World oil production to half by 2030

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World oil production peaked in 2006 and is likely to reduce to half of current production in 2030. Peak Oil represents the situation when amount of oil that can be extracted in a year begins to decline , because geological limitations are reached. Digging up of oil becomes more and more difficult ,so the costs increase and oil production decreases. More This decline in production is due to reduction of pressure in the oil fields. This reduction in pressure takes place as we drill oil. It becomes necessary to inject gases in the oil wells to increase pressure. Finally, even when this ceases to keep up the production oil is pumped up at a slow rate. Germany based Energy Watch Group , an association of scientists and parliamentarians released a report titled Crude Oil: The Supply Outlook, in which it is concluded that oil production peaked at 81 million barrels a day r Mb/d in 2006 , much earlier than most experts had forecast. The report which comes only a few days after global oil production hit a record high , has also predicted that global oil production will fall several per cent each year and by mid 2030 it will be 39 Mb/d. Hans-Josef,the group’s founder and German Mp,told The world soon will not be able to produce all the oil it needs as demand is rising while supply is falling. This is a huge problem for the world economy. This report is in sharp contrast to International Energy Agency’s remarks which denies that such essential changes are going to happen in the near mid-term future. The report said that IEA’s message that business as usual will be possible in near future is not reflecting the true state of affairs . Image Via:CbC

Gazprom and Eni to develop pipeline to EU

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Gazprom and Italian oil firm Eni have agreed to build a massive pipeline to take Russian gas under the Black Sea to Europe. In the 50-50 joint venture, ‘South Stream’ stretch of pipeline is 900km, which will pass through Bulgaria and then branch to Austria and Slovenia in one spur and southern Italy in another. With this project, Russia will avoid the problem of oil stealing and threat of block supplies to Europe as two transit countries Ukraine and Belarus did in the early months of the year. The South Stream will carry about 30 billion cubic meters, or one trillion cubic feet, of natural gas a year. To make South Stream more secure and safe, delegations from the joint venture are pursuing the Bulgarian government. The total cost of the project isn’t disclosed yet, as they said that it will be decided after a feasibility study of the entire project will be completed by the Italian oil services company Saipem. The construction might begin next year. The projects will empower Russia to supply uninterrupted oil supplies to EU. Russia based Gazprom alone provides about a quarter of European natural gas needs. The company’s profitability depends on exports since state-set gas prices in Russia are about a fifth of those in Europe. For Eni, the pipeline would secure supplies for the third-largest natural gas market in Europe, behind Britain and Germany. Italy buys 86 percent of its natural gas from abroad, mainly from Algeria and Russia. Eni’s CEO Paolo Scaroni said:Building South Stream is the most audacious plan in the history of gas pipelines and in our sector it aims to meet the gap between Europe’s gas supply and demand Russia recently forced western oil drillers out from the country, in the wake of empowering state owned oil driller Gazprom. To be the market leader in the world, Russia is planning to increase its influence in southeastern Europe by buying state assets, supplying fuel through new pipelines and linking power grids. Russian government has also invited Balkan countries to join South Stream project, which will make it more viable. Via: gulf-times

Kazakhstan warns to stop work on Kashagan offshore field

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The vicious side of global warming is apparent to all and most of the nations are pledged to take possible measures on it. Oil drillers are widely criticized and pressurized to minimize their proven role in it. After decades of environmentalists’ battle with the government, now it seems that they are taking environmental damage seriously. To curb the environmental damage at the Caspian Sea, Kazakhstan government has issued stiff regulations on Eni-led foreign oil drillers group and threatens to suspend work at Kashagan offshore field. After the allegations, the group which is developing Kashagan, includes Eni, Exxon Mobil, Royal Dutch Shell, ConocoPhillips, Total, Inpex Holdings and with state owned KazMunaiGas, can face government wrath as it’s emulating new plans for Kashagan oil fields, which can arose worries for many foreign oil drillers. Eni-led group has already faced government threats that the terms of its production sharing agreement to develop the field could be changed in favor of the government. Although, threat unlikely to halt the development at the oil basin, yet it’ll definitely add pressure on the foreign companies during negotiations. Analysts analyzing Kazakhstan’s step is resemblance to one issued by the Russian government as it sought control of Royal Dutch Shell’s Sakhalin-2 oil and gas venture. Valery Nesterov, oil and gas analyst at Troika Dialog in Russia said: This is a kind of Sakhalin-2 situation. The Kazakh government will use this to change the terms in its favour. It is just another step increasing the pressure on the consortium The Kashagan field, which was discovered in 2000 is one of the largest found in more than 30 years. Oil field is expected to produce 1.5m barrels per day by 2019. Kashagan oil field is difficult to develop and it will be interesting to see that will government firm on its environment friendly stance or will change with the time frame, to get maximum profit out of it, as other are doing. Image Via: New York Times

