Daily Archives: January 27, 2012
Two export pacts a coup for Beijing
By Kelly Hearn – Special to The Washington Times
BUENOS AIRES — Off the coast of Rio de Janeiro — below a mile of water and two miles of shifting rock, sand and salt — is an ultradeep sea of oil that could turn Brazil into the world’s fourth-largest oil producer, behind Russia, Saudi Arabia and the United States.
The country’s state-controlled oil company, Petrobras, expects to pump 4.9 million barrels a day from the country’s oil fields by 2020, with 40 percent of that coming from the seabed. One and a half million barrels will be bound for export markets.
The United States wants it, but China is getting it.
Less than a month after President Obama visited Brazil in March to make a pitch for oil, Brazilian President Dilma Rousseff was off to Beijing to sign oil contracts with two huge state-owned Chinese companies.
The deals are part of a growing oil relationship between the two countries that, thanks to a series of billion-dollar agreements, is giving China greater influence over Brazil’s oil frontier.
Chinese oil companies are pushing to meet mandatory expansion targets by inking deals across Africa and Latin America, but they are especially interested in Brazil.
“With the Lula and Carioca discoveries alone, Brazil added a possible 38 billion barrels of estimated recoverable oil,” said Luis Giusti, a former president of Venezuela’s state oil company, PDVSA, referring to the new Brazilian oil fields.
“That immediately changed the picture,” he said, adding that Brazil is on track to become “an oil giant.”
During Mrs. Rousseff’s visit to China, Brazil’s Petrobras signed a technology cooperation deal with the China Petroleum & Chemical Corp., or Sinopec.
Petrobras also signed a memorandum of understanding with Sinochem, a massive state-owned company with interests in energy, real estate and agrichemicals.
The Sinochem deal aims to identify and build “business opportunities in the fields of exploration and production, oil commercialization and mature oil-field recovery,” according to Petrobras.
The relationship with China goes back to at least two years before Mr. Obama came to Brazil to applaud the oil discovery and tell Mrs. Rouseff:
“We want to work with you. We want to help with technology and support to develop these oil reserves safely, and, when you’re ready to start selling, we want to be one of your best customers.”
China rescued Petrobras in 2009, when the oil company was looking at tight credit markets to finance a record-setting $224 billion investment plan. China’s national development bank offered a $10 billion loan on the condition that Petrobras ship oil to China for 10 years.
A chunk of Brazil’s oil real estate appeared on China’s portfolio in 2010, when Sinopec agreed to pay $7.1 billion for 40 percent of Repsol-YPF of Brazil, which has stakes in the now internationally famous Santos Basin, and the Sapinhoa field, which has an estimated recoverable volume of 2.1 billion barrels. Statoil of Norway also agreed that year to sell 40 percent of the offshore Peregrino field to Sinochem.
Last year, Sinopec announced it would buy 30 percent of GALP of Brazil, a Portuguese company, for $3.5 billion. GALP has interests in the Santos Basin and a 10 percent stake in the massive Lula field.
“The $5.2 billion cash-in we will get from Sinopec is paramount for our strategy in Brazil,” GALP CEO Manuel Ferreira de Oliveira told Bloomberg News.
“It will give us a rock-solid capital base as we enter a decisive investment period at the Santos Basin. This operation values our existing Brazilian assets at $12.5 billion and is really a landmark for the company and for our shareholders.”
News reports in December said Sinopec is the current favorite to buy stakes in Brazilian oil owned by Britain’s BG Group, which also has interests in the massive fields of Carioca, Guara, Lula and Lara.
On Jan 8., the French company Perenco announced it was selling Sinochem a 10 percent stake in five offshore blocks located in the Espirito Santos Basin. Some of the transactions still await approval by Brazil’s government.
In December, Venezuelan Oil Minister Rafael Ramirez publicly reiterated his government’s commitment to an oil refinery joint venture with Petrobras.
That project reportedly is set to be funded by China’s national development bank. Some news reports have quoted the head of China’s development bank saying that new deals with Brazil are under consideration.
James Williams, an energy economist with the U.S. consulting group WTRG Economics, said the Chinese are taking on big risks with ultra-deep-water investments.
“But for them, the benefits are greater, as they become partners with companies that have better technology and expertise,” he said.
• This article is based in part on wire service reports.
