Posts by Yilmaz

The Gulf oil disaster isn't the only time a blowout preventer failed to stop an explosion.

On June 3, a natural gas well in central Pennsylvania erupted despite the fact that it too was outfitted with a blowout preventer, spewing gas 75 feet into the air for 16 hours before it was brought under control.
The BOPs were touted by the industry for their ability to make dangerous drilling operations safer, or at least less dangerous. But although failures are rare, their consequences can be catastrophic.

There are actually three different kinds of BOPs -- pipe rams, blind rams and shear rams -- each of which use various mechanisms to remotely seal off a leaking well. The pipe ram fits tightly around the pipe to cut off flow from the outside, according to Paul Bommer, petroleum engineering professor at the University of Texas in Austin. The blind ram caps the pipe by closing completely over the top of it, and the shear ram cuts through a leaking pipe and seals the open hole.

Even tough they are tested thoroughly, it has been seen that the BOPs can fail. It is time for a revamp of the BOPs and welcoming of some fool-proof BOP technology?

The International Energy Agency joined the chorus of groups predicting higher worldwide oil demand in 2010 in its monthly report issued Tuesday. It seems to be a popular stance to take in recent weeks. Just last week, the U.S. Energy Information Administration projected higher demand in the U.S. over the next couple of years.

The shift in sentiment is grounded on assumptions that world economies are going to recover, fueling higher demand. The forecast also points to growing demand from China as the biggest force behind higher petroleum usage this year.

Sometimes these forecasts prove correct, many times they are wrong. One need go back only two years when IEA, EIA, and just about every other agency was predicting higher prices and surging demand just a few months before the market
collapsed.

IEA allows for some skepticism in the April forecast, writing that "underlying concerns remain that oil markets are overheated with West Texas crude and Brent (the benchmark crude for futures trading) recently hitting 18-month highs."

We continue to see contradictory signs that oil demand is on the rebound, though it is foolish to deny it could be so.
One of the most astounding pieces of news this week came when U.S. automaker General Motors said it would sell 2 million cars in China in 2010, reaching that plateau four years ahead of schedule. It also predicted that it would reach 3 million in vehicle sales by 2015 in China. GM says auto demand in China is running 70% higher than a year ago.

Given those kinds of numbers, its difficult to dispute that China will fuel a large portion of the growth in oil demand projected by IEA.
On the other hand, a survey by the Associated Press of economists over a wide range of businesses in the U.S. indicated that the U.S. economy would remain in the doldrums for the next two years, especially regarding jobs and housing, two twin pillars of the economy.

The survey indicated that U.S. economic growth would be about 3%, not enough to support job growth, meaning that America's unemployment rate would continue to be high.
Nonetheless, IEA believes that world oil demand will hit a record in 2010, topping the prior number of 86.5 million b/d set in 2007. That would be a much faster recovery from a debilitating price spike than occurred following the 1979 price spike, the previous record. It took U.S. oil demand nearly two
decades to recover to pre-1979 price-spike levels.

Global oil demand will grow by 1.7 million b/d in 2010, IEA projects, to 86.6 million b/d. Most of the extra demand will come from the non-OECD sector, including China, as the developing countries claim a larger share of the world petroleum pie.

Here's what one can also glean from IEA's April report. The 2010 gap between world oil supply and demand is shrinking. In fact, if you take IEA's March 2010 global demand production figure (86.6 million b/d), it matches the agency's demand forecast for 2010, leaving no cushion.

IEA noted that OPEC crude production posted its first significant decline in over a year, falling 190,000 b/d in March to 29 million b/d, thanks to a 10% drop in Iraqi crude production. However, OPEC's quota system excludes Iraq, and the eleven other members of the cartel managed to hike production in March.
A couple of threats remain to the robust picture painted by IEA. First -- and IEA admits this -- higher oil prices could stifle economic growth, punching a hole in demand. More importantly, there remains lots of excess refining capacity and sufficient crude stocks to cover the extra demand so a ceiling on price levels could exist.

This is an extract from : http://www.tankterminals.com/news_detail.php?id=725

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Oil & Gas Directory

This is an extract from http://www.heatingoil.com/blog/goldman-s…-90-barrel1204/

According to Reuters on Wednesday, Goldman Sachs has kept its prediction for 2010 oil prices but has upped its forecast for 2011. And neither bodes well for heating oil consumers.

Goldman Sachs says that one barrel of West Texas Intermediate oil, which is used as the benchmark price for crude, will cost $90 in 2010, up from the $70 to $80 price range crude oil has been selling at for the past few months. And in 2011, due to rising demand from emerging countries such as China, India and Brazil, Goldman says that oil will reach $110 per barrel.

MOSCOW: The World Bank forecast an average oil price of $75.29 per barrel in 2010 in a presentation released on Tuesday, saying it did not expect a
return next year to price levels seen before the economic crisis.

The bank did not specify the type of oil to which it was referring in the presentation on the Russian economy.

US crude prices fell on Tuesday to $79 a barrel as a late-season hurricane subsided in the Gulf of Mexico and traders awaited key US inventory data.

This is an extract from http://economictimes.indiatimes.com/news/economy/i…how/5215544.cms

The oil prices have fallen to below $44. This is a 47 month low.

This will cause major problems in countries which depend on oil money to run their economies/ambitious programmes. Russia needs oil money for their military. Iran needs money for their research and to gain power in the middle East. Venezuela needs money for their ambitions. Probably the building boom in UAE is also fuelled by the oil money.

If the oil prices remain this low or go lower, there will be dramatic changes.

The subject of my post is a question that many will ask and are asking always. So, then what do we do?
We find a source that can give the information and you get information on various figures of costs sorted by companies.

We start using this info. But we must see the background of how authentic this information is. How did the information source company obtain this information? Did they get it from the oil company's records? Maybe some... but definitely not all. There are many companies, I think who would say that this information is classified. To solve this doubt, wemust examine if th source company can disclose the information. That will be too much work.

What is the solution? All the sources of information that you have may have the above problem and the consequential ambiguty. But, we need something to work on and take decisions. So, we use the available information, sometimes with more than one pinch of salt.

Let us consider we have very authentic information with no ambiguity. Some companies do have a smaller cost per barrel probably averaged over many of the varying costs in the various oilfields.

I read last week that a general value for the marginal cost per barrel is $72. If the price falls below this, there will be fewer new investments into new drillings except by those companies that feel that the oil prices will rise soon.

However, wouldn't this drop in deeper exploration cause a shortage in oil, as the easily-avaialable oil is depleting and the only way to get more oil is to drill deeper which is of course costlier?