The largest economies in South America
should expect annual growth in renewable
energy production of 10.1% from
2009 to 2020, according to a report released
Tuesday.
The study, by London-based business information
firm GBI Research, cites support
for renewables development by governments,
the private sector, and international
financial institutions as important drivers of
this growth.
2. Oil Prices to Rise as Demand Sees Significant Growth to 2035
The US Department of Energy’s Energy In- Demand growth will mainly depend on lion b/d in 2035, up more than 4 million
formation Administration (EIA) has issued a prices, but for the reference case, the EIA b/d from 2008.
new long-term forecast for energy supply projects demand to be 111 million barrels Iraq will see the fastest growth rate, with
and demand saying that petroleum’s share of per day in 2035, up from about 86 million output rising by 4 million b/d, or 4% per
the world’s energy mix will decline by 2035. b/d in 2007. year, to 6.1 million b/d. While that is a large
But increases in transportation demand will Economic growth, particularly in devel- jump from today, the forecast is much more
still push oil prices up and raise greenhouse oping countries outside the OECD, will be sober than the Iraqi government’s own pro-
gas emissions. the main driver. Non-OECD demand will jection of 16 million b/d. In the lower-price
In its “International Energy Outlook,” re- skyrocket by almost 24 million b/d, or scenario, the EIA has Iraqi production at 7.6
leased Tuesday, light, sweet crude prices will 1.8% per year, during the timeframe to 61 million b/d in 2035.
trend upward and average $133 per barrel million b/d. Of total supply in 2035, unconventional
(in 2008 real dollars) by 2035. This is mostly Meanwhile, OECD demand is expected to sources such as oil sands, biofuels, and gas-
consistent with the EIA’s forecast in last year’s rise only slightly from 2007 levels, to 49.5 to-liquids will make up 13 million b/d, a
Outlook (OD Jun.2,p5). million b/d. roughly 9 million b/d rise from 2008 levels.
Speaking in Washington on Tuesday, In the high-price case, world demand Non-Opec conventional supply will remain
EIA’s deputy administrator, Howard Gru- would be considerably lower, averaging flat at 52 million b/d.
enspecht, acknowledged the high degree 90 million b/d, while the lower-price sce- The EIA also says that overall energy de-
of uncertainty in the forecast. He also nario would put demand at 120 million mand in non-OECD countries will surpass
pointed out that the forecast is based on b/d in 2035. that of OECD members in 2025. Non-
existing policies and regulations, which To meet demand, supply will come from OECD demand will make up 86% of the in-
are, of course, subject to change. both conventional and unconventional crease over the next two and a half decades.
Gruenspecht made his comments at the outlets. Oil production is set to rise by al- By 2035, non-OECD energy demand will
Center for Strategic and International Stud- most 26 million b/d from current levels, constitute 62% of the world’s total. As a result,
ies (CSIS), where the EIA announced the with Opec making up about 40% of the the agency says, most increases in the world’s
launch of its new forecast. world’s total in 2035, more or less the greenhouse gas emissions will come from de-
In the Outlook, the agency has a number same share as today. veloping countries. The EIA predicts green-
of different price scenarios to 2035, with the Within Opec, the biggest gains will come house gas emissions of 42 billion metric tons
highest-price case at $210/bbl and the low- in Saudi Arabia, Iraq, and Kuwait. The EIA in 2035, a 43% increase from current levels.
est case at a price of $51/bbl. pegs Saudi Arabia’s production at 15.1 mil- Matt Piotrowski, Washington
Liability . . .
(Continued from 1)
(OD May13,p1). bility Trust Fund with “significant increases” against individual firms.
At a hearing before the Senate Energy in liability caps for individual companies, “The litigation on punitive damages for
Committee on Tuesday, lawmakers griped Associate US Attorney General Thomas Per- the Exxon Valdez spill took two decades to
that the existing liability limits set under the relli told senators. resolve, and that itself was a tragedy,” she
Oil Pollution Act of 1990 were not crafted to The trust fund, administered by the US said. “I’m committed to ensuring that we
keep pace with inflation. Coast Guard, spreads the cost of disaster don’t see a similar situation unfold over this
The $75 million economic damage cap is response across the offshore oil industry, Gulf spill.”
“nowhere near the damages which will result he said. Lauren O’Neil, Washington
from this accident,” said Sen. Jeff Bingaman Withdrawals from the fund are capped
(D-New Mexico), who chairs the panel. at $1 billion per incident, but the presi-
“Equally troubling, the law requires the dent is hoping to boost this to $1.5 billion
Leaking . . .
