Posted on 06/16/2011 10:27:47 AM PDT by thackney
It will likely be months before production disrupted by a damaged pipeline in Yemen can resume, says the chief executive of TransGlobe Energy Corp.
The 120,000-barrel-a-day pipeline has been closed since being attacked by militants in the troubled Middle Eastern country in March. TransGlobe had about 2,400 bpd on the line from its working interest in a field operated by partner Occidental Petroleum.
"We've modelled six months shut in for our operations," Ross Clarkson told reporters at the Canadian Association of Petroleum Producers investor symposium in Calgary on Wednesday.
"The government is the one that has to go in and fix it, and the opposition tribes are saying no one is allowed in to fix it until we see a move toward elections."
TransGlobe still produces 500 bpd in eastern Yemen.
On Wednesday, gunmen reportedly seized control of a southern Yemen city after President Ali Abdullah Saleh left the country for medical treatment in Saudi Arabia. He was injured in an earlier attack on his palace.
Presenters at the Calgary conference insisted international business is still being done despite the wellpublicized troubles that have swept many countries in North Africa and the Middle East.
Dave Monachello, president of junior Winstar Resources Ltd., complained that his company's stock has been punished because its main assets are in Tunisia, which has been relatively quiet since February when an interim government took over from ousted president Zine El Abidine Ben Ali. Tunisia borders Libya, where rebels are fighting a bloody war with dictator Moammar Gadhafi.
"Winstar has experienced only minor inconveniences as a result of the people's uprising last December," said Monachello. "Our field operators stayed on the job throughout the conflict and our office staff continued to perform their duties.
"We've sold gas as before and we've been paid as before."
He said the company plans to spend $38 million US in Tunisia this year to nearly double production from about 1,650 barrels of oil equivalent per day to about 3,000 boe/p. And the oil will get near-Brent prices, he said.
Winstar stock closed down four cents at $3.66 Wednesday. It has ranged from $3.06 to $6.79 in the past year.
During a presentation, Albert Gress, vice-president of business development for TransGlobe, emphasized its Egyptian assets and noted it plans to spend $81 million there this year to drill 50 wells.
A pending acquisition is to add 4,000 bpd to Egyptian production.
"We'll be coming out with new guidance. Don't be surprised to see 20,000 barrels (per day) as we exit 2011 -last time I checked the map, that's about 100 per cent over the 2010 average," said Gress.
Without the acquisition, TransGlobe had previously estimated it would grow production from 11,200 in the first quarter to 13,000 to 13,500 bpd by year-end.
Another Egyptian producer, Sea Dragon Energy Inc., is spending $13 million there this year, reported president Tony Anton, as it aims for exit production of 2,000 bpd from its working interest in two oilfields.
ping
Hey, I remember this pipeline...as I’m sure you do. :)
Yemen gets Saudi crude as shortages spread: sources
http://www.calgaryherald.com/business/energy-resources/Yemen+gets+Saudi+crude+shortages+spread+sources/4957628/story.html
The first shipment of Saudi crude oil donated to Yemen to help relieve widespread fuel shortages arrived at the port of Aden on Thursday, trade and shipping sources said.
Saudi Arabia donated three million barrels of oil to its impoverished southern neighbour, where months of pro-democracy protests against President Ali Abdullah Saleh’s 33-year rule have sparked clashes between government forces and tribesmen, killing dozens.
Fuel shortages have spread since a mid-March blast on Yemen’s main oil pipeline stopped the flow of Light Marib crude to Aden’s 130,000-barrels-per-day refinery.
“The first tanker carrying 600,000 barrels has arrived,” one shipping source said, adding that the oil would be sent to the refinery, which has been shut for months, to be processed into much-needed oil products.
“This shipment is important as there are power cuts in so many places across Yemen,” a trade source said.
“Yemen coast guard boats are only carrying out occasional patrols in Aden’s harbour and are not going too far out because of fuel shortages,” the trade source said.
“There might be a small trickle, but Mukalla has effectively run out of fuel,” the source said, referring to the southern port town.
To help ease its fuel crisis, Yemen has ramped up imports of oil products, but payment problems have meant shipments have not been able to discharge or arrive on time.
“There is one vessel, which arrived on June 5, carrying 30,000 tonnes of petrol (gasoline), waiting at anchorage,” another shipping source said.
The second shipping source said the discharge of the tanker, along with another vessel loaded with 30,000 tonnes of gas oil, were delayed because of payment problems.
Since the start of the unrest, several Gulf-based traders have been wary of trading with Yemen because of its worsening finances.
The first shipment of Arab Light oil from OPEC member Saudi Arabia, the world’s largest crude oil exporter, was unlikely to solve Yemen’s fuel crisis, shipping and trade sources said.
“I understand when they refine this oil, only 20 per cent of it, which is around 17,000 tonnes, will be diesel,” the first shipping source said.
“So, in reality it won’t be enough to solve the whole problem,” he said.
At least 50 per cent of the crude oil received would be turned into fuel oil, a source said, which would then be sent to power stations.
Yemen state TV reported on Thursday that the crude oil donated by Saudi Arabia was going to be distributed starting from next week.
The tanker which delivered the first shipment was due to return to Yanbu, Saudi Arabia’s Red Sea port, and was likely to reload and deliver a second shipment, sources said, without giving a time frame.
Trade sources said petrol prices continue to soar in many parts of the country. A 20-litre drum of petrol cost 5,000 Yemen rials ($23.26) in the capital Sanaa and 7,000 rials in the coastal port of Hodeidah, compared with 1,500 rials in Aden, they said.
“It will take a few more days for the fuel shortages to be alleviated and the number of trucks and cars queuing for fuel at filling stations has continued to grow,” a trade source said.
Any descent into chaos in Yemen, which lies next to major shipping lanes, would alarm Gulf neighbours and Western powers worried about al Qaeda.
OPEC Secretary General Abdullah al-Badri urged a speedy political resolution this week at the Reuters Global Energy and Climate Summit.
“If that problem is not solved now, then we will have a lot of problems — in the safety of shipping going through that part of the world,” Badri said.
That was my first thought, but more research makes me think it may be a west coast pipeline, perhaps the one done by Hunt or in that area.
Ours was initially designed for 120,000 bpd. I thought the pumps had been upgraded to 180,000 bpd but I am not sure.
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