Daily Archives: March 12, 2012

Kyle Bass Explains Why He Had The University Of Texas Take Physical Delivery Of $1 Billion In Solid Gold


Linette Lopez | Mar. 12, 2012

We already know that Hayman Capital’s Kyle Bass is getting ready for the worst. Case in point, he keeps all kinds of weapons on his Texas compound and he’s buying up nickels because he believes the coins will eventually be worth more than 5 cents.

He’s also bullish on gold, and he reminded CNBC why in an interview today:

“The pattern is set, we’re going to continue to monetize fiscal deficits by expanding central bank balance sheets… I call it creating money out of thin air.”

He believes this so fully that while he was on the board of the University of Texas, he had them take physical delivery of $1 billion in gold. You can watch him explain why in the video below (via CNBC), but in a nutshell, he figured out that it would be much cheaper to store it.

And for the record, Bass doesn’t advocate going back to the gold standard, he thinks that’s impractical. Instead, he believes our economy should be tied to a basket of goods and services.

Read more: BI

Anadarko’s First Flow Test Offshore Mozambique Successful


Anadarko Petroleum Corporation today announced the results of its first flow test offshore Mozambique. The Barquentine-2 well flowed at an equipment-constrained rate of 90 to 100 million cubic feet per day (MMcf/d), with minimal pressure drawdown, providing confidence in well designs that are capable of 100 to 200 MMcf/d.

“The test at Barquentine-2 exhibited exceptional flow characteristics, confirmed the deliverability of this reservoir and indicated a low density of development wells may be sufficient to produce the reservoir,” Anadarko Sr. Vice President, Worldwide Exploration, Bob Daniels said. “Using pre-set gauges in an offset well, we were able to confirm connectivity and reservoir continuity over a distance of more than 3 kilometers. The test also proves the reservoir has very high permeability, meeting the quality specifications for the partnership’s LNG development plans. This is a very encouraging way to start our testing program, which is an important component in the reserve certification process, as we focus on achieving FID (final investment decision) around the end of 2013.”

The Barquentine-2 well is located in water depths of approximately 5,400 feet (1,650 meters) in the Offshore Area 1 of the Rovuma Basin. The drillstem test was conducted by the Deepwater Millennium drillship, which is expected to be mobilized to the Barquentine-1 location for a second flow and interference test in the complex. The 2012 testing program also includes drillstem tests in the Lagosta and Camarao areas to the south of Barquentine.

Anadarko is the operator of the 2.6-million-acre Offshore Area 1 with a 36.5-percent working interest. Co-owners in the area are Mitsui E&P Mozambique Area 1, Limited (20 percent), BPRL Ventures Mozambique B.V. (10 percent), Videocon Mozambique Rovuma 1 Limited (10 percent) and Cove Energy Mozambique Rovuma Offshore, Ltd. (8.5 percent). Empresa Nacional de Hidrocarbonetos, E.P.’s 15-percent interest is carried through the exploration phase.


Let consumers, not bureaucrats decide our country’s energy future


By Phil Kerpen & Steve Lonegan
Published March 08, 2012

While President Obama is trying futilely to convince the American people he supports an “all of the above” energy policy, he has remained stubbornly committed to vast subsidies for unproven, expensive technologies like wind.

Obama has repeatedly described his intention to increase wind subsidies “doubling down,” an appropriate use of gambling terminology.

The U.S. Senate will likely be put on record soon on amendment votes to extend wasteful, expensive subsidies for windmills and to create vast new subsidies for natural gas vehicles. These votes will tell us which senators, like the president, want to double down on a losing hand and which think it might be time to try a free market energy policy.

Sadly, it is hardly a given that Republicans will oppose massive taxpayer-funded giveaways to favored energy players. The clearest evidence of that comes from New Jersey, where Governor Chris Christie has led the way on a disastrous proposed offshore wind scheme.

