Thursday, November 12, 2009

Oil company drafting Iraqi Constitution speechless

“The idea that an oil company was participating in the drafting of the Iraqi Constitution leaves me speechless,” said Feisal Amin al-Istrabadi, a principal drafter of the law that governed Iraq after the United States ceded control to an Iraqi government on June 28, 2004.

In effect, he said, the company “has a representative in the room, drafting.”

DNO’s chief executive, Helge Eide, confirmed that Peter Galbraith helped negotiate the Tawke deal and advised the company during 2005. But Mr. Eide said that Mr. Galbraith acted solely as a political adviser and that the company never discussed the Constitution negotiations with him. “We certainly never did give any input, language or suggestions on the Constitution,” Mr. Eide said.

Mr. Galbraith did work as a mediator between DNO and the Kurdish government until the oil contract was signed in the spring of 2004, and maintained an “ongoing business relationship” with the company throughout the constitutional negotiations in 2005 and later.

Galbraith recently was in the news after being fired from his post at the U.N. mission in Afghanistan because, Galbraith says, he had strongly warned about the possibility of fraud and corruption before Afghanistan's ill-fated presidential election in August.

The reply from Hawrami, also dated Oct. 5, called the issues arising from the regulatory probe "unfortunate internal disagreements" with the Oslo Stock Exchange, which "were exploited by the media beyond DNO's control."

That scandal is taking place in Norway, where Galbraith, the son of famed Harvard economist John Kenneth Galbraith, lives in Bergen with his Norwegian wife.

Norway's largest financial newspaper, the "Dagens Naeringsliv," reported last week that Galbraith acquired a 5 percent share in an oil field in the Iraqi Kurdish region at a time when he was a leading voice in the U.S. debate over the structure of post-Saddam Iraq.

At the time, the former diplomat urged in meetings with U.S. officials and in articles in the "New York Review of Books" that the Kurds should be given maximum autonomy.

And he helped draft Iraq’s 2005 constitution by advising Kurdish leaders on legal language they should seek to insert into it -- including keeping future oil development in their region under their own control.

In the lead-up to the Iraq war, Galbraith worked as an adviser to then-U.S. Deputy Defense Secretary Paul Wolfowitz. Galbraith then left government service and in late 2003 and early 2004 worked as a paid consultant to Kurdish politicians. Later, in 2005, he advised them again on an unpaid basis.

Oslo-based DNO was the first independent Western oil company to secure an oil deal in post-Saddam Iraq, signing a production sharing contract with the Kurds in June 2004 to develop the Tawke field. DNO also has stakes in two other oil fields in the region, which are both still at the exploration level.

Wednesday, July 29, 2009

long-dated U.S. crude oil futures

Declining demand in a global recession has produced a glut of crude at the massive Cushing oil storage terminal. Storage capacity at Cushing, about 70 miles northeast of Oklahoma City, is expected to exceed 55 million barrels by the end of the year. The premium for long-dated U.S. crude oil futures has grown dramatically since mid-July 2009, which should spur traders to hoard more crude on land and at sea to turn a profit.

Friday, June 19, 2009

Norway supply renewed in Norwegian Sea

A/S Norske Shell, operator of production licence 326, has hit gas with wildcat well 6603/12-1. The discovery is located 150 kilometers (93 miles) northwest of the 6506/6-1 Victoria gas discovery in the northern Norwegian Sea.
Well 6603/12-1 is being drilled by Ocean Rig semisub "Leiv Eiriksson". The prospect is located in license PL 392. “The well hit a 16-metre gas column in the Upper Cretaceous, in a reservoir of varying quality,” the Norwegian Petroleum Directorate said.

Leiv Eiriksson Drilling Rig
- Semisub - 5

The offshore drilling rig Leiv Eiriksson is a Semisub type rig. It is currently owned by Ocean Rig Asa.
Leiv Eiriksson Semisub Drilling Rig Specification:
Design: Trosvik Bingo 9000
Built: Friede & Goldman at the Friede & Goldman, Pascagoula, Mississippi shipyard
Age: 2001
Drilling Rig Type: Semisub
Additional Type Spec: 5
Water Depth Rating: 8,200 ft
Drilling Depth: 30,000 ft
Classification: DNV

Monday, March 30, 2009

crude storage facilities brimming

The U.S. government last week said crude storage facilities were brimming with more oil than they've had in 16 years. Combined with the strategic petroleum reserve, the nation now has 1.05 billion barrels of oil in storage -- enough to fuel roughly 44 million cars for a year.

Saturday, March 14, 2009

Western Hemisphere's largest find in three decades.

Exxon Mobil Corp.’s oil discovery off the coast of Brazil may hold enough crude to rival the nearby Tupi prospect as the Western Hemisphere’s largest find in three decades.

Exxon Mobil’s Azulao-1 well in an offshore region designated BM-S-22 tapped a reservoir that could contain 8 billion barrels of recoverable oil, A floating drilling rig began boring a second well, called Guarani, into the reservoir in BM-S-22 earlier this week.

“We have no idea how big it is,” McGinn said “We’re nowhere near that yet.

Petrobras triggered a flood of interest in Brazil’s offshore crude deposits with the November 2007 announcement that Tupi may hold the equivalent of 8 billion barrels of recoverable oil. That would make it the largest find in the Americas since Mexico’s Cantarell field was discovered in 1976.

Domestic oil production is expected to increase this year over last, for the first time since 1991. That swing is attributable in part to increased production in the Gulf of Mexico from two giant new platforms that were years in the making. Domestic natural gas output rose by almost 8 percent last year from 2007, the biggest annual jump in more than a generation.

Tuesday, February 17, 2009

Crude should trade at $21.

In the late 1990s, oil companies traded on valuations that assumed a long-term oil price around $15 a barrel. The oil price should rise at the rate of global inflation, all other things being equal. Assume it was $15 in 1995. Then today it should be $21. Crude oil traded near $37 a barrel in New York on Tuesday, February 17, 2009.

Tuesday, February 10, 2009

Hayward says increase refinery capacity now

The challenge for all of us is to not allow this cyclical fall to pitch us into a structural loss in capacity," BP Plc Chief Executive Tony Hayward said. BP operates five U.S. refineries that in aggregate can process 1.54 million barrels of crude a day,