Secretary of Interior to adjust the amount of by increasing per-barrel fees to 9¢ from 8¢ (Continued from 1)
these caps at least every three years ... yet the at present. to Transocean’s Deepwater Enterprise on
limits on damages for offshore facilities have Perrelli also addressed mounting concerns the surface, where the oil would be col-
not been increased since the law was passed that higher liability caps could make it too lected and the natural gas flared.
in 1990 — 20 years of inflation have been difficult for small, independent producers to Wells said such an “LMRP cap” would al-
ignored,” he added. obtain insurance. low BP to capture as much of the flow from
Some feel a retroactive liability hike could Lawmakers should be aware that some the well as possible while the company
violate the ex post facto clause of the US Con- liability hikes may diminish “the number works on other options to kill the well. The
stitution, which prohibits new laws from be- of market participants,” he urged in his “LMRP cap” has already been lowered to the
ing applied to most past occurrences. testimony. seabed near the well, so it can immediately
Robert Meltz, a legislative attorney for the Sen. Lisa Murkowski (R-Alaska), the com- be put into position should the “top kill” fail.
Congressional Research Service, countered mittee’s ranking member, is pressing for en- The final option, according to Wells,
that retroactive adjustments to liability law hancements to the trust fund through legis- would be to drill two new relief wells and di-
may legitimately conflict with three constitu- lation she has co-sponsored with Sen. Mark vert the oil and gas flow from the damaged
tional clauses regarding contracts and prop- Begich (D-Alaska). well to there. BP is currently drilling those
erty rights. However, she said lawmakers should use wells, and they should reach their target
The Obama administration hopes to cou- caution when reexamining the value of eco- depth in about 40 days, he said.
ple an expansion of the existing Oil Spill Lia- nomic damage claims that can be brought John A. Sullivan, Houston
May 26, 2010 2 www.energyintel.com
3. Some Benchmarks Hit Yearly Lows as Prices Continue Retreat
Crude and oil products had another sig- Crude markets and equities had the same which could drive down oil demand.
nificant sell-off Tuesday as investors contin- downward trajectory, both driven by a host Heightened tensions between North and
ued to steer away from risky assets such as of news events which cast doubt on the South Korea also caused traders to seek safe
commodities into safe havens like the dollar. health of the global economy. investments.
Nymex July crude futures fell $1.46 Concerns about Europe’s economic “Fear has gripped market participants.
to end at $68.75 per barrel. In London health once again contributed to the day’s There is no other way to explain the com-
on ICE Futures, July Brent contracts negative sentiment. The dollar approached plete reversal of the consensus that held just
dropped $1.62 to $69.55, their lowest a four-year high against the euro, one day a few weeks ago that $90 crude oil was in-
since October. Nymex June gasoline fu- after news broke that Spanish regulators evitable,” wrote MF Global’s Mike Fitzpatrick
tures slipped 4¢ to close at $1.9308 per were forced to take over a bank. in a note. “What began as skepticism that re-
gallon. Nymex June heating oil futures, A strengthening dollar makes dollar-de- covery was sustainable has now become a
which also hit a yearly low, finished at nominated commodities such as oil more wholesale rout.”
$1.8717, down 2.76¢. expensive for users of other currencies, Gregory Gethard, New York
Daily Oil & Gas Price Review Prices for Tuesday, May 25, 2010
Crude Oil Nymex Light Sweet ($/barrel) Light Sweet Futures — Prompt Month ($/barrel)
Change 1st Month 5-Day Avg. 2nd Month 3rd Month
150 79 Nymex Light Sweet -1.46 68.75 69.38 70.10 71.04
125 77 ICE Brent -1.62 69.55 71.59 70.38 71.09
100 75
75 73
50 71 Cash/Spot Change Spot Price 5-Day Avg. Month-Ago Year-Ago
69 WTI (Cushing) -3.40 64.33 67.55 82.41 59.49
25 67
D J F M A M J J A S O N D J F M A M M T W T F M T
WTI (Midland) -0.64 65.30 67.68 81.83 59.31
Brent (Dated) -2.44 66.93 69.48 85.63 57.21
North American Crudes ($/barrel) International Crudes ($/barrel)
Cash/Spot Change Spot Price 5-Day Avg. Month-Ago Cash/Spot Change Spot Price 5-Day Avg. Month-Ago
WTS (Midland) -0.64 64.10 66.31 80.08 Opec Crude Basket I -+1.05 68.59 70.50 83.91G
LLS (St. James) -0.64 72.20 74.13 86.48 Nigeria Bonny Light -2.49 68.43 70.84 86.83
ANS (California) -0.04 69.41 69.20 79.83 Dubai -1.66 68.37 70.17 83.92
Mars (Clovelly) -0.64 74.15 72.25 80.98 Oman -2.19 67.41 69.65 83.63
Maya (Mexico) -0.35 58.64 60.22 72.81 Russia Urals -2.44 65.63 68.00 83.23
Refined Products Nymex Gasoline (¢/gallon) Heating Oil/Gasoline Futures — Prompt Month (¢/gallon)
Futures Change 1st Month 5-Day Avg. 2nd Month 3rd Month
375 240 Nymex (¢/gal.)
