ConocoPhillips CEO Says Production Will Start Rising by Year's End

HOUSTON - ConocoPhillips Chief Executive Ryan Lance told shareholders at the company's annual meeting Tuesday that the company's long-awaited production growth rebound will begin by the end of this year.

He said 2013 will be an "inflection point" for ConocoPhillips, as it closes on $8.5 billion in announced asset sales and reaches a production low. But production will start to ramp up again by the end of the fourth quarter and into next year as the sales put cash on the company's balance sheet to fund development and grow its dividend.

"The growth is coming," Mr. Lance said. "You don't have to wait for that growth and the margin improvement for our company."

ConocoPhillips is in the midst of a transformation facilitated by drilling technologies that have unlocked oil and natural gas within the U.S. that had been unreachable or too expensive to drill. Mr. Lance's presentation to shareholders emphasized ConocoPhillips' ability to fund its operations and deliver on its promises of 3-5% production and margin growth even as it continues to pay a high dividend.

Mr. Lance said there's a "clear line of sight" to production of 1.9 million barrels of oil equivalent a day by 2017, up from an estimated 1.5 million barrels of oil equivalent per day this year. Much of that will be fueled by ConocoPhillips' acreage in unconventional U.S. shale formations--the Eagle Ford and Permian formations in Texas, and North Dakota's Bakken.

Income brought in from production in those areas will be used to fund the company's major projects around the world and exploration that is expected to fuel long-term growth. Mr. Lance highlighted the company's work in the Gulf of Mexico, where company is working to renew its presence. It will participate in five to eight wells this year, including its first operated well there in nearly a decade.

"We are back," Mr. Lance said of the Gulf.

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Brazil's First Oil Auction in Five Years Draws Record Bids

RIO DE JANEIRO - Brazil saw record bidding at its first oil auction in five years Tuesday as the growing promise of oil finds along the equator attracted huge interest in exploration blocks at the mouth of the Amazon River.

Large oil finds in the Gulf of Guinea off the coast of Africa, along with promising finds in French Guyana on the South American continent, have shifted attention to Brazil. The South American country suspended its annual oil auctions in 2008 after the discovery of the subsalt oil province--close to 40 billion barrels of oil equivalent trapped under a layer of salt several thousand meters below the South Atlantic seabed.

Interest in that so-called equatorial margin "created more appetite for companies to invest," said Magda Chambriard, head of Brazil's national petroleum agency, ANP. "Those areas have become more important" to the global oil industry, which was reflected in the heavy bidding for the blocks, she said Tuesday.

A group led by France's Total SA--and that includes BP PLC and Brazil's state-run oil Petroleo Brasileiro SA--agreed to pay 345.95 million Brazilian reais ($172 million) for rights to explore an area of about 900 square kilometers at the mouth of the Amazon, topping a previous record set in 2006 for an oil field off Brazil's southeastern coast.

Ms. Chambriard said she sees the possibility of several platforms in the region producing 120,000 to 150,000 barrels of oil a day, similar to what is already happening in the Jubilee oil field off the African coast.

At the end of the auction, Brazil's government had raised BRL2.88 billion from selling exploration rights, topping the record BRL2.1 billion raised during a 2007 auction.

The record bids suggest that companies weren't scared off by requirements imposed by Brazil's government that a portion of exploration equipment be manufactured locally. However, bids Tuesday hewed relatively close to the minimum local-content level, showing that firms are being "more cautious," even as they acknowledge that the local-content requirement is "here to stay," Ms. Chambriard said.

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Lukoil to Invest $1B in Samara-Nafta in Next 5 Years

MOSCOW - OAO Lukoil Holdings, Russia's No. 2 oil producer, will invest $1 billion in the oil firm Samara-Nafta to increase production, Russian news agencies reported Monday, citing a company presentation.

Lukoil acquired Samara-Nafta from Hess Corp. this month for $2 billion as part of a strategy to stabilize and increase oil production. Lukoil has for years fought declining output at its main, Soviet-era fields in Western Siberia.

