NPD Head: Norway's New Oil Finds May Help Stem Mid-Term Output Fall

- NPD Head: Norway's New Oil Finds May Help Stem Mid-Term Output Fall

Monday, September 12, 2011
Dow Jones Newswires
by Katarina Gustafsson

Two major oil finds this year by Norwegian oil and gas giant Statoil (STO) could stave off a steep decline in Norway's production in the mid-term, but won't reverse the longer downward trend, Bente Nyland, head of the Norwegian Petroleum Directorate has told Dow Jones Newswires.

This summer's find in the North Sea that is one of the 10th biggest discoveries ever on the Norwegian continental shelf and the earlier slightly smaller success in the Barents Sea complement measures to tackle the fall in the short- and mid-term that are being considered and implemented by the Scandinavian country.

However, ultimately Norway will have to open up new areas and that is more problematic.

"In the short- and mid-term it's important to keep and increase recovery, to have new finds in production and build out what you have found. While in the long run, it's necessary to discuss whether to open up new areas. And that is a political question," Nyland said.

Norway this year reached a treaty with Russia over a long disputed maritime border in the Barents Sea. But it could be a while before this new zone is opened up for exploration, Nyland said the quickest scenario would be around two or three years.

The petroleum directorate has started collecting seismic data from the region and Nyland, a geologist and head of the government body since 2008, said some indication of the region's resources could be given in 2012-13.

The state agency, tasked with overseeing Norway's oil and gas activities, predicts total production will be kept at about the current level until around 2020-25, Nyland said.

Norway's oil production peaked in 2001. Gas production is still rising but Nyland said she expects output to begin decreasing some time at the start of the 2020s given the lack of large gas finds.

"Gas production will to some extent fill in the gap in coming years," she said, adding that increasing the recovery rates in existing oil fields will be critical in the short term.

The petroleum sector is Norway's largest industry. Investments next year in oil and gas activities are seen at a record-high NOK172 billion ($32 billion), according to a recent forecast from Statistics Norway.

Last week, the Norwegian krone climbed to an eight-year high as traders sought a new safe haven after the Swiss National Bank capped the value of the Swiss franc against the euro.

"We have no indications that companies have become more restrictive. But it's too early to say," Nyland said.

In January, the Norwegian Petroleum directorate revised down estimates for undiscovered resources on the Norwegian continental shelf, to 2.6 billion standard cubic meters of oil equivalents from 3.3 billion standard cubic meters of oil equivalents.

"This year's finds give no base for changing our analysis," she said.

Copyright (c) 2011 Dow Jones & Company, Inc.

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Help Wanted: Energy Firms Competing For Hires

- Help Wanted: Energy Firms Competing For Hires

Wednesday, August 10, 2011
Dow Jones Newswires
NEW YORK
by Steve Gelsi

Despite a big drop in oil and stock prices in recent days, U.S. energy companies bearing down on the country's shale fields have yet to waver from plans to add staff this year to boost domestic production.

The industry is hiring as it brings new U.S. supply on line and demand grows from power-generation companies switching to natural gas from coal or fuel oil.

"Our industry is competing for talent," said Jim Haynes, vice president for U.S. operations at Spectra. "We continue our hiring mode."

Spectra Energy, for example, expects to add staff as part of plans by the pipeline firm and its affiliates to add up to $10 billion in infrastructure in the next five years.

The Independent Petroleum Association of America projects as many as 200,000 new jobs in the energy patch from hundreds of oil and gas producers in 2011.

"I don't think the threat of a double-dip recession will stop many companies from hiring," said Jeff Eshelman, spokesman for the trade group of oil and gas producers, once known as "wildcatters."

"Overall, the natural-gas industry is one that is adding people, not scaling back," Haynes added. "We've seen at least a 15% increase, industry-wide, over the past several years, even during the downturn." Last year, Spectra hired 130 people and it's already brought on about 129 this year.

Dave Pursell, managing director and head of securities for Houston-based research firm Tudor Pickering Holt & Co., said an analysis of shale-gas fields in the United States revealed that nearly all remain profitable with oil at $80 a barrel or less. On July 25, oil was still $100 a barrel; on Tuesday, crude futures rose 1% to $82.

"The velocity of the drop has gotten people's attention," according to Pursell. "But companies aren't going to change their strategic hiring based on a two-week move in oil."

To be sure, the industry contracted during the 2008-09 financial crisis as it became more difficult for companies to get funding for their drilling programs, but so far, that doesn't seem to be happening, he said. The 2008 crisis, for instance, saw a much steeper drop in natural-gas prices than now.