Oil largesse by Venezuela; clout in Caribbean on rise

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Love him or hate him, but you have to like the way he flaunts his oil reserves. The fact that Venezuela has the largest proven oil reserves outside of the Mid-east has permitted Hugo Chavez (Venezuela’s President) to do a lot of things which he otherwise wouldn’t have dared. 4th Petrocaribe summit in Cuba marked another such event. There Chavez offered its Caribbean partners to pay for oil in form of goods and services. Epitome of perverted socialism, Chavez also attacked US capitalism and said that Petrocaribe and its member nations were creating a new ‘new geopolitics of oil.” He went on: In spite of the Yankees, our oil and gas will always be at the service, first of Venezuela, and at the same time of our brother nations of Latin American and the Caribbean. The summit was held in the southern city of Cienfuegos, Cuba, and marked an extension in the number of member countries of Petrocaribe. Honduras joined the ranks to bring the total membership of the alliance to 17 nations. The entire concept of Petrocaribe is based upon Venezuela using its oil to increase its influence in the region. Venezuela supplies oil on preferential terms to the Caribbean nations, giving huge subsidies. The Petrocaribe mechanism allows its member countries to defer payment on 40% of the oil that they buy from Venezuela for up to 25 years. On this amount these nations pay interest at a mere 1% annually. Chavez has offered other signatories to become a part of the arrangement that currently exists between Venezuela and Cuba. Every year Cuba pays for its oil by offering free services like teaching and medical in return. Cuba has sent 20,000 doctors and teachers to work off its oil-debt that is estimated at $3billion a year. And of course, Chavez’s visit to Cuba would have been incomplete without meeting his dear and ailing friend Fidel Castro. Before the summit, Venezuelan President spent nearly two and a half hours with Castro. Castro, subsequently, wrote a letter to Chavez, congratulating him on his ‘brilliant’ job in hosting the Petrocaribe summit. The analysts have mixed opinions when it comes to the Petrocaribe initiative. While it is true that several Caribbean nations would be unable to pay for their oil, especially as price of crude hovers around $90 a barrel. The mechanism becomes crucial for relieving their oil-burden and thus simulating economic development in these nations. But there’s a flip side too. Chavez’s generosity is rightly dubbed as an ostensible attempt to spread his leftist ideology in the region. Besides, critics say the deal supplies oil at market prices and is increasing the indebtedness of small Caribbean states. To reiterate: you’ve got to love the way Chavez uses his resources. It ain’t easy to trash America. Via

Gazprom to strengthen gas supply with $420bln investment by 2030

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Gazprom has agreed to invest $420 billion in the gas sector by 2030 to ensure enough supplies to the domestic and foreign market. This announcement strengthens the speculation that Russian state-controlled energy producer could further try to take a half share in TNK-BP or buy British Gas’s parent group, Centrica. Russian government has already pushed western drillers out from the country. Most of the countries, which depend on Russia for oil were accusing that state-controlled Gazprom was investing too little in production and leaving dependant countries in scarcity. Chairman Dmitry Medvedev, rules out criticism and asserts that Russian government is aware for the dependent countries need and will take all necessary measure to meet the growing demands. Making oil viable for its customers, Gazprom is considering possible swap deals with a number of foreign companies, such as Germany’s E.ON, BASF and Britain’s BP Plc. Experts assert that joint ventures and asset swap deals with foreign partners would ensure that Gazprom can supply the market in full. Gazprom supplies a quarter of Europe’s gas needs, an average of $260 per 1,000 cubic meters of gas. State owned oil driller produced 556 billion cubic meters of natural gas last year and plans to raise output to 940 billion cubic meters by 2020. Image Via: Guardian