275
230 RBOB Gasoline -4.00 193.08 196.85 191.93 191.66
220 Heating Oil -2.76 187.17 190.30 188.42 190.24
175 210
200
75 190 ICE (London)
D J F M A M J J A S O N D J F M A M M T W T F M T Gasoil ($/ton) -11.75 592.50 605.30 595.50 599.75
Gasoil (¢/gal.) -3.73 188.10 192.16 189.05 190.40
US Product Spot MarketsH —————— Gulf Coast —————— —————— New York —————— —————— Los Angeles ——————
Gasoline (¢/gal.) Change Spot Price 5-Day Avg. Month-Ago Change Spot Price 5-Day Avg. Month-Ago Change Spot Price 5-Day Avg. Month-Ago
Regular Gasoline -2.27 182.33 185.49 219.21 -1.37 185.83 188.06 222.21 -1.33 191.67 192.89 231.48
Premium Gasoline -0.02 200.33 199.39 229.21 -1.37 198.08 200.11 234.96 -1.33 201.67 202.89 240.48
Regular RBOB -2.77 189.43 192.03 225.96 -1.37 195.33 197.38 231.71 -1.33 193.67 194.89 233.48
Mid-Distillates (¢/gal.)
No. 2 Heating Oil -1.84 186.19 187.69 216.35 -1.46 187.64 189.57 219.10 — — — —
No. 2 Low Sulfur Diesel -0.96 188.54 189.65 219.60 -1.46 191.29 193.20 224.10 -1.84 198.19 198.22 230.23
Jet Fuel -1.46 191.54 192.70 221.60 -1.46 195.29 196.80 223.10 -1.46 197.04 198.30 229.73
Residual Fuel ($/bbl)
No. 6 Oil (low sulfur) -0.15 64.88A 66.02 75.97 +0.10 66.13B 67.21 79.97 — — — —
No. 6 Oil 1% S -0.15 63.88C 65.02 74.97 +0.10 63.88D 64.96 78.03 — — — —
No. 6 Oil 3% S -0.10 62.03 63.08 74.05 +0.19 62.47 62.84 74.97 0.00 445.00E 454.00 485.00
Natural Gas Nymex Henry Hub ($/MMBtu) Nymex Henry Hub — Prompt Month ($/million Btu)
Futures Change 1st Month 5-Day Avg. 2nd Month
14 4.7 Nymex ($/MMBtu)
11 4.2
Henry Hub +0.034 4.051 4.073 4.114
8
5 3.7 Spot Gas Prices ($/MMBtu)F
2 3.2 Key Hubs/Cities Change Spot Price Week-Ago Month-Ago
D J F M A M J J A S O N D J F M A M M T W T F M T
New York +0.12 4.61 4.82 4.55
Henry, Louisiana -0.00 4.08 4.42 4.18
Chicago +0.02 4.12 4.49 4.27
Produced by Oil Daily in cooperation with Reuters. All spot assessments are bid prices published by Reuters at 5.30 p.m. ET. Katy, Texas +0.00 4.02 4.38 4.15
Notes: A—0.7% sulfur low pour. F—Source: Natural Gas Week Southern California Border +0.04 3.90 4.27 4.10
B—0.3% sulfur high pour. G—20-day avg. AECO Hub (Canada) -0.03 3.37 3.69 3.61
C—Low pour. H—Bid prices for latest spot deals at press time.
D—High pour. I—Opec basket price is for previous day.
