglLyU9NLoyEpRdoVTUqwWTDe3liWRS0tWOYOn25FM4SMxkethetJsxW5L59zRCp-mfHioOlbqnF2tEB/s1600/la-fg-wn-mexico-energy-reform-hurdle-approval--001.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgWCWn4bN_A0fW3tGwa3ZTUlsJWCBwgj0WGLY-Cw7ZgKUF5e4WOS76hdAC3pNnOcglLyU9NLoyEpRdoVTUqwWTDe3liWRS0tWOYOn25FM4SMxkethetJsxW5L59zRCp-mfHioOlbqnF2tEB/s1600/la-fg-wn-mexico-energy-reform-hurdle-approval--001.jpg" /></a></span></div><span style="font-size: x-small;"></span><span style="font-size: x-small;">The Centenario exploration oil rig operated by Mexican company Grupo R and working for Mexico's state-owned oil company Pemex, in the Gulf of Mexico. State and federal bodies have quickly lined up behind constitutional changes that will allow foreign investment into what has been a 75-year-old state monopoly. <span class="credit">(<span class="photographer">Omar Torres / AFP/Getty Images</span>)</span></span><br /><br />Because measures in the bill require changing the constitution, a majority of states also had to give their OK. That happened over the weekend and early Monday, when 17 of 31 states voted in favor of the bill, even as leftist demonstrators protested and surrounded some state legislatures in hopes of discouraging approval.<br /><br />But passage was never really in doubt because most state governments are controlled by the Institutional Revolutionary Party (PRI) of President Enrique Peña Nieto, for whom overhauling state oil giant Petroleos Mexicanos (Pemex) has been a major goal of his year-old administration. Along with the PRI, the conservative National Action Party also lent crucial support.<br /><br />The bill now returns to the Senate for official recognition of the states’ votes and then will be signed into law by Peña Nieto -- all formalities.<br /><br />Peña Nieto, on an official visit to Turkey on Monday, praised the “responsibility and commitment” exhibited by the states. “This shows that Mexico has solid democratic institutions, capable of carrying forth major national transformations,” he said via Twitter.<br /><br />The new law will call for “production-sharing” agreements that allow private firms to take a cut of the crude they find under licensing agreements and contracts. It also opens up the highly inefficient state electricity sector and is designed to make Pemex a competitive and more productive company.<br />Proponents argue that Mexico needs outside expertise to be able to exploit the hard-to-reach deep-water oil reserves and shale rock deposits of gas. Otherwise, with production declining and shallow-water wells drying, Mexico could become a net importer of oil by 2020, experts say.<br />But opponents, including the left and a large percentage of ordinary Mexicans, maintain that allowing foreign companies to drill and take away oil amounts to a sell-out of precious natural resources. A better plan would be to fight rampant corruption and waste in Pemex, they argue.</div>

Mexico: Energy reform clears final hurdle of state approval

MEXICO CITY -- Mexico’s sweeping energy reform cleared its final legal hurdle Monday when San Luis Potosi became the 17th state legislatur...

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I’m Waiting For the Crude – Crude Price Differentials at The Gulf Coast

