ALBERT

Description: The poorly explored and mostly undeveloped gas resources of the Russian Far East (RFE) are large enough to support several large-scale projects, with an aggregate exportable surplus of up to 30 bcm of natural gas a year. However, owing to the uncertainties of the regional and national investment climate, new development projects, which heavily rely upon invited foreign participation, are likely to be delayed and will hardly yield, by the year 2000, more than 10 bcm of Russian gas for export. Nevertheless, in the foreseeable future the region will surely emerge as an important player in the Asia-Pacific energy market and, consequently, in this area's geopolitical arena as well.

Description: World energy supplies to the year 2010 are reviewed. At energy and oil prices not significantly different from $18 per barrel oil in 1992 money terms, there are alternatives to the Middle East becoming the core supplier of oil.

Description: An integration of map based and geological/geochemical modelling methodologies has enabled us to image the burial, subsidence, thermal and organic maturation histories of an area which, given its present and past structural geometry, drains into the Hibernia Oil Field. Our models indicate that the deeper parts of the Hibernia Drainage Area (HDA) contributed significant volumes of hydrocarbons, as early as 80–100 Ma, to the Hibernia structural culmination. The shallower portion of the HDA, such as the area vertically below pooled petroleum at Hibernia, has only been contributing hydrocarbons during the last 30–40 Ma. Translation of the modelled maturation history into volumetric estimates of generated, expelled and migrated oil within the area is accomplished assuming a 20% saturation threshold prior to hydrocarbon flow from the source to the reservoir/carrier system. Secondary Migration loss is estimated through assuming a reservoir/carrier-wide residual saturation of 2%. Our volume estimates suggest that the defined HDA was unable to provide sufficient charge volumes to fill the Hibernia structure and that additional charge must have been available from a drainage area to the north across the Nautilus fault. Extrapolation of HDA volumes throughout specifically defined play areas and the broader Jeanne d'Arc Basin suggests that, after accounting for secondary migration loss and assuming 30% recovery efficiency, some 2,015 106m3 (12,650 Mmbbls) of oil remains to be discovered. Our models do not account for losses due to biodegradation processes. Although this is not thought to be significant within the HDA, it will reduce basin-wide resources estimates and requires further study.

Description: Northeastern B.C. has several trillion cubic feet of established gas reserve and estimates of ultimate potential are as high as 50 tcf. Westcoast's current deliverability of 1.9 bcf/d is expected to rise by 30% over the next five years. Through-put on Westcoast's pipeline system reached 0.5 bcf/d in 1992. The new role of natural gas in the energy mix will lead to greater consumption such as in gas-fired cogeneration. The price will be “right” when supply and demand are evenly balanced.

Description: The European Bank for Reconstruction and Development was established in 1991 and is owned by the western industrialized countries, including Canada, and the former communist countries of Europe and Central Asia. Its purpose is to assist the latter countries to make the transition from command to market economies in a democratic framework. The Bank, with an initial capital of approximately US$1.2 billion, directs 60 per cent of its resources towards private enterprises and state-owned enterprises which are being privatized. The remainder of the EBRD's lending is directed to governments for infrastructure development. The EBRD's lending, now at US$1.5 to 2 billion a year, is small in relation to the investment needs of its countries of operation. As a result, the Bank tries to maximize its leverage by limiting its share in total project financing to 35 per cent and encouraging co-financing by other lenders and investors. Through its lending it tries to create a demonstration effect and to encourage institutional reforms which increase private investment flows. In the energy sector, most of the EBRD's lending has been in the oil and gas sector in Russia, but it is open for business in other sectors and in all countries of operation. Unlike other development banks, the EBRD is prepared to finance nuclear power projects, especially for improving the safety and extending the operating life of nuclear power stations built before the fall of communism. In this connection, it operates a Nuclear Safety Account established by the G-7 countries after the 1992 Munich Summit. The Bank also is prepared to finance conventional power plants where these would permit the closure of obsolete or unsafe nuclear plants. In the oil and gas sector, most of the EBRD's lending has related to private sector, joint venture projects in Russia, aimed at oilfield rehabilitation and development. Three of the eight projects done so far have involved Canadian firms, reflecting their expertise in secondary and tertiary recovery, and cold weather operations. The private sector ventures supported by the Bank normally involve joint stock companies owned 50 per cent by western partners and 50 per cent by Russian state oil companies, which are being privatized or are operating according to private sector principles. The joint stock companies make up the difference between the EBRD's financing and total project cost through equity contributions in cash and kind, and through debt financing. The EBRD adds value not simply through its own financing. Its involvement in a project promotes co-financing by other investors. Its influence on behalf of foreign and local investors can help overcome administrative and regulatory difficulties affecting projects. Furthermore, the EBRD can give potential clients the benefit of its accumulated knowledge on how to structure the deal to meet host country priorities and regulations and to benefit from the greatest possible financing from the EBRD and from other lenders and investors.

