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Big Oil's Tricky Mix of Shale and Scale–Heard on the Street

If you are going to be big, you have to make it work for you. The problem for Big Oil is that one of the world’s biggest opportunities, shale, doesn’t necessarily reward bigness. Royal Dutch Shell’s partial retreat from U.S. shale this year suggests it overreached as it scooped up assets there. Latecomers always risk getting the crumbs after first-movers have picked up the choice cuts. But there also is a structural problem confronting Big Oil. Until recently, majors went anywhere but the onshore U.S., thinking it was tapped out. Instead, they hunted “elephant” fields with huge reserves in deep-water locations or far-flung countries. This played to their strengths. Huge balance sheets and solid credit ratings allowed them to finance megaprojects. Bob Brackett, analyst at Sanford C. Bernstein, characterizes the majors’ model as deploying capital and technical teams with “lots of command and control.” One advantage: This model scales […]

Posted On : Published By : Tom Whipple
Category:

Big Oil’s Tricky Mix of Shale and Scale–Heard on the Street

If you are going to be big, you have to make it work for you. The problem for Big Oil is that one of the world’s biggest opportunities, shale, doesn’t necessarily reward bigness. Royal Dutch Shell’s partial retreat from U.S. shale this year suggests it overreached as it scooped up assets there. Latecomers always risk getting the crumbs after first-movers have picked up the choice cuts. But there also is a structural problem confronting Big Oil. Until recently, majors went anywhere but the onshore U.S., thinking it was tapped out. Instead, they hunted “elephant” fields with huge reserves in deep-water locations or far-flung countries. This played to their strengths. Huge balance sheets and solid credit ratings allowed them to finance megaprojects. Bob Brackett, analyst at Sanford C. Bernstein, characterizes the majors’ model as deploying capital and technical teams with “lots of command and control.” One advantage: This model scales […]

Posted On : Published By : Tom Whipple
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Iran Talks Tread Tricky Line on Sanctions

U.S. officials head to Geneva this week for a pivotal new round of discussions with Iran over its nuclear program. So you can be sure some tricky talks lie just ahead for the Obama administration. Tricky negotiations with the Iranians, of course. But also tricky negotiations with Congress and with Israel over the future of economic sanctions against the Iranian regime. The administration and its partners among big world powers—Britain, France, Russia, China and Germany—believe they are moving toward a two-phase agreement with Iran designed to rein in its nuclear program before it becomes capable of producing nuclear weapons. Under the first phase of that deal, Iran would freeze elements of its nuclear program immediately in return for what officials say would be “modest” relief from some of the broad and crippling sanctions the West put in place. And that’s where the rub comes in. That first phase, the […]

Posted On : Published By : Tom Whipple
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British Columbia's LNG industry to face stiff competition for Asian gas markets

Houston (Platts)–4Nov2013/541 pm EST/2241 GMT Developers of proposed liquefied natural gas terminals on the west coast of Canada’s British Columbia province will have to move quickly to secure supply contracts if they want to beat the competition to ship gas to Asian markets, the co-author of a study on the subject said Monday. “That means they need to act aggressively, they need to compete effectively and they need to be in the market to lock down the contracts that will underpin their projects,” said Len Coad, director of the Calgary-based Center for Natural Resource Policy. The province’s developing LNG industry “must move nimbly and quickly to beat out the competition and capture market share in Asia,” according to the 21-page study, released last week by the Canada West Foundation. Article continues below… Request a free trial of: LNG Daily LNG Daily LNG Daily is essential reading as LNG supply […]

Posted On : Published By : Tom Whipple
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British Columbia’s LNG industry to face stiff competition for Asian gas markets

Houston (Platts)–4Nov2013/541 pm EST/2241 GMT Developers of proposed liquefied natural gas terminals on the west coast of Canada’s British Columbia province will have to move quickly to secure supply contracts if they want to beat the competition to ship gas to Asian markets, the co-author of a study on the subject said Monday. “That means they need to act aggressively, they need to compete effectively and they need to be in the market to lock down the contracts that will underpin their projects,” said Len Coad, director of the Calgary-based Center for Natural Resource Policy. The province’s developing LNG industry “must move nimbly and quickly to beat out the competition and capture market share in Asia,” according to the 21-page study, released last week by the Canada West Foundation. Article continues below… Request a free trial of: LNG Daily LNG Daily LNG Daily is essential reading as LNG supply […]

Posted On : Published By : Tom Whipple
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US Shale Boom Will Boost LPG Exports and Bring Down Prices

