Monday, October 8, 2012

No Social Licence, No Economic Sense, No Science, NO WAY

Woodside vs The Good-side                                                                                                                                               Thanks again to Red Broome



    Are the Wars in the Middle East and North Africa Really About Oil?

    The Iraq war was really about oil, according to Alan Greenspan, John McCain, George W. Bush, Sarah Palin, a high-level National Security Council officer and others.

    Dick Cheney made Iraqi’s oil fields a national security priority before 9/11.
    It’s a War for GAS

    But it’s about gas as much as oil …

    As key war architect John Bolton said last year:

    The critical oil and natural gas producing region that we fought so many wars to try and protect our economy from the adverse impact of losing that supply or having it available only at very high prices.

    For example, the pipeline which the U.S. wanted to run through Afghanistan prior to 9/11 was to transport gas as much as oil.
    With maps in hand, we can now discuss the great geopolitical battle raging between the U.S. and its allies, on the one hand, and Russia, China and Iran, on the other hand.

    Iran and Pakistan are still discussing a pipeline without India, and Russia backs the proposal as well.

    Indeed, the “Great Game” being played right now by the world powers largely boils down to the United States and Russia fighting for control over Eurasian oil and gas resources:

    Russia and the USA have been in a state of competition in this region, ever since the former Soviet Union split up, and Russia is adamant on keeping the Americans out of its Central Asian backyard. Russia aims to increase European gas dominance on its resources whereas the US wants the European Union (EU) to diversify its energy supply, primarily away from Russian dominance. There are already around three major Russian pipelines that are supplying energy to Europe and Russia has planned two new pipelines.

    The rising power China is also getting into this Great Game:

    The third “big player” in this New Great Game is China, soon to be the world’s biggest energy consumer, which is already importing gas from Turkmenistan via Kazakhstan and Uzbekistan to its Xinjiang province — known as the Central Asia-China Pipeline — which may tilt the balance towards Asia. Pepe Escobar calls it the opening of the 21st century Silk Road in 2009 when this pipeline became operational. China’s need for energy is projected to increase by 150 per cent which explains why it has signed probably the largest number of deals not just with the Central Asian republics but also with the heavily sanctioned Iran and even Afghanistan. China has planned around five west-east gas pipelines, within China, of which one is operational (domestically from Xinjiang to Shanghai) and others are under construction and will be connected to Central Asian gas reserves.

    China is also pushing for an alternative to TAPI: an Turkmenistan-Afghan-China pipeline.

    Iran is also a player in its own right:

    1. Holding the pricing trump card
      Tuesday, 9 October 2012

      JAPAN may have stirred the pot on LNG pricing but it is China that has taken a stronger stance - and if its ongoing stalemate with Russia is any indication then Australian LNG exporters have a lot to be worried about. By Gomati Jagadeesan


    US should move quickly to export LNG, experts say


    By Nick Snow

    The US potentially could exploit East Asia's hunger for LNG, but it will have to move quickly, experts suggested at a Sept. 20 forum. Authorizing LNG exports would be one of the easier decisions in building strong trade relations with that region's countries, but it will need to be followed quickly with construction of the necessary pipelines from producing tight gas fields to coastal liquefaction terminals, they said. Exports particularly of Alaskan North Slope LNG would quickly find markets in South Korea and Japan, particularly since the latter country is moving away from nuclear power following the Fukashima plant accident in March 2011, according to Seethpathy Chander, director gener...


    Woodside Petroleum drops to four-month low

    Australian Company News Bites - Market Report
    October 8, 2012


    [in descending order of MCap; figures in brackets show price change in %, % discount to 52-week high, and Present Value of 1000 invested a year ago in the local currency; company vs sector with sector average in brackets]

    Woodside Petroleum drops to four-month low [-0.5%, 13.6%, $1,020]


    BHP Billiton has matched the World Bank's pessimistic outlook for the Chinese economy, by confirming that job cuts are afoot within its flagship iron ore division.

    Confirmation that BHP has started redundancy and redeployment talks with workers in its iron ore division coincided with the latest World Bank report predicting the slowdown in the Chinese economy will be ''more pronounced'' than expected.


    A CHAMPION of indigenous communities in Australia has been accused of human rights abuses in Papua New Guinea after settlers' homes were bulldozed to make way for a multi-million-dollar hotel and marina development.

    Gummi Fridriksson, who is based in Cairns in northern Queensland, is secretary of the PNG-registered Paga Hill Development Company, which was handed a lucrative commercial lease over a 14ha piece of land at Paga Hill overlooking the harbour in central Port Moresby.

    With all the news lately one would think we are sitting on a tourism goldmine.

    2 things for Barnett to chew on - and Ferguson.

    Recent Australian Bureau of Statistics figures have revealed many hotel rooms in regional areas across Western Australia are sitting empty, while hotels in Perth and Port Hedland are benefiting hugely from business trips.

    The council's Evan Hall says that is because both the private sector and the State Government have invested heavily in infrastructure in mining hubs, while somewhat neglecting other areas.

    "It is still a huge difference between say Port Hedland and Perth, with occupancy of well over 80 per cent and towns like Broome and Busselton with occupancy around 50 per cent," he said.


    The head of the Department of State Development says the Oakajee Port and Rail project will be a lot more difficult to get up and running than it was a year ago.

    Stephen Wood has told a parliamentary hearing, global economic conditions are making it harder to get major projects off the ground.

  4. Coleman recently said a lump sum figure ($45 billion) is only 2/3rds at best,of the final price for a land based plant in Australia.

    Shell recently said the first FLNG vessel would cost $12 billion,and the others would become cheaper and produce more LNG.

    So JPP would be $60 billion.

    Potentially Shell could do Browse for 1/2 that price with FLNG.

    Or to put it another way,have the equivilent of 2 JPP plants with FLNG for the same price.

    And with FLNG they get to forget all the worries of continuous dredging,thousands of klms of pipelines to maintain,a town that hates them,damn pesky environment groups,etcetc.

    From the article below.

    ""Woodside is committed to meeting our Retention Lease obligations which require the earliest commercial development of the Browse resources," the spokesman said."


    And Shell said.

    Dr Bichsel said Shell was working on future versions of its FLNG vessels that could produce up to 6 million tonnes a year of LNG.

    "We have an ability to do much larger fields too," he said.


    They only want the money - so surely this is it.


    Woodside isn’t a company like Gunns once was. It is stronger financially; in my opinion it has a more experienced and better credentialed board; it has less political baggage. At the moment. But as I see it, all these strengths are at risk in this one project and can disappear in a surprisingly short time. Once confidence in a company begins to crumble, chairmen can become casualties, reputations can suffer, shareholder value can erode in a flash.

    So if you’re smart, you move. You take the initiative, you gain kudos for choosing the right path and engage your opponents instead of keeping them at arm’s length. You come out of the bunker before the walls crash around you.

    This is where Woodside is right now. It’s a fascinating dilemma — the sort that is increasingly common in business today. Ignore community concerns, plough ahead with hubris and contempt for contrary views, and you can end up with