Ahmadinejad to Run Oil Ministry Despite Legal Ban

- Ahmadinejad to Run Oil Ministry Despite Legal Ban

Monday, May 23, 2011
Knight Ridder/Tribune Business News
by Farshid Motahari, dpa, Berlin

Iranian President Mahmoud Ahmadinejad will run the Oil Ministry despite a legal ban, his legal deputy said Sunday.

Ahmadinejad last week dismissed oil minister Massoud Mirkazemi and took over the ministry himself, which would have also made him rotating chairman at June's OPEC meeting in Vienna.

But Iran's constitutional watchdog, the Guardian Council, rejected the plan as illegal and said that Ahmadinejad could not run the Oil Ministry as caretaker.

The president's legal deputy, Fatemeh Bodaghi, told ISNA news agency that the decision has already been made, as the Guardian Council could only decide on decisions to be made but not on those already been made. Therefore, Ahmadinejad would remain caretaker of the ministry, she said.

Ahmadinejad had argued that he planned to trim the cabinet, and one of his decisions was to abolish the Oil Ministry and merge it with the Energy Ministry. The plan led to wide-spread criticism in Parliament.

Ahmadinejad is involved in a row with Iran's clergy and conservative factions over his reform plans, which include reducing the cabinet from 21 to 17 ministries.

As caretaker of the Oil Ministry, Ahmadinejad would also chair the OPEC meeting next month in Vienna, where protests against the Iranian president are reportedly being planned.

Copyright (c) 2011, dpa, Berlin

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US Govt Asks for Legal Certainty in Indonesia's Oil Industry

US Govt Asks for Legal Certainty in Indonesia's Oil Industry

Tuesday, May 10, 2011
Knight Ridder/Tribune Business News
by Rangga D. Fadillah, The Jakarta Post, Indonesia

The US Department of Energy called on the Indonesian government to ensure the certainty of energy sector contracts and regulations to attract more investment from US companies.

Tom Cutler, the department's director for European and Asia Pacific affairs, said that following Indonesia's impressive economic growth over the past several years, the country needed more investment to develop its energy potential to cope with fast-growing domestic demand.

"The most important [thing to attract investment] is certainty. Once you have a contract with certain terms, companies want those terms to stay in place, because they make business calculations based on whatever the contract terms are," he told reporters on the sidelines of the US-Indonesia Energy Investment Roundtable in Jakarta.

Investment from US companies would help Indonesia boost its energy supply since they have been proven of being capable to provide capital and technology not only in the oil and gas sector but also in renewable energy, Cutler said.

US companies were interested in developing all of Indonesia's energy resources, including geothermal, bio-energy, hydro and wind, he added.

"We heard that Indonesia has 40 percent of the world's geothermal resources. We've some of the best companies in the world, like Chevron, which are interested in developing geothermal resources," he said.

Recently appointed US Ambassador to Indonesia Scott Marciel said US companies were interested in undiscovered oil and gas reserves offshore or in deep waters.

"According to our data, 90 percent of Indonesia's undiscovered oil and gas reserves are located in offshore and deep water areas," he said during his opening remarks.

Cutler said that to reverse the declining trend in oil production, Indonesia was in dire need of more investment to find more oil and gas reserves.

The nation's oil production is currently 916,000 barrels of oil per day (bpd), far below a government target of 970,000 bpd for 2011. Indonesia produced 954,000 bpd in 2010, below a target of 965,000 bpd.

Energy and Mineral Resources Minister Darwin Zahedy Saleh, who also attended the roundtable, said he would consider providing fiscal "incentives and more attractive production-sharing arrangements" to potential investors in the energy sector.

However, he did not elaborate in detail on the form of the incentives and more attractive production sharing arrangements.

"The government is also ready to consider fiscal incentives to encourage acceleration of resources development, as well as more attractive terms and conditions in production-sharing contracts," he said in his speech.

Darwin said he hoped that the bilateral roundtable would be soon followed by the participation of more US investors, not only in oil and gas, but also infrastructure development, new and renewable energy development and energy conservation.

Copyright (c) 2011, The Jakarta Post, Indonesia / Asia News Network. Distributed by McClatchy-Tribune Information Services.

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Controversial 'Horizontal Fracking' Remains Legal in Idaho

Controversial 'Horizontal Fracking' Remains Legal in Idaho

Wednesday, April 20, 2011
Knight Ridder/Tribune Business News
by Rocky Barker, The Idaho Statesman, Boise

Though the only natural gas drilling company active in Idaho today has no plans to employ a method blamed around the country for polluting drinking water, industry officials say other companies could one day.

That was enough to keep Gov. Butch Otter and the other state elected officials who make up the Idaho Oil and Gas Conservation Commission from banning the practice Tuesday.

Bridge Resources, the Canadian-based exploratory company that has discovered natural gas in Payette County, said it only will use a "mini-fracking" procedure to stimulate flows of some of its wells.

But David Hawk, representing Snake River Oil and Gas, a subsidiary of Weiser-Brown, another exploration company, pointed to the Chainman Shale formation in Nevada, which has already gained interest from oil and gas explorers and may extend into Idaho.

"People are looking at southern Idaho," Hawk said. "I'd hate to forestall anything."

The commission approved temporary rules Tuesday that allow Bridge Resources to become the first natural gas driller in the state.

Idaho Conservation League Program Director Justin Hayes offered several amendments he said would protect groundwater. One would prohibit horizontal fracking, where fluids are pumped into shale formations at high pressure to allow natural gas to permeate through for recovery.

"Let's just keep those doors closed," Hayes said.

Bridge would inject only vertically, at high pressure, a mixture of gel and sand into the sandstone formation where the company has found gas to clean out the reservoir near the well bore. This process props open fractures and entices gas to flow more freely.

Hayes wanted drillers to ensure their liquids were not carcinogenic and were not a threat to children. Kim Parsons, Bridge Resources' explorations manager, said the rules as written and the company's own practices will ensure its very limited fracking poses no threat to groundwater.

An impermeable shale formation lies between the drill head area, where the fracking will take place thousands of feet below the surface, and the groundwater closer to the surface.

Parsons said other industries on the surface -- such as agriculture -- use far more dangerous compounds that have far more opportunities to leach into the groundwater.

"We invite the rest of industry to come up to our level of groundwater protection," Parsons said.

The commission, made up of Gov. Butch Otter, Secretary of State Ben Ysursa, Attorney General Lawrence Wasden, state schools chief Tom Luna and State Controller Donna Jones, voted unanimously for the temporary fracking rules. Over the summer, the Idaho Department of Lands will hold a series of meetings to develop permanent rules.

Bridge Resources and its partner, Paramax Resources Ltd., both of Canada, have drilled 11 wells in Payette County. Three of the 11 wells can produce at economic levels naturally. Four require stimulation through fracking, officials said. The other four were dry.

Bridge officials said they could go into production before the end of 2011. That could mean money for schools from state land royalties and for other programs from state severance taxes.