<br /><div class="tabs"></div><div class="meta submitted"><span content="2013-12-15T20:00:00-06:00"></span>The bases are loaded for another 2 MMb/d of pipeline capacity to bring additional crude supplies to the Texas Gulf Coast by the end of 2014. The majority of that payload will likely be light sweet crude from tight oil formations, a.k.a., shale. As the flood of crude headed to Texas passed through the Midwest over the past two years, prices at Cushing and points north were heavily discounted versus coastal markets. Now the discount action has moved to the Gulf Coast where light sweet crude imports have been pushed out. Today we look at the impact of the changing supply position on crude price differentials.</div><br />This is Part 1 of a two-part review of Gulf Coast crude price differentials that extends a series on the topic that we started back in November (2013). The first episode in the series described 4 MMb/d of current and planned expansions to crude transportation capacity into the Texas Gulf Coast region (see Handling The Texas Gulf Coast Crude Flood). Our analysis showed that the new incoming light crude capacity will exceed Texas Gulf Coast demand by somewhere north of 0.5 MMb/d by the end of 2015. In episode two we described how some of these excess crude supplies would move east on the reversed Ho-Ho pipeline (see Gulf Coast Crude West to East Flows). In episode three we looked at how shippers could divert supplies away from Texas Gulf Coast congestion (see Texas Gulf Coast Bypass Options). Episode four looked at progress bringing TransCanada’s Keystone XL Gulf Coast extension (a.k.a, Cushing Marketlink Pipeline (CMP)) online (see Keystone Marketlink Comes to Texas). Episode five looked at the impact of the twin Seaway Pipeline from Cushing to Freeport expected online during the second quarter of 2014 (see Impact of the Seaway Expansion). Now we’ll get into what happens to price differentials as new crude supplies come flooding into Texas in the next six months.<br /><br />Forecasting prices for tomorrow is like gambling – only fun if you don’t mind losing money. And the odds of being right get worse the further out the predictions go. So our intent here is to concentrate on price differentials – the spread between key crude benchmarks rather than getting into absolute price levels. We start with a review of what has happened since 2012 and then offer some scenarios for how things might turn out next year (2014). Buckle up.<br /><br /><b>Recap 2012</b><br />Figure 1 below shows average differentials for key benchmark light sweet crude grades at the Gulf Coast during 2012. The prices are averages for the year versus the West Texas Intermediate (WTI) NYMEX benchmark price at Cushing - set to $0/Bbl.  Recall that during 2012 surging crude production in North Dakota and Canada exceeded demand in the Midwest and supplies started backing up at Cushing, OK because there was very little pipeline capacity from the Midwest to the Gulf Coast (where 50 percent of US refining capacity resides). Because of this logjam a stockpile of crude built up at Cushing and inland domestic prices based on WTI were discounted heavily versus Gulf Coast supplies priced against the international benchmark Brent crude (see The Seven Gates of Hell for WTI Traders). Domestic light sweet crude grades sold at the Gulf Coast – represented by Light Louisiana Sweet (LLS) in our diagram - traded at the higher international levels. In 2012 both Brent and LLS averaged $18/Bbl above the discounted WTI “stranded” at Cushing. The dotted yellow line on the chart indicates the pipeline ‘capacity constraint’ boundary that split Cushing and Gulf Coast pricing markets at that time.  You can think of that yellow line as separating zones of domestic and international pricing along the Gulf Coast region.<br /><br /><div style="text-align: center;"><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg-gV1vtrH7ax6BACQlmkOV1RnF0WCAUHabBRJd1W6Op7M5QK0IQ_Wa8ZXktaqVlEO8wCPbrl52dcYjuuhNaqGjbg1Xq4VJ3ViIt03GI3ISWHjB7kJTUjlRAKcmb8t62hB2fQTE4jQ_aHzd/s1600/figure1_5.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="267" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg-gV1vtrH7ax6BACQlmkOV1RnF0WCAUHabBRJd1W6Op7M5QK0IQ_Wa8ZXktaqVlEO8wCPbrl52dcYjuuhNaqGjbg1Xq4VJ3ViIt03GI3ISWHjB7kJTUjlRAKcmb8t62hB2fQTE4jQ_aHzd/s400/figure1_5.png" width="400" /></a></div><br /></div><div style="text-align: center;">Figure 1 - Source: RBN Energy</div><div style="text-align: left;">Prices for WTI are set both at Cushing, OK – the gateway to Midwest refineries – as well as at Midland, TX, closer to the Permian Basin production region. During 2012, Midland prices for WTI were discounted by an average of $4/Bbl to WTI at Cushing because of capacity constraints on the pipelines between Midland and Cushing (caused by surging crude production in the Permian Basin). Until new pipelines opened up from the Permian direct to Houston in 2013, WTI had to travel to market from Midland to Cushing - into an already oversupplied Midwest market (see New Adventures of Good Ole Boy Permian). </div><div style="text-align: left;"><br /></div>Next we move to Figure 2 below – which shows average price differentials to WTI during the past three months – between September 20 and December 10, 2013.<br /><br />But before we get to those numbers we need to fill in the gap in our analysis covering the first 9 months of 2013 – since Figure 1 only covered 2012. That nine-months was a transition period during which new pipeline capacity opened up between Cushing and Houston (Seaway Phase 2 expansion) and between the Permian Basin in West Texas and Houston (Longhorn Reversal). Crude-by-rail shipments also increased the flow of light sweet Bakken crude from North Dakota to the Gulf Coast during this period (hence the rail track shown on Figure 2). As a result more light sweet crude by-passed the Cushing logjam and reached Gulf Coast refineries - reducing the need for waterborne imports. The crude stockpile in Cushing declined from its record high levels and Gulf Coast crude stocks began to increase. The net effect was that the Brent premium to WTI, which reached $23/Bbl in February 2013 evaporated to less than $1/Bbl by July (see Strangers in the Night). Between July and September 2013, Brent, WTI and LLS traded in a narrow range of about $5/Bbl with Brent “in the middle” at a discount to LLS and a $3/Bbl premium to WTI.<br /><br />Since the middle of September, however, Brent prices have taken off on their own track, leaving LLS trading at a narrow $3/Bbl premium over WTI that is roughly equivalent to the pipeline tariff between Cushing and the Gulf Coast (see Goodbye Stranger). And that situation has prevailed ever since – as depicted in Figure 2 below. Over this period the Gulf Coast has been oversupplied with light sweet crude, leaving no need for imports – allowing Brent prices to effectively disconnect from LLS and take their own path – reaching as high as a $17/Bbl premium over WTI but averaging $10/Bbl over the period. The yellow dotted capacity constraint line separating international and domestic markets at the Gulf Coast moved offshore. Behind that imaginary yellow line, LLS prices tracked more closely with WTI and traded at a discount to Brent that averaged $7/Bbl. Prices for WTI in Houston and LLS in Louisiana tracked closely together – indicating that both markets were equally well supplied. The WTI prices at Midland continued to trade at a discount to Cushing over this past three month period because although new capacity opened up from the Permian to Houston, surging production in West Texas continues to overwhelm pipeline capacity.<br /><br /><div style="text-align: center;"><img alt="" class="image-large" src="http://www.rbnenergy.com/sites/default/files/styles/large/public/field/image/figure2_7.png?itok=UY0CQejf" /></div><div style="text-align: center;">Figure 2 - Source: RBN Energy </div><div style="text-align: center;"><br /></div><div style="text-align: left;">And one argument for next year is that price differential relationships at the Gulf Coast will stay basically the same as they have been for the past three months. A December 11 “This Week in Petroleum” report from the Energy Information Administration (EIA) notes that its short term forecast for US domestic crude production - 7.5 MMb/d in 2013 rising to 8.5 MMb/d in 2014 will place continued downward pressure on crude oil prices such as WTI and LLS.  EIA expects the WTI discount to Brent to average $12/Bbl during the fourth quarter of 2013 and $9/Bbl during 2014. EIA also expect the price for LLS to continue to move in step with the WTI price plus the pipeline tariff.</div>So we will use that scenario as our base case – holding steady. In the next episode in this series we will revisit the pipeline events that will impact the differentials in 2014 and examine alternatives to our base case price scenario for 2014.<br />------------ <br /><br /><table class="views-table sticky-enabled cols-4 tableheader-processed sticky-table"><tbody><tr class="even"><td class="views-field views-field-name"><a class="username" href="http://www.rbnenergy.com/user/28" title="View user profile.">Sandy Fielden</a> </td> <td class="views-field views-field-picture"><div class="user-picture"><a href="http://www.rbnenergy.com/user/28" title="View user profile."><img alt="Sandy Fielden's picture" height="150" src="http://www.rbnenergy.com/sites/default/files/styles/user_profile/public/pictures/picture-28-1331334672.jpg?itok=cCGRUjKw" title="Sandy Fielden's picture" width="125" /></a> </div></td> <td class="views-field views-field-field-expertise">Energy market pricing and fundamental data, Data Integration with ETRM, writer on Energy Markets, Consultant, Conference Speaker </td></tr></tbody></table>

I’m Waiting For the Crude – Crude Price Differentials at The Gulf Coast

The bases are loaded for another 2 MMb/d of pipeline capacity to bring additional crude supplies to the Texas Gulf Coast by the end of 201...

