It is difficult to see any positive interpretation of the changes and conflicts that are increasingly filling the headlines of the press. Fluctuating optimism over the return to credible export production from Libya, to take but one example, is no sooner reported when the news comes of increased fighting in Tripoli, including the international airport. At the same time violence is spreading towards Egypt. Without a strong central government it is likely that the conflicts in that country will continue into the foreseeable future, with continued negative impacts on the export of oil from the country.
Transient attempts to maintain a cease-fire and stabilize South Sudan have apparently failed again. The fighting has shut down local oil production, while overall production from South Sudan has been cut to 165 kbd.
Capital continues to leave Russia (h/t Nick) and that flight is only likely to accelerate as the tensions over the shooting down of the Malaysia Airlines plane continue to grow. Given that investment continues to be required to sustain Russian oil production against the current transition into decline, and that such cash is not being spent only magnifies the concern that Russian export decline will be faster and sooner than the world anticipates. (And given the critical value of Russian oil and gas exports to their economy – it provides about half the budget revenue - President Putin desperately needs a scapegoat to blame as the economic gains of the past, and future growth targets of over 5% become unrealistic dreams for that future).
With the emphasis on the daily events in all these countries (not forgetting Iraq) it is more difficult to discern the overall medium term impact that this is likely to have on oil availability, and consequently on oil and gas prices. Europe cannot function at current economic levels without the 30% of its energy that it gets from Russian natural gas, which has to be a big consideration as they discuss whether to impose more sanctions on Russia. While a recent Total study shows that, with Gazprom co-operation, Europe could cope if flows through Ukraine were stopped, without that co-operation the EU would not be able to adequately replace the lost fuel. And the conflict in Ukraine is unlikely to be resolved fairly soon, so the degree of co-operation that Western Europe can expect from Gazprom next winter is likely to lead to some fairly tense negotiations over the next few months.
One of the frustrations with watching TV pundits muse on this is that there seems to be an assumption that wells, pipelines and other necessary infrastructure will magically appear to provide immediate solutions should things start to get worse. One such today commented that President Putin is now in total control, since should the west decide not to take all of the Russian oil and natural gas that they currently consume, that he could immediately increase sales to China to replace the lost income.
That neglects the time that it is going to take to get the wells drilled in Siberia, the pipeline connections made and the receiving network in place to meet the current amount that has been sold. Even with the current agreement to increase Russian exports to China it is going to take some four years for the new gas to flow, and it took years for this agreement to be signed.
By the same token Europe can’t turn around and expect the US to be able to replace any significant amount of Russian natural gas for about a similar period of time. Facilities cannot be created overnight, and permitting and construction take finite amounts of time.
I would expect that, if anything, the price that is charged for Russian oil and gas is going to go up for the Europeans, even as the oil supply starts to decline. As Euan Mearns has noted all the significant producers of natural gas in Western Europe are seeing declines in production and while the fall last year was not that significant, overall the continued cumulative decline will make the need for Russian gas that more critical, given that the pipelines are in place to deliver it.
Unfortunately as oil and natural gas supplies continue to tighten, the natural consequence is going to be an increase in price. And this will, in turn, affect the economic growth of the different countries around the world. The current price has slowed economic growth, but as it continues to ratchet up then the impact on global growth will become rapidly obvious, although differentiated by country depending on how dependent they are on fuel imports.
Complacency within the United States, given the assumptions of indigenous supply availabilities, is likely to be shaken as internal oil supplies stop there unsustainable growth rates, while the current low prices for natural gas will disappear as the available funds for future wells reduce on the increasing evidence that most of these wells are unprofitable at current gas prices.
It is difficult – well, to be honest, impossible - for most of us to be able to see how almost any of the growing conflicts around the world can be resolved in any short-term period. The consequent impact on oil production in the countries of the Middle East and North Africa (MENA) is going to lead to a tightening of the surplus between available supply and demand, particularly at current levels. And, unfortunately, when economic circumstances grow colder political rhetoric gets hotter, and there is less chance for negotiation and diplomacy to resolve the situation.
The main surprise, at the moment, is how rapidly the situation is deteriorating in so many of the countries that supply oil and gas to the world. Sadly the headlines will only cover one or two of these at a time. As a result the overall trends are missed as headlines instead focus on the very small changes driven more by sentiment and political perspective than by the realities of the medium, and even short-term oil and gas supply situation.
Showing posts with label Ukraine. Show all posts
Showing posts with label Ukraine. Show all posts
Sunday, July 20, 2014
Monday, June 16, 2014
Tech Talk - Thatcher, Putin, Coal and Gas
Back some forty years odd years ago when Edward Heath was Prime Minister of the United Kingdom, and the coal industry was still nationalized, the miner’s union went on strike, just after the Christmas Season. This followed an overtime ban that had started the previous November. The strike began on January 9, 1972 and lasted 7 weeks. Tellingly, just after it began some 17 schools had to close, as they had no heat in their buildings, without coal. Within a month the Government had to declare a state of emergency, and factories began to close due to a lack of power. Sensibly the Government of the day gave in to miners’ demands and they went back to work at the end of February.
Two years later there was a relatively similar series of events, with an overtime ban, followed by a three-day workweek as power cuts and blackouts developed, but this time Edward Heath also called a General Election, assuming he had the national sympathy. He was wrong, he lost.
These lessons were not lost on Margaret Thatcher, who had noted that it was not smart to offend the miners when the nation still relied on coal for much of its power, and when, in the winter, there was not a lot of coal in reserve at the power stations (because of the preceding overtime bans leading into winter). Thus, in 1984 when she, in turn, had to face the wrath of the National Union of Mineworkers (NUM), she had made sure that the situation was much different. Prior to the strike she had arranged for coal stockpiles to be built up over a period of three years. In addition the strike began on March 5th. It started because of the Coal Board decision to close 20 mines (since the earlier strike the number of miners had already fallen from 250,000 to 187,000 and the closures would cut another 20,000 from that number). It crumbled a year later, with a vote to return to work on March 3, 1985. The mining industry never recovered, and by the turn of the century the NUM was down to around 5,000 members.
I was reminded of those days by the latest clash between Gazprom and the Ukrainian government. In the past, when the Russians demanded that Ukraine pay its gas bill, the timing usually took place at the beginning or in the heart of winter. The problem that this gave the Russians was that they were supplying Western Europe through Ukraine, and any shut-off in the supply of natural gas to Ukraine had immediate consequences in Europe, which has become increasingly dependant on that gas. The result of the timing of the disputes was, therefore, generation of considerable diplomatic pressure leading to a relatively rapid resolution, without Russia getting all the deals that it wanted.
This time, however, it may be that Russia has learned, as Margaret Thatcher did, that timing is critical in this type of situation. Instead of waiting to November to call in the bill, Gazprom has presented it in June, when European demand for natural gas is lower. In addition the Nord-Stream gas pipeline is in place. This carries roughly 2 trillion cu. ft. a year of natural gas 760 miles into Germany, without passing through Ukraine. The twin pipes were completed and on line by October 2012.
Figure 1. Nord-Stream (Baltic Sea pipeline) bypassing Ukraine with 55 billion cu m of natural gas a year, (Daily Mail), out of a total sale of 262 billion cu m.(Spiegel)Note a second major pipeline from Yamal goes through Poland.
And while there has been talk about bringing in natural gas through Nabucco, that has slowly faded in the face of reality. Gazprom (as Brenda Shaffer has noted) has done remarkably well in gaining control of the different feeds and pipelines that come out of the East and head west into Europe. For example:
So Gazprom can now wait while Ukraine exhausts its own reserves. It is reported to have some 13.5 billion cu m on hand, but it needs to have 18-20 billion at the start of the winter, if it is to get through. By stopping the flow now, Russia is having Ukraine burn those reserves between now and winter, while keeping the nations further west supplied. This means that the pressure will become that much more intense on Ukraine as winter starts to approach, and there is no alternate source of supply.
Gazprom has not hesitated to profit from this in the past, and is already in a position to demand whatever price it sees fit.
Two years later there was a relatively similar series of events, with an overtime ban, followed by a three-day workweek as power cuts and blackouts developed, but this time Edward Heath also called a General Election, assuming he had the national sympathy. He was wrong, he lost.
These lessons were not lost on Margaret Thatcher, who had noted that it was not smart to offend the miners when the nation still relied on coal for much of its power, and when, in the winter, there was not a lot of coal in reserve at the power stations (because of the preceding overtime bans leading into winter). Thus, in 1984 when she, in turn, had to face the wrath of the National Union of Mineworkers (NUM), she had made sure that the situation was much different. Prior to the strike she had arranged for coal stockpiles to be built up over a period of three years. In addition the strike began on March 5th. It started because of the Coal Board decision to close 20 mines (since the earlier strike the number of miners had already fallen from 250,000 to 187,000 and the closures would cut another 20,000 from that number). It crumbled a year later, with a vote to return to work on March 3, 1985. The mining industry never recovered, and by the turn of the century the NUM was down to around 5,000 members.
I was reminded of those days by the latest clash between Gazprom and the Ukrainian government. In the past, when the Russians demanded that Ukraine pay its gas bill, the timing usually took place at the beginning or in the heart of winter. The problem that this gave the Russians was that they were supplying Western Europe through Ukraine, and any shut-off in the supply of natural gas to Ukraine had immediate consequences in Europe, which has become increasingly dependant on that gas. The result of the timing of the disputes was, therefore, generation of considerable diplomatic pressure leading to a relatively rapid resolution, without Russia getting all the deals that it wanted.