Venezuelan oil driller gets majority stakes in country

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After nationalizing country’s oil reserve, Venezuela government has forced foreign oil drillers to sign a pact, in which they will sell their majority stakes to state-run Petroleos de Venezuela, S.A. New norms have forced to change hands as Hugo Chavez provides only two options, as one is to opt or to leave country altogether. Two American oil giant, Exxon Mobil and ConocoPhillips have firmly rejected Venezuelan government offer to negotiate with the new norms as they are ready to leave country. But four others Statoil, BP, Total and Chevron have signed the deal and ready to work with the Venezuelan PDVSA. We got the detail of six heavy oil projects in Venezuela about the revised stakes and estimated production. In CERRO NEGRO: Petroleos de Venezuela SA (PDVSA) will own 83.37 percent and BP PLC will left be 16.63 percent stake, whereas previously PDVSA owned only 41.6 percent; Exxon Mobil 41.7 percent; BP 16.7 percent, and will produce 105,000 barrels per day. In SINCOR: PDVSA gets 60 percent dominance, Total was left with SA 30.3 percent and Statoil ASA 9.7 percent, and total production will be 180,000 barrels per day. Previously PDVSA had 38 percent stakes, Total had 47 percent and Statoil were enjoying with 15 percent. In AMERIVEN: PDVSA get access to ConocoPhillips 40 percent additional shares and its total stakes rose to 70 percent, whereas Chevron Corp. is firm on its previous stakes 30 percent and will produce 190,000 barrels per day. In PETROZUATA: PDVSA successfully gets 100 percent stakes, in which ConocoPhillips owned 50.1 percent, but as it didn’t sing the new Venezuelan pact, PDVSA get access to 100 percent stakes. PETROZUATA will now produce 104,000 barrels per day. In LA CEIBA: PDVSA will get advantage over the 50 percent stakes of Exxon Mobil and will be empowered with the 100 percent equity. In COROCORO: PDVSA will rule with the additional 36 percent stakes, which it acquire from the ConocoPhillips 32.5 percent and OPIC Karimun Corporation 6.5 percent, Eni SpA successfully retain its previous owned 26 percent stakes. Venezuela has opted to nationalize country’s measure business. Chavez has already pulled out his country from the World Bank and IMF. Chavez led Country show its displeasure with U.S dominating ruling and urges other nation to pad up against U.S autocracy. Image Source

Shell’s Alaskan Drilling Project put on hold

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A U.S. federal appeals court has thwarted Royal Dutch Shell Plc’s plan to drill the deepest offshore Alaskan oil well amid the concern of project’s adverse effect on bowhead whales and other animals. A federal court in San Francisco accepted the environmental groups and Eskimo’s request to require more research on their impact on marine wildlife. The court put on hold the U.S. Minerals Management Service’s approval of the plan and scheduled an Aug. 14 hearing. The ruling deals a serious blow to Shell’s plan to drill up to four exploration wells during the brief Arctic summer. Shell was the high-bidder in two recent lease sales for offshore tracts in the Arctic, spent more than $44 million for offshore leases in the Beaufort Sea. In April, the company intensified its program by bidding $39 million for offshore leases, including more than $14 million for Flaxman Island northwest of the Arctic National Wildlife Refuge. The plan submitted by Shell Offshore Inc. proposed to drill up to 12 exploration wells on 12 tracts over three years, including four exploration wells this summer. Shell, the world’s second-largest oil company, has already invested $200 million in the drilling program. It claimed that company has thoroughly studied the effects on sea mammals and developed a plan to respond to oil spills. The Interior Department’s Minerals Management Service had approved Shell’s drilling plans in February, but environmentalists advocated that Interior Department failed to take seriously the threat posed to bowhead whales and other wildlife. However, federal court’s ruling will halt the exploration and further research may cause a significant delay or prevent drilling altogether in 2007. Oil had been discovered at Sivulliq in the 1980s but Shell had abandoned U.S. arctic exploration 21 years ago, due to the high cost of developing oil fields in the Beaufort Sea. However, galloping oil prices in the international market and increasing pressure from the Venezuela and Russia force driller to ponder over Sivulliq prospect. Shell had planned to drill one well to 14,000 feet (4,267 meters) beneath the sea floor, which would exceed the deepest well drilled in Alaskan waters by 3,000 feet. Two additional wells will be 7,000 feet deep. But now all visions and its plan seems to doom away as court has hammered its futuristic plan. Image Via: IHT

