TPT January 2007

From the AMERICAS

mining. But development of the sands has already led to labour and materials shortages and higher construction costs in the province, and EnCana and other Canadian oil and gas companies have been reluctant to commit to more refining capacity. Oil sands development entails a tedious process of extracting heavy tar, or bitumen, from rock and sand by high-pressure injection of steam into the wells. While such projects are more expensive to build and operate than conventional oil rigs, the high oil prices over the last year or two have enhanced their attractiveness. The Conoco-EnCana venture assumes future oil prices averaging $50 a barrel, about $10 below current prices. The two partners said that sending the heavy oil mined in Alberta south to the Texas refineries will require additional pipeline capacity. Their ten-year, $10 billion joint venture, announced 5 October, is subject to regulatory approval in Canada and the US.

DaimlerChrysler confirmed a report in the German industry newspaper Automobilwoche (9 October) that Volkswagen; its premium unit Audi ; BMW ; and Mercedes hope to launch and market Bluetec in the US beginning in 2008. Bluetec is the technology developed by Mercedes-Benz and German diesel injection system specialist Bosch , the world’s largest automotive parts supplier. The time seems right for the alliance, as Bluetec diesels will meet the stringent US emissions norm Bin 5 that takes effect in 2009. Diesel has a market share of just 5 per cent in the US, as compared with 50 per cent in Western Europe.

Oil and gas

A US-Canada venture will develop the Alberta oil sands

A joint venture for the development of Canadian oil sands properties will be divided between two new companies, each owned equally by EnCana (Calgary, Alberta) and ConocoPhillips (Houston, Texas). One, to be based in Calgary, will control two EnCana oil sands projects in northeastern Alberta. The other, Houston-based, will control Conoco refineries in Roxana, Illinois, and Borger, Texas. The partners’ intention to send heavy oil from the tar sands to the US for processing may meet resistance in Alberta where, because refineries offer long-term employment, there has been a growing call for additional refining capability to be built in tandem with oil sands

Opinion: A European view of Americans as energy consumers

Writing in the New York Times, Jad Mouawad observed that oil industry executives are usually cautious and secretive. If so, Paolo Scaroni, the chief executive of Eni SpA of Italy, is an exception to the rule. In Vienna recently, between meetings in Moscow and Rome where he had just announced a wide-ranging deal between Eni and Russia’s Gazprom, Mr Scaroni sat for an interview with the Times.

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J ANUARY /F EBRUARY 2007