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Private equity sees growing investment opportunities in oil and gas

In the post-financial crisis era, private equity firms are once again looking for the most promising opportunities, and oil and gas is proving to be fertile ground, according to a recent industry survey.<br /><br />Nearly two-thirds of global private equity executives responding to a survey said they plan to actively raise funds aimed at specific oil and gas subsectors next year, seeking to benefit from an industry ripe with opportunity and hungry for capital. The survey results were released Tuesday by EY, the international accounting and consulting firm.<br /><br /><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgeSuU-HiMjaRPnjx2xfTSkYQ73NNlHHikJS__ajfVBBu8Z9z7PJH2domFn2TH6DNwwG2x5HDr2rzjkyT1b5d5B5uLqwIDPlM3ANqQvY_eA5uMKdDpEpDe0He-UlJ6XDI8o3wX17nSdfuLw/s1600/6551534889_9c8ae52997_z-306x306.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgeSuU-HiMjaRPnjx2xfTSkYQ73NNlHHikJS__ajfVBBu8Z9z7PJH2domFn2TH6DNwwG2x5HDr2rzjkyT1b5d5B5uLqwIDPlM3ANqQvY_eA5uMKdDpEpDe0He-UlJ6XDI8o3wX17nSdfuLw/s1600/6551534889_9c8ae52997_z-306x306.jpg" /></a></div>The oil and gas industry is capital intensive, with projects that run into the billions of dollars, making it an attractive investment for private equity firms, EY noted.<br /><span style="font-size: 13px; line-height: 19px;">Mergermarket, a national survey firm, conducted the survey on behalf of EY, interviewing 100 private equity leaders on the relationship between private equity and the oil and gas industry.</span><br />“The easy or cheap barrels have been produced,” EY wrote in the report. “There are now more players going after the more difficult areas of oil production, creating opportunities for PE firms with different risk appetites.”<br /><br /><br /><b>Energy executives: <a href="http://fuelfix.com/blog/2013/12/03/access-to-capital-funds-will-improve-in-2014-energy-execs-say/?cmpid=eefl" target="_blank" title="Access to capital will improve in 2014, energy execs say">Access to capital will improve in 2014</a></b><br />The survey provides an encouraging view of investment, <b><a href="http://fuelfix.com/blog/2013/07/29/deloitte-ma-energy-deals-down-30-percent-from-2012/?cmpid=eefl" target="_blank">even as deal making in the sector has slowed down</a></b>, with energy executives saying they want to focus on more efficient operations rather than expanding their reach.<br /><br />But private equity is bringing more than money to the table. The firms increasingly are offering their expertise in oil and gas, combined with financial discipline strategies, to increase returns, EY said in the report.<br /><br />Nearly two-thirds of private equity leaders believe that the main way they add value to oil and gas companies is by providing access to growth capital. But nearly 20 percent noted that they increasingly are allowing companies to expand geographically. And one in ten felt that the operational expertise provided by private equity also added value.<br />Private equity firms continue to see North America as the most attractive market for oil and gas investment, but expect investments in Latin America and in Asia to increase in the next two years, especially in China and Brazil.<br /><br />“We are seeing an influx of capital investment into the emerging markets,” said Andy Brogan, EY’s Global Oil and Gas Transaction Advisory Services Leader, in a written statement, explaining that the risk profiles of emerging markets typically varies with that of developed countries, allowing for investment diversification. “Companies are exercising caution, but optimism around the potential returns from acquisitions remains high.”

Private equity sees growing investment opportunities in oil and gas

In the post-financial crisis era, private equity firms are once again looking for the most promising opportunities, and oil and gas is pro...

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FRACK! local policy : new role.

<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj6SCdSZzAEWAJ_7VXZNC5as-WkZgaxeKE9moy9BDkEYYzTd4CcGjgU9We5uega4rHyrutVDjf_gD3tkAIxLGZWUCNxRkoyP9pqdR6XfWx2F4SaSsthB9s_TurrlnSViizO1gp7P4D2Ez30/s1600/3323f60.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj6SCdSZzAEWAJ_7VXZNC5as-WkZgaxeKE9moy9BDkEYYzTd4CcGjgU9We5uega4rHyrutVDjf_gD3tkAIxLGZWUCNxRkoyP9pqdR6XfWx2F4SaSsthB9s_TurrlnSViizO1gp7P4D2Ez30/s1600/3323f60.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;"><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;"><br /></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;"><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;">A new role for local policy</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;">Our industry is fond of distinguishing “above ground” from “below ground” factors when debating resource access. Below ground is geology, circumstances inherited from nature; above ground lure man-made conditions, such as the political, legal or economic framework.</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 role of “above ground” political discussions is likely to reach new heights in determining whether, where and when shale resources will be accessed. These debates will evolve around local, as opposed to big geopolitical, concerns - simply as a corollary of the widespread geographic distribution of shale 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;">The flukes of nature that distributed sizeable ‘conventional’ oil resources millions of years ago have distributed them in a highly concentrated fashion. Traditional politics of oil and gas are consequently, more often than not, reduced to the simple issue of who effectively controls these sweet spots, few and far between as they are.</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 the matter of tight oil and shale gas, in contrast, local debates will come to the fore, dominated by local attitudes toward energy, competition and environmental policies – all this in turn reflecting the interplay between the relatively even spatial distribution of shale resources and the role of free entry, competition and – and not least - environmental concerns in accessing them.</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 signs are everywhere already.</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 Europe, Poland and the Ukraine are aggressively competing for investment whereas France and Bulgaria have put moratoria on fracking in place, removing shale prospects for the time being. Germany and the UK are debating.</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;">China’s lack of success to date in accessing shale gas as planned is largely due to the preferential allocation of prospective areas to national monopolists, with high barriers to entry for everyone else - including companies with better technologies or less risk aversion, be they domestic or foreign. Russia faces an interesting trade-off between pursuing entirely new and high cost technologies to shift production into the concentrated resources of the Arctic, or of allowing a little more of the trial and error necessary to explore technology to access it’s well known shale plays. Albeit hesitantly, it is reforming its tax sector in pursuit of the second option.</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;">Even in the US, production from shale formations so far has remained concentrated in the middle of the country, leaving large known fields in the coastal areas of California and New York State untapped, in this case because of environmental concerns.</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;">All these examples reflect above ground, political discussions. They mirror local attitudes towards free access, competitive energy markets, and the environment. We should expect more of the same.</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;">Increasingly, decisions determining whether and how these resources are brought to market will be made in consumer’s own town halls and parliaments - not by ‘big’ geopolitics mirroring the capricious design of nature in allocating conventional oil endowments in faraway places.</div>

FRACK! local policy : new role.

A new role for local policy Our industry is fond of distinguishing “above ground” from “below ground” factors when debating resource access....

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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 ...

