oilvoice magazine | april 2012

7/31/2019 OilVoice Magazine | April 2012

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Edition One - April 201

MAGAZINEOilVoice

Fending off a sea of troubles

2012 Budget pushes drilling to next level

Kenya hits oil

The Bakken success story


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1 OilVoice Magazine APRIL

Adam MarmarasManager, Technical Director

Welcome to the first edition of the OilVoiceMagazine. We've taken the very best featuredcontent from our online site, and assembled it inan easy to read electronic format. We hope youlike it!At OilVoice we've always experimented with

different ways to deliver oil and gas news. Backin 2002 when the term 'RSS' was relativelyunknown, we rolled out dozens of feeds for ourusers to subscribe to. That service is now usedon a daily basis by thousands of people. WhenTwitter was still a baby we signed up and started

, notdelivering all our headlines out to the worldknowing if the service would take off or not.Today, 2000 people receive our 40+ tweets aday. And finally, with the PC losing ground totablets, we recently announced - anOilEarth.comiPad friendly site that presents headlines in awhole new way. We never stop innovating, andkeeping abreast of all the latest technologies issomething we enjoy doing.Our latest contribution to the industry is the

magazine you are reading now. Available inelectronic format only, we hope you find it agreat read. By analysing the pageview statisticson OilVoice we can see what articles are drawinginterest from the oil and gas community. Thoseare then harvested for the magazine. All killer,no filler - as they say.Special thanks must be made to the authors

who have contributed the fantastic content insideOilVoice Magazine. We're lucky enough to havecontributions from the top writers in thebusiness, and it goes without saying that if youlike what you read, then please visit theirwebsite and see what else they have to say.We'd love to hear from you too, so if you'd liketo have an article appear in the next edition,then please . get in touch Thanks for reading!

Adam Marmaras

OilVoice

Issue 1 APRIL 2012

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Contents

Aprils Featured Authors Biographies of this months featured authors. 3Who will survive oil refinery competition from the Middle East?By Hanife Mehmet 5Review: The Middle East: Still on top...By Richard Etherington 5Recently Added Companies An overview of the recent companies added to the OilVoice database. 7North Sea caught in Scottish independence rowBy Hanife Mehmet 8Insight: The US locomotive gets under way!By David Bamford 8Exploration: The Bakken success storyBy David Bamford 9The price of safety in the spotlight againBy Hanife Mehmet 10Watching World Energy: Showdown in SudanBy Eric Watkins 11Operational Energy: Fending off a sea of troublesBy Eric Watkins 13Exploration: What's happening in the Arctic?By David Bamford 162012 Budget pushes drilling to next levelBy Hanife Mehmet 16Watching World Energy: Turmoil in the South China SeaBy Eric Watkins 17Watching World Energy: Rattling the supply chainBy Eric Watkins 19Exploration: Arctic Gas Hydrates - a stupendous gas resource!By Halfdan Carstens 20Review: Is the oil industry of Brazil progressing?By Richard Etherington 21Featured University of the MonthThis month we are featuring Heriot-Watt University 23Review: Can Petrobras deliver?By Richard Etherington 24Watching World Energy: Crossing swords in the Gulf By Eric Watkins 26Kenya hits oilBy Hanife Mehmet 28Doing Business with Petrobras: How to score a goalBy Camilo Muoz 29Watching World Energy: A double whammy on IranBy Eric Watkins 30


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Aprils Featured Authors

OilVoice is always on the lookout for quality, original content. We receive submissionsfrom people in the industry on a regular basis, who in turn benefit from our large user

base. You get a chance to broadcast to the industry and spread the word, and we getfantastic original content. Get in touch for more details!

Hanife Mehmet

Contract Jobs

Hanife Mehmet is a copywriter working for contractjobs.com, the contractonly job board and news resource for freelance professionals. The siteprovides information for professional temporary workers from all leadingindustry sectors including the oil and gas sector.

Richard Etherington

OilEdge

Richard Etherington works as a freelance journalist. Richard, a BA HonsPolitical Science graduate, is also a fully trained sub-editor and reporter.

David Bamford

OilEdge

David Bamford is non-executive director of Tullow Oil, and a past head of exploration, West Africa and geophysics with BP.

Eric Watkins

Oil Diplomacy

Oil Diplomacy produces news, analyses, commentary and tailoredresearch concerning the global oil and gas industry. Watching WorldEnergy, which appears daily, comments on current events in the energyindustry

Halfdan Carstens

GEO ExPRO

Halfdan obtained a M.Sc. in Geology from the University of Oslo and then

worked for Saga Petroleim for five years including a year in the US. Healso worked for Nopec and PGS, before becoming Founding Editor of GEOExPro Magazine. He is Editor of the Norwegian geological magazine GEO.

Camilo Muoz

Translation Source

Translation Source helps companies communicate worldwide by offeringcomprehensive multilingual solutions based upon client needs. Oursolutions are developed in more than 140 languages and include a fullrange of language translation and localization services, internationaltraining and e-learning development, interpretation, instruction, bilingualstaffing and other supporting linguistic services.
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Hanife MehmetContract Jobs Submitted March 01, 2012

Who will survive oilrefinery competition fromthe Middle East?

Indian Oil refinery Essar has put forth

the notion that the UK may well see

refinery closures in the near future, due

to stiff competition. While bigger

establishments in Cheshire may be able

to handle the tough economic market,

rivals may find the profitability balance

too difficult to achieve.

Following a collapse of a refinery in

Coryton, which supplied 20% of the

south-east's fuel, competition presented

by the middle-east and India has gained

more momentum. The Petroplus owned

site went into administration in January,

putting over 900 jobs on the line.Chief executive at Essar stated: 'There is

some sort of structural change in the

refining industry globally. Refineries that

were small-sized or low-complexity are

being replaced by large, complex

refineries mostly built in the Asia-Pacific

region Those refineries that are not

economically sustainable or of low

complexity will find it much harder to

survive in this marketWe believe that

there has to be some shake-up in the

European refining industry and that

uneconomic capacity will move out."

So if this 'shake-up' never materialises,

what will this mean for oil and gas

contract jobs ? Many of those working in

smaller refineries may be questioning

their current vacancies.

Richard EtheringtonOilEdge Submitted March 05, 2012

Review: The Middle East:Still on top... It is hard to talk about the Middle East

region without mentioning its number

one cash crop, oil, in the same breath.

More recently, however, the words

'political' and 'tension' have acquired

similar status.

While the Middle East may be continue

to be the 'bread basket' of the global oil

industry, the energy risks that come

with it will never been far behind.

Indeed, the risk of a damaging shock is

always just around the corner, and the

same could be said for a potential spike

in prices.

Although the popular political unrest

that spread rapidly across the MENA(Middle East & North Africa) region last

year hit the North African nations and

subsequently the local oil industry the

hardest, Middle Eastern operations did

not escape unscathed. Indeed, the

ongoing violence and uprisings in both

Syria and Yemen continue to grab

headlines and the attention of world

leaders even today. The political tension

in these two nations also poses serious

questions of Middle East oil production

outside of the OPEC (Organisation of the

Petroleum Exporting Countries)

grouping.

Despite the recent volatility, the Middle

East's dominance of global oil supply is

unlikely to be challenged anytime soon.After all, the Persian Gulf states are sat
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upon huge reserves and as such they

remain the key region for oil export.

