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Shale Gas Africa Ip Week 2012 APRIL 2012 SHALE GAS G Dealing with induced seismicity AFRICA G Sudan separation fuels oil strife IP WEEK 2012 G Meeting the energy challenge Covering the international oil and gas industry from field to forecourt – exploration, production, refining and marketing www.energyinst.org APRIL 2012 VOLUME 66 NUMBER 783 SINGLE ISSUE £22.00 • SUBSCRIPTIONS (INLAND) £260.00 AIRMAIL £430.00 PUBLISHER IN THIS ISSUE... his issue looks at the latest gas developments, with an overview of the prospects for gas-to- 61 New Cavendish Street, London W1G 7AR, UK Tpower (GTP) – no longer used primarily as a peak demand supplier, its share of the electricity genera - Chief Executive: Louise Kingham FEI OBE tion marketplace has surged. We also discuss induced seismicity in unconventional gas E&P – a geological Editor: Kim Jackson MEI phenomenon sometimes causing a public relations t: +44 (0)20 7467 7118 headache in the search for shale gas across the globe. e: [email protected] We continue our review of this year’s IP Week from day two and day three of the conference programme, Deputy Editor: Louise Hunnybun which included regional focuses on Africa and on t: +44 (0)20 7467 7142 Russia, Arctic and the CIS. The event also looked at the latest developments e: [email protected] in deepwater E&P, pipelines, fuels for the future, and in the downstream sector, as well as a special panel session on gas. Production Officer: Yvonne Laas This month’s regional focus is on Africa and we assess the oil-pricing dispute t: +44 (0)20 7467 7117 between South Sudan and north Sudan and prospects for the countries going e: [email protected] forward. The issue also looks at kidnap and ransom by Somali pirates – despite a fall in ships being successfully hijacked, ransom dealings are as Editorial enquiries: General enquiries: complex as ever. t: +44 (0)20 7467 7118 t: +44 (0)20 7467 7100 The magazine also discusses the forces shaping today’s global lubricant e: [email protected] e: [email protected] market and explains how diesel fuel additives can be used to improve the filterability of biofuels. ADVERTISING Louise Hunnybun, Deputy Editor For advertising opportunities please contact: Nick Ackroyd, ExCel Publishing t: +44 (0)161 661 4182 e: [email protected] NEWS & REGULARS MAGAZINE SUBSCRIPTIONS 2 PERSPECTIVE 3 UPSTREAM Chris Baker t: +44 (0)20 7467 7114 f: +44 (0)20 7255 1472 6 DOWNSTREAM e: [email protected] 10 INDUSTRY 11 GOVERNMENT MEMBERSHIP 12 ENERGY INSTITUTE For all membership enquiries please contact 44 EVENTS CALENDAR e: [email protected] or visit www.energyinst.org FEATURES ABBREVIATIONS 14 AFRICA – KIDNAP AND RANSOM Taming the pirates The following are used throughout Petroleum Review : 16 E&P – INDUCED SEISMICITY mn = million (10 6) kW = kilowatts (10 3) Avoiding demerger downfalls bn = billion (10 9) MW = megawatts (10 6) tn = trillion (10 12 ) GW = gigawatts (10 9) 18 GAS – ELECTRICITY cf = cubic feet kWh = kilowatt hour cm = cubic metres km = kilometre Floating on air boe = barrels of oil sq km = square kilometres equivalent 20 AFRICA – SUDAN b/d = barrels/day Sudan separation fuels oil strife t/y = tonnes/year t/d = tonnes/day 22 AFRICA – CAMEROON No single letter abbreviations are used. Abbreviations go together eg. 100mn cf/y = 100 million cubic feet per year. Powering the future 24 IP WEEK – ROUND-UP Printed by Geerings Print Ltd IP Week retrospective MEMBER OF THE AUDIT BUREAU OF CIRCULATION 38 ENERGY INSTITUTE – CAREERS Salaries, benefits and careers in energy Front cover: The Preese Hall-1 well drilling site, near Singleton, Lancashire 40 LUBRICANTS – OVERVIEW Photo: Cuadrilla Resources Responding to global challenges 42 FUELS – ADDITIVES Terms of control: Petroleum Review is circulated free of charge to all paid-up mem - Improving the performance of biodiesel bers of the Energy Institute. To libraries, organisations and persons not in member - ship, it is available on a single subscription of £250 for 12 issues in the UK and £420 for overseas subscribers. Agency Commission –10%. ISSN 0020-3076. Energy Institute Registered Charity No.1097899, 61 New Cavendish Street, London W1G 7AR, UK. © Energy Institute 2012. The Energy Institute as a body is not responsible either for the statements made or opinions expressed in these pages. Those readers wishing to attend future events advertised are advised to check with the contacts in the organi - sation listed closer to the date, in case of late changes or cancellations. To view the full conditions of this disclaimer, visit http://www.energyinst.org.uk/disclaimer.pdf P ERSPECTIVE Petroplus – first of many dominoes to fall? Chris Faulkner, President and the Keystone XL pipeline project, which CEO, Breitling Oil and Gas. would ultimately pipe tar sand crude from Alberta, Canada, to the US Midwest and Gulf Coast. The possibility he