After an initial recovery in output, oil prospects are dipping
BOTH sides in Libya’s civil war knew they would need to sell oil again fast once the conflict was over. So for the most part they took care not to ruin the energy infrastructure. For example, while fierce fighting was devastating the western town of Zawiya, the large oil refinery to its north lay idle but untouched by war, its workers still able to have lunch in the canteen.
By mid-2012, less than a year after Muammar Qaddafi’s demise, Libya’s oil production, almost entirely switched off during half a year of ferocious fighting, had regained its pre-war level of about 1.5m barrels a day (b/d)—years earlier than expected. Proudly, Libya’s new leaders said output could soon rise to 2m b/d or more. The oil minister, Abdelbari Arusi, promised a new hydrocarbons law and an auction of leases for unexplored territory to foreign oil companies. Libya’s oil reserves, at 47 billion barrels, already Africa’s biggest, could—it was said—increase by another 10 billion. (…)
Read the rest of the piece here.
There is a mammoth survey coming in Petroleum Economist’s March issue on the future of transport.
Editing it and writing portions has turned me into a petrolhead. I’m very pleased with the shape of the survey. Watch out for it!
I’m doing lots on Iran (natch), quite a bit on Iraq and turning back to Libya again.
On Iran, I’d like to get some nuts and bolts — sorely missing in much coverage — about actual shipments and cargoes now. I’ve got good information about how Iran’s discounts system is working. In short, it’s keeping Asian buyers sweet at a cost of about $1.20 per barrel per month. The method is a little more complex than that… But I’ve also got contradictory information about the White House’s sanctions strategy. I’m reliably told it wants a 25% drop in volumes, which is hardly earth shattering. (That said, Iran’s at the table to negotiate, or may be soon, so it might be working.)
On Iraq, the piece is done. But all information on Iraq is gratefully received.
On Libya, well, I’d really like to get there again. Failing that, I’m working on a wider story or two. One is an attempt to navigate the politics — and to explain why the country’s oil industry seems to be coping fine while mini political implosions happen all around it. Also: where is the oil money going?
Please get in touch.
I’m now updating more frequently at derekbrower.tumblr.com
It’s just a bit easier on the eye and definitely smart-phone friendly.
I promised myself that when I was back from Libya I’d do a favour to other journalists — especially the freelance ones like me — and write a post about the specifics of getting into the rebel-held east. Forget the fears about heading into a warzone: before I left for Libya, it was the logistics that troubled me most. And, specifically, I was worried about how dicey or otherwise the trip across the north of eastern Libya would be.
It isn’t. The trip was safe. There’s a big difference between going to Benghazi, now deep inside rebel territory, and going to, say, Brega or Misrata. This post isn’t about that kind of trip.
So here, to prevent others going through the same fruitless Google search for information, is my Guide on How to Get from Egypt to Benghazi. Continue reading
Petroleum Economist’s new “special reports” are underway. The first of them, a big ballsy look at Venezuela, spread over 12 or more pages, will be published in the October issue. It will be independent, comprehensive and authoritative.
We’re working on it now. Tom Nicholls will be in Caracas and the rest of us will be picking up the pieces and learning everything else we need to know about Venezuela and its energy sector.
The usual request applies: if anyone has a view, information, or anything else they’d like to share, please get in touch.
I’ve been in hiatus land, but writing lots. I went to Calgary to cover two conferences and filed some copy on the oil sands for Petroleum Economist.
My piece, long in the gestation (thanks to the BP slick), on the oil majors growing gassier made the cover of last week’s Economist.
And, in addition to becoming Petroleum Economist’s new editor, I’m also launching a new “product” (in 21st-century media jargon) for the magazine. It will be called PE Unconventional — a pricey, but valuable, new source of intelligence on shale gas, oil sands, and shale oil.
As for Petroleum Economist, much has changed. There’s new management in place and the magazine has staffed up its editorial department.
Next auxiliary project: to pitch a book on America and oil.
It’s brutal, ugly and will have big implications for the oil and gas industry. It’s also just the kind of disaster that will entrench the slow move away from oil dependency in the rich Western countries.
The Economist will have a big piece on it tomorrow. It was a collaborative effort, led by the brilliant Oliver Morton. We’re proud of how it came out.
Edit… Here it is.
Next week, I’ll be working on a piece for The Economist about how the big oil companies are getting gassier. That’s to say, natural gas is taking up more of their portfolios. Why? And what does this say about how the energy industry is changing? The usual request: if anyone has a view, or information, worth sharing please don’t hesitate to get in touch.
For the rest of this week, I’m meeting deadlines for Petroleum Economist. I’m doing a leader on Goldman Sachs and the oil markets, as well as a feature on Ukraine’s proposal to divvy up management of its natural-gas pipelines, with Gazprom and unnamed European firms to be involved. Some newsier bits, too.
Edit: in between, I’m running the London marathon this weekend. Nightmare.
This is excellent (hat tip: the FT’s Energy Source). Stephen Schork, editor of the Schork Report, compares Americans’ spending on car fuel with their outlay on entertainment (the “bimbos”). Conclusion: energy costs, as a share of expenditure per head, continue to rise. It’s not quite as bad as 2008, when gasoline and other motor fuels took up 4.2% of consumer income (a record). But at 3.24% it’s getting closer — and is well above the historical norm. Meanwhile, Schork says, other costs have also gone up (like communications). Continue reading