TPT January 2007

Oil & Gas News

• In other news of Gazprom, Ukraine agreed to a 36 per cent price increase for natural gas supplied by the Russian gas company in 2007, wrapping up before the New Year the annual contract talks that dragged on late into 2005 until Gazprom cut off the gas on 1 January. A Swiss-registered energy trader, RosUkrEnergo, will supply all of Ukraine’s natural gas imports at $135 per 1,000 cubic metres, up from $95 in 2006, according to Prime Minister Viktor F Yanukovich of Ukraine, who brokered the deal.

ExxonMobil , Shell , BP , ConocoPhillips , and several independents are expected to make bids in the area, Lease Area 181, a relatively shallow stretch close to pipelines and other existing infrastructure. Preceding the elections, energy industry leaders were in strong support of the House bill. They said drilling off the two coasts would add enormous amounts of oil and gas to the national inventory over many years, although exact amounts were not cited. • ExxonMobil has offered to pay a $20 million fine and relinquish some leases to the state of Alaska to resolve a dispute over a North Slope oil and gas field that has remained undeveloped for decades. The US firm would surrender some 20,000 acres of the 116,000-acre Point Thomson unit for failure to develop the field as quickly as promised. The company’s offer was accompanied by an updated plan that links future field development to a yet- to-be-built pipeline that would ship North Slope natural gas to the lower 48 US states. The natural gas pipeline, a massive project estimated to cost over $20 billion, is expected to take years to build. Point Thomson holds 250 million to 300 million barrels of natural gas condensates and oil, according to state officials. It also holds 8 trillion cubic feet of conventional natural gas. • The US Interior Department has dropped claims that Chevron Corp (San Ramon, California) systematically underpaid the government for natural gas produced in the Gulf of Mexico, a decision that could allow energy companies to avoid paying hundreds of millions of dollars in royalties. The agency had ordered Chevron to pay $6 million in additional royalties but could have sought tens of millions more had it prevailed. Interior

A new US Congress is set to sharply curtail coastal drilling

The 7 November victory of the Democrats in midterm elections in the US has drastically diminished the prospects for opening the seas off the country’s coasts to oil and gas drilling. Under the Republicans, now the minority party, the House of Representatives passed a bill last year that would permit extensive drilling on most of the outer continental shelf off the Atlantic and Pacific coasts. Now the House bill seems a dead letter. Instead, a Senate bill prohibiting drilling over a far greater area is likely to be enacted. The more modest Senate version opens to bidding only 8.3 million acres of federal waters in the Gulf of Mexico. The waters, south of the Florida Panhandle and 235 miles west of Tampa, are believed to hold 5.8 trillion cubic feet of natural gas and 1.3 billion barrels of crude oil.

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J ANUARY /F EBRUARY 2007