Social Pressure for
Bolivian Energy Reform Intensifies
Efe 3/15/2005 URL: http://www.rigzone.com/news/article.asp?a_id=21112
Union pressure for approval of energy industry legislation obliging
foreign oil and gas companies to pay much higher royalties to the state
intensified Tuesday in central and southern Bolivia.
In addition to the highway blockades in the Chapare region which have
halted the passage of some 1,500 vehicles along the country's main
east-west road, protesters closed several routes to the southern
provinces of Sucre and Potosi.
The increase in pressure tactics came just hours after Congress
restarted its debate on the new Hydrocarbons Law, whose elements -
particularly concerning the royalties to be imposed on transnational
energy firms - have brought the administration and the legislature, on
the one hand, into conflict with the leftist opposition and labor
unions.
Bolivia's huge reserves of natural gas are the nation's main resource.
Gas industry officials say the industry overhaul - including a proposed
50 percent royalty on energy exploitation - espoused by the leftists
amounts to nationalization, and would scare foreign investment out of
the country.
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Bolivia's Lower
House Discusses Royalty Article Proposals
Business News Americas (BNamericas.com) 3/4/2005 URL:
http://www.rigzone.com/news/article.asp?a_id=20838
Bolivia's lower house has begun the final round of discussions over a
key article in the new hydrocarbons bill that would allow the state to
receive up to 50% of oil revenues, the ABI government news service
reported. The lower house is evaluating three different proposals for
royalties and taxes that would give the state a 50% share of oil
revenues.
The economic development commission led Santos Ramírez, who belongs to
the opposition MAS party, proposes charging international oil companies
a 50% royalty.
The government proposes charging an 18% royalty and a 32% tax, while
the president of the lower house, Mario Cossío, has proposed a 50% tax.
The lower house has approved just over half of the 142 articles that
make up the bill and is debating the most controversial articles such
as regional royalties and the industrialization of gas.
Just last week the lower house approved article 90 of the bill, which
would open up the country's hydrocarbons transportation sector and
thereby eliminate the monopoly held by gas transport company Transredes.
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Repsol Mum on Bolivian
Demand for Increased Royalties
Efe 3/11/2005 URL: http://www.rigzone.com/news/article.asp?a_id=21033
The Spanish energy company Repsol YPF declined to comment Friday on a
demand by a Bolivian leftist leader that it hand over to La Paz half of
its profits in the Andean nation, which is home to vast deposits of
natural gas.
Evo Morales, head of Bolivia's Movement Toward Socialism and leader of
the powerful coca-leaf growers' federation, is engaged in a battle with
moderates in his country over the revamping of legislation regulating
gas and oil extraction. He said in an interview published Friday in the
Spanish daily ABC that Prime Minister Jose Luis Rodriguez Zapatero
"should oblige" Repsol to increase the royalties it pays Bolivia to 50
percent.
He said that, because of the 16th-century conquest and subsequent
exploitation, Spain "has a historic debt" to Bolivia. He also acuses
multinational energy companies operating there, including Repsol, of
committing "contraband" because they pay royalties he deems
insufficient.
Consulted by EFE, a Repsol YPF spokespeson said only: "We do not
comment on press articles."
Repsol last year increased its natural gas production by more than 11
percent due mainly to a 51-percent hike in its Bolivia operation. The
firm has said that further investment in the Andean nation depends on
the final terms of the new hydrocarbons law there.
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Namibia Offshore
EnerGulf Acquires Stake in Block
EnerGulf Resources March 10, 2005
EnerGulf Resources has entered into a Memorandum of Cooperation with
National Petroleum Corporation of Namibia (NAMCOR, the state petroleum
company of Namibia) establishing a working relationship with regard to
joint ventures in oil and gas exploration, development and production
opportunities in Namibia, in particular Block 1711, and gas to liquids
and related opportunities.
Under the terms of the MOC, NAMCOR has granted to EnerGulf an option
for up to 25% of NAMCOR's interest in Block 1711,
Related Products
Basic Well Log Analysis, 2nd Edition offshore Namibia (being a 25%
working interest in the Exploration License that will be granted by the
Minister of Mines and Energy). Block 1711 is situated in the Namibe
Basin off the northern coast of Namibia along the international
boundary with Angola.
Two separate exploration prospects have been identified by extensive
seismic data on the 8,931 sq. km Block, being the Kunene and Hartmann
prospects.