Description: The discovery of oil in the Hibernia region in 1979, and subsequently at the Ben Nevis, Terra Nova, Whiterose and Hebron locations has heightened the demand for information on surficial and subsurface sediments for northeastern Grand Bank. Both gravity-based production facilities and subsea installations require a detailed understanding of the seabed foundation zone and any variations in sedimentary and physical properties of near-surface seabed materials which may affect seabed strength and stability. High resolution single-channel airgun (0.16 l) seismic reflection profiles and information from industry and government boreholes show the near-surface stratigraphy to be dominated by a sequence of shallow, seaward-dipping, parallel reflections which are interpreted to have resulted from progradation and aggradation on the continental shelf. At least locally at the Hibernia site, the upper parallel reflection sequence has complex, internal lenticular reflections and dense interbedded sands, silty-clayey sands and minor gravel and cobbles. Zones of clinoform reflections are interbedded within the sequence. The largest overlies the Hibernia oilfield and is composed of medium to coarse sand with silt and clay interbeds. It is interpreted as a shallow marine progradational sequence, which may have resulted from meltwater deposition of glacially-eroded sediment. Sediment composition and stability within the progradational sequence varies locally and regionally. A regional unconformity near the seabed truncates the progradational and the parallel reflection units and underlies thin surficial sands and gravels that are periodically transported and reworked by bottom currents and scouring icebergs. Four (4) potential seabed constraints to offshore development are described: 1) nearfield sediment transport around seabed installations, 2) liquefaction of seabed foundation sediments as a result of seismic loading, 3) seafloor iceberg scouring, and 4) site-specific and regional geological variability of foundation sediments and their physical properties. Constraints 1–3 can be addressed with appropriate design and proper siting, while 4) needs to be recognized and quantified as seabed strength and composition will vary and therefore impact design and installation of facilities such as wellheads, flowlines and pipelines.

Description: With international refining industries facing a number of challenges in the near future, it seems clear that those who survive will be ones with the ability to turn serious problems into real opportunities. In the U.S. refining industry, challenges such as slow growth in product demand, increasing reliance on imported raw materials, and continued exposure to offshore exporting refineries will have critical effects on the ability of the industry to capitalize on available opportunities. Other challenges include the ability to tolerate continued declines in crude oil quality and the serious monetary questions related to compliance with environmental legislation, including air, soil, and water clean-up. This paper presents the challenges which the U.S. refining industry faces over the coming years, and seeks to address those issues which will impact the success or failure of the industry as a whole. The paper begins with a focus on the demand for U.S. petroleum products, encompassing brief historical data and forecasts of demand for the next few years. Closely related to demand is the subject of U.S. refinery operations, including product import and yield patterns. In this vein, the paper offers forecasts of crude runs to stills, as well as forecasts of capacity changes. Because profitability of U.S. refineries is affected by raw material costs, the paper next probes the possibilities resulting from world crude oil price fluctuations, considering the reemergence of Iraq as a market player. Forecasts of profit margins for U.S. refiners in 1998 are also offered. Turning to crude oil supplies and qualities, the paper examines the downward trend of U.S. crude oil production, providing a forecast of the decline by 1998. An associated trend, that of U.S. crude oil imports, is also evaluated, with a discussion of the origins of these imports included. The paper then presents a brief discussion of the principal recipient of Canadian crude oil exports, the U.S. Midwest (PADD II), encompassing statistics for refinery runs and deliveries of crudes. Volumes of Canadian crude exported to the region are also presented, as well as crude oil qualities in the region. Finally, heavy crude oil prices are examined because of the degradation of average crude oil qualities consumed by U.S. refiners. Spreads between light and heavy crudes are contemplated, with a forecast for the current-dollar WTI/Maya price spread provided.

Description: The OPEC cartel failed to keep prices above the competitive level because, among other reasons their market sharing mechanism failed. Their best future seems to indicate a trade-off-by relinquishing some market share for a higher price. Slow demand growth and expansion of the natural gas market should restrict OPEC sales. Non-OPEC is likely to expand but the price will be under downward pressures.

Description: A country review shows that Argentina has been the first Latin American country to respond pragmatically to financial pressure. Peru appears prepared to take a similar radical approach. Brazil, Mexico and to a letter extent Venezuela, still protect a monopolistic state-owned oil industry which is a deterrent to foreign investment.

