Russia threatens to cancel Shell, Mobil and Total's licenses

The Russian government is threatening to cancel oil and gas exploration licenses it granted to Royal Dutch/Shell, ExxonMobil and Total. On Sept. 16, Russia's Prosecutor-General charged that a key environmental permit for Shell's project, which covers the $20 billion Sakhalin-2 development, does not comply with Russian law.

The projects run by Shell and ExxonMobil are production sharing agreements (PSA), which cover the development of offshore oil and gas fields at the Sakhalin Island, in Russia's Far East. Total was granted a license to develop a large northern Kharyaginsk oil field.

- Note that Singapore is also looking for LNG supplies from this Sakhalin project.

Polar bears drown, islands appear in Arctic thaw

peakoil.com -> news.yahoo.com :

Polar bears are drowning and receding Arctic glaciers have uncovered previously unknown islands in a drastic 2006 summer thaw widely blamed on global warming. "We know about three new islands this year that have been uncovered because the glaciers have retreated," said Rune Bergstrom, environmental adviser to the governor of Svalbard, a Norwegian archipelago about 1,000 km from the North Pole. The largest is about 300 by 100 meters, he told Reuters.

"We saw a couple of polar bears in the sea east of Svalbard - one of them looked to be dead and the other one looked to be exhausted," said Julian Dowdeswell, head of the Scott Polar Research Institute in England. He said that the bears had apparently been stranded at sea by melting ice.

"The Arctic is likely to warm more than any other part of the world" because of global warming, said Dowdeswell. Darker water and soil, once exposed, soaks up far more of the sun's heat than mirror-like ice and snow. The melt may also open up the Arctic to more exploration for oil, gas and minerals, increase fisheries and open a short-cut shipping route linking the Atlantic and Pacific Oceans.

As prices tumble, doomsayers hold fast to prophecy

peakoil.com -> theglobeandmail.com :

It's been a tough week for peak-oil theorists - those limits-to-growth doomsayers who argue the world's crude oil supply has begun an inexorable decline that will force prices ever higher. Abullah Jum'ah, chief executive officer of Saudi Arabia's state-owned Saudi Aramco, directly challenged their theory, saying there is plenty of world oil left to be recovered. Crude oil prices on the New York Mercantile Exchange - which hit a record $78.40 in July - traded briefly below $63 a barrel before settling at $63.33, down $2.92 on the week.

But Kenneth Deffeyes, a leading peak-oil theorist from Princeton University, has seen nothing that shakes his conviction. On the contrary, he said he can point to the precise month when global crude production peaked: December, 2005. Prof. Deffeyes, a geologist who last year published Beyond Oil: The View from Hubbert's Peak, said short-term market fluctuations in price have absolutely no relevance to the debate over the life expectancy of the world's crude oil supply. "This is 99-per-cent physical; 1-per-cent economics," he said in an interview. "There is only so much oil in the ground and we have now reached the peak of productive capacity."

- Even OPEC is talking about high and volatile oil prices. Remember that volatility means sudden, unpredictable moves both up as well as down. Hold on to your seat-belts.

(2006-09-19 23:33:17 SGT) [Energy] Permalink

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