E—Price is for 380 CST, given in $/metric ton.
May 26, 2010 3 www.energyintel.com
4. AIM-Listed Oil and Gas Firms Continue Share Price Recovery
Share prices of small-cap oil and gas compa- ration point,” E&Y said. “Many, but by no ed estimated oil reserves off Namibia.
nies listed on London’s junior Alternative In- means all, companies have been able to repair For the other 52% whose share prices
vestment Market (AIM) made further gains in their balance sheets — now it’s time for them dropped, the main reason was poor drilling re-
the first quarter of 2010, outperforming their to deliver on expectations.” sults. Shares in Uganda-focused Tower Re-
larger peers on the main FTSE market. The outlook for energy IPOs is promising, sources tumbled 63% after it drilled a second
Ernst & Young said its Oil and Gas Eye in- with several oil and gas firms planning flota- dry well in Block EA5, Desire’s shares fell 45%
dex, which monitors shares of the top 20 AIM- tions this year. E&Y said investors are more after it abandoned a well in the North Falkland
listed firms, increased for the fifth quarter in a likely to plow their money into firms with Basin, and shares in Oilex tumbled 30% after a
row, rising 20% in the three months to March. proven track records of delivering growth. New Timor Sea well was dry.
This brought the increase since the start of Zealand-focused Kea Petroleum — whose Two companies — Cove Energy and Ser-
2009 to 167% — although share prices are still board brought Rift Oil to AIM before it was ac- ica Energy — joined AIM in March, while
8% below their value in March 2008. quired by Talisman Energy — raised $6 mil- Amerisur Resources and Faroe Petroleum
Secondary fundraising slowed in the quarter lion in February in the exchange’s first oil and delisted. Thirteen oil and gas firms have
as firms raised £180.6 million ($258 million), gas IPO since September 2008. quit AIM since the start of 2009, leaving
just under the total a year earlier, but far below “However, with a large junior oil and gas 106 trading.
the £547 million raised in the last quarter of population and strong funding demands in the The tough operating environment for oil-
2009. Of the 19 oil and gas firms that secured secondary market, it is perhaps not surprising field service companies was brought into
finance, many plan to use the proceeds to ac- that larger main market listings, such as En- sharp focus. Hallin Marine Subsea Interna-
celerate drilling programs. Quest, are seeing more traction,” the report tional delisted in January after its takeover
Recently, Cove Energy raised $37 million for said. “This is where the gap in the market is by Superior Energy Services, while Sovereign
work in Mozambique’s frontier Rovuma Basin, currently perceived by investors.” Oilfield Group cancelled its planned listing
while Desire Petroleum raised $28.5 million for Almost 48% of oil and gas players saw share after going bankrupt.
exploration in the Falkland Islands. Dominion prices gain in the quarter. Energy XXI, which In the broader global oilfield services sec-
Petroleum also raised $47 million for cam- operates in the US Gulf of Mexico, saw its tor, consolidation gathered pace in the quar-
paigns in Uganda and Tanzania, while Aurelian shares jump by 290% after a massive discovery ter, with Schlumberger’s acquisition of Smith
Oil & Gas put together $39 million to fund at its Davy Jones ultra-deep prospect. International, Halliburton’s purchase of Boots
drilling in Poland. Gulf Keystone raised $23 Similarly, shares in Cove Energy jumped & Coots and KBR’s acquisition of Energo En-
million for its Kurdish campaign in northern 147% after news of a significant gas find at the gineering. Many of the larger oilfield services
Iraq and has just nailed down more funding. Windjammer exploration well off Mozambique companies have both the cash and the ap-
“That said, there is a feeling that investors in (OD Feb.19,p1). Chariot Oil & Gas’ share petite for further deals, E&Y said.
the junior oil and gas sector are reaching satu- price ended the quarter up 179% as it upgrad- Deb Kelly, London
Iran Expected to Cut Term Prices to Increase Japanese Appetite
Japanese refiners expect Iran to agree to “will be a little more flexible and a little more in- national Energy Agency said in its most recent
cut official selling prices (OSPs) for a range clined to lower the price, because their crudes monthly oil market report. Iran has reportedly
of crudes during key meetings in Tokyo this are not selling well these days.” built up more than 30 million bbl of crude and
week. With Japan losing its appetite for Iran- For the second quarter, Iran Light offered to condensates in floating storage (OD Apr.21,p2).
ian grades — at a time when Tehran is also Asian customers carried a 20¢ per barrel premi- NIOC officials declined to comment Tuesday
feeling widespread political heat over its nu- um to Saudi Arabia’s Arab Light; Iran Heavy a but said the Iranian state firm’s marketing strate-
clear program — buyers say National Iranian 10¢ premium to Arab Heavy; and Foroozan a gy in Asia is unchanged.
