Oil country hot line

Oil demand lagging U.S. economic rebound

The International Energy Agency said global oil demand growth trails behind the recovering, consumer-led, U.S. economy. The agency revised down its forecast for this year’s oil demand growth by 80,000 bpd, to 420,000 bpd, putting total demand at 76.4 million. Last year’s economic slowdown cut growth to just 90,000 bopd. This is a drastic drop from the more than one-million-bopd annual growth rate of the 1990s. IEA does not share market optimism about the impact of economic recovery on oil demand. Thus, it has lifted its second and third-quarter global demand forecasts by a marginal 100,000 bopd, and has cut 500,000 bopd from its fourth-quarter projections.

Ayatollah Ali Khamenei

OPEC keeps cuts despite crises

After initially dismissing the chances for an Arab oil embargo to be effective, the White House later questioned the potential impact of Iraq’s plan to suspend oil exports for 30 days, or until Israel withdraws from Palestinian territories. Curtailed Venezuelan shipments, caused by PDVSA executives’ protest against the government’s choice of a new board of directors, allowed Iraq’s decision to furnish enough market trepidation to keep world oil prices relatively high. Iran’s supreme leader, Ayatollah Ali Khamenei, is rarely involved in detailed political and economic policy-making. However, he called on Arab states to hold a "symbolic" one-month embargo against Western countries, to force them to stop supporting Israel. Amidst all the Middle Eastern and Venezuelan upheaval, OPEC has agreed to maintain output cuts until the end of June. Ministers are seeking to cement the price for their reference basket of crudes in a $22 – 28/bbl range, as they wait for an economic revival to lift demand for their oil.

GOM deepwater output up swiftly in 2001

MMS Regional Director Chris Oynes said Gulf of Mexico deepwater production continued to rise at a "phenomenal pace," increasing 24% in 2001 from 2000’s level. Last year, the region produced an estimated 570 million bbl of oil, up about 50 million bbl from 522 million bbl in 2000. Oynes added that "natural gas production in the Gulf showed a small increase in 2001, to an estimated 5.1 Tcf." Deepwater gas production has also continued to rise, up 20% from 2000’s pace.

ExxonMobil begins development in Chad

A 300-well, development drilling program is underway in the Doba basin in southern Chad. An ExxonMobil-led consortium began the $3.5-billion project in February. Beginning fourth-quarter 2003, a controversial 651-mi pipeline will pump oil from the landlocked country through Cameroon. The oil will then be shipped to Kribi. Peak output from the area should eventually hit an estimated 225,000 bopd.

Nigeria: Feds control oil resources

After years of fighting, a definitive ruling has been issued on whether littoral states hold claims to reserves in the Gulf of Guinea. The Nigerian Supreme Court ruled unanimously that the federal government, and not regional authorities, has control over offshore resources. The ruling, which marks the climax of a tense confrontation between the central government and six southern oil-producing states, shuts these states out of the offshore revenue. At the heart of this case, the Supreme Court had to define the limits of the boundaries of littoral states. The court defined a littoral state as "the low-water mark of the land surface thereof or . . . the seaward limits of inland waters within the state."

Ecuador deports activists protesting pipeline

Ecuadorean officials ordered the deportation of 14 foreign environmental activists who were protesting the construction of an oil pipeline through Mindo, a protected forest and bird habitat. The activists were cited for "illegally seizing property and destroying and blocking the project," said provincial immigration official Victor Hugo Olmedo. In all, police detained 17 activists – three Ecuadoreans will face charges in local courts. To boost its economy, Ecuador is depending on a new heavy crude pipeline to increase oil transport capacity.

Shell lowers expectations for Norwegian find

Stavanger Aftenbald reported that Shell’s anticipation of a possible giant gas field on Norway’s continental shelf is waning. Tests reveal water instead of gas underneath the initial gas layer. Exploratory drilling at the Presidenten field struck hydrocarbons last month, prompting speculation about the largest-ever discovery since Troll, which accounts for 60% of Norway’s total gas reserves. Shell will forecast results only when additional tests are complete.

Officials refuse ANWR drilling report

The Bush administration has rejected a government biologists’ report for the U.S. Geological Survey, which concluded that drilling in the Alaskan wildlife refuge would pose substantial risks to the caribou herd and other wildlife. U.S. Geological Survey Director Charles Groat has ordered the biologists to re-evaluate their conclusion, using the drilling plans that the administration contends would be less damaging to the Arctic National Wildlife Refuge. Furthermore, he told Interior Secretary Gale Norton that he asked the scientists to report within 10 days on the scaled-back scenario. The original report revealed that the region’s wildlife species are vulnerable to disturbances, including those from drilling. Sen. Joe Lieberman (Democrat-Connecticut) jumped on the report, saying that the findings confirm "the environmental destruction that would occur" if drilling is allowed in the refuge.