Mr. Michele Acerra

GLG News by Mr. Michele Acerra, Independent 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.

Conoco Phillips withdrawal from Yambu project sends a serious industry signal.

May 4, 2010

An interesting article on 4/29/10 MEED by Peter Salisbury "A false dawn for the downstream petrochemical industry".Conoco Phillips withdrawal from the $10+ Billion project, is a sure signal that the medium-term future of refining and petrochemical markets is not rosy. It is as well a confirmation that the company is still recovering from the 2006 outlay of $35.6 B to acquire Burlington Resources.

Oil is cheap at $78 a barrel and we should increase gas usage for cars.

October 19, 2009

Analysis of:Oil Tops $78 to Year High on Inventory Drop, Weak Dollar | www.cnbc.com

There are two main drivers of last week's temporary record: the value of the US dollar, which makes every commodity more expensive and the ever increasing US consumption of gasoline and distillates. The guzzlers on US roads are increasing, and powering vehicles with natural gas is not pursued vigorously enough. The "Peak Oil Theory" is no longer a theory and finding oil will continue to be more and more difficult and expensive.

Do the Goldman Sachs Wizards Know Something?

September 30, 2009

Analysis of:SEPTEMBER 25, 2009, 12:08 P.M. ET.Goldman Lifts View On Refining, Upgrades Oil Cos | online.wsj.com

Goldman Sachs raised their refining view to neutral from cautious on a better demand outlook. Goldman analysts said in a note to clients: "We increasingly believe we are moving through the trough of the refining cycle."This position is very difficult to understand in view of the current glut of crude and of gasoline and refined products announced by the EIA.

Refinery project postponements, cancellations and a long-term energy strategy.

March 20, 2009

Analysis of:Poor market delays completion of refinery expansion | www.chron.com

Motiva will delay by more than a year the date for completing a $7 billion expansion of its Port Arthur refinery, becoming the latest U.S. refiner to postpone a project amid bleak market conditions. Valero, ConocoPhillips and Marathon Oil, have also announced delays and suspensions of refinery upgrade projects. This is not only a domestic phenomenon: Oman has placed on hold their Duqm refinery and petrochemical complex, and Saudi Aramco has delayed the Jubail and Yambu refineries and the Swedish refiner Preem AB announced today that is holding its coker project at Lysekil.  Is it all doom and gloom? Not really. In the oil & gas and refining industries management should have a long term vision and many projects are going forward pursuing long-term strategies. It is meaningful that, on the same day of the announcement of the Port Arthur refinery project, Shell announced $31 billion 2009 investments.

The Siemens - Areva divorce

January 29, 2009

Analysis of:Siemens aims to sell Areva nuclear stake: report | www.reuters.com

The interest of Alstom in a deal with Areva is sponsored by President Nicolas Sarkozy who is interested in a strong French nuclear axis possibly including the construction company Bouygues - Alstom - Areva. Will it happen? Will Anne Loauvergeon be able to keep Areva indepenedent? Will Siemens and Atomenergoprom form a JV? Which effect any new line-up, and in particular a possible Areva – Alstom – Bouygues alliance, will have on SGT, the joint venture between Areva and the URS Corporation’s Washington Division. It is important to follow the impact of the Siemens - Areva divorce on the US and global nuclear "renaissance".

The Obama plan and its impact on the construction and energy industries.

January 26, 2009

Analysis of:The Obama Gap | www.nytimes.com

The current Administration’s plan may not be sufficient to fill the gap of at least $2 trillion between the US economy’s potential output over the next two years and what US will be able to sell. I would have preferred that the tax cuts were 19.25% and the infrastructure investment 33% of the total package. Which are the industries and the companies likely to benefit from the stimulus?  

The “other natural resource” shortage in the energy industry.