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Tullow’s Agete-1 Well Hits Oil Onshore Kenya

<div style="background-color: white; color: #333333; font-family: Arial, Helvetica, sans-serif; font-size: 14px; line-height: 22px;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj-P0Go0tI4z0k3AlkIgN3S4zv1WB4wSVsyZDBjbOeb_YKz13fNFL95tV2z_Ca00s7m0VKJPZDuFzIKCaHeum6mefYkwBnMRCRoMJpUEWSGPT-fNAIupEtfSvBLX_Es8kh-UjdnoIuacfWD/s1600/download.jpeg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj-P0Go0tI4z0k3AlkIgN3S4zv1WB4wSVsyZDBjbOeb_YKz13fNFL95tV2z_Ca00s7m0VKJPZDuFzIKCaHeum6mefYkwBnMRCRoMJpUEWSGPT-fNAIupEtfSvBLX_Es8kh-UjdnoIuacfWD/s1600/download.jpeg" /></a>Tullow Oil Plc announced in a press release that the Agete-1 exploration well in Block 13T, onshore northern Kenya, has discovered and sampled moveable oil with an estimated 100 m (328 ft) of net oil pay in good-quality sandstone reservoirs.</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;">The Agete-1 wildcat well is part of a major exploration campaign and has made the fifth consecutive oil discovery in the first of a chain of multiple rift basins across Tullow’s acreage in the region. This discovery derisks several follow-on prospects located to the north and is on trend with the Twiga South, Ekales, and Ngamia oil discoveries, Tullow said.</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;">The Sakson PR5 rig drilled Agete-1 to a total depth of 1,930 m (6,332 ft). Following completion of logging operations the well will be suspended for future flow testing, which will confirm the net pay count. The rig will then move to drill the Ewoi-1 wildcat in the east of this basin, targeting a rift flank prospect similar to the recent Etuko oil discovery, according to the 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;">Tullow operates the Agete-1 well with a 50% interest and Africa Oil (50%) has a nonoperated interest.</div><div style="background-color: white; color: #333333; font-family: Arial, Helvetica, sans-serif; font-size: 14px; line-height: 22px;">Elsewhere in Kenya, exploration and appraisal activities continue to accelerate with the Amosing-1 well in Block 10BB, expected to commence drilling before the end of November with the Weatherford 804 rig. The Etuko-1 well test in Block 10BB also is scheduled to commence this month with the PR Marriott 46 rig, which recently arrived in country, Tullow said. The Ekales-1 well test is scheduled to commence with the new SMP-5 workover unit in early December.</div><br />http://www.epmag.com/Production-Drilling/Tullows-Agete-1-Hits-Oil-Onshore-Kenya_126133

Tullow’s Agete-1 Well Hits Oil Onshore Kenya

Tullow Oil Plc announced in a press release that the Agete-1 exploration well in Block 13T, onshore northern Kenya, has discovered and sampl...

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Global Spare Oil Capacity Drops

<div id="ArticleToolBar" style="background-color: white; border-bottom-color: rgb(223, 223, 223); border-bottom-style: solid; border-bottom-width: 1px; border-top-color: rgb(223, 223, 223); border-top-style: solid; border-top-width: 1px; font-family: Arial, Helvetica, sans-serif; font-size: 8pt; line-height: 17px; margin: 0px 0px 10px; padding: 4px 0px;"><div id="Article_Byline" style="color: #666666; float: left; font-size: 13px; margin-left: 3px;">By Velda Addison, Hart Energy</div><div class="date" style="color: #747474; float: right; font-size: 12px; line-height: 11px; margin: 3px 0px 0px; text-align: right; white-space: nowrap; width: 160px;">September 25, 2013</div><div class="clear" style="clear: both;"></div></div><div id="ArticleContent" style="background-color: white; color: #333333; float: left; font-family: Arial, Helvetica, sans-serif; font-size: 14px; line-height: 22px; margin-top: 15px; width: 550px;"><div class="articleBody" style="padding-bottom: 40px;"><div style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><br /><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjhM8CHi4Vh5xIUWJ5I9y8SMjyRoLMfbFsf8V797WY0wa7pxT9fK1_cUfukPEzqC7veLpRsUvGA96FwfStPEkqqOVMFX_eBGEUEqlytknoy33T9vLjKvhUWBVZFyzcRKq7R-zSBWvcr5k16/s1600/MENA.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjhM8CHi4Vh5xIUWJ5I9y8SMjyRoLMfbFsf8V797WY0wa7pxT9fK1_cUfukPEzqC7veLpRsUvGA96FwfStPEkqqOVMFX_eBGEUEqlytknoy33T9vLjKvhUWBVZFyzcRKq7R-zSBWvcr5k16/s1600/MENA.jpg" /></a></div><a href="http://www.epmag.com/Images/2013/09/MENA.jpg?w110" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><i style="color: #333333;">Turmoil in the Middle East and North Africa continues to impact oil production, but the North American tight oil supply is helping the situation.</i></a></div>Geopolitical disruptions and lower than anticipated output from Libya, Iraq, and Nigeria are contributing to an overall thinning of global spare oil capacity.<br /><br />“We are at level of spare capacity that is pretty thin and doesn’t leave a lot of little wiggle room for any unexpected supply shortages,” Aaron Brady, senior director forIHS, said during the company’s energy forum. OPEC spare capacity – defined as spare capacity held by Saudi Arabia, the United Arab Emirates (UAE), and Kuwait – has dropped from just less than 5 MMb/d in January 2011 to between 2 MMb/d and 2.5 MMb/d in August 2013. “That’s the lower level of what the oil market is comfortable with.”