Briefs - December 12, 2008

•          Iran faces the prospects of an 8 percent annual decline in production because of a lack of investment and old technology. Sanctions by western nations and a tight credit market because of the global financial crisis have crimped financing for Iranian projects while a 70% decline in crude oil prices since July cut investments. (12/10, #9)
•          Driving in America has undergone its most dramatic continuous decline in history.  Americans drove 100 billion fewer miles during the 12-month period between November 2007 and October 2008 compared with the prior year.  During October, Americans drove 3.5% less, or 8.9 billion fewer miles, compared with October 2007. Trips on mass transit were up 6.5% during the third quarter, the largest jump in 25 years. (12/13, #13)
•          Mexico’s crude exports are expected to drop steadily over the next 10 years, from 1.42 million b/d in 2008 to 875,000 b/d in 2017, for an average annual rate of decline of 5.3%, according to the Energy Ministry’s recent 10-year outlook. (12/11, #12) (Editor’s note: we suspect that Mexican exports could cease altogether by or even before 2017.)
•          Petrobras plans to spend at least $20 billion a year through 2012 to expand oil output, refining and other operations. The company intends to borrow about $4 billion a year on international markets to finance the investment program. (12/13, #7)
•          Brazilian oil workers are threatening a nationwide strike to protest the scheduled auction of oil and gas exploration blocks scheduled. The oil workers are demanding that Brazil’s government maintain control over all unlicensed oil and gas exploration blocks. (12/13, #8)
•          Falling oil prices and the credit crunch have ended the euphoria surrounding Brazilian state-controlled Petrobras. Much of the company’s profit has been used to pay royalties and taxes, as well as to compensate for the impact of a 40% fall in the exchange rate in the past two months. The current low price of crude oil will greatly reduce Petrobras’ profitability and its ability to finance spending from its own resources in the near future.  (12/13, #9)
•          Heating-oil dealers in the Northeastern US currently have more than $100 million in unpaid bills from residential and business customers after fuel prices rose to a record. (12/13, #16)
•          Alberta’s oil balloon continues to deflate after Canadian petroleum giants EnCana and Petro-Canada squeezed more than $3 billion from their 2009 capital spending plans, citing the need to stay flexible. The capital deferrals are in effect a wait-and-see strategy at a time of unprecedented volatility in the price of oil. (12/13, #17)
•          The Canadian Association of Petroleum Producers now expects the country’s total oil production to near 3.6 million b/d in 2015, down around 300,000 barrels a day from the forecast made in June.  Analysts say most new developments need crude prices above $80 a barrel to make a decent return. (12/12, #15)
•          Total, Europe’s third-largest oil company, said crude oil prices need to be about twice current levels for investment in Canadian oil sands projects to be profitable. (12/11, #19)
•          Gazprom has offered Ukraine a compromise deal on its outstanding gas supply debts. Gazprom says Ukraine’s Naftogaz state gas company owes it $2.4 billion and Russian officials have warned of steep price rises or cuts in supplies if the outstanding debt is not cleared. (12/13, #19)
•          Russia’s energy ministry believes that the country’s oil production will stabilize at 10.7 million barrel/day by 2020, after which it will start falling. The country’s oil production is projected to reach 10 million b/d in 2010, 10.6 million b/d in 2015, 10.7 million b/d in between 2020 and 2025, and to decline to 10.6 million b/d in 2030. (12/8, #17)
•          Russia became the first G8 country since the start of the financial crisis to have its credit rating downgraded after Standard and Poor’s noted the recent exodus from the ruble and sharp drop in oil prices. (12/9, #16)
•          Goldman Sachs, which earlier this year had predicted $200 per barrel oil, virtually halved its 2009 price forecast to $45 and said the price could fall to $30 in the short term.
•          The Deutsche Bank economics team expects global gross domestic product growth to be nearly zero in 2009 and 2.6% in 2010. The bank expects the current economic downturn to be the worst in 50 years, and forecasts that oil will average $47.50 a barrel during 2009, $55 during 2010 and $80 during 2011. (12/12, #5)
•          China’s top oil firms may have to scale back investment if crude oil prices do not recover from their current doldrums, according to the president of the Chinese Petroleum Society. (12/12, #10)
•          California has set detailed goals to cut greenhouse gases and address global warming but faces criticism that the new plan’s economic assumptions are hopelessly optimistic. (12/12, #12)
•          ExxonMobil’s CEO Tillerson confirmed the largest US oil company is planning to invest around $125 billion in capital projects over the next five years, the same amount it has previously announced. (12/12, #14)
•          In Nigeria the power situation today is the worst in the country’s history. In an average home, the maximum time of uninterrupted supply is often two to three hours a day. (12/11, #11)
•          The 13 OPEC members pumped an average 31.38 million barrels per day of crude oil in November, according to a Platt’s survey of OPEC and oil industry officials just released. This is a decline of 880,000 from the October level of 32.26 million b/d. (12/10, #4)
•          Oil would have to sell for between $55 and $65 per barrel for developers to produce transportation fuels derived from coal, according to a Rand report. (12/10, #17)
•          Natural gas futures in New York fell to a 15-month low after Dow, the largest U.S. chemical maker, said it plans to shut plants and cut jobs because of declining sales. (12/9, #3)
•          A study commissioned by the American Petroleum Institute concluded that developing offshore areas covered by congressional moratoriums until recently, along with resources in the Arctic National Wildlife Refuge and a small portion of currently unavailable land in the Rocky Mountains, could increase US crude oil production by as much as 2 million b/d by 2030, offsetting nearly a fifth of the nation’s crude imports. (12/9, #12)
•          Oil producer and refiner Hess Corp said on Monday it would cut 2009 capital spending by more than 27 percent from 2008 levels to protect its financial health during the economic slump. (12/9, #13)