Oil Co. (NIOC) is likely to reduce prices of 15¢ premium to Arab Heavy. One buyer sus- “Our main target is to make direct relation-
Iran Heavy, Iran Light and Foroozan. pects Iran will be willing to cut by up to ships with the final users, the refiners. That is
Japanese buyers have been complaining that 10¢/bbl, although — not surprisingly — buy- the major strategy of marketing our crude oil,”
the price of Iranian crudes is well above that of ers want bigger reductions. a NIOC official said, while refusing to discuss
comparable grades and have been cutting back Japanese imports of Iranian crude fell by either prices or buyers.
on imports as they trim buying to cope with 19% year-on-year in the first three months of Other leading Asian buyers have also been
falling domestic demand. Refiners say the Iran- 2010 to roughly 420,000 barrels per day. Of the cutting their Iranian imports.
ian supplies have been first to get the ax because main grades, Iran Heavy accounted for 194,000 In India, private-sector giant Reliance Indus-
of the “unrealistic” prices. b/d, or roughly 46%, of the total. Imports of tries did not renew its 110,000 b/d term con-
Iran sets OSPs to Japan every quarter after Foroozan averaged 92,500 b/d, of Iran Light tract with Iran for this year, but sources say it
meeting with buyers, who have been represent- 57,700 b/d, and of South Pars condensate still has an option to buy.
ed for the past 10 years or so by Showa Shell, 38,000 b/d. In 2005, Iran was Japan’s third- India’s state-owned Oil and Natural Gas
the largest Japanese customer for Iranian crude. largest crude supplier, providing an average of Corp.’s Mangalore Refinery and Petrochemicals
Buyers say a team of four or five NIOC repre- 581,000 b/d, or 14% of its imports. Last year, it also trimmed term volumes, by 10,000 b/d to
sentatives is now in Tokyo for talks, which be- fell to fourth place — the spot it still holds — 130,000 b/d, but remains India’s largest term
gan Tuesday, over third-quarter prices. and in the first quarter of 2010 accounted for buyer of Iranian crude.
The Japanese are optimistic. “We expect 10.6% of Japan’s imports. In China, imports from Iran dropped 21%
them to lower their prices,” a member of the “Weaker demand for heavier crudes, unat- year-on-year in April to 424,000 b/d. For the
Japanese negotiating team tells Oil Daily. A buy- tractive price formulas and the threat of new first four months of the year, they tumbled
er at a major Japanese refiner that is not directly sanctions have combined to reduce buying in- more than 20%, to average 396,000 b/d.
involved in the discussions says he believes Iran terest in [Iran’s] heavier, sour crudes,” the Inter- Ramsey al-Rikabi, Singapore
May 26, 2010 4 www.energyintel.com
5. Senators Call on US Attorney General Oil Tanker Collision Causes
Spill in Straits of Singapore
To Decry Transocean Dividend Program At least 18,000 barrels of crude oil have
More than a dozen US senators, led by those who died in the disaster, the fishing been spilled into the waters between Sin-
Ron Wyden (D-Oregon), have called on industry that has been devastated by the gapore and Malaysia after a bulk carrier
the US attorney general to investigate oil spill and the governments that have collided with an oil tanker.
Transocean’s $1 billion dividend program. worked full-time to clean up this spill de- The dry bulk carrier MV Waily struck
Transocean recommended a serve better,” the letter stated. the port side of the Aframax-size tanker
77.75¢/share quarterly dividend in Febru- Transocean has, in fact, said it is not li- Bunga Kelena 3 early Tuesday in the Straits
ary, and shareholders approved the mea- able for the clean-up and containment of Singapore, according to the Maritime
sure this month. It is Transocean’s first costs associated with the ongoing spill, Port Authority of Singapore (MPA) and
dividend since 2002. saying that responsibility lies instead with the Bunga Kelena 3’s owners.
