Commodity Corner: Oil Edges Lower on Econ Woes

- Commodity Corner: Oil Edges Lower on Econ Woes

Tuesday, September 06, 2011
Rigzone Staff
by Saaniya Bangee

Light, sweet oil edged lower Tuesday on lingering concerns about the global economy.

Oil futures traded 43 cents lower at $86.02 a barrel on the New York Mercantile Exchange.

Concerns that the European debt crisis might worsen pushed prices and equities lower Tuesday. Traders worry that the economic plague could spread to neighboring countries.

Prices fell as low as $83.20 a barrel in intraday trading as U.S. stock indexes plummeted for a third consecutive session. They peaked at $86.50. Earlier today, the Dow Jones Industrial Average fell 308 points but rebounded after the Greek government indicated swifter economic reforms.

Traders are waiting to take cues from President Obama and the Federal Reserve's speech later this week.

Brent crude, which is used to price many international oil varieties, gained $2.81 Tuesday to settle at $112.89 a barrel. Brent took its cues from production problems in the North Sea and a continued absence of Libyan oil in the market.

Likewise, natural gas for October delivery added 6.6 cents to settle at $3.94 per thousand cubic feet. Prices fluctuated between $3.85 and $3.95 Tuesday.

The U.S. National Hurricane Center reported that a new weather system west-southwest of the Cape Verde Islands had a 90 percent chance of becoming a cyclone in the next 48 hours.

After trading between $2.77 and $2.84, front-month gasoline lost 1.7 cents to settle down at $2.82 a gallon.

Oil & Gas Post

Promote Your Page Too
LINK

Commodity Corner: Oil Falls Amid Softer Demand Outlook

- Commodity Corner: Oil Falls Amid Softer Demand Outlook

Friday, September 02, 2011
Rigzone Staff
by Matthew V. Veazey

Light sweet crude oil for October delivery lost nearly three percent Friday after the U.S. Department of Labor announced that the U.S. economy added zero jobs last month.

The WTI settled at $86.45 a barrel, a $2.48 day-on-day decline, after the Labor Department reported that the loss of 17,000 government jobs in August offset the addition of the same number of private-sector jobs during the period. According to media outlet MSNBC, the government last reported zero job growth 66 years ago. The Labor Department also announced that the unemployment rate held steady at 9.1 percent.

The unimpressive employment figures support the view that the U.S. economy is experiencing a double-dip recession, lowering expectations for oil demand.

Brent futures also ended the day lower, losing 1.7 percent to settle at $112.33 a barrel. The benchmark traded within a range from $111.57 to $113.51. The WTI peaked at $88.99 and bottomed out at $85.42.

By noon Friday, one-third of Gulf of Mexico natural gas production had been shut-in as Tropical Storm Lee ambled toward the Louisiana coastline. That was not enough to counter the aforementioned dismal economic prospects, however; October natural gas lost more than four percent Friday to settle at $3.87 per thousand cubic feet.

Front-month natural gas fluctuated from $3.85 to $4.065 during floor trading. Reformulated gasoline for October delivery lost a nickel to end the day at $2.84 a gallon after trading within a range from $2.795 to $2.90.

Oil & Gas Post

Promote Your Page Too
LINK

Commodity Corner: Oil Gets Boost from EIA, Bernanke

- Commodity Corner: Oil Gets Boost from EIA, Bernanke

Wednesday, July 13, 2011
Rigzone Staff
y Matthew V. Veazey

Oil futures received a boost Wednesday from the latest inventory data from the U.S. Energy Information Administration as well as testimony by Federal Reserve Chairman Ben Bernanke. The WTI benchmark on the New York Mercantile Exchange gained 62 cents to settle at $98.05 a barrel. Brent futures, meanwhile, rose $1.03 to end the day at $118.78 a barrel.

The EIA reported that U.S. commercial crude oil inventories declined sharply last week. According to the agency, oil stocks fell by 0.9 percent to 355.5 million barrels. The 3.1 million barrel week-on-week decline exceeded analysts' expectations. A panel of analysts surveyed by Platts, for instance, predicted a relatively modest 2.1 million-barrel draw.

