(clips from recent Peak Oil News dailies are indicated by date and item #)

  • Kuwait’s oil minister said the emirate’s production capacity of 3 million b/d was sustainable without the help of international oil companies, but conceded that foreign expertise would be needed to develop heavy oil fields in the north. (6/27, #4)
  • The five leading sources of oil exports to the US are Canada (2.4 million barrels/day), Mexico (1.2 million b/d), Venezuela (1.1 million b/d), Saudi Arabia (1.0 million b/d) and Nigeria (0.9 million b/d). At least three of this group have serious long-term supply challenges that could result in their not being able to sustain their current level of exports to the US. (6/24, #16)
  • While the death of Mexico’s Cantarell oil field has been much discussed since it peaked five years ago at 2.1 million b/d, what’s less recognized is that Cantarell’s troubles have absolutely shattered Mexico’s effort to halt the decline of oil exports. Given that Mexico will one day not be able to export oil at all, one wonders if they should take preemptive action, and phase out oil exports now. Mexico will indeed stop exporting oil, probably no later than 2012. (6/25, #8)
  • Nigeria’s oil production, which has hovered around 1.2 million b/d since last month, has dropped to about 1 million b/d, owing to attacks on oil facilities in the region during the last three weeks. (6/23, #11)
  • Saudi Arabia’s oil production fell by 320,000 barrels in April to its lowest level this year, according to the latest figures from the Joint Oil Data Initiative (JODI), which uses data submitted by its member countries. They show Saudi crude output at 8.038 million b/d in April, down from 8.358 million bpd in March. (6/23, #6)
  • Spending globally on exploration and production is expected to shrink by 15 percent in 2009 from the previous year, compared to the 12 percent drop the companies had expected in December, Barclays’ analysts said in a report on their semi-annual survey. (6/23, #5)
  • Occidental Petroleum, the fourth-biggest US oil producer by market value, is drilling exploratory wells in California in a bet that deposits there hold hundreds of millions of barrels of crude. The company will drill 20 exploratory wells this year on sites ignored by rivals that quit searching California in the 1970s in favor of overseas sites. (6/26, #12)
  • Sinopec’s $7.2 billion bid for oil explorer Addax Petroleum is a sign that China’s energy giants find it easier to secure reserves in parts of the world where there are fewer hang-ups about Beijing owning local natural resources. Africa and the Middle East, where Swiss-based Addax has its main assets, are more politically disposed to China than are developed nations such as the United States, where local politicians blocked CNOOC’s $18.5 billion bid for Unocal in 2005. (6/25, #9)
  • Frontline, the world’s largest operator of supertankers, recently cancelled orders for two supertankers and four supermaxes, with a total value of $556 million. The chairman of Frontline predicted that moves by other shippers will “emerge in the next weeks” that could result in as much as one-third of all orders for new oil tankers being cancelled or delayed due to the slackening global demand for crude. (6/25, #3)
  • The number of working US rigs increased for a second week as improved crude oil prices lured back drillers even as natural gas activity weakened.. The US rig count rose by 18 rigs to 917, having touched a six-year low of 876 two weeks ago that was down from the peak of 2032 last September. But the number of rigs drilling for natural gas fell again, down by five to 687, as gas prices remained subdued by massive production and weak demand. (6/27, #13)
  • Demand for natural gas in Europe has plummeted in the first half of this year in part because Gazprom links its natural gas price to the price of oil, but with a six-month delay. That arrangement meant the price for natural gas is only now falling sharply, mirroring the drop in oil prices last autumn. (6/27, #17)
  • U.S. liquefied natural gas imports are up 36% in 2009 as the recession cuts into gas demand from Asia and Europe. (6/25, #17)
  • Exxon is scheduled to start up another three LNG projects in Qatar this year. They will produce more than 3.0 billion cubic feet per day of natural gas and cool it down for transportation. Europe and Asia are potential markets. But the U.S. could be a magnet for LNG cargoes, despite not really needing it – a paradox that spells low prices. Valuable liquids also produced in its Qatari projects take the market breakeven price of the natural gas itself “towards zero…” A big increase in low-cost LNG supply would displace some US natural gas production. The average US field requires a NYMEX natural gas price of $7.79 per million Btu to earn a 10 percent return on capital. (6/26, #13)