- Sinopec to Buy Galp’s Offshore Asset in Brazil for USD 3.5 Billion (mb50.wordpress.com)
- Brazil: OGX Encounters Huge Hydrocarbon Column in Santos Basin (mb50.wordpress.com)
- Brazil: Petrobras Discovers Hydrocarbons in Campos Basin (mb50.wordpress.com)
- Petrobras Announces New Discovery in Carioca Area, Offshore Brazil (mb50.wordpress.com)
- Modec Receives FPSO Order from Petrobras, Brazil (mb50.wordpress.com)
- Petrobras production hurt by ‘global bottleneck’ for rigs (mb50.wordpress.com)
- Ocean Rig Bidding to Rent 5 Drillships to Petrobras, Brazil (mb50.wordpress.com)
- Petrobras Discovers Oil at Tucura Well, Campos Basin, Offshore Brazil (mb50.wordpress.com)
NEW YORK — A different kind of F-word is stirring a linguistic and political debate as controversial as what it defines.
The word is “fracking” — as in hydraulic fracturing, a technique long used by the oil and gas industry to free oil and gas from rock.
It’s not in the dictionary, the industry hates it, and President Barack Obama didn’t use it in his State of the Union speech — even as he praised federal subsidies for it.
The word sounds nasty, and environmental advocates have been able to use it to generate opposition — and revulsion — to what they say is a nasty process that threatens water supplies.
“It obviously calls to mind other less socially polite terms, and folks have been able to take advantage of that,” said Kate Sinding, a senior attorney at the Natural Resources Defense Council who works on drilling issues.
One of the chants at an anti-drilling rally in Albany earlier this month was “No fracking way!”
Industry executives argue that the word is deliberately misspelled by environmental activists and that it has become a slur that should not be used by media outlets that strive for objectivity.
“It’s a co-opted word and a co-opted spelling used to make it look as offensive as people can try to make it look,” said Michael Kehs, vice president for Strategic Affairs at Chesapeake Energy, the nation’s second-largest natural gas producer.
To the surviving humans of the sci-fi TV series “Battlestar Galactica,” it has nothing to do with oil and gas. It is used as a substitute for the very down-to-Earth curse word.
Michael Weiss, a professor of linguistics at Cornell University, says the word originated as simple industry jargon, but has taken on a negative meaning over time — much like the word “silly” once meant “holy.”
But “frack” also happens to sound like “smack” and “whack,” with more violent connotations.
“When you hear the word ‘fracking,’ what lights up your brain is the profanity,” says Deborah Mitchell, who teaches marketing at the University of Wisconsin’s School of Business. “Negative things come to mind.”
Obama did not use the word in his State of the Union address Tuesday night, when he said his administration will help ensure natural gas will be developed safely, suggesting it would support 600,000 jobs by the end of the decade.
In hydraulic fracturing, millions of gallons of water, sand and chemicals are pumped into wells to break up underground rock formations and create escape routes for the oil and gas. In recent years, the industry has learned to combine the practice with the ability to drill horizontally into beds of shale, layers of fine-grained rock that in some cases have trapped ancient organic matter that has cooked into oil and gas.
By doing so, drillers have unlocked natural gas deposits across the East, South and Midwest that are large enough to supply the U.S. for decades. Natural gas prices have dipped to decade-low levels, reducing customer bills and prompting manufacturers who depend on the fuel to expand operations in the U.S.
Environmentalists worry that the fluid could leak into water supplies from cracked casings in wells. They are also concerned that wastewater from the process could contaminate water supplies if not properly treated or disposed of. And they worry the method allows too much methane, the main component of natural gas and an extraordinarily potent greenhouse gas, to escape.
Some want to ban the practice altogether, while others want tighter regulations.
The Environmental Protection Agency is studying the issue and may propose federal regulations. The industry prefers that states regulate the process.
Some states have banned it. A New York proposal to lift its ban drew about 40,000 public comments — an unprecedented total — inspired in part by slogans such as “Don’t Frack With New York.”
The drilling industry has generally spelled the word without a “K,” using terms like “frac job” or “frac fluid.”
Energy historian Daniel Yergin spells it “fraccing” in his book, “The Quest: Energy, Security and the Remaking of the Modern World.” The glossary maintained by the oilfield services company Schlumberger includes only “frac” and “hydraulic fracturing.”
