Upstream News
Crude prices reach 18-month high; Opec supports price hike and Brazil; Petrobras strengthens Asian exports; Denbury makes $900m sale; and Shell and Chevron celebrate deepwater success.
The return to trading after the Easter break heralded a spike in crude prices to 18-month highs of more than $85 a barrel. As well as post-holiday enthusiasm, the rise in prices was attributed to positive US jobs figures. Brent crude also rose on a positive market.
Prices had already been climbing before the holiday, helped by the news that US President Barack Obama is to permit new offshore drilling areas along the West Coast.
OPEC was quick to support the price increase, with Secretary-General Abdalla Salem El Badri stating that prices around $80 a barrel are good for the world economy and producers, allowing the latter to invest in exploration activities. Mr El Badri also took the opportunity to suggest that Brazil may eventually gain OPEC membership as a result of recent offshore discoveries, but this would not happen any time soon.
Brazil's Petrobras added to the positive note with news that it is set to acquire the remaining 12.5% share of Okinawa refiner Nansei Sekiyu KK from Sumitomo Corporation. Petrobras has changed its original plans for Nansei and will now use it as a base to ship and store 1.8m barrels of crude oil every two months for export to other parts of Asia.
In the US, Denbury resources has agreed a $900m sale of some of its oil and gas assets to Houston-based Quantum Resources Management. The assets are mainly based in Texas and New Mexico with proved reserves of some 54m barrels of oil equivalent as of the end of 2009. Income from the sale will mainly be used by Denbury to repay debt.
And finally, Shell and Chevron were amongst the producers celebrating confirmed first oil production from the world's deepest deepwater project. Drilling at more than 1.2 miles below sea level, the Perdido field is 200 miles off-shore in the Gulf of Mexico and started to flow at the end of March, setting any number of depth and technology records for oil exploration.
The production spar is built to withstand the hostile conditions of hurricane force storms and freezing water temperatures. The Perdido field is expected to produce 100,000 barrels of oil equivalent daily when running at full capacity.