  • Today, natural gas is cheaper in the US than it was in the 1980s and 1990s when supplies were plentiful and demand was restricted. Spot natural gas prices have fallen well below estimates of the marginal cost to find new gas supplies. (6/26, #15)
  • Alberta, the biggest foreign supplier of natural gas to the US, said it will extend by one year incentives to boost drilling for the fuel to make it more competitive with U.S. shale gas deposits. (6/26, #14)
  • Royal Dutch Shell, Europe’s largest oil company, made a natural gas discovery at a record depth in the northern Norwegian Sea that may equal the size of Norway’s annual production of the fuel. (6/21, #7)
  • Saudi Aramco is shifting its exploration and production focus to natural gas to meet rapidly rising domestic demand as its program to expand oil production capacity comes to a close. (6/25, #5)
  • In an effort to mitigate dramatic spikes in fuel prices similar to those in 2008, the American Trucking Association is calling on Congress to increase the transparency of futures markets and impose limits on energy commodity speculation. (6/25, #16)
  • Cultivating the next generation of fuel-efficient vehicles, the Obama administration said it would lend $5.9 billion to Ford plus about $2.1 billion to Nissan and Tesla Motors in a government-industry partnership to build green cars. (6/24, #11)
  • General Motors will do the “heavy lifting” to help meet the ambitious goal set by President Obama of having one million plug-in hybrid and electric vehicles on U.S. roads by 2015, a GM executive said on Tuesday. GM will launch the rechargeable Chevy Volt plug-in hybrid by the end of 2010 and plans to have a total of 14 hybrid models in production by 2012. (6/25, #24)
  • China’s top political advisor is calling for more resources and support for alternative fuel vehicles to boost the car industry and spur the economy. (6/23, #14)
  • Oil markets risk another speculative bubble unless the financial sector is reformed and transparency increased, but prices are not yet a threat to economic recovery, the EU and OPEC said after joint talks on Tuesday. (6/24, #6)
  • Japan may cancel a planned $1.5 billion loan for Venezuela’s El Palito and Puerto La Cruz oil refineries after Caracas seized assets of Japanese companies. (6/23, #12)
  • The World Bank’s new projection says that the Russian economy will contract by 7.9 percent this year and not recover to pre-crisis levels until at least 2012. Just before the crisis reached Russia, in the first quarter of 2008, the country had been growing at an annual rate of 8.7 percent. The bank’s estimate was all the more remarkable because oil prices have recovered recently, a positive sign for resource-dependent Russia. (6/25, #22)
  • Peru’s Congress overturned two controversial land laws that ignited clashes between police and indigenous protesters in the Amazon rain forest two weeks ago, killing at least 34 people. The vote to throw out legislative decrees 1090 and 1064 could delay foreign investment in mining and energy projects and may prompt Peru and the United States to reevaluate clauses of their free-trade pact. (6/22, #9)
  • Oil and gas companies have been slow to pursue methane clathrates [hydrates], believing them to be unreliable and uneconomical. Feasibility studies and the diminishing supplies of conventional natural gas are changing that, making commercially viable production realistic within a decade, says Ray Boswell, who heads the clathrates program at the US Dept of Energy. Estimates vary, but conservative figures place global reserves at roughly 3 trillion tons of previously untapped carbon – more than is trapped in all the other known fossil fuel reserves put together (6/27, #19) [Editors’ note: we’re interested but still skeptical.]
  • Fuel from algae: with the range of technologies available and a ground swell of R&D investment cash, confidence among developers is high that algae-derived biofuels will soon be able to compete with fossil fuels. (6/22, #16)[Editors’ note: we’re interested but skeptical.]
  • As a source for biodiesel, the jatropha tree doesn’t have the name recognition of corn-based ethanol, but it is easier to grow than corn, untied to the food market and free from any carbon dioxide or sulfur emissions. The trees cost $6 to $7 each, can be grown 400 to an acre, and produce more than two gallons of oil apiece each season. However, it would take a farm about the size of Rhode Island to produce 65,000 barrels/day – and the U.S. economy uses close to 3 million barrels/day of diesel. (6/27, #18)
  • In Japan, about 30 percent of woody biomass power station operators have suspended or reduced operations due to a shortage of thinned wood and wood chips used for generating power. This has occurred despite 20 million cubic meters of thinned wood and brush being left to rot in forests each year as it is too costly to clear and transport, and the price of wood chips having increased 10-fold. (6/27, #8)