Among them, however, is a clear wild

card: Iraq. Despite being a stellar

producer with strong potential for future

output growth, political agendas may

serve to cloud the country's medium to

long-term oil industry growth ambitions.

The escalation of the war of words

between Iran and some of the world's

leading powers has stepped up a notch

this year, over the former's development

programme for nuclear energy. On the

back of this earlier this month, Iran

announced that it would be stopping the

sale of crude oil to British and French

firms, pledging to sell to new customers

instead. The pre-emptive move came in

the wake of the US urging its allies to

scale down on their purchases of Iranian

crude as part of the foundations for a

broader scheme of sanctions. In turnthis prompted the European Union (EU)

to ban all oil purchases from Iran.

However, in knowledge of the fact that

the ban would not take full effect before

the end of 2012, Tehran acted first to

send out a clear political message to the

allies. And this message was only ever

going to lead to one thing: a spike in

prices. Indeed a halt of Iran's oil exports

to Organization for Economic

Cooperation and Development (OECD)

nations could well trigger as much as a

20% to 30% spike in the price of a

barrel of oil, according to the

International Monetary Fund (IMF).

In fact, helped in part by Iran's dispute

with a number of Western nations,

prices have already begun climbing. At

the time of writing on February 23,

Brent crude futures have risen by 11%

in the 2012 year-to-date to above $120

a barrel (up by around $12 from the

start of the year). Moreover, around 9%

of that jump higher has come in the

month of February alone, as the rhetoric

surrounding the Iran embargo hardened.

Although prices are widely expected to

continue trending higher in the near

term, the likely scenario is that the likes

of Saudi Arabia, Libya and Iraq will step

in and increase their respective supplies,

helping to normalising prices somewhat

and subsequently help cool nerves

surrounding Iran's role as an oil

exporter.

In sum it appears that while the Middle

East may be continue to be the 'bread

basket' of the global oil industry, the

energy risks that come with it will neverbeen far behind. Indeed, the risk of a

damaging shock is always just around

the corner, and the same could be said

for a potential spike in prices.


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Recently Added Companies

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Cardinal MidstreamNatural Gas

Cardinal Midstream, LLC is a natural gasmidstream company focused on providingexceptional customer service in the areasof natural gas gathering, transportation,processing and treating.

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Hawk ExplorationCrude Oil and Natural Gas

Hawk is a company engaged in the

exploration, development and productionof conventional crude oil and natural gas inwestern Canada and is based in Calgary,Alberta.

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North Atlantic DrillingOffshore Drilling

North Atlantic Drilling is a leading offshoreharsh environment drilling company,aiming to be their customers' mostimportant partner in making oil and gasavailable in a safe and cost-effectivemanner.

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Oil Refineries Ltd.Oil Refinery

Oil Refineries Ltd. (ORL), located in thebay area of Haifa, is Israel's largest Oilrefinery.

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Surmont EnergyOil Sands

Surmont Energy Ltd is a privately held oilsands company founded in 2011 andheadquartered in Canada. Their philosophy

was built on a foundation of integrity,honesty, scientific principle, creativeapplications and hard work.

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Grand Gulf EnergyConventional Oil and Gas

Grand Gulf Energy is focused on low-risk,conventional oil and gas plays in Louisiana,Texas and Arkansas, close to existinginfrastructure and close to or withinexisting oil and gas production.

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Texas Energy Group Crude oil and natural gas

Texas Energy Group, LLC (TEG) is anAustin, Texas based oil and gas explorationand development company specializing inbringing industry prospects to the privateinvestor.

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NAL Energy Corp.Oil and Gas

NAL Energy Corporations strategy is todeliver total return to its investors whichcombines income with modest growth inthe Canadian upstream oil and gasindustry.

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List your business free of charge onOilVoice in a few simple steps.
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North Sea caught inScottish independencerow

While Independence is very much still on

the political agenda concerning Scotland,

new fuel to the fire has been added in

the form of North Sea Oil. According to

claims, Scotland would have been in a

much better position compared to the

rest of the UK if it's entire North Sea Oil

revenue was included in the Scottish

government's annual analysis report.

Although the opposition have expressed

that this in fact shows that Scotland is

too heavily dependent on North Sea oil

revenue, many also believe that this

could hold the key to exposing Scotland

as far more financially sound than therest of the UK.

If Scotland were to gain full control of

its share of North Sea oil, it would be

worth around 81% of the rest of the

UK's North Sea income. Scottish finance

secretary, John Swinney stated on the

matter: "With responsibility for our own

finances and our own vast natural

resources, we will be able to make

choices in our own best interestsWith

independence, we would control the

fiscal levers we need to suit our own

economic circumstances and maximise

Scotland's potential to secure new

investment and jobs."

If 'full control' was eventually granted to

the Scottish Government, it is possible

that oil and gas contract jobs could

increase among local workers. But

before this is even considered,

oppositional opinion shows that greater

emphasis needs to be given to the

Scotland's apparent dependency on

separate UK spending. Whatever the

outcome, possible consequences from

both propositions are too risky for a

decision to be decided upon straight

away.

David BamfordOilEdge Submitted March 12, 2012

Insight: The USlocomotive gets underway!

A recently released report states that, in

total, an estimated 26 billion to 61 billion

barrels of economically recoverable oil

could be produced in the United States

using currently available CO2-EOR

technologies and practices, or potentially

more than twice the country's proved

reserves.

Expanded use of CO2-EOR also can

advance the development of

infrastructure needed for long-term

capture, transportation and storage of

carbon emissions.

The US National Enhanced Oil Recovery

Initiative (NEORI) was formed to help

realize CO2-EOR's full potential as a

national energy security, economic and

environmental strategy. Organized and

staffed by the Center for Climate and

Energy Solutions (C2ES) and the GreatPlains Institute (GPI), the Initiative
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brought together a broad and unusual

coalition of executives from the electric

power, coal, ethanol, chemical, and oil

and gas industries; state officials,

legislators and regulators; and

environmental and labor

representatives.

A great report is available - I offer just

one extract:

'Amidst economic uncertainty, fiscal

crisis and political division over energy

policy, carbon dioxide enhanced oil

recovery (CO2-EOR) offers a safe andcommercially proven method of

domestic oil production that can help the

United States simultaneously address

three urgent national priorities:

Increasing our nation's energy

security by reducing dependence

on foreign oil, often imported

from unstable and hostileregimes;

Supporting job creation,

increasing tax revenue, and

reducing our trade deficit by

keeping dollars now spent on oil

imports here at home and at

work in the U.S. economy; and Protecting the environment by

capturing and storing CO2 from

industrial facilities and power

plants, while getting more

American crude from areas

already developed for oil and gas

production.

A largely unheralded example of

American ingenuity, CO2-EOR was

pioneered in West Texas in 1972 as a

way to sustain oil production in

otherwise declining oil fields. It works by

injecting CO2 obtained from natural or

man-made sources into existing oil fields

to free up additional crude oil trapped in

rock formations. In this way, CO2-EOR

can significantly extend the lifespan and

revitalize production of mature oil fields

in the United States." Exactly!!

David Bamford

OilEdge Submitted March 13, 2012

Exploration: The Bakkensuccess story

Discovered in the 1950s, North Dakota's

Bakken Formation oil production was

just 1,500 bpd in 2004.