<br /><br />Information presented during the IHS Forum session on global crude oil and refined products markets showed that OPEC Gulf producers are producing at near record highs to make up for the shortfalls elsewhere. Combined, Saudia Arabia, Kuwait, and the UAE produced about just more than 15.5 MMb/d in July 2013, up from about 14.5 MMb/d in January 2013. Production from the rest of OPEC dropped to about 15 MMb/d from just less than 16 MMb/d during the same time period.<br /><br />Geopolitical-driven supply disruptions are mostly to blame for the production declines, according to IHS. Libyan production has collapsed in the last few months, and uncertainty remains about when production will return to the impressive levels reached following the fall of the Mu’ammar al-Qadhafi regime. In addition, IHS is pessimistic about Iraqi production growth. The firm was expecting 200,000 b/d to 300,000 b/d of annual growth from Iraq over the next few years, but IHS now anticipates output to drop next year, which in turn will impact the region’s spare capacity.<br /><br />Assuming lower supplies from Iraq and Libya, IHS foresees a spare capacity of 3.5 MMb/d in 2015, about 1 MMb/d less than its previous forecast.<br /><br />“The clear message is that political stability in the Middle East and North Africa is worsening. We’re starting to think that maybe the market will carry more of a fear premium in the oil price than it otherwise would have without the situation in Syria, without the situation in Egypt, etc.,” Brady said. However, “That’s being counterbalanced by the North American supply surge.  … That is a crucial balancing factor in the market.”<br /><br />Tight oil production growth in North America has helped to fill gaps worldwide thanks to use of the same hydraulic fracturing and horizontal drilling techniques that led to plentiful shale gas supplies.<br /><br />“Canadian oil sands are part of it, but clearly the tight oil revolution in both the US and Canada is the big story. Imagine how the oil market might look today if we had not had the MMb/d year-over-year growth that we are seeing out of the US,” Brady said. “If we had not had the extra supply, given all of the outages that we are seeing right now in the OPEC countries and the non-OPEC countries that we’ve seen over the past year and a half, I think it’s safe to say that oil prices would be a lot higher than they are right now.”<br /><br />The potential impact would be even greater if tight oil plays worldwide were developed, leading to significant supplies.<br /><br />“There is a tremendous amount of tight oil potential around the world, but it’s going to take time to develop,” said Jim Burkhard, vice president, IHS.<br /><br />IHS’s recently released Global Tight Oil Study identified potential sources of tight oil. These include Europe, 27 play areas; North Asia, 26; South Asia, 20; Australasia, 17; the Middle East, 16; Africa, 15; South America, 14; and CIS, 13. The study revealed that the potential technically recoverable resources of these 148 plays could be nearly 300 Bbbl.<br /><br />“While it is too early to assess the proportion of this that could be commercially recovered, the potential is significant compared to the commercially recoverable resources of tight oil (43 Bbbl) estimated in North America by previous IHS studies,” IHS said in the release.<br /><br />The US has proven to be the dominant source of global oil production growth.<br /><br />“US tight oil is already playing a major role in tempering the upward price pressure,” Burkhard said. “We have been consistently increasing our outlook for tight oil production, so there is lots of growth still ahead of us.”<br /><br />And that is good news for the energy market, considering the turmoil in parts of the Middle East and North Africa may last longer.<br /><br />The Arab Spring brought not only the process of regime changes but also the collapsing of states, as central governments and institutions crumbled, creating a vacuum filled with decentralization and subnational groups working on very different basis, said Raad Alkadiri, senior director, petroleum risk sector, IHS. Clashing ideologies persist, and disagreements are crossing borders, with no mediator or central authority to help impose a consensus.<br /><br />“The structural instability has started to have a contagion effect. It’s beginning to impact countries that are not necessarily going through regime changes but are starting to fill the impact of that regime change,” Alkadiri said. “The Arab Spring in some ways has turned into the Arab Hangover. … The Middle East is starting to look in many places more like Nigeria and Afghanistan than it is looking like Poland or Eastern Europe after the fall of the Berlin Wall.”<br /><br />And the instability could spread to areas where oil and gas plays – frontier and traditional – are present, he said. This includes the Levant basin, the site of a number of significant number offshore gas discoveries since 1999.<br /><br />“This is a crisis that is not going to go away easily,” Alkadiri said. However, “not all parts of the Middle East are the same. … In the gulf states, there has been a cohesion that has been maintained.”<br /><br /><i>Contact the author, Velda Addison, at <a href="mailto:vaddison@hartenergy.com" style="color: #007ac2; text-decoration: none;">vaddison@hartenergy.com</a>.</i></div></div>