This time, however, it may be that Russia has learned, as Margaret Thatcher did, that timing is critical in this type of situation. Instead of waiting to November to call in the bill, Gazprom has presented it in June, when European demand for natural gas is lower. In addition the Nord-Stream gas pipeline is in place. This carries roughly 2 trillion cu. ft. a year of natural gas 760 miles into Germany, without passing through Ukraine. The twin pipes were completed and on line by October 2012.
Figure 1. Nord-Stream (Baltic Sea pipeline) bypassing Ukraine with 55 billion cu m of natural gas a year, (Daily Mail), out of a total sale of 262 billion cu m.(Spiegel)Note a second major pipeline from Yamal goes through Poland.
And while there has been talk about bringing in natural gas through Nabucco, that has slowly faded in the face of reality. Gazprom (as Brenda Shaffer has noted) has done remarkably well in gaining control of the different feeds and pipelines that come out of the East and head west into Europe. For example:
Moscow has taken steps to block the entrance of Iran into European gas markets; in 2006, the Russian company Gazprom bought a pipeline from Iran to Armenia and limited its size to ensure that it could be not be used to carry Iranian gas into Europe.Consistently supplies have been confined to pipes that are under Russian control. It has a percentage of the Interconnector that carries natural gas into the UK and there has been little regard paid as it stepped in and took interests in other national pipeline companies across Europe.
So Gazprom can now wait while Ukraine exhausts its own reserves. It is reported to have some 13.5 billion cu m on hand, but it needs to have 18-20 billion at the start of the winter, if it is to get through. By stopping the flow now, Russia is having Ukraine burn those reserves between now and winter, while keeping the nations further west supplied. This means that the pressure will become that much more intense on Ukraine as winter starts to approach, and there is no alternate source of supply.
Gazprom has not hesitated to profit from this in the past, and is already in a position to demand whatever price it sees fit.
Ukrainian and Russian officials have been fighting about gas pricing since Yanukovych was ousted. After Russia annexed the Crimean Peninsula, it hiked gas prices for Ukraine 81 percent, from $269 per 1,000 cubic meters of gas to $485. That price was the highest in Europe, and Ukrainian officials refused to pay, calling it politically-motivated retaliation.Don’t hold your breath waiting for this to be resolved.
Gazprom has since lowered its price demand to $385, broadly in line with prices for other European countries. Ukrainian officials have sought to pay less and have said the way Russia was structuring the deal meant they would remain vulnerable to price hikes if they did anything to displease the Kremlin.
“Any price they offer is in the form of a discount that can be undone at any time,” said Pierre Noel, an energy security expert at the International Institute for Strategic Studies.
Read more!
Thursday, February 14, 2013
OGPSS - Ukraine moves to escape Gazprom's grip
You know it is winter when Russia and Ukraine publically row about supplies of natural gas. On Tuesday Ukraine completed the signing of an agreement with Turkmenistan for the supply of natural gas. In the past the purchases have been for up to 36 billion cu m per year, although this was historically through Russian intermediaries. That deal ended in 2006, and Turkmenistan has been able to find a customer in China that now provides an alternate sale that does not leave it dependent on whatever price Russia was willing to provide.
But this does not mean that Ukraine has been able to escape having to pay whatever price Russia wished to impose, since to get from Turkmenistan to Ukraine the natural gas still requires passage through a pipeline that runs through Kazakhstan and Russia. There is no prize for guessing that Gazprom owns those pipelines.
Figure 1. The Central Asia Center pipeline and the route of the projected Pre-Caspian pipeline – both owned by Gazprom. (Gazprom).
This continues to give Gazprom leverage over Ukraine, and with the North Stream pipeline now approaching its full potential after the second string was commissioned last October, Europe can receive up to 55 billion cu m per year without the gas having to pass through Ukraine.
Figure 2. Path of the North Stream (NordStream) pipeline from Russia to Germany (Gazprom)
There is now talk of adding additional capacity so that there can be a direct feed from Russia to the UK. BP is taking the lead on this, apparently with Gazprom support, although previous experience would suggest that Gazprom may end up as the major shareholder in the end, after all the bills have been paid. And speaking of which, their current dispute with Ukraine involves payment for $7 billion worth of natural gas,that Ukraine contracted for but did not, in the end use during 2012. Ukraine is paying $430 per thousand cubic meters ($12.18 per thousand cu ft) for a fixed volume per year, whether they use it or not, under an agreement signed in 2009.
There is some implication that this pressure may be related to the recent 50-year production sharing agreement that Ukraine signed with Shell to develop natural gas from shale deposits. The country is believed to have the third largest shale-bound natural gas resource in Europe (behind France and Norway ) estimated at around 42 trillion cu ft (1.2 trillion cu m).
The deposits are centered around the Yuzivskaya region, with production anticipated to start in 2017, rising to levels of around 8 – 10 bcm in ten years. Although there is some domestic opposition to the development, the schedule is aggressive.
Chevron is expected to develop deposits in the Olesska region with start dates of around the same time. Opposition to their plans seems to be growing, and they have yet to sign a production sharing agreement. They are, however hoping to get the same sort of deal that Shell negotiated.
It is worth injecting a note of caution into this optimistic view of the future. Just a year ago Poland was anticipating a similar bonanza from the natural gas in its shale deposits. Events have limited that dream. Although a 2011 EIA report stated that Poland had 187 tcf of technically recoverable natural gas, the Polish Geological Institute has now cut the estimates of the viable size of the resource by 90%, and there are other problems.
Secondly Ukraine is working with the Chinese to gasify some of their coal from their large deposits, with the intent of producing the equivalent of 4 bcm of natural gas to displace Russian imports.
But this does not mean that Ukraine has been able to escape having to pay whatever price Russia wished to impose, since to get from Turkmenistan to Ukraine the natural gas still requires passage through a pipeline that runs through Kazakhstan and Russia. There is no prize for guessing that Gazprom owns those pipelines.
Figure 1. The Central Asia Center pipeline and the route of the projected Pre-Caspian pipeline – both owned by Gazprom. (Gazprom).
This continues to give Gazprom leverage over Ukraine, and with the North Stream pipeline now approaching its full potential after the second string was commissioned last October, Europe can receive up to 55 billion cu m per year without the gas having to pass through Ukraine.
Figure 2. Path of the North Stream (NordStream) pipeline from Russia to Germany (Gazprom)
There is now talk of adding additional capacity so that there can be a direct feed from Russia to the UK. BP is taking the lead on this, apparently with Gazprom support, although previous experience would suggest that Gazprom may end up as the major shareholder in the end, after all the bills have been paid. And speaking of which, their current dispute with Ukraine involves payment for $7 billion worth of natural gas,that Ukraine contracted for but did not, in the end use during 2012. Ukraine is paying $430 per thousand cubic meters ($12.18 per thousand cu ft) for a fixed volume per year, whether they use it or not, under an agreement signed in 2009.
There is some implication that this pressure may be related to the recent 50-year production sharing agreement that Ukraine signed with Shell to develop natural gas from shale deposits. The country is believed to have the third largest shale-bound natural gas resource in Europe (behind France and Norway ) estimated at around 42 trillion cu ft (1.2 trillion cu m).
The deposits are centered around the Yuzivskaya region, with production anticipated to start in 2017, rising to levels of around 8 – 10 bcm in ten years. Although there is some domestic opposition to the development, the schedule is aggressive.
Shell is to work with Nadra Yuzivska, a joint venture in which the state-owned resources company Nadra Ukrayiny owns 90%. SPK-Geoservice, a small private company, owns the remaining 10% in Nadra Yuzivska.An adjacent well drilled by Hutton has shown promising signs of “interpreted pay in three intervals.”
Shell is expected to invest $410 million to drill the first 15 wells, Oleh Proskuriakov, the environment and natural resources minister, said earlier in January.
The total area of the Yuzivska field is 7,886 sq km. The deposit could hold 4.05 Tcm of gas, according to the government. Proskuriakov has also projected output from Yuzivska could hit 10 Bcm/year in 10 years and 20 Bcm/year in 15. Ukraine's Stavytskiy characterized the latter figure as representing the "optimistic scenario."
"We can project that in an optimistic scenario, the project will produce 20 Bcm/year of gas, while under a pessimistic scenario, 7-8 Bcm/year," Stavytskiy said.
Chevron is expected to develop deposits in the Olesska region with start dates of around the same time. Opposition to their plans seems to be growing, and they have yet to sign a production sharing agreement. They are, however hoping to get the same sort of deal that Shell negotiated.
It is worth injecting a note of caution into this optimistic view of the future. Just a year ago Poland was anticipating a similar bonanza from the natural gas in its shale deposits. Events have limited that dream. Although a 2011 EIA report stated that Poland had 187 tcf of technically recoverable natural gas, the Polish Geological Institute has now cut the estimates of the viable size of the resource by 90%, and there are other problems.
Difficult geology, an uncompetitive service sector, poor infrastructure, and lack of rigs have hampered development. Poland has a venerable oil and gas sector, but most of the transmission pipelines are based in the southwest, while major shale gas areas are in the northeast. Strict EU environmental laws, as well as unclear regulatory and tax frameworks have further eroded prospects. And while exploration has been going on for a few years now, only 33 wells have been drilled, with just eight of them fracked (at least 200 would have to be drilled in the exploratory stage, just to assess the actual size of reserves).And there are two more factors that should be considered. Ukraine is planning an LNG plant on the Black Sea to be ready by 2015, but even this is controversial. To reach the Black Sea tankers will have to pass through the Bosphorus and Dardanelles straits, and Turkey has intimated that it may not allow LNG tankers rights to that passage. That is because the terminal would compete with two that already exist in Turkey.