More US Shale Boom Will Boost LPG Exports and Bring Down Prices LONDON, Nov 4 (Reuters) – A U.S. energy drilling boom is revolutionizing the niche market for liquefied petroleum gas (LPG), bringing down global prices and challenging established exporters in the Middle East. The changes are the latest sign of the global impact of a drilling renaissance in the United States that has already hit oil and natural gas. And like oil and gas, it is U.S. producers of LPG who are set to gain most while established exporters may struggle with new competition in a suddenly altered landscape. Unconventional oil and gas drilling, including shale gas extraction from fracking, is controversial because it requires large amounts of water and chemicals to be pumped at high pressure into the earth, and some countries such as France and Bulgaria have banned the technology. In the United States, however, shale […]

Posted On : Published By : Tom Whipple
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Iran Burning Gas Worth Billions Set to Lead Exporters Group

Iran will lead a club of the world’s biggest natural gas exporters as its own shipments abroad are hampered by U.S. and European Union sanctions that force the country to burn off billions of dollars worth of the fuel. Mohammad Hossein Adeli , the country’s former deputy foreign minister, was elected secretary-general of the Gas Exporting Countries Forum , whose 13 member countries hold 60 percent of the world’s reserves, the group said yesterday in a statement. Adeli, who will replace Leonid Bokhanovsky of Russia next year, vowed to turn the Persian nation into a “major player among the gas exporting countries,” he told reporters after a group meeting in Tehran. U.S. and EU trade sanctions over Iran’s nuclear program have cut the Persian nation’s crude exports, its largest revenue source, by half since 2011 and are stifling projects to export some of its gas reserves, the world’s largest. […]

Posted On : Published By : Tom Whipple
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Iran urges elimination of all nukes ahead of talks

UNITED NATIONS (AP) — Iran’s U.N. ambassador called nuclear weapons the greatest threat to present and future generations on Monday, just days before Tehran resumes talks with six world powers aimed at reining in its suspect nuclear program. Mohammad Khazaee told a meeting of the General Assembly’s disarmament committee that “the total elimination of these inhuman weapons is the only absolute guarantee against their threat or use.” The election of President Hassan Rouhani, viewed as a moderate, has led to a revival of talks in Geneva aimed at allaying Western fears that the real aim of Iran’s nuclear enrichment program is producing nuclear weapons, not nuclear energy and medical isotopes as it claims. For years, Iran has insisted that its nuclear program is purely peaceful, and that it opposes nuclear weapons, but Khazaee’s comments were especially strong. “Before they consume us all together, we must consume them all together,” […]

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Iranian official says Iran doing its part on gas pipeline to Pakistan

TEHRAN, Nov. 4 (UPI) — Iran has done most of the work needed to get a troubled gas pipeline developed for the Pakistani market, Iranian Oil Minister Bijan Zanganeh said. “Iran has done a major part of the work [necessary] for the implementation of the project and now Iran’s gas has reached near the border with Pakistan with a high capacity,” Zanganeh was quoted as saying in a Press TV report Sunday. Zanganeh questioned the prospects for the pipeline last week, saying Pakistan was having trouble financing construction of the pipeline in its territory. Iran’s Fars News Agency quoted Pakistani lawmaker Ijaz Hussain Jakhrani as saying the pipeline “must be completed.” Pakistan’s aging infrastructure and energy sector mismanagement have left most the country without a reliable source of electricity, observers say. The U.S. government warned Pakistan earlier this year the pipeline would violate sanctions targeting Iran’s energy sector. U.S. […]

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Iraq mulls prospects for oil pipeline from Kurdish north to Turkey

ERBIL, Iraq, Nov. 4 (UPI) — Building a pipeline to carry oil from the Kurdish north of Iraq to Turkey will take longer than Kurdish officials say, a Turkish Energy Ministry spokesman said. The unidentified spokesman told the Platts energy news service in an article published Friday it’s not possible to build a oil pipeline in the time expected by Kurdish officials. Ashti Hawrami , natural resources minister for the semiautonomous Kurdistan Regional Government, said last week it would take less than two years to build a pipeline to carry 1 million barrels of oil per day from Kurdish fields through Turkey. Pipelines in northern Iraq have been the target of frequent terrorist attacks. Officials in the semiautonomous Kurdish north of Iraq blamed al-Qaida for a string of bombings in Erbil, the Kurdish capital, that left six people dead and more than 40 others injured in late September. The […]

Posted On : Published By : Tom Whipple