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Brazil prepares for the second great LNG bailout

Brazil should give up electricity for Lent, a Rio de Janeiro-based analyst told Interfax on Wednesday, with a touch of gallows humour. However, it is no laughing matter: the hydropower-dependent country has just recorded the second-driest January in 80 years, and the prospect of electricity rationing looms. The 100 days between Carnival and kick-off for the 2014 World Cup now threaten to be the toughest period of Dilma Rousseff’s presidency. Rousseff, who has staked her political credibility on the lights staying on, is likely to write blank cheques for LNG to bail out the power sector. Analysts blame both the structural weakness of Brazil’s power sector – which affords the country little flexibility during supply tightness – and poor policy decisions for the situation. As reservoir levels run low, costly LNG imports appear to be the country’s last resort for the second consecutive […]

Posted On : Published By : Tom Whipple
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Drilling Surge in Permian Drives U.S. Oil Rigs to Record

Rigs targeting oil in the U.S. surged to a record this week as producers from Concho Resources Inc. (CXO) to Pioneer Natural Resources Co. (PXD) boost horizontal drilling in the Permian Basin. U.S. oil rigs jumped by 13 to 1,443, the highest level since Baker Hughes Inc. (BHI) separated its oil and gas rig counts in 1987, the Houston-based company said in a weekly report posted on its website today. Rigs drilling horizontally in the Texas-New Mexico formation rose by 10 to 265, the highest level since at least February 2011, while vertical rigs there gained three and the directional count added one. “One could argue that all of the increase in the oil rig count this week was because of the Permian,” James Williams , president of WTRG Economics in London , Arkansas , said by telephone. “While it’s one of the oldest fields in the U.S., there […]

Posted On : Published By : Tom Whipple
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Baker Hughes: US drilling rig count spikes to 1,792

The US drilling rig count jumped 23 units to 1,792 rigs working during the week ended Mar. 7, Baker Hughes Inc. reported. All 23 of those rigs were land-based, bringing that total to 1,719. Unchanged from a week ago were rigs drilling offshore at 55 and rigs drilling in inland waters at 18. A 13-unit rise in oil rigs to 1,443 outdid a 10-unit increase in gas rigs to 345. Rigs considered unclassified were unchanged at 4. Horizontal drilling rigs leaped 21 units to 1,202 while directional drilling rigs edged up 1 to 198. Canada’s rig count, meanwhile, dropped 39 units to 587, but still remained 7 rigs higher than its tally from a year ago this week. A vast majority of those units lost were oil rigs, which relinquished 34 to a total of 389. Gas rigs declined 5 units to 198. Major states, basins Reflecting the upward […]

Posted On : Published By : Tom Whipple
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Egypt: IPR finds oil, gas in Southwest Gebel El-Zeit prospect

Irving, Tex., independent IPR Inc. has made a discovery in its first drilled well, SWGEZ-5, in its Southwest Gebel El-Zeit concession in the Gulf of Suez offshore Egypt. IPR operates the block, which was acquired from Devon Energy International in 2007. IPR constructed a modern 3-slot platform, 9.5-km, 8.5-in. pipeline from platform to shore, and state-of-the art surface facilities to receive future deliveries. SWGEZ-5 was drilled using Advanced Energy Systems’ ADM-IV jack up rig under the supervision of IPR’s operational teams and its joint venture operating company, PetroHurghada. The well took 43 days to drill, test, and complete to a total depth of 8,020 ft in the basement of the Precambrian age. The well encountered a total of 107 ft of net hydrocarbon pay in Late Cretaceous age Nubia and Matulla formations, as targeted prolific producers in the Gulf of Suez. SWGEZ-5 tested naturally flowing oil and gas at […]

Posted On : Published By : Tom Whipple
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Crude oil propping up rail business, AAR says

Crude oil deliveries now account for a major part of the railroad business, the senior vice president of the Association of American Railroads said. AAR said more than half of the 20 commodity groups carried by rail saw decreases in their year-on-year deliveries in February. AAR Senior Vice President John Gray said better weather and a healthier economy should lead to improvements in rail volumes in the month ahead. "In the meantime, crude oil has become a significant part of the railroad business," he said in a statement Thursday. AAR reported 127,534 carloads of crude oil, or about 89 million barrels of oil, were sent by rail from Jan. 1 to March 1, a 6.5 percent increase from the same time last year. However, the 13,244 carloads, or 9.3 million barrels of oil, for the week ending March 1 was down 3.8 percent compared […]