New Jersey’s offshore wind boondoggle was authorized by the Offshore Wind Economic Development Act, signed into law by Gov. Christie in 2010. A cost analysis of the act conducted by the Beacon Hill Institute at Suffolk University concluded that the wind project would cost the state as much as $4.1 billion, drive up electricity rates up as much as 4.2% and cost up to 4,440 jobs. More recently a consulting firm hired by state officials to analyze the bid from Fishermen’s Atlantic, LLC to construct the project found that it would result in the loss of almost 30,000 jobs, and drive up electricity rates by $286 million.

With hefty federal subsidies for wind in place, such boondoggles will continue to spring up around the country. Fortunately, the principal federal subsidy for wind, the so-called Production Tax Credit (PTC) is scheduled to expire at the end of this year. Unfortunately, the Senate will soon vote on extending this giveaway, despite the fact that wind is second only to solar in subsidies and is highly suspect both economically and environmentally.

While Obama tells us it’s time to end the outrageous subsidies for fossil fuels, the facts are the vast majority of subsidies go to wind and solar. — In 2010, subsidies per megawatt-hour were $0.63 for natural gas, $0.64 for coal, $52 for wind, and $968 for solar.

Instead of looking at those numbers and concluding it’s time to pull the plug on wind subsidies and even more scandalous solar subsidies, some Washington politicians look at them and conclude we need to massively increase subsidies for natural gas.

The Senate is poised to vote on doing just that, on an amendment that would add the provisions of the so-called Nat Gas Act to the surface transportation bill. This amendment, sponsored by New Jersey’s Senator Robert Menendez, would provide hefty subsidies – up to $64,000 per truck – to subsidize the conversion of vehicles to natural gas.

The bill, sadly, has bipartisan support, including from Republicans like Senator Richard Burr of North Carolina, who apparently believes that the only difference between Republicans and Democrats is which industries they prefer to choose to lavish with special giveaways.

The consequences of huge subsidies to shift natural gas into the transportation sector are easy to foresee. If we artificially boost demand at taxpayer expense, prices will go up. That means higher natural gas bills for home heating bills, and it means higher prices for all the industries that use natural gas as a feedstock.

Just as ethanol subsidies rippled through corn prices to higher food prices, natural gas subsidies would have economy-wide effects through higher prices for chemicals, plastics, and fertilizers.

Moreover, with natural gas prices collapsing thanks to the fracking revolution, these subsidies are wholly unnecessary.

As long as the EPA and overzealous state regulators can be kept at bay, natural gas vehicles will come to market without subsidies. In fact, this week Chrysler and General Motors announced duel-fuel pick-up trucks that run on both compressed natural gas and gasoline.

Why not let consumers decide if they want these vehicles, instead of putting a government thumb on the scale at a cost of billions of dollars?

In the aftermath of Solyndra, politicians should recognize that its time to pull the plug on energy subsidies, scale back on onerous regulations, and let consumers, not bureaucrats, decide our country’s energy future. The U.S. Senate should therefore reject both on the PTC and Nat Gas amendments.

Phil Kerpen is vice president for policy at Americans for Prosperity and the author of “Democracy Denied” (BenBella Books, 2011). Steve Lonegan is executive director of Americans for Prosperity – New Jersey.

Read more: Fox News

Odfjell Offshore Raising up to $500M to Develop Fleet


by  Odfjell Offshor
Press Release
Monday, March 12, 2012

Norway’s Odfjell Offshore plans to raise up to $500 million in a private equity placing to develop further its fleet of six state-of-the-art ultra deepwater and harsh environment offshore drilling units. In addition, Odfjell Offshore may over-allot up to 10 percent of additional new shares, the firm announced Monday.

Parent company Odfjell Drilling will remain a majority shareholding in Odfjell Offshore after the private placing and will continue to provide its 40 years of operational experience, as well as its 3,000 highly skilled employees in the Odfjell Drilling organization, it said in a statement.

“Odfjell Offshore’s strategy is to expand our drilling operations in the ultra deep water and harsh environment market,” said Odfjerll Offshore Chairman Simen Lieungh. “Our fleet is uniquely positioned and we have a strong backlog. Currently, we have one newbuild ultra deep water semi under construction. In addition we have secured an option to build two similar units at Daewoo Shipbuilding & Marine Engineering in South Korea.”

