Recently in Oil Category

International humanitarian organization Oxfam America commends the U.S. Congress for making disclosure of payments from oil and mining companies to governments around the world a legal requirement. Included as part of the Dodd-Frank financial reform legislation passed by the House and Senate, this historic measure will increase financial transparency in the oil, gas, and mining industry and help reduce the corruption, mismanagement, and conflict that are too often associated with natural resource extraction booms.

"Congress has made an unprecedented commitment to financial transparency and good governance in a sector that not only affects American wallets, but also some of the most vulnerable communities around the world," said Raymond C. Offenheiser, president of Oxfam America. "Secrecy of oil, gas and mining company payments to governments fosters government corruption and violent conflict in resource-rich countries that are home to more than half of the world's poorest people. Instability in these regions poses a long-term threat to national security, foreign policy, and economic interests in the United States."

The language included in the financial services reform measure was based on the Energy Security through Transparency Act (S. 1700), a bipartisan Senate bill championed by Senators Lugar (R-IN) and Cardin (D-MD). The new law creates a low-cost, uniform transparency method for oil, gas, and mining companies registered with the US Securities and Exchange Commission (SEC) and covers more than 90 percent of internationally operating oil companies and many of the top international mining companies. Companies will be required to publicly disclose payments for the extraction of oil, gas, and minerals on a country-by-country and project basis as part of financial statements that are already required by the SEC. This not only includes American companies but also many foreign companies, such as Shell and BP, as well as companies from emerging markets such as China, India, Brazil, and Russia.

"This provision is a critical part of the increased transparency and corporate responsibility that we are striving to achieve in the financial industry. Given the catastrophic events in the Gulf of Mexico, oil companies, in particular, should well understand that secrecy fosters instability, corruption and greater risk," said Senator Cardin. "We now have the tools to help people in resource-rich countries hold their leaders accountable for the money made from their oil, gas and minerals."  

"Too often, oil money intended for a nation's poor ends up lining the pockets of the rich or is squandered on showcase projects instead of productive investments," said Senator Lugar when he spoke in favor of the measure when it was offered as an amendment to the Senate financial reform bill in late May. (The Cardin-Lugar amendment was co-sponsored by Senators Durbin (D-IL), Schumer (D-NY), Feingold (D-WI), Merkley (D-OR), and Johnson (D-SD).) He added:  "This 'resource curse' affects us as well as producing countries. It exacerbates global poverty which can be a seedbed for terrorism, it empowers autocrats and dictators, and it can crimp world petroleum supplies by breeding instability."

"We applaud Senators Cardin and Lugar for spearheading this effort in the Senate that will both level the playing field for oil, gas, and mining companies and help citizens hold their governments accountable for using revenues for economic development and poverty reduction. We also thank Senator Leahy for offering the measure during the House-Senate conference process and House Financial Services Chairman Barney Frank for his early leadership on transparency in the oil and mining industries and for his support for this measure that demonstrates U.S. commitment to transparent business practices and accountable governance," said Offenheiser.

"Passing this law sets up an international standard for the public disclosure of natural resource revenue information, but its effectiveness will be determined by strict implementation by lawmakers and development of effective implementing regulations by the SEC. Companies should heed the call for transparency so citizens of resource-rich countries can begin to use this information to hold their governments accountable for using revenues to address essential services like healthcare, education, and job creation."

Oxfam America calls on the SEC to quickly undertake its rule-making process to implement this important measure as Congress intended. "Oxfam America and its allies in the Publish What You Pay campaign will be closely following the rule-making process to ensure this groundbreaking disclosure measure is quickly put in place," said Offenheiser.

Oxfam America is an international relief and development organization that creates lasting solutions to poverty, hunger, and injustice. Together with individuals and local groups in more than 100 countries, Oxfam saves lives, helps people overcome poverty, and fights for social justice. Oxfam America is an affiliate of the international confederation Oxfam.

Recent news stories have been erroneously reporting that foreign skimming vessels are not able to work on the BP oil spill cleanup because of the Jones Act.  These reports are incorrect. The Jones Act does not apply and therefore does not prevent foreign vessels from working on oil skimming operations in waters beyond the state's three-mile limit.  In fact, a number of foreign vessels have been working at the scene for some time. 

For skimming activities within any state's three-mile limit, longstanding and established law says that any such work, including the skimming activity, must be performed by a U.S. vessel, if one is available.  If a U.S. vessel is not available, there is a waiver process that can be used to bring in foreign vessels.  We are not yet aware of any waiver request being made because a U.S. vessel is not available.  The important distinction is that under the Jones Act, foreign vessels may be used only if U.S. vessels are not available.  

"Once again, it appears that critics of the Jones Act are distorting the facts by claiming that the Jones Act applies in an instance when it simply doesn't, or where it does, not being forthcoming with the law and the facts.  Worse, they are taking advantage of this disastrous situation to undermine American workers for the benefit of foreign companies and foreign workers," said Ken Wells, President of the Offshore Marine Service Association (OMSA).  "But even in instances where the law does not require the use of a U.S. vessel, BP should make every attempt to hire U.S. vessels and their workers.  The entire Gulf Coast and surrounding areas have been hurt by the BP spill.  The seafood and tourism industries have suffered.  And it doesn't make sense now to put the Gulf Coast maritime industry out of work just to give jobs to a few foreign boats," he continued

OMSA, on behalf of the owners and operators of U.S. flag vessels that work in the offshore energy sector, is working diligently to make sure that the spill is brought under control and cleaned up as quickly as possible.  OMSA is also making sure that available American vessels are put to work and, if a waiver is necessary, that this is accomplished quickly and effectively.  

"We want to make crystal clear that in no way, shape or form are we taking any action that hampers the spill cleanup effort.  However, this should not become an excuse for foreign companies to take advantage of this tragic accident for their own gain or for opponents of the law to try to undercut it," Wells said.

The Jones Act is the common name for the U.S. cabotage laws, which say that only U.S. flag vessels with coastwise endorsements may transport merchandise or passengers between points in the United States.  The original cabotage laws trace back to the founding of our nation and have served to maintain a domestic shipbuilding and maritime industry throughout our history.

www.offshoremarine.org - SOURCE Offshore Marine Service Association

Attorney General Eric Holder announced today that he is dispatching a team of attorneys from multiple divisions within the Justice Department to New Orleans to meet with the U.S. Attorney and response teams and to monitor the oil spill in the Gulf of Mexico.

"The British Petroleum oil spill has already cost lives and created a major environmental incident," said Attorney General Holder. "The Justice Department stands ready to make available every resource at our disposal to vigorously enforce the laws that protect the people who work and reside near the Gulf, the wildlife, the environment and the American taxpayers."

The team will be led by Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division, and Tony West, Assistant Attorney General for the Civil Division, and will include relevant United States Attorneys. The combined group from the Department plans to make a site visit and meet with representatives from federal agencies working on the response.

A coordinated response continues with a comprehensive oil well intervention and spill-response plan following the April 22, 2010 sinking of the Transocean Deepwater Horizon drilling rig 130 miles southeast of New Orleans. More than 1,000 personnel from federal, state and local agencies are involved in the response effort both on and offshore, with additional resources being mobilized as needed.

SOURCE U.S. Department of Justice

W&T Offshore, Inc. (NYSE: WTI) today announced the startup of production from its Daniel Boone discovery well, a deepwater development in the Gulf of Mexico within Green Canyon Block 646.

Daniel Boone lies in water depths of approximately 4,230 feet about 120 miles from the Louisiana coast. The discovery well has current gross daily production of approximately 6,000 barrels of oil and 5,700 thousand cubic feet of natural gas per day, or 6,950 barrels of oil equivalent per day. The well is connected via a 22-mile subsea tieback to a third-party operated platform in Green Canyon Block 338. Sales commenced September 28, 2009. W&T has been steadily increasing production to the current rate and production will continue to be adjusted to achieve maximum recovery from the reservoir. W&T holds a 60% working interest and operates the Daniel Boone field. Mariner Energy, Inc. (NYSE: ME) holds the remaining 40% working interest.

Tracy W. Krohn, Chairman and Chief Executive Officer, commented, "High flow rates and high cash flow at our Daniel Boone project are examples of why W&T has always enjoyed having a presence in the Gulf of Mexico."

W&T Offshore is an independent oil and natural gas company focused primarily in the Gulf of Mexico, including exploration in the deepwater and deep shelf regions, where it has developed significant technical expertise. W&T has grown through acquisition, exploitation and exploration and now holds working interests in over 147 fields in federal and state waters and a majority of its daily production is derived from wells it operates. For more information on W&T Offshore, please visit its Web site at www.wtoffshore.com.

SOURCE W&T Offshore, Inc.

Second only to the Middle East, the Caspian Region of Russia holds a wealth of natural resources and an open opportunity for market growth in the near future. Europe/Eurasia has 11.61% of the world proved oil reserves and 33.5% of the world's proved gas reserves. Frost & Sullivan reports that the energy market in this region is one of the most attractive markets today due to its strategic importance for Europe. Investments into pipeline infrastructure alone (North Stream, South Stream and Nabucco) range in the US$ 60 billions, demonstrating the importance that this region plays and will play in the near future. On oil and gas markets in Russia Frost & Sullivan will host a complimentary analyst briefing which will take place on 28 October, at 3 pm GMT. The presentation will be live and will include a dedicated question and answer session. It will also be recorded and the recording will be available to everyone interested in these markets.

"The European/Eurasian continent is in second place both in terms of quantity of oil and gas reserves and is of high strategic importance for Europe, making this energy market one of the most dynamic in the world," notes Frost & Sullivan analyst Christopher Siemienski who will be presenting his analysis.