January 21, 2008

Analysis of:Oil groups seek a burst of energy | www.ft.com

While much has been written regarding the potential for natural resource shortages in the energy industry, recent articles have highlighted a shortage no less severe: the shortage of highly qualified technical personnel.  The skill level of personnel is often cited as one of the leading causes of production problems in refineries, petrochemical facilities, and power plants. An interesting article by Sheila McNulty in the January 16th, 2008 Financial Times covers a number of initiatives by oil companies to replace retiring experienced personnel and to attract new talent. The scarcity of young talent may ultimately be best addressed by bringing their pay scale in line with other highly desirable fields, such as investment banking, law, etc. The Financial Times article concludes by citing Mr. Tony Ward, a director of Ernst & Young’s energy, chemicals and utilities group saying: “It is a very good time to be an engineer”. I am not so sure!

Threats and opportunities for the European refining industry.

January 15, 2008

Analysis of:Refinery conundrum lobs challenges, opportunities at EU. | www.hydrocarbonprocessing.com

In the last twenty years European refining capacity has been strongly reduced due to poor margins, and this should automatically generate additional investments for modernization and upgrading of units. However, demand for gasoline is decreasing in Europe and slowing in North America. The main threats for the European refiners are: 1. USA market shrinking 2. Improved vehicles fuel economy 3. Reduced driving distance per vehicle 4. Increase in production of biofuels 5. Increased transportation costs for inland refinery exports.   These threats make new investments indispensable and have increased the attention of capital, authorities and the general public and create new investments opportunities that have not been there for over ten years.

Oil-eating bacteria could improve the exploitation of tar sands and heavy-oil reservoirs

January 7, 2008

Analysis of:Oil-eating bacteria make light work of heavy fuel | intl.emboj.org

A very interesting article, published on 12- 12-07 by K. Sanderson in Nature magazine reports on a study by a team of Canadian, Norwegian and English researchers headed by Dr. Larter of Calgary Univ. The study explored how naturally occurring bacteria deep down in the Earth break down in anaerobic conditions heavy hydrocarbons producing methane. The results suggest that, fed with the appropriate nutrients, these bacteria would be able to accelerate the process of methane production. It is estimated that methanogenesis, takes several millions of years, but Larter team concluded that under certain conditions this process could be expedited to occur in  approximately ten years. The impact of this research for some oil companies, for the energy markets, and for mankind could be tremendous. he “end of oil” date, which many estimate to be around 2060, could be pushed back by many years.  The geopolitical center of the energy markets could be tilted from the Middle East towards the America

Ethanol and the US energy policy.

October 29, 2007

Analysis of:Ethanol's Water Shortage | online.wsj.com

WSJ’s article “Ethanol Water Shortage”  summarizes very well ethanol from corn shortcomings and why subsidizing it is not a solution to America’s transportation fuels. Ethanol from corn is probably the worst renewable fuel as its production has a negative energy balance, i.e. it requires more energy that can produce, and in addition requires great quantities of water and land to grow the corn. The Big Ethanol lobby has been pushing Congress to pass legislation supporting ethanol as “renewable fuel”, and now House and Senate negotiators are preparing for an energy-bill conference, and ethanol could become a big problem for America.

SAFETY IN THE WORKPLACE

October 17, 2007

Analysis of:Mine Mishaps Raise Questions on Safety | online.wsj.com

The Elandsrand accident present an opportunity for a fundamental discussion on safety, not only in gold mining, but also in the mining industry in general and more broadly in any industrial environment. Coal mining accidents in China or in USA point to the need of improvements in safety best practices. The oil production, refining, and petrochemical industries have also their share of problems, both during the construction phase and/or during operations. This essay summarizes some key points of safety best practices that are valid for any industrial workplace. An investigation by the South African Department of Minerals & Energy together with representatives of the Elandsrand Health & Safety Committee will report on the accident root causes and hopefully will suggest improvements. In the meantime, more than focusing on the fragility of the gold mining industry "social license", this should be an opportunity to think of the social impact of safety in any workplace activity.

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