Engineers wanted

While the U.S. jobs figures for July came in better than expected, the overall picture for employment remains moribund -- outside of the energy sector.

Among the hotter areas for employment growth: Some 50,000 job additions this year are expected for the Barnett shale of Texas, and 48,000 in the Marcellus shale of Pennsylvania, West Virginia, Ohio and New York, according to the IPAA.

Besides the Barnett and Marcellus shales, U.S. energy companies plan to beef up rolls in the Haynesville shale of Texas and Louisiana, the Eagle Ford of South Texas, the Bakken of North Dakota and Utica formations of Ohio.

Hiring activity also has picked up as natural-gas firms focus on more labor-intensive oil drilling; plus, companies need to drill to hold acreage under most of their leases with property owners, Tudor Pickering's Pursell pointed out.

Another incentive to drill is to get higher-priced Louisiana sweet crude, which fetches a price near the Brent crude level of $100 a barrel, he said. "Companies are drilling because they want growth. And drilling for oil still makes money with oil below $80 a barrel in most areas."

Some of the most sought-after job candidates in the energy sector right now are petroleum engineers -- a specialization in charge of technology used to maximize returns from wells, according to Apache spokesman Bill Mintz.

"One area of concern in the industry is that a lot of petroleum engineers are in their 50s and expected to retire," he said.

Chip Minty, spokesman for Devon, said the company currently has more than 300 openings right now and no plans to curtail hiring.

"The swing we've seen in oil and equity prices does not have a bearing on our long-term operational objectives," he commented. "We do analysis as we put together our budget. We use market prices that are quite conservative. Even if oil and natural gas dropped below where they are today, we'd still be looking at wells that are economical."

Apache's Mintz said the independent energy company's ranks rose to 4,500 in 2010 up from 3,500 in 2009, and more jobs are coming in 2011. "We're continuing to hire. We've got a lot going on in all of our regions."

The company has been recruiting graduates from the Colorado School of Mines, Texas A&M University, Texas Tech University, the University of Oklahoma, University of Texas and the University of Tulsa.

Asked if Chesapeake planned to scale back hiring this year in the wake of Monday's big selloff in the equities market, company spokesman Jim Gipson said "nope," and referred to a local newspaper report about economic expansion in Oklahoma City, Chesapeake's headquarters.

Copyright (c) 2011 Dow Jones & Company, Inc.

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Rep. Gardner Bill to Help Oil Cos Drill Off The Coast of Alaska Slate

- Rep. Gardner Bill to Help Oil Cos Drill Off The Coast of Alaska Slate

Monday, June 20, 2011
Greely Tribune, Colorado
by Nate A. Miller, Greeley Tribune, Colo.

U.S. Rep. Cory Gardner is the driving force behind legislation slated for a vote in the House this week that would make it easier for oil companies to drill off the coast of Alaska.

"Energy security and job creation is very important to me," the Republican said. "This bill accomplishes both goals."

The bill, H.R. 2021, would streamline the process for air permits on deep-water drilling operations off the coast of the U.S., with the exception of the Gulf of Mexico, which is controlled by the Department of the Interior. It also would require the Environmental Protection Agency to make a ruling on permit requests within six months.

Fort Collins resident Gary Wockner, who is the Colorado program director of Clean Water Action, said the bill is misguided.

"This bill will increase polluters' profits at the expense of public health and the environment," he said.

While it may seem strange for a Colorado congressman to take up the cause of offshore oil drilling in Alaska, Gardner, who serves on the House Energy and Commerce Committee, said it's a good fit.

"We need an all-of-the-above energy policy in this country that lessens our dependence on Middle Eastern oil," he said. "Whether it's natural gas produced in Weld County or oil produced in our deep-water reserves. We need to be doing everything we can to help reduce the price of gasoline and to help ween ourselves off of Middle East oil."

Gardner said permits to drill off the coast of Alaska have become stuck between the EPA and the Environmental Appeals Board, which the EPA created to address administrative appeals involving the major environmental statutes the EPA administers.

"Congress said these permits had to be approved or denied within a limited time frame. The EPA created a bureaucracy without Congress that has delayed some of these permits by as much as six years," he said. "It's the EPA end-run around Congress that's hurting our energy independence."

Gardner's legislation would remove the duplication created by the EPA and appeals board permitting process.

