Looking ahead

Controversial oil pipeline to begin in Chad. Thirty years after the country’s first oil exploration effort, pipeline construction has begun in southern Chad. The presidents of the former French colony and Cameroon, along with officials from an international oil consortium and the World Bank, will create Africa’s largest sub-Saharan construction project. This 670-mi underground pipeline will carry oil from 300 wells in Chad to Cameroon’s Atlantic port of Kribi. Initial output is expected in three to four years at 225,000 bopd. Chad is the fifth-poorest nation in the world: The project is expected to generate between $2.5 and $8.5 billion from royalties and taxes for Chad over a 25-year period. The project has become a testing ground for the effects of globalization and the role of international financial institutions in the increasing indebtedness of poor countries. It is the first time that the bank has loaned money to a poor country via a commercial pact for an oil production venture. ExxonMobil is the operator of the three-member consortium, leading with a $3.5-billion investment.

U.S. congressman requests gas price investigation. Due to major concerns about an increase of natural gas prices that could reach as high as 90% before year-end, Congressman Henry Hyde (R-Illinois) asked the Federal Trade Commission to investigate the causes of soaring gas prices. Hyde believes recent price hikes might be the effect of alleged collusion among natural gas companies that may have agreed to cut production to drive up prices. Consumers need to know whether production and distribution companies deliberately allowed inventories to decline, Hyde said. However, U.S. Natural Gas Producers Association leader Skip Horvath denied any collusion had occurred among natural gas companies.

Pakistan’s gas output to rise nearly 50% as industry flourishes. As a result of newly discovered gas fields, gas production in Pakistan is expected to increase by almost 50%. These additional fields will add almost 1 Bcfgd to Pakistan’s current production level of 2.2 Bcfgd, said Petroleum Ministry spokesman Jehangir Bas. Among the new discoveries, Zamzama field is the first expected to come onstream, in March 2001. Capitalizing on the new gas fields, the government has approved a $400-million plan to add an additional 242 mi of transmission pipeline to the country’s infrastructure. The plan will be implemented within the next three years.

Kenya allows UK firm to explore for oil. Although exploration efforts in Kenya can be traced back to colonial times, only one such effort has yielded significant deposits. And despite the country’s history, the Kenyan government has signed an exploration contract with a United Kingdom-based company, said Energy Minister Francis Masakhalia. The British firm will explore two potential oil blocks in Kwale and Lamu districts along the Indian Ocean. Exploration will be onshore and offshore. The country currently rations its electrical power – an action instigated by a prolonged, severe drought.

Dagang to become China’s largest gas field. China’s State Reserve Commission has declared the Qianmiqiao condensate gas field at Dagang oil field complex as the country’s largest condensate/gas field ever discovered. Proven reserves are about 1.077 Tcf. According to the recovery ratio-based calculation, the field’s available gas is roughly 720 Bcf, and its available condensate is about 2.7 million t. Current output capacity at Dagang is 12.36 Bcfgd. This amount is expected to increase two to three times when the Qianmiqiao field comes online. This is the first large gas field found in eastern China.

Iran may double oil output to meet energy consumption. Addressing attendees at the 5th annual International Conference on the "Impact of the Middle East/Caspian Oil on Global Energy Markets," Iranian Oil Minister Bijan Namdar-Zanganeh said Iran needs to double its crude output by 2020. This step will enable the country to more easily manage increases in energy consumption, along with a 2% to 3% decrease in global oil share. Zanganeh said "If (Iran) takes a conservative approach and estimates oil demand growth at 1.5% annually, it will amount to about 110 MMbopd of worldwide oil demand by the end of the next two decades." Currently, Iran’s share of OPEC output is 15%. The country already has added more than 26 billion bbl of oil and 30.005 Tcfg to national reserves within the past three years.

Russia gets help to develop Siberian gas field. Russia, along with neighboring China and South Korea, has agreed to conduct a feasibility study for development of the Kovykta gas/condensate field and to construct a pipeline to take the gas to market. China National Petroleum Corp., Cogas of Korea and Russia Petroleum are signatories to the agreement. South Korea will join Russia and China, who began work in 1999. The firms will draw up a timetable for the feasibility study expected to be completed in fourth-quarter 2001 or first-quarter 2002. Kovykta field has proven gas reserves of more than 49.4 Tcfg. Gas exports to China and Korea are expected to reach a combined total of 1.059 Tcfg annually over a 30-year period, said Vladimir Kazakov, general director of Russia Petroleum.