Petroleum Review - October 2009
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Editorial - Time to remember the fundamentals
GAS – GLOBAL MARKETS
An unprecedented market
Due to the economic recession, for the first time in the history of international gas markets significant demand destruction will occur in 2009 and perhaps also in 2010, setting back the market by up to nine years, write Booz & Company’s Robert Oushoorn, Otto Waterlander, Thomas Schlaak and George Sarraf. Combined with the completion of gas export infrastructure projects currently under way, the reduced demand could lead to an oversupply in the market of 5% to 15% until well into the next decade. The implications for suppliers, buyers and infrastructure companies cannot be overstated. To reduce the risks of huge oversupply and concomitant price pressure, large incumbent suppliers have a strong incentive to manage supply through increased cooperation. Buyers must review their assumptions to take advantage of the current buyer’s market – for example, by joining together to access previously inaccessible sources of gas and spread the risk. Infrastructure providers may need to rethink their business models to take advantage of opportunities that may arise from changing trade flows.
ENERGY INSTITUTE – PRESIDENT
James Smith – looking to the future
James Smith FEI, Chairman, Shell UK, who recently took over as the Energy Institute’s President, talked to Petroleum Review about his career to date and the challenges facing both the industry and the EI in the future.*
AVIATION – JET FUEL QUALITY
The challenge of FAME
The December 2008 issue of Petroleum Review highlighted the potential risk of cross-contamination of aviation kerosene (jet fuel) by biodiesel in the fuel distribution system. Throughout 2009 the EI’s Technical Department has been working with industry stakeholders on various initiatives to assist the industry in its efforts to manage this risk. Martin Hunnybun, Technical Team Manager at the EI, reports.
EUROPE – ENERGY
Energy lobbying is big business at the EU
It is an important symbol of the changing focus of the European Union (EU) that its energy lobby is today regarded as an equal to, if not more important than, the once feared agriculture lobby in Brussels, write David Haworth in Brussels and Keith Nuthall. Even though 40% of the EU budget is still spent on agriculture, free market reforms have clipped the influence of food groups at the EU, clearing the way for energy, whose importance as an international and strategic issue becomes ever more obvious.
ENERGY – INSURANCE
When cover flees for cover
As Hurricane Bill turned east in August, brushing alongside Bermuda and New England, many rig operators in the Gulf of Mexico breathed a sigh of relief and felt vindicated. Spooked by massive rises in insurance premiums and deductible levels for windstorm insurance, many oil companies had decided to self insure, ie buy no cover. Energy insurers and reinsurers are beginning to regret their decisions earlier this year to tighten terms for their clients. Indeed, the future for energy insurers is looking gloomy, writes Maria Kielmas.
PROFESSIONAL DEVELOPMENT – TRAINING
Nurturing industry talent – present and future
A key objective for any successful organisation is to be represented by employees who know their business and products inside out, understand their customers’ needs and enthusiastically advocate solutions that can help both parties achieve their business objectives. However, this does not happen overnight, and unless organisations are prepared to make the necessary investment in the development of their most valuable asset – their people – this can often be little more than a pipe dream. The process industry is no different to any other in this respect, as Honeywell’s Michel Jennes, EMEA Automation College Manager, and David Gillespie, Senior Manager – Technical Training, explain.
PROFESSIONAL DEVELOPMENT – ENERGY INSTITUTE
A guide to getting ahead
Most people are familiar with the term professional development but people often think that it isn’t something relevant to them. Or perhaps they know it’s something they should be doing – but they are unsure how to begin. There is always a reason not to do professional development and it is easy to put off this part of your career as day-to-day activities take priority, but if fitting it into your work life is too difficult – then maybe it’s time to rethink your own views about professional development. Kate Dunk, Professional Development Manager, Energy Institute, explains.
Features
CARIBBEAN – ENERGY SECURITY
The Caribbean energy scene
In a world of unpredictable oil prices and unstable sources of supply, ‘energy security’ has become a major preoccupation of oil importing countries around the globe – and the small island nations of the Caribbean are as concerned as any in this regard, writes David Renwick.
E&P – DEBATE
Is ‘peak oil’ upon us?
This year’s Petroleum Geology Conference (PGC) – organised by the Geological Society, the Petroleum Exploration Society of Great Britain (PESGB) and the Energy Institute – was the latest of seven held over the past 30 years. Held at the QEII Centre, Westminster, it included for the first time three hour-long, lively lunchtime debates that were convened under the theme of topical ‘Geocontroversies’, in which two expert protagonists presented their views for and against three motions of direct relevance to the oil industry. The second of these debates tackled the issue of peak oil. John Underhill, Grant Institute of Earth Science, The School of Geosciences, The University of Edinburgh, reports.
NORTH SEA – DECOMMISSIONING
Environmental countdown to decommissioning
The UK is currently home to approximately 470 offshore oil and gas installations, primarily located in the northern, central and southern North Sea. Many of these have now entered their ‘mature’ phase, with their working lives scheduled to come to an end in the next decade or so. Preparing for the decommissioning of structures in the North Sea has, unsurprisingly, been on the industry’s agenda for quite some time. Here, Pamela Coulthard, a lawyer in the Planning and Environmental Team at Maclay Murray & Spens, looks at the environmental issues surrounding this process and the precautions that are being taken.
WPC – PREVIEW
Energising a future generation
Young professionals – the industry’s future leaders – from across the world will come together to debate whether a sustainable future is within our grasp, when the World Petroleum Council’s Youth Forum meets in Paris next month.
CRUDE OIL – QUALITY MEASUREMENT
Loss reduction through technology
With crude oil prices stabilising at over $60/b, loss control is high on the agenda of many companies. The Energy Institute’s HMC-4(A) Marine Oil Transportation Database Committee has been collecting and analysing world crude oil shipping data for over 20 years. Its annual report, published last month in Petroleum Review, shows a continued reduction in crude oil losses (see Figure 1). This is, in part, due to the modernisation of the fleet and better operating procedures, but it is mainly due to the improvements made in loading and receipt terminal quality measurement systems, write Jon Moreau and Mark Jiskoot of Cameron Measurement Systems.
E&P – OFFSHORE EUROPE
Energy at a crossroads
Attracting 49,000 people to the European oil capital Aberdeen, this year’s Offshore Europe was – once again – bigger than it had ever been before. Louise Smith reports.
GAS – LNG
LNG and EU energy security
World LNG production and export are concentrated within a handful of countries. The Middle East is where the fastest growth in production and exports is taking place, with Qatar alone expected to account for 25% of global LNG supply by 2015. The EU receives all of its LNG from the Gas Exporting Countries Forum (GECF), eight of whose 15 members are OPEC oil producers. With the exception of Egypt, Norway and Trinidad, all the other GECF members who supplied Europe with LNG in 2007 were OPEC members. Mojgan Djamarani reports.