Preliminary results have not been encouraging, either: This summer, resource giant ExxonMobil withdrew from Poland after the failure of commercial gas flows, while its competitor ConocoPhillips decided not to exercise its 70 percent option in three concessions in northern Poland. Overall, costs per well have increased to $15 million, according to interviews with industry officials, roughly three times the cost in the United States.
Secondly Ukraine is working with the Chinese to gasify some of their coal from their large deposits, with the intent of producing the equivalent of 4 bcm of natural gas to displace Russian imports.
The projects are two-fold: first, heat-producing facilities will be converted to use coal-water slurry as fuel; second, new plants will be built to enable the gasification of brown and bituminous coal in three regions: Luhansk, Donetsk and Odessa. While most of the media reports claim that Ukraine will be using Chinese coal-slurry technology, it’s actually Shell’s technology.How soon Ukraine (and Poland) can stop imports of energetic fuels from Russia is not clear, but obviously this should happen before long, and the winters of their discontent may well disappear from the headlines.
Read more!
Wednesday, January 18, 2012
OGPSS - future promise of production from Romania
There are violent protests taking place in Bucharest, Romania which carry with them the threat of destabilizing the government, as we have seen in countries which lie further south. But while countries involved in the “Arab Spring” have oil and natural gas that are being exported, Romania is no longer a leader in production and export of petroleum products, but now imports them. Yet back in 1837 it was reportedly the first country to have an oil industry, reaching a production of 1719 barrels a year. It was also, in 1900, the first country to export gasoline, at a time when it was producing some 5,000 barrels a day. That made it the then third largest producer in the world. But by the 1930’s the country had fallen to seventh place, even though Romania was still the second largest producer in Europe, behind the Soviet Union.
By the time of the Second World War the oil fields of Ploetsi were underpinning the operations of the German military machines, providing an estimated third of that country’s need. Attempts to bomb the fields were prolonged and, though they were not always successful and the fields and refineries continued to provide fuel for most of the war, the continued bombing finally got production down to 7% of capacity.
Location of Romania and Ploetsi (Home of Heroes)
Following the war the region fell into the Soviet zone of influence. Production picked up, and rose until 1980, following which it has declined, until fairly recently.
Annual production and discovery (Jean Laherrere)
More recently, as demand has continued to rise, the country has had to rely, increasingly, on imports.
Recent Romanian oil balance (Energy Export Databrowser)
Similarly peak natural gas production was also around 1980, with the country, since then, barely keeping a declining supply in tune with falling demand.
Recent Romanian natural gas production (Energy Export Databrowser)
(The country started nuclear production in the late '90s and has significant coal production)
The nine oil fields in the Ticleni region, one of the older oil producers in the country has just changed management hoping thereby to increase production of 4,500 bd from some 300 wells to over 6,000 bd.
Seismic exploration, introduced after WW II, helped make the majority of the discoveries that led to peak oil production in 1976. It has been the use of 3-D seismic that has revealed much of the potential that had not been developed in the past.
Romanian oil production and peak (Petrom)
Petrom was privatized in 2004, and began paying a dividend in 2010. Exploration offshore began in 1975, with oil production starting in 1987, from the Lebada East Field. By the end of 2010 total production, from a total of 250 fields, had risen to 174 kbd.
Encouraged by recent activity, Melrose has begun investing money in the offshore Black Sea. This follows a recent trend in which the Deepwater Champion entered the Black Sea to drill off Turkey, last March. Just this month it has moved off the Romanian coast, after having terminated work at two sites off Turkey. Drilling is under an ExxonMobil/Petrom partnership, with Exxon Mobil providing the funds. If the initial well proves out, plans are to invest more than $3 billion in developing the prospect.
The historic fields have all been onshore around Torcesti for oil and Mamu for natural gas, while the new fields offshore are such as the Delta, which is in deeper water. It is currently anticipated that crude oil reserves are around 420 million barrels, with some 2 Tcf of natural gas, though there is potential for more.
Map of the Black Sea showing the relative position of Romania. (World Atlas)
There is still an ongoing efforts to redevelop mature oilfields in the country, steam injection will be tried this year using long horizontal holes, rather than the vertical used to date, in the heavy oil SUPLAC field in the West of the country. Water injection is to be tried in the OPRISENESTI field in the East, and polymer injection is being considered for the VIDELE field in the South. VIDELE was earlier the site for a successful World Bank funded project that used in-situ combustion to try and reverse the declining production of this and the BALARIA fields. The treatment was intended to increase ultimate oil recovery from 15% to 39% of the OIIP. In 1998 Supalcu de Barcau was the largest in-situ combustion project in the world with about 9,000 bd of production.
More recently the discovery of a new reservoir in the TOTEA gas field, and a new well currently on test, has the potential to be the largest gas find on shore in six years.
However much of the future looks deep offshore in the potential of fields such as the NEPTUN. (Though the company is hedging its bets by also building a wind farm).
Romanian oil and gas fields (USGS)
The new exploration and development is shared between Petrom and Romgaz, who have 55% of the natural gas sites in the country.
Romanian concession holders (Romanian National Agency for Mineral Resources)
Offshore production from the Histeria Block
While the current production from the Delta IV field is on the Continental Shelf, the new exploration is ranging into the deeper waters of the NEPTUN field, where the Deepwater Champion program is scheduled to last some 90 days. Water depth fluctuates from 160 ft to 5,500 ft over the field, but the first hole has been spudded in 3,200 ft of water. The field is a hundred miles offshore, and has undergone the largest 3-D seismic survey in Romanian history prior to the drilling program.
Deepwater Champion (Transocean)
The maritime dispute with Ukraine was settled in 2009 setting up the bidding offshore, and estimates for the Neptun field run up to 3 Tcf of natural gas and 73 million barrels of oil. Unfortunately even if these discoveries pan out they are unlikely to have much impact on the problems in Bucharest, although perhaps by the time that oil is brought ashore, they will be over and production might be sufficient to help with the budgets of the country. But that thought includes a lot of possibly wishful thinking . . . .and that future will not be here for several years yet, even if it should come to pass.
By the time of the Second World War the oil fields of Ploetsi were underpinning the operations of the German military machines, providing an estimated third of that country’s need. Attempts to bomb the fields were prolonged and, though they were not always successful and the fields and refineries continued to provide fuel for most of the war, the continued bombing finally got production down to 7% of capacity.
Location of Romania and Ploetsi (Home of Heroes) Following the war the region fell into the Soviet zone of influence. Production picked up, and rose until 1980, following which it has declined, until fairly recently.
Annual production and discovery (Jean Laherrere) More recently, as demand has continued to rise, the country has had to rely, increasingly, on imports.
Recent Romanian oil balance (Energy Export Databrowser) Similarly peak natural gas production was also around 1980, with the country, since then, barely keeping a declining supply in tune with falling demand.
Recent Romanian natural gas production (Energy Export Databrowser) (The country started nuclear production in the late '90s and has significant coal production)
The nine oil fields in the Ticleni region, one of the older oil producers in the country has just changed management hoping thereby to increase production of 4,500 bd from some 300 wells to over 6,000 bd.
Seismic exploration, introduced after WW II, helped make the majority of the discoveries that led to peak oil production in 1976. It has been the use of 3-D seismic that has revealed much of the potential that had not been developed in the past.
Romanian oil production and peak (Petrom) Petrom was privatized in 2004, and began paying a dividend in 2010. Exploration offshore began in 1975, with oil production starting in 1987, from the Lebada East Field. By the end of 2010 total production, from a total of 250 fields, had risen to 174 kbd.
Encouraged by recent activity, Melrose has begun investing money in the offshore Black Sea. This follows a recent trend in which the Deepwater Champion entered the Black Sea to drill off Turkey, last March. Just this month it has moved off the Romanian coast, after having terminated work at two sites off Turkey. Drilling is under an ExxonMobil/Petrom partnership, with Exxon Mobil providing the funds. If the initial well proves out, plans are to invest more than $3 billion in developing the prospect.
The historic fields have all been onshore around Torcesti for oil and Mamu for natural gas, while the new fields offshore are such as the Delta, which is in deeper water. It is currently anticipated that crude oil reserves are around 420 million barrels, with some 2 Tcf of natural gas, though there is potential for more.
Map of the Black Sea showing the relative position of Romania. (World Atlas)There is still an ongoing efforts to redevelop mature oilfields in the country, steam injection will be tried this year using long horizontal holes, rather than the vertical used to date, in the heavy oil SUPLAC field in the West of the country. Water injection is to be tried in the OPRISENESTI field in the East, and polymer injection is being considered for the VIDELE field in the South. VIDELE was earlier the site for a successful World Bank funded project that used in-situ combustion to try and reverse the declining production of this and the BALARIA fields. The treatment was intended to increase ultimate oil recovery from 15% to 39% of the OIIP. In 1998 Supalcu de Barcau was the largest in-situ combustion project in the world with about 9,000 bd of production.
More recently the discovery of a new reservoir in the TOTEA gas field, and a new well currently on test, has the potential to be the largest gas find on shore in six years.
However much of the future looks deep offshore in the potential of fields such as the NEPTUN. (Though the company is hedging its bets by also building a wind farm).
Romanian oil and gas fields (USGS) The new exploration and development is shared between Petrom and Romgaz, who have 55% of the natural gas sites in the country.