The investment in Samara-Nafta will increase production by between 5% and 7% over the next five years from 2.5 million metric tons a year, Prime news agency cited the company as saying.

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Shtokman Gas Field Decision 3 Years Away

MOSCOW - Formulating a new technical concept for developing the Shtokman natural gas field in Russia's Arctic will take at least three years, Russia's deputy energy minister said Thursday, according to the Interfax news agency. 

"For the technical concept, the project will need more than three years," Kirrill Molodtsov is quoted as saying. 

Last year, Russia's state-run gas company OAO Gazprom shelved attempts to develop the gas field, which is estimated to hold almost 4 trillion cubic meters of natural gas, as technical studies indicated the project wasn't financially viable. 

Gazprom teamed up with French oil company Total SA and Norwegian oil company Statoil ASA to develop the field, with Gazprom holding 51% of the partnership, Total 25% and Statoil 24%. 

Launched in the 1990s, Shtokman has been repeatedly delayed because of disagreements between the partners over investment terms and because of the extreme Arctic weather. The project has also become less attractive because the boom in the shale gas industry in the U.S. has disrupted the natural gas market, bringing prices down.

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Shtokman Gas Field Decision 3 Years Away

MOSCOW - Formulating a new technical concept for developing the Shtokman natural gas field in Russia's Arctic will take at least three years, Russia's deputy energy minister said Thursday, according to the Interfax news agency. 

"For the technical concept, the project will need more than three years," Kirrill Molodtsov is quoted as saying. 

Last year, Russia's state-run gas company OAO Gazprom shelved attempts to develop the gas field, which is estimated to hold almost 4 trillion cubic meters of natural gas, as technical studies indicated the project wasn't financially viable. 

Gazprom teamed up with French oil company Total SA and Norwegian oil company Statoil ASA to develop the field, with Gazprom holding 51% of the partnership, Total 25% and Statoil 24%. 

Launched in the 1990s, Shtokman has been repeatedly delayed because of disagreements between the partners over investment terms and because of the extreme Arctic weather. The project has also become less attractive because the boom in the shale gas industry in the U.S. has disrupted the natural gas market, bringing prices down.

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Iraq Plans to Invest $130B in Oil, Gas Over 5 Years

Iraq plans to invest some $130 billion over the next five years in order to triple the country's output, which is currently stood at 3.25 million barrels a day, the country's oil minister said Saturday.

Abdul Kareem Luaiby said that his country would allocate $18 billion to raise natural gas output and $25 billion to upgrade refinery capacity. Iraq expects to earn some $600 billion in revenue from these oil expansion plans, Mr. Luaiby told an energy conference held in Basra.

Iraq has boosted its crude oil production last year by 24%, thanks to several oil deals Iraq signed with international oil companies such as Royal Dutch Shell PLC, BP PLC, Exxon Mobil Corp., Eni SpA, OAO Lukoil Holdings and China National Petroleum Corp.

Iraq's crude oil exports have, over the last few months, surpassed those of Iran and became the Organization of the Petroleum Exporting Countries' second-largest producer.

Iraq's crude oil exports in February rose by 7.5%, to 2.536 million barrels a day on month, compared with 2.359 million barrels a day in January, according to figures released by the State Oil Marketing Organization, or SOMO. Iraq plans to raise exports to 2.9 million barrels a day this year.

Production from Iraq's super-giant Majnoon oil field, which is being developed by Shell, will reach 100,000 barrels a day in May and 200,000 barrels a day by the end of the year, Luaiby told the conference.

Last year, the Paris-based International Energy Agency estimated that Iraq would be able to pump up to 6.1 million barrels a day in 2020 and 8.3 million barrels a day in 2035. Iraq said it would be able to reach 8 million to 9 million barrels a day in 2020.

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Qatar Makes First New Gas Find in Over 40 Years

DUBAI - Qatar has discovered an offshore gas field containing 2.5 trillion cubic feet of natural gas, its first such discovery since 1971, energy minister Mohammed bin Saleh al-Sada was quoted as saying Sunday.