In testimony last month before the subcommittee on Energy and Power of the House Committee on Energy and Commerce, EPA assistant administrator for air and radiation Regina McCarthy said the appeals board ensures all parties are heard and often actually makes the process more efficient.

"Rather than adding a step, the board usually serves as a cheaper, faster, more expert substitute for judicial review," she said. She used the example of a group of subsistence fisherman concerned that an EPA permit didn't address their concerns about air pollution. "They would not be required to hire a lawyer; they could attend oral arguments via video conference; and they would know that their concerns were being heard by experts."

She also said offshore drilling operations can have very real impact on air quality, and it's important to ensure effective, efficient oversight of the operations.

Gardner said the permitting process gives ample time for public comment without the added bureaucracy of the appeals board. He said the permits can be held up even when there aren't health concerns. He gave the example of a Royal Dutch Shell permit for Alaska drilling which he said the EPA held up for six years, even though EPA head Lisa P. Jackson said health concerns weren't an issue.

Gardner estimates the measure, if it becomes law, would create 50,000 jobs across the country -- including some in Colorado -- and help ease the pressure at the pump for drivers by allowing more than 1 million barrels of oil a day to be pumped from Alaska.

Wockner said Gardner should focus on energy solutions Colorado has to offer.

"Rep. Gardner should be worrying about clean energy jobs in northern Colorado, not polluters' profits in Alaska," he said.

Copyright (c) 2011, Greeley Tribune, Colo.

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Philippines Welcomes US Help to Contain China

- Philippines Welcomes US Help to Contain China

Tuesday, June 14, 2011
Dow Jones Newswires
MANILA

Philippine President Benigno Aquino said Tuesday his country needed help from longtime ally the United States in its increasingly tense dispute with China over rival claims in the South China Sea.

Aquino accused China of breaking international law by sending vessels into waters claimed by the Philippines and close to its landmass, while portraying his country as weak compared with its militarily superior Asian neighbor.

"Of course they (China) are a superpower, they have more than 10 times our population. We do not want any hostilities to break out," Aquino told reporters when asked about recent Chinese actions in the disputed area.

"Perhaps the presence of our treaty partners, the United States of America, ensures that all of us will have freedom of navigation (and) will conform to international law."

The U.S. and the Philippines are bound by a 1951 Mutual Defense Treaty that calls on both parties to come to one another's aid if either were to be attacked by an external party.

Aquino's comments came after the U.S. ambassador to the Philippines, Harry Thomas, Tuesday said the U.S. remained committed to helping its former colony in any dispute over the South China Sea.

Thomas emphasized at a public forum in Manila that the Philippines and the U.S. were "longstanding treaty allies" and "strategic partners".

"We will continue to consult each other closely on all issues, including the South China Sea and Spratly Islands," Thomas said.

Aquino welcomed Thomas's comments, which are likely to irk China as it has long insisted that the U.S. has no role to play in resolving its territorial disputes with Asian countries.

"We are pleased by that, especially the reiteration that we are a strategic partner," Aquino said when asked to respond to Thomas's comments.

Aquino's remarks continued an escalation in tensions between China, the Philippines and other rival claimants to the strategically vital and resource-rich South China Sea over recent months.

The Philippines and Vietnam, in particular, have expressed alarm at what they say are increasingly aggressive actions by China in the disputed waters.

The Philippines has accused China of putting up posts and a buoy in Philippines-claimed areas of the Spratlys, an archipelago of more than 100 islands and reefs in the South China Sea.

It also accused China of sending naval vessels to intimidate Filipino fishermen and the crew of an oil exploration ship near an atoll called Reed Bank.

Aquino on Tuesday specifically highlighted recent "incidents" at Reed Bank, pointing out it was well within the Philippines' exclusive economic zone of 200 nautical miles.

He said the Reed Bank was just 80 miles from the nearest major Philippine landmass, but 576 miles from Chinese territory.

"Five-hundred-and-seventy-six miles is obviously greater than 200 miles, so why is there suddenly a dispute if we are all conforming to international law," he said.

Under the United Nations Convention on the Law of the Sea, a country's exclusive economic zone extends to 200 miles from its continental shelf.

In response to earlier complaints from the Philippines, China has denied taking any aggressive actions and insisted it remained committed to resolving territorial disputes with its neighbors peacefully.

Aside from China, the Philippines and Vietnam, Taiwan, Brunei and Malaysia have overlapping claims to sections of the South China Sea.

The area is believed to hold major oil and gas deposits, and has commercial shipping lanes that are vital for global trade.

Copyright (c) 2011 Dow Jones & Company, Inc.

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