Romanian concession holders (Romanian National Agency for Mineral Resources)
Offshore production from the Histeria BlockWhile the current production from the Delta IV field is on the Continental Shelf, the new exploration is ranging into the deeper waters of the NEPTUN field, where the Deepwater Champion program is scheduled to last some 90 days. Water depth fluctuates from 160 ft to 5,500 ft over the field, but the first hole has been spudded in 3,200 ft of water. The field is a hundred miles offshore, and has undergone the largest 3-D seismic survey in Romanian history prior to the drilling program.
Deepwater Champion (Transocean)The maritime dispute with Ukraine was settled in 2009 setting up the bidding offshore, and estimates for the Neptun field run up to 3 Tcf of natural gas and 73 million barrels of oil. Unfortunately even if these discoveries pan out they are unlikely to have much impact on the problems in Bucharest, although perhaps by the time that oil is brought ashore, they will be over and production might be sufficient to help with the budgets of the country. But that thought includes a lot of possibly wishful thinking . . . .and that future will not be here for several years yet, even if it should come to pass.
Read more!
Monday, May 3, 2010
Gazprom and Ukraine - natural gas and the shale gas potential
Well now that is interesting. Quietly, while everyone’s attention was, increasingly focused either on the British Election or the oil spill in the Gulf (this was before the attempted bombing in NY) Russian Prime Minister made one of those almost un-noticed Friday announcements. He suggested that Gazprom, the Russian gas company, merge with the Ukrainian natural gas company Naftogaz.
In February the election in Ukraine switched the country from a Westward leaning Administration to one that favored Russia This could be one result of that, and it has a couple of implications. Firstly it ties the country much more tightly to Russian energy strings. Secondly it stops the embarrassing headlines that have occurred in recent winters as Ukraine and Russia have quarreled over the price Ukraine will pay for its natural gas.
The statement has apparently caught many Ukrainian administrators a little off guard. They might perhaps want to take the hint.
But at the same time there is a potential to break the dependence on Russian natural gas.
As for Poland, it was at the end of last year that the energy advisor suggested that they could be self-sufficient in 4-5 years.
Shale gas has even fueled interest up in New Brunswick
But this international move to indigenous resources does not install confidence in the Kremlin that they can sustain the markets which they need to generate the funds to support their budgets. And so, in the hope perhaps that the change in Administration in Ukraine will help them, they have begun to possibly look at other ways of keeping themselves in business.
In February the election in Ukraine switched the country from a Westward leaning Administration to one that favored Russia This could be one result of that, and it has a couple of implications. Firstly it ties the country much more tightly to Russian energy strings. Secondly it stops the embarrassing headlines that have occurred in recent winters as Ukraine and Russia have quarreled over the price Ukraine will pay for its natural gas.
The statement has apparently caught many Ukrainian administrators a little off guard. They might perhaps want to take the hint.
“It’s no secret that Russia continues work on its two pipelines by-passing Ukraine, specifically the South Stream project, which is soon to take off the ground. We’ve finished preparing all legal documents. What will this project mean for Ukraine? Serious losses,” Peskov explained.The first paragraph is, I suspect, just to ensure that Ukraine understands the underlying ground rules. And it is reported that this was no sudden whim, but rather has been under consideration for some time.
“Ukraine is interested to have a co-owner, Gazprom, for its Naftogaz. On the other hand, Gazprom is interested in Ukraine’s pipelines undergoing modernization and operating at full transit capacity,” the Russian official argued. Gazprom wants to merge with Naftogaz as it will provide a guaranteed route for meeting Gazprom’s obligations with regard to clients in Western Europe, the official said.
"We have talked about integration in the nuclear field. We are prepared to do the same in the gas field," Putin said. "I propose merging Gazprom and Naftogaz."One point that is perhaps adding a little momentum to the discussion is the growing interest in gas shale and other resources. Gas shale may make Poland independent in energy and there is Western interest in providing some support.
Although a spokesman for Azarov described Putin's comments as "impromptu," Putin's spokesman, Dmitry Peskov, said the proposal was in fact "a thought-out, calculated proposal."
Such a merger would allow Moscow to control its own gas transit to Europe, 20 percent of whose gas imports flow through Naftogaz's pipelines.
EuroGas, Inc. today announced that through its subsidiary, EuroGas Polska sp.z o.o., it has entered into a confidentiality agreement with Total E&P Activites Petrolieres (Total), a wholly owned subsidiary of Total S.A., one of the world’s largest oil companies. The agreement was entered into in connection with the evaluation and possible acquisition by Total of certain rights held by EuroGas Polska’s wholly-owned West Ukrainian subsidiary in an onshore region in Western Ukraine. Total has also been evaluating the Bieszczady concession in Poland, in which EuroGas owns a 24% interest.These properties are, however, coal bed methane related, and thus more readily accessible.
But at the same time there is a potential to break the dependence on Russian natural gas.
The International Energy Agency has estimated that Europe, which gets 25 percent of its gas from Russia, has around 35 trillion cubic meters of unconventional gas reserves – half of which is in shale. That’s around six times its remaining conventional gas reserves.Russia had already agreed to lower the price it charged Ukraine for natural gas by 30%, provided it extended the lease for the Russian Black Sea Fleet.
Energy giants such as ExxonMobil and ConocoPhilips are parked in Ukraine’s backyard. ExxonMobil is already drilling in Germany, ConocoPhillips is exploring in Poland and Austria’s OMV is test drilling at home.
The new technology requires work in wide-open spaces, making it more suitable to a country like Ukraine, which could possess some of the most promising shale deposits, than densely-populated Europe.
As for Poland, it was at the end of last year that the energy advisor suggested that they could be self-sufficient in 4-5 years.
We already know ConocoPhillips, Exxon Mobil and Marathon among big players (and there are plenty of independents: Aurelian, San Carlo, BNK, 3 Legs etc)are investing in Poland. December 9 saw what should be the story of the month, where the energy adviser to the Polish Prime Minister predicted enough gas to export in 4 to 5 years.The whole of Europe is undergoing a geological re-evaluation to determine the potential for natural gas from shale, and with the high cost of developing some of the larger deposits in Russia, thinking particularly of Yamal and Shtokman, shale may also be attractive to Gazprom.
Shale gas has even fueled interest up in New Brunswick
North of the border, oil and gas companies are beginning to pour money into surveying, drilling and producing gas from land in British Columbia, Alberta, Saskatchewan, Quebec and the Maritimes in the hopes they'll discover the next jackpot.
In March, New Brunswick issued its largest tender to date for oil and gas exploration - more than one million hectares of land - to Southwestern Energy Co. (NYSE:SW), a Texas firm known for pioneering exploitation of the Fayetteville shale in Arkansas for natural gas.
The Canadian division of Houston oil and gas major Apache Corp. (NYSE:APA) is interested, too, and plans on drilling two wells this summer for shale gas near Elgin.
But this international move to indigenous resources does not install confidence in the Kremlin that they can sustain the markets which they need to generate the funds to support their budgets. And so, in the hope perhaps that the change in Administration in Ukraine will help them, they have begun to possibly look at other ways of keeping themselves in business.
Read more!
Wednesday, February 3, 2010
Gasoline, crude, supplies and miles travelled
This winter has been a little harder, in the sense of snow on the road, than some I have experienced in the past. Which may explain, to a degree, the drop in gasoline demand that the EIA is reporting has happened over the past month.
Gasoline Demand (EIA )
If you look at this time last year the current curve seems to be tracking what happened back then, and the steady upward trend in demand that has occurred in the last two years as we move forward from this date will, I suspect, likely be repeated.
What is that going to do to gasoline prices, and with them the price of crude? Well prices have dropped back a little, bear in mind that it was this time last year that they bottomed out, and then there was a run-up until about August, which was the end of the summer driving season.
Average gasoline prices (EIA)
We have had the same sort of pattern with crude prices (and the change since last February is why I consider recent drops as relative inconsequential). Domestic crude, after a steady rise since last August, has taken a little drop, and with imports also falling, the inputs into domestic refineries are around 900 kbd off last year’s numbers.
Refinery inputs of crude (EIA)
There is still enough oil available through the market to cover an expected increase in demand over the short term, but I have a growing concern for supply on the summer of 2011.
Looking at traffic volumes, after a little hiccup in October, the numbers for November were more of a gain. The average traffic increased by 1.4%. While for the entire year through November traffic had risen by 0.3%. And this time all regions were showing an increase in traffic, although there was still a decline in urban traffic off the interstate.
Monthly changes in miles driven for 2009 relative to 2008 (FHWA )
The hiccup does show up in the running 12-month total, which has flattened, at around the levels that we were at in 2004, when the curve was merrily climbing upwards.
Cumulative miles driven through November 2009 (FHWA )
Given that car sales rose 6% last month (with the exception of Toyota) with some manufacturers showing double digit rises in sales over last year there is more promise for the economy in these numbers.
Saudi Arabia is maintaining higher levels of supply both to Asia and to Europe. And while Russia is still playing nice, as the Ukrainian election is on Sunday, and it still has a candidate or two in the race, it too has promised to keep supplies up to Western Europe. With the higher crude prices bringing a bit of stability back, perhaps we can get through this winter without any histrionics in that part of the world.
Gasoline Demand (EIA ) If you look at this time last year the current curve seems to be tracking what happened back then, and the steady upward trend in demand that has occurred in the last two years as we move forward from this date will, I suspect, likely be repeated.
What is that going to do to gasoline prices, and with them the price of crude? Well prices have dropped back a little, bear in mind that it was this time last year that they bottomed out, and then there was a run-up until about August, which was the end of the summer driving season.