Oil and gas are the key industries in Russia and in the Caspian Region in general. The current economic crisis demonstrates the need for heavy investment in this industry and the growing need for foreign capital. This traditional state controlled industry is experiencing changes, however challenges still lie ahead.

The briefing will look at market sizing for upstream, downstream and midstream markets, drivers and restraints, and location/quantities of reserves. Investors looking for European opportunities in this industry will find this briefing beneficial.

The opportunities for investment are great. Currently the Russian pipeline infrastructure is highly focused on the European markets and the government is trying to expand towards Asia as to reduce its dependency on Europe. Expansion into Eastern Siberia is another uncharted frontier ripe for investment.

"Russia controls around one quarter of the world's gas reserves and has the 8th largest oil reserves in the world, making it one of the more attractive countries in which to invest," states Siemienski.

SOURCE Frost & Sullivan

Today Exobox Technologies Corp. (OTC Bulletin Board: EXBX) (the "Company") announced that one of its board members has identified and assisted management in entering into a non-binding letter of intent to acquire 15 income producing oil & gas wells in the Clinton and Marcellus Shale region in Ohio from a private oil & gas company. These oil & gas wells have a represented PV10 reserve value of approximately $22.5 million (based on current NYMEX pricing). It is intended that the cash flow and net worth from the oil and gas assets will assist to further develop the Company's software products and technologies, as well as those oil and gas assets being acquired. The parties intend on executing a definitive agreement on or before October 19, 2009.

"Upon the closing of the transaction, this will enable Exobox to continue its operations as originally planned. It should provide us critical mass and bring substantial asset value to the Company," said Exobox CEO, Kevin Regan.

The non-binding letter of intent contemplates a purchase price of approximately $13.25 million which includes the assumption of existing debt in an amount not to exceed $3 million, as well as the issuance to the seller of a combination of convertible notes, convertible preferred stock and common stock that on a fully-converted basis would not exceed 9.9% of the total shares outstanding of the Company.

This is a non-binding letter of intent, subject to completion of due diligence by both parties and negotiation of definitive agreements, and there can be no assurance that a definitive transaction will be entered into between the parties incorporating these or any other terms.

Cautionary Statement Relating to Forward - Looking Information for the Purpose of "Safe Harbor" Provisions of the Private Securities Litigation Reform Act of 1995. This release contains "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. The words "anticipate," "believe," "estimate," "expect," "intend," "will," "should" and similar expressions, as they relate to us, are intended to identify forward-looking statements. These statements reflect management's current beliefs, assumptions and expectations and are subject to a number of factors that may cause actual results to differ materially. These factors include but are not limited to: the unprecedented volatility in the global economy; the risk that the future business operations of our software products and/or the oil and gas assets that are to be acquired will not be successful; the risk of due diligence by both parties may not be to the satisfaction of either party; the risk of our ability to close on the acquisition of the oil and gas assets; the risk that we will not realize all of the anticipated benefits from our acquisition of oil and gas assets; the risk that oil and gas prices may fall and negatively affect the value of the properties we intend to acquire and/or our ability to raise additional financing based on the value of these properties; actions of competitors; changes and developments affecting the software industry and the oil and gas industry; quarterly or cyclical variations in financial results; development of new products and services; interest rates and cost of borrowing; our ability to protect our intellectual property rights; our ability to maintain and improve cost efficiency of operations, including savings from restructuring actions; changes in economic conditions, political conditions, trade protection measures, licensing requirements and tax matters in the locations in which we do business; reliance on third parties for the provision of exploration and production services; and other factors that are set forth in the "Risk Factors" section, the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section and other sections of Exobox's Quarterly Report on Form 10-Q for the quarters ended April 30, 2009 and Exobox's 2008 Annual Report on Form 10-K filed with the Securities and Exchange Commission. Exobox assumes no obligation to update any forward-looking statements as a result of new information or future events or developments, except as required by law.

SOURCE Exobox Technologies Corp.

Low cost energy abundance is possible for the United States but is being blocked by environmental extremists in the Obama Administration according to a new article by Jon Basil Utley just posted at Reason Magazine on-line: http://www.reason.com/news/show/136265.html .

Jon Utley is The American Conservative associate publisher, and a former foreign correspondent for Knight Ridder newspapers.

In "Alaska Oil Abundance Versus Washington's Wasted Billions: The case for new oil drilling in Alaska and off America's coasts," Utley explains that 80% of American oil consumption comes from imports, costing some $300 to $400 billion yearly. "They wreck our trade balance, subsidize many of our enemies, and add to our already mountainous foreign debt," Utley says.

While analysts are forecasting $100 dollar-a-barrel oil within a year, the Obama Administration continues to block offshore drilling (even though it was approved by Congress last year) and wants to raise taxes on the oil companies, Utley says.

"New oil drilling in Alaska and off America's coasts would create hundreds of thousands of American jobs and billions of dollars in real tax revenue for Washington," Utley writes in the article. "Compare that to government spending to create jobs, which costs some $200,000 per job."

Solar power, Utley says "involves billions of dollars in costly subsidies which add to the ballooning budget and trade deficits" while wind power will cost the taxpayers $10 billion. "Ethanol was similarly hyped by Washington -- another gigantic boondoggle with severely damaging consequences for food prices and tens of billions of dollars of wasted resources."

"Major technological breakthroughs make vast new oil production possible -- once Washington permits it," Utley says. Natural gas is "already abundant and promises to stay cheap into the foreseeable future. . . . there exists tremendous potential for natural gas in auto and truck engines. . .many trucks, buses, and taxis could easily be converted to run on natural gas, costing less than a dollar a gallon."

"Research drilling has made vast new oil production possible," Utley says. "Horizontal drilling allows wells to reach into oil reserves as never before and to produce far more oil from each field. . . .a traditional vertical well might expose 200 to 300 feet of reservoir rock [while] a new well using multiple horizontal sections can expose over 20,000 feet of reservoir rock."

"The Obama Administration is a prisoner of its 'base,' which includes extreme environmentalists doing all they can to delay and handicap new oil and gas drilling. If just a fraction of the $700 billion stimulus bill was spent on subsidizing natural gas fueling facilities at interstate truck stops, America could use more of its natural gas to avoid tens of billions of dollars of oil imports," Utley said.

See the entire article at Reason Magazine on-line: http://www.reason.com/news/show/136265.html

SOURCE Reason Magazine On-line

According to VBCC, advisors to Karl W. Miller, a senior energy executive and institutional investor, today issued the following statement through his advisors, regarding the state of the U.S. Equity Markets and the Energy Industry.

Mr. Miller warns that China continues to be irrelevant to the US economy and energy complex at the current time, given the fact that there is no fundamental U.S. demand.

Oil and Natural Gas are decoupled in the U.S. and investors should not chase a speculatively driven oil price when it has nothing to do with the fundamentals on the ground relating to Natural Gas production and demand in the United States. Oil is a dollar based, but has no linkage to natural gas in the U.S. as it does in Europe and Asia.

Mr. Miller has issued a sell recommendation on Natural Gas producers. There is no fundamental reason for Natural gas to trade above $3 mmbtu in the U.S. in the near term.

Mr. Miller expects natural gas to correct to the $2.50 to $2.75 mmbtu price range getting cheaper, as there is no demand. Thus, the pipeline and natural gas producers will suffer reduced earnings and are overvalued as well.

Chinese government owned and controlled energy companies are deploying capital cheap natural resources globally outside the U.S. to shore up their own deficient domestic portfolio. Chasing China or Asia in the equity market rally is a false illusion in the near term.

Mr. Miller retains a sell recommendation on U.S. renewable energy companies. He predicts will see many of these companies, which are reliant upon massive government subsidies, state approval of pass through price increases, and highly levered fail and/or be purchased at distressed prices when the bust comes, and it is sure to come.

Chasing a false market rally is a formula for failure for all class of investors. Mr. Miller recommends that the sidelines are the best placement of capital at the current time. The real buying opportunity will come, but now is not the time.

About Mr. Miller

Mr. Miller is a globally recognized energy executive and institutional investor with a balance of both financial and energy sector expertise. Mr. Miller began his career on Wall Street during the 1980's and has an extensive background in banking, commodities trading and risk management.

Mr. Miller has a long history in the global energy business and has held a variety of executive management positions both within the United States, Europe and Asia. Mr. Miller has bid on over $25 billion in energy related assets during his career.

Mr. Miller has built, restructured and managed energy businesses for major public energy companies on several continents, including PG&E Corporation, Electricite de France, El Paso Energy, Enron Corporation and JPMorgan Chase.

Mr. Miller holds an MBA in Finance from the Kenan-Flagler Business School at The University of North Carolina, Chapel Hill. Mr. Miller also holds a B.A. in Accounting from Catholic University located in Washington DC.

Mr. Miller is currently on medical leave until late 2009.

Source: VBCC

Chinese oil demand continues to grow versus last year after reversing the first quarter's decline in April, official data showed August 19, though some of it could be attributed to stockpiling.

Chinese refiners ratcheted up their combined crude oil processing volume to a new record high of 33.11 million metric tons, or 7.83 million barrels per day in July, and overall implied oil demand in the world's third largest economy rose 4.2% from a year ago to 34.92 million metric tons, according to a Platts analysis.

July was the fourth consecutive month to register a year-on-year increase in China's apparent oil demand, which includes barrels moving into storage.

The latest monthly data dwarfs the 33.51 million metric tons of apparent demand calculated in July 2008, when oil stockpiling ahead of the Beijing Olympics had propped up Chinese appetite more than usual.

