Oil country hot line

U.S. oil reserves rise 1.3% said EIA

The Energy Information Administration reports that discoveries in western states and the Gulf of Mexico have produced an increase in U.S. reserves. Crude reserves totaled 22.0 billion bbl at year-end 2000, up 1.3% from the previous year. Proven dry natural gas grew 6% to 177.4 Tcf, representing the largest increase since the agency began tracking annual reserves 24 years ago. Due to diminishing frontier (drilling) areas, "such unusually large (gas) increases should not be expected very often," said EIA. The gas reserves came from Texas and New Mexico, along with states that have large increases in coalbed methane reserves.

OPEC plans cuts as price hits two year low

A decrease in global economic activity, spurred by persistently weakened oil prices, instigated plans by OPEC to cut production by as much as 1.4 million bpd at the November 14 meeting. Oil traders said OPEC’s probable decision to reduce output for the fourth time this year may not be enough to bolster a consensus outlook that still focuses on poor energy demand growth. The concern is whether the cartel will curb output sufficiently to pull prices back within the target range of $25/bbl. For this to occur, non-OPEC suppliers such as Norway, Russia and Mexico, would have to cut their output similarly. Any output reductions will not be implemented until January 1.

ChevronTexaco achieves first oil

Located offshore Angola on Block 14, deepwater Kuito field’s Phase 1C development has gone onstream. The new phase adds more than 30,000 bopd to the firm’s daily Angolan output, increasing it to about 85,000 bopd. In 2002, Kuito is expected to produce about 66,000 bopd. There are several ongoing projects on the block, and detailed reservoir and development studies are underway. "This is a significant milestone for the continuing development of Kuito field, which has already yielded over 39 million bbl of oil," said John Gass, managing director of Cabinda Gulf Oil Co. Ltd., ChevronTexaco’s Angolan operating unit. Gass added that the field’s phased approach has minimized project cycle time while narrowing subsurface uncertainties. Also, initial phases provided valuable data to optimize subsequent well locations.

Alaska lease sales draw $12.9 million

Despite falling oil and gas prices, bids on Alaskan acreage are encouraging, said State Division of Oil and Gas Director Mark Myers. Firms attempting to secure exploration tracts paid a total of $12.9 million in high bids for two Alaskan lease sales. One sale offered exploration rights that stretched across 5.1 million onshore acres. It drew over $7.4 million in high bids for 110 tracts. The other sale, which offered exploration rights spread over 2 million offshore and tideland acres, drew high bids of more than $5.4 million for 21 tracts. Among the bidders were Shell, Anadarko Petroleum, Phillips Petroleum and many more, including individual investors. Myers has special enthusiasm for the return of Shell, which had explored frontier areas of the state but ended operations in 1988.

U.S. Congress bans Great Lakes drilling

Environmentalists gained a victory over the energy industry when Congress voted to ban drilling under the Great Lakes for the next two years. This provision is part of a House-Senate conference committee version of the House bill 2311, the FY-2002 Energy and Water Development Appropriations bill. Federal agencies are prohibited from issuing permits for new drilling in the area through September 30, 2003. It also allows the government to produce a study on the environmental effects of such drilling. President George Bush is expected to sign the bill although it hinders his plan to boost domestic energy production. The House approved the bill by a 399 – 29 vote. Senators passed it by a 96 – 2 margin.

Expatriates return to cash-strapped Pakistan

Foreign staff, including those at senior management levels, have been trickling back into Pakistan after many top energy expatriates evacuated the country. Pakistan was viewed as a potential venue of unrest as the U.S. prepared to strike neighboring Afghanistan following terrorist plane attacks in New York and Washington. Foreign staff evacuations severely affected the country’s energy sector. Exploration activities in five major blocks had slowed, and most firms were not operating at full strength. Pakistan’s petroleum ministry expressed concern about lengthy delays in planned E&P activities. It said the government will not extend exploration licenses, and the firms would be responsible for project delays and cost overruns.

   Meanwhile, Pakistan plans to extend the bidding deadline for its upcoming lease sale of nine tracts. The original deadline was set for October 12. At press time, the new submission deadline had yet to be announced.

EIA to start reporting LNG storage levels

Secretary of Energy Spencer Abraham directed the Energy Information Administration to provide weekly natural gas storage estimates. This directive follows the AGA’s decision to discontinue its weekly LNG storage survey at the end of the calendar year. "Natural gas supplies almost a quarter of the nation’s energy needs, and that demand is likely to increase by almost a third by 2010," said Abraham. The AGA survey has been the only weekly supply data available to the market.