Average gasoline prices (EIA) We have had the same sort of pattern with crude prices (and the change since last February is why I consider recent drops as relative inconsequential). Domestic crude, after a steady rise since last August, has taken a little drop, and with imports also falling, the inputs into domestic refineries are around 900 kbd off last year’s numbers.
Refinery inputs of crude (EIA) There is still enough oil available through the market to cover an expected increase in demand over the short term, but I have a growing concern for supply on the summer of 2011.
Looking at traffic volumes, after a little hiccup in October, the numbers for November were more of a gain. The average traffic increased by 1.4%. While for the entire year through November traffic had risen by 0.3%. And this time all regions were showing an increase in traffic, although there was still a decline in urban traffic off the interstate.
Monthly changes in miles driven for 2009 relative to 2008 (FHWA ) The hiccup does show up in the running 12-month total, which has flattened, at around the levels that we were at in 2004, when the curve was merrily climbing upwards.
Cumulative miles driven through November 2009 (FHWA ) Given that car sales rose 6% last month (with the exception of Toyota) with some manufacturers showing double digit rises in sales over last year there is more promise for the economy in these numbers.
Saudi Arabia is maintaining higher levels of supply both to Asia and to Europe. And while Russia is still playing nice, as the Ukrainian election is on Sunday, and it still has a candidate or two in the race, it too has promised to keep supplies up to Western Europe. With the higher crude prices bringing a bit of stability back, perhaps we can get through this winter without any histrionics in that part of the world.
Read more!
Wednesday, January 13, 2010
The Russia:Belarus oil dispute and Western Oil supplies
I hadn’t actually been paying much attention to the Russian:Belarus dispute over oil supplies. After the annual debacles that we are used to over natural gas supplies that flow from Russia to Western Europe through Ukraine, and which seem somewhat quiescent at the moment, I had failed to grasp how much Western supplies of oil from Russia flow through Belarus. But as is pointed out in Foreign Policy the flow is significant, and this is a more far-reaching conflict than I grasped. As a brief review:
Russia is now warning that it will reduce oil flows to Belarus even further and wants the duty on the roughly 290,000 bd that is refined in Belarus and then exported to the West. At the moment the refineries in Belarus have a relatively short reserve (between a few days and a week, reportedly - depending on source) and the current contracts have expired.
In the interim the Baltic states are going to be dependent, not only on Russia for their electricity and oil, but also on satisfactory conditions to allow the transit of both through Belarus on their way.
Meanwhile, over in Ukraine, there is an election underway, with initial voting to take place on Sunday. It is perhaps for that reason that there have been no major gas disruptions so far this year. Anger with the current administration is giving a bit of a boost to a third candidate, so perhaps it is in Russia’s best interests to retain a low profile at this point. In fact Russia is claiming credit for keeping the UK supplied with gas as supplies from Norway dropped due to bad weather at some of the production sites. However Russia is also being nice to Turkey as insurance just in case it will still need to do some bypassing around Ukraine to supply Western Europe after the election is over.
Not that conditions in Ukraine itself have been unaffected. There are some 175 towns and villages that are reported to be still without power, due to the bad weather. This is a decided improvement from the 1,598 who lost power in the Dec 29th storm. At least they are more used to the cold.
Those in Florida who aren’t, and plugged in too many heaters, are also causing power outages down there.
In 2001, Belarus unilaterally canceled a contract that mandated the sharing of these revenues, leading to substantial losses for Russian pipeline monopoly Transneft and the Russian state budget. Now, Transneft is demanding that Belarus pay full import duties for the portion of Russian oil that it resells on the European market, a demand that could cost Belarus as much as $5 billion per year. The Belarusian government argues that the Russia-Belarus customs union obviates the need for Minsk to pay duty on imports from Russia. Although deliveries through the Druzhba pipeline have not, as of mid-January, been cut off, the prospect that Transneft (whose chairman is Russian Deputy Prime Minister Igor Sechin, a close confidant of Prime Minister Vladimir Putin) will turn off the taps to force compliance from Minsk is clearly one that has European leaders worried because the European Union imports about a third of its oil from Russia, mostly via Belarus. Already, the prospect of supply disruptions has driven U.S. crude oil prices to a 15-month high, presumably to Moscow's delight.Well, as my post yesterday showed, I am not convinced that this conflict had a lot to do with the rise in oil prices (which actually dropped a little today, on their overall march upwards). But that does not lessen the longer-term impact of what is going on. It is, as it was with the Ukraine dispute, to with control, with Russia seeking to control fuel distribution in these countries, and through supply controls also influence the directions in which the country moves.
Russia is now warning that it will reduce oil flows to Belarus even further and wants the duty on the roughly 290,000 bd that is refined in Belarus and then exported to the West. At the moment the refineries in Belarus have a relatively short reserve (between a few days and a week, reportedly - depending on source) and the current contracts have expired.
Germany and Poland are believed to be hit hardest once Russia halts shipments through the Druzhba pipeline. Germany depends on Russian crude for about 15 percent of its total consumption, and Poland buys from Russia to meet 75 percent of its market demands.At the moment the talks appear to be stalled. However they are not limited to the transit of oil. There is also a dispute over the transmission of electric power. Belarus acts as a transit country for power both to Kalingrad and to the countries of the Baltic. It has assumed somewhat greater urgency with the closure of the Ignalina nuclear power plant in Lithuania. The plant closed on December 31, and there are fears of greater dependence on Russia for future power. Russian complacency about the situation is not, I suspect, exactly helpful.
Minsk has threatened to raise the transit fee for its European customers more than tenfold, from 3.9 dollars to 45 dollars per metric ton, should Moscow not agree to its conditions, RIA Novostinews agency quoted an unidentified expert close to the talks as saying.
“It is inevitable that Russia is going to become a bigger supplier of energy to Europe and particularly to the Baltic countries. Ultimately there comes a point where you have to let the old days go,” Chris Weafer, chief strategist on Moscow’s Uralsib bank, told New Europe on 5 January, adding that the Baltics, which sorely need energy supplies, should adopt a pragmatic approach and rely on their eastern neighbor and forget the legacy of the Soviet Union. As long as Russia continues to try and build a modern and diversified economy with greater global integration, then it needs the goodwill of the West just as much as the West needs Russia’s energy.Bids for construction of a new plant are due to be submitted by the end of this month, with the hope of getting the new plant on line by 2018. (Kalingrad is hoping to have its own reactor in about the same time frame).
In the interim the Baltic states are going to be dependent, not only on Russia for their electricity and oil, but also on satisfactory conditions to allow the transit of both through Belarus on their way.
Meanwhile, over in Ukraine, there is an election underway, with initial voting to take place on Sunday. It is perhaps for that reason that there have been no major gas disruptions so far this year. Anger with the current administration is giving a bit of a boost to a third candidate, so perhaps it is in Russia’s best interests to retain a low profile at this point. In fact Russia is claiming credit for keeping the UK supplied with gas as supplies from Norway dropped due to bad weather at some of the production sites. However Russia is also being nice to Turkey as insurance just in case it will still need to do some bypassing around Ukraine to supply Western Europe after the election is over.
Not that conditions in Ukraine itself have been unaffected. There are some 175 towns and villages that are reported to be still without power, due to the bad weather. This is a decided improvement from the 1,598 who lost power in the Dec 29th storm. At least they are more used to the cold.
Those in Florida who aren’t, and plugged in too many heaters, are also causing power outages down there.
Read more!
Wednesday, November 11, 2009
Russia, Ukraine and the annual gas game
There is a developing tradition at the end of the year, in which Russia gets into a spat with Ukraine about the payment of the Ukrainian gas bill. Gas supplies are curtailed to Ukraine, which immediately passes on the cuts to the Western European nations on the other end of the pipeline, and there is a short-term, very public row, at the end of which gas supplies are re-started and the situation gets pushed under the rug for another year.
In trying to develop a longer term solution to the problem, Gazprom (the Russian gas company) and its partners have been developing two pipelines, one around the North, and one following a Southern route, to bring natural gas to Western Europe without going through Ukraine. Austria was asked to join the southern branch (South Stream) today. At the same time the West has been trying to line up enough gas supplies to run its own pipeline from Azerbaijan and Turkmenistan into Europe without going through Russia; the pipeline is called Nabucco.
None of these pipelines is yet in place, and so, as the winter season starts to arrive one would naturally begin to worry that the traditional drama would play out again this year. Thus Gazprom has hastened to proclaim, in an interview with Bloomberg that this year will be different. Ukraine is paying its bills each month, and as long as that continues then gas will continue to flow. Although, at the same time, there have been the usual heavy hints that if bills aren’t paid then taps will again close. And Ukraine is hinting that to meet those bills it will need money from the International Money Fund. However it is also seeking a loan from Europe. And the latest comments from Ukraine suggest that this years bargaining round is only just starting. The reassurances that Ukraine is providing, while superficially calming, also retain the caveat that could warn of future problems.
UPDATE: Coincidentally Jerome has written an article that explains in much greater detail the background to this situation and yet comes to somewhat the same conclusion I draw. His article is well worth the read in understanding why, however.
And unfortunately it has been trouble in the pipelines supplying gas either to or from Russia that has caused earlier problems around the Russian perimeter, and there seems to be no indication that this year will be any different.
Unfortunately the situation is not that cut and dried. I have written about the concern that Turkmen gas, normally a significant supplier, through Russia into Ukraine, may not be available this year. Further the drop in prices and demand for Russian gas is giving Gazprom some financial problems, since they have not sold some 8.5 billion cubic meters of gas or so that they had anticipated, on top of the actual 142.5 billion cu m they actually have sold the west this year to date. (In context Gazprom would normally sell about 45 bcm to Europe in the fourth quarter, and that is about the amount of gas that they normally buy from Turkmenistan in a year). Because of the contract sales language Gazprom is thinking of fining its customers for not buying their full allocation.