Shell and Rosneft to drill together

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Royal Dutch Shell and Russian oil giant Rosneft, has signed a deal to explore possibilities of working together to develop oil fields and market gasoline and other petroleum products worldwide. The deal seems to help both oil drillers as Rosneft is battling with heavy debt after a series of acquisitions earlier this year, secure a foreign partner to finance greenfield development and Dutch driller seeks to enter back in the Russian soil as it had forced to leave rich oil reserve year before, following months of pressure from state environmental officials. The British-Dutch firm is after new investment opportunities in Russia at a time when its two existing projects — in Sakhalin and Siberia — are close to maturing. Shell’s chief executive, Jeroen van der Veer, said: We are committed to developing our business in cooperation with Russian companies across the entire range of the energy business Shell now has a 27.5 percent stake in Sakhalin-2, which includes the world’s largest liquefied natural gas project. It is expected to start LNG production next year. Shell win back opportunity to explore in world richest oil reserve after seven month of blockade. The Anglo-Dutch group asserts that company had entered into a broad partnership with Rosneft, the Kremlin-controlled oil giant, to cooperate in oil production and refining projects in the country. Experts predict that deal will help Shell to increase its presence in the world market as both drillers are eying to develop number of joint projects in Russia and other countries. Shell is currently developing the Salym onshore oil project and has often spoken of its desire for a third big development in the country. Rosneft, worth an estimated $60 billion, has more than 6.6 billion tonnes of oil reserves on its books. Shell’s reentry in Russia, kindles the hope for other ouster western oil drillers. Image Source

Fight for oil in melting ocean now

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Man’s greed knows no boundaries. The next gold rush is to the freezing Arctic Ocean. The hullabaloo started after Russia planted its flag in the ocean bed and staked its claim over the part of Arctic Ocean called North West passage- which remains frozen during winter.Canada and Denmark have come up with their own claims. Thanks to global warming that ice is melting. The sea in a few years time will be free of ice. Hence the scramble for it. According to estimates it contains 25% of earth’s untapped oil. United States, Russia, Canada, Iceland, Norway, Sweden, Finland, and Denmark (via control of Greenland) have claims on the stretch of sea. The latest developments will severely test the international accord that governs oceans and seabeds. The matter is complex. The Law of the Sea Treaty gives a nation the option of expanding its ocean economic zone-over which it has exclusive resource-development rights-beyond the two-hundred-mile limit off its coasts if it can prove that the seafloor is actually an extension of its geological territory. Russia has made its bid on that basis. It claims Lomonosov Ridge starts from its landmass. The sickening part of the whole matter is that the nations concerned are fighting over future benefits from global warming. It should have intensified attempts to contain the growing threat of the earth heating up. What use will be all the minerals if human existence will end, unable to tolerate the climate changes wrought by man’s wrong deeds. Image credit

Chavez invites Russian investors to explore Venezuela

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Venezuelan president Hugo Chavez urges Russia to increase its investment in his country as Venezuelan government has pushed western investors out from the state and those who are providing their services in Venezuela they are under immense pressure to co-ordinate with newly formatted law. Chavez led government has put the country on socialistic stance as the country nationalizes its oil reserve and its national bank. Venezuela has taken majority stakes from the foreign oil drillers and empowered state led Petroleos de Venezuela, S.A. with majority holdings. Four major western oil drillers accepted Venezuelan suppressive norms, whereas Exxon Mobil and ConocoPhillips firmly rejected the government proposed deal and decided to leave rich Orinoco Belt. New regulations squeezes American as well as European investors to invest in the country and new investors are abandoning their plan to provide services in Venezuela. Venezuela, which is folding arms against America, criticizes U.S. for its dominating laws and leveling their companies as “vampires”. After restricting western oil drillers, Venezuela is in dearth of investors, so it’s seeking Russian help to explore country’s rich oil deposit. While touring Russia, Chavez interacted with the Russian business leaders to develop “road map” that would bolster and diversify Russian-Venezuelan business ties – especially in the energy sector, including construction of a natural gas pipeline and oil refineries. Chavez said, We are very satisfied with the presence of Russian companies in our oil industry, and will do our best to develop this cooperation further Chavez disclosed, with Russia’s help Venezuela will build four massive oil refineries and will make headway for other 13 pending projects. President also invited Russian companies to invest in a 5,000-mile, or 8,000 kilometer, natural gas pipeline to Argentina, retrofitting Venezuela’s dilapidated seaports, and developing its gold mining and chemical industries. It’s notable that Chavez has pulled the country out of the international institutions like World Bank and IMF but many economists have warned that his steps can jeopardize country’s economy. Initially it was looking like that, but after this development socialist government is observing on the right path to lead the country. Chavez is on week-long EurAsian tour. During this tour Chavez will try to win favor from European and Asian nations to invest in Venezuela and enhance bilateral trade with Venezuela. Right now Chavez is in diplomatically isolated Belarus and after it, it’s expected that the leader will fly back to Russia to win the heart of Kremlin leader. Source