Meanwhile, domestic crude oil production inched 0.3% lower to 16.14 million metric tons, or 3.8 million barrels per day in July. Chinese crude imports spiked in July to an all-time high of 19.64 million metric tons, or 4.66 million barrels per day, which is 42.4% greater than a year ago.

However, China's year-to-date implied oil demand is only marginally higher than the corresponding period of 2008, still weighed down by the slump in the first quarter. At 221.47 million metric tons, January-July consumption was just 0.69% above the 219.96 million metric tons recorded for the same period of last year.

"The recent robust Chinese oil demand growth rates seem counter-intuitive, given that exports, the mainstay of the Asian giant's economy, remained depressed in July," said Vandana Hari, Asia news director at Platts. "The continued rise in crude refining volumes is understandable because that puts more money into the pockets of the refiners under the government's new products pricing formula. But if end-user demand is not in sync, that simply translates to more oil moving into storage."

"Whether Chinese industrial activity is able to get fully back on track once Beijing's massive fiscal stimulus runs out will hold the key to the country's oil demand growth in the coming months," Hari added.

    MONTHLY TRADE DATA IN MILLION METRIC TONS:

                Jul'09  Jul'08   % Chg  Jun'09  May'09  Apr'09  Mar'09  Feb'09
    Net crude
     imports     19.20   13.53  +41.90   16.31   16.62   15.81   15.87   11.12

    Crude
     production  16.14   16.19   -0.30   15.71   16.03   15.59   15.82   14.32

    Apparent
     demand      34.92   33.51   +4.21   33.35   33.23   31.47   31.26   27.91

Platts calculates China's apparent or implied oil demand on the basis of crude throughput volumes at the domestic refineries and net oil product imports, as reported by the National Bureau of Statistics and Chinese customs. The government releases data on imports, exports, domestic crude production and refinery throughput, but does not give official figures on the country's actual oil consumption or stockpiles.

Platts releases its monthly calculation of China's apparent demand between the 18th and 26th of every month via press release and via its website. Any use of this information must be appropriately attributed to Platts.

For more information on crude oil, visit the Platts website at www.platts.com For Chinese-language information on oil and the energy and metals markets, visit http://www.platts.cn/.

Source: Platts

Proper Power & Energy, Inc. (OTC Bulletin Board: PPWE) announced today Robert Dunbar, using his improved radiometric technology, Radiometric Plus, has identified potential Giant Fields in Utah. Proper Power & Energy holds an 11,000 acre lease in Utah with room for over 75 wells with an excellent chance for a "pay," according to Dunbar. Robert Dunbar, Geologist, stated, "Based on Radiometric Plus, I predict a very high probability that Proper Power & Energy will be successful in hitting a large pay and potentially a giant field similar in size or larger than that of the Covenant field."

Giant oil and gas fields are considered those with 500 million barrels of ultimately recoverable oil or gas equivalent. Geoscientists believe these giants account for 40 percent of the world's petroleum reserves. Robert Dunbar has identified potential giant oil fields in Utah.

The central Utah thrust belt, or "Hingeline," has seen cycles of petroleum exploration for the past 50 years because explorers viewed the geology as a natural extension of productive thrust belt-style structures in northern Utah and southwestern Wyoming. Wolverine Gas & Oil Corp. lit a firestorm of interest in central Utah with its Covenant oil field discovery in Sevier County in 2004. Original estimates of Wolverine's Covenant field range from 75 million to 150 million barrels. According to data compiled by the Utah Geological Survey in 2005, Utah holds 493 million barrels of proved oil reserves (about 1.9 percent of the total U.S. onshore oil reserves). As oil prices remain above $50/barrel, it is predicted that oil exploration will increase in Utah and should dramatically increase the proven oil reserves in the state.

SOURCE Proper Power & Energy, Inc.

Speaker-Designate Dean Cannon (R-Winter Park) unveiled a bold proposal today that would lift the state's current ban on oil & gas exploration and production in the state waters off Florida's coast - a move economists say could be worth at least $1.6 billion a year in state revenues and create more than 19,000 jobs.

The measure amended to CS/CS/HB 1219, which was approved by the Policy Council of the Florida House of Representatives, would not immediately trigger energy exploration in state waters. Instead, it would empower the Governor and Cabinet to consider a process for reviewing, approving or rejecting proposals for exploration and production of oil & gas in Florida's state waters.

With Florida's coast harboring anywhere from 3 billion to 20 billion barrels of oil, approved oil & gas leases could generate billions of dollars in new annual revenues - without raising new taxes.

"Florida's families and businesses are facing unprecedented economic challenges, and the potential for significant, new public revenues from oil & gas are immense," said Barney Bishop III, President and CEO of Associated Industries of Florida. "I am confident that we can do this in a way that will protect our environment and our precious coastline, which is such a critical natural resource for our state."

As Florida has been forced to make nearly $7 billion in painful budget cuts since 2007, Texas has collected nearly $7 billion in annual oil & gas revenues - revenues that fund significant portions of the state's public K-12 and state university budgets.

"Floridians continue to suffer from devastating cuts to higher education, environmental protection, health care and vital infrastructure," said Martha Barnett, partner at Holland & Knight and past president of the American Bar Association. "For the sake of our state's future, we cannot delay discussion of this issue any longer, nor ignore the benefits that other states continue to derive from their energy resources.

Buoyed by the struggling economy and high energy prices, public opinion has swung decisively in favor of offshore energy exploration, as shown by many public opinion polls including a new survey of 625 voters conducted April 15-16 by Mason-Dixon Polling & Research.

Among the results of that survey:

• 59 percent of Floridians generally support drilling off Florida's coast,
• 79 percent support drilling if it raises money for public education, health care and environmental protection,
• 83 percent support drilling if it will produce new jobs and stimulate the economy, and
• 88 percent support drilling if it is environmentally safe.

"Recent public opinion surveys document that Floridians have come to strongly support exploration and production of oil and gas resources off the Florida coast," said Larry Harris, a principal with Mason-Dixon. "Nine in 10 voters (88 percent) support offshore production if it is done in an environmentally safe fashion and raises significant revenues, boosts the economy and creates jobs."

SOURCE Associated Industries of Florida

Baker Hughes Incorporated (NYSE: BHI) announced today that the international rig count for March 2009 was 1,012, down 8 from the 1,020 counted in February 2009, and down 42 from the 1,054 counted in March 2008. The international offshore rig count for March 2009 was 281, down 5 from the 286 counted in February 2009 and down 4 from the 285 counted in March 2008.

The US rig count for March 2009 was 1,105, down 215 from the 1,320 counted in February 2009 and down 692 from the 1,797 counted in March 2008. The Canadian rig count for March 2009 was 196, down 217 from the 413 counted in February 2009 and down 212 from the 408 counted in March 2008.

The worldwide rig count for March 2009 was 2,313, down 440 from the 2,753 counted in February 2009 and down 946 from the 3,259 counted in March 2008.

March 2009 Rotary Rig Counts

                       March 2009             February 2009      March 2008
                    Land  OS  Total   Var.   Land  OS  Total   Land  OS  Total

      Europe         36   59    95     14     30    51   81     48   52   100
      Middle East   232   30   262     (2)   233    31  264    238   31   269
      Africa         48   13    61      2     44    15   59     52   18    70
      Latin America 284   74   358    (16)   294    80  374    302   78   380
      Asia Pacific  131  105   236     (6)   133   109  242    129  106   235
                    ---  ---   ---           ---   ---  ---    ---  ---   ---
    International   731  281  1012     (8)   734   286 1020    769  285  1054

      United
       States      1060   45  1105   (215)  1264    56 1320   1737   60  1797
      Canada        195    1   196   (217)   412     1  413    407    1   408
                    ---    -   ---           ---     -  ---    ---    -   ---
    North America  1255   46  1301   (432)  1676    57 1733   2144   61  2205

    Worldwide      1986  327  2313   (440)  2410   343 2753   2913  346  3259

About the Baker Hughes Rig Counts

The Baker Hughes Rotary Rig Counts are counts of the number of drilling rigs actively exploring for or developing oil or natural gas in the United States, Canada and international markets. Baker Hughes has issued the rotary rig counts as a service to the petroleum industry since 1944, when Hughes Tool Company began weekly counts of US and Canadian drilling activity. Hughes initiated the monthly international rig count in 1975.

North American rig count data is scheduled to be released at noon central time on the last working day of each week. The international rig count is scheduled to be released on the 5th working day of the month. Additional detailed information on the Baker Hughes rig counts is available from our website at http://www.bakerhughes.com/investor/rig.

Baker Hughes provides reservoir consulting, drilling, formation evaluation, completion and production products and services to the worldwide oil and gas industry.

Source: Baker Hughes Inc.

Noble Energy, Inc. (NYSE: NBL) announced today a discovery at the Santa Cruz prospect in Mississippi Canyon Blocks 519/563. The well, located in 6,515 feet of water, was drilled to a total depth of approximately 18,900 feet. Open-hole logging indicated over 140 feet of net gas condensate pay and more than 110 feet of net oil pay in multiple high-quality reservoirs. The overall thickness of the reservoirs encountered was greater than originally expected.

David Stover, Noble Energy's Executive Vice President and Chief Operating Officer, said, "The results at Santa Cruz complement the successful momentum we have been experiencing in our worldwide exploration programs. Our discoveries at Santa Cruz and Isabela will be an important development program for our Company. Current plans consist of subsea tiebacks to nearby infrastructure, and we anticipate first production from this area in 2011.

"Our deepwater Gulf of Mexico program is positioned very well, with a combination of existing production, several ongoing developments of recent discoveries, and a growing exploration portfolio. Our next exploration test will likely be late in the year at Deep Blue in the Green Canyon region, which will be testing our largest deepwater Gulf of Mexico prospect to date," Stover added.