Today, it exceeds 440,000 bpd and is

expected to be 700,000 bpd within the

next few years.

Just what is going on there? The longer

version of this article is by Tom Smith

and can be found in Geoexpro. (Page 52

or page 50 in the pdf!).

The Bakken is one of a growing number

of shale formation success stories,

thanks to new, innovative technologies

that make unconventional plays

possible, as well as to the constant quest

of the oil and gas companies to find new

reserves.

The increase of Bakken oil production in

North Dakota has come within the past

five years. In the beginning of 2007,

North Dakota had 303 wells producing

12,000 bopd. By early 2009, thatnumber had risen to 904 wells producing


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106,000 bopd.

Jump to November of 2011 (the most

recent date published for North Dakota)

where 3,118 wells were producing

443,425 bopd.

The North Dakota Department of

Mineral Resources predicts that oil

production from the Bakken and Three

Forks Formations will exceed 700,000

bpd in the next four to seven years.

North Dakota is not the only area

currently with Bakken production.

Neighbouring Montana, where the

present oil boom originated (see GEO

ExPro Vol. 7, No. 2), has been producing

a steady 64,000 boepd. Further north in

Canada, production is 75,000 boepd. In

total, there are around 5,700 producing

wells, with about 2,000 new wells to be

drilled this year.

The Bakken Formation is divided into

three informal members and lies

between the Three Forks and Lodgepole

formations. The upper and lower shalemembers are world class source rocks.

While the middle member is the primary

reservoir target, all the units shown are

potential reservoir targets, with oil

production from the Three Forks

Formation growing rapidly.


The price of safety in thespotlight again

Since the oil spill in the Gulf of Mexico,

health and safety has been on every oil

and gas professional's lips when

engaging with new projects. But perhaps

it's a case of lesson not learnt for some

UK oil and gas companies according to

Green MP, Caroline Lucas.

While UK companies are putting all their

efforts into projects concerning Artic

Water resources, Lucas has suggested

that financial and environmental factors

have been put in the side lines. She

stated: "There is no reason to believe

that that any lessons have been learned

from the Deepwater Horizon blowout.

They seem to be shutting their eyes and

crossing their fingers that they will not

have a spill and it beggars belief that

they are not able to tell shareholdershow much it would cost to deal with a

worst case scenario. Either it has not

been done or we were not being told,"

Shell and Cairn energy have been put in

the firing line for not putting forth

pollution information and safety

procedures to investors, leaving many in

the dark. It may be a case of too little

too late, as Cairn have already started


12/34


drilling off the coast of Greenland and

Shell have proposed to start their drilling

expedition this coming summer.

Shell have defended their lack of safety

information by stating that they had not

attached fixed prices to spill clear ups

due to the fact that the risk was 'very

small'. While the area in question could

open up hundreds of oil and gas contract

jobs, the battle between safety and

diving straight in continues between

green MP's and oil and gas companies

continues.

Eric WatkinsOil Diplomacy Submitted March 19, 2012

Watching World Energy:Showdown in Sudan

Actor George Clooney, fresh off a visit to

the White House last week, found

himself a guest of another branch of

government a few days later: the US

Secret Service. Along with Clooney, at

least eight others were given similar

accommodations, including his father

Nick Clooney.

They were all arrested after staging a

protest at the Sudanese embassy in

Washington D.C. Their demand? That

Sudanese President Omar al-Bashir

immediately end his government's

blockade of food and humanitarian aid

intended for people in the Nuba

Mountains and Blue Nile regions.

After speaking on the steps of the

embassy to hundreds of activists,Clooney along with other activist leaders

were asked by police to leave. When

they refused, officers swooped in for the

arrests.

The protestors included Martin Luther

King III, NAACP President Ben Jealous,

Enough Project Co-Founder John

Prendergast, President of United to End

Genocide Tom Andrews and four US

Congressmen: Jim McGovern, D-Mass.,

Al Green, D-Texas, Jim Moran, D-Va.,

and John Olver, D-Mass.

CLOONEY'S EXPERTISE CITED

If anyone doubts Clooney's sincerity in

protesting on behalf of the beleaguered

Sudanese people, they need to think

again.

The Hollywood actor, nominated for an

Oscar this year, has long been on this

issue as underscored by his role as

producer and narrator of Sand and

Sorrow, a documentary depicting thehorrors perpetrated in the region by al-

Bashir's regime.

Clooney certainly has the respect of US

leaders, too. Just days before his protest

at the Sudanese embassy, he testified

before the Senate Committee on Foreign

Relations which held a hearing on

independence and insecurity in Sudan

and South Sudan.

Committee Chairman Sen. John Kerry

introduced Clooney as an actor, but

underlined his credentials by referring to

him as co-founder - along with John

Prendergast - of an important means to

understand events in the region.

'They represent the Satellite Sentinel

Project, which has given us a window into events in Southern Kordofan and Blue
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13/34


Nile and elsewhere,' Kerry said, adding

that the two had just returned from

Sudan. 'So I think today we will have a

good opportunity to really get some

insights, and we welcome it,' he said.

SUDAN'S SHUTDOWN RAISES US GAS

PRICES

Quite apart from the humanitarian crisis

now brewing in Sudan, Ranking

Committee Member Sen. Richard Lugar

noted that the impact of the 'bloody

fighting' has been brought home to theUS in the form of higher gas prices.

'When the comprehensive peace

agreement, signed in 2005, finally

achieved the separation of South Sudan

from the north last July, it was hoped

that the petroleum wealth that they

share, oil from the south exported

through pipelines in the north, would be

deemed too precious for either side toforego,' Lugar said.

'Instead, however, oil exports have

stopped, putting upward pressures on oil

prices globally. Even though the United

States imported no oil from Sudan, oil is

traded on a world market. So in today's

tight oil market, any major loss of

supply affects all prices,' he said.

Clooney and Prendergast are highly

aware of the role played by oil in the

current crisis. Indeed, two years ago, in

an Op-Ed for The Washington Post, they

were explicit in linking Khartoum's policy

of terror to its drive to secure the

country's oil.

IT'S ABOUT OIL

'Over the past 20 years, the regime in

Khartoum has armed and politicized the

northern communities that border Abyei,using them as a battering ram to drive

out residents and ensure control of the

area's valuable oilfields,' Clooney and

Prendergast wrote.

They went on to quote Dinka

inhabitants of Abyei on their need for the

oil that lies underneath their lands: 'We

have suffered so much for so long. The

oil is a gift for our suffering. We cannotgive it away. We just want to feel the

winds of freedom.'

The repercussions of the situation in

Sudan go far beyond the Dinka, now

stretching all the way into the highest

levels of international politics as Sudan's

oil is mostly exported to China, thirsty

for every drop it can find.

Apart from higher gas prices, though,

the shutdown of oil production in South

Sudan also makes a problem for

Washington D.C., given its efforts to get

Beijing on board with sanctions against

Iran. In the Kerry hearing, Prendergast

recognized that point and drew it to

everyone's attention.

HIGH ON THE INTERNATIONAL RADAR

SCREEN

'To put a fine point on what this moment

does present with the cut off of the oil,

is that President Obama and President

Hu are going to meet very soon,' he

said. 'This is a chance to put the issue

high on the radar screen of the two

leaders.'