Posted On : Published By : Tom Whipple
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Enbridge line to bring Bakken, western Canadian crude eastward

A decision by Canada’s National Energy Board to approve of a plan by Enbridge to reverse an oil pipeline will open up new markets, a trade group said. Canada’s National Energy Board, an independent federal regulator, gave Enbridge approval to reverse the 397-mile segment of its so-called Line 9 pipeline between Ontario and Quebec. The decision gives Enbridge consent to increase the pipeline’s overall capacity by 25 percent to 300,000 barrels per day. "Enbridge will be permitted to operate all of Line 9 in an eastward direction in order to transport crude oil from western Canada and the U.S. Bakken region to refineries in Ontario and Quebec," the NEB said in a statement Thursday. Greg Stringham, vice president of oil sands projects at the Canadian Association of Petroleum Producers, said the NEB’s decision adds diversity to the nation’s energy market. "The NEB’s decision is an important milestone that again […]

Posted On : Published By : Tom Whipple
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'Carbon bubble' threatens stock markets, say MPs

Investments in coal and oil may be overvalued, according to MPs The world’s financial markets could be creating a "carbon bubble" by over valuing the fossil fuel assets of large companies say MPs. Much of this coal and oil may have to be left in the ground to combat climate change, according to the Environmental Audit Committee (EAC) The Committee also hits out at the lack of green finance. Less than half the £200bn needed to deliver emissions cuts by 2020 is in place they say. A number of studies in recent years have warned that stock markets around the world have overvalued companies with large holdings of coal, oil and gas. The problem stems from the fact that countries including the UK agreed at a UN meeting in Mexico in 2010 to limit global temperature rises to 2C. To achieve this, economists including Sir Nicholas Stern have calculated […]

Posted On : Published By : Tom Whipple
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‘Carbon bubble’ threatens stock markets, say MPs

Investments in coal and oil may be overvalued, according to MPs The world’s financial markets could be creating a "carbon bubble" by over valuing the fossil fuel assets of large companies say MPs. Much of this coal and oil may have to be left in the ground to combat climate change, according to the Environmental Audit Committee (EAC) The Committee also hits out at the lack of green finance. Less than half the £200bn needed to deliver emissions cuts by 2020 is in place they say. A number of studies in recent years have warned that stock markets around the world have overvalued companies with large holdings of coal, oil and gas. The problem stems from the fact that countries including the UK agreed at a UN meeting in Mexico in 2010 to limit global temperature rises to 2C. To achieve this, economists including Sir Nicholas Stern have calculated […]

Posted On : Published By : Tom Whipple
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Gazprom Threatens Ukraine Supplies Over Late Payment

Gazprom said Friday it may suspend gas supply to Ukraine after Kiev failed to pay for February deliveries, but Russia’s gas monopoly said it will continue transit shipments to Europe. "We cannot supply gas for free. Either Ukraine redeems debt and pays for the current deliveries, or there is a risk to return to the situation of early 2009," Gazprom Chairman Alexei Miller said. Mr. Miller said that Ukraine now owes $1.89 billion for gas after it failed to meet a March 7 deadline for payment of the February deliveries. Russia switched off natural gas to Ukraine at the start of 2009 after talks on a new contract ended in failure. The failure of those talks lead to the temporary suspension of deliveries to Europe through Ukraine. But a spokesman for Gazprom said the current dispute with Ukraine wouldn’t have impact on supplies to the rest of Europe. […]

Posted On : Published By : Tom Whipple
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Why Russia Can’t Afford Another Cold War

in 1958. The old Soviet Union was all but impervious to foreign economic or business pressure. Credit Agence France-Presse — Getty Images Russian troops pour over a border. An autocratic Russian leader blames the United States and unspecified “radicals and nationalists” for meddling. A puppet leader pledges fealty to Moscow. It’s no wonder the crisis in Ukraine this week drew comparisons to Hungary in 1956 and Czechoslovakia in 1968 or that a chorus of pundits proclaimed the re-emergence of the Cold War. But there’s at least one major difference between then and now: Moscow has a stock market. Continue reading the main story Under the autocratic grip of President Vladimir Putin , Russia may be a democracy in name only, but the gyrations of the Moscow stock exchange provided a minute-by-minute referendum on his military and diplomatic actions. On […]

Posted On : Published By : Tom Whipple