UPI Energy Watch

Azerbaijani officials blame British Petroleum for gas field delays.

Natig Aliyev, Azerbaijan's minister for industry and energy, voiced his concerns over the slow development of the second stage of the Shah gas field development project.

"This is my private viewpoint that BP postpones this project," Aliyev said.

Stage two of the Shah Deniz field is scheduled to be complete by 2012, but it could take an additional year at least "if BP continues working in this way," he said.

Production from the field will be increased to 12 billion cubic meters of gas a year during the current stage.

Aliyev said he does not understand the delays, especially with the market the way it is -- high oil prices are boosting demand for natural gas, especially in many European countries, Trend news agency reported.

"Therefore, BP was to intensify some processes," Aliyev said.

He suggested BP could raise the gas production rate even higher in the field with new technologies, up to 20 billion to 40 billion cubic meters a year over one-and-a-half to two years.

Chevron Corp. announced plans to spend big money on African oil.

The second-largest U.S. oil company has said it will spend $20 billion over five years on production in Africa to help meet global demand for oil, natural gas and cleaner fuels.

That's about 30 percent more than was spent during the last five years, said Peter Robertson, vice chairman of Chevron, but global demand for energy may increase by 50 percent by 2025.

"The world is saying it needs it,'' he said.

Almost all the money will be spent in the sub-Sahara's largest oil producers, Nigeria and Angola; up to $5 billion will be used for a plant in Escravos in Nigeria's Niger Delta region; and Chevron plans to start producing up to 125,000 barrels of oil a day in Tombua Landana, Angola, in the next few years at a cost of $3 billion.

The plant in Escravos will convert gas to diesel and is expected to be complete by 2012, with a capacity of about 30,000 barrels a day.

Untapped North Sea oil reserves could far exceed industry estimates.

According to recent estimates by geological experts, the reserves could stand at around 30 billion barrels of oil.

Since the discovery of oil in the North Sea, the equivalent of 37 billion barrels of oil have been extracted from the U.K. Continental Shelf, leaving up to 25.5 billion barrels still to be recovered. However, industry experts believe remaining reserves surpass current estimates by as much as a fifth, The Times of London reported.

The rising price of oil has made it more economically viable to drill fields that once were considered too difficult or remote.

The suggestion that the North Sea could harbor more oil than was previously anticipated comes as the U.K. government recently changed the North Sea taxes to increase falling investment levels in the U.K. Continental Shelf.

High taxes and the high cost of drilling have led to a fall in oil and gas output from the North Sea -- about 3 percent a year since 2006.

According to Oil & Gas U.K., the total cost of recovering oil in the region is one of the highest in the world at a cost of about $35 per barrel.

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Closing oil prices, June 4, 3 p.m. London

Brent crude oil: $127.10

West Texas Intermediate crude oil: $126.87

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(e-mail: energy@upi.com)