Briefs - December 8, 2008

•          Rental rates for deepwater drilling rigs continue to surge as a worldwide shortage of vessels used to search for oil outweighs the drop in crude prices. Lack of financing is preventing smaller companies from following through with plans to build new vessels. (12/6, #4)
•          The world’s biggest shipyards will record the lowest LNG tanker orders in a decade as charter rates halve. Banks which lent 90 percent of the cost of a ship are now funding less than half. Most LNG carriers are chartered at $60,000 to $70,000 a day on a term basis for between 15 years and 25 years (12/6, #6)
•          Industrial companies are sharply cutting back their natural gas consumption as the economic slowdown erodes demand for their products. Between April and September, gas consumption by industrial users dropped 14% to the lowest monthly figure since at least 2001.(12/6, #14)
•          Crude oil may dip below $25 a barrel next year if the recession that’s slashing fuel demand around the world spreads to China, Merrill Lynch & Co. said.  (12/5, #2)
•          Japan’s Nippon Oil Exploration is in talks with Iraq on the construction of an oil refinery worth $5-10 billion and investment in oil exploration for the same amount, a company official said on Friday. (12/5, #9)
•          China National Petroleum Corp has signed a framework agreement with Cuba’s state-owned Cubapetroleo for expanded cooperation in oil and gas development.  (12/5, #11)
•          Prime Minister Putin warned that Russia will reduce gas supplies to Ukraine if it tries to siphon Russian gas intended for European consumers. The warning, which comes amid difficult talks on a price for Russian gas supplies to Ukraine, will likely stoke fears in European nations. (12/5, #18)
•          In the oil and gas industry, there is a broadly used parameter that expresses the “dryness/leanness” or “richness/wetness” of natural gas. This parameter is expected to change to dryness/leanness over time, based on an extensive analysis of the world data. The IEA WEO 2008 forecast to 2030 implies the opposite result–namely that the shift will be toward richness/wetness. Doubts about their forecast increase. (12/5, #19)
•          AFS Trinity’s problem is their Extreme Hybrid^TM drive system seems just too good to be true.  The skeptics are wrong — AFS Trinity has created a technology that could, if commercialized, make 150 mpg driving an everyday reality.” (12/5, #21)
•          The US Minerals Management Service reported that 14.9% of Gulf of Mexico crude oil, or 193,910 barrels a day, still remained shut in last week after hurricanes Ike and Gustav. Some 21% of Gulf natural gas output also remained off line. (12/4, #11)
•          Natural-gas producers must shut down more drilling rigs to stem a decline in prices XTO Energy CEO Keith Hutton said. There were 1,443 rigs drilling for gas as of Nov. 28, a drop of 10 percent from 1,606 on Sept. 12. (12/4, #12)
•          The IEA’s WEO 2008 report points out that biofuels will not scale up to produce more than a small fraction of our fuel demand, and even then with potentially serious consequences. (12/4, #17)
•          Iraqi oil exports could fall by as much as 13% next year amid maintenance problems and labor shortages. The Iraqi government has already been forced to slash its 2009 budget by 16 percent from an original plan of $80 billion because of the collapse in crude prices since July. (12/3, #4)
•          Mexico’s options for avoiding a dramatic decline in oil output are narrowing to a multibillion dollar gamble on the Chicontepec basin, where producing crude is so difficult it has been largely ignored since its discovery in the 1920s. (12/3, #8)
•          Refiners in Japan, the world’s third-largest oil consumer, are cutting processing in December and probably in January to cope with bigger declines in fuel demand at home and abroad.  Nippon Oil plans to cut processing this month by 18 percent from a year ago after slashing the run rate by 25 percent in November. (12/3, #10)
•          Royal Dutch Shell has drilled the deepest production oil well ever, at its Silvertip field in the Gulf of Mexico.  The well has been drilled 9,356 feet below the surface, The Silvertip well will connect to Shell’s Perdido platform, which, moored in 8,000 feet of water, is itself the deepest of its kind. Perdido will be capable of processing 130,000 barrels of oil equivalent a day. (12/3, #15)
•          Energy companies harvesting oil from the Canadian tar sands may wipe out 6 million to 166 million warblers, sparrows and other birds during the next half century as strip mines, waste ponds and air pollution damage nesting grounds. (12/3, #18)
•          Most US oil and gas exploration companies expect the economic crisis to affect their ability to borrow money in 2009, according to a study by BDO Seidman LLP. (12/2, #3)
•          Gasoline and diesel stockpiles belonging to China’s two oil giants, Sinopec Group and CNPC, hit record highs in October. (12/2, #6)
•          Three months ago, China and India were said to be immune from the credit crisis gripping developed nations. More recently, their economic booms were supposed to stabilize global growth. Now, both countries are suddenly looking inward and fretting over the destabilizing effects of sluggish growth.  (12/3, #9)
•          In China, fast-rising unemployment has led to an unusual series of strikes and protests. Normally cautious government officials have offered quick concessions and talk openly of their worries about social unrest. Laid-off factory workers in Dongguan overturned patrol cars and clashed with police last Tuesday. (12/2, #5)
•          The U.S. Energy Department will resume filling the nation’s Strategic Petroleum Reserve next month, once Congressional restrictions expire. (12/2, #11)
•          The cost of asphalt is more than double what it was a year ago and almost four times the price in 2000. When oil prices shot up, refineries installed new equipment to increase fuel output from crude. The consequence for the asphalt industry was that less of the by-product it needs is available. (12/2, #12)
•          China National Petroleum Corp. has made six major oil and gas discoveries this year as the organization steps up efforts to meet rising domestic demand for energy.  The additional oil reserves found may hit a record for a third year. (12/1, #10)
•          When energy production is viewed for all companies combined, analysis suggests the credit crisis will cause the production of virtually all fuels to decline, relative to what they otherwise would have been. Production of oil should also decline (in absolute terms, not just relative terms) in the years ahead. (12/1, #16)