Noble Energy operates the Santa Cruz discovery with a 23.25 percent working interest. Other interest owners in the discovery are Houston Energy, L.P. with 10 percent, Red Willow Offshore, LLC with 20.25 percent, and BP Exploration & Production Inc., a wholly-owned subsidiary of BP America Inc. (NYSE: BP) with the remaining 46.5 percent.

Noble Energy is a leading independent energy company engaged in worldwide oil and gas exploration and production. The Company operates primarily in the Rocky Mountains, Mid-Continent, and deepwater Gulf of Mexico areas in the United States, with key international operations offshore Israel, UK and West Africa. Noble Energy is listed on the New York Stock Exchange and is traded under the ticker symbol NBL.

Source: Noble Engergy, Inc.

Marathon Oil Corporation (NYSE: MRO) announced today that its subsidiary, Marathon International Petroleum Angola Block 31 Limited, has participated in the Leda discovery well in the central northern area of Block 31 offshore Angola. Leda is Marathon's 29th discovery on Angola Blocks 31 and 32.

The Leda discovery well is located approximately 250 miles off the Angolan coast, and is about 7 miles southwest of the Marte field.

The well was drilled in about 6,800 feet of water, to a total depth of more than 19,300 feet. It is the fifth discovery in Block 31 where the exploration well has been drilled through salt to access the oil bearing sandstone reservoir beneath. The well test results confirmed the capacity of the reservoir to flow in excess of 5,000 barrels per day under production conditions.

The concessionaire of Block 31 is Sonangol, Angola's state-owned oil company. Marathon holds a 10 percent interest in Block 31. The operator is BP Exploration (Angola) Limited with 26.67 percent. The other interest owners are Esso Exploration and Production Angola (Block 31) Limited with 25 percent, Sonangol P&P with 20 percent, Statoil Angola A.S. (a subsidiary of StatoilHydro ASA) with 13.33 percent, and TEPA (BLOCK 31) LIMITED, a subsidiary of the Total Group with 5 percent.

Marathon is an integrated international energy company engaged in exploration and production; oil sands mining; integrated gas; and refining, marketing and transportation operations. Marathon has principal operations in the United States, Angola, Canada, Equatorial Guinea, Gabon, Indonesia, Ireland, Libya, Norway and the United Kingdom. Marathon is the fourth largest United States-based integrated oil company and the nation's fifth largest refiner.

SOURCE Marathon Oil Corporation

Oil companies in resource-rich nations are recognizing the power of investor trust and a focus on national development as their best tools for survival in the current financial downturn.

"State-owned oil companies are a pivot-point in this crisis," said Karin Lissakers, director of Revenue Watch Institute. "They are realizing that transparency in revenue management and reporting has become an economic necessity."

At a meeting hosted by Revenue Watch during this week's global conference of the Extractive Industries Transparency Initiative (EITI) in Qatar, companies voiced anxiety about losing revenue in the downturn and setting aside regulatory reforms that could lead to long-term fiscal and national growth.

"Without sound corporate governance and disclosure policies, companies will lose the trust of the investors and lending institutions they need to operate successfully," said Lissakers. "Open reporting practices can safeguard future windfalls against the volatility that is wreaking havoc today."

With more than two dozen countries now in the EITI, and Azerbaijan named as the first compliant country, Revenue Watch is urging resource-rich nations to use the momentum of the transparency movement to secure their prospects for long-term growth.

The Revenue Watch meeting on Monday brought national oil companies from countries including Azerbaijan, Qatar, Kazakhstan and Norway together with experts from the World Bank and Stanford University, and international business leaders including EITI Chairman Peter Eigen, George Soros of the Open Society Institute, and Karina Litvack of F&C Asset Management.

George Soros warned producing countries against energy deals that favor quick profit over sound practice. Speaking to the full EITI conference on Tuesday, Soros said "The commodity downturn is likely to be temporary, but the deals bind you for decades. Don't give away the store for short-term gains. Better to leave a valuable asset in the ground than accept terms that will yield your country little revenue or other benefits over the long term."

Revenue Watch offered its warm congratulations to the Republic of Azerbaijan for being named the first EITI compliant country, and welcomed the United Republic of Tanzania as the latest confirmed candidate country.

The attendance of Iraqi oil minister Hussain al-Shahristani at the EITI conference also underscored the importance of adding a major Middle East oil producer to the initiative. Revenue Watch expressed its continued enthusiasm about the progress of Iraq toward becoming an EITI candidate. Revenue Watch Institute is a part of the EITI governing board and was actively involved in its founding in 2002.

SOURCE Revenue Watch Institute

HOUSTON, Feb. 13 / -- Noble Energy, Inc. (NYSE: NBL) announced today an oil discovery on Block "O" at the Carmen prospect, offshore Equatorial Guinea. The Carmen well, which represents the Company's first oil discovery on Block "O", encountered approximately 26 feet of net oil pay, along with 13 feet of net gas pay. Located in approximately 150 feet of water, the well was drilled to a total depth of 11,550 feet to test a lower Miocene reservoir. The well has been temporarily abandoned pending future development considerations. There are no plans to flow test the reservoir at the current time.

Charles D. Davidson, Noble Energy's Chairman, President and CEO, said, "The result at Carmen is another positive data point for our West Africa operations where we have now drilled ten consecutive successful wells on our operated acreage. We are excited to confirm that the oil sourcing extends from Block "I", where we have two separate oil discoveries, to the north in Block "O". We are optimistic about the further prospectivity of the region, and we will be recalibrating our seismic to identify other similar opportunities. At the same time, our teams are continuing to advance the oil development scenario for first production in 2012 and Carmen looks to be a very nice tie-in candidate."

The Minister of Mines, Industry and Energy, H. E Marcelino Owono Edu, stated, "The Government of Equatorial Guinea is extremely pleased that another oil discovery has been made within the Equatorial Guinea part of the Douala Basin. The Government of Equatorial Guinea will continue to aggressively develop the discovered oil and gas resources within its territory for the benefit of the people of Equatorial Guinea, whilst maintaining a stable and consistent investment policy."

Noble Energy is the Technical Operator of Block "O" with a 45 percent participating interest. Its partners on the block include GEPetrol, the national oil company of the Republic of Equatorial Guinea with a 30 percent participating interest and Glencore Exploration Ltd. with a 25 percent participating interest.

Noble Energy is a leading independent energy company engaged in worldwide oil and gas exploration and production. The Company operates primarily in the Rocky Mountains, Mid-Continent, and deepwater Gulf of Mexico areas in the United States, with key international operations offshore Israel, UK and West Africa. Noble Energy is listed on the New York Stock Exchange and is traded under the ticker symbol NBL. Visit Noble Energy online at www.nobleenergyinc.com.

SOURCE Noble Energy, Inc.

HOUSTON, Feb. 6 / -- Baker Hughes Incorporated (NYSE: BHI) announced today that the international rig count for January 2009 was 1,044, down 34 from the 1,078 counted in December 2008, and down 9 from the 1,053 counted in January 2008. The international offshore rig count for January 2009 was 279, down 12 from the 291 counted in December 2008 and down 12 from the 291 counted in January 2008.

The US rig count for January 2009 was 1,553, down 229 from the 1,782 counted in December 2008 and down 196 from the 1,749 counted in January 2008. The Canadian rig count for January 2009 was 377, up 16 from the 361 counted in December 2008 and down 117 from the 494 counted in January 2008.

The worldwide rig count for January 2009 was 2,974, down 247 from the 3,221 counted in December 2008 and down 322 from the 3,296 counted in January 2008.

    January 2009 Rotary Rig Counts

                    January 2009            December 2008     January 2008
                  Land  OS  Total   Var.  Land  OS   Total   Land  OS  Total
    ------------------------------------------------------------------------

      Europe        39  54    93    (8)    48   53    101     48   45    93
      Middle
       East        239  35   274    (5)   246   33    279    241   34   275
      Africa        46  12    58    (9)    51   16     67     52   16    68
      Latin
       America     305  76   381    (8)   312   77    389    291   74   365
      Asia
       Pacific     136 102   238    (4)   130  112    242    130  122   252
                  ---- ---  ----         ----  ---   ----   ----  ---  ----
    International  765 279  1044   (34)   787  291   1078    762  291  1053

      United
       States     1487  66  1553  (229)  1716   66   1782   1690   59  1749
      Canada       375   2   377    16    359    2    361    492    2   494
                  ---- ---  ----         ----  ---   ----   ----  ---  ----
    North
     America      1862  68  1930  (213)  2075   68   2143   2182   61  2243
    -----------------------------------------------------------------------

    Worldwide     2627 347  2974  (247)  2862  359   3221   2944  352  3296

Oil rich Kazakhstan is planning to cut tariffs on the export of crude oil by one third in order to help domestic producers, energy minister Sauat Mynbayev said today.
In a move to reduce soaring oil prices in their domestic market, the Kazakh government had introduced an export tariff in May. This way they boosted their state revenue while helping their domestic fuel market. However, with the drop in oil prices, the tariff started eating into the profit margins of domestic producers.
As per the proposal by the energy minister, the government is considering dropping the duty to $139 per ton from the current levy of $210 per ton.
The duty is adjusted every quarter to keep pace with the fluctuations in global prices. Mynbayev has said that this may change with revisions of tariff taking place as often as on a biweekly or monthly basis.
Kazakhstan has some of the world's largest oil reserves, concentrated in the western parts of the country.
Information from The Associated Press website.

