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Showing posts with label disruptions. Show all posts
Showing posts with label disruptions. Show all posts

Monday, June 20, 2011

Little Lizard Could Cause Big Disruptions for Texas Drillers

- Little Lizard Could Cause Big Disruptions for Texas Drillers

Monday, June 20, 2011
Fort Worth Star-Telegram, Texas
by Anna M. Tinsley

Deep in the West Texas sand dunes is something that some say could threaten the state's oil and gas production: A tiny lizard.

But it's not just any lizard: It's a dunes sagebrush lizard, also known as the sand dune lizard.

This little brown reptile is a concern for state officials, who hope that federal officials don't designate it an endangered species. That, they say, could disrupt oil and gas exploration in the heart of Texas' oil country, leading to higher gas prices and shrinking dollars for schools.

"It's reptile dysfunction," said Texas Land Commissioner Jerry Patterson, who oversees the permanent school and university funds, which get money from royalties and leases on some of the potentially affected land. "It has the potential to bring oil exploration and production to a halt."

The U.S. Fish and Wildlife Service, which has had the issue before it for about a decade, is considering protections because oil and gas exploration and ranching are shrinking the lizard's habitat. A decision could come by year's end.

The lizard

The blunt-nosed lizard at the heart of the issue has bright yellow eyes but is barely as long as a person's hand. The lizard is important prey for a number of other species, including some birds and mammals.

It can be found in the West Texas counties of Andrews, Crane, Gaines, Ward and Winkler -- part of the Permian Basin, known to petroleum officials as the most "prolific oil-producing region in onshore America" -- as well as in southeast New Mexico.

There it lives, in the shade of shinnery oak trees, which look like bushes and are found mainly in the sand dunes. The lizard lives only in dunes that have medium-size sand grains.

Environmentalists say the spiny lizard is in danger of extinction because its habitat has been disturbed or removed by oil and gas development. Shinnery oaks, for instance, have been destroyed by drillers, who clear space and move equipment. They have also been killed by ranchers, who say the plant can be poisonous to cattle.

The lizard has been a candidate for endangered status since 2001, when the Center for Biological Diversity asked the federal government to list it. But this proposal was moved forward at least in part because of a federal lawsuit by the environmental advocacy group WildEarth Guardians.

"I think the current federal proposal is based on a number of years of examining the status of the lizard," said Ken Kramer, director of the Lone Star Chapter of the Sierra Club. "It's not a last-minute sort of proposal."

State opposition

Patterson, who has compared the sand dune lizard to Godzilla for its ability to potentially freeze gas and oil work, said this fight is about more than just a reptile.

It's about what he said is a new strategy to gain endangered status for many animals and essentially block industries from doing their work.

"You overwhelm Fish and Wildlife with requests ... and rather than do science on several hundred species, they just settle the lawsuit," he said.Patterson, who has held a sand dune lizard and said it actually is "a cute little bugger," is calling on federal officials to reject the proposed designation.

"The science is not complete, it's out of date, and there's no decent information that has been sufficient to warrant the designation," he said. "If the designation comes, and it isn't based on sound science, we will file a lawsuit."

Texas Agriculture Commissioner Todd Staples, University of Texas System officials and Texas Association of Business President Bill Hammond also oppose the designation.

UT System officials manage more than 2.1 million acres for the benefit of the system, including acreage that could be a habitat for the lizard. They sent a letter to federal officials saying that listing the lizard as endangered is "at best premature" because that decision would be based on "faulty science, inadequate data and seriously erroneous assumptions."

Patterson said that a herpetologist from Texas A&M University has been hired and that studies of the lizard have been commissioned.

The Texas Endangered Species Task Force, primarily made up of property and business owners who could be affected, is developing conservation plans, said R.J. DeSilva, a spokesman for the Texas comptroller's office.

"The goal is to have a plan by November," he said. "There's a need to balance the development of the industry, and economic development in the industry, and take actions to mitigate and preserve the habitat."

Political move?

This year, the Obama administration said a decade's worth of petitions to add wildlife to the endangered species act would be addressed over the next six years.

About 1,400 plant and animal species are designated endangered. Officials work to protect their habitats and review what can be done. Several Texas Republicans in Congress, including Reps. Michael Conaway of Midland, Randy Neugebauer of Lubbock and Francisco Canseco of San Antonio, have asked colleagues to keep the lizard from being designated as endangered. Sen. John Cornyn filed an amendment to prevent federal officials from offering protections to the lizard.

"If the Obama administration has its way, this scaly political pawn will land on the Endangered Species List, without sufficient supporting research to back up the move, and effectively bring new and existing oil and gas production in parts of Texas and New Mexico to a screeching halt," he said in a statement.

Federal officials say they used the best science available and are working with companies to minimize problems or interruptions. Some petroleum companies have signed on to voluntary conservation agreements, agreeing to pay for habitat restoration and use techniques to lessen the impact on the lizards.

Kramer, of the Sierra Club, said he believes that state and industry officials are exaggerating the crisis.

"Practically every time there is a proposal, we get these people saying ... 'The sky is falling. This is going to be the end of civilization as we know it,'" Kramer said. "There is almost always an overreaction based upon their lack of understanding in which the species can be protected."

Copyright (c) 2011, Fort Worth Star-Telegram, Texas

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Wednesday, March 23, 2011

Melrose Resources looks elsewhere for oil
















Revenue was up from $224m (£137m) to $240m (£147m).

Executive chairman Robert Adair said Egypt has traditionally been perceived as a country with relatively low political risk.

