Oil Rigs – Booming Oil Business

January 2nd, 2008 at 07:09am Under Oil Drilling+ Oil Rig+ Oil and gas+ Oil business+ Oil company+ Oil fields

Oil explorers expect to aim more for deepwater rigs this year as shortages caused crude oil prices to triple in the world’s second-biggest market for the oil rigs. This is the tightest oil rig market not seen in a lot of years. Stated by an U.N. Executive at Oil & Natural Gas, who has spent 31 years in oil exploration.

A boom in exploration in India,the fourth-biggest Asian economy, has tripled oil rig usage over the past four years, adding to a global shortage and causing delays in tapping natural gas off the Indian east coast. Transocean, the world’s largest offshore drilling company, may raise oil rig prices further after India completes the biggest auction of offshore blocks this month.

“Most of the oil rigs in Asia are from India”, said Tony Regan, a consultant in Singapore at Nexant, a U.S.chemicals, oil and gas consultant. “The demand for oil rigs will continue in response to the new exploration rounds”. India intends to offer 55 exploration areas this month and announces a new round for more rigs in March especially to serve the hydrocarbons plants in India.

Oil explorers have drilled less than half of the 218 wells agreed under exploration licenses awarded by the government since 2000, underscoring the need for more rigs. The area covered by the licenses is the size of Texas USA. India is deploying 31 floating rigs, some able to drill holes as deep as 9,100 meters, or 30,000 feet and to 85 rigs for the United States as of November. The Asia- Pacific region accounts for 108, or 31 percent of the world’s offshore oil rigs. Explorers worldwide were using 92 percent of the offshore oil rigs deployed. The rig utilization rate in South Asia was 97.6 percent. Oil Rig rents have tripled since 2005 for new oil rig contracts stretching up to 2012 as explorers seek to decrease the delay between discovery and development and refinery to take advantage of current high oil prices.  

Daily Oil Rig Costs

An offshore rig cost an average of $137,509 a day in December, compared with a worldwide average of $99,382 in January 2006. The number of rigs earning at least $300,000 a day in 2006 rose to 29. Offshore jack-up rig hiring rates have risen to as much as $200,000 a day from $40,000 a day in 2002-3. Reliance is paying $320,000 a day until August 2008 to rent the Deepwater Frontier rig, more than twice what the rig’s owner, Transocean, charged an earlier client, according to Transocean. The rent is set to rise to $477,000 a day, if Reliance extends the contract in 2008 for another three years. The increase in rig rentals has doubled the costs and delayed development at Reliance’s biggest gas discovery in the Krishna Godavari Basin. Two of Transocean’s rigs will arrive late. 

Transocean, whose oil rig helped make the first Indian offshore discovery in 1974 at Mumbai High, has increased its work force in India to about 1,700 on 10 rigs, or 15 percent of the global total, from 25 workers in 2001. The company, based in Houston, plans to add three oil rigs in India the upcoming year. Transocean, the world’s largest offshore drilling contractor with 82 units, made $296 million, or 10.2 percent, of total sales from India, according to its 2005 annual report. Revenue from India more than doubled since 2003, the fastest among Transocean’s main markets. Shares of Transocean climbed 16.07 percent last year compared with a 13.61 percent increase in the Standard and Poor’s 500 Index. Transocean shares closed at $80.89 Friday, trading at a multiple of 38 times. 

Oil Companies in India are entering the rig business because of the scramble for oil rigs worldwide, fueled by a boom in offshore exploration in the Gulf of Mexico and off China, West Africa and Brazil.

By Oilism.com 1 comment

World’s Next Top Oil Company

January 1st, 2008 at 03:29pm Under Middle East+ Oil+ Oil company+ Oil industry

As you may know, oil & energy companies are becoming some of the richest companies in the world, even toping larger companies like Microsoft and Apple. Just last year, ExxonMobile, America’s largest oil company, toped at 195 billion dollars. Second in the US ranking was the ChevronTexaco with over 130 billion dollars, but spent over 6 billion that same year.

The absolute top oil company of the world is Saudi Aramco which is a state owned national oil company for Saudi Arabia which is headquartered in Dhahran. Saudi Aramco owns and operates within the world’s largest hydrocarbon network.

Coming up to the second in row of Worlds Largest Oil Companies is Petroleos Mexicanos (or PEMEX), which distributed just over 1270 million barrels of crude oil in 1998. PEMEX is the stat-owned, nationalized petroleum company for Mexico, and is located in Mexico City. PEMEX made over 98 billion dollars in 2006 and employees over 138,000 people.

Even more interesting is number 5 for world distribution which is a company called Petroleos de Venezuela, which is located in Caracas, Venezuela, and distributed over 1200 million barrels in 2006. This oil company is 100% ownership of Hugo Chavez and toped its revenue at over 100 billion dollars in 2006, and is expected to release even more profit when the yearly figures for 2007 come in. This company was founded in 1975, and ever since has had record amounts for producing and refining crude oil, revenue income, and company popularity – imago.