Global Spare Oil Capacity Drops

By Velda Addison, Hart Energy September 25, 2013 Turmoil in the Middle East and North Africa continues to impact oil production, but the Nor...

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East Mediterranean Finds Reveal Area’s Gas Potential

<div id="ArticleToolBar" style="background-color: white; border-bottom-color: rgb(223, 223, 223); border-bottom-style: solid; border-bottom-width: 1px; border-top-color: rgb(223, 223, 223); border-top-style: solid; border-top-width: 1px; font-family: Arial, Helvetica, sans-serif; font-size: 8pt; line-height: 17px; margin: 0px 0px 10px; padding: 4px 0px;"><br /><div id="Article_Byline" style="color: #666666; float: left; font-size: 13px; margin-left: 3px;"><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi_40Nz8Rj2DQld2F5fKR_NFKffr_47nSWrDlhIsMOU6AD6oZTpa_0kUEr9hFTin9pu7KrXXGE2_Ybfv7c4oupDa8u4LzZYTgrjv8JbG4XK_GefiXiNggVLRa58a332PDLOAJfhJ_5rSLdk/s1600/Interperted-seabed-horizon_Eastern-Mediterranean-MegaProject330x327.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="317" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi_40Nz8Rj2DQld2F5fKR_NFKffr_47nSWrDlhIsMOU6AD6oZTpa_0kUEr9hFTin9pu7KrXXGE2_Ybfv7c4oupDa8u4LzZYTgrjv8JbG4XK_GefiXiNggVLRa58a332PDLOAJfhJ_5rSLdk/s320/Interperted-seabed-horizon_Eastern-Mediterranean-MegaProject330x327.jpg" width="320" /></a></div><i style="color: #333333; font-size: 14px; line-height: 22px;">Despite its political concerns, the region has become an exploration hot spot. </i><span style="color: #333333; font-size: 14px; line-height: 22px;">Gas discoveries in the offshore Levant basin could change the energy supply dynamics in the Eastern Mediterranean region and spur natural gas exports in the near future, according to a new report.</span><br /><span style="color: #333333; font-size: 14px; line-height: 22px;">Reserve figures from countries in the region – Cyprus, Israel, Syria, Lebanon, Palestinian territories, and Jordan – are likely to change as more drilling takes place. Reserves from discoveries made since 1999 by Cyprus, Israel, and Palestine territories alone stand at more than 41.4 Tcf (1.17 Tcm), according to the US Energy Information Administration (EIA).</span></div></div><div id="ArticleContent" style="background-color: white; color: #333333; float: left; font-family: Arial, Helvetica, sans-serif; font-size: 14px; line-height: 22px; margin-top: 15px; width: 550px;"><div class="articleBody" style="padding-bottom: 40px;">In a global context, the region’s reserves do not even hit 1% of the world’s total proven oil and gas reserves, but the small region has become a hot spot following some big discoveries in recent months. The region also is a political hothouse and securing export routes will be a major challenge, especially with Syria’s current turmoil causing international concern.<br /><br /><b>Discoveries Offer Potential</b><br />“Uncertainty over the location and configuration of export infrastructure persists, but several proposals are making progress despite complications posed by regional security problems, territorial disputes, and macroeconomic uncertainty,” the EIA said.<br />“There have been a number of significant discoveries of natural gas in the Levant basin since 1999. Large fields in Cyprus and Israel contain most of the recently discovered natural gas reserves. Together the estimated recoverable reserves in these fields total more than 40.5 Tcf (1.15 Tcm) of gas.”<br />The main discoveries in the region are: Aphrodite in Cyprus with 7 Tcf (198.3 Bcm); Israel’s Tamar (10 Tcf/283.3 Bcm), Leviathan (18 Tcf/509.9 Bcm), Tanin (1.2 Tcf/33.9 Bcm), Karish (1.8 Tcf/50.9 Bcm), and Mari-B (1.5 Tcf/42.5 Bcm). Palestine also claims the Gaza Marine find (1 Tcf/28.3 Bcm) as its resource.<br />“A large share of the newly discovered energy resources will help meet domestic demand in the countries of the Eastern Mediterranean region, but there could be enough surplus natural gas to spur exports from Cyprus and Israel,” the report said.<br />“Determining how and where to export natural gas remains a topic of continued debate, with several proposed export routes competing for political and economic support.”<br /><b>Export Options</b><br />There are proposals, at different stages of development, to export gas via pipeline and as LNG from Cyprus and Israel.<br />A proposed LNG terminal in Cyprus already has started pre-FEED work and could start construction in 2015. Cyprus hopes to incorporate volumes from fields in offshore Israel into its plans, but Israel appears to prefer its own LNG facility at this stage, the EIA said.<br />Other natural gas export options include: a new pipeline from the Eastern Mediterranean to Crete, where the volumes could flow into the European grid; a new pipeline from the Eastern Mediterranean to Turkey; and the use of existing infrastructure to send volumes to Egypt for export via its LNG facilities.<br />“Several factors may influence how and when exports may come online: regional insecurity, such as the ongoing conflict in Syria and the recent unrest in Egypt; territorial disputes, such as that between Israel and Lebanon; and the status of economies in both potential exporting countries and destination markets like Europe and Asia,” the report said.<br /><b>Levant Basin Reserves</b><br />Extending across a large section of the offshore areas of the Eastern Mediterranean, the Levant basin is at the center of recent exploration activity in the region.<br />In a 2010 report, the US Geological Survey (USGS) estimated that the Levant basin has mean probable undiscovered oil resources of 1.7 Bbbl, natural gas resources of 122 Tcf (3.46 Tcm), and NGLs of 3.1 Bbbl.<br />“While the USGS estimates do not reflect the entirety of potential energy resources in the Eastern Mediterranean region, the resources of the Levant basin likely represent a large part of the overall resource base,” the EIA said.<br />“The USGS estimate of 1.7 Bbbl of oil, if discovered, would increase the region’s proved reserves by slightly less than 70%, while the 122 Tcf (3.5 Tcm) of natural gas represents more than six times the region’s current proved reserves.<br />“An additional 1.7 Bbbl of oil in the Levant basin would meet regional demand for roughly 20 years at current levels of consumption, while 122 Tcf (3.5 Tcm) of natural gas could meet current regional demand almost indefinitely.<br />“Nearly all the recent significant discoveries in the Levant basin were of natural gas, and, while offshore exploration may eventually yield recoverable quantities of oil, to date there have not been any commercially viable discoveries.”<br /><b>History And Politics</b><br />The oil and gas sector sprang into life in the Eastern Mediterranean around 80 years ago when oil exploration started in Syria following the successes in neighboring countries like Saudi Arabia.<br />Syria and Israel are also natural gas producers, although those sectors did not develop commercially until the 1980s in Syria and the mid-2000s in Israel. Jordan has had very low levels of production of oil and natural gas since the 1980s, and the country relies primarily on imports to meet internal demand.<br />In Cyprus, Lebanon, and the Palestinian territories oil exploration and development is still in their infancy; however, each is keen to capitalize on successful offshore exploration in the Levant basin to develop their own domestic natural gas reserves.<br />“Today, there is considerable focus on exploration and new projects, but international transit remains a key policy consideration of several Eastern Mediterranean countries. As the region continues to discover and develop hydrocarbon resources, the pressure to increase its role as an important energy hub is likely to increase,” the EIA said.<br /><b>Geology</b><br />The Eastern Mediterranean region includes eight significant basins: Cyprus, Eratosthenes High, Latakia, Levant, Judea, Nile Delta, Western Arabian Province, and Zagros Province.<br />The majority of the historical hydrocarbon production has taken place in the Nile Delta, Western Arabian Province, and Zagros Province.<br />Most of the Nile Delta basin lies within Egypt’s territorial waters, although there is a small area under Cypriot control. To date, there have not been any significant discoveries in the Cypriot territory, although much of Egypt’s offshore oil and gas production comes from the area.<br />The Western Arabian Province basin covers large parts of Jordan and Syria and extends into Iraq, Saudi Arabia, and Turkey. Most of Jordan’s fields and many of Syria’s are in the Western Arabian Province.