He added: "Fortunately, the situation there now appears to be calm and whilst we suffered no business disruption there, we will continue to monitor the situation closely.

"The recent events have, however, underlined the importance of asset diversification and we are particularly pleased that we brought our new Bulgarian fields on stream last year as part of that process."

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Tuesday, March 22, 2011

[Oil and Gas] - Libya oil faces steep hurdles before return to global markets

Libya oil faces steep hurdles before return to global markets

March 21, 2011, 8:17 p.m. EDT

By Claudia Assis, MarketWatch

Reuters - Rebels walk past a burning Al-Sedr Oil Terminal after it was hit by pro-Gaddafi forces during clashes between Ras Lanuf and Bin Jawad March 9, 2011.

 The Iraq invasion was a major conflict in which much of the oil infrastructure suffered not only damage through warfare but also through looting.
SAN FRANCISCO (MarketWatch) — Caught between Libyan rebels, outside forces and Moammar Gadhafi, it could take years before much of Libya’s oil flows to world markets, energy analysts cautioned Monday.

The crisis, which deepened after western forces began bombing Libyan defenses Saturday, bears a resemblance to the situation in fellow OPEC-member Iraq, where output was severely disrupted by two Gulf wars and a diplomatic battle over who controlled the revenue from its sale.

Some of the Libyan oil fields could avoid major damage because they are far away from cities and towns, the target of much of the past weeks’ fighting.

“However, there are no guarantees Gadhafi and his motley crew of fellow believers ... will not follow a scorched earth policy,” said Leo Drollas, chief economist at the Centre for Global Energy Studies in London.

That’s one danger facing Libyan oil fields. As Iraqi forces under Saddam Hussein withdrew from Kuwait during the first Gulf war, they burned oil wells, Drollas noted.

The United Nations on Friday authorized military action in Libya to protect civilians amid fighting between forces loyal to Gadhafi and rebels seeking an end to his rule. Fighting is mostly concentrated in eastern Libya -- where most of the country’s oil’s production is located. Even the most optimistic analysts don’t expect Libyan oil back on line until after the first half of the year.

Output has already been severely curtailed. Most estimates point to production down by about 1 million barrels a day, J.P. Morgan said in a note to clients Monday. Production before the uprising was estimated around 1.6 million to 1.8 million barrels a day, mostly exported to Europe and, to a lesser degree, to Asia.

“U.N. sanctions have effectively imposed an embargo on Libyan exports. Based on the experience in Iraq, we continue to emphasize Libyan production will remain low and volatile for many years,” they said.

Support for crude-oil prices is likely to rise as demand ramps up ahead of the Northern hemisphere summer, although experts say most of Libya’s strife has been factored into the recent high prices for oil futures.

Oil futures for April delivery /quotes/comstock/21n!f:cl\j11 (CLJ11 102.21, -0.12, -0.12%)   rose 1.3% to $103.33 a barrel on the New York Mercantile Exchange Monday, extending the year’s gains to roughly 13%. Oil topped the $100 mark as some pro-democracy protests in North Africa and the Middle East turned to violent conflicts with the ruling regimes, particularly in Libya. Brent crude, the European benchmark, has shot even higher.

Iraq comparisons

Iraq’s oil output following the wars is serving as a model for energy analysts trying to determine how long Libyan oil could be unavailable to European and other refiners.

Production in Iraq was around 2.5 million barrels a day right before the invasion in March 2003
It was back at such levels only in 2007, Drollas said. Recent estimates put Iraq’s current production at 2.8 million barrels a day, Drollas added.


In Libya, much hinges on how the oil installations fare as the battles rage on, and how soon foreign workers will be able to return to the country, said Samuel Ciszuk, a senior Middle East energy analyst at IHS Global Insight in London.

Oil installations near the town of Ras Lanuf have been damaged as the conflict escalated, but experts say most infrastructure has been spared.

As for replacements for Libya’s light, sweet crude, the world has available oil from Nigeria and Angola, which are similar to Libyan oil. Unlike 2008, when Nigerian oil disruptions contributed to the record high oil price, these and other African countries have been able to keep their production, he said.

Some of the heavier Saudi Arabian oil, although not a perfect substitute, is also appropriate for refineries previously using Libyan oil with the addition of natural gas liquids and other liquid hydrocarbons.

But the full price impact of the conflict in Libya may yet to be seen, said Sarah Emerson, managing director of Energy Security Analysis Inc. in Massachusetts.

“We’re in the shoulder season,” she said. Heading to peak season, there may not be enough light, sweet oil to go around, she added. “We may not have the right quality at the right time of the year.”

More sophisticated refineries in Europe and elsewhere are able to process heavier crude but there’s only so much tweaking refiners will be able to do, Emerson said.

Switching grades “is more than a little throw off. We lost a very specific light sweet crude and it is not that easy to replace it.”

The spectrum of another conflict elsewhere in the world also haunts markets.

“The extra capacity (from Saudi Arabia) is there but it tights up the world capacity,” Drollas said. If oil suffers another shock somewhere, “then we are back at 2008.”

Oil hit a record high in the summer of 2008, when it soared to $147 a barrel only to fall to below $50 before the year was out.

Oil around $150 a barrel this year would mean “a slip back into the recession next year,” Drollas said. Prices are at a level they may be already hurting global growth, he added.

The only possible resolution for the conflict is a Libya without Gadhafi, Drollas said. “A wounded Gadhafi is worse, metaphorically speaking,” he said.

Claudia Assis is a San Francisco-based reporter for MarketWatch

Link
http://www.marketwatch.com/