The spelling of “fracking” began appearing in the media and in oil and gas company materials long before the process became controversial. It first was used in an Associated Press story in 1981. That same year, an oil and gas company called Velvet Exploration, based in British Columbia, issued a press release that detailed its plans to complete “fracking” a well.
The word was used in trade journals throughout the 1980s. In 1990, Commerce Secretary Robert Mosbacher announced U.S. oil engineers would travel to the Soviet Union to share drilling technology, including fracking.
The word does not appear in The Associated Press Stylebook, a guide for news organizations. David Minthorn, deputy standards editor at the AP, says there are tentative plans to include an entry in the 2012 edition.
He said the current standard is to avoid using the word except in direct quotes, and to instead use “hydraulic fracturing.”
That won’t stop activists — sometimes called “fracktivists” — from repeating the word as often as possible.
“It was created by the industry, and the industry is going to have to live with it,” says the NRDC’s Sinding.
Jonathan Fahey can be reached at http://twitter.com/JonathanFahey.
- “Fracking”: Is it a dirty word? (cbsnews.com)
- No Energy Industry Backing For The Word ‘Fracking’ (dfw.cbslocal.com)
- No energy industry backing for the word ‘fracking’ (sfgate.com)
- No energy industry backing for the word ‘fracking’ (seattlepi.com)
By Hashem Kalantari
TEHRAN | Fri Jan 27, 2012 8:36am EST
(Reuters) – A law to be debated in Iran’s parliament on Sunday could halt exports of oil to the European Union as early as next week, the semi-official Fars news agency quoted a lawmaker as saying on Friday.
“On Sunday, parliament will have to approve a ‘double emergency’ bill calling for a halt in the export of Iranian oil to Europe starting next week,” Hossein Ibrahimi, vice-chairman of parliament’s national security and foreign policy committee, was quoted as saying.
Parliament is pushing for the export ban to deny the EU a 6-month phase-in of the embargo on Iranian oil that the bloc agreed on Monday as part of a raft of tough new Western sanctions aimed at forcing Iran to curb its nuclear program.
The EU accounted for 18 percent of Iranian crude oil sales in the first half of 2011, according to the U.S. Energy Information Administration (EIA), making it Iran’s second biggest customer after China.
“If the deputies arrive at the conclusion that the Iranian oil exports to Europe must be halted, the parliament will not delay a moment (in passing the bill),” Fars quoted Moayed Hosseini-Sadr, a member of parliament’s energy committee, as saying.
“If Iran’s oil exports to Europe, which is about 18 percent (of Iran’s oil exports) is halted the Europeans will surely be taken by surprise, and will understand the power of Iran and will realize that the Islamic establishment will not succumb to the Europeans’ policies,” he said.
Reflecting how seriously Tehran was taking the idea, Iran’s OPEC governor Mohammad Ali Khatibi told the ILNA news agency the country might choose to raise the issue at the next OPEC meeting.
Iran’s conservative-dominated parliament has previously shown it is ready to force the government to take action against what it sees as hostility from the West.
In November it voted to expel the British ambassador after London announced new sanctions ahead of other EU countries.
The day after that vote, radical Iranians stormed the British embassy, causing London to withdraw all staff and close the mission.
- Iran ‘definitely’ closing Strait of Hormuz over EU oil embargo (mb50.wordpress.com)
- Oil Surge Begins (mb50.wordpress.com)
- Iran threatens to stop Gulf oil if sanctions widened (mb50.wordpress.com)
- EU firms renew Iran oil deals to win sanction reprieve (mb50.wordpress.com)
- Oil-for-gold: Will Iran dodge US Sanctions with metal shield? (richardemanuel.wordpress.com)
- Futures Movers: Oil futures edge above $100 a barrel (marketwatch.com)
- Revenge for EU Sanctions: Iran Set to Turn Off Oil Supply to Europe – SPIEGEL ONLINE – News – International (worldwright.wordpress.com)
- Oil hovers near $100 amid Iran tensions (seattlepi.com)
- Iran says EU oil embargo will be ineffective (foxnews.com)
- Iran threatens to hit U.S. targets over Strait of Hormuz as Europe joins oil import ban (tribuneofthepeople.com)
Posted on January 27, 2012 at 6:40 am by Dan X. McGraw
President Barack Obama has gotten an earful from Republicans and energy industry officials for claiming his administration has helped to spur a rise in oil and natural gas production.
So who’s right?