14/34


The D.C. protest that saw the arrest of

one of Hollywood's most famous actors,

along with a host of other activists was

not a stunt. Clooney, Prendergast, and

all of the others know exactly what is at

stake.

Yes, it's about oil, but oil that will

enable the Dinka and other South

Sudanese to feel the winds of freedom.

It's also about oil that could spell the

difference between war and peace in the

Middle East.


Operational Energy:Fending off a sea of troubles

Winston Churchill knew what he was

doing when he took the decision to

transform Britain's Royal Navy from a

coal-burning fleet to an oil-burning force

in the early 1900s. But he also knew the

risks.

'The advantages conferred by liquid fuel

were inestimable,' he said, knowing that

oil had double the thermal content of

coal so that boilers could be smaller and

ships could travel twice as far.

Then, too, oil enabled greater speed

and burned with less smoke than coal so

that the fleet would not reveal its

presence as quickly. Oil also could be

stored in tanks anywhere, allowing more

efficient design of ships.

Oil could also be transferred throughpipes without reliance on stokers, which

reduced manning problems, and oil also

enabled refueling at sea - something

hard to imagine with coal.

Still, Churchill also knew that there was

something about oil that would make it a

hard sell with his defense chiefs. 'To

change the foundation of the navy from

British coal to foreign oil was a

formidable decision in itself,' he said.

VAST OIL TRUSTS

'The oil supplies of the world were in the

hands of vast oil trusts under foreigncontrol,' he said. 'To commit the navy

irrevocably to oil was indeed to take

arms against a sea of troubles'

Nearly a hundred years later, the U.S.

Department of Defense has come to

recognize the same risk in the use of oil

that is under foreign control, and it has

come to fight it with a new concept

called Operational Energy.'The newest area of focus for the DoD is

energy - more specifically, renewable

energy, and even more specifically,

advanced biofuels,' said Raymond James

analyst Pavel Molchanov in a note to

investors this week.

'The DoD, however, is actually putting

its money where its mouth is in terms of

providing tangible support - not just

rhetoric - for companies that could

eventually be significant fuel suppliers

for the armed forces,' Molchanov said.

STRAIT OF HORMUZ

'This comes at a time when geopolitical

threats to oil supply abound - including,

but by no means limited to, Iran's threatto shut down the Strait of Hormuz,' he


15/34


said, echoing an idea Churchill would

have understood.

If anyone would know about Churchill's

sea of troubles, it would be the U.S.

Navy, which reaches around the globe to

every hotspot imaginable. It certainly

has accepted the idea that energy is a

strategic resource and that energy

security is fundamental to its mission.

'From a strategic perspective, the

objective is to reduce reliance on fossil

fuels,' the Navy says. 'Tactically, the

objective is to use energy sources

available on location and increase

energy efficiency to reduce the volatility

that is often associated with long fuel

supply transport lines.'

As far as renewables go, the US Navy

has a clear plan in mind: By 2020, 50%

of its total energy consumption will come

from alternative sources.

According to Molchanov, several firmsare involved in the effort to step up

production of biofuels for the Navy,

including Solazyme, which produces

algae-based oils, and Syntroleum, which

produces biodiesel.

ORDERING BIOFUELS

In 2009, the Navy ordered 20,000

gallons of Solazyme's HRF-76 Naval

Distillate, the renewable equivalent of

the Navy's main shipboard fuel, and

another 150,000 gallons a year later.

The June 2011 test flight of the MH-60S

Seahawk helicopter, using a 50% biofuel

blend, involved the first-ever military

aircraft to fly with algae-based jet fuel.

Earlier this month, the Navy announcedthat the USS Ford successfully transited

from the ship's homeport in Everett,

Wash., to San Diego, Calif., using

'25,000 gallons of a 50/50 algae-

derived, hydro-processed algal oil and

petroleum F-76 blend in the ships LM

2500 gas turbines.'

THUMBS UP TO F-76

According to Richard Leung, Naval Sea

Systems Command Navy Fuels

engineering manager, the biofuel was

virtually indistinguishable from ordinary

marine diesel.'The crew reported no change in their

typical procedures when receiving,

handling, or processing the biofuel, and

said operational performance of the fuel

system and gas turbine engines on the

blend was almost identical to operations

on traditional F-76,' Leung said.

For the U.S. Navy, the tide is turning.

Its transition away from petroleummarks the end of an era, but one that

makes sense - especially with demand

rising and supplies concentrated in the

hands of ever fewer producers. Where's

the security in that?


16/34

Health, Sa ety, Environmentand Risk Management

RPS Energy is a global multi-disciplinary consultancy, providing integrated technical,commercial and project managementsupport services in the felds o geoscience,engineering and HS&E.

Contact James BlanchardT +44 (0) 20 7280 3200E [email protected]


17/34


David BamfordOilEdge Submitted March 20, 2012

Exploration: What'shappening in the Arctic?

Spring and summer approaches and

the shoots of oil & gas activity in the

Arctic are showing through! How

'green' are they?

As mentioned in an earlier article, the

Norwegian sector of the Barents Sea is

attracting a lot of interest and justrecently it was reported that

development drilling is scheduled to

begin this month from the first

permanent offshore platform in the

Russian Arctic. Over 500 workers are

currently preparing the platform, towed

from Murmansk in August of last year,

for drilling, deferred from last

September. The platform is located inthe eastern Pechora Sea, and is 90%

surrounded by ice.

Shell is putting into place plans for

exploration drilling in the Alaskan Arctic

including taking what many regard as

'pre-emptive' legal action to prevent

their operations being disrupted by

protests.

And Cairn Energy is attempting to farm-

down its circa 80,000 sq km net West

Greenland acreage position after a

disappointing 2011 drilling campaign

which has resulted in them writing off

just shy of US$950m.

So the Arctic is beginning to acquire the

characteristics of routine exploration

activity - and yet the area is far fromroutine, indeed is probably the most

challenging frontier the oil & gas

industry has faced whether we consider

how to explore and develop in the ice,

the costs involved, the environmental

risks, the rights and needs of indigenous

peoples.

I recommend a couple of Geoexpro

articles to you: one by myself and

another by Jane Whaley

Hanife Mehmet

Contract Jobs Submitted March 22, 2012

2012 Budget pushesdrilling to next levelMany things were expected to come

from the 2012 budget announcement

yesterday thanks to circulating rumours

and hints from Government officials.

However, one factor that came of the

Budget run-down has come as a shock

to some people, mainly green

campaigners.

This is due to an announcement that

will see a 3bn tax break from George

Osborne to assist BP and other major

companies commence new drilling off

the north shore of Scotland. Although

this has the potential to spark freshinvestment into the area, creating

hundreds of oil and gas jobs ,

campaigners argue that new expeditions

are too risky, especially following the

Gulf of Mexico spill two years ago.

The Chancellor stated on the issue: "We

will end the uncertainty over

decommissioning tax relief that has

hung over the industry for years by
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entering into a contractual approach ...

We are also introducing new allowances

including a 3bn new field allowance for

large and deep fields to open up west of

Shetland, the last area of the basin left

to be developed."

The voice of campaigners is likely to be

drowned out by the Government and the

UK oil and gas industry alike, who both

view the tax break as the beginning of a

more sustainable oil and gas industry in

Britain. Derek Leith from Ernst & Young

in Aberdeen commented following the

2012 Budget announcement: "We see

today's action by the Treasury as a

turning point for the UK's oil and gas

industry - towards a more stable future

fostered by constructive collaboration

between the government and industry to

ensure that the recovery of the country's

oil and gas resource is maximised."