And as Turkey and Azerbaijan negotiate on getting Azer natural gas for the pipelines through Turkey, the prices for transport that are being negotiated appear similar to those that Russia charges:
Meanwhile Russian companies are coming under pressure to reduce gas flaring since Prime Minister Putin sees this as a loss in revenue. At the moment Russia is flaring about 20 bcm a year (apparently about a third of that which comes out as a byproduct of Russian oil production).
Incidentally, in regard to my earlier post on Saudi Arabian production, Platts ( has noted that it is not only Asia that saw the reduction in Saudi exports, but that the United States also got a reduced allocation, with imports falling to 745 kbd in August. Whether this is a simple monthly aberration or portends something more dramatic, only time will tell.
In trying to develop a longer term solution to the problem, Gazprom (the Russian gas company) and its partners have been developing two pipelines, one around the North, and one following a Southern route, to bring natural gas to Western Europe without going through Ukraine. Austria was asked to join the southern branch (South Stream) today. At the same time the West has been trying to line up enough gas supplies to run its own pipeline from Azerbaijan and Turkmenistan into Europe without going through Russia; the pipeline is called Nabucco.
None of these pipelines is yet in place, and so, as the winter season starts to arrive one would naturally begin to worry that the traditional drama would play out again this year. Thus Gazprom has hastened to proclaim, in an interview with Bloomberg that this year will be different. Ukraine is paying its bills each month, and as long as that continues then gas will continue to flow. Although, at the same time, there have been the usual heavy hints that if bills aren’t paid then taps will again close. And Ukraine is hinting that to meet those bills it will need money from the International Money Fund. However it is also seeking a loan from Europe. And the latest comments from Ukraine suggest that this years bargaining round is only just starting. The reassurances that Ukraine is providing, while superficially calming, also retain the caveat that could warn of future problems.
"Ukraine is ready to comply with its obligations on gas transit through its territory within the next half a year at least," he (Ukrainian presidential envoy for international energy security Bohdan Sokolovsky) said at a press conference in Kyiv on Nov. 9. . . . . Having 27 billion cubic meters of gas and repaired gas transportation system, Ukraine can guarantee the transit of the Russian gas provided it comes to Ukraine's GTS (Gas Transportation Services)," he said.It’s that little catch phrase at the end that always seems to generate trouble.
UPDATE: Coincidentally Jerome has written an article that explains in much greater detail the background to this situation and yet comes to somewhat the same conclusion I draw. His article is well worth the read in understanding why, however.
And unfortunately it has been trouble in the pipelines supplying gas either to or from Russia that has caused earlier problems around the Russian perimeter, and there seems to be no indication that this year will be any different.
Unfortunately the situation is not that cut and dried. I have written about the concern that Turkmen gas, normally a significant supplier, through Russia into Ukraine, may not be available this year. Further the drop in prices and demand for Russian gas is giving Gazprom some financial problems, since they have not sold some 8.5 billion cubic meters of gas or so that they had anticipated, on top of the actual 142.5 billion cu m they actually have sold the west this year to date. (In context Gazprom would normally sell about 45 bcm to Europe in the fourth quarter, and that is about the amount of gas that they normally buy from Turkmenistan in a year). Because of the contract sales language Gazprom is thinking of fining its customers for not buying their full allocation.
And as Turkey and Azerbaijan negotiate on getting Azer natural gas for the pipelines through Turkey, the prices for transport that are being negotiated appear similar to those that Russia charges:
According to him,( Turkish Minister of Energy and Natural Resources Taner Yildiz) Turkey has offered Azerbaijan a fee of $2.36 per 100 km for transporting every 1,000 cubic meters of the South Caucasus republic’s gas.The attempts by Ukraine to get that higher fee have not stopped.
“The proposed fees are completely competitive. Russia charges $2.6 for transporting the same volume,” the Turkish minister said.
We recall that during the “gas war” between Russia and Ukraine this January, Kyiv sought to raise transit fees for Russian gas giant Gazprom to $3 per 100 km in case prices for Russian gas increased.
Meanwhile Russian companies are coming under pressure to reduce gas flaring since Prime Minister Putin sees this as a loss in revenue. At the moment Russia is flaring about 20 bcm a year (apparently about a third of that which comes out as a byproduct of Russian oil production).
Incidentally, in regard to my earlier post on Saudi Arabian production, Platts ( has noted that it is not only Asia that saw the reduction in Saudi exports, but that the United States also got a reduced allocation, with imports falling to 745 kbd in August. Whether this is a simple monthly aberration or portends something more dramatic, only time will tell.
Read more!
Sunday, April 12, 2009
P61. Pick Points
A few stories of interest to start off the week.
When I wrote about the EIA Energy Conference last week I had promised that I would make a better reference to the views of others who were there. For example, I noted that Reuters had a piece on the final morning session dealing with greenhouse gases and climate change. Robert Rapier has two posts up now, one on Dr Chu’s remarks; and the second on the rest of day 1. Robert went to the session on Transport demand that I missed, and so this is a place to catch up. His take on the Renewable Energy session is also a little different, and so a trip over there would be worthwhile. Gail, at TOD, has so far, only covered the Plenary Session.
Stranded Wind also has a post summarizing the whole Conference at Daily Kos.
Moving on around the world to see what other stories have been gathering headlines, it sometimes seems that one cannot go far without bumping into Gazprom stories. It seems to have troubles on two fronts at the moment. Looking first at its supply, it has (as I noted last Sunday) run into a bit of bother with Turkmenistan. The story got worse as the week continued with a reported gas explosion in a pipeline inside Turkmenistan that was carrying natural gas to Russia. This shut down the feed to Russia.
There has been a significant drop in demand from Europe. In March Gazprom produced 24% less gas than the same month last year, and is down 18% over the whole quarter. Demand in Russia alone dropped 6.6%. With demand for Russian gas expected to stay depressed by 10% over the next five years. However in the short term, it does report seeing a slight upturn in demand from Europe.
Which brings us to the second side of the story, since Gazprom is now threatening to fine Ukraine for not consuming more gas, and lowering demand below expected levels. With this threat of a lack of customers it seems odd to some that Gazprom is taking the step of buying Eni’s stake in Gazprom Neft (the oil side of the house). At a cost of $4.2 billion it is considered “a strange decision” given the company’s need to cut debt. On the other hand there is now an agreement to ship some of Sakhalin gas to the West Coast of the USA. (Actually to Mexico and then into the US).
While many eyes on Pakistan are focused on the problems with insurgents and controlling the travel of the Taliban and friends across the border into Afghanistan, it is not as widely known that the country remains in a relatively desperate energy shortage. In one of the latest moves to counter this, the country will go onto daylight saving time on April 15th, in a move that is hoped to save the country 250 MW a day. Given that the country is short around 4,000 MW, this won’t help much. In Islamabad alone the gap was 190 MW last Thursday causing 150 MW of load shedding to be imposed. By Sunday it had increased to a shortfall of 1,200 MW and after having only had load shedding of 4 – 6 hours, the city is now back to blackouts of up to 12 hours as air conditioning demand rises with the hotter weather.
In Karachi the daily shortfall of 350 MW is coming with 8-10 hours of unannounced blackouts. (Hat tip to Energy Shortage). The Prime Minister still believes that load shedding can be ended this year. Part of the problem in Karachi, apparently, is that the power company has been taken over by a Saudi company who then sold it, but the new owners have yet to take possession. None of the problems have apparently been tackled.
And just to return to Russia for a moment, I had always remembered that before things got unpleasant in Iraq, Russia had been on its way to getting a sizeable chunk of the energy in that country. Turns out that they are now back
When I wrote about the EIA Energy Conference last week I had promised that I would make a better reference to the views of others who were there. For example, I noted that Reuters had a piece on the final morning session dealing with greenhouse gases and climate change. Robert Rapier has two posts up now, one on Dr Chu’s remarks; and the second on the rest of day 1. Robert went to the session on Transport demand that I missed, and so this is a place to catch up. His take on the Renewable Energy session is also a little different, and so a trip over there would be worthwhile. Gail, at TOD, has so far, only covered the Plenary Session.
Stranded Wind also has a post summarizing the whole Conference at Daily Kos.
Moving on around the world to see what other stories have been gathering headlines, it sometimes seems that one cannot go far without bumping into Gazprom stories. It seems to have troubles on two fronts at the moment. Looking first at its supply, it has (as I noted last Sunday) run into a bit of bother with Turkmenistan. The story got worse as the week continued with a reported gas explosion in a pipeline inside Turkmenistan that was carrying natural gas to Russia. This shut down the feed to Russia.
"Turkmengaz informed Gazprom that on April 9 at 01:32 an explosion occurred at the 487th kilometer of the Davletbat-Daryalik pipeline. Since then, transport of Turkmen gas to Russia has not been carried out," Gazprom said.This was followed, on Friday, by a story in the LA Times where Turkmenistan blamed Gazprom
"At the present time the Turkmen side is working to rapidly repair the damage.... The damage will not affect the supply of gas to Gazprom's customers," it said in a statement.
Turkmenistan's Foreign Ministry said in a flurry of statements that Russia's Gazprom decided on short notice to reduce the amount of gas it takes from Turkmenistan. Gazprom's export division gave only one day's warning, which wasn't sufficient time for Turkmenistan to reduce its flow into the pipeline network, the ministry said.Turkmenistan is now reportedly angry that the Russians are, in contrast, blaming the blast on them. Repairs were scheduled to take 3 days. The story is now being carried in Moscow, where part of the blame is seen to be because of the decision of the Turkmen to seek international bids for a pipeline, instead of giving it to Russia.