The International Energy Agency (IEA) has predicted that the era of cheap oil is over. They warn that crude oil prices will soon skyrocket above $100 a barrel and that by 2030 this will double with fields in the North Sea and in other areas of the world getting depleted faster than expected.
The IEA, which acts as an energy policy advisor to 28 countries, was founded during the oil crisis of 1973-74. It says that more than $26 trillion of investment would be needed over the next few years to help countries of the world achieve energy independence.
At the moment, market fluctuations have caused prices to fall but this trend will not last long.
On a brighter note they categorically stated that it wasn't that the world was running out of resources, the risk to supply was that there was a lack of investment in the right areas. Total world oil production isn't projected to peak before 2030 but the more easily accessible sources of crude or conventional oil will most likely plateau towards the end of that period. Besides that, energy sources are concentrated with a few people, largely being confined to the OPEC producer's cartel. It is Non- OPEC oil production that is projected to decline by the middle of the next decade.

Information from The Guardian website.

Oil futures rose early Tuesday after falling nearly 6 percent in the previous session. Crude oil for December delivery rose by $1.41 to $65.34 a barrel in electronic trading done on Globex.
Futures prices rebounded today after falling by $3.90, or 5.8 percent closing at $63.91 per barrel yesterday on the New York Mercantile Exchange. The futures prices of oil have taken a beating amid concerns about the impact of the economic slowdown on energy demand.
Pic courtesy yuan2003 from flickr.com

The World’s largest oil companies are raking in huge profits owing to the rise in oil prices. Their windfall gain has come at a time when even their production has come down. While Royal Dutch Shell recorded a third quarter profit of $10.9 billion up 71 percent, Exxon Mobil broke its own record for the biggest quarterly profits in the US by earning $14.8 billion up 58 percent, despite an 8 percent decline in production. BP recently declared a profit growth of 148 percent which prompted Gordon Brown into stating that a reduction of oil prices in oil pumps was needed after the reduction of oil prices globally.
Such profits prompt the public to call for the creation of windfall tax that applies a tax on the huge profits companies make in inflated markets. The companies claim however that all their profits get invested back into their businesses and that their huge profits also imply that they have to pay very large taxes on their income hence a windfall tax in unnecessary.
To read the complete article click here.

AGL Energy, Australia’s largest power and gas retailer is leaving Papua New Guinea after selling all its assets in the country to an unknown international buyer for $1.16 billion.
This decision comes after the sale of 22 percent of their stake in Queensland Gas Company to a British company for $1.18 billion.
The current condition of global markets may have prompted AGL to take this action.
To read the complete article click here.

With the pace of global growth slowing down, people are worried about the demand of oil falling. This has led to a further decrease in oil prices on Wednesday. The promise of output cuts by OPEC has been outweighed by what traders perceive to be a  fall in demand for oil. Besides, traders feel that any cuts implemented now will take a few months to have any impact on the market.

The fall in prices are beginning to alarm OPEC nations, several of whom depend on oil for most of their revenue.

To read the complete article click here.

OPEC producer Venezuela has joined fellow member Nigeria in making a token cut in supply to stem falling oil prices.

OPEC spokesman Omar Farouk Ibrahim said that "Venezuela has formally informed the OPEC secretariat of its voluntary decision to cut production by 50,000 barrels per day" from its 2.5 million bpd output and an overall OPEC quota of 28 million bpd.

Nigeria said it will cut exports by 120,000 bpd. Analysts question whether Nigeria will make good on its supply cuts. They cite strong demand for the country's light, sweet crude that is rich in gasoline and heating oil.

Despite the news oil fell more than $1. This is because there is plenty of oil around at the moment and investors are waiting for evidence that actual cuts are being instigated.

"There is definitely no agreement -- whether formal or informal -- within OPEC to cut current production," an OPEC official said.

OPEC officials say that there are no plans for an emergency meeting but there are plans to meet face-to-face on December 14.

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The possible revival of a Saddam-era oilfield deal between Iraq and China has given hope to top oil multinationals over the potential of getting contracts giving them access to Iraq's vast untapped resources.

The deal, like others made by Saddam Hussein was effectively frozen by international sanctions and then by his overthrow.

The news that Iraq's oil ministry is thinking of awarding China the first foreign contract to develop oil resources has given heart to western oil majors that Baghdad is opening up and looks ready to honor its contract rather than handing over the al-Ahdab field to the US, which has 142,000 troops in the country.

After the US led invasion in 2003, US firms won most of the big infrastructure deals and European firms feared that the same would happen with Iraq's oil wealth.

This deal, worth some $700 million, could be a beginning for other Chinese companies and a door opener for other development deals. Iraqi oil minister al-Shahristani is expected to visit China, Japan and Australia to discuss oil investment projects.

The oil minister favors centralized control of Iraq's oil, but a new constitution gives autonomous federal regions a role in

developing resources. There might be a political message in his overture to China signaling his centralization goal to the Kurdish regional government in the north which has struck deals with many independent oil exploration companies.

The government has given priority to the Ahdab oilfield because of its proximity to new power stations and refineries. It expects output to increase from 30,000 barrels per day to full capacity of 90,000 over two years.

Though Russia's Lukoil did not comment, analysts say that if Baghdad were to validate the West Qurna oilfield deal, Lukoil would be willing to start work again.

While multinationals will not sign multibillion dollar contracts until an investment law is in place and security improves, a western executive says that the Chinese "don't give a damn whether there's an investment law to protect them" and "don't have the same incentives on profitability as the international oil companies."

The major oil companies are confident that the fields they would like to work on will not be assigned to rival companies from India or China, as the Iraqi government is aware that it needs the technology and finance that international oil companies bring.

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The US government's independent inspector on Iraqi reconstruction reported that Iraq's largest industry, the oil sector, has lost $US16 billion in oil export revenue over a 2 year period and insurgent attacks on the country's energy infrastructure have prevented it, in part, from maintaining adequate electricity supplies.

"A number of factors, including attacks, aging and poorly maintained infrastructure and criminal activity are adversely affecting Iraq's ability to develop a viable energy sector," said Inspector General for Iraq Reconstruction Stuart Bowen.

In an unclassified summary Bowen said that these factors are working together to hold down Iraq's oil exports and the availability of electricity.

The oil sector in Iraq which was expected to be a big revenue raiser for the rebuilding of Iraq, has been subjected to repeated attacks on its pipelines and oil export facilities.
Iraq is paying billions of dollars to import gasoline and other refined petroleum products for its people, in spite of owning huge oil holdings.

The US has invested about $320 million to help Iraq improve its capability to protect its oil and electricity infrastructure.
Bowen noted that in addition to the initiatives Iraqi leaders are taking to enhance security and performance of the oil and electricity infrastructure, they also need to take "bold action" to protect energy sites in the country.

Iraq's oil production is far below pre-war levels when Iraq pumped between 2.8 million and 3 million bpd. Currently the country's oil exports have been running at almost 1.7 barrels a day.

Iraq needs investments by foreign energy companies in its underdeveloped and undiscovered fields to boost its oil production.
Iraq claims to need up to US$20 billion in investment to reach oil production limits of 6 million bpd.

However, many foreign companies are apprehensive about doing business in Iraq due to the ongoing violence.

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A deal between Iran and Sinopec for developing a major Iranian oilfield will be finalized in the next 2 months, Iran's deputy oil minister stated.

Deputy Oil Minister Mohammad Hadi Nejad Hosseinian was quoted as saying "The talks will be finalized in less than two months and the contract will come into effect two months later."

Sinopec agreed in October 2004 to take the lead in developing the Yadavaran field and to buy 10 million tons of LNG a year for 25 years.
But the finalization of the deal, in the manner of other Iranian energy contracts with foreign firms had been subject to protracted negotiations and delays. Disagreements over pricing for the deal were behind a previous delay.

The Yadavaran oilfield is estimated to have 3 billion barrels and is expected to produce 300,000 bpd, around the same amount of crude that China currently imports from Iran.
The deal worth as much as US$100 billion if signed could draw fire from the US.

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Russian Foreign Minister Sergei Lavrov in an effort to alleviate Western concerns over Russian energy deals said that talk of revising PSA's or seeking to exclude foreigners from the sector were unfounded.

Lavrov said, "Assertions about 'revisions' of PSAs and especially about squeezing foreigners out of the Russian energy sector have absolutely no basis whatsoever".

He also added that "Carrying out checks in no way means that licenses for developing deposits within the Sakhalin-2 project will be withdrawn".

Recent threats from Russian officials to withdraw an ecological permit for the Sakhalin-2 oil and gas project led by Shell have led to fears that Russia wants to renegotiate the production sharing agreement.

Natural Resources Minister Yuri Trutnev said on Tuesday that work on the Sakhalin-2 project could continue while a full-scale ecological probe, due to start on October 25 is held.

Shell has doubled the estimated cost of the Sakhalin-2 project to $20 billion which has infuriated Russia, complicating talks on the strategic swap of assets with state controlled Gazprom.

Concerns about the suspension of oil pipeline loading for technical checks on the ExxonMobil run Sakhalin-1 PSA project abounded while ExxonMobil's arm in Russia said it was unaware of any order to suspend work and business was continuing as usual.

The head of Russia's technical standards agency said that he hoped Sakhalin-1 would be able to deal with any breaches of the rules at its De Kastri terminal before its planned launch on October 1.

ExxonMobil said that while the issue needed to be sorted out, the scheduled launch of the terminal was possible.

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Update

Key OPEC producers, including Saudi Arabia, have agreed unofficially to cut production to curb falling prices.

With oil falling toward $61 on robust US inventories ahead of the winter heating season, OPEC said that the price slide from summer peaks had gone as far as it should go.

US crude fell to US$61.01 per barrel, reversing the rebound from 6-month lows below US$60.
Easing Middle East tensions, ample fuel stocks and slowing US economic growth have resulted in the steepest decline in oil prices since the Gulf War, falling from July's high of US$78.40 a barrel.

