The deepwater drilling industry is expected to continue to grow through the decade and see expenditures reach $20 billion annually by 2010, a leading research firm said.
In its World Deepwater Market Forecast, U.K.-based Douglas-Westwood estimates deepwater spending will rise annually by 7.3 percent. Growth will be led by Asia and Latin America, where drilling is rising, but analysts say the "golden triangle" of deepwater exploration and development -- offshore West Africa, the Gulf of Mexico and offshore Brazil -- will still account for 85 percent of global deepwater expenditures in the coming years.
"After the drilling and completion of subsea wells, an activity that is becoming increasingly expensive in areas such as the US Gulf of Mexico, it is floating platforms that form the main component of deepwater development expenditure," Steve Robertson, research manager at Douglas-Westwood, was quoted as saying in an industry publication.
"Advances in technology, particularly in mooring systems and innovative hull designs, are allowing production from greater water depths to be viable on both a technical and economic basis," he said.
Through the end of the decade, oil and gas companies were expected to invest $28 billion on deepwater floating production systems, $36 billion on drilling and completing subsea wells, and $14 billion on flowlines and control lines.
CNPC gets Kazakh green light on $4.2B takeover
China National Petroleum Corp. President Chen Geng said Thursday the firm received government approval to buy PetroKazakhstan for $4.2 billion.
The Kazakhstanskaya Pravda said: "This transaction will be completed as it is profitable not only to PetroKazakhstan and CNPC, but also to Kazakhstan."
PetroKazakhstan shareholders approved the acquisition in October, but in order to seal the deal, the Kazakh government had to render its approval.
"The president expressed his support for CNPC's takeover of PetroKazakhstan," Chen told journalists after meeting Kazakh President Nursultan Nazarbayev.
Last month, the Kazakh parliament rushed to adopt a law that would allow the government to block sales of foreign-held stakes in companies developing the nation's natural resources, which raised concerns CNPC's takeover of PetroKazakhstan could be blocked, too.
As one of the most vociferous critics of the deal, Kazakh Energy Minister Vladimir Shkolnik backed down and criticized the firm for failing to inform the government ahead of the deal.
"By any ethical standards, they should have contacted the government and said: 'We want to do this, what's your attitude?'" Shkolnik told parliament in Astana.
Canada-listed PetroKazakhstan has all of its operations and assets in Kazakhstan, and produces oil in the southern Kyzyl Orda region. It also owns a refinery at Shymkent, which is the most modern of only three refineries in Kazakhstan.
CNPC must now finalize the transfer of its 33 percent stake in PetroKazakhstan to state-owned Kazmunaigas for $1.4 billion in a move designed to appease the Kazakh government, which will split ownership of the Shymkent refinery with its Chinese partner.
South American gas talks come to a halt
Political and border disputes with Chile might have led Peru to suspend negotiations to expand a cross-border natural gas transport from its Camisea field.
Peru's Prime Minister Pedro Pablo Kuczynski confirmed the temporary suspension of the talks Thursday but denied it was because of the country's decision earlier this week to redraw its maritime border with Chile so Peru could acquire an offshore area rich in fish.
Following the law's passage to redefine the maritime boundary, Chile reacted by suspending negotiations with Peru on expanding bilateral trade.
Kuczynski told a local radio station the two sides postponed gas talks so they could estimate the amount of actual reserves at Camisea to ensure supply sufficiency for the new $2.5 billion South American gas project.
Much of the field's reserves supply the domestic market or are geared to exports as liquefied natural gas to Mexico under a Hunt Oil-led project to begin in 2009.
The project will construct a 720-mile pipeline to transport 1 billion to 1.2 billion cubic feet per day of gas from Camisea to Chile and Argentina. Later, Uruguay and Brazil will also receive gas and connect with existing pipelines to complete a regional gas supply loop.
Chile is the largest advocate of the project and imports 90 percent of the gas it uses from neighboring Argentina and looks to diversify supply.
Shortages in Argentina over the past two years caused export cuts that curtailed consumption in Chile.
"We have to define all this before we give approval to an accord with the markets to the south," Kuczynski said.
U.S. asked to repay over $200M to Iraq
U.N.-appointed auditors said the United States should repay Iraq $208 million in disputed fees because Halliburton subsidiary KBR received nearly $1.4 billion in no-bid contracts.
Set up to keep an eye on the use of Iraqi oil revenues by the U.S.-led coalition, the International Advisory and Monitoring Board conducted a special audit of Kellogg Brown & Root for the procurement and distribution of fuel products and the restoration of Iraq's oil infrastructure. The watchdog discovered KBR worked at inflated prices or did a poor job.
KBR, the U.S. military's largest private contractor in Iraq, became subject of inquiries about overcharging for fuel supplies, while attracting allegations of political favoritism because Halliburton was headed by Dick Cheney before he became vice president in 2000.
KBR denied wrongdoing.
The watchdog recommended Iraq establish an independent oversight body after the board ceases operations on Dec. 31, following elections to select a permanent postwar government in Baghdad.
Board representatives come from the United Nations, the World Bank, the International Monetary Fund, the Arab Fund for Economic and Social Development and the Iraqi government.
Closing oil prices, November 11, 3 p.m. London
Brent crude oil: $55.14
West Texas Intermediate crude oil: $58.55
(Please send comments to AMihailescu@upi.com)