The Kunene Prospect, defined originally by 2D and recently confirmed by
a 650 sq. km. 3D seismic program over the prospect, is a huge
structure, probably Cretaceous in age and appears to be a carbonate
buildup, sealed by a thick Tertiary shale sequence. The structure forms
a four way dip closure covering 95 square km., with over 675 to 1,400
m. of vertical closure. Additionally, there are abundant direct
hydrocarbon indicators associated with the Prospect. The resource
potential has been assessed at up to 8 trillion cubic feet of gas (or
1.4 billion barrels of oil), with a mean value of 5 TCF/G (733 MMbbl/O).
Analogs to the Kunene Prospect are several giant oil and gas fields
including El Abra/Tampico (Mexico) with reserves of approximately 3
Bbbl/O, Malampaya/Camago (Philippines) with approximately 4 TCF/G and
200 MMbbl/O and Tenghiz (Kazakhstan) with approximately 8 Bbbl/O.
The Hartmann Prospect, located in the southern part of the Block, has
been identified by extensive 2D seismic and is interpreted as a large
stratigraphic trap with an area of 343 sq. km and 1,600 m vertical
relief. It appears to be a carbonate buildup with the same age of the
Kunene carbonate buildup. Its assessed mean recoverable resource
potential is estimated to be 2.2 Bbbl/O or 16.4 TCF/G.
Commenting for EnerGulf, Jeff Greenblum, Chairman of the Board, said:
"We are looking forward to our new relationship with NAMCOR and the
opportunity to develop this exciting Block in such a great country. We
are pleased with the pace at which we are moving forward with our
Pan-African business plan in building a strong portfolio of high impact
exploration opportunities."
Also commenting, Dr. Bill St. John, EnerGulf's Senior Advisor for
African Exploration, said: "Block 1711 contains the most attractive
undrilled structure that I have seen in over 40 years of exploring for
oil and gas internationally."
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Egypt Petronas and
Partners Export First LNG
Petronas 3/7/2005 URL:
http://www.rigzone.com/news/article.asp?a_id=20880
PETRONAS, together with its partners BG International Limited (BG) and
Egyptian General Petroleum Corporation (EGPC), have successfully
delivered their first liquefied natural gas (LNG) cargo to Asean LNG
Trading Company Ltd (ALTCO), a subsidiary of PETRONAS.
The delivery is the partners' first cargo commitment under a five-year
sale and purchase agreement signed with ALTCO and BG Gas Marketing Ltd
(BGGM). Under the agreement, ALTCO and BGGM will on a 50:50 basis lift
1.45 million tonnes of LNG annually from the Damietta LNG Complex in
Egypt, owned by Spanish Egyptian Gas Company (SEGAS). The plant
receives its feed gas from the West Delta Deep Marine (WDDM) Concession
Area under a separate five-year processing agreement it reached with
Egyptian Natural Gas Company Holding (EGAS). PETRONAS has a 50 per cent
working interest in the WDDM Concession Area, about 140 kilometers away
from the LNG Complex.
The LNG was loaded into an ALTCO's vessel at the Complex last Friday.
The cargo is among the first batch of LNG shipments from Egypt and
marks the product's first export by PETRONAS and its partners from the
country.
PETRONAS, which first entered Egypt in 2001 through a joint venture
with Shell in the North Mediterranean Deep Water (NEMED) block, is an
active player in the country's upstream and downstream oil and gas
activities. It has a strategic interest in the Egyptian LNG Project
(ELNG) in partnership with BG, EGPC and EGAS. The ELNG project
comprises the development and operation of LNG liquefaction plant and
related infrastructure at Idku, approximately 50 kilometers east of
Alexandria. The first of the plant's two trains is expected to come on
stream middle of this year.
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Louisiana LNG Project
Sempra LNG
Sempra LNG Signs Heads of Agreement With Eni S.p.A for
- 20-Year Capacity Agreement With Italian Firm Slated to Begin in
2008
- Involves Approximately One-Third of Terminal's Total Capacity
SAN DIEGO and MILAN, March 8, 2005 (PRIMEZONE) -- Sempra LNG, a unit of
Sempra Energy (NYSE:SRE), today announced it has signed a Heads of
Agreement (HOA) that provides Eni S.p.A. (NYSE:E), one of the world's
leading oil and natural gas exploration and production companies, with
approximately one-third of the capacity of Sempra LNG's Cameron LNG
receipt terminal under development near Lake Charles, La.
The non-binding HOA contemplates finalizing a definitive 20-year
terminal services agreement by mid-2005.