OPEC President Edmund Daukoru said that the slide in prices was harmful for investments and that OPEC was already talking among itself about what needs to be done.

Industry analysts feel that if the price slide continues, OPEC might cut its quota.
It is expected that if prices fall below US$60, it would trigger OPEC action.

While OPEC has avoided setting a target oil price to defend, Saudi Oil Minister Ali al-Naimi said that prices were "reasonable" when they were above US$62 a barrel.

On the other hand, BP is adding to the downward pressure on prices by increasing production at its Prudhoe Bay Field. BP expects to hit 400,000 barrels a day by the weekend, just 50,000bpd below full capacity.US stocks stand at their highest level since January 1999. US stocks of distillates are projected to rise.

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The Peak Oil Theory of Value is worth analyzing in the view of recent comments by ExxonMobil's Australian CEO Mark Nolan that there " is no peak oil theory of value."
Beyond something "that possesses us" and "makes us speak its words and do violence to our nature", is the question: What is theory?
A theory is a doctrine, or scheme of things, which terminates in speculation or contemplation. A simple way to understand the concept of a theory is that it is the premise or set of premises upon which an argument rests, although the focus of theory is on the “science” of something, more so than the “art” thereof. 
If a theory is something that is going to possess us, it better be a good theory.

Reporter Mike Sexton from ABC in a conversation with Mark Nolan ExxonMobil came upon the ExxonMobil view regarding peak oil.
He said that while the peak oil theory suggests that at one point the world will have used more than half its oil supply and future demand will be sharply higher than supply, big oil isn't buying it.
Nolan said that these theories have been around since the 1920's, especially when oil hits high prices. The ExxonMobil view is that the world has abundant energy resources and there is no peak oil theory of value.
Mr. Nolan did not expand on his throwaway comment that there is no peak oil theory of value initially. Later he talked about

the US Geological Survey's report that the Earth has more than 3 trillion barrels of conventional recoverable resources and so far we’ve produced 1 trillion of that. An additional 1 trillion barrels are estimated with conservative estimates of heavy oil and shale oil.

While the USGS estimate is notoriously optimistic with lots of good petroleum geologists and engineers taking the USGS to task on it, the focus of this article shall remain on the Exxon man's comment on there being "no Peak Oil theory of value."

So what is a theory of value?
You know what a theory is; Value is the worth of something or its utility to satisfy the needs of people.
A theory of value must be the premise or set of premises upon which an argument rests, relating to the worth of something, or its utility to satisfy the needs of people.
A key question in economic theory is how the value of goods and services comes about, and how to calculate the correct value of goods and services if such a value exists.

The first category in measuring value is called the "intrinsic theory of value". This theory implies that every item has an inherent worth built into the item itself that does not depend on what people think of it. Intrinsic valuations mostly depend on the process of producing an item and the costs involved in that process as a measure of the item’s intrinsic value. The "labor theory of value" which holds that the value of an item comes from the amount of labor spent producing the item, is one of the  most influential of the intrinsic theories.

The second category is the "subjective theory of value". This theory holds that for an object to have economic value, i.e. a price, it must be useful in satisfying human wants and not be in unlimited supply.
Goods that are in unlimited supply, or in a greater supply than that demanded, would have lower value. This theory recognizes that an item may be more useful in satisfying the needs or wants of one person than another, or of no use to one person and of great use to another.
This theory differs from the intrinsic theory in that it holds that beyond the objectively correct value of an object, is the value of individual judgments.

The third category is the "cost-of-production theory of value". The theory is that the price of an object is determined by the sum of the cost of the resources that went into making it. Factors such as labor, capital, land or technology will all come under cost of production.

Now that we have the basics, it's back to the Peak Oil Theory of Value. The central argument of Peak Oil is a scientifically valid concept that relies on historical "discovery" numbers and extraction figures for conventional petroleum.
Extraction figures implies that you cannot extract what you have not discovered and peak oil says that mankind has found most of the world's oil deposits. And it appears that mankind has extracted about half of all the conventional oil that will ever be extracted. This is the basic premise.

Peak oil refers to conventional petroleum as the substance that will be available in lower and lower quantities. Conventional petroleum is the rock oil that is made to flow from pores in rock formations into bore holes in the ground and lifted from there to the surface of the Earth.
The world’s exploration, production, transportation, refining, marketing, delivery and end use is geared by conventional petroleum.
The world's extraction and use is currently at 85 million barrels per day.

As a departure from conventional petroleum are tar sands and oil shale, that require different methodologies not only to extract or produce, but also for transportation, refining and delivery. The infrastructure in the world for plumbing for these is negligible. Besides, non-conventional hydrocarbon sources have a far more negative economy in both energy return on investment and monetary metrics.

The question for the future is whether the world's energy sectors and the economies they drive can make the transition from extracting, refining and delivering conventional petroleum to delivering non-conventional petroleum. And additionally, if the transition can happen... will it happen faster than conventional sources are depleting?

Coming back to the peak oil theory of value begs the question - what is it worth to be able to understand if not predict that the world's capacity to extract conventional petroleum is on a downhill run? What is it worth to be forewarned?

If we're headed for a cold, bleak future, isn't it best to look at the peak oil theory of value as a caution toward the future trends of mankind's energy use and particularly mankind's oil use.

Is the value of peak oil intrinsic or subjective? Is it based on the cost of production? Or is it quite simply that understanding of Peak Oil is a key to mankind understanding how to survive into the future. That seems like a perfectly useful “theory of value.”

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Venezuela's state oil company is helping Grenada build storage tanks needed to store the fuel bought under the Petrocaribe deal.  The lack of storage has been a key issue holding up the delivery of oil to the Caribbean.

Under the Petrocaribe deal which was finalized in June 2005, Caribbean countries pay market price for Venezuelan fuel but need pay only part of the cost immediately. The remaining can be paid over 25 years at low interest. The governments can also pay part of the amount with services and goods such as rice and bananas, while Venezuela will provide storage tanks and docking facilities.

The tanks will hold up to 20 days worth of Grenada's fuel needs - more than the current maximum of a 10 day supply.

Grenada's Petrocaribe program has been weighed down because it lacks the infrastructure to receive and distribute oil.

While 14 countries in the region have signed the Petrocaribe deal, itis unclear whether Grenada has received any oil under the agreement.

The Petrocaribe deal is seen as a bid by anti-Us Venezuelan President Chavez to make inroads in the Caribbean, where the US is a major trading partner. His deals are an opposition to the US free trade deals.

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An editorial in the Chronicle last September warned of peaking global oil production in this decade followed by an inevitable decline. If that were to happen, the US needs to invest heavily in developing alternative energy sources or be prepared to endure steep increases in the price of energy.

A study conducted by the US Department of Energy concurred with the editorial's conclusions.

The study, led by Robert Hirsch, affirmed that global spending on developing alternative energy sources should be $1 trillion per year to prevent the economy from being crippled by oil shortages and the resulting chaos. Considering that the study recommends a 20-year lead time, it might already be too late to prevent a crunch.

Hirsch predicts that oil production will certainly peak by 2020, if not in the next 5 years.
In fact, oil production does not need to peak for severe shortfalls in oil supplies to occur. Natural disasters like Hurricane Katrina, wars like the Israel-Hezbollah conflict, political unrest, government intervention, deteriorating equipment like in the case of the Prudhoe Bay field pipeline, accidents or any combination could interrupt the supply of oil.

The trend of dropping oil prices with the end of the vacation season is extremely temporary. ExxonMobil CEO Rex Tillerson predicts that world demand for crude ol will increase by 50 percent in the next 10 years. Demands from countries like India and China and the developing world will only go up.

Perhaps the report's most sobering conclusion is that the free market and private industry alone will not be able to avoid economic catastrophe from energy shortages. A policy for managing the transition from conventional crude oil to other energy forms is required to be set in place by the government.

If oil companies disagree, they need to make good by showing where all the oil to meet excess demand is going to come from, or come up with plans to develop alternative sources.

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Russia tried to ease European concerns over its business maneuvers like investment in the European aerospace consortium and the withdrawal of permits to western oil companies in Russia. France, Germany and Russia met over the weekend at a castle in the north of Paris where these issues came up.

A Russian state-controlled bank has acquired a 5.02 percent stake in EADS and the government is believed to want to increase the stake. Speculation that Russia might gain a position on the board of the European consortium was rebuffed by EADS and French Finance Minister Thierry Breton.
However at the meeting in Paris, Putin stated that the acquisition "is not at all the sign of an aggressive behavior on the part of Russian partners" and that they "will not use this stake to change in any way the institutional situation of EADS."

Concern was also evinced over the future of French oil giant Total in Russia. There have been indications that Total may lose its license for the Kharyaga oil field. Putin told reporters in Paris that these were "greatly exaggerated rumors".
French officials believe that Putin's words are solid guarantees for France's investments in Russia.

Though Putin did not address the disagreements with ExxonMobil or Shell over contracts and revoked licenses, he assured western countries that he was aware of the co-dependent nature of energy suppliers and consumers. He also indicated that some oil resources would be redirected to Europe.

Russia also signed two "Memoranda of understanding" which act as blueprints for potential contracts worth more than $10 billion.
One MOU is between French construction giant Vinci and the Russian Transportation Ministry for a highway between Moscow and St. Petersburg. The other looks at possible cooperation on railroad, transportation and infrastructure in Russia between the Russian and French transportation ministries.

Chancellor Angela Merkel of Germany insisted on the need for "reliable partners," between Europe and Russia, in energy matters.

Besides business matters, the three countries also discussed current diplomatic issues.