Description: The development of the Hibernia offshore oil and gas field is one of the largest ventures undertaken by the oil industry in Canada. It is also the first field to be developed on Canada's Grand Banks. Located in waters adjacent to the east coast of Canada's least developed, its discovery led to hope of prosperity for Newfoundland. The project offers the prospects of employment royalties and development of other offshore fields. With these prospects in mind, federal and provincial governments have provided substantial inducements to a consortium of oil companies to ensure that it would develop the field. This paper reviews Hibernia's controversial past and assesses the extent to which it may serve as a catalyst for economic recovery in Newfoundland.

Description: The natural gas futures market is fundamental to the current natural gas market both as means of price discovery and for price hedging. Thus, the informational efficiency of the futures market is an important issue. In this article we re-examine the informational efficiency of the natural gas futures market. In this re-examination several cash price series are considered. It is found that the natural gas futures market is informationally efficient for only one of the cash markets. The characteristics of the current natural gas market that might explain the estimated results are also discussed.

Description: Romanian natural gas production and use, starting in 1912 reached 35 BCM/year in the mid eighties and by 1990 was supplemented by imports of 40 BCM/year from the Soviet Union. ROMGAZ is responsible for most aspects of the Romanian gas industry (exploration, production and distribution). Restructuring and modernization of the industry, with help from the World Bank and USAID, is taking place and growing foreign participation is planned.

Description: Since its revitalization in 1968 the Western Canadian bituminous coal industry has operated almost exclusively in export markets. As a result, coal sales have been subject to external demand and pricing forces beyond the control of Canadian companies and governments. The recession that affected all industrialized nations in the early 1980s compounded by the world oil price collapse of 1986 initiated a period of low coal prices, intensified competition among producers and oversupply of internationally traded coal. The attritional effects of this adverse marketing regime became serious for Western Canadian metallurgical coal producers after 1989 and reached crisis proportions in 1992. Major coal industry restructuring involving corporate consolidation and substantial write-downs of financial assets quickly followed. Four companies emerged from the restructuring process with 90–95% of potentially reduced regional production capacity and appear to be in reasonably solid positions to compete viably under current marketing conditions. The next major crunch for the industry looms in 1998 when initial 15 year contracts come up for renewal at several mines and serious concerns arise over their ability to operate economically beyond then.

Description: Estimates have been made by ten different groups of different categories contributing to potential gas resources for the USA. The estimates are evaluated using probabilistic methods to determine both the most likely values of potential reserves (or resources) in a given category, and also to assess the range of uncertainty of each category, i.e. the volatility of each estimate. In the case of conventional existing gas fields, where the most copious and most accurate data are available from which an estimate can be constructed, the range of uncertainty is about 40%. In the cases of all other more speculative resource categories the range of uncertainty is at least 75% and as high as 160% for shale gas. Estimates of the total Lower 40 States reserves are uncertain by about 80% and for the total 50 United States by 70%. A total reserve estimate, risk-weighted inversely with the volatility of each category, would suggest a likely discoverable gas reserve of greater than 110 Tcf (90% chance), less than 260 Tcf (90% change, and probably (2/3 chance) less than about 190 Tcf. It is also 5 times as likely that the majority of this discoverable gas will be in existing and discoverable fields in the Lower 48 States together with tight sands, as compared to anywhere else in the nation or in any other category.

Description: UK oil petroleum exploration and production policy is becoming more transparent and relying more and more on market forces. This article is based on the UK Government's detailed directions to petroleum exploration and production companies, together with the existing regulatory powers, prefaced by a recent statement by the UK Minister for Energy.

Description: Different age-scales are used to identify ages of several particular horizons. In general the ages recorded vary from age-scale to age-scale. A cumulative probabilistic procedure is given to illustrate how to use the differences in recorded behaviour in order to provide a most likely estimate of horizon ages based on the different age-scale data available. In this way the need to devise better measurement controls on particular horizons is brought more sharply into focus; as are those horizons which are sufficiently well-determined that they act as templates against which probabilistic assessments of more ill-controlled horizons can be gauged for resolution and precision.

Description: A recent report by the European Bank for Reconstruction and Development (EBRD) has forecast a continuation of the high inflation rates in the FSU.

Description: Experience has shown that country risks are not only reasonably predictable but that risks have remained stable despite the turbulence of the times. Country risk, the additional dangers to business in other than the domestic economy, include credit and market risk. Comparison of three regions and individual country ranking rates China highest followed by Venezuela with Russia last.

Description: The passing of the threat of global conflict has been replaced by a world characterised by civil disorder and war in a number of countries which has implications for those engaged in the global energy business. Geopolitical considerations can be expected to be dominated by economic considerations and the slow recovery of the OECD nations from recession. Russian politics are driven by domestic constraints. Their continued decline in the oil industry is not likely to be reversed without massive investment.