Testifying before a U.S. House panel Wednesday, Bernanke hinted that the central bank may initiate a third attempt to stimulate the economy by printing more money to buy Treasury bonds. This "quantitative easing" monetary policy approach is designed to improve liquidity in the economy by enticing banks to make more loans to businesses and consumers. A third round of quantitative easing, or "QE3," would be bullish for oil because the Fed would weaken the value of the U.S. dollar by making money more widely available to banks. For investors holding currencies other than the greenback, dollar-denominated crude oil would become a better value.

The WTI peaked at $99.21 and bottomed out at $96.53 while Brent futures fluctuated from $117.01 to $119.50.

Front-month natural gas gained seven cents to settle at $4.40 per thousand cubic feet. Sizzling temperatures extending from the Midwest to the East Coast, with more to come beginning this weekend after a brief respite, have boosted cooling demand.

The intraday range for natural gas during midweek trading was $4.31 to $4.42.

Gasoline futures rose by a nickel to end the day at $3.15 a gallon. The commodity traded within a range from $3.08 to $3.175.

Oil & Gas Post

Promote Your Page Too
LINK

Ford Increases Availability of Fuel-Efficient Tires Across Lineup

- Ford Increases Availability of Fuel-Efficient Tires Across Lineup



Jul 11, 2011

New fuel efficient, low resistance tires developed by Ford (NYSE:F) are expected to advance fuel economy by up to 2 mpg and are likely to be featured in Ford's up and coming C-Max Energi, C-Max Hybrid and the Focus Electric Cars.

David Rohweder, Ford's Global Chief Engineer for tire and wheel engineering said, "Tire technology, pressures and wear can make a big difference to a vehicle's fuel economy, so the company is working closely with leading tire companies to optimize performance with low-rolling-resistance tires." Ford Motor (NYSE:F) has a potential upside of 46.1% based on a current price of $13.5 and an average consensus analyst price target of $19.73.

Oil & Gas Post

Promote Your Page Too

PetroVietnam to Start Output at 5 New Fields in 2nd Half

- PetroVietnam to Start Output at 5 New Fields in 2nd Half

Wednesday, July 06, 2011
Dow Jones Newswires
HANOI
by Vu Trong Khanh

State-run Vietnam Oil & Gas Group said that it is starting production at new fields in the second half of the year and beginning construction on a second refinery, as it seeks to increase production to feed its fast-growing economy.

The company, known as PetroVietnam, said it will begin producing at five oil fields, including two that are overseas. The announcement comes amid uncertainty about Vietnam's offshore program due to an increasingly bitter territorial dispute with China, which has involved Chinese harassment of Vietnamese oil prospecting activities.

PetroVietnam said it expects to begin production at Russia's Nenetsky field this month and at Dana field in Malaysia's SK305 Block in August.

Production at Te Giac Trang and the second phase of Dai Hung field will start in August, while output at Chim Sao field will begin in September, it said. The fields are between 100 kilometers and 350 kilometers off Vietnam's southern coast, an area that is far away from the area of dispute with China.

The company reported two new commercial findings in the first half, raising its proven crude oil reserves by 10.2 million metric tons.

Late last month, Vietsovpetro, a joint venture between PetroVietnam and Russia's JSC Zarubezhneft, announced that it had discovered additional oil in the Bach Ho field off Vietnam's southern coast, with tests confirming strong oil flow of 4,560 barrels a day.

Meanwhile, Malaysia's Petroliam Nasional Bhd., or Petronas, said last month that it and PetroVietnam have discovered oil offshore Vietnam, with confirmed oil flow of 5,200 barrels a day.

PetroVietnam said Wednesday that it will continue oil exploration Vietnam's continental shelf in the second half of this year, aiming to raise its proven crude oil reserves by 20 million-25 million tons in the period. It didn't say how large its current reserves are.

Meanwhile, the company said it and its partners will start building the Nghi Son oil refinery in northern Vietnam in the third quarter.