Under the proposed agreement, Sempra LNG will provide Eni between 400
million cubic feet per day (MMcfd), or 4.1 billion cubic meters (Bcm)
per year, and 600 MMcfd, or 6.2 Bcm per year, of capacity in the
company's Cameron LNG receipt terminal. Upon its completion in 2008,
Cameron LNG will have an initial sendout capacity of 1.5 billion cubic
feet per day, or 15.5 Bcm per year, of natural gas.
"This new relationship with one of the world's leading oil and natural
gas companies marks another significant step in our corporate LNG
strategy," said Darcel L. Hulse, president of Sempra LNG. "We look
forward to concluding the definitive terminal service and supply
agreements involving Cameron LNG in the near future, so that we can
begin delivering new gas supplies through the facility in 2008."
On Jan. 27, 2005, Sempra LNG announced it signed an HOA providing
Tractebel LNG North America LLC (Tractebel LNG NA), one of the business
divisions of SUEZ (NYSE:SZE), with between 325 MMcfd and 500 MMcfd of
capacity of the Cameron LNG receipt terminal. That non-binding HOA
contemplates finalizing a definitive 20-year capacity agreement by June
30, 2005.
Cameron LNG is located near the Gulf Coast along the Calcasieu Ship
Channel, about 15 miles south of Lake Charles. The project has received
the "authority to construct" from the Federal Energy Regulatory
Commission and is slated to begin construction later this year.
Cameron LNG is expected to be interconnected with U.S. interstate and
intrastate pipelines. These pipelines will have up to 10 billion cubic
feet per day of downstream capacity to the Midwest, Southeast, Atlantic
and Northeast markets.
Another Sempra LNG project, Energia Costa Azul, is designed to help
Baja California, Mexico, meet its long-term energy needs, while, at the
same time, providing significant supplies to the U.S. market. It will
be the first major LNG receipt terminal built on North America's West
Coast. Sempra LNG is the sole owner and operator of Energia Costa Azul.
The company has signed a 20-year agreement with Shell International Gas
Limited for half of the facility's capacity, or 500 MMcfd. The
remaining capacity will be utilized to send out 500 MMcfd of regasified
LNG, which Sempra LNG has procured from Indonesia's Tangguh LNG
project. Construction at Energia Costa Azul has commenced and is
scheduled to begin operation in early 2008.
LNG is natural gas that has been cooled below minus 260 degrees
Fahrenheit and condensed into a liquid. LNG occupies 600 times less
volume than in its gaseous state, which allows it to be shipped in
cryogenic tankers from remote locations to markets where it is needed.
At the receiving terminal, LNG is unloaded and stored until it is
vaporized back into natural gas and moved via pipelines to customers.
Headquartered in Italy, Eni S.p.A. is an international company
operating in the oil, natural gas, electricity generation,
petrochemicals, engineering and construction and oilfield services
sectors of the energy industry. The company is active in approximately
70 countries and has more than 76,000 employees. The company's 2004
consolidated net sales from operations of 58,346 million euros
generated a net profit of 7,274 million euros.
Sempra LNG, a unit of Sempra Global, oversees LNG project development.
Sempra Energy, based in San Diego, is a Fortune 500 energy-services
holding company with 2004 revenues of $9.4 billion. The Sempra Energy
companies' 13,000 employees serve more than 10 million customers in the
United States, Europe, Canada, Mexico, South America and Asia.
Sempra LNG is not the same company as the utility, SDG&E or
SoCalGas, and Sempra LNG is not regulated by the California Public
Utilities Commission.
CONTACT: Sempra Energy Media Contact: Art Larson (877) 866-2066
Financial Contact: Karen Sedgwick (877) 736-7727
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Gulf Coast.
ExxonMobil LNG, Pipe Project Prelim Environmental Nod
Intelligence Press March 04, 2005
The Federal Energy Regulatory Commission has given preliminary
environmental approval to ExxonMobil Corp.'s proposed Golden Pass
liquefied natural gas (LNG) terminal and associated pipeline facilities
along the Gulf Coast.
"Approval of the proposed project with appropriate measures as
recommended would have limited adverse environmental impact," according
to the notice of availability of the draft environmental impact
statement on the Golden Pass project [CP04-386, CP04-400]. Before
Golden Pass can move forward with its LNG project, it must receive a
final environmental impact statement and Section 3 approval.