The senators, though, believe such a well operator BP. The accident occurred 13 kilometers
move is inappropriate after the Apr. 20 “The way the contract typically reads, southeast of Singapore’s eastern tip. By
explosion of Transocean’s Deepwater Hori- we are indemnified from any expense or mid-afternoon, the resulting oil slick mea-
zon rig in the US Gulf of Mexico. That ac- claim related to pollution from the well- sured 4 km by 1 km and was about 6 km
cident killed 11 workers and caused a gi- bore, and we believe in this particular in- south of the city-state, the MPA said.
ant oil spill that has continued to date, stance that the contract is pretty clear Emergency teams are now working to
fouling the Gulf coastline and devastating about that,” Transocean Chief Executive contain the spill. The MPA said late Tues-
regional fisheries. Steven Newman told analysts on the com- day that 20 government and private craft
In a letter to Attorney General Eric pany’s first quarter earnings call earlier had responded to the accident, “equipped
Holder, the senators said “such action to this month (OD May7,p1). with 41 tonnes of non-toxic and bio-
quickly move money out of corporate cof- Meanwhile, BP continues to point the fin- degradable oil spill dispersants, 1,500
fers to individual investors may make it ger at Transocean over the cause of the acci- metres of containment booms and two
more difficult to pursue liability claims dent, but the UK supermajor has accepted skimmers with fast tanks.”
against the company.” financial responsibility for costs associated The accident “caused a significant gash”
“Transocean’s stockholders should with the spill itself (OD Apr.28,p1). in the double-hulled Bunga Kelena 3, said
not take huge profits from polluting Nevertheless, news of the possible Paul Lovell, spokesman for the vessel’s
our country’s Gulf Coast,” the letter investigation sent Transocean’s stock owner, AET Tankers. AET is a wholly-
continued. down 9% on Monday alone, bringing owned subsidiary of shipping giant MISC,
The letter pointed to Transocean’s its total losses since last month’s explosion itself a subsidiary of Malaysian state oil
“troubling” refusal to accept financial to 41%. company Petronas. Lovell declined to say
responsibility for the spill. “Families of Casey Sattler, Houston who had chartered the ship.
The tanker was carrying very light
Noble Watching Spill Situation in US Gulf crude oil and condensates from Bintulu,
Indonesia, and was heading towards
It is too early to tell just how the Deepwa- One rig is still on site at the recent Malacca, Malaysia. Malacca is home to
ter Horizon oil spill will affect Noble Energy’s Deep Blue discovery in Green Canyon two refineries — one wholly owned by
operations in the Gulf of Mexico, the compa- Block 723 and is slated to drill an ap- Petronas and the other owned by a
ny’s chief operating officer said Tuesday. praisal well at the deepwater Gunflint dis- Petronas-ConocoPhillips joint venture.
While there will likely be stricter regu- covery later this year (OD May12,p7) According to Lovell, only the very light
latory oversight of offshore drilling, the (OD Oct.15’08,p1). crude had been spilled. AET said that
extent of that is still uncertain, Dave Stover said Noble already has a permit booms were being put in place to isolate
Stover told the UBS Global Oil and Gas to drill the Gunflint well, but “like every- the spill on Tuesday afternoon.
Conference in Austin, Texas. one else is interested in seeing any new AET said the initial report estimated
“When you look at the deepwater Gulf [regulatory] requirements that could go that 2,500 tons (18,325 bbl) of crude had
of Mexico, it still has a tremendous poten- into place.” been spilled, although the final volume
tial,” Stover said. “It’s still a large produc- On land, Noble is focusing much of its will not be known for days. It added that
ing resource for the country.” effort on the liquids-rich Wattenberg gas the Bunga Kelena 3 was carrying 200,000
While the US is unlikely to put an end field in northeast Colorado. The field is bbl of condensate and 300,000 bbl of Bin-
to all offshore drilling in the Gulf in the Noble’s largest onshore US asset. tulu crude at the time of the collision.
wake of the disaster, as the region ac- Of the 12 rigs Noble has working in The accident has not affected shipping in
counts for nearly one-third of domestic the onshore US, six are drilling in the the sea lanes round Singapore.
production, Stover said that Noble, like Wattenberg Field. The MV Waily, registered in St Vincent
everyone else, is “concerned with what’s The company recently expanded its and the Grenadines, was travelling from
going on out there.” acreage position in the field to 700,000 India to China, the MPA said. Both ships
“We’ll just have to wait and see what net acres, with a $494 million purchase were anchored off Singapore Tuesday
the outcome is,” Stover said. from Suncor in January (OD Jan.6,p1). evening.
