Replies to post #4645 on PEAK OIL - EPOCHAL EVENT OF OUR LIVES

[OptionMonster]

Nigeria signs energy deal with Russia's Gazprom
09.03.08, 1:37 PM ET

Nigeria - (Adds analyst comment)
By Tume Ahemba and Nick Tattersall

LAGOS, Sept 3 (Reuters) - Russian gas giant Gazprom has signed an oil and gas exploration agreement with Nigeria, a deal which could strengthen its position as a supplier of natural gas to Europe and North America.

The Nigerian National Petroleum Corp. (NNPC), the country's state-run oil firm, said it had signed the memorandum of understanding (MOU) with the Russian gas export monopoly on joint venture projects, but gave few details.

"The MOU covers petroleum and gas exploration, as well as power," NNPC spokesman Levi Ajuonoma said.

"Details of the specific projects will be worked out later along with the quantum of money involved," he said.

The Nigerian government said in January that Gazprom would spend between $1 billion and $2.5 billion developing the resource-rich country's gas sector.

Gazprom has said that investing in Nigeria's liquefied natural gas (LNG) made strategic sense as it was much closer to its main North American market than Russia.

Nigeria has the world's seventh-largest proven gas reserves, but has been unable to develop its gas industry to anywhere near full potential because of a lack of funds and regulation.

Some industry experts in Europe see Russia's tentative deals with African OPEC members as an attempt to get a stranglehold on Europe's natural gas supplies. Gazprom already provides a quarter of Europe's gas.

Gazprom Chief Executive Alexei Miller said in April that the world's largest gas company was in preliminary talks with Nigeria about participating in a multi-billion dollar project to pipe Nigerian gas to Europe across the Sahara.

Gazprom has also agreed with Algeria's oil company Sonatrach to seek out and commercialise natural gas together after a visit to Algiers last year by former Russian President Vladimir Putin, now prime minister.


IN WHOSE INTERESTS?

Russia's renewed interest in Africa, which waned after the Cold War, is partly about diversifying energy interests and securing raw materials for a fast-growing economy.

But given Africa's role as an alternative energy source for European nations reliant on Russia, it is also seen by some as part of an increasingly assertive Kremlin foreign policy.

The deal is also likely to divide opinion in Nigeria.

Analysts say some decision makers in Nigeria want to send a warning to foreign oil firms that they have new rivals, like China and Russia, while others fear Nigeria will be exploited against its interests as part of a bigger geopolitical game.

"The Russians have been lobbying fairly hard to gain access for a year and they have supporters and opponents," said Antony Goldman, analyst at London-based risk consultancy PM consulting.

"Advocates of the deal with the Russians see it as a way of putting pressure on complacent international oil companies while opponents are concerned about the agenda behind Russia's interest in Nigeria's gas potential," he told Reuters.

Nigerian President Umaru Yar'Adua has said that foreign firms will have to divert a greater proportion of their natural gas output in Nigeria for domestic use over the coming years as the country tries to end a crippling power crisis.

The government has said it wants to boost economic growth by generating much more power with gas, which unless more gas production facilities are built could lead to a shortfall in gas available for export and further tighten global supplies.

"A lot of countries are interested in the Nigerian oil and gas sector and Russia is one of them," Ajuonoma said.

"The present government is also very keen to see that Nigeria realises its full potential in oil and gas for the benefit of the people," he added. (Editing by James Jukwey)

[sumisu]

Cantarell — An Omen?

By Tom Whipple

Falls Church News--Press

February 16 - 22, 2006

http://www.fcnp.com/550/peakoil.htm

There are a lot of bad things out there waiting to bite as the world moves towards peak oil— Iran, Iraq, Nigeria, Venezuela, China, globalization, and hurricanes to name a few. Last week a new bogeyman arose — super fast oil depletion.

Our story begins 65 million years ago when the Chicxulub meteor (or perhaps comet) crashed into the sea near the Yucatan Peninsula . This was one big bang, for it not only wiped out all our dinosaurs, but also took out 75% of the species living on earth.