The proposed facilities would consist of an LNG import terminal and
interconnecting pipeline facilities near Sabine Pass, TX, 10 miles
south of Port Arthur, with a 1 Bcf/d capacity, expandable to 2 Bcf/d,
and targeted for in-service in late 2008.
The proposed marine terminal basin would be connected to the Port
Arthur Channel, and would include a ship maneuvering area, two
protected berths and unloading facilities capable of accommodating up
to 200 LNG tankers each year. Other facilities would include five LNG
storage tanks, with a total working volume of approximately 975,000
barrels; and a pipeline system comprised of 77.8 miles of 36-inch
diameter mainline, 42.8 miles of 36-inch diameter loop, and 1.8 miles
of 24-inch diameter lateral.
ExxonMobil and Qatar Petroleum have signed an agreement for delivery of
15.6 million tons of LNG (2 Bcf) to the United States from Qatar over a
25-year period. The Golden Pass project mirrors another ExxonMobil LNG
proposal, the Vista del Sol project on the Texas coast near Corpus
Christi.
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S. Korea Finds New
Gas Reserves Off East Coast
3/6/2005 12:36:00 PM Moneyplans.net Staff
SEOUL, March 3 Asia Pulse - State-run Korea National Oil Corp.
said Thursday it has discovered additional gas reserves near the
Donghae-1 gas field off South Korea's east coast. The reserves are
estimated at 800,000 tons of liquid natural gas worth US$280
million.
The new gas reverves, is located 5 kilometers southwest of the
Donghae-1 gas field, some 60 kilometers off the southeastern
industrial city of Ulsan. The state-run company plans to exploit the
reserves from the latter half of 2007. It has been exploring in
two areas near the Donghae-1 gas field, including the new gas
field, since the end of last year.
South Korea, which began commercial gas production at the
Donghae-1 field in November for the first time, expects to
produce 400,000 tons of liquefied natural gas annually for 15
years, or 2.2 per cent of the country's current gas consumption.
South Korea is the world's second-largest importer of gas.
The Donghae-1 field, found in 1998, supplies Ulsan and its
surrounding regions, saving South Korea US$1.2 billion annually
in gas import payments. South Korea aims to meet 10 per cent of its
total oil needs by 2008 through increasing investment in
exploration and development.
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Chukchi Sea Potential off
Alaska's northwest coast -- 14 Tcf
Second Look at Alaskan Well May Show Big Find
by Tim Bradner Alaska Journal of Commerce 3/15/2005 URL:
http://www.rigzone.com/news/article.asp?a_id=21097
The U.S. Minerals Management Service has revised a geologic analysis of
an offshore exploration well drilled in the Chukchi Sea off Alaska's
northwest coast in 1989 and now concludes the well may have found a
major natural gas discovery. The remote location of the find, about 100
miles west of Barrow, means that it is uneconomic - at least for now.
The analysis now shows the find may have about 14 trillion cubic feet
of gas in place, as well as 724 million barrels of gas condensate, a
liquid hydrocarbon.
MMS released the report by government geologists James Craig and Kirk
Sherwood in February. The revised estimate was completed in December,
according to the report.
The Burger prospect was drilled by Shell Western Exploration Co. in the
winter seasons of 1989 and 1990. Drillers encountered a significant gas
show in a 107-foot-thick section of sandstone rock at a depth of 5,560
feet, according to the MMS report. Shell and its partners were hoping
to find oil instead of gas, however. After drilling Burger and two
other Chukchi Sea prospects, the company shelved its program. The
leases were ultimately turned back to the federal government.
The analysis by Craig and Sherwood indicates that the geologic
formation covers 189,800 acres underlying 50 federal lease tracts, none
of them now leased. Shell and its partners paid $170 million in a 1987
federal outer continental shelf lease sale for exploration rights on 37
of the tracts.
"Burger could represent the largest hydrocarbon discovery to date on
the Alaska OCS," the report indicated. There was a cautionary note,
however. "Volumetric estimates for the Burger pool are highly
speculative because only one well was drilled on the very large
structure," the report said.
An economic analysis showed that it might cost as much as $11 billion
to develop the prospect.
Any development would require use of untested arctic technology such as
sub-sea wells and yeararound operations in pack ice, the report said. A
long-distance pipeline to shore would also be needed as well as a
pipeline across the National Petroleum Reserve-Alaska to the Prudhoe
Bay area.