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Russia's nationalist oil policy that's aiming to wrest back control of the country's resources from the world's most powerful energy firms has come under international glare following events last week.

Shell and ExxonMobil's Sakhalin island project, BP's joint venture with TNK in eastern Siberia and Total's operations in the Kharyaga oil field have all been affected by threats to revoke licenses granted years ago to the companies. The Russian move was no crude step, rather a well planned effort with ambassadors overseas, Siberian officials, the natural resources ministry officials, environmental agencies all coming in with a variety of reasons - financial, time overruns, environmental - to account for the retraction of contracts.
For Shell, BP and Total, environmental concerns were cited by government officials.

While Western companies have not commented publicly, the moves have attracted international condemnation.
Japan was stinging in its reaction saying the delay in the Sakhalin-2 project would have a 'negative influence on overall Japanese-Russian relations.'

Japan is to take gas from the Sakhalin-2 project and has two leading companies, Mitsui and Mitsubishi, holding 45 per cent of the venture.

Russia's nationalized energy giant Gazprom, is believed to be the reason behind the politicking and in fact in response to Japan's statement, Russian ambassador said that a state-run company could speed along the project. He meant Gazprom, which has been trying to negotiate its entry into Sakhalin for many years now.

The asset swap that was being negotiated between Gazprom and Shell, which would give Gazprom a 25 percent stake in Sakhalin-2 has also been suspended.
Costs overrun have been touted as the reason behind the falling through of the deal. Cost increases mean that Gazprom can claim a reduction in value of the 25 per cent of Sakhalin that it is acquiring, which means recalculating the asset swap.

The Production Sharing Agreement signed a decade ago between Shell and the government, allows the government to retain ownership while the partners develop the project and take revenue in early years to pay back their investment. After this, the government receives an increasing proportion of revenues up to 70 per cent. Cost overruns and delays mean that the government will get less money, and get it later.

PSA's and cost overruns also affect ExxonMobil's Sakhalin-1 project. Costs could increase there, from $12.8bn to $17bn. The Russian government reacted angrily and said that Exxon could be stripped of its license.

Total faces the withdrawal of its license for environmental reasons and failing to reach production levels set out in its PSA.

PSA's made sense for Russia in the mid-90's when the government was financially stretched and could not invest on its own account.

But it is unpopular in today's Kremlin, when the rising oil prices have filled government coffers. Also the fact that they are internationally enforceable make them humiliating for the government in that it does not have sovereignty over its assets.

Gazprom is in talks with ONGC, India to buys out its stake, which will give the company a stake in 2 key projects on the island. Gazprom is also keen to secure the stake of three owners in the TNK-BP venture.
There have been reports that exploration licenses for the Kovykta field could be withdrawn from BP.

It certainly seems clear that Gazprom and the government are strategically exerting pressure on foreign companies.

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Crude oil dipped to below $60 a barrel at $59.80 after Iranian President Ahmadinejad said that Iran is open to discussing "everything" if the US stops its threats against the country.

Crude oil for November delivery fell by 61 cents, or 1 percent, to $59.94 a barrel in after-hours electronic trading on the Nymex.

Hedge-fund managers and other large speculators cut their long positions, or bets prices will rise, by 39 percent in the week ended Sept. 19. Traders with long positions outnumbered short positions by 22,498 contracts on the Nymex.

BP's announcement that it expects to resume production of about 150,000 barrels a day from the eastern field in a week's time is also expected to have helped in the price drop.

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A day after Venezuelan President Chavez called President Bush "the devil" in a speech to the UN General Assembly, he visited a Harlem church and pledged to double the amount of discounted heating oil his country ships to poor Americans.
Chavez announced that Citgo, the US-based refining arm of Venezuela's state-run oil company, plans to increase the amount of heating oil it is making available under the relief program from 40 million gallons to 100 million.
He said the oil will reach people in 18 states, including American Indians in Alaska.

Chavez started the heating oil program last winter, accusing Bush of neglecting the poor.
He called Bush "an alcoholic and a sick man" to applause from the crowd which included activists and supporters at the Mount Baptist Olive Church.
Chavez said that the American people are friends of Venezuela and he hoped that they would awaken before long and elect a better president. He called Bush's policies in Iraq criminal.

The South American country receives billions of dollars from the US as its top buyer of Venezuelan oil, which fund many of Chavez's popular social programs.
Chavez repeated warnings that if the US government tries to oust him, Venezuela would halt oil sales to the US.

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BP and its minority partner, ExxonMobil in the Thunder Horse project in the Gulf of Mexico, are at odds over how to deal with increasing problems at the deepsea oil project.

The world's largest semi-submersile oil and gas platform, has been delayed yet again, this time targeting 2008 production.

According to a BP employee, the delay has been caused by problems including inferior welding on the project's distribution systems and other underwater equipment, as well as defects on the production, drilling and quarters platform.

He said BP is considering a temporary bypass system to get oil flowing in 2007 that will involve the completion of a workover riser, a connecting piece used to install equipment to complete the wells.
This temporary structure would be environmentally very risky from a spill standpoint and 25 percent partner ExxonMobil has pushed for waiting until the permanent structure can be properly repaired before production begins.

While ExxonMobil said that it cannot discuss any business it conducts with co-venturers, it can assure the public that any developments that they are part of will adhere to the "highest standards of safety, health and environmental conduct in design, construction and operation of facilities."

ExxonMobil and ConocoPhillips are also BP's partners in the Prudhoe Bay Field project. As the operator of Prudhoe Bay, and the majority owner in Thunderhorse, BP is the key decision maker on those projects and its partners are said to be suffering from the fallout of BP's decisions.

Analysts noted that the closure of the Alaskan field and the delay of the Thunder Horse project would affect the earnings of ExxonMobil.

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Speculation that BP will become a partner of Calgary-based EnCana Corp. has been stoked by BP PLC's announcement that it is making the largest investment to date in U.S. refining capacity to handle Canadian oil sands output. The company stated that it is in the final stages of planning a $3 billion upgrade of its Whiting refinery near Chicago.

The investment would increase the refinery's capacity to handle heavy crude from 85,000 barrels to 350,000 barrels a day.
BP is the only major oil giant without a stake in the Alberta oil sands.

EnCana Corp. hopes to produce 500,000 barrels of oil sands crude a day by 2015, and is close to deals to help process the output. A deal would probably include exchanging an interest in a refinery for a stake in oil sands production.
EnCana will announce a partner or partners by the end of this month.

BP said it is in talks to expand deals with current suppliers and has nearly completed agreements with other players.

The capacity to process additional oil sands is essential for the industry because of estimates that production from Alberta's Fort McMurray region could triple to three million barrels a day by 2015.

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Update

BP said Wednesday it will spend $3 billion to upgrade its Whiting, Ind., refinery to process more Canadian crude and benefit from increasing production from deposits buried in northern Alberta.

The largest gasoline market in the world hasn't seen a new refinery open in 29 years. Though the industry enjoyed record profits last year, it isn't likely to break that streak anytime soon.

Despite dramatically improved profit margins, most refiners still don't believe that the 5 percent a year return on investment is worth plunking down $2 billion to build a new facility.

New refinery construction has been stunted for years by poor economics, changing environmental rules and vociferous community opposition.
The years long struggle to obtain the necessary air and zoning permits is another factor stymieing the building of new facilities. Instead, refiners run their facilities full-tilt and resort to upgrading and expanding them.

Currently, the US has some 149 refineries processing nearly 17 million barrels of crude a day. This is less than the 1981 figure of 325 refineries handling 18.6 million barrels a day. With demands 20 percent higher today, much of the deficit is made up by imports and also with refiners adding capacity to their existing sites.

Connecticut-based Premcor Refining Group plans to spend up to $220 million to boost capacity at its Port Arthur refinery. San Antonio-based Valero Energy Corp. will add 36,500 barrels-per-day of capacity across its refineries, while Marathon Ashland Petroleum is expanding its Detroit refinery by about 26,000 barrels a day.

Good refining years tend to encourage major expansion projects.
Refining margins, the difference between the cost of a barrel of oil and the price of products made from it, hit $16 a barrel during the second quarter of last year and averaged $10.44 for all of 2004. This is a significant increase from the average margin of $6.45 between 1999 and 2003.

Despite the lucrative margins, experts believe that refiners are not expected to expand production capacity at the same rate as in previous years.
This might be because refiners have tackled the easier expansion projects and have been busy making changes to meet new lower-sulfur regulations.
Concerns over a shifting federal regulation known as New Source Review might also have stifled investments.

During the Clinton administration, an interpretation on the law required refiners to make environmental upgrades when performing what the industry deemed routine maintenance.
Under pressure from the industry, the Bush administration has backpedaled on that provision.

Over the next several years though, we can expect new facilities.
Phoenix-based Arizona Clean Fuels plans to build a $2.5 billion, technologically advanced refinery in southwest Arizona. The company hopes to negotiate an oil supply agreement with Mexico's national oil company, Pemex, which would ship crude to the Pacific Coast using an existing pipeline.
The crude would then be loaded aboard tankers and shipped up the West Coast. The investment group would then build a pipeline from the coast to the refinery.

Considering that the Arizona Clean Fuel partners have been trying to obtain the necessary air permits since 1999, many in the industry remain dubious.

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World oil prices dropped to further lows below $61 a barrel after data showed a surge in US stockpiles of distillates, used for heating oil and diesel fuel. The inventories of distillates have gone up by 4.1 million barrels to 148.7 million in the week to September 15.

With the end of the driving season, the market has switched its attention from gasoline to heating fuels.

New York's light sweet crude hit $60.60, while In London, Brent North Sea crude dropped to $60.74.