Watching World Energy:Turmoil in the SouthChina Sea

Even as world attention is mesmerized

with the Strait of Hormuz, worrisome

problems are now arising in the South

China Sea, a region along the all-

important energy sea lane of

communication out to Asia Pacific.

'You have this conundrum of a region

that needs energy and yet has a lot of

territorial disputes or gray areas that

inhibit the ability to produce some of it,'

said Robert Hormats, U.S.

undersecretary of state for economic

growth, energy and the environment.

Hormats' remarks came after the

Philippines said that it has the right to

invite foreign companies to explore for

oil and gas in waters located between its

western coast and the South China Sea -

remarks dismissive of China's own

claims.

'It is illegal for any country, government

or company, without the Chinese

government's permission, to develop oil

and natural gas in waters under Chinese

jurisdiction,' said Chinese foreign

ministry spokesman Hong Lei.

EXPLORATION ANNOUNCED

The dispute arose after the Philippines'

Energy Secretary Jose Almendras

announced that his country had invitedinternational oil companies to explore for

oil and gas offshore Palawan province in

two areas that fall within the country's

200-mile exclusive economic zone.

Palawan province faces the South China

Sea, which is claimed entirely by China.

But other nations in the region, including

the Philippines, Brunei, Malaysia, Taiwan

and Vietnam, have competing claims of

their own.

Claims over portions of the sea can

have immense bearing on ownership of

any oil or gas that lies under the region's

waters, according to the U.S. Energy

Information Administration. But no one

knows for sure just how much oil and

gas is actually there.According to EIA, one Chinese estimate


19/34


suggests potential oil resources as high

as 213 billion barrels of oil (bbl), but EIA

also mentions a 1993/1994 estimate by

the U.S. Geological Survey which put

reserves at just 28 billion bbl.

EVIDENCE QUESTIONED

EIA notes speculation that the Spratly

Islands could be an untapped oil-bearing

province, but it said that, 'There is little

evidence outside of Chinese claims to

support the view that the region

contains substantial oil resources.'Of course, there is only one way to find

out and that is to explore, explore,

explore. The problem, though, is that

overlapping claims to the region are

hindering exploration.

That was certainly true a year ago when

two Chinese vessels threatened to ram

the Veritas Voyager, a survey ship hired

by U.K.-based Forum Energy PLC.The Philippines government dispatched

a surveillance plane, patrol ships and

light attack aircraft to the disputed area,

known as Reed Bank. By then, though,

the Chinese vessels had vanished and

Forum decided to suspend its exploration

activities.

Now, a year on, Forum Energy

apparently is planning to return to Reed

Bank, aiming to drill its first well for oil

and natural gas, an event that some

analysts say could spark a military crisis

if China responds more aggressively

than it did last year.

TOP PRIORITY

Still, that year has seen a significantchange in the posture of the U.S. in the

region, with President Barack Obama

announcing in January that Asia Pacific is

now his country's top priority in terms of

global defence.

That view was underlined in early March

by Admiral Robert Willard, head of the

U.S. Pacific Command, who said that the

America's military must be present in

the South China Sea.

China was less confrontational in 2011

in asserting its claims in the South China

Sea than it was in 2010, Willard told the

Senate Armed Services Committee.

But Willard also noted that China

continues to challenge vessels

conducting oil and gas exploration within

space that it claims as its own. In a

word, he said, 'They remain aggressive.'

LITMUS TEST

Just how aggressive they will remain is

yet to be determined, perhaps by U.S.plans for war games in April with the

Philippine navy near Reed Bank - war

games that one analyst suggests will be

viewed by China as provocative.

'This will be a litmus test of where China

stands on the South China Sea issue,'

said Ian Storey, a fellow at the

Singapore Institute of Southeast Asian

Studies.

According to Storey, the Chinese 'could

adopt the same tactics as they did last

year and harass the drilling vessels, or

they might even take a stronger line

against them and send in warships.'


20/34



Watching World Energy:Rattling the supply chain

Does North Korea's threat to launch a

ballistic missile next month have

anything to do the global oil industry? If

you believe not, I'll sell you the Empire

State Building or the Egyptian pyramids.

Does that phrase ring a bell? It should.

It was uttered just a few days ago bySaudi Arabia's indefatigable Oil Minister

Ali I. Al-Naimi who was dismissing Iran's

threats to close the Strait of Hormuz as

bluster.

Along the way, though, the minister

also mentioned an interesting point

about Saudi oil storage tanks: 'Our

inventories both in Saudi Arabia and

worldwide are full. Our Rotterdaminventory is full, Sidi Kerir is full,

Okinawa is full. 100% full. 10 million

barrels in total, I think.'

'The reason we have them there, is that

they are near the market. And I will give

you an example,' Al-Naimi said. 'Two

weeks ago the Chinese needed about 1.5

million barrels on a rush basis. It is the

first cargo we sold from Okinawa,

because it is near the market.'

NEAR THE MARKET

Okinawa is indeed near the oil market,

and it is also a terminus for the very

large crude carriers that ply the supply

chain that stretches from the Persian

Gulf, across the Indian Ocean, throughthe Strait of Malacca and northward to

East Asia's markets - including Japan.

No less important, Okinawa lies near

the trajectory of North Korea's planned

missile launch next month. Indeed, on

announcing the launch, the North

Koreans pointedly said their rocket

would be heading in a southerly

direction so as to avoid the Japanese

mainland.

'A safe flight orbit has been chosen so

that carrier rocket debris to be

generated during the flight would not

have any impact on neighboring

countries,' the North's news agency said.

The Kwangmyongsong-3, designed as a

'polar-orbiting earth observation

satellite,' will be launched from a station

in the northwestern corner of the

country, bordering China, and blasted in

a southern direction, North Korea said.

However, the Japanese are so

concerned about the trajectory crossingOkinawa that they have plans to shoot

down the North Korean missile, if

necessary.

JAPAN DEPLOYS INTERCEPTORS

'I have ordered officials to prepare to

deploy the PAC-3 and Aegis warships,'

said Japan's Defense Minister Naoki

Tanaka, referring to surface-to-air

missiles and destroyers carrying

missiles.

'We are talking to relevant local

governments about the deployment,' he

added, as the surface-to-air interceptors

are likely to be deployed on Okinawa

and its island chain.

The North Korean missile launch also isPyongyang's way of thumbing its nose at


21/34


the March 26-27 Nuclear Security

Summit to be held across the 38th

Parallel in South Korea.

Leaders and representatives from 57

countries and international organizations

are scheduled to attend the summit,

where protection of nuclear facilities and

steps to tackle nuclear terrorist threats

are high on the agenda.

What else can North Korea's planned

launch be called except a nuclear

terrorist threat? And it is a threat aimed

at the world's main oil supply line, with

its terminus in Japan.

POINT-COUNTER-POINT

Does this have anything to do with the

Iranian situation?

Call it point-counter-point: as the U.S.

and its allies apply pressure to Iran at

one end of the supply chain, North Korea

is rattling its nuclear capability at theother end. And nothing could make the

need to encourage Iran to abandon its

nuclear ambitions more clear.

