Mr. Michael Lynch

GLG News by Mr. Michael Lynch, Consultant

GLG News is now G+ Insights

G+ is a community for professionals, academics and entrepreneurs to connect through online discussions and in-person meetings. You will continue to see G+ Insights (formerly GLG News) here as well as on the G+ website, where you can share and discuss the G+ Insights you read.

Royal Dutch Ramps up natural gas operations

July 14, 2011

Analysis of:Iraq signs $12 billion gas agreement with Shell, Mitsubishi | www.ogj.com

Iraq signed an agreement valued at $12 billion with Royal Dutch Shell and Mitsubishi to capture natural gas currently flared at Rumaila, Zubair and West Qurna Phase 1. The agreement means that Iraq will likely become a net exporter of liquid petroleum gas next year. Ali al-Khudhier, head of state-owned South Gas Company said that Iraq will soon compete in international markets for exports of Liquefied natural gas (LNG). The 25 year agreement will capture of 700 million cubic feet/day.

BP and partners will redevelop Schiehallion and Loyal fields west of Shetland

July 13, 2011

Analysis of:BP, Co-Venturers to Redevelop N.Sea Fields for $4.8 billion | www.rigzone.com

BP announced that with its partners, it will proceed to redevelop the Schiehallion and Loyal fields at a capital cost of $4.8 billion. Todate the two fields have produced nearly 400 million barrels of crude oil since production began in 1998. BP said that the two fields are established assets with good potential for more reserves. BP will use the latest technology to maximize recovery. the existing Floating, Production, Storage and Offloading (FPSO) will be replaced by a new unit in 2015.

Norway has good news for High Spec offshore new builds

July 12, 2011

Analysis of:NPD Kicks Off Seismic Survey in Barents Sea | www.rigzone.com

On July 8, the Norwegian Petroleum Directorate began a seismic acquisition project in the new maritime zone in the Barents Sea. PGS will be conducting the survey of the large area with expectations of completion next summer with results ready for the spring of 2013. Data acquisition will utilize the new PGS GeoStreamer technology, characterized by the single streamer will be towed deeper in the water than in conventional surveying. This means that the activity is less weather-dependent.

Oklahoma Mississippian Play picks up steam

July 11, 2011

Analysis of:Doxa to Acquire Additional Interest in Mississippian Oil Play | www.rigzone.com

Doxa acquired 20% interest in an existing project located in Alfalfa, Garfield, Grant and Kay Counties. Dynamic Production of Fort Worth manages the project. The plan calls for acquiring 18,000 acres. CEO John D. Harvison of Doxa said that the emerging horizontal play has the potential to become one of the most profitable onshore plays today. Recent public disclosures indicate excellent economics. A single well can develop between 300,000 and 500,000 barrels over the life of the project.

Namibia Oil resources maybe, reserves no, at least not yet

July 9, 2011

Analysis of:Namibia Sees 11 Billion Barrels in Offshore Oil Reserves | www.rigzone.com

Energy Minister Isak Katali announced on Wednesday that 11 billion barrels of oil reserves have been found offshore. First production is planned within four years. Enigma Oil & Gas, owned by Chariot Oil & Gas (London) has identified 11 prospects along the southern coast. The Nimrod prospect in 1,150 feet of water most likely could hold more than four billion barrels. Off Namibia's cental coast, the Delta prospect contains as much as two billion barrels. Six to eight wells will be drilled soon.

BP climbs up a step from the brink

July 7, 2011

Analysis of:S&P Lifts BP Outlook To Stable; Sees Less Downside Risk | www.rigzone.com

Standard and Poor's Ratings Services revised its credit outlook on BP to stable from negative. The company says it sees less downside risk to Bp's credit quality. The corporate credit rating of A was affirmed. An A rating is five steps below the rarely given AAA. Standard and Poor's outlook reflects the view that BP is well positioned to meet potentially substantial fines and penalties. BP's first-quarter average realized oil price was 19.2% higher than fourth quarter 2010. Downstream improved.