Odfjell Offshore has retained DNB Markets, Pareto Securities, RS Platou Markets and Swedbank First Securities as joint lead managers and bookrunners, while Danske Markets and Nordea Markets as Co-Lead Managers to advise on and effect the private placement of new shares directed towards investors in Norway and other jurisdictions subject to applicable exemptions from registration and other requirements under applicable securities laws.

The offer price per share will be determined through a book-building process within an indicative price range of between $7 and $8 per share. The bookbuilding period commences Mar.12 2012 and will close Mar. 23 2012. Odfjell Offshore may, however, at any time resolve to shorten or extend the application period at its own discretion, it said.

Odfjell Offshore owns a fleet of highly capable and modern semisubmersible drilling units and UDW drillships currently under contracts in Norway, UK, Brazil, Angola and Tanzania:

  • Deepsea Atlantic (DW semisub) and Deepsea Stavanger (DW semisub).
  • – Two state-of-the-art ultra deepwater and harsh environment semi-submersible drilling units delivered in 2009 and 2010.
  • ‐ Deepsea Aberdeen.
  • – Ultra deepwater and harsh environment semi-submersible drilling rig currently under construction at Daweoo Shipyard in South Korea with expected delivery in May 2014.
  • – Options for two similar units with scheduled delivery in December 2014 and March 2015.
  • Deepsea Metro I (DW drillship) and Deepsea Metro II (DW drillship).
  • – Two ultra deepwater drillships delivered in 2011
  • Deepsea Bergen .
  • – Enhanced 3rd generation North Sea semisubmersible drilling rig designed and built by Odfjell in 1983 (with subsequent substantial upgrades).

Odfjell Offshore has decided to apply for listing on Oslo Stock Exchange following completion of the private placing and targets listing in end May 2012.


Politics sank Keystone XL, Exxon says


Published: March. 12, 2012 at 6:47 AM

HOUSTON, March 12 (UPI) — A decision to delay a permit for TransCanada‘s Keystone XL oil pipeline was based largely on U.S. politics, an energy executive said.

U.S. President Barack Obama in January denied a permit for TransCanada to build the billion-dollar Keystone XL oil pipeline. Republican leaders had tried to push the permit through by including the pipeline in a bill that extended payroll tax benefits. Obama rejected the permit because of an “arbitrary” deadline proposed in the legislation.

Exxon Mobil Chief Executive Officer Rex Tillerson told a major energy conference in Houston that industry leaders were practicing due diligence with the project but it was the U.S. political system that was getting in the way of development.

The decision to deny the initial permit for TransCanada, Tillerson said, was because of “political calculations” in Washington.

“In the end, it was also a disservice to public employees who are charged with overseeing this process and who met their obligations,” he was quoted by the Platts news service as saying. “We must continue to engage elected officials of the public to communicate the consequences of failing to move forward with such strategic opportunities.”

Backers of the pipeline describe it as a “shovel-ready” project that would shield the U.S. market from the effects that Middle East tensions have on the oil market. Critics say crude oil from Canada, designated for Keystone XL, is one of the dirtiest types of crude oil.

TransCanada can reapply after it settles on a route through Nebraska.

Read more: UPI

Cruiseships Move to LNG


AGA Gas AB, a member of the Linde Group, and Viking Line Abp have signed an agreement on delivery of liquefied natural gas (LNG) to Viking Line’s new cruise ship, the 57,000 grt, 214 m (702 ft) M/S Viking Grace.

“AGA’s and Viking Line’s investment means major environmental gains in comparison to traditional maritime fuel”, says Jan Bäckvall, Head of Europe North in Linde and responsible for AGA”. “For Baltic shipping, this can be the primary solution in the future”.