New York's main contract, light sweet crude for delivery in October fell by 71 cents to $60.95 per barrel in pit trading.

Brent North Sea crude for November delivery plunged $1.03 to $61.14 per barrel in electronic trading.

Crude oil prices have shed almost 23 per cent in value since striking historic highs above $78 in July and August.

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A rare rebellion by government investigators against their own agency, has 4 auditors who monitor leases for oil and gas on federal property say that the Interior Department clamped down on their efforts to recover more than $30 million in fraudulent underpayments of royalties for oil produced in publicly owned waters in the Gulf of Mexico.

Bobby L. Maxwell, who was formerly in charge of Gulf of Mexico auditing, said that these assets belong to the American public and "the agency has lost its sense of mission, which is to protect American taxpayers."

These lawsuits have surfaced as both Democrats and Republicans are questioning the Bush administration's willingness to challenge the oil and gas industry.
Two of the lawsuits claim that two senior auditors with the Minerals Management Service were ordered to drop their claim that Shell Oil had fraudulently shortchanged taxpayers out of $18 million.
Similar suits against Kerr-McGee Corporation and another 2 dozen companies were also suppressed.

Interior officials have denied these accusations, claiming that the auditors simply want a share of any money recovered through their lawsuits.
The department says that the auditors should have followed proper procedure if they believed that fraud was being committed by the companies they were auditing, instead of pursuing private lawsuits under which they could receive up to 30 percent of the monies recovered from the companies.

The auditors have sued the companies under the False Claims Act, that allows individuals to expose fraud against the government. A losing company is required to pay triple the amount of recovered money as well as back interest. In the cases brought by the auditors, this amounts to more than $120 million. People who successfully recover money for the government in such cases are entitled to a share.

While Shell said it had not seen the suits and could not comment, a spokesman from Kerr-McGee said that the case is without merit and the company is fighting it.

The lawsuits come at a time when the Interior Department is already under fire from Congress, accused of covering up ethical lapses and managerial incompetence.

Senator Ron Wyden, Democrat of Oregon, who has been investigating the accusations said, “If it was one isolated instance, you could say that’s somebody who had a bad experience and was frustrated,” Mr. Wyden said.

“But when you have three or four professional, nonpolitical, independent auditors all bringing the same message, that is too important to ignore.”

The Interior Department under President Bush has focused on increasing oil and gas production in the US. Lawyers who have specialized in lawsuits under the False Claims Act said they had never seen a group of government investigators use the law against their own agency and considering that it is 4 and not an isolated one, it forms a pattern of practice.

The agency’s own statistics indicate that revenue from auditing and enforcement plunged after President Bush took office.

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Reliance Industries from India announced that its natural gas reserves could yield as much as 50 trillion cubic feet and that it was bringing forward the start up of a new refinery it had planned by 6 months.
Additionally, Reliance's head of international operations Atul Chandra stated that one of its discoveries at a site he declined to identify could yield 1 billion barrels of oil.

Reliance made one of the world's largest gas finds at the Krishna Godavari basin, which were estimated to contain 35 tcf. Now with reserves and technical resources put together, it could exceed 50 tcf.

Chandra also said that Reliance will soon enter the coal business once the Indian government has liberalized the coal industry to allow private investment in production.
Reliance also hopes to enter Iraq "at the appropriate time" either on its own or with partners.

At a time when many international oil majors are struggling to keep projects on schedule due to a tight market for inputs and contractors, Reliance has preponed the start up date of its new Jamnagar refinery by 6 months to June 2008.
Chandra said it would be one of the most sophisticated in the world, with a complexity level of 14.4 as measured by the Nelson index, enabling it to process heavy crudes.

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Expectations of rising fuel stockpiles and long drawn out negotiations with Iran caused crude oil to trade near a 6 month low of $61.66 a barrel in New York.

A statement by President Bush that he will give European diplomacy a chance to resolve the dispute with Iran and reports that

US fuel stockpiles have extended their gains from the past month caused the biggest oil price fall in 4 months.

Crude oil fell by $2.14 to $61.66 a barrel, the lowest close since March 21 and the biggest one-day decline since May 15. In after-hours electronic trading on the Nymex, crude oil for October delivery went up by 13 cents.

Hedge funds may also be selling futures after seeing others lose money in the energy market and as the pace of the decline in oil has accelerated, analysts and traders said.

Gasoline for October delivery was at $1.5090 a gallon in after-hours trading, after falling 4.8 percent to $1.5038 yesterday, the lowest close since Feb. 22.
October heating oil was at $1.6980 a gallon, after falling 2 percent to $1.6916 yesterday, the lowest close since March 10.

The UN-Iran dispute looks like it will be a long drawn out affair.
The US seems to have moved over to the European position with French President Chirac proposing the suspension of plans for sanctions if Iran also suspends its enrichment during negotiations.
Bush said that the US would "come to the table" once Iran suspended enrichment and that there was "no objection" to Iran pursuing a truly peaceful nuclear program.

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Inflation and foreign exchange pressures have pushed up Exxon Mobil's expected spending on its Sakhalin oil project in Russia above the 2002 estimate of $12.8 billion.

Bob Davis, a spokesman from the company said that Exxon Mobil had seen higher oil field service costs, but that he was unable to quantify the spending amount on the Sakhalin-1 project.

He said that "the budget is essentially the same, but the $12.8 billion was in 2002 dollars."

The Sakhalin-1 started output in August and is expected to reach 250,000 barrels per day by the end of the year.
Moscow plans to auction off newly discovered deposits in the region, though Exxon Mobil says those properties are included in its existing contract. The government and the company are currently at odds over whether the oil giant will be allowed to enlarge the license territory of the Sakhalin-1 block to the nearby deposits.

Just weeks before its first shipments are set to begin, a regional environmental watchdog questioned the environmental and technical readiness of Exxon Mobil's export terminal on the Pacific Ocean.
The Russian Resources Ministry has also revoked environmental permits for Shell's Sakhalin-2 project.

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BP's Gulf of Mexico field which was originally scheduled to start production at the end of 2005 has hit new technical glitches which will push its start-up date to the middle of 2008.

This latest slippage in the Thunder Horse field will make it harder for BP to meet production growth targets in the coming years and also calls into question the company's skill at overseeing complex projects, especially when its management of Alaskan oilfield and pipelines in already under scrutiny.

BP announced that tests carried out had revealed metallurgical failure in components of the subsea system and that while the company plans to retrieve and rebuild all the subsea production equipment, it was too early to estimate the additional costs involved.

Thunder Horse's manifolds were manufactured by FMC Technologies, which also built the manifolds for the similarly sized Atlantis project.

The shut down of the Prudhoe Bay Field has severely affected BP's US output. The Alaskan problem and the fatal explosion at a BP Texas refinery last year have got regulators, lawmakers and law enforcement agencies investigating BP.

Thunder Horse, designed to process 250,000 barrels of oil  and 200 million standard cubic feet of gas per day has been repeatedly delayed.

It is expected to be the biggest producer in the Gulf of Mexico when it finally gets going. BP owns 75 percent of the project with ExxonMobil owning the balance.

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Government approval for Shell's $20 billion Sakhalin project was withdrawn and state-owned Gazprom was reported to be trying to buy half of the TNK-BP joint venture, giving impetus to doubts about the involvement of foreign companies in the Russia's oil and gas sector.

The reason for withdrawing environmental approval on the Sakhalin-2 project was supposedly to "satisfy the arguments of the prosecutor's office". The prosecutor generals office had allaged that the permission to develop the second phase of the

Sakhalin scheme had been granted illegally. Shell denied the charge and said it was continuing work on Sakhalin, but admitted that the removal of its environment permit might lead to more delays and further cost overruns.

Shell has faced lots of problems on the project with doubling costs and mounting anger from environmentalists over potential damage to the endangered whale population. In this situation state-owned Gazprom has been trying to purchase 25 percent stake in Sakhalin-2.

Some feel that Gazprom is acting as the political arm of Kremlin and the permit issue is the latest attack by the government in an attempt to wrest back control of oil and gas assets held in the private sector.
Local reports hint that ExxonMobil's Sakhlain 1 project could meet a similar fate.

Sakhalin-2 is one of 2 projects run by western energy firms under production sharing agreements signed in the 1990's when

Russia lacked the resources to develop oil and gas projects on its own. With the Russian economy now booming thanks to high oil prices, many government officials have called for a revision of the Sakhalin-2 deal to include Russian participation.

Similarly, Gazprom is said to be in talks to buy the holding in the TNK-BP joint venture that is currently controlled by three local Russian investors.

Russia has taken repeated steps in recent years to consolidate state control over the energy sector.

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The no-show of oil giants in the recent auction of oil prospecting licenses held in India has been attributed by Director-General of Hydrocarbons VK Sibal to the strength of the country.

The absence of the oil majors like Exxon, Chevron and ConocoPhillips has been attributed to the maturity of Indian companies which refused give in to demands for large share of the production from the blocks.

BP and BG from the UK, Total of France and ENI of Italy, and companies from Malaysia, Myanmar, Australia, Ukraine, and Cyprus took part in the auction.

Though the actual investment could be much larger, the latest auction of prospecting licenses is expected to lead to investment of $8-10 billion, in a worst-case scenario.

The next round of auction blocks are expected to be bigger in scale and the data acquisition process for the blocks has begun with marketing kicking off in December.

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Update

A record 165 bids were received for 52 blocks put up for exploration by the Indian government.

Global energy giants British Gas, British Petroleum, Italy's ENI and Malaysia's Petronas are among the 66 firms that have bid for exploration acreages.

However, super majors Chevron, ExxonMobil and Conoco Philips of the US, who were expected to partner Reliance Industries, did not participate at all.

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