Daily Archives: March 20, 2012
Steven Chu on Solyndra: Enough already !!!
Energy Secretary Steven Chu has just about had it with House Republican accusations about Solyndra and other clean-energy companies that won billions of dollars in federal loan guarantees.
“After hundreds of thousands of pages of documents sent over, there’s not any whiff that this was a politically influenced decision,” Chu told reporters Tuesday shortly after wrapping up House committee testimony on the controversial program. “That’s true of all the loans.”
Chu’s frustration was apparent after spending more than two hours before the Oversight and Government Reform Committee answering pointed GOP questions concerning his handling of more than $14.5 billion in stimulus-funded loan guarantees.
Earlier in the day, Rep. Darrell Issa’s panel released a blistering report claiming Chu had “turned a blind eye to the risks” associated with many of the companies applying for the loan guarantees, putting billions of dollars in taxpayer money in jeopardy.
During the hearing, House Republicans peppered Chu with questions about a “revolving green door” of current and former Obama administration officials and campaign fundraisers who have connections to the stimulus-funded loan guarantee winners.
Rep. Jim Jordan (R-Ohio) asked Chu whether his decisions had been influenced by several specific people tied to the administration, including former National Economic Council Chairman Larry Summers, who before joining the White House worked as a part-time managing director at D.E. Shaw, a New York-based investment firm that has an ownership stake in the Kahuku Wind project.
Chu replied that Summers’s connections to the Hawaii wind farm had nothing to do with it securing a $117 million loan guarantee in July 2010.
The DOE chief also had similar replies when asked about Commerce Secretary John Bryson, who before joining the administration sat on the board of directors at BrightSource, which won a $1.6 billion loan guarantee in April 2011 to support the Ivanpah Solar Energy Generating System in California’s Mojave Desert; Nancy-Ann DeParle, a deputy White House chief of staff for policy who served on the board of directors at Noble Environmental Power, the owner of the Granite Reliable wind energy project that won a partial $168.9 million loan guarantee last September; and Michael Froman, a deputy assistant to Obama and deputy national security adviser who worked at Citigroup, a major investor in SolarReserve, winner last September of a $737 million loan guarantee.
“There seems to be a pattern,” said Rep. Jason Chaffetz (R-Utah). “There’s so many names on this list. I just want to know personally what are you doing to follow through on our concerns that these people are personally financially benefiting from the decisions that they’re in positions to influence people when they have major financial gain on the upside of these loans.”
Chu responded that all of the DOE loan guarantees got greenlights based on their merits and without White House involvement. The DOE chief also said he hadn’t referred any of the specifics to the department’s inspector general, though he said he’d ask the DOE general counsel to review whether any of the officials breached a “firewall” designed to stop such conflict of interest concerns.
“We will look into this,” Chu told reporters after the hearing. “But again it’s easy to raise something and say, ‘Oh, by the way, this person had a connection to that company.’ Then there’s a big leap to say we funded the company because of it.”
Chu noted prominent Republicans and GOP donors have ties to some of the stimulus winners. But he also noted, “It’s not relevant to what we funded and that’s the bottom line.”
This article first appeared on POLITICO Pro at 3:59 p.m. on March 20, 2012.
Steven Chu on Solyndra: Enough already – Darren Samuelsohn – POLITICO.com.
- CAGW Names Energy Sec. Steven Chu 2011 Porker of the Year (mb50.wordpress.com)
- On Solyndra and Obama’s 2011 SOTU Avoidance, Politico’s Samuelsohn Misses the Big Cahuna: By That Time, Everyone Knew (newsbusters.org)
- Republicans expand complaints of energy loans beyond Solyndra (business.financialpost.com)
- When Wall Street Makes Crap Loans, It’s a Crisis; When DOE’s Steven Chu Does It, It’s Green Energy. (reason.com)
Oil Theft is Big Business for Mexican Gangs
Written by Patrick Corcoran
Theft from Mexico‘s state oil company Pemex appears to have shifted from a small-scale criminal nuisance into big business, with actors such as the Zetas and Sinaloa Cartel increasingly getting involved.