The blast, which occurred late Wednesday, "was caused by a gross unilateral violation by Gazpromexport of the norms and rules of the natural gas sales agreement," the statement said. Another statement said Gazprom's actions were "rash and irresponsible" and put lives at risk.
There has been a significant drop in demand from Europe. In March Gazprom produced 24% less gas than the same month last year, and is down 18% over the whole quarter. Demand in Russia alone dropped 6.6%. With demand for Russian gas expected to stay depressed by 10% over the next five years. However in the short term, it does report seeing a slight upturn in demand from Europe.
Which brings us to the second side of the story, since Gazprom is now threatening to fine Ukraine for not consuming more gas, and lowering demand below expected levels. With this threat of a lack of customers it seems odd to some that Gazprom is taking the step of buying Eni’s stake in Gazprom Neft (the oil side of the house). At a cost of $4.2 billion it is considered “a strange decision” given the company’s need to cut debt. On the other hand there is now an agreement to ship some of Sakhalin gas to the West Coast of the USA. (Actually to Mexico and then into the US).
In a statement announcing the agreement yesterday, the two companies said liquefied natural gas (LNG) from the newly completed Sakhalin-2 project will be shipped to a regasification facility in Baja California, Mexico. It will then be transported to southern California by pipeline and sold to U. S. consumers by Gazprom's subsidiary in Houston, Gazprom Marketing & Trading USA, Inc.The first tanker of Sakhalin gas arrived in Japan last Monday, after leaving the island on the 1st April. Japan is expected to take 60% of Sakhalin’s supply (about 7% of Japan’s need) with the remainder being split between South Korea and the USA.
While many eyes on Pakistan are focused on the problems with insurgents and controlling the travel of the Taliban and friends across the border into Afghanistan, it is not as widely known that the country remains in a relatively desperate energy shortage. In one of the latest moves to counter this, the country will go onto daylight saving time on April 15th, in a move that is hoped to save the country 250 MW a day. Given that the country is short around 4,000 MW, this won’t help much. In Islamabad alone the gap was 190 MW last Thursday causing 150 MW of load shedding to be imposed. By Sunday it had increased to a shortfall of 1,200 MW and after having only had load shedding of 4 – 6 hours, the city is now back to blackouts of up to 12 hours as air conditioning demand rises with the hotter weather.
In Karachi the daily shortfall of 350 MW is coming with 8-10 hours of unannounced blackouts. (Hat tip to Energy Shortage). The Prime Minister still believes that load shedding can be ended this year. Part of the problem in Karachi, apparently, is that the power company has been taken over by a Saudi company who then sold it, but the new owners have yet to take possession. None of the problems have apparently been tackled.
And just to return to Russia for a moment, I had always remembered that before things got unpleasant in Iraq, Russia had been on its way to getting a sizeable chunk of the energy in that country. Turns out that they are now back
A Russian consortium including oil group Lukoil signed a $3.7 billion deal to develop Iraq's West Qurna oil field in 1996, when Saddam Hussein was in power.
"The goal has been set to restore the contracts concluded between Russian and Iraqi companies before the war," Energy Minister Sergei Shmatko told Reuters, adding that a working group on the issue would convene in the near future. . . . .
Saddam's government tore up the Lukoil deal in 2002, months before the invasion, saying the Russian company had done no work at West Qurna since signing it and had failed to fulfil its contractual obligations.
JP Morgan said in March last year that, according to Russian estimates, production at the field was expected to peak at 700,000 barrels per day, and reserves could total between 4.5 billion and 7.3 billion barrels.
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Tuesday, March 24, 2009
P55. Pick Points
Given the size of a couple of the stories a little less than half-a-dozen stories of interest today:
Redoubt, the volcano in Alaska that was being monitored when I flew over here has now erupted, and though it threw a plume of ash some 60,000 ft into the air, the wind was such that Anchorage, 110 miles away, was not covered. And the heavy snow falls turned into enough water that much of the ash that landed was washed away to a distance of up to 22 miles. By 4:30 am Monday there had been five eruptions, back in 1989 when it last erupted the eruptions lasted for four months. It has since erupted again, and appears now to be building a lava dome.
Source Alaska Volcano Observatory/U.S. Geological Survey
More recently the air had cleared enough to allow planes to be unwrapped and to take off again and resume service.
Source Alaska Volcano Observatory/U.S. Geological Survey
It has been postulated, by Lamb among others, that the fine dust high in the atmosphere can cause a reduction in the Earth temperature, though the effect of one volcano really depends on the size and volume of the ash generated and I suspect this is not producing enough yet to be significant.
Last year, shortly after he was inaugurated President Medvedev travelled to Kazakhstan, Turkmenistan and Uzbekistan with the President of Gazprom to lock up control of the natural gas supplies for those countries. Now the agreement may turn out to be an expensive one for Gazprom. The company has seen its own production drop 25% and so relies on the agreement, but that was at a $409/tcm, and now the price is falling to $260 per tcm.
And speaking of natural gas, CERA has announced a new analysis which sensibly says:
I would normally not take up this much space in a Pick Points, but the report goes on to say
Redoubt, the volcano in Alaska that was being monitored when I flew over here has now erupted, and though it threw a plume of ash some 60,000 ft into the air, the wind was such that Anchorage, 110 miles away, was not covered. And the heavy snow falls turned into enough water that much of the ash that landed was washed away to a distance of up to 22 miles. By 4:30 am Monday there had been five eruptions, back in 1989 when it last erupted the eruptions lasted for four months. It has since erupted again, and appears now to be building a lava dome.
Source Alaska Volcano Observatory/U.S. Geological Survey More recently the air had cleared enough to allow planes to be unwrapped and to take off again and resume service.
Source Alaska Volcano Observatory/U.S. Geological Survey It has been postulated, by Lamb among others, that the fine dust high in the atmosphere can cause a reduction in the Earth temperature, though the effect of one volcano really depends on the size and volume of the ash generated and I suspect this is not producing enough yet to be significant.
Last year, shortly after he was inaugurated President Medvedev travelled to Kazakhstan, Turkmenistan and Uzbekistan with the President of Gazprom to lock up control of the natural gas supplies for those countries. Now the agreement may turn out to be an expensive one for Gazprom. The company has seen its own production drop 25% and so relies on the agreement, but that was at a $409/tcm, and now the price is falling to $260 per tcm.
Gazprom currently buys about 50 billion cubic meters (bcm) of Turkmen gas, 15 bcm of Kazakh gas, and 7 bcm of Uzbek gas, amounting to about 14 percent of the company’s total production in 2008, according to the Nezavisimaya Gazeta report. Rising transit costs and falling consumer demand in Europe and Russia mean that the company’s operating costs in Central Asia are becoming a big burden. The company has already scaled back development plans for the region.Poland meanwhile, which had an agreement with the “middleman” between Gazprom and the Ukraine (RosUkrEnergo), an entity which has supposedly been kicked out of the deal, is now negotiating directly with Gazprom. The hope is to get the agreement in place so that the Poles can fill their storage tanks before winter comes, when supply becomes more of an issue. Meanwhile Ukraine is reducing the amount of gas that it plans on buying from Gazprom by 17.5%.. However part of this is that Ukraine needs someone to invest in their infrastructure and update it, and the hope is that this will come from Europe which is not sitting too well with the Russians.
Gazprom officially acknowledged in early March that gas production in 2009 may decrease by 7 percent this year. But analysts say the cut in output could likely to be much higher.
And speaking of natural gas, CERA has announced a new analysis which sensibly says:
North American natural gas is entering a new era in which supply is no longer constrained, according to a new Cambridge Energy Research Associates (CERA: undefined, undefined, undefined%) multiclient study, Rising to the Challenge: A Study of North American Gas Supply to 2018. A revolution in technology has unlocked "unconventional" gas resources, dramatically changing the prospects for the market. Demand, rather than supply, will be the challenge for the market going forward, accentuated currently by the economic crisis.Not wishing to be argumentative, but one wonders if CERA has been monitoring the rates at which drilling rigs are being shut down?
I would normally not take up this much space in a Pick Points, but the report goes on to say
Given the increased productivity of unconventional wells, the study concludes that it is not necessary to increase drilling activity to maintain - or increase - production. After years of developing unconventional gas with its long-lived production, in the aggregate, the average decline rate will fall. This means, the study says, that a smaller quantity of new production is required to offset natural production declines. CERA does expect production to increase, with dry gas productive capacity growing from an average of 53.5 Bcf/d in 2009 to 60.6 Bcf/d in 2018 in the lower 48 United States, and from 15.8 Bcf/d in 2009 to 19.6 Bcf/d in 2018 in Canada.Sometimes I wonder what reports they are reading, the average life of an unconventional (read gas shale) well is less than 3 years. The average well is depleting 60% in the first year. I have posted on this before and these are not my numbers. Well, as they say, the next eighteen months will see which of us is correct. And LNG imports may change the picture a little, Wood Mackenzie are expecting them to rise. On the other hand the steps by the Indiana Governor to allow synthetic natural gas from coal won’t likely make much of a difference.
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Thursday, March 5, 2009
P49. Pick Points
Sometimes there are situations that don’t know when to quit. So it is with the Ukraine:Russia dispute over gas. Today Prime Minister Putin “harshly accused” Ukraine of threatening the passage of Russian gas west. (He also appears to be ignoring the “President guy”) and said he would cut off gas this Saturday. This whole situation is now starting to threaten Russian credibility. But the demagoguery seems to have worked and Ukraine is coughing up the ready.