The discovery was made at the 4-North offshore block near the large North Field, by a consortium that includes Wintershall AG of Germany and Mitsui Gas Development Qatar, the Qatar News Agency quotes Mr. Sada as saying.

Qatar, a member of the Organization of the Petroleum Exporting Countries, holds the world's largest natural gas reserves and is the single-largest supplier of liquefied natural gas.

The Gulf state has proven natural gas reserves of about 890 trillion cubic feet--about 13% of total world natural gas reserves--most of which is located in its offshore North Field, the world's largest non-associated gas field.

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Shell May Be Less Than 2 Years Away from Major China Shale Advancements

Royal Dutch Shell says it may be less than two years away from a major advance in shale gas production in China, bringing the Asian country closer to being the first outside of North America to cash in on technology that's transformed the U.S. energy industry.

Unlocking the gas trapped inside China's shale rock reserves, the world's biggest, would provide much needed energy supplies to the energy-hungry economy and help cut down on expensive imports of gas. It would also provide a windfall for western energy giants who provide the complex hydraulic fracturing technology.

Shell is on track to have spent $2 billion by the end of this year exploring the central province of Sichuan, and has drilled nearly 30 wells in joint-venture projects with China National Petroleum Corp.

"Mid-decade we will be able to decide" on the so-called final investment decision that will determine whether to go into full commercial production, said Maarten Wetselaar, who heads Shell's integrated gas operations worldwide excluding North America, and was speaking in an interview.

The multinational energy company is already producing tiny amounts of shale gas as part of its exploration work that it pumps into Sichuan's natural gas network. How quickly output can be ramped up after further investment isn't clear.

Beijing has set an ambitious target of producing 6.5 billion cubic meters of shale gas annually by 2015, and as much as 100 billion cubic meters by 2020, from nearly zero now. Getting the Shell project into operation will be critical in meeting those goals.

In the U.S., which pioneered the technology to extract gas and oil trapped in shale rock formations, gas production has soared, bringing down prices of fuel for manufacturing and chemical production. It has also raised the prospect of liquefied natural gas exports from North America of as much as 70 million tons a year within a decade, equivalent to deliveries from current world leader Qatar, Mr. Wetselaar said.

The U.S. Energy Information Administration has a preliminary estimate of some 36 trillion cubic meters of recoverable shale-gas resources in China, more than the U.S. and Canada combined, which if extracted could transform China's energy profile.

Those estimates have also sent rival Chevron Corp. into China searching for shale, while ConocoPhillips and Total SA are also planning exploration projects. Foreign companies are obliged to have local partners when exploring for shale in China.

China's government has not yet given a formal go-ahead to Shell's draft production-sharing pact with partner CNPC, but Mr. Wetselaar said he isn't worried.

"We will get the correct regime in place," he said. "I don't think it is lack of intent."

Other obstacles in China to successful exploitation include scarce supplies of water required to get the gas out of shale rock, and more complicated geology than in Canada and the U.S.

Still, "outside of North America, China is the most mature in terms of wells, in terms of activity on the ground," said Mr. Wetselaar.

But after China, next ready to produce commercial quantities for shale gas is likely to be Ukraine, where Shell is in the early stages of a drilling program, said Mr. Wetselaar.

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Man gets 414 years for Denver murder

Font ResizeCops and CourtsBy Tom McGhee
The Denver Postdenverpost.comPosted: 12/17/2012 03:38:14 PM MSTDecember 17, 2012 10:39 PM GMTUpdated: 12/17/2012 03:39:53 PM MST


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Colorado roads to see another $300 million per year for 5 years

Font ResizeLocal NewsBy Tim Hoover
The Denver Postdenverpost.comPosted: 12/14/2012 09:56:06 AM MSTDecember 14, 2012 5:15 PM GMTUpdated: 12/14/2012 10:15:33 AM MST


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