failure of the Petroplus of an influx of crude from the EU could refining group isn’t simply a local help the US refinery dominoes stay Tor regional concern. When viewed upright, even while facing the potential in the context of other world markets, for Canadian crude to be snapped up by it may prove to be the first of many the Chinese if the Keystone project dominoes toppled by a perfect storm of doesn’t go through. At the same time, economic and market conditions. the price advantage from the glut of Which dominoes fall after Petroplus crude at the Cushing, Oklahoma, will depend on the region and other storage hub has begun to narrow, political and economic conditions. leaving American refineries looking for On a broad scale, Petroplus’ fate crude with higher profit margins. could appear almost inconsequential In the meantime, oil prices have risen for the refining market. According to globally by over 30% since the start of Morningstar analysts, it is Europe’s the year, and are likely to continue largest independent oil refiner by rising as global politics and economies oil production as needed. capacity, but its three refineries facing come into play. Every time the Saudis do this, they shutdown total only about 2% of total It remains to be seen whether shale damage the reserves and shorten the life European capacity. gas will lower oil prices. Although the of the fields. In the long term, they’re production of shale gas is cheaper than reducing the amount of producible ‘oil any renewable alternative, it has Sanctions impact in place’. This is the reason Saudi Arabia always been a contentious energy In fact, the shutdown of Petroplus’ is using secondary and tertiary recovery product and the debates over shale gas three refineries could actually ease methods like water flooding, carbon – or, more precisely, the hydraulic frac - overcapacity in the region. However, dioxide (CO ) flooding and other 2 turing methods used to extract shale the European Union has agreed to ban controversial methods to stimulate pro - gas – rage on. In the US, some vigor - oil imports from Iran, and the US is duction in their ageing fields. ously oppose the practice and are under pressure to join the embargo. Saudi Arabia doesn’t want to admit seeking to ban it. France has voted to This embargo could accelerate addi - it, but the country reached peak oil pro - ban the use of hydraulic fracturing. tional refinery closures throughout duction a long time ago and has not China, on the other hand, is embracing Europe, hitting hardest the smaller and had any recent new discoveries. In the shale gas. The country’s largest energy older refineries that specialize in the end, Saudi Arabia may not be able to company, CNPC, has pledged to kind of heavy oil Iran provides. come to the rescue after all. increase its production of shale gas by Asian countries, of course, have 2015, attracting interest from both ensured that their dominoes won’t be Shell and Chevron. tipped, refusing to embargo Iranian oil. Boon for US Due to the economic climate and the China and other Asian countries could The Petroplus situation has different increasingly pressurised atmosphere of end up buying Iranian oil at a discount, implications across the pond. Indeed, it the Iran oil embargo, it’s difficult to cutting European refineries out of the could prove to be a boon for US predict how many and which refinery loop and selling their cheaper refined refiners. US exports have already been ‘dominoes’ will fall. The largest products back to Europe. If China and on the rise, up 22% in 2011 with a refineries seem best insulated against other Asian countries follow this record 1.07mn barrels of distillates the potential ripple effect of Petroplus’ course, dozens more European refinery exported last October, according to the woes, while the smaller, older refineries dominoes could fall. US Energy Information Administration appear vulnerable. G (EIA). Europe received 48% of those exports, an increase of 43% from the Founded by Chris Faulkner in 2004, Saudi saviour? year before. Breitling Oil and Gas is an independent While refiners can replace Iranian Unlike many of their European coun - oil and natural gas company based in imports with Saudi Arabian and Russian terparts, US refiners have been Irving, Texas, US. oil, let’s not forget the age and extraor - upgrading equipment and are well- dinary exploitation of the Saudi oil situated to process and export more fields. Saudi Arabia has always come to crude. This is especially true as US The opinions expressed here are not the rescue with ‘elastic reserves’, refiners have been bitterly disappointed necessarily endorsed by the EI. opening the valves and increasing daily by President Obama’s refusal to approve EI members receive Petroleum Review free of charge as part of their membership benefits.
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