For industry folks, it isn’t exactly what you imagine, but Rapier says the graph doesn’t paint the clearest picture of who is responsible for driving production of oil and natural gas.
“The reason that oil production has risen under President Obama is due to events that happened years earlier. In this case, it wasn’t some grand initiative that President Bush passed, rather it was years of steadily increasing oil prices that caused oil companies to approve a number of new projects that had marginal economics at lower oil prices. But these projects take some years to build, and as in the case of the Alaska Pipeline, decisions that were made (four to six) years earlier benefited President Obama with increased domestic oil production.”
- Oil, gas industry opposes use of word ‘fracking’ for method 1/27/12
- Looking for work? Click here to see job openings 1/27/12
- Steffy: President needs a dose of energy reality 1/27/12
- Cloudy Europe outlook depresses P&G 1/27/12
- Shell president says federal permitting may have turned the corner 1/27/12
|This week the SubseaIQ team added 10 new projects and updated 31 projects. You can see all the updates made over any time period via the Project Update History search. The latest offshore field develoment news and activities are listed below for your convenience.|
- Recap: Worldwide Field Development Jan 6 – Jan 12, 2012 (mb50.wordpress.com)
- The Smallcap Oil & Gas round up. (brokermandaniel.com)
- Norway: Technip Participates in Statoil’s Vilje and Visund Developments (mb50.wordpress.com)
Sub Sea Research LLC, a Portland Maine based company located the worlds richest shipwreck, a WWII British Freighter carrying a secret cargo of 71 tons of Platinum sunk by a German U-Boat off the coast of Cape Cod.
Sub Sea Research (SSR) spent months searching for the elusive ship, the Port Nicholson, torpedoed by German U-boat U87, June 1942. It took two torpedoes and about 7 hours to sink her. U-87 also fired at the troop ship the “Cherokee,” quickly sinking her with a heavy loss of lives.
The Port Nicholson is a steel-hulled, 481 ft. merchant ship, coal fired freighter built in 1918 at the Tynes & Wear shipyard. She was carrying two special envoy USSR agents overseeing the delivery of a very important Lend-Lease payment from the USSR to USA. She along with 4 other commercial vessels were being escorted by an unusually high number of military ships. The normal ratio at the time was near 1:10 or less but this convoy ratio was 6:5. Maybe it was the fact they were delivering 1,707,000 oz. troy, in 400 oz. bars of platinum. Strangely the two USSR special envoy individuals quickly disappeared after being rescued and brought to American shores. They were not de-briefed like all the other survivors were.
SSR first discovered the Port Nicholson in 600-800 feet of water off Cape Cod in 2008. In 2009 SSR obtained legal recognition from the US Courts as the legal owner and salvager of the ship.
SSR researchers corresponded with individuals manning the ships and even spoke with another U-boat captain who was in the same area. They have talked with survivors and relatives of the men of the Port Nicholson and the Cherokee. One Yarmouth, MA author has written a book and is waiting for “the last chapter” of raising the valuable cargo of the Port Nicholson. These researchers also found declassified documents verifying the cargo as well as the debriefing of the sinking.
According to SSR research, the Port Nicholson and four other ships were being escorted by six military ships in a convoy from Halifax to New York. The Port Nicholson is documented to be carrying ~1,707,000 troy ounces of platinum. It may also contain $165M of copper, zinc and war stores. Greg Brooks, one of two SSR founders, said his team has already recovered several identifying and critical artifacts. He has verified that “it is without a doubt the Port Nicholson”.
Late in the summer of 2011, after 100’s of hours of ROV video, they have seen what appear to be bullion boxes containing 4 bars, each being 400 troy ounces of precious metal. “We have seen boxes indicative of those used to store and ship this type of bullion in 1942. Our video clearly shows the box and our inspection class remotely operated vehicles (ROV) could not lift it due to its weight of about 130 lbs.”
A similar discovery occurred in 1981 when the HMS Edinburgh was discovered in the Barents Sea. It too carried a USSR Lend-lease payment. This wreck, in 800 feet of water, took almost three years to salvage in 1981 (Salvage of the Century) and contained $100M of gold (1981 prices). Richard Wharton, one of the original salvagers, provided SSR with photos and dimensions of the wooden boxes from the HMS Edinburg containing the gold bullion bars. These wooden bullion boxes were the same type shipped within six weeks of the Port Nicholson. According to Brooks, “We used our manipulator arm to scale our box dimensions. They appear close and almost exactly match the boxes salvaged in 1981. Mr. Wharton’s photos are almost identical to the boxes we have seen on our wreck. We nudged and pushed the boxes with maximum thrust from our ROV. We have verified these boxes have unusually high mass as one would expect for bullion. What is different from the Edinburgh boxes and unique to ours is that ours are very well preserved and do not easily come apart. Things are very well preserved. We even flipped the pages in a book and the pages remained intact. That was amazing to see.”