Who wishes to see both ends of the

world's main oil supply line in the hands

of enemies holding nuclear weapons

along with the ability to deliver them

thousands of miles? If you think oil

prices are high now, just imagine how

much higher they'd go then.

That would really make the markets go

ballistic.

Halfdan CarstensGeoExpro Submitted March 23, 2012

Exploration: Arctic GasHydrates - a stupendousgas resource!

The Arctic contains huge volumes of

conventional oil and gas, but if we also

include non-conventional hydrocarbons -

such as gas hydrate - the Arctic may be

a source of energy for centuries to

come.Arctic Alaska and Arctic Russia are two

established petroleum provinces that

have already produced vast volumes of

oil and gas.

In addition, the USGS has concluded

that some 400 Bboe, including 90 Bb of

oil, have yet to be discovered in the

Arctic. That amounts to 25% of the

undiscovered resources worldwide as judged by the same experts. The

Russians, on the other hand, claim that

as much as 58% of the world's

undiscovered oil and gas belong to the

Arctic. As a comparison, the annual

world oil production is about 30Bbo.

For oil, five basins stand out in the

USGS assessment: Arctic Alaska, the

Amerasia Basin, East Greenland Rift

Basins, the East Barents Basins and

West Greenland-East Canada, while

three basins account for most of the

undiscovered gas: the West Siberian

Basin, the East Barents Basins and Arctic

Alaska. If we combine oil and gas and

convert to oil equivalents, it turns out

that the West Siberian Basin alone maycontain 30% of the Arctic oil and gas to


22/34


be found. It is worthwhile to keep in

mind that almost all of the Arctic

resources (84%) are expected to found

offshore and in water depths less than

500m.

These numbers, however, are dwarfed

when we include gas hydrates. While the

figures for unconventional resources

definitely are more speculative than for

conventional oil and gas, there is reason

to believe that there may be enough gas

around the Arctic to keep the

hydrocarbon economy going for several

centuries.

'Peak oil' takes a different meaning

when we look at resources from that

perspective.

'The energy content of methane

occurring in hydrate form is immense,

possibly exceeding the combined energy

content of all other known fossil fuels,'

said Espen Andersen of Statoil at theArctic Frontiers conference in Troms,

Norway, in January. Gas hydrate is a

solid, crystalline material formed from

natural gas (mainly methane) and

water. 1 m3 of hydrate contains about

164 m3 gas (at STP). Gas hydrate

occurs on land in permafrost regions and

in oceanic sediments in Gas Hydrate

Stability Zones (GHSZ), ocean

continental slopes and deep continental

shelves. Gas hydrate will be stable in the

very cold Arctic Ocean sediments from

depths as shallow about 350m.

'Gas hydrate is an environmentally

secure resource in an environmentally

fragile area like the Arctic region. It is a

thermodynamically stable solid in itsnatural environment and is unlikely to be

spatially associated with petroleum,'

according to Michael Max of Hydrate

Energy International speaking at the

Arctic Frontiers conference. 'What

matters is the volume of gas hydrates

accumulated in sand sediments. Even if

a small fraction of the energy contained

in natural gas hydrates can be

commercially produced, it could

substantially increase the volume of

clean-burning natural gas and improve

global energy security by reducing

imports,' said Andersen.

While the US consumes about 125 Tcfg

a year, the Arctic may on its own contain

some 6,000 Tcf, according Michael Max.

But, beware, that is not to be looked

upon as 'reserves'! We are talking about

highly speculative, undiscovered

resources.


Review: Is the oilindustry of Brazilprogressing?

When you think of the Latin American oil

industry, you immediately think of

Brazil. And rightfully so.

The nation already leads the pack in the

region and it will only continue to

cement its position at the top over the

coming years. Indeed thanks to the

industry's strong fundamentals in Brazil,

it is very easy to be bullish on the

outlook for the industry. So much so infact that upon his visit to Brazil last


23/34


year, US premier Barack Obama paid

homage to the country's strong offshore

potential and made moves to put the US

at the front of the queue for exports

stating that 'when you are ready to start

selling, we want to be one of your best

customers.'

On a macroeconomic level, the BRIC

nation has enjoyed rapid economic

growth over recent years and this is

appears unlikely to change anytime

soon. This year-on-year growth will

likely serve to continue to push demand

for oil from domestic consumers higher

still. The likely result? Rising demand for

fuel will force Brazil's hand to expand its

refining base further still.

Simultaneously, the continued growth in

production output is widely forecast to

continue over the near, medium and

long-term, as a combination of new

projects come on stream and productionlevels at existing projects are sent rising

higher.

Although the outlook is largely positive,

this is not to say that there will not be

bumps along the way. A poor 2011 for

state-run giant Petrobras has already

brought some concerns to the forefront

of the industry's consciousness. Last

month, the industry behemoth

announced its results for the fourth

quarter of 2011 and they were not

pretty: profits were down by 52% year-

on-year and production levels were

depleted also. The firm's problems were

then compounded by leading Brazilian

lender Banco Bradesco downgraded its

rating for the firm. All that said,

Petrobras remains the undisputed leader

of Brazil's lucrative oil sector.

So if the country's strong fundamentals

were not enough to convince you, then

this will be: Brazil is rich in subsalt, and

the rush for it has only just begun. The

discovery of billions of barrels of oil in

the subsalt oil province in Brazil's

offshore territory has the potential to

take Brazil's domestic oil industry to a

whole new level - and the local

government has already realised this.

Former president Lula de Silva made

several regulatory reforms that placed

the responsibility for developing these

untold reserves at the door of the state-

backed operator. Foreign operators will,

however, have the opportunity to play

their part. In fact Statoil - Norway's

national oil firm - has already shown

interest on muscling its way into the

equation, via the potential takeover of the assets of a firm with a strong subsalt

portfolio, independent player Anadarko

Petroleum. The US-based firm is

presently in the process of withdrawing

from the upstream segment of South

America's leading economy.

The potential of the subsalt sector is

vast, but nobody yet knows to quite

what degree. Importantly for the local oil

industry, however, the government and

Petrobras appear to have a good handle

of things from the outset - which bodes

well for the nation's rising role as a

global energy and oil industry leader in

the coming years.
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24/34


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26/34



Review: Can Petrobrasdeliver?

Acting Local But Thinking Global?

State-run Petrleo Brasileiro - or

Petrobras as it is more commonly known

- is widely regarded as a world leader in

deepwater exploration. The industry

giant controls virtually all upstream oil

and gas production in Brazil, as well asdominating exploration activity.

Furthermore, the Rio de Janeiro-based

firm owns most of Brazil's refining

capacity. Quite simply, the South

American company is a giant.

Already a leading player in Latin

America, Petrobras has big aspirations:

by the end of the decade, the firm hopes

to have become one of the world's fivelargest energy players - and with the

right management and strategy, this is

not an unrealistic possibility. This will,

however, require plenty of hard work:

the company has forecast that it will

more than double production to 6.4

million barrels of oil per day (bpd) by the

year 2020.

Although the firm is 54% government

owned (including voting rights) and is

decreed to adhere to state energy policy,

Petrobras remains autonomous in many

ways. Most notably the firm is keen to

remind investors that it maintains

control over a large share of its

operations and its finances - which is

significant given that Petrobras boaststhe world's largest corporate capital

expenditure programme, valued at

around US$225 billion over five years.