PetroVietnam said previously that it would work with Kuwait Petroleum Corp., Idemitsu Kosan and Mitsui Chemicals on the 200,000-barrel-a-day refinery in Thanh Hoa province.

PetroVietnam is targeting output of 7.8 million tons of crude oil in the January-June period, which will take its full-year output to 15 million tons, flat from last year.

It will sell 7.3 million tons of crude oil in the period, including 1.66 million tons to the Dung Quat refinery, which will likely produce 2.48 million tons of oil products in the second half, taking its 2011 output to 5.6 million tons, the company said.

The 130,000-barrel-a-day refinery is scheduled for a maintenance shutdown for two months starting July 15.

PetroVietnam had pretax profit of VND49.9 trillion in the January-June period, up 44% from a year earlier and meeting 68% of its full-year target, the company said.

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

Oil & Gas Post

Promote Your Page Too
LINK

IEA Emergency Oil Release Aims to Protect Economy

- IEA Emergency Oil Release Aims to Protect Economy

Thursday, June 23, 2011
Dow Jones Newswires
LONDON
by James Herron

Acting to protect a fragile global economic recovery against a backdrop of continually high oil prices, the International Energy Agency said Thursday it will release 60 million barrels of oil from emergency stocks to address the supply shortfall from Libya.

The move, announced by the agency's executive director at a hastily-organized press conference in Paris, helped send oil prices sharply lower Thursday, the latest drop in the commodity amid increased uneasiness about the economic outlook.

"The global economy is still emerging from recession and it is essential that this recovery not be endangered by an oil supply shortage," IEA Executive Director Nobuo Tanaka said. "The situation is getting tighter and tighter," he said, adding: "we have to act now and to fill the gap."

The IEA almost never diverts from a its public mantra on the need for OPEC and other producers to pump more oil to keep the economy humming. But Tanaka and other IEA officials have sounded an increasingly brittle note over the economy in recent weeks. Tanaka told a St. Petersburg, Russia economic forum last week that he feared a "very hard landing" due to high prices.

The IEA's surprise decision comes less than three weeks after a meeting of the Organization of Petroleum Exporting Countries disintegrated into chaos as members couldn't agree on a plan to boost output. The IEA has subsequently praised unilateral moves by Saudi Arabia and others to boost output without the OPEC agreement. On Thursday, Tanaka said the emergency release was taken to make up for a delay before Saudi supplies hit the market.

The IEA, which represents consuming countries and is responsible for coordinating emergency releases, said it will add an extra 2 million barrels a day of oil, equivalent to around 2% of global supply, into the market for the next 30 days from emergency stocks.

The IEA consulted OPEC members, as well as Chinese officials and representatives from other countries not officially part of the IEA, IEA officials said.

The IEA's move gave further downward pressure to oil prices on a day in which gloomy economic data had already sent crude lower.

Even before the IEA announcement, oil prices had been trading lower Thursday following surprisingly poor labor department figures in the U.S. But the IEA news sent prices lower still.

Light, sweet crude for August delivery tumbled $5.42, or 5.6%, to $89.99 a barrel on the New York Mercantile Exchange. Prices fell as low as $89.69 a barrel earlier in the session, their lowest since Feb. 22.

Brent crude on the ICE futures exchange fell even further, giving up $7.66 or 6.7%, to $106.55 a barrel, a day after the European contract rose sharply.

Crude prices have dropped around 10% since the June 8 OPEC meeting. Investors have fixated their attention on fears of weakening consumer demand and the ongoing debt crisis in Greece has dominated headlines.

The IEA elected not to release oil from stocks earlier this year, when 1.5 million barrels a day of Libyan oil supplies were shut down by the civil war. However, as the Libyan conflict has dragged on in stalemate, the effect of loss of those crude supplies has become more pronounced, the IEA said.

"The normal seasonal increase in refiner demand expected for this summer will exacerbate the shortfall further. Greater tightness in the oil market threatens to undermine the fragile global economic recovery," the IEA said in a statement.