<br />The Zagros Province basin extends from Turkey in the north, through Iraq and Iran, terminating in the Gulf of Oman in the south. Several of Syria’s largest fields are part of the Zagros Province basin, but the vast majority of fields in this basin are in other countries, including Iraq, Iran, and Saudi Arabia.<br />“While the Western Arabian and Zagros province basins account for most of the historical hydrocarbon production in the region, most of the focus today is on the Levant basin due to the recent discoveries,” the EIA report said.<br /><div class="MsoNormal"><b><span style="font-family: Calibri, sans-serif; font-size: 11pt;">Recent gas discoveries in Levant basin</span></b></div><table border="1" cellpadding="0" cellspacing="0" class="MsoTableMediumList2Accent1" style="border-collapse: collapse; border: none; width: 84%px;"><tbody><tr><td nowrap="nowrap" style="border: none; padding: 0in 5.4pt; width: 75.625px;" valign="top" width="19%"><div class="MsoNormal"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">Country</span></div></td><td style="border: none; padding: 0in 5.4pt; width: 79.625px;" valign="top" width="20%"><div align="center" class="MsoNormal" style="text-align: center;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">Discovery date</span></div></td><td style="border: none; padding: 0in 5.4pt; width: 78.625px;" valign="top" width="20%"><div align="center" class="MsoNormal" style="text-align: center;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">Field name</span></div></td><td style="border: none; padding: 0in 5.4pt; width: 78.625px;" valign="top" width="20%"><div align="center" class="MsoNormal" style="text-align: center;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">Estimated recoverable reserves</span></div></td><td style="border: none; padding: 0in 5.4pt; width: 78.625px;" valign="top" width="20%"><div align="center" class="MsoNormal" style="text-align: center;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">Year of first production</span></div></td></tr><tr><td nowrap="nowrap" style="border: none; padding: 0in 5.4pt; width: 75.625px;" valign="top" width="19%"><div class="MsoNormal"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">Cyprus</span></div></td><td style="background-color: #d3dfee; background-position: initial initial; background-repeat: initial initial; border: none; padding: 0in 5.4pt; width: 79.625px;" valign="top" width="20%"><div align="center" class="MsoNormal" style="text-align: center;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">2011</span></div></td><td style="background-color: #d3dfee; background-position: initial initial; background-repeat: initial initial; border: none; padding: 0in 5.4pt; width: 78.625px;" valign="top" width="20%"><div align="center" class="MsoNormal" style="text-align: center;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">Aphrodite</span></div></td><td style="background-color: #d3dfee; background-position: initial initial; background-repeat: initial initial; border: none; padding: 0in 5.4pt; width: 78.625px;" valign="top" width="20%"><div align="center" class="MsoNormal" style="text-align: center;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">7 Tcf</span></div></td><td style="background-color: #d3dfee; background-position: initial initial; background-repeat: initial initial; border: none; padding: 0in 5.4pt; width: 78.625px;" valign="top" width="20%"><div align="center" class="MsoNormal" style="text-align: center;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">2017</span></div></td></tr><tr><td nowrap="nowrap" style="border: none; padding: 0in 5.4pt; width: 75.625px;" valign="top" width="19%"><div class="MsoNormal"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">Israel</span></div></td><td style="border: none; padding: 0in 5.4pt; width: 79.625px;" valign="top" width="20%"><div align="center" class="MsoNormal" style="text-align: center;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">1999</span></div></td><td style="border: none; padding: 0in 5.4pt; width: 78.625px;" valign="top" width="20%"><div align="center" class="MsoNormal" style="text-align: center;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">Noa</span></div></td><td style="border: none; padding: 0in 5.4pt; width: 78.625px;" valign="top" width="20%"><div align="center" class="MsoNormal" style="text-align: center;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">40 Bcf</span></div></td><td style="border: none; padding: 0in 5.4pt; width: 78.625px;" valign="top" width="20%"><div align="center" class="MsoNormal" style="text-align: center;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">2012</span></div></td></tr><tr><td nowrap="nowrap" style="border: none; padding: 0in 5.4pt; width: 75.625px;" valign="top" width="19%"><div class="MsoNormal"><br /></div></td><td style="background-color: #d3dfee; background-position: initial initial; background-repeat: initial initial; border: none; padding: 0in 5.4pt; width: 79.625px;" valign="top" width="20%"><div align="center" class="MsoNormal" style="text-align: center;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">2000</span></div></td><td style="background-color: #d3dfee; background-position: initial initial; background-repeat: initial initial; border: none; padding: 0in 5.4pt; width: 78.625px;" valign="top" width="20%"><div align="center" class="MsoNormal" style="text-align: center;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">Mari-B</span></div></td><td style="background-color: #d3dfee; background-position: initial initial; background-repeat: initial initial; border: none; padding: 0in 5.4pt; width: 78.625px;" valign="top" width="20%"><div align="center" class="MsoNormal" style="text-align: center;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">1.5 Tcf</span></div></td><td style="background-color: #d3dfee; background-position: initial initial; background-repeat: initial initial; border: none; padding: 0in 5.4pt; width: 78.625px;" valign="top" width="20%"><div align="center" class="MsoNormal" style="text-align: center;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">2004</span></div></td></tr><tr><td nowrap="nowrap" style="border: none; padding: 0in 5.4pt; width: 75.625px;" valign="top" width="19%"><div class="MsoNormal"><br /></div></td><td style="border: none; padding: 0in 5.4pt; width: 79.625px;" valign="top" width="20%"><div align="center" class="MsoNormal" style="text-align: center;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">2009</span></div></td><td style="border: none; padding: 0in 5.4pt; width: 78.625px;" valign="top" width="20%"><div align="center" class="MsoNormal" style="text-align: center;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">Dalit</span></div></td><td style="border: none; padding: 0in 5.4pt; width: 78.625px;" valign="top" width="20%"><div align="center" class="MsoNormal" style="text-align: center;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">500 Bcf</span></div></td><td style="border: none; padding: 0in 5.4pt; width: 78.625px;" valign="top" width="20%"><div align="center" class="MsoNormal" style="text-align: center;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">2013</span></div></td></tr><tr><td nowrap="nowrap" style="border: none; padding: 0in 5.4pt; width: 75.625px;" valign="top" width="19%"><div class="MsoNormal"><br /></div></td><td style="background-color: #d3dfee; background-position: initial initial; background-repeat: initial initial; border: none; padding: 0in 5.4pt; width: 79.625px;" valign="top" width="20%"><div align="center" class="MsoNormal" style="text-align: center;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">2009</span></div></td><td style="background-color: #d3dfee; background-position: initial initial; background-repeat: initial initial; border: none; padding: 0in 5.4pt; width: 78.625px;" valign="top" width="20%"><div align="center" class="MsoNormal" style="text-align: center;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">Tamar</span></div></td><td style="background-color: #d3dfee; background-position: initial initial; background-repeat: initial initial; border: none; padding: 0in 5.4pt; width: 78.625px;" valign="top" width="20%"><div align="center" class="MsoNormal" style="text-align: center;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">10 Tcf</span></div></td><td style="background-color: #d3dfee; background-position: initial initial; background-repeat: initial initial; border: none; padding: 0in 5.4pt; width: 78.625px;" valign="top" width="20%"><div