UPI Energy Watch

By ANDREA MIHAILESCU, UPI Energy Correspondent

Norway eyes Gulf of Mexico

Norway’s Statoil is looking to invest in the Gulf of Mexico as it bids on leases to grab a large slice of deepwater exploration acreage, the Oil and Gas Journal reported.


Statoil, expanding operations away from Europe, has offered the highest bids of the 47 oil companies that participated in the U.S. government's latest exploration round.

The company submitted 40 bids for offshore acreage worth $143 million, which is nearly three times as much as the nearest rival BP. The U.S. Minerals Management Service, which is part of the Department of the Interior, attracted almost $290 million in high bids from these 47 companies in the latest auction.

Oil companies placed 358 bids on 282 tracts of offshore acreage in the Western Gulf of Mexico -- a move that shows how eager oil companies are for new exploration ventures.


"The success of this lease sale once again demonstrates industry's commitment and interest in the Gulf," Randall Luthi, director of the Minerals Management Service, was cited as saying.

Statoil submitted 36 high bids with a value of $138.9 million for blocks in the highly attractive deepwater areas of the western Gulf of Mexico.

Shell oil project in Kazakhstan halted

Royal Dutch Shell had to halt development of the Kashagan oil field in Kazakhstan for alleged environmental violations and cost overruns in a move with ominous similarities to the $20 billion Sakhalin-2 dispute, the Guardian reported.

Shell is one of several Western partners in the Agip Kazakhstan North Caspian Operating Co. Other companies developing the Kashagan field, one of the largest oil discoveries with commercial reserves of up to 16 billion barrels, include Italy’s Eni and ExxonMobil.

Officials from Kazakhstan and Shell have been holding fierce talks that implicate Shell and its partners in allegations that production may not come on stream until 2010, five years later than expected, while costs are claimed to have soared from $57 billion to $136 billion.

According to media reports, Eni, the operator, has 60 days to respond and come up with a plan to ameliorate the government's fears over alleged breaches of the operating license.


Ministry officials said concerns were over the death of baby seals and fish in the Caspian Sea.

Gazprom to build pipeline in Nizhny region

Russian gas monopoly Gazprom plans to construct a natural gas pipeline in the north of the Nizhny Novgorod Region in 2009-2010, Valery Ulyanov, the region's fuel and energy minister, told reporters Wednesday.

After receiving approval, Gazprom will construct the pipeline between the village of Krasnye Baki and the town of Uren, Ulyanov was cited as saying by Prime-Tass.

Ulyanov did not provide any details on the amount of investments in the construction.

In January-June, investments in the pipeline’s construction amounted to about half of the investment planned for all of 2007, Ulyanov said.

These funds have made it possible to build enough gas pipelines to connect 4,042 households to the gas supply network, he added.

In March, the Nizhny Novgorod government and Gazprom signed a protocol on construction of gas pipelines in the region in the next 10 years. Investment in the construction will amount to approximately $468 million.


Closing oil prices, Aug. 30, 3 p.m. London

Brent crude oil: $72.38

West Texas Intermediate crude oil: $73.87


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