Demand for oil typically rises in the summer season due to increased gasoline use in the U.S. Oil demand has also exceeded expectations in China as electricity supply problems have prompted higher use of diesel for power generation in China. Oil prices have retreated in recent days, but consumers remain concerned about a supply crunch later this summer.

Previous IEA stock releases followed the first Gulf War and hurricane Katrina.

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

Oil & Gas Post

Promote Your Page Too

IEA: Oil Price Risks Hard Landing for World Economy

- IEA: Oil Price Risks Hard Landing for World Economy

Thursday, June 16, 2011
Dow Jones Newswires
ST. PETERSBURG
by Geoffrey T. Smith

The continuing high price of crude oil risks creating a hard landing for the world economy, the International Energy Agency's Executive Director Nobuo Tanaka said Thursday.

Addressing a briefing at the start of the St. Petersburg International Economic Forum, Tanaka said: "If the current oil price continues it will be to the detriment of the global economic recovery."

The current situation "is starting to resemble 2008, and we know that 2008 was a very hard landing for the world economy. We'd prefer a soft landing," Tanaka said.

The IEA is still monitoring the global oil supply situation in the wake of this month's fractious meeting of the Organization of Petroleum Exporting Countries, Tanaka said, against a background of evidence showing that the world needs more oil from OPEC, which controls around a third of the globe's production and is home to almost all of the world's spare production capacity.

OPEC's ministers last week refused to endorse a group-wide increase in output to take the edge off crude prices, to the frustration of its largest producer Saudi Arabia. Saudi also has the bulk of OPEC's spare capacity.

Earlier in the briefing David Fyfe, head of the IEA's oil markets division, said that current prices for crude oil don't reflect any degree of "excessive speculation," but rather reflected a genuine tightening in the world market.

Fyfe's comments came two days after French President Nicolas Sarkozy made a sweeping attack on speculation in commodities markets, continuing a campaign for greater regulation that has been the centerpiece of France's presidency of the Group of 20 largest industrialized and emerging economies.

Fyfe also noted Thursday that the IEA's research showed that oil prices do more to reflect exchange rates than vice versa.

Fyfe and other officials were summarizing a new IEA report on the outlook for the world energy market over the next five years. As reported, the IEA has revised upwards its estimate for average oil prices in that period by $19 to $103 a barrel.

The price of crude oil rose by nearly $2 a barrel in Europe and nearly $1 a barrel in the U.S. on the release of the report. At 0850, the benchmark Brent blend was trading at $114.78 a barrel on the Intercontinental Exchange, while the New York Mercantile Exchange's contract for oil for July delivery was up 82 cents at $95.63 a barrel.

Over 90% of the increase in global demand in the five-year period will come from emerging markets, Fyfe said. He also said that a "tidal wave" of new refining capacity in emerging markets will continue to pose an existential threat to many refineries in developed markets, estimating that the overhang of global refining capacity may reach 4 million barrels a day by 2016.

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

Oil & Gas Post

Promote Your Page Too

Iran Economy Minister May Attend OPEC Meeting June 8

- Iran Economy Minister May Attend OPEC Meeting June 8

Tuesday, May 31, 2011
Dow Jones Newswires
by Benoit Faucon

Iran's Economy Minister Shamseddin Hosseini may represent the Islamic Republic at the next meeting of the Organization of Petroleum Exporting Countries, a person familiar with the matter said over the weekend.

"It's a possibility," the person familiar with the matter said.

The considerations are bringing some clarity over who could chair the gathering at a key juncture for the producer group.

Iran's Oil Ministry caretaker head, President Mahmoud Ahmadinejad, has told officials he wouldn't attend, breaking away from earlier governmental statements that he would come.

Attendance by the economy minister, who would represent the holder of the presidency Iran, would make sense for the country at a time of increased budgetary needs from oil revenues.

But Iran's OPEC governor Muhammad Ali Khatibi said last week that "we are waiting for a decision from the president."

OPEC will have to decide June 8 in Vienna if it increases its output quotas or keeps them unchanged.