Energy Intelligence produces every year the complete Top 50 of Oil companies worldwide. The past annual reports are available on the EI website but for the race of World’s Next Top Oil Company the following key findings are already published;

• Saudi Aramco holds on the poll position for 2008 and leaves the oil competition way behind.  Their ongoing investment in both downstream as upstream oil and gas producing/refining is paying them out in the first place of the Top 50 2007 Oil Companies.
• ConocoPhillips makes top ten debut; Mexico’s Pemex drops out of the top ten
• For the first time in years, Iran’s NIOC enters the top 10, helped by the ascent of ConocoPhillips and its acquisition of Burlington Resources, which moved it ahead of Chevron and Total.
• Russia’s Novatek enters the Top 50 on position 49. These rankings are based on rapid increases in both their oil and gas supplies and oil output. Japanese Inpex benefits from its merger with Teikoku Oil.

By Oilism.com 4 comments

China wins crude oil in Iran

December 15th, 2007 at 03:20pm Under China Oil+ Middle East+ Oil and gas+ Oil company+ Oil fields

The Iranian minister of oil Gholam Hossein Nozari told the press during a press conference a contract had been closed with the Chinese Oil company Sinopec for the development of the Iranian oil field Yadavaran.

The Chinese oil company Sinopec invests over two billion dollar for the development of the Iranian oil field Yadavaran. 

China is already consumer of Iranian crude oil and gas. It is however for the first time that a Chinese joint venture will develop an Iranian oil field. The signatures placed on the contracts is a sign that China is not really impressed by the American, European and Israeli attempts to isolate Iran and all tensions that comes with it.

Fact is that the contract, about which was negotiated for a long time,  was signed immediately after the American information services have came with its conclusion that Iran in 2003, stopped with the development of nuclear energy. Adoptive must become that the managers of Sinopec do not expect that the sanctions will further be tightened up against Iran within a short period of time. Peking has already made clear to be against any kind of sanctions against Iran.

11% of Chinese crude oil import comes from Iran and that will increase during the duration of this contract. According to last estimates the Yadaravan field contains 3.2 billion barrels of crude oil or black gold! The intention is that Sinopec will eventual pump up 185,000 barrels per day from these oil sources. A month earlier

Chinese oil ministers already visited the Iranian president Ahmedinejad and talked about more coorperation between China and Iran in the field crude oil refinery and general energy winning. It not only about crude oil but also concerns a new gas contract.

By Oilism.com Add comment

Peaking Oil Price

November 3rd, 2007 at 03:58pm Under Middle East+ Oil+ Oil company+ peak oil

In the United States the US weekly oil estimates on supply have unexpectedly decreased. This report came out on Wednesday which the American ministry of energy released. The weekly crude oil supplies, 5.288 million barrels, increased with 316.577 million barrels while analysts assumed an increase with 963,000 barrels.
The petrol supply is set to 1.931 million barrels up with193.937 million barrels. Analysts had expected here an increase with 475,000 barrels. The supplies on fuel and diesel decreased with 1.847 million barrels up to 134.471 million. Analysts expected here an increase with 250,000 barrels. So overall a negative sentiment which will not be over yet I fear.

Record again!

The price of a barrel crude oil breaks record after record these last weeks. On the future market in New York the oil hovered to 96 dollars 24 a barrel. That is the highest level ever in history. Finally a price of 100 dollars a barrel comes in sight and many investors will be very pleased, a couple of months we started this race from 53 dollar a barrel. Time flies when having fun

Dollar drop vs Oil peak

An important reason for the enormous increase on crude oil is the fact that the US dollar drops day after day. Because oil is settled up in dollars non US countries like Europe can buy a lot cheaper oil nowadays. Maybe it wasn’t a bad idea after all of the oil producing countries (OPEC) to value oil based on a currency like the Euro. This idea came up last summer during the oil price dip of 2007. Now the OPEC gets in fact less money for the same barrel, thank you weak dollar, thank your Mr. Bush

According to Shell the crude oil price is forced up by speculations. The record price for a barrel of the previous weeks is partly increased on speculation and political tensions and not by a poor supply.

Political bonus

These words where said by the CFO of Shell, Peter Voser, in an explanation on the third quarter figures of his company. According to him the prices seem be floated by speculation. He added to that there is a political bonus presented in the current oil price. The price for a barrel Brent crude oil (North Sea oil) reached Thursday a record of 86.28 dollar, peaked by the tensions between Turkey and Kurdish militants.

OPEC covers Shell’s back
Shell doesn’t stands on its own regarding its opinion on the recent peaking of the oil price. Also the OPEC stated that a large part of the increase of the crude oil price in the previous months has been caused by market speculation. According to the OPEC there is no lack on the supply side and the market is very well foreseen. According to the OPEC beside speculation, problems with refining, continuing geopolitical problems in the Middle East and fluctuations of the American US dollar plays a big role. But also Mexico is a source of care for the price of crude oil. In Mexico 20% of the production have been cut because there is a storm heading. Furthermore the incurring tensions in the Middle East are doing no good to the price of black gold. The United States will impose sanctions against Iran and Turkish troops have arrived at the border of Iraq for a possible attack on Kurdish militants. The OPEC forecasts higher prices if the tensions will keep on front the upcoming weeks.

By Oilism.com 2 comments