Maersk $1.3 Billion new builds based on demand and higher crude oil prices

July 6, 2011

Analysis of:Maersk Extends Rig Fleet with $1.3 B drillship order | www.rigzone.com

Maersk Drilling has decided to exercise an option to build two ultra deepwater drill ships at Samsung Heavy Industries in South Korea. Delivery of the first unit is scheduled for second quarter of 2014 and the second in third quarter of the same year. Maersk desires to be better placed to serve customers in the ultra deepwater segment. The company sees a strong market for deep water drilling as global demand increases and older mature oil fields continue to decline. Vessels will have be faster.

Odds long on Brazilian production of 3.95 million bbl/day in 2020

July 4, 2011

Analysis of:Petrobras Production Plans, Brazilian Oil Consumption Impact Oil Exports | www.rigzone.com

Brazil's plans to become a major crude oil exporter depends on execution of its proposed time schedule. Petrobras intends to expand production from 2.1 million bbl/day in 2010 to 3.95 million in 2020. That is a 6.5% year-over-year increase. On June 30, Barclays Capital reported that such an increase seemed to be a challenge. Brazil's oil consumption is expected to exceed 3%/year. The potential for rising infrastructure investment during the 2010-2020 period could increase domestic demand.

Rising capital and operating costs point to higher crude oil prices

July 2, 2011

Analysis of:Upstream O&G Costs Rise Anew, IHS CERA Reports | www.rigzone.com

The IHS CERA Upstream Capital Costs Index (UCCI) rose 5% between 3Q 2010 and 1Q 2011. The IHS CERA Upstream Operating Costs (UOCI) Index rose two percent over the same period. The trend is expected to continue. Costs recently began trending upward after falling for a year after their peak in 3Q 2008. Confidence by operators that stronger demand for oil and gas results in increased project construction. The UOCI is just two index points below the 2008 peak level. The UCCI is also near the peak.

Why so much controversy on SPR oil release?

July 1, 2011

Analysis of:MARKET WATCH: Oil prices back to levels before SPR release news | www.ogj

Crude oil prices continued to climb on back to levels prior to the International Energy Agency's announcement of a pending 60 million barrel crude oil release from members emergency petroleum reserves. Earlier the IEA announced the release was an effort to drive down oil prices. The price action suggests that supply and demand is so tight that 30 million barrels of oil release from U.S Strategic Petroleum Reserves does not matter. The first IEA release is equal to 1/3 of Libya cumulative loss.

Shale gas wells require careful pre-drill analysis to be profitable

June 26, 2011

Analysis of:Insiders Sound an Alarm Amid a Natural Gas Rush | www.nytimes.com

Natural gas companies have been placing big bets on the wells they drill. But Energy executives, lawyers, state geologists and market analysts are skeptical. Money is pouring in from investors even though shale gas is inherently unprofitable. Company data from 10,000 wells in three major plays raise further questions about the industry's prospects. The data show that some wells are active, but are often surrounded by less-productive wells. Forecasting shale gas reserves is a tricky science.

U.S.sells crude to stave off Treasury default;Europe sells to ease Greek crisis

June 23, 2011

Analysis of:Surprise Oil Release by IEA Rattles Markets | www.cnbc

A surprise release of 60 million barrels of oil from the strategic petroleum reserves of 28 nations sent shockwaves through global markets. Investors became confused. Why did governments opt to sell crude oil now? International Energy Agency said the decision was aimed at offsetting "imminent threat of shortfall." The U.S. Department of Energy will sell 30 million barrels. Europe will sell 18 million barrels and the Pacific nations will sell 12 million. Oil prices fell in Europe and the U.S.

Royal Dutch Shell and China National ally for international projects

June 21, 2011

Analysis of:Shell, CNPC Form Alliance for Well Manufacturing JV | www.rigzone.com

Shell and China National signed a Global Alliance Agreement to emphasize their intention to pursue mutually beneficial cooperation opportunities. The scope of the agreement includes China and the rest of the world. Basic aim of he combine will be to meet the world's growing demand for clean, inexpensive energy. The two companies plan to use state-of-the-art technology such as automated drilling developed by Shell in its North American tight gas operations. Low-cost suppliers in China favored.