“We have been working and planning the site since 2009. Our current equipment is just not enough to handle the 2-5 knot currents, mostly zero visibility and the excessive ocean conditions at the site. It takes us 10 hours from Boston Harbor to get to the site. And, conditions such as these leave few and very small windows of onsite time each year in which we can safely work on the site. We certainly underestimated the conditions and maybe over estimated our capacity even with the 214 ft. M/S Sea Hunter and a 95 ft. ship M/S Son Worshipper fully equipped with a sub, ROVs, 125 ton crane, claw and sonar gear.
Photos taken from the HMCS Nanaimo at the time of the sinking show the Port Nicholson bow straight up in the air. She went down straight and slammed to the bottom vertically, stern first at about 30 mph and is now lying on her starboard side. This position, along with the numerous metal, wires, pipes, booms, debris as well as 70 years accumulation of fishing net snags makes access extremely difficult from the deck side. “The holds are not upright and we certainly are not simply going down into the holds with a lift and pulling up the cargo. We may have to cut into the hull to gain access and that is complicated and requires a different tool set. The ship carried war stores thus requiring even greater caution and safety procedures.”
“There is nothing more frustrating for each of our crew, as well as our financial supporters, to see, touch and feel the bullion box and not be able to quickly and simply retrieve it. There is nobody on this earth who wants to bring up that box more than me. We’ve been at it a while now.”
While the ship, M/S Sea Hunter is capable of remaining on-site in almost any weather, SSR has exhausted the capability of the ROV and support equipment. SSR is now entertaining private support from special technical and financial organizations. The operation needs to re-capitalize so that SSR can order or retain a heavy duty state of the art work class ROV, fully outfitted with the tool set to complete the salvage and bring a bar on deck. This specialized equipment costs about $2.5M, requires well trained support crews and is capable of lifting heavy loads and has a long build/lease lead time of up to 20 weeks.
“Many marine technology firms are very interested in helping and being part of such an exciting treasure salvage project right in Boston’s back yard. They want to share in this once in life time adventure. And, it has a rich local and national history with a high degree of intrigue.”
“We have spoken with some interesting individuals and some family investment groups who are bored with traditional opportunities. They are certainly tired of the significant swings and losses occurring in the market today. They are most intrigued with the unique sense of history and adventure the Port Nicholson treasure simply from the excitement factor.
“Who wouldn’t want to be a treasure hunter, have a real piece of history (1942 platinum) and be able to say ‘I am a real treasure hunter’. It is every kid’s dream to be a treasure hunter and some adults dream of it too!”
“All we have left to do is get the right equipment to bring up the bars we have seen. 2012 is our year to make this all come to fruition!”
Sub Sea Research LLC (SSR), a Maine company founded in 1994, maintains a fleet of ships and scientific exploration equipment to engage in research, conservation, development and exploration activities around the world aimed at finding, recovering or preserving underwater shipwrecks of special historical and cultural significance.
- Ireland: Odyssey Conducts Search Operations for SS Gairsoppa Using Research Vessel Yuzhmorgeologiya
- Odyssey Confirms Identity and Location of SS Gairsoppa Shipwreck (Ireland)
- Astrakhan Shipyard Builds Project 22870 Salvage Ship for Russian Navy
- SCTA Starts Salvage Wreckage Works at Qunfudah Port (Saudi Arabia)
- Odyssey Discovers Second Silver Cargo Shipwreck Offshore Ireland
- The Largest Treasure Find Ever – How Nazi’s Found and Sunk The British Treasury Ship Gairsoppa (gcaptain.com)
- Shipwreck Hunters Find Millenium Falcon Shaped Object On Sea Floor [Video] (inquisitr.com)
- Treasure hunters say Irish waters have valuable wrecks – Irish Times (news.google.com)
- Silver worth $18 million found on bottom of North Atlantic; ship carrying treasure sunk by torpedo in 1917 – @nytimes (nytimes.com)