Category: Oil and Gas business

Seismic energy which has traveled partly as a P-wave and then as an S-wave; having been converted upon reflection at an interface.

The United States Oil Fund is a domestic exchange traded security designed to track the movements of light, sweet crude oil (“West Texas Intermediate”). USO issues units that may be purchased and sold on the NYSE Arca. The investment objective of USO is for the changes in percentage terms of its units’ net asset value (“NAV”) to reflect the changes in percentage terms of the spot price of light, sweet crude oil delivered to Cushing, Oklahoma, as measured by the changes in the price of the futures contract for light, sweet crude oil traded on the New York Mercantile Exchange (the “NYMEX”), less USO’s expenses

Asian gas hub

Rising liquidity in LNG derivatives has important implications for the evolution of an Asian gas hub. It suggests the Asian gas market will develop differently to the US and Europe, even if the emergence of a dominant Asian gas hub appears to make sense as a counter point to its US and European equivalents.

This should not be surprising because the Asian gas market is much more fragmented than the gas markets of the US and Europe, spanning multiple unconnected national markets as different stages of liberalisation and with very different regulatory regimes. The concept of an ‘Asian’ gas market only really makes sense if thought of in terms of LNG trade because it is LNG that can be arbitraged between Asian national markets, as well as between the Atlantic and Pacific basins. In Europe and the US, LNG is an adjunct to existing markets based around pipeline supply.

There are nonetheless three main contenders hoping to fill the role of Asian gas hub – Singapore, Japan and China.

Singapore has a cluster of trading companies, a well-developed financial community and an open liberalised market. It could provide independent regulation and arbitration and non-discriminatory third-party access to infrastructure, but it is a small market in physical terms. It has no domestic gas production to speak of and consumed 12.3bn m³ of gas in 2018, sourced primarily by pipeline from Indonesia, as LNG and a smaller proportion by pipeline from Malaysia.

Japan also has strong advantages but also some important disadvantages, first among which is that its gas market, while large, is not well integrated. Pipelines connect import points with local markets rather than forming a national gas system. In addition, the Japanese market is not expected to grow over the long term as the expansion of renewable energy sources and the return of nuclear reactors eats into gas’ share of power generation.

Japan also has no significant gas production of its own and no international interconnections for pipeline gas trade. The Japanese market is going through a process of liberalisation, and liquid gas hubs have historically emerged after rather than before liberalisation, but this may not be enough to foster anything more than localised gas trade at the wholesale level.

China offers much more in terms of both interconnections and market growth. Gas demand, including for LNG, is rising rapidly and the country is expected to overtake Japan as the largest market for LNG imports globally. Chinese LNG imports grew by 38.8% in 2018.

It also has multiple international interconnections, receiving pipeline gas from Myanmar, Central Asia and by the end of this year, if the Power of Siberia pipeline is completed on time, from Russia. It is also a major producer of gas in its own right; China produced 161.5bn m³ of gas in 2018, while consuming 283bn m³, importing 73.4bn m³ as LNG and 47.9bn m³ by pipeline, according to BP data.

However, the Chinese market remains dominated by large state companies and third party-access to infrastructure is limited, not just at LNG terminals but inland. The Chinese market is insufficiently liberalised to support the development of a regional gas hub, while concerns about market access, the continuity of energy policy and availability of independent arbitration also detract from its suitability.

Derivatives solution

The lack of an obvious candidate creates a vacuum which LNG derivatives hope to fill, but there is more to their potential for success.

LNG is the glue which binds fragmented Asian gas markets together and the primary means of price transmission. Access to domestic gas infrastructure, such as import terminals, storage and pipelines is not necessary for a commodity delivered by ship because there is no system balancing requirement. LNG carriers are the LNG market’s transportation system and the market for LNG carriers is open.

Even if the end markets lack liberalisation, there is sufficient diversity of buyers from multiple national markets to create active competition in wholesale LNG trade in Asia.

There is also no problem with a lack of a specific physical delivery point as Henry Hub, the NBP and TTF show – they are all systems rather than individual points for delivery.

As LNG supply becomes more flexible and less tied to oil indexation, and as markets like Japan liberalise their domestic markets, creating direct price risk between local and international markets for importers, the need to hedge LNG sales and purchases grows.

Asian gas markets – Japan, South Korea, Taiwan — are dominated by LNG trade. The newer participants – China, India, Pakistan and Bangladesh – import or will import enough LNG to make the Asian price of LNG a key element of domestic pricing.

 

The ability of the formation rock to transmit the fluid contained within it.

On occasion reprocessing of existing seismic lines or processed data is required in order to reinterpret a prospect or area. In addition, oil companies unwilling to initiate new seismic or drilling, may feel inclined to spend some dollars on reprocessing their existing data, maybe more than usual. Reprocessing is an economic way to update data already in the bank using the latest methods in a rapidly evolving technology, and there’s always a chance that the enhanced images may reveal fresh clues to finding extra reserves

A mooring system utilizing a single anchor base and single riser, designed to operate as an unmanned marine terminal

This log measures the bulk resistivity (the reciprocal of conductivity) of the formation. Resistivity is defined as the degree to which a substance resists the flow of electric current. Resistivity is a function of porosity and pore fluid in a rock. Porous rock containing conductive fluid (such as saline water) will have low resistivity. A non-porous rock or hydrocarbon-bearing formation has high resistivity. This log is very useful for determining the type of fluids in formations and is frequently used as an indicator of formation lithology and grain size.

Chavez, a self-described revolutionary socialist, has forced all of the country’s private oil companies into minority positions in joint ventures

In accordance with section 10 of the Natural Gas Sector Law, a supplier’s transportation license was given (1) In December 2003 to Yam Tethys. The license is for the transmission of gas from their offshore field, including land handling facilities up to the point of connection to the onshore national transportation system. (2) To EMG in December 2006 for its installations within the territory of Israel, up to the point of connection to the transportation system