Viking Line’s new vessel with the project name “NB 1376″ will operate on the stretch Stockholm-Åbo from January 2013. Powered by four Wartsila 8L50 DF (dual-fuel) engines, the vessel is being manufactured at the STX boatyard in Åbo and has a capacity of 2,800 passengers, as well as large space for vehicles. LNG fuel will be stored in purpose-built tanks.

LNG contains no sulphur or heavy metals and reduces carbon emissions by 20-30% compared to oil. LNG meets IMO’s (International Maritime Organization) directives that sulfur content in marine fuel must not exceed 0.1 percent by weight from 2015 onwards. In addition, it complies with future requirements to reduce nitrogen oxide emissions.

The vessel’s consumption of LNG is estimated at 22,500 tonnes annually, or about 60 tonnes per day. AGA will supply the liquefied natural gas from AGA’s LNG terminal in Nynäshamn, which opened in 2011. Planning, projecting and permission for bunkering (refueling) of the vessel at Stadsgården in Stockholm is in progress.

“The cooperation between AGA and Viking Line means that the guidelines for the management of a new fuel will be developed. This paves the way for a new infrastructure for Swedish shipping where LNG is of great future importance,” says Michael Backman, CEO of Viking Line Abp.

“Viking Line’s environmentally conscious investment is an important “flagship” for shipping and a cleaner Baltic Sea area. The proximity to the LNG terminal, which provides flexible and reliable deliveries and AGA’s knowledge of cryogenic environmentally friendly fuel and bunkering technology, make AGA a natural partner in this pioneering project,” says Jan Bäckvall, AGA.

Looking to the future, AGA believes the biggest market for its LNG fuel supplied from Nynäshamn will most likely be marine transport. Trond Jerve, LNG Manager at AGA, explains: in Norway car ferries are required to run on natural gas. By 2013, more than 40 ships will be powered by LNG, and the majority of these will be equipped with cryogenic equipment from Cryo AB. At international level, industry experts also agree that natural gas is the fuel of the future for marine fleets across the globe as environmental shipping regulations set down by the International Maritime Organization (IMO) become increasingly stringent. Thresholds for sulphur levels in fuel have been subject to particularly strict regulation, with limits for shipping in the North Sea and Baltic Sea set to drop from the current 1.5 percent to 0.1 percent by 2015. Ships docking in European ports today must already comply with a 0.1 percent limit. “Natural gas is an attractive option in the move towards these goals,” confirms Jerve.


USA: Mr. Charlie Initiated the Modern Offshore Oil & Gas Industry, ASME Says


American Society of Mechanical Engineers, ASME, has decided to recognize Mr. Charlie, the first transportable oil drilling rig to be deployed offshore for historic significance.

ASME wil name Mr. Charlie a Historic Mechanical Engineering Landmark at a ceremony to be held March 17, 2012, in Morgan City, La., where the rig is moored

Built in 1952-53 and placed into service in the Gulf of Mexico in 1954, Mr. Charlie was the world’s first submersible and fully transportable drilling rig. Its drills and other machinery were installed on a 220-foot floating barge, which allowed a company to tow Mr. Charlie from one location to another in the search for reserves in the oil-rich waters of the Gulf. Once Mr. Charlie was situated over a drill site in depths averaging 40 feet, the giant pontoons were flooded with seawater to enable the vessel to rest on the sand for safe drilling.

Featuring a 500-ton hoist and durable welded construction, Mr. Charlie advanced the practice of coastal oil exploration from the stationary caisson structures used in the early 1950s to a revolutionary moveable rig that allowed an entire field to be drilled.

“Mr. Charlie’s success initiated the modern offshore oil and gas industry,” says ASME in a bronze plaque to be presented to the International Petroleum Museum and Exposition at the March 17 ceremony.

During its lifetime of service from 1954 to 1986, Mr. Charlie drilled hundreds of wells in the Gulf Coast for Shell and other oil companies. The rig, while transformative in its time, became obsolete when the industry began to perform offshore Gulf Coast oil exploration in waters deeper than 40 feet. Mr. Charlie today is a museum exhibit and training facility.


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