The spill is unlikely to have a signifi- The other six rigs Noble is operating in The Straits of Singapore are one
cant impact on Noble in the near-term, the US are spread across the Haynesville of the world’s busiest sea lanes, connect-
as the independent producer presently Shale, Western Oklahoma and the Rock- ing trade routes from Asia to Africa
has only two rigs working in the US Gulf ies, Stover said. and Europe.
of Mexico. Rachael Seeley, Houston Ramsey al-Rikabi, Singapore
May 26, 2010 5 www.energyintel.com
7. oil price and US economic growth.
Energy security risk rose throughout the South America Expects Renewables Growth
1970s and fell during the 1990s, in part be-
cause of policy decisions such as tougher fu- The largest economies in South Ameri- many countries in the region has lagged
el-efficiency standards and the deregulation ca should expect annual growth in renew- due to political instability, government
of oil markets. The tool will be used to assess able energy production of 10.1% from controls on energy prices, and a lack
the effects of potential future legislation, 2009 to 2020, according to a report re- of financing (OD Mar.2’09,p2).
Harbert said. leased Tuesday. The Inter-American Development Bank
The study, by London-based business in- has provided $2.1 billion for renewable
Oil & Gas Markets formation firm GBI Research, cites support projects – hydroelectric, wind and geot-
for renewables development by govern- hermal among them – since 2000, accord-
Euro Gas Flat Before Driving Peak ments, the private sector, and international ing to GBI Research.
European gasoline exports have fallen flat financial institutions as important drivers of South America has also received much as-
at a time when shipments should be boom- this growth. sistance from developed economies, which
ing ahead of the start of the US summer dri- Governments across the region have “en- have invested in hundreds of projects related
ving season. acted favorable policies to encourage invest- to the Kyoto Protocol’s Clean Development
Officially, the gasoline season kicks off with ment in non-conventional energy sources Mechanism, established in 2006.
the May 31 Memorial Day holiday, when the such as wind, solar and biomass,” according “More than 60% of the total projects relate
American Automobile Association expects to the report. These energy sources as well to the energy segment, especially renewable
32.1 million Americans to take to the roads as hydroelectricity, which provides 63.5% of energy sources,” GBI Research says. “A com-
— the first annual increase in five years. power generation in South America, should bination of small hydro, solar, wind and bio-
But instead of an armada of European all increase in importance going forward. mass contributes to the majority of this in-
gasoline tankers heading across the Atlantic The report notes that new laws in Ar- vestment.”
to quench American thirst for gasoline, weak gentina, Brazil, Chile, and Colombia have Underlining the growing interest and
US buying has kept the trans-Atlantic arbi- instituted development incentives to pro- investment in expanding the use of renew-
trage stubbornly closed — despite a mount- mote investment in renewables, while subsi- able energy in South America is the threat
ing European surplus. dies and tax credits also encourage growth. of declining production and availability of
Fresh from maintenance, Europe’s refin- The private sector, meanwhile, has en- fossil fuels.
ers have ramped up diesel production, mak- couraged the expansion of renewable ener- “The focus is to develop sustainable energy
ing gasoline almost a byproduct. Benchmark gy production through financing and tech- for the longer term through renewable ener-
Eurobob gasoline shed a massive $20/ton nical assistance programs, the report says. gy sources,” the report reads.
Tuesday to trade at a three-month low of The United Nations Framework for Cli- Technological advances are also making
$646-$648/ton. mate Change estimates some 85% of the renewable energy more cost-competitive rel-
One of the region’s biggest gasoline bro- region’s energy investment will come from ative to traditional sources of energy, particu-
kers tells Oil Daily that the sudden change in private sources. larly in the wind power sector, according to
oil market conditions in general has para- Investment in electricity generation GBI Research.
lyzed Europe’s gasoline market. will need to reach $572 million between Further impetus for the development of
“Traders are just sitting on their hands,” 2007 and 2030 to meet increased de- renewable energy resources comes from a be-
he says. “Most companies did very well in mand estimates, says the United Nations’ lief that such projects are effective job-cre-
the first quarter, only to give up all of those Economic Commission for Latin America ation mechanisms and can provide a boost to
profits in April. People were hedged the and the Caribbean. small and medium enterprises.
wrong way. One or two have been very badly However, renewables investment in John Galante, New York
burned [by the collapse in prices].”
May 26, 2010 7 www.energyintel.com