And speaking of revisiting crises, the Pakistan Chief Minister would like to reassure the country
Regulation of the coal industry has become the intent du jour, the European Commission has now set in place emission rules that will likely, through constriction of sulfur dioxide emissions , threaten to close the deep mines of Britain. The threats of increased regulation have just caused cancellation of another coal-fired power plant, this one a 649 MW plant in Iowa. Wisconsin also recently cancelled expansion of the Nelson Dewey facility. The utility planning the facility is now looking into wind power but, from a statistical point of view
Regardless, the pressure is on coal operators to find solutions but what might get lost in the shuffle is that, whether in Europe or the United States, if we shot the old, before the new can carry the load, life could go downhill really quickly. To counter that the IEA suggests that the US should consider new gas and diesel taxes, and open up offshore areas for drilling.
More stories can be found at The Energy Bulletin and Drumbeat at The Oil Drum.
Naftogaz on Thursday transferred the final $50 million installment of a $360 million payment for gas consumed in February, the Ukrainian company's spokesman Valentyn Zemlyansky said. Gazprom confirmed that Naftogaz had paid in full for February supplies.Part of the problem now appears to be a political struggle in Ukraine
Tymoshenko and her allies deny that Naftogaz diverted Russian gas. They claim Yushchenko initiated the search in order to get his hands on the company's profits and hinder the company's dealings with Russia by confiscating vital documents.The message has spread beyond just government and industry also is now learning about using renewable energy, and conservation.
And speaking of revisiting crises, the Pakistan Chief Minister would like to reassure the country
Qaim Ali Shah said, “A meeting will soon be convened to resolve power outage crisis in which KESC administration, representatives from trade community and local citizens will be invited.”The Canadians are trying to help but supplies are short, and still the Pakistan Senate is urging that prices be lowered. Imports of fuel oil are up 87% over this time last year. Sadly, and a little along the lines of my Tech Talk on Sunday, some 14 miners were killed and 19 injured in a gas explosion in a coal mine in Pakistan on Thursday.
Regulation of the coal industry has become the intent du jour, the European Commission has now set in place emission rules that will likely, through constriction of sulfur dioxide emissions , threaten to close the deep mines of Britain. The threats of increased regulation have just caused cancellation of another coal-fired power plant, this one a 649 MW plant in Iowa. Wisconsin also recently cancelled expansion of the Nelson Dewey facility. The utility planning the facility is now looking into wind power but, from a statistical point of view
Power producers have canceled more than 90 coal-fired projects totaling more than 55,000 MW of capacity for various reasons, over the past few years, according to data from the Sierra Club. There are still about 70 coal plants under construction or in development in the United States.I believe I heard someone comment recently that all the wind and power installed in the U.S. to date would be the equivalent of one medium coal-fired power plant, just to put this in perspective.
Regardless, the pressure is on coal operators to find solutions but what might get lost in the shuffle is that, whether in Europe or the United States, if we shot the old, before the new can carry the load, life could go downhill really quickly. To counter that the IEA suggests that the US should consider new gas and diesel taxes, and open up offshore areas for drilling.
More stories can be found at The Energy Bulletin and Drumbeat at The Oil Drum.
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Sunday, January 25, 2009
P23. Pick Points
Half-a-dozen, or so, stories of interest.
Time was when the word Audit would strike fear, since it was (and perhaps still is) associated with a Tax Audit. But, as part of the move to reduce the demand for fossil fuels, the lowest hanging fruit (to follow on Dr Chu’s lead) is conservation and energy efficiency, and to know how to save, one must first know where energy currently goes, particularly in a home. And thus the new emphasis on Energy Audits. It is a term that is now coming to Washington, and last week A WP reporter had one done.
At the end of lat year I wrote about the experience of hiring a professional, but it is possible to do it yourself, though Austin Energy has a web site that might be useful.
Unfortunately this will not help those indigenous villages in Alaska that are currently running out of money after having had to pay the costs of fuel. Because the early onset of winter froze the rivers before the barges could deliver fuel it now must be flown in. Prices have risen to more than $8 a gallon for fuel oil. This was known last August , and by October the Coast Guard was helping get barges in to deliver although in that particular case the problem was low tides. But the price meant that many villages did not get enough, and now they have been calling for help. While there has been a significant response, the State government is considering fuel vouchers as a solution. Alaska is also looking to use some of the stimulus package to put in roads to help with the gas pipeline from the North Slope.
Prices of gas and fuel oil have slowed purchases in Pakistan which now only has 6 days of gasoline, and nine days of fuel oil in storage, though a fresh boatload of fuel (good for five more days) is due on Tuesday. However, because the government is not paying its bill, fuel oil supplies to some power plants, refineries and distributors are being shut off. One consequence is that electricity prices will have to go up, and coal is getting another look.
Over in Bangladesh, recognizing their problems, electricity for farm irrigation is being given priority. The season runs from mid-February until April and irrigation is needed even as the supply of electricity is likely to be about 30% short of demand. Perhaps they can follow India’s lead and use more local solar power. Certainly it got a better press at the Energy Summit in Abu Dhabi, despite the worsening news on funding.
The President of Turkmenistan now feels strong enough to “go it alone”, as demand for the natural gas with which his country is endowed continues to grow. Now the Russians have been happy to buy as much as possible to ship to the West, thereby reducing the supply that will be available for the Nabucco pipeline, and have just had the Uzbek’s fall in line. Yet the shortage of energy sources for India and Pakistan mean that there is an increased urgency in getting a pipeline into Turkmenistan completed. If they can then pay for the gas it will carry. On the other hand not only Prime Minister Tymoshenko, but now President Yushchenko is also calling for the Russia:Ukraine deal to be re-negotiated. meanwhile the head of the Ukrainian gas company is in hospital, and the post mortem continues.
Hmm, maybe I should have been a geologist, with average salaries increasing over 50% last year though costs are now diminishing as demand fades, and oil company earnings also suffer, perhaps cut as much as 50%. Yet smaller companies are continuing to recruit .
Norway is joining IRENA, the international renewable energy agency – at the same time that the Norwegian coal company Store Norske made a large profit as coal moved from $80 to $160 a ton, before falling back to $75. Meanwhile a Russian company is planning on putting a wind farm on the Norwegian:Russian border.
More stories can be found at The Energy Bulletin and at Drumbeats on The Oil Drum
.
Time was when the word Audit would strike fear, since it was (and perhaps still is) associated with a Tax Audit. But, as part of the move to reduce the demand for fossil fuels, the lowest hanging fruit (to follow on Dr Chu’s lead) is conservation and energy efficiency, and to know how to save, one must first know where energy currently goes, particularly in a home. And thus the new emphasis on Energy Audits. It is a term that is now coming to Washington, and last week A WP reporter had one done.
At the end of lat year I wrote about the experience of hiring a professional, but it is possible to do it yourself, though Austin Energy has a web site that might be useful.
Unfortunately this will not help those indigenous villages in Alaska that are currently running out of money after having had to pay the costs of fuel. Because the early onset of winter froze the rivers before the barges could deliver fuel it now must be flown in. Prices have risen to more than $8 a gallon for fuel oil. This was known last August , and by October the Coast Guard was helping get barges in to deliver although in that particular case the problem was low tides. But the price meant that many villages did not get enough, and now they have been calling for help. While there has been a significant response, the State government is considering fuel vouchers as a solution. Alaska is also looking to use some of the stimulus package to put in roads to help with the gas pipeline from the North Slope.
Prices of gas and fuel oil have slowed purchases in Pakistan which now only has 6 days of gasoline, and nine days of fuel oil in storage, though a fresh boatload of fuel (good for five more days) is due on Tuesday. However, because the government is not paying its bill, fuel oil supplies to some power plants, refineries and distributors are being shut off. One consequence is that electricity prices will have to go up, and coal is getting another look.
Over in Bangladesh, recognizing their problems, electricity for farm irrigation is being given priority. The season runs from mid-February until April and irrigation is needed even as the supply of electricity is likely to be about 30% short of demand. Perhaps they can follow India’s lead and use more local solar power. Certainly it got a better press at the Energy Summit in Abu Dhabi, despite the worsening news on funding.
The President of Turkmenistan now feels strong enough to “go it alone”, as demand for the natural gas with which his country is endowed continues to grow. Now the Russians have been happy to buy as much as possible to ship to the West, thereby reducing the supply that will be available for the Nabucco pipeline, and have just had the Uzbek’s fall in line. Yet the shortage of energy sources for India and Pakistan mean that there is an increased urgency in getting a pipeline into Turkmenistan completed. If they can then pay for the gas it will carry. On the other hand not only Prime Minister Tymoshenko, but now President Yushchenko is also calling for the Russia:Ukraine deal to be re-negotiated. meanwhile the head of the Ukrainian gas company is in hospital, and the post mortem continues.
Hmm, maybe I should have been a geologist, with average salaries increasing over 50% last year though costs are now diminishing as demand fades, and oil company earnings also suffer, perhaps cut as much as 50%. Yet smaller companies are continuing to recruit .
Norway is joining IRENA, the international renewable energy agency – at the same time that the Norwegian coal company Store Norske made a large profit as coal moved from $80 to $160 a ton, before falling back to $75. Meanwhile a Russian company is planning on putting a wind farm on the Norwegian:Russian border.
More stories can be found at The Energy Bulletin and at Drumbeats on The Oil Drum
.
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