Hugo Chavez Changes His Mind

Hahahaha:

President Hugo Chávez, buffeted by falling oil prices that threaten to damage his efforts to establish a Socialist-inspired state, is quietly courting Western oil companies once again.

Until recently, Mr. Chávez had pushed foreign oil companies here into a corner by nationalizing their oil fields, raiding their offices with tax authorities and imposing a series of royalties increases.

But faced with the plunge in prices and a decline in domestic production, senior officials have begun soliciting bids from some of the largest Western oil companies in recent weeks — including Chevron, Royal Dutch/Shell and Total of France — promising them access to some of the world’s largest petroleum reserves, according to energy executives and industry consultants here.

Their willingness to even consider investing in Venezuela reflects the scarcity of projects open to foreign companies in other top oil nations, particularly in the Middle East.

An "Earthquake" At The IEA

I don't like writing about oil much, but this amounts to the IEA hitting the panic button. Years too late, but ...

LONDON: The rapidly growing appetite for fossil fuels in China and India is likely to help keep oil prices high for the foreseeable future - threatening a global economic slowdown, a top energy expert said Wednesday.

The unusually stark warning by Fatih Birol, chief economist of the International Energy Agency, about the impact of Asia's emerging giants comes as the agency prepares to issue its influential annual report next week, which will focus on China and India.

In preparing the report, Birol said he had experienced "an earthquake" in his thinking.

"China plus India are going to dominate growth in the oil markets," Birol said during an interview at an oil industry conference. During the past 18 months, he noted, more than two-thirds of the growth in global oil demand came from China and India alone.

Demand for oil in China, he added, would eventually equal the entire supply from Saudi Arabia.

Partly as a result, he added, the annual report would predict that oil prices, now at about $93 a barrel, could remain at levels much higher than thought possible in the past. This, he said, heightened the risk of a serious global economic slowdown.

"We may see very high prices that will come to a level where the wheels may fall off," Birol said. "I definitely believe that if prices stay at these levels, there will be a slowdown of the global economy."

Another Sidebar Update: R-Squared

I'm still around and reading, so while this blog is largely dormant in terms of new content, I'm still maintaining the blogroll on the right. It's hardly a new blog, but Robert Rapier's R-Squared Energy Blog has some insightful contents, including yesterday's guest post about the unfortunate and serious problems with algal biodiesel being any sort of near-term cavalry to rescue us from our energy straits. We appear to agree on the side effects of peak oil: industrial civilization will not collapse, sorry James Kunstler. He also seems to have the same problem with primitivist trolls that I have had earler. (You'll have to scroll down, as his blogging template doesn't [yet] get page anchors right.)

On a related note, Rapier shows up in the comments of this Wall Street Journal Energy Roundup post relaying a fascinating and all-too-sadly-mundane report at The Oil Drum indicating that the Saudis may have inadvertently published data showing that their biggest field, Ghawar, has hit peak production and has been sliding downhill since 2004.

Yay! Oil For Everybody!

The SEC may be thinking about changing the way reserves are booked ($), according to the Wall Street Journal. Given the Bush Administration's proclivities, I have to wonder what kind of shenanigans are about to go on.

Updated SEC standards could mean that billions of barrels of oil and trillions of cubic feet of natural gas may finally make it onto balance sheets, sparking a revaluation of the sector.

Despite several major reviews and updated industry guidelines approved by the international Society of Petroleum Engineers, the World Petroleum Council and the American Association of Petroleum Geologists, the SEC has maintained the same reserve booking standards since the late 1970s.

But after nearly a decade of lobbying the SEC to modernize, to little avail, the industry may be beginning to see some changes, though insiders say a complete renovation of the rules may be too much to hope for yet.

One indication the Commission may be starting to budge from its hard and fast stance on rules is a recently posted notice on its Web site for applicants for a new, 12- to 18-month "Academic Petroleum Engineering Fellowship." Applying engineers must have "significant experience in petroleum reservoir engineering with expertise in petroleum reserve estimation" and "be familiar with modern analytical reservoir assessment methods."

One wonders whether this is a reaction to the Iraq war by pragmatists buried deep in the government; that oil isn't going to see daylight for a long, long time, and the war is lost, whether or not the lunatics in the White House want to admit it or not. Best to pull the wool over the shareholders' eyes one last time, maybe. Perhaps I'm being too cynical, especially without reading the proposed changes (which haven't even been made yet — all this reports is a "help wanted" ad attached to speculation). But a happy ending doesn't seem likely.

Kern County Fields Still A-Pumpin'

... years after they were supposed to be shut down:

The Kern River oil field, discovered in 1899, was revived when Chevron engineers here started injecting high-pressured steam to pump out more oil. The field, whose production had slumped to 10,000 barrels a day in the 1960s, now has a daily output of 85,000 barrels.

In Indonesia, Chevron has applied the same technology to the giant Duri oil field, discovered in 1941, boosting production there to more than 200,000 barrels a day, up from 65,000 barrels in the mid-1980s.

And in Texas, Exxon Mobil expects to double the amount of oil it extracts from its Means field, which dates back to the 1930s. Exxon, like Chevron, will use three-dimensional imaging of the underground field and the injection of a gas — in this case, carbon dioxide — to flush out the oil.

Within the last decade, technology advances have made it possible to unlock more oil from old fields, and, at the same time, higher oil prices have made it economical for companies to go after reserves that are harder to reach. With plenty of oil still left in familiar locations, forecasts that the world’s reserves are drying out have given way to predictions that more oil can be found than ever before.

Of course, if this oil really is going to be here anytime soon, well, where is it?

Hat tip to MDMH vonPA for the word, and getting me to post the damn thing.