As our 10 km wide meteor was tooling along at 60,000 miles per hour when it hit, there was not much left of the meteor but vapor after the impact, but for a few seconds, there was a monster hole in the earth 100 miles in diameter. I won't go into all the terrible things that happened to our earth in the months after the blast, but few living things survived.

Our new hole promptly filled up with rubble (breccia, to geologists) pushed in by the rushing waters of the returning sea and landslides along the sides of the crater. Somewhere, between 65 million years ago and 1976, parts of this underwater rubble filled hole, filled up with about 35 billion barrels of oil. Making it one of the world's greatest oil fields. It is now called Cantarell.

Within a few years of its discovery in 1976, it was producing over a million barrels a day from only 40 wells. Fifteen years later however, the natural gas pressure driving out the oil started to give out and production started dropping. In response, the Mexican Oil Company PEMEX built a large nitrogen separation plant near the field and started injecting 1.2 billion cubic feet of high-pressure nitrogen into Cantarell each day.

The program worked like a dream; a few years later Cantarell was producing 2.1 million barrels per day— making it number two in the world right up there behind the Saudi's great Ghawar field which is producing on the order of 4.4 million barrels a day. This 2 million barrels a day represents about 60% of Mexican oil production and is what allows the country to export 1.82 million barrels a day most of which went to the United States.

Like all good things, massive flows of cheap oil must one day come to an end, so only four years after getting production up to over 2 million barrels a day, PEMEX announced the end was in sight and Cantarell was going into depletion. Last year, they announced the decline had actually started and that 2005 production would be down to 2.0 million barrels a day— 5% lower than in 2004.

There the matter rested. However, as we know in Washington , you simply can't keep a really good secret very long. Last week, somebody leaked the top secret PEMEX Cantarell Depletion study, and guess what? The situation might just well be a whole lot worse than the Mexicans have been letting on.

An energy consultant in Mexico City published parts of the study and later the Wall Street Journal got to examine the document. It seems there is only 825 feet between the gas cap over the oil and the water that is pushing into Cantarell from the bottom. This distance is closing at between 250 and 360 feet per year.

The more pessimistic of the study's scenarios have Cantarell's production dropping from 2 million b/d to 875 thousand barrels a day by the end of next year and 520 thousand barrels a day by the end of 2008.

PEMEX, while refusing to release the study comments the pessimistic scenarios will only happen if they do nothing and they are taking aggressive steps to mitigate the situation.

Outside experts are not so sure. Cantarell is a meteor-crater based field and as such is unlike any other. Extremely high depletion rates are not completely unknown. Production at Oman 's 35 year-old Yibil field peaked in 1997 at 225-250 thousand barrels a day and then declined to 88-95 thousand barrels a day in three years. In the case of Yibil, part of the rapid decline was attributed to the introduction of horizontal and multi-lateral drilling into field that increased the percentage of water being brought to the surface with the oil to a greater extent then anticipated.

If the pessimistic scenarios outlined in the PEMEX study come to pass, it will be very serious. The loss of nearly 1.5 million barrels a day of production capacity within three years will be very difficult to overcome either from other Mexican fields or from new production in other countries. Unlike political stoppages from exporters such as Iran or Nigeria , depletion can't be put right. Mexican exports will be seriously reduced or perhaps even eliminated forever.

Cantarell could turn out to be another case where advanced technology —in this case nitrogen injection— does not ultimately increase the quantity of oil recovered from a field, but simply gets a smaller amount out faster.

In the meantime, oil production from Cantarell bears close watching. An unusually fast decline will be yet another indicator that peak oil is indeed very near at hand.









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[OptionMonster]

Lindsey Williams says $50 oil>>>Palin out of left field from Alaska for V.P. with a drill drill drill mentality>>>Could we have some large Nat Gas/Oil finds that they are going to unleash and make themselves look like saviors?? Man my wheels are turning right now..