The recent change at the helm, which

saw Maria das Graca Foster become the

company's new Chief Executive Officer,

should serve to bring in an era of

consistency to Petrobras. Indeed in her

first press conference, the new CEO

stressed a policy of continuity, with the

firm's investment plans and production

targets for 2012 likely to remain

unchanged.

Without doubt, the Petrobras story is

one of continued growth. This is not to

say, however, that the energy giant has

not encountered problems along the

way. More recently, the firm has begun

struggling on a financial level. 2011 saw

the firm's shares slump by 17% during

the twelve-month period,

underperforming the 1.2% drop in the

Bovespa benchmark index - according toBloomberg. At the same time, the

company posted worse-than-expected

fourth quarter results in 2011, with net

profit more than halved from a year

earlier as a result of the firm's

downstream operations weighing on its

performance.

Perhaps even more concerning

however, is the fact that Petrobras has

failed to meet its own production targets

for the best part of three years now. At

the end of last year, the firm's global

production level stood at 2.72 million

bpd - lower than it was twelve months

prior. This certainly does not bode well

for the company's ability to lift its global

production levels in the near-term.But there is some hope: back in
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and assuming they stay at 10 million

barrels a day. Does anything sound

more like money in the ground than

that? Wouldn't anyone like to keep it

that way?

Keeping it that way is exactly what the

Saudis want and that is why they always

aim for moderation in pricing. They

know, and know only too well, that high

prices are an invitation for consumers to

seek cheaper sources of supply or, for

that matter, cheaper forms of energy.

That's why Al-Naimi says that, 'The

bottom line is that Saudi Arabia would

like to see a lower price.' And his

explanation makes perfect sense, too.

'It would like to see a fair and

reasonable price that will not hurt the

global economic recovery, especially in

emerging and developing countries, that

will generate a good return for producing

nations, and that will attract greaterinvestment in the oil industry.'

FINANCIAL INCENTIVE

In a word, a moderate price keeps

everyone happy, and productive. Most of

all, it is in the interest of oil producers

such as Saudi Arabia to keep exploring

and producing oil: they have a financialincentive to keep their industry going.

Doesn't that make sense, too?

So, what's with high prices these days?

Al-Naimi concedes that, 'geopolitical

tensions in the region, and concerns

over supply, are helping to keep prices

high.' That's short-hand for what we all

know: the current troubles with Iran.

'Yet fundamentally the market remains

balanced,' he says. 'It is the perceived

potential shortage of oil keeping prices

high - not the reality on the ground.

There is no lack of supply. There is no

demand which cannot be met. Total

commercial stocks for OECD nations are

within target, and there is at least 57

days forward cover, enough to handle

almost any eventuality.'

Can the Iranians close Hormuz? No. Can

the Saudis make up for Iran's sanctioned

oil? Yes.

Here is a man who knows the score,

and it is summed up in that wonderful

distinction he makes between a

perceived shortage and a real one. That

is the distinction on which so much of

today's trading turns: not on whether

there is an actual disruption of supply

but on whether there could be one.

SLIGHT UNCERTAINTY

Al-Naimi acknowledges that there is

enough oil on hand and in storage to

handle 'almost any eventuality.' And it is

that slight uncertainty which is driving

the market: what if what if what if?

People are betting, and they do not want

to bet the wrong way. Too much is at

stake.

But the bet is still on a perception, a

possibility.

Against that, Al-Naimi offers a lifetime

of experience in his country's oil

industry. He started out as an Aramco

office boy, don't forget, and he has risen

in its ranks over the course of a lifetime.

If there's something about the oil

business he doesn't know, then itprobably is not worth knowing.


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In a word, Al-Naimi is letting us know

that those who bet on the possibility of

something going wrong - of some

hypothetical demand not being met - are

betting against the proven realities of

the oil trade over decades.

As he says: 'We want to correct the

myth that there is, or could be, a

shortage. It is an irrational fear, a fear

without basis.' And so it is.

But there is something else that Al-

Naimi is not disclosing: that it is in the

interest of Iran to create and play on the

possibility of supply shortages precisely

in order to drive prices higher and

higher. This is a new use of the oil

weapon, and the Iranians are adept at it.

CROSSING SWORDS WITH IRAN

In their efforts to keep world oil prices

reasonable, the Saudis are crossing

swords with Iran or, if you will, oilweapons. And why should they not? A

nuclear Iran standing just across the

Gulf is the last thing the Saudis want to

see - and they are not alone in that.

Saudi Arabia is doing its level best to

keep oil prices low as part of the

international effort to thwart Iran's

nuclear ambitions. Lower oil prices

means less income for Iran and its effort

to acquire nuclear weapons.

Saudi Arabia is also pumping more oil

than it has in decades. The reason for

that is clear, too. More Saudi oil means a

diversity of supply, and that means more

choice for countries that want to stop

buying Iran's oil in support of the

sanctions regime.Al-Naimi is an oil diplomatist par

excellence, too diplomatic perhaps to be

so pointedly clear in the purpose of

pumping more oil to achieve lower

prices. In the long run, it is certainly to

preserve his country's market share. But

for the immediate future, it is to support

the international effort to thwart Iran's

nuclear ambitions.

The Saudis know how to use the oil

weapon, too.


Kenya hits oil

This week, Kenyan officials reported that

oil had been found in the country for the

first time. Tullow Oil Plc came across the

find in the North Kenya and is now in the

process of discovering the commercial

value and validity of the discovery.

President Mwai Kibaki stated: "This is

the first time Kenya has made such a

discovery and it is very good newsIt is,

however, the beginning of a long

journey to make our country an oil

producer, which typically takes in excess

of three years."Although establishing Kenya as a

progressive oil provider to the world may

be a tedious journey, the opportunities

and oil and gas contract jobs it could

open are undeniably bountiful.

Kenyan energy officials and Tullow Oil

Plc have both adamantly expressed that

the find is to benefit the Kenyan public.

This may be in order to deter fears
http://www.oilvoice.com/Description/Tullow_Oil/5f37abdc.aspxhttp://www.oilvoice.com/Description/Tullow_Oil/5f37abdc.aspxhttp://www.oilvoice.com/Description/Tullow_Oil/5f37abdc.aspxhttp://www.contractjobs.com/jobs/oil-and-gas/http://www.contractjobs.com/jobs/oil-and-gas/http://www.contractjobs.com/jobs/oil-and-gas/http://www.contractjobs.com/jobs/oil-and-gas/http://www.oilvoice.com/Description/Tullow_Oil/5f37abdc.aspx


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realised in other countries where oil has

been found but not used to help the

home economy.

Kenya's energy minister Kiraitu Murungi

stated:'We will make sure that the oil in

Kenya is a blessing for the people of

Kenya and not a curse"

Camilo MuozTranslation Source Submitted March 29, 2012

Doing Business withPetrobras: How to score agoal

Doing business with Petrobras , Brazil's

largest oil company, may seem

intimidating but opportunities abound in

this ever-expanding company. Before

you throw yourself in the game, take a

look at our 7 unknown tips to optimize

your relationship with Petrobras.