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

Oil & Gas Post

Promote Your Page Too

ConocoPhillips Commits to $2B Slope Project If State Tax Change Is Made

ConocoPhillips Commits to $2B Slope Project If State Tax Change Is Made

Monday, April 18, 2011

Alaska Journal of Commerce

by Tim Bradner

ConocoPhillips CEO James Mulva said his company will increase its Alaska drilling and will work toward development of a $1.5 billion to $2 billion partial gas processing plant, and a new 50-well drill pad, in the west end of the Prudhoe field.

That's if the state of Alaska takes steps to improve the fiscal environment.

Mulva spoke to a gathering of Make Alaska Competitive, a group formed to push for modifications to the state's production tax that are proposed by Gov. Sean Parnell.

Parnell's bill, House Bill 110, passed the state House of Representatives April 1 but was bogged down in the state Senate with days left before the Legislature's scheduled April 17 adjournment.

Mulva's statements were intended to counter criticisms by state senators, including Senate President Gary Stevens, that there is no commitment by industry to invest if the state does lower the tax and forego revenues.

The west-end Prudhoe field project needs approvals of other field owners BP and ExxonMobil, but Claire Fitzpatrick, BP's Alaska chief financial officer, said in Juneau recently that the west-end project was the type of development that could occur quickly if changes in taxes were made.

The project, aimed at developing viscous oil resources in that part of the Prudhoe field, had been planned but was put on hold when the Legislature increased the state production tax in 2007.

Mulva said ConocoPhillips would also increase its work on the West Sak viscous oil development in the Kuparuk River field and pursue small satellite accumulations known to exist around the Alpine field if the tax changes are made. ConocoPhillips is the operator of those fields.

"Alaska's business environment has deteriorated over the past several years. We face restricted access, increased litigation and the highest tax rates," of any producing region outside OPEC, Mulva said. "Meaningful improvements in the business environment are needed this year to affect investment decisions next year. We need new investments. Past investments cannot sustain us."

Mulva cited continued production decline of 6 percent yearly and potential operating problems with the Trans-Alaska Pipeline System due to the low flow of crude oil moving through the system.

TAPS is operating at about one-third of its capacity, he said.

In opening remarks at the meeting Northrim Bank chairman Marc Langland warned against an us vs. them attitude that has developed between the state and the petroleum industry, it's major source of revenue."

"Our state and our economy need a new vision based on what we can accomplish together, not how we can tear each other apart," Langland said. "We need a vision based on cultivating partnerships, not building adversaries. We've done this before. The road map already exists. All we need to do is ask directions."

Make Alaska Competitive was formed earlier this year by business and labor leaders and former political leaders including former Gov. Tony Knowles, a Democrat, and former House Speaker Gail Phillips, a Republican.

Crude For May Delivery Approaches $112 A Barrel

Crude For May Delivery Approaches $112 A Barrel



Light crude for May delivery approached the $112 a barrel level, while Brent crude futures rose $1.74 to $124 a barrel.

Buying momentum has continued as hopes fade for a quick resolution of conflicts in Libya. Last week, crude-oil futures traded at $106 a barrel and prices have only climbed since then.

The weakening of the U.S. dollar and uncertainty over a possible U.S. government shutdown helped crude-oil prices increase.

Tudor Pickering Holt analysts said, "Middle East tensions driving further crude-oil gains from these elevated levels will make us incrementally more nervous about energy demand, the economy and inflation."

Oiltanking Partners Files For $200 Million IPO (OTLP)

Oiltanking Partners Files For $200 Million IPO (OTLP)



Oiltanking Partners LP plans to offer up to $200 million in common units in an initial public offering.

The limited partnership was formed in March, and will serve as a growth vehicle in the U.S. for the Hamburg, Germany based Oiltanking GmbH, the indirect owner of the company's general partner, according to the company's filing with the SEC.

Oiltanking GmbH is the world's second largest independent storage provider for crude, refined products, and liquid chemicals and gases. Oiltanking Partners has terminating, storage, and pipeline operations in Texas and the upper Gulf Coast.

