Oil India Ltd, second explorer in the country, has a war chest of $ 2.47 billion to acquire oil fields in Africa, Latin America and Australia. Just like China, India is seeking to secure supplies to meet its rising energy demands. (Bloomberg​.com).

Various cancelled /delayed projects especially in Qatar and Algeria, means that the impact of significant Gas-to-Liquid products hitting the market could be later and smaller than previously envisioned.  (Early Warning: Gas-to-Liquids)

The plan to import gas from Qatar to Pakistan and thus by-passing India, is a far fetched plan that may never see the light. India has gas and is ready under the right financial guarantees to supply Pakistan.  Nevertheless, Pakistan is considering building an undersea pipeline to deliver Qatari Gas to the country.  The cost and challenges are prohibitive to say the least. India News.

The debate as to why we don’t use a particular type of fuel to heat out homes or fill in our cars especially with regard to Biofuels / alternative energy,  can be clearly seen  from this analysis by The Oil Drum. Consumers are driven by convenience, cost and availability of supply.  Oil Drum compiled list of all major fuels and compared cost on a BTU equivalent basis. They compared the cost per one source / fuel that is needed to raise temperature of one pound of water y 1 degree Fahrenheit. They took into account the cost of subsidies wit regard to Bio/alternative energy.

Saudi’s Oil Minister, Ali Al-Naimi, reiterated that current price levels are good for both the consumer and the producer.  The comments were posted on the International Energy Forum. He also added interestingly that one of the challenges is to deal with “artificial fear about availability” of production and supplies and how this is creating a of perception of scarcity.  He touched also on Financial players in the market and their impact of oil prices (paper trading has grown 45 times faster than physical trading in oil).  (Al-Naimi IEF)

Related articles

• Saudi Aramco CEO Says China Overtakes U.S. as Largest Customer (businessweek​.com)

Saudi Aramco & Total secured $6 billion bank financing for the $12 billion Jubail Export refinery. The refinery will be located in Eastern Province with capacity of 400,000 bpd and fully operational by second half of 2013.  Aramco and Total will each have 37.5% shareholding with 25% sold to the public. (AMEinfo​.com)

IPIC’s proposed refinery and Petrochem facility in Pakistan is to go ahead following prolonged delays. (The National Newspaper)

Turkey is becoming a target for Middle East Investment flows. (FT​.com )

Kuwait trying to resolve penalty payment ($2.5 bn) following cancellation of the Dow Chemical Petrochemical complex.(AMEinfo​.com)

Refining margins continue to hurt results of diversified oil companies as storage of refined products are at all time high. ConocoPhillips, Hess and Valero Energy Corp all reported yesterday. Conoco suffered $204 m loss, Valero loss of $1.41 billion and Hess’s refining business profits plunged by 89%. Oil Refining Drags on Earnings – WSJ​.com.

2009 saw for the first time a large number of spot LNG cargoes searching for a home in the Atlantic Basin (AB) as supply outstripped weak demand especially from Asia.  The Global oversupply (Q3 09) has meant convergence in spot prices $3.10 – 4.60 per MMBtu, the tightest range for some time.

(Source Barclays Capital)

… Continue Reading

Dubai to import up to 37 billion cubic feet per year of natural gas from Qatargas 4 (JV between Shell & Qatar Petroleum) as more LNG cargos are diverted from North America. China will take 40% and Dubai 10% of Qatargas 4. … Continue Reading

Yemen’s oil revenue is down from $4.2 billion in 08 to US$ 2 billion in 09. Doing a bit of number crunching on Yemen’s production, it means that the Gov share of exported production accounted to 115,000 bpd in 08 compared to 85,000 bpd in 09 out of total of 300,000 bpd (Gov & Concessions) taking into account price variation on grades / Brent – WTI.

Alarmingly, local consumption is rising fast – importing around 150,000 bpd in refined products (source: EIA) and growing at approx. 7% annually between 1994 & 2008. … Continue Reading

Shell’s new CEO sheds light on development in Iraq.  They see Shell’s Iraq project as producing a good IRR and NPV even though it is perceived by analyst as not lucrative for the company. Shell’s focus is on gas for domestic market and LNG and played down gas pipeline via the north.  He cites that the amount of associated gas (produced as by-product of oil extraction) that is being flared is “mind boggling“.    [more on Qatar, Nigeria & E&P] … Continue Reading

Bill Gross, the legendary head of PIMCO (the largest fund managers with over $ 1 trillion under management) and nicknamed Mr. Bond for his influence on the Bond / Fixed income market, is out with his eagerly awaited outlook letter to investors.

Some of the highlights of Mr Gross’s letter :

• He mentions a Mckinsey study that analyzed historical data and concludes that Governments facing banking crisis usually double their outstanding debt within 3 years and an increase of 7% in unemployment rate and remains elevated for five years. Once debt reaches 90% of GDP, its economic growth slows by 1%.

• In what he refers to as a “Ring of Fire” are those countries (in Red) where their debt may exceed 90% of GDP within few years time while the yellow and green are the most conservative.
• He also cites another McKinsey study that shows that countries that start deleveraging,this phase usually 2 years after the crisis (2008 in this case), and last for 6 to 7 years. In 50% of the cases, a period of belt-tightening exert drag on GDP growth. On the other half, outright corpoarte defaults or acceleration of inflation will emerge. … Continue Reading