BP's finest CEOS were all major crisis managers

June 19, 2011

Analysis of:Dudley Delivers for BP | www.rigzone.com

Robert Dudley, became CEO of BP in October 2010 as controversy raged around the MC-252 incident. The the first American to head BP, his first and primary task was to restore the U.S. public's trust in BP. In March 2011 he announced that he was determined that BP would emerge from the incident as a safer, stronger, more sustainable and more valuable company. Dudley worked his way up through the Amoco Corporation from 1979 and as strategy manager and continued in 1998 after the merger with BP.

Declining production rates drive South American rig count

June 18, 2011

Analysis of:Analysis: Latin America Rig Activity Grows | www.rigzone.com

South American oil and gas activity is booming. Year-on-year activity from April 2010 to April 2011 has increased in Argentina, Brazil, Ecuador and Venezuela. Current rig count is up 15% in the five countries. Columbia has become the second most active country. In Argentina, YPF has discovered an estimated 150 million barrels of shale oil in the Neuquen province. In Mexico, government policy changes as a consequence of the nation's high decline rate has resulted in more rigs being employed.

Enhanced oil recovery could lead to new oil from old Ohio fields

June 17, 2011

Analysis of:Oil-Extraction Method Could Reduce Greenhouse Gas | www.rigzone.com

State officials in Ohio are investigating whether carbon dioxide could be used to draw millions of barrels of crude oil from fields that are near total primary depletion. Energy companies have been injecting carbon dioxide into old oil fields in Texas and California for decades. During Ohio's first test, 81 tons of carbon dioxide were pumped into a low-yield well near Canton. After the injection, the well produced 58% more oil. Environmentalists claim that much of the carbon dioxide returns.

Gas-to-Liquids from North Field in Qatar goes to market

June 15, 2011

Analysis of:Qatar Petroleum and Shell Ship First Cargo of Pearl GTL Products from Qatar | www.oilvoice.com

Qatar Petroleum and Shell announced on June 13 that the Pearl gas-to-liquids (GTL) plant has sold its first shipment of GTL Gasoil. It is the first sale of GTL products. Over the next few months, production will increase to 140,000 bbl/day of GTL plus 120,000 bbl/day of condensate. Shell is operator and uses its unique technology. The project was launched in 2006. In late March of 2011, the processing plant began producing condensate, LPG, sulphur and oxygen. Gas plus oxygen makes GTL wax.

Will floating LNG plants and Q-Max LNG carriers trump long gas pipelines?

June 14, 2011

Analysis of:European Natural Gas Pipelines Plagued by Uncertainties | www.nytimes.com

Could the plan to build the world's most expensive natural gas pipeline turn out to be an elaborate bluff? Gazprom's South Stream would run beneath the Black Sea and deliver large volumes of natural gas to the European Union (EU). But the costs and exact routes of South Stream are ill-defined. In 2006, the EU decided to build Nabucco as a competitive line. It has no guaranteed source of natural gas. Thus both pipelines are on shaky grounds. Cost is the main hurdle for both lines.

Long term global depression may bring crude oil supply/demand back in balance?

June 13, 2011

Analysis of:Global Deficit Between Oil Consumption and Production Remains the Norm | www.rigzone.com

The Economist Online recently posted an article "Running Dry." Quoting the just released BP "Statistical Review of World Energy 2011", during 2010 consumption exceeded production by over 5 million bbl/day. This is the widest daily gap on record going back to 1965. The last year when production outpaced consumption was in 1981. New discoveries sufficient to offset declines is not the reality. Thus the fundamental imbalance favors a trend of increasing crude oil prices.

Shell reinforces commitment to liquefied natural gas in Far East

June 11, 2011

Analysis of:Shell to Set Record with PRELUDE Floating LNG Structure | www.rigzone.com

Shell's Prelude floating liquefied natural gas (FLNG) facility will be the largest floating structure ever built. At 600,000 tonnes, it will weigh six times of that of the world's largest aircraft carrier. The unit will be deployed in the Browse Basin offshore Northwest Australia. Forecasted increases of energy demand in the Far East, especially in China, is the driver for the FLNG development. Final investment decision was made at a board meeting last month. Unit will be built in North Korea.

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