Oiltanking Partners plans to apply to list on the New York Stock Exchange under the symbol OTLP.

Ford's March Sales Outpace GM's (F,GM)

Ford's March Sales Outpace GM's (F,GM)



Ford Motor Co (NYSE:F) posted a 19% increase in vehicle sales for the month of March, driven by strong growth for its Fiesta, Fusion, Escape, and Explorer, as well as the F-Series, which saw year-over-year sales growth of 25%.

Ford's monthly total of 212,777 surpassed that of General Motors (NYSE:GM), which reported selling 206,621 vehicles in the month, though GM outsold Ford for the quarter, 592,545 to 496,720.

Ken Czubay, vice president of Ford U.S. marketing, sales and service, said, "With gasoline prices eclipsing $3.50 a gallon, consumers are placing a high priority on fuel efficiency in every size and kind of vehicle. Customers are rewarding Ford for our investment in new products as well as more efficient engines and transmissions, which save them money at the pump whether they drive Fiestas or F-Series trucks."

Credit Suisse Lowers U.S. GDP Forecasts for First Half 2011

Credit Suisse Lowers U.S. GDP Forecasts for First Half 2011



Credit Suisse has revised down its U.S. GDP forecasts for the first half of 2011. The firm now expects 2.5% real GDP growth in Q1, down from its previous forecast of 3.5%. Its Q2 forecast was also revised down to 3.3% from 3.7%. However, the firm's 2011 second half forecasts remain unaltered at 3.8% and 4.0% for Q3 and Q4, respectively. Credit Suisse expects full year 2011 growth of 3.4% on a year-over-year basis and 3% on an annual average basis. This is down from its previous estimate of 3.8% and 3.3%, respectively. The firm sees 4.0% real GDP growth in 2012.

Credit Suisse issued a statement saying: The first quarter's forecast revision is mostly due to current quarter accounting. The monthly building blocks that add up to GDP have consistently printed below expectations this quarter, defying the much rosier readings from other parallel evidence on the economy (such as the ISM surveys). The list of GDP "source data" disappointments includes home sales, housing starts, capital goods shipments, non-residential construction, federal spending, and a sharp increase in the trade deficit. Most importantly, the GDP's largest building block - consumer spending - is slowing sharply on a sequential basis, on track for less than 2% growth in Q1, compared to 4% growth in Q4. Our revision to second quarter growth is partly a consequence of higher oil prices and the negative effect on real income growth. Consumer confidence gauges also fell sharply in March, presumably due to higher gasoline prices. Another reason for our Q2 downgrade is housing, particularly the 22% plunge in February housing starts. Falling starts will impact future readings on construction outlays and the associated GDP component - residential investment.

BP, Rosneft Look to Salvage Alliance after Setback

BP, Rosneft Look to Salvage Alliance after Setback

Friday, March 25, 2011

by  Guy Chazan & Gregory L. White

The Wall Street Journal

 

BP and Rosneft scrambled Friday to salvage their landmark alliance after BP's Russian partners in its TNK-BP Ltd. joint venture blocked it. But it is unclear how a deal so mired in legal challenges and high-stakes Russian power struggles can now be rescued.

Rosneft still appears determined to implement its tie-up with BP, despite Thursday's decision by a Stockholm arbitration panel to effectively put it on ice. The Russian company's chairman, Igor Sechin, noted the arbitrators did not block the deal completely, but simply extended an injunction temporarily freezing it.
Sechin, who is also Russia's deputy prime minister, told Russian newswires that Rosneft was "satisfied" with BP as a partner, and was working on a series of measures to allow it "to defend its interests."
That suggests the state-controlled oil company has not given up on its proposed alliance with BP, under which the two firms agreed to swap shares in each other and explore for oil and gas together in the frigid, hydrocarbon-rich waters of the Russian Arctic.

The panel's move marked a setback for the architects of the deal, Sechin and BP Chief Executive Bob Dudley, and both are bound to lose face as they seek to navigate a way out of the impasse. Some analysts worry the dispute could harm BP's overall position in Russia, which accounts for one-quarter of its global oil and gas production and close to a fifth of its reserves.