Description: Cautious optimism about the deliverability of Alberta natural gas during the 1993/1994 heating season is justified. There are not likely to be the shortages of the previous winter. These predictions are based on favourable reserve and production figures together with an increase in drilling activity. There are also more disciplined contracting practices and a positive outlook for available pipeline capacity.

Description: The CIS oilpatch is experiencing decline and disarray. Underlying problems which contribute to this downturn cannot be solved without massive investment, which is unlikely in the near term. However, the CIS still offers opportunity for prudent, long-term Western investment. KomiArticOil, a joint venture between Gulf Canada, British Gas and local Russian energy associations, has operated in the Komi Republic since December 1991.

Description: Petroleos de Venezuela, S.A. (PDVSA) is an international energy corporation wholly owned by the Republic of Venezuela, whose principal areas of activity are petroleum, bitumen, natural gas, coal and petrochemicals. The steady expansion of PDVSA's NATURAL GAS INFRASTRUCTURE IN Venezuela and the strong performance of its subsidiaries, has contributed to increase its operational and marketing flexibility, thus allowing it to evolve from a simple exporter of crude oil and refined products to an important supplier of Natural Gas Liquids (NGL) to the world's major energy markets. In this respect Corpoven one of PDVSA's affiliated Companies has made considerable progress with the expansion of its Eastern Venezuela Cryogenic Complex. In 1994 it will produce an incremental volume of 45 thousand barrels per day of natural gas liquids from gas pipe in from northern Monagas region. Also, it has programmed the installation of two other Criogenic Plants in the next ten years, and as a result NGL exports are expected to increase from 175 thousand barrels day in 1994 to 232 thousand barrels day in 1998. Plans are also well underway for Venezuela to become a major exporter of LNG towards the turn of the century. More specifically, at the end of 1992, another PDVSA subsidiary, Lagoven, reached an agreement with Exxon, Shall and Mitsubishi to develop the Cristobal Colon LNG project, which calls for the exploitation of vast reserves of natural gas located in the Gulf of Paria, in northeastern Venezuela. The projected LNG production is in the order of 6 million tons per year.

Description: The next OPEC meeting will occur on the 20th anniversary of the first oil shock. While the 1993 meeting is unlikely to be as dramatic as the 1973 one, its long-run outcome could be just as great. Indeed, this meeting could mark another anniversary – the end of OPEC's influence on crude oil prices. Oil-exporting nations are in deep trouble. A global recession is suppressing consumption growth and frustrating exporter attempts to boost prices. Financial conditions in exporting nations have deteriorated so much that the Federal Reserve Bank of New York has attempted to lower Saudi Arabia's credit rating. Political stability in at least three OPEC nations is precarious. Future prospects for oil exporters appear even bleaker. New production from several satellites of the former Soviet Union (FSU) will reach the market within a few years, limiting the increase in OPEC sales, and the FSU's incremental output will be augmented by much larger exports from Iraq, where multinational oil companies may once again play a large role in developing Middle Eastern oil. An oil price surge resulting from turmoil in Nigeria will, ironically, only serve to emphasize OPEC's loss of influence. When a cartel-like organization breaks down, the result is usually lower and more volatile prices, and so political or physical production disruptions have a greater impact on volumes supplied. In the future, these disruptions will occur more often because of the worsening financial situation in exporting countries.

Description: Population, national and per capita income increase will be reflected in greater energy demand. By 2010 30% larger than in 1990 for OECD countries and 120% for the rest of the world. The share of oil in primary energy demand is expected to decline from the present 39.5% to 37%. Nevertheless, the quantity of oil demand will continue to increase by about 1.3 mb/d per year rising to more than 92 mb/d by 2010.

Description: In August 1994, BP completed a 5.5 km horizontal well from an onshore base which is a world record for such a well in reservoir depth of around 1600m.

Description: It is possible to design ecological safe environments under high voltage overhead transmission lines. The experiments carried out in the USSR are described with considerable supporting technical detail.

Description: The refineries of the Commonwealth of Independent States (CIS) need substantial investment for modernisation. The investment is required to reduce the proportion of heavy fuel oil produced and to manufacture high quality gasolines and distillates that would benefit the internal market and be suitable for world trade. However the investment required in the refining sector is in effect competing with investment required in many other sectors in a period of sharp economic decline with substantial inflation.

Description: “Costs” reflect all exploration and development outlays and include a 15% real rate of return. Costs in itself is generally not a barrier to new developments in OPEC countries. Costs are notably higher for most non-OPEC countries where they do inhibit developments. Mexico and Russia are potentially low cost producers. In the North Seas the cost-price squeeze is crucial. Low prices have forestalled net increases in new non-OPEC production.