align="center" class="MsoNormal" style="text-align: center;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">2013</span></div></td></tr><tr><td nowrap="nowrap" style="border: none; padding: 0in 5.4pt; width: 75.625px;" valign="top" width="19%"><div class="MsoNormal"><br /></div></td><td style="border: none; padding: 0in 5.4pt; width: 79.625px;" valign="top" width="20%"><div align="center" class="MsoNormal" style="text-align: center;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">2010</span></div></td><td style="border: none; padding: 0in 5.4pt; width: 78.625px;" valign="top" width="20%"><div align="center" class="MsoNormal" style="text-align: center;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">Leviathan</span></div></td><td style="border: none; padding: 0in 5.4pt; width: 78.625px;" valign="top" width="20%"><div align="center" class="MsoNormal" style="text-align: center;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">18 Tcf</span></div></td><td style="border: none; padding: 0in 5.4pt; width: 78.625px;" valign="top" width="20%"><div align="center" class="MsoNormal" style="text-align: center;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">2016</span></div></td></tr><tr><td nowrap="nowrap" style="border: none; padding: 0in 5.4pt; width: 75.625px;" valign="top" width="19%"><div class="MsoNormal"><br /></div></td><td style="background-color: #d3dfee; background-position: initial initial; background-repeat: initial initial; border: none; padding: 0in 5.4pt; width: 79.625px;" valign="top" width="20%"><div align="center" class="MsoNormal" style="text-align: center;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">2011</span></div></td><td style="background-color: #d3dfee; background-position: initial initial; background-repeat: initial initial; border: none; padding: 0in 5.4pt; width: 78.625px;" valign="top" width="20%"><div align="center" class="MsoNormal" style="text-align: center;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">Dolphin</span></div></td><td style="background-color: #d3dfee; background-position: initial initial; background-repeat: initial initial; border: none; padding: 0in 5.4pt; width: 78.625px;" valign="top" width="20%"><div align="center" class="MsoNormal" style="text-align: center;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">80 Bcf</span></div></td><td style="background-color: #d3dfee; background-position: initial initial; background-repeat: initial initial; border: none; padding: 0in 5.4pt; width: 78.625px;" valign="top" width="20%"><div align="center" class="MsoNormal" style="text-align: center;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">unknown</span></div></td></tr><tr><td nowrap="nowrap" style="border: none; padding: 0in 5.4pt; width: 75.625px;" valign="top" width="19%"><div class="MsoNormal"><br /></div></td><td style="border: none; padding: 0in 5.4pt; width: 79.625px;" valign="top" width="20%"><div align="center" class="MsoNormal" style="text-align: center;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">2012</span></div></td><td style="border: none; padding: 0in 5.4pt; width: 78.625px;" valign="top" width="20%"><div align="center" class="MsoNormal" style="text-align: center;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">Shimshon</span></div></td><td style="border: none; padding: 0in 5.4pt; width: 78.625px;" valign="top" width="20%"><div align="center" class="MsoNormal" style="text-align: center;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">300 Bcf</span></div></td><td style="border: none; padding: 0in 5.4pt; width: 78.625px;" valign="top" width="20%"><div align="center" class="MsoNormal" style="text-align: center;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">unknown</span></div></td></tr><tr><td nowrap="nowrap" style="border: none; padding: 0in 5.4pt; width: 75.625px;" valign="top" width="19%"><div class="MsoNormal"><br /></div></td><td style="background-color: #d3dfee; background-position: initial initial; background-repeat: initial initial; border: none; padding: 0in 5.4pt; width: 79.625px;" valign="top" width="20%"><div align="center" class="MsoNormal" style="text-align: center;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">2012</span></div></td><td style="background-color: #d3dfee; background-position: initial initial; background-repeat: initial initial; border: none; padding: 0in 5.4pt; width: 78.625px;" valign="top" width="20%"><div align="center" class="MsoNormal" style="text-align: center;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">Tanin</span></div></td><td style="background-color: #d3dfee; background-position: initial initial; background-repeat: initial initial; border: none; padding: 0in 5.4pt; width: 78.625px;" valign="top" width="20%"><div align="center" class="MsoNormal" style="text-align: center;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">1.2 Tcf</span></div></td><td style="background-color: #d3dfee; background-position: initial initial; background-repeat: initial initial; border: none; padding: 0in 5.4pt; width: 78.625px;" valign="top" width="20%"><div align="center" class="MsoNormal" style="text-align: center;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">unknown</span></div></td></tr><tr><td nowrap="nowrap" style="border: none; padding: 0in 5.4pt; width: 75.625px;" valign="top" width="19%"><div class="MsoNormal"><br /></div></td><td style="border: none; padding: 0in 5.4pt; width: 79.625px;" valign="top" width="20%"><div align="center" class="MsoNormal" style="text-align: center;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">2013</span></div></td><td style="border: none; padding: 0in 5.4pt; width: 78.625px;" valign="top" width="20%"><div align="center" class="MsoNormal" style="text-align: center;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">Karish</span></div></td><td style="border: none; padding: 0in 5.4pt; width: 78.625px;" valign="top" width="20%"><div align="center" class="MsoNormal" style="text-align: center;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">1.8 Tcf</span></div></td><td style="border: none; padding: 0in 5.4pt; width: 78.625px;" valign="top" width="20%"><div align="center" class="MsoNormal" style="text-align: center;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">unknown</span></div></td></tr><tr><td nowrap="nowrap" style="border: none; padding: 0in 5.4pt; width: 75.625px;" valign="top" width="19%"><div class="MsoNormal"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">Palestine</span></div></td><td style="background-color: #d3dfee; background-position: initial initial; background-repeat: initial initial; border: none; padding: 0in 5.4pt; width: 79.625px;" valign="top" width="20%"><div align="center" class="MsoNormal" style="text-align: center;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">2000</span></div></td><td style="background-color: #d3dfee; background-position: initial initial; background-repeat: initial initial; border: none; padding: 0in 5.4pt; width: 78.625px;" valign="top" width="20%"><div align="center" class="MsoNormal" style="text-align: center;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">Gaza Marine</span></div></td><td style="background-color: #d3dfee; background-position: initial initial; background-repeat: initial initial; border: none; padding: 0in 5.4pt; width: 78.625px;" valign="top" width="20%"><div align="center" class="MsoNormal" style="text-align: center;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">1 Tcf</span></div></td><td style="background-color: #d3dfee; background-position: initial initial; background-repeat: initial initial; border: none; padding: 0in 5.4pt; width: 78.625px;" valign="top" width="20%"><div align="center" class="MsoNormal" style="text-align: center;"><span style="font-family: Calibri, sans-serif; font-size: 11pt;">unknown</span></div></td></tr></tbody></table><div class="MsoNormal"><span style="font-family: Calibri, sans-serif; font-size: 11pt;"><i>Source: EIA</i></span><br /><span style="font-family: Calibri, sans-serif; font-size: 11pt;"><i><br /></i></span><a href="http://www.epmag.com/Exploration/East-Mediterranean-Finds-Reveal-Areas-Gas-Potential_121800" style="font-family: Times; font-size: medium; line-height: normal;">East Mediterranean Finds Reveal Area’s Gas Potential</a> - Full Article</div></div></div>

East Mediterranean Finds Reveal Area’s Gas Potential

Despite its political concerns, the region has become an exploration hot spot.  Gas discoveries in the offshore Levant basin could change th...

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