"On the face of it this looks a messy situation and one where we think BP will do well to emerge with all of its investment in TNK-BP, reputation in Russia and Arctic oil deal intact," Citigroup said in a note.
But for the apparent winners of the spat, Access-Alfa-Renova or AAR, the group of Soviet-born billionaires who own 50% of TNK-BP, the victory may be Pyrrhic. Some bankers and analysts say AAR could soon face pressure from the Russian authorities to drop its opposition to a deal that has the public support of the country's top leaders.

"It's pretty risky to challenge the government on something that's considered strategically important," said one veteran Moscow banker.

People close to AAR insist the Russian shareholders are confident they have the support of the authorities for what they see as a defense of their legal interests.

One way out of the standoff would be for TNK-BP to participate in the Arctic project in place of BP, as the joint venture's management had proposed last month. At the time, both Rosneft and BP opposed that option, arguing that TNK-BP lacked the experience and technology required for the venture.

Sechin appeared to soften his position slightly Friday, saying TNK-BP might be able to come up with a structure that would allow it to take part -- such as by outsourcing some of the work to others with experience drilling offshore. "But this is a somewhat different construct," he said.

BP, meanwhile, is still determined to at least salvage the share swap element of its deal with Rosneft. It said Thursday that it would be seeking a determination from the Stockholm arbitrators as to whether that part of the agreement "may proceed on its own."

A BP spokesman denied suggestions from analysts that such an equity investment would be of dubious strategic value to BP without the Arctic deals. "It would still be a very effective way of building on the relationship we've had with Rosneft since the late 1990s," he said.

In opposing the BP-Rosneft tie-up, AAR argued that it violated their shareholder agreement with BP, which stipulates the U.K. company must pursue all business opportunities in Russia exclusively through TNK-BP. The deal was sent to independent arbitrators after AAR won a court injunction last month freezing it.

The Russian tycoons can now either ensure that TNK-BP is dealt in on the BP-Rosneft alliance, or that they are richly compensated for dropping their opposition to the deal.

Thursday's ruling will also give them maximum leverage if they want to discuss terms for an exit from TNK-BP, according to people close to the situation. "This at least forces everyone to the table," said one person.
AAR insists they have no plans to sell, and Sechin said Friday that Rosneft has not discussed a buyout with them. The likely price tag -- at least $30 billion -- would make the deal a costly one for any potential buyer, analysts and bankers say.

Another possible outcome could see BP selling its stake in TNK-BP to another international oil company, thereby freeing the U.K. giant up to proceed as planned with its Rosneft deal. No such discussions have been held, according to people close to TNK-BP.

The most painful scenario for BP would be to see the Arctic deal go to a rival, such as Shell or Chevron.
The exclusivity period of its deal with Rosneft expires Apr. 14. Yet people familiar with the situation say it's unlikely any other Western major would agree to swap shares with Rosneft. BP's willingness to carry out such an arrangement was a key factor in it winning the Arctic deal.

API: New Energy Policy to Add Jobs for Brazil

Tuesday, March 22, 2011

API President and CEO Jack Gerard said the administration's offer to exchange batteries for oil from Brazil reflects its inadequate and illogical energy policy:

"It is beyond comprehension the administration would encourage trade for Brazilian oil while obstructing U.S. oil and natural gas development, eliminating related jobs here at home, and decreasing oil and natural gas revenues to the U.S. Treasury when the government is trillions of dollars in debt. The message from the White House to America's oil and natural gas workers: we're going to outsource your job.

"The administration is missing the obvious: what makes sense for Brazil also makes sense for the United States. Like every other nation, we should be developing our own oil and natural gas resources. It's good for energy security, good for the economy, good for jobs, and it will help bring down our deficit.

"The administration says it supports more oil and natural gas development here in the United States, then at every turn discourages it. And today, the White House is making a deal with Brazil for the oil it is not allowing companies to produce here. There's nothing wrong with buying Brazilian oil, but there's a big problem when we're forced to because we're held back from producing our own."

Link