1. Know the prospects:

Petrobras' made history in 2006 with

their huge discovery of pre-salt and a

conservative estimate projects that

reserves will double thanks to broad

access to new reserves. Exploration inBrazilian sedimentary basins show

incredible hydrocarbon potential and

deep-water discoveries in Brazil make up

1/3 of global discoveries from 2005-

2010. This planned expansion means

many new refineries as well as critical

resources and equipment will be

required and US$4.6 billion has been set

aside for investment in cutting-edge

technology. In the meantime, the

company remains committed to

investment in research and development

in order to maintain their competitive

advantage. No matter what your game

is, the prospects for doing business with

Petrobras have never been better.

2. Know who you're dealing with:

Petrobras is Brazil's pride and joy as

proved by former Brazilian President

Lula who once said 'If Petrobras were a

woman, it would be the one that allmothers would like their sons to be

married to.' Boasting $70billion in the

last five years, business is booming and

the company has a lot to be optimistic

about as the newly appointed CEO Maria

das Graas Foster brings a new

perspective to the company. Nicknamed

'the Iron Lady of Oil' this self-made

woman rose from one Rio's favelas tobecome the first woman to head

Petrobras, the largest company in South

America.

3. Learn what they're looking for:

Petrobras employees are loyal to their

company and applaud the many

professional development and learningopportunities offered at Brazil's oil giant.

Petrobras prides itself in its constant

search for improvement, excellence, and

profitability allied with social and

environmental responsibility. If you want

to do business with Petrobras, you will

need to show that you are playing the

same game, which brings us to our next

tip.
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4. Avoid Foul Play:

Many of our oil and gas translation

clients have found that Petrobras is truly

committed to social and environmentalresponsibility; this is reflected in their

long-term business strategy. Terms such

as 'corporate citizenship' and

'sustainable development' have been

prevalent in Brazilian consumer society

for years and Brazil is on the cutting

edge of innovating and implementing

new procedures that keep up with global

environmental protection standards.Petrobras states explicitly that it works

towards 'managing the potential impacts

of its activities and projects geared to

the protection of endangered areas and

species'. They've set the bar high so if

you have hopes of doing business with

Petrobras, you'll need to show them that

are able to keep up in areas of

environmental protection.

5. Develop an entry strategy:

It is said that business in Brazil is based

on personal relationships but when it

comes to doing business with Petrobras,

it's going to take more than a contact to

get your foot in the door. An organized,

clear cut business plan is a must sincethe company has strict requirements on

procurement and procedures.

6. Play by Their Rules:

If you want to be successful in doing

business with Petrobras, you can't ignore

their ground rules. Your product or

service must be fully qualified and you

will need to develop a complete proposal

or bid package to even be considered.

Petrobras establishes a straightforward

but complex bidding process and

invitations aren't always broadcast so it

can be difficult to spot the upcoming

opportunities. Experts such as oil and

gas translators may make the process

run smoother for you and a partnership

with a local company will also help you

score the bid.

7. Move Forward:

After you've landed the contract withthis multi-billion dollar oil company,

you'll have much to celebrate but before

you sit back and enjoy the caipirinhas,

you'll first want to ensure that your

partnership is successful and will lead to

future collaborations. The best advice

out there is 'don't go it alone.' Pair up

with local experts that can help you with

international staffing, local tax andlabour laws, as well as Portuguese

language services to assure that your

business with Petrobras is communicated

effectively.


Watching World Energy: Adouble whammy on Iran

If Tehran thought it was going to evade

U.S. and E.U. sanctions by using its own

Islamic Republic of Iran Shipping Lines

(IRISL) or Yas Air cargo lines, it has

been sadly disappointed.


32/34


Washington imposed more sanctions on

IRISL this week due to its connections

with the Islamic Revolutionary Guard

Corps. It said IRISL has 'played a key

role' in Iran's efforts to advance its

missile programs and transport other

military cargoes.

'The IRGC has continued to expand its

control over the Iranian economy - in

particular in the defense production,

construction, and oil and gas industries,'

it said - a reminder that Iran's Oil

Minister Rostam Qasemi is a Brigadier

General in the IRGC.

The US Department of the Treasury also

designated two IRISL front companies

based in Malta: Modality Limited and

Malship Shipping Agency Ltd. It said that

the companies are owned by Mansour

Eslami, an IRISL executive.

PRIOR DESIGNATION

It said that Eslami had already been

designated in October 2010 for his role

as director of an IRISL subsidiary, IRISL

(Malta) Ltd., and for his co-management

of several IRISL-affiliated holding

companies.

Two IRISL employees were also

designated this week including a senior

IRISL legal advisor, Seyed Alaeddin

Sadat Rasool, and Ali Ezati, IRISL's

Strategic Planning and Public Affairs

Manager.

The announcement of new sanctions

follows a media report last month thatclaimed IRISL has continued to operate

around the globe under a variety of

guises all aimed at bypassing sanctions.

'Despite the sanctions 130 of the 144

banned ships in IRISL's fleet continue to

call at many of the world's major ports

hidden behind a web of shell companies

and diverse ownership,' the report said,

naming Malta as a place where the

Iranians can play those shell games.

'Despite being a member of the

European Union, Malta not only supplies

flagging services to IRISL ships, but is

also home to 24 shell companies that

help conceal Iran's ownership of

vessels,' the report said.

PAPER TRAIL

In the Grand Harbor of Malta, Transport

Malta earns around 300,000 eurosannually from registering IRISL ships,

according to an estimate by Reuters

based on a table of tariffs on the

agency's website.

Transport Malta also is home to the

country's public shipping register, the

location of the paper trail of Iran's shell

games, as well as evidence of those who

have worked for the country.

As sanctions have tightened, the

Maltese register shows that Iran's ships

have regularly switched not just flags,

but names, registered owners,

registered agents, and the addresses of

owners and agents.

The IRISL announcement came just a

day after another one designating theIranian cargo airline, Yas Air; Behineh


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Trading; three Iranian Islamic

Revolutionary Guard Corps-Qods Force

(IRGC-QF) officials; and one Nigerian

shipping agent for acting for or on behalf

of, or providing support to, the IRGC-QF.

'The airline, the trading company and

the IRGC-QF officials were involved,

respectively, in shipments of weapons to

the Levant and Africa, further

demonstrating Iran's determination to

evade international sanctions and export

violence and instability throughout the

Middle East and beyond,' the Treasury

said.

COVERT ARMS TRADE

It said the Tehran-based Yas Air is an

Iranian cargo airline that acts for or on

behalf of the IRGC-QF to transport illicit

cargo - including weapons - to Iran's

clients in the Levant. In particular, itsaid, Yas Air has moved IRGC-QF

personnel and weapons 'under the cover

of humanitarian aid.'

According to the announcement, IRGC-

QF officials oversaw and authorized

actions taken by Yas Air that involved a

series of flights carrying weapons

destined for Syria and worked with

Hizballah and Syrian officials to ensure

passage of the illicit cargo.

It said that a Turkish inspection of one

of the Yas Air flights bound for Syria -

which listed 'auto spare parts' on its

cargo manifest - found weapons

including Kalashnikov AK-47 assault

rifles, machine guns, nearly 8,000

rounds of ammunition, and anassortment of mortar shells.

Behineh Trading, the shipping company,

and the Nigerian agent designated today

were involved in a weapons shipment

seized in Nigeria in late October 2010.

'This weapons shipment - orchestrated

by the IRGC-QF and intended for The

Gambia - is part of a larger pattern of

Iranian lethal aid shipments to clients in

Africa and around the world,' the

announcement said.


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oilvoice magazine | april 2012

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