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Alaskan Hydrates
Could Hold 100 TCF Gas
Alaska Journal of Commerce 3/15/2005 URL:
http://www.rigzone.com/news/article.asp?a_id=21098
Huge volumes of natural gas are trapped in frozen hydrates on the North
Slope, and if gas can be economically produced from the ice-like
crystalline solids, some critical problems facing a $20 billion natural
gas pipeline could be eased.
A gas hydrate is formed from a mixture of water and natural gas,
usually methane. They occur in the pore spaces of sediments, and may
form cements, nodes or layers. A research program led by BP Exploration
(Alaska) Inc. and the U.S. Department of Energy has concluded that
there are 100 trillion cubic feet of gas physically in hydrates that
have been located above the now-producing Prudhoe Bay, Milne Point and
Kuparuk River oil fields.
"There is now a high degree of confidence in this number," state oil
and gas director Mark Myers told state legislators in briefings.
The work by BP, which involved reservoir simulation work and other
studies, also concluded that it might be possible to produce gas from
the hydrates with conventional wells.
Myers said the simulations indicate that the well could produce at
initial rates of 50 million cubic feet per day and stabilize with a
long-term production rate of around 5 million cubic feet per day.
"That's a very good gas well," he said.
BP was cautious in its assessment of the study results, however.
"Natural gas hydrates represent a very interesting, very prospective
area of unconventional energy supply. Our studies are at an early
stage, however," said Dave MacDowell, a spokesman for BP. The company
isn't counting on hydrates yet, however. "Given the highly uncertain,
unproven potential of unconventional sources like gas hydrates, our
focus is firmly directed on developing the best natural gas pipeline
project possible," MacDowell said.
If a pipeline can be successfully planned based on the known gas
reserves, it will set the stage for successfully developing
unconventional gas, such as from hydrates, he said.
Still, the state Division of Oil and Gas is very bullish on hydrate
prospects. Myers believes that as much as 60 percent, or 60 trillion
cubic feet, of the gas physically in the Prudhoe-area hydrates can be
economically produced. The state is asking Congress to fund a $70
million research program to do a test production program from the
Prudhoearea hydrates.
If the gas can be produced it has big implications for the gas
pipeline, Myers said. At present there are about 35 trillion cubic feet
of proven gas reserves on the North Slope, most of it in the Prudhoe
Bay oil field and the undeveloped Point Thomson gas field 60 miles to
the east. That's enough gas to support a large-diameter gas pipeline
carrying 4 billion cubic feet per day for about 20 years. While the
industry and the state are confident more gas will be found to extend
the life of the gas pipeline, the financial community will require the
project's economics to be based on the gas that is proven. This
essentially means the giant project must be paid off in 20 years.
The tariff, or transportation charge for moving gas, will be based on
that 20-year capital recovery requirement.
If more gas is available sooner, such as that from hydrates, the
financial community could be persuaded to accept a longer economic life
for the project, Myers said.
If the pipeline could be paid off in 30 years instead of 20 years, as
an example, the shipping charges would be lower, state revenues and
production revenues to producers would be higher, and the huge risk for
the project would be somewhat mitigated.
The financial concept is similar to that of a home mortgage with a
30-year loan compared with a 20-year loan. The monthly payments on the
30-year mortgage will be lower than that of the 20-year mortgage.
The work by BP is encouraging to the state because of the particular
circumstances in which the hydrates seem to occur in the vicinity of
the producing oil and gas fields, Myers said. The fields are laced with
layers of shale that create impermeable fault blocks, which means that
the hydrates would appear to be contained in many separate small
segments. There appears to be layers of free natural gas below the
hydrates in many locations.
The BP studies seem to indicate, Myers said, that it might be possible
to produce gas from the hydrate by first producing the free gas in the
trap just below the hydrate with a conventional production well.
When the reservoir pressure declines in the free gas trap, the pressure
would also be drawn down in the overlying hydrate, which would result
in gas coming out of the hydrate. The gas could then be produced
through the well, Myers said.
"What are methane hydrates?
Hydrates are formed when a cagelike lattice of ice encases molecules of
methane, the chief constituent of natural gas. When the hydrate forms,
the trapped methane compresses. A cubic centimeter of methane hydrate,
when it melts at room temperature, will release about 160 cubic
centimeters of methane.
Methane hydrates form in generally two types of geologic environments:
permafrost regions where cold temperatures dominate and beneath the sea
in sediments of the outer continental margins where high pressure
dominate. Hydrates can also form a seal that traps more conventional
supplies of natural gas seeping toward the surface.
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