The oil company, which provides the Mexican government with roughly a third of its operating budget, has long been plagued by robberies. In the past, these were typically carried out by small-scale gangs or Pemex distributors, and would involve intentionally mislabeling gasoline products, or selling off gas siphoned from pipelines at below-market prices.
During the Calderon administration, however, both the type of robberies and the perpetrators have changed, as Proceso reports, based on an internal Pemex document. Today, crude oil is being stolen on a wide scale, and the groups behind the theft are not small-scale gangs or businessmen gaming the system, but rather criminal networks like the Zetas. Furthermore, instead of reselling the oil at Pemex stations, the criminal groups are exploiting their international reach to sell it on to US refineries.
The geography of illegal siphons discovered in recent years demonstrates the growing role of organized crime groups — initially the Zetas, and increasingly, it would appear, the Sinaloa Cartel. According to Proceso, the two states where the largest number of illegal siphons were discovered in the first half of 2010 were Veracruz and Nuevo Leon, both of them notorious havens of Zeta activity. Sinaloa was third, followed by Puebla and then·Tamaulipas, which is also a Zeta stronghold.
But according to a recent report from Excelsior, Sinaloa became the state worst-hit by pipeline theft in 2011, leapfrogging the two Zetas-held states that were ahead of it in 2010.
The Zetas are known for their diverse revenue sources, involved in activities like extortion, pirate merchandise, kidnapping, car theft, and other rackets, in addition to oil theft. It is no surprise that Zetas-dominated states have seen a spike in stolen hydrocarbons.
In contrast, the Sinaloa Cartel has a reputation for sticking to drug trafficking. In 2010, for instance, a captured high-ranking member of the Sinaloa Cartel told authorities that the cartel boss Joaquin “El Chapo” Guzman had prohibited his subordinates from supplementing their wages by kidnapping. Other groups also operate in the Sinaloa state, such as the Beltran Leyva Organization, but the scale of the thefts suggests that the Sinaloa Cartel, as the foremost network in the region, is involved. If this is the case, it would seem to represent a significant shift in the group’s modus operandi.
Pemex has discovered 5,000 illegal siphons since Calderon took office in late 2006, with more than 1,300 of those found last year. Some 3 million barrels of hydrocarbons were stolen in 2011, an increase of 52 percent from the previous year. This caused losses of roughly $475 million to the company, which had revenues in 2010 of nearly $80 billion.
In response, Mexican authorities have ramped up investigations into the robberies; just 161 were opened in 2007, but more than 1,000 were opened last year. Most of those arrested for stealing oil have been linked to the Familia Michoacana and the Zetas, though the small-time operations have not entirely disappeared from the game.
In addition to the vast sums to be made, stealing oil and gas is an attractive business for a number of other reasons. Neither Pemex nor the Mexican government have the resources to patrol the thousands of miles of pipelines, meaning that the product can be stolen with relatively low risk. Furthermore, as InSight Crime has pointed out, the large bureaucracy in Pemex also generates a large number of targets for corruption. In many cases, people within the company have taken part in the robberies. And as Excelsior notes, while it may sound sophisticated, robbing oil or gas from a pipeline is a low-tech business.
As InSight Crime has reported, oil and gas theft are a serious issue for Latin American oil companies in countries including Colombia, Venezuela, and Bolivia. Hydrocarbon theft became a big source of funds for paramilitary group the United Self-Defense Forces of Colombia (AUC), with $10 million disappearing from 2001 to 2003 from AUC territory.
- Pemex Ready to Drill in GOM’s Deep Waters (mb50.wordpress.com)
- Official: Gang leader behind massacre in port city (seattletimes.nwsource.com)
STX OSV Adds to their Backlog, DOF ASA Sends Newbuild Order for Subsea Construction Vessel
In their second contract announcement so far today, Norway-based STX OSV adds to their offshore vessel newbuild orderbook with a NOK 650 million contract for the design and construction of an Offshore Subsea Construction Vessel (“OSCV”) for Norway-based offshore vessel owner, DOF ASA.
The vessel is of OSCV 11 design, developed by STX OSV in Ålesund, Norway. It will be designed with the new innovative moon pool concept from STX OSV.
STX OSV Design has together with Marintek and DOF Management just completed an extensive research program supported by the Norwegian Research Council, focusing on safe design and operation of moon pools. The results of the three years’ R&D program have been incorporated into the new moon pool design for the OSCV. Compared to vessels with conventional moon pool design, the vessel can operate in a wider range of weather conditions in a safer manner for the vessel’s crew and equipment.
The overall length of the vessel will be approximately 121 meters with a beam of 22 meters. It will be equipped with one 250 ton offshore crane and two ROV systems. The vessel will have accommodation for 100 persons.
Delivery is scheduled from STX OSV Søviknes in Norway in 2Q 2013. The hull of the vessel will be delivered from STX OSV Tulcea in Romania.
DOF was founded in 1981 and is today an international group of companies which owns and operates a modern fleet of offshore / subsea vessels. The DOF group’s diversified fleet consists of innovative vessels specialized for different operational purposes; Platform Supply Vessels (PSV), Anchor Handling Tug Supply Vessels (AHTS) and Construction Support /Subsea ROV Vessels (CSV).
- Norway: STX OSV Delivers Platform Supply Vessel to Solstad (mb50.wordpress.com)
- Norway: STX OSV Brevik Shipyard Hands Over PSV Island Captain (mb50.wordpress.com)
- Brazil: Deep Sea Supply Takes Delivery of New PSV (mb50.wordpress.com)
- Norway: DOF Subsea to Provide Offshore Survey & Construction Services to Statoil (mb50.wordpress.com)
Halliburton Charters Island Captain for UK Operation
Norway’s Island Offshore reports that Halliburton has chartered the Company’s Island Captain as a well stimulation vessel on a 2 months firm contract.
The vessel will be operating on the Clipper South field in the Southern North Sea. The Island Captain is with this joining Island Commander and Island Patriot as the 3rd well stimulation vessel from IO, with a 4th vessel going into operation in January 2013.
“We are very happy to have made this deal with Halliburton and feel confident that the vessel will perform to the charterers’ expectations,” reads Island Offshore’s statement.
The Island Offshore Group is currently operating a fleet of 17 vessels ranging from Platform Supply vessels, Anchor Handling Vessels, Subsea Construction Vessels to Light Well Intervention Vessels. The group has several vessels under construction.
- Norway: STX OSV Brevik Shipyard Hands Over PSV Island Captain (mb50.wordpress.com)
- Norway: STX OSV Delivers Platform Supply Vessel to Solstad (mb50.wordpress.com)
- Norway: Ulstein Launches New Platform Supply Vessel for Blue Ship Invest (mb50.wordpress.com)
- Baker Hughes Bringing High-End Well Stimulation Vessel to North Sea (mb50.wordpress.com)
UK: Ensco Ranks 1st Among Offshore Drillers by Costumer Satisfaction
Ensco plc once again received the first place ranking for total customer satisfaction among offshore drillers in the 2011 Oilfield Products & Services Customer Satisfaction Survey. Conducted by EnergyPoint Research, the annual survey is the industry benchmark for customer satisfaction in the global oilfield.
Ensco led all offshore drilling contractors in the survey, also receiving top honors in 12 of 16 additional categories including health, safety and environment; job quality; performance and reliability; technology; special drilling applications; non-vertical wells and shelf wells. Ensco also earned the top ranking among deepwater drillers and the top ranking by independent operators, and was rated first internationally, with top scores in both offshore Latin America/Mexico and in the North Sea.
Ensco Chairman, President and Chief Executive Officer Dan Rabun stated, “Our people around the globe work safely to exceed customer expectations every day. This recognition is a testament to every Ensco employee’s commitment to that goal. When we operate safely and efficiently, we create success for everyone involved – customers, employees and shareholders.
“We realize that today’s drilling environment is more complex,” he added. “The technological challenges are higher, there is greater public scrutiny, and customers are counting on us more than ever to deliver operational excellence. In this environment, being recognized for success takes on even more meaning.”
EnergyPoint’s research showed a rise in overall customer satisfaction across all industry segments, with the largest increases in onshore and offshore drilling contractor scores.
The independent survey was conducted as part of EnergyPoint Research’s 2011 industry-wide Oilfield Products & Services Survey, comprising thousands of in-depth evaluations performed over a 24-month period by qualified professionals at domestic and international customers of oilfield suppliers.
- USA: Anadarko Contracts ENSCO 8506 Semi (mb50.wordpress.com)
- Ensco challenges new U.S. oil drilling moratorium (reuters.com)
USA: Cheniere CEO Sees Domestic Gas Prices at USD 2/MMBtu
In an interview on E&ETV yesterday, Cheniere CEO Charif Souki said that domestic natural gas prices could drop to $2 per million British thermal units as a result of improved drilling technologies, regardless of whether LNG exports are increased.
“The rationale is this is no longer an exploration play. We know where the resource is. This is now a technology play. Technology plays become better, not worse.
We are learning how to image better, so we know where we have to drill. Our drill bits are getting better, so we know how to manage them and get them to the right place faster and better with less intrusion.
John Berge was talking last week about being able to reduce the amount of water used in the fracking process by 80 percent over the next few years. So, this is going to become a better and better process,” he said.
“We’re very early in the learning curve and we’re going to be able to find this resource more easily, faster and cheaper over a long period of time.
Whatever we can do to export is not going to be sufficient to make any impact at all. Most of the studies talk about 20 cents, I would propose that 20 cents statistically is insignificant, because gas prices can go up or down 20 cents every week. So, over a 20 year period, if our impact by modeling is 20 cents, that’s fine,” he added.
Cheniere of USA is developing a project to add liquefaction and export capabilities to the existing infrastructure at the Sabine Pass LNG terminal.
The Liquefaction Project is being designed and permitted for up to four modular LNG trains, each with a nominal capacity of approximately 4.5 mtpa.
In November 2011, Sabine Liquefaction, a unit of Cheniere, entered into a lump sum turnkey contract for the engineering, procurement and construction of the first two trains of the project with Bechtel Oil, Gas and Chemicals.
Sabine Liquefaction has also entered into four long-term customer sale and purchase agreements for 16 mtpa of LNG volumes, which represents approximately 89 percent of the nominal LNG volumes.
The customers include BG Gulf Coast LNG for 5.5 mtpa, Gas Natural Fenosa for 3.5 mtpa, KOGAS for 3.5 mtpa and GAIL (India) for 3.5 mtpa.
- USA: Cheniere Urges FERC to Approve Sabine Pass Liquefaction Project (mb50.wordpress.com)
- Cheniere: Sabine 1,2 Train Construction Start in H1 2012 (USA) (mb50.wordpress.com)
- USA: Cheniere, KOGAS Ink Sabine Pass LNG Deal (mb50.wordpress.com)
- USA (Sabine Pass): BG Ups Sabine Pass LNG Volumes to 5.5 MTPA (mb50.wordpress.com)
- GAIL to buy 3.5 million tonnes of LNG from U.S. firm (mb50.wordpress.com)
- USA: Sabine Pass LNG Gets Cargo (mb50.wordpress.com)
- USA: Cheniere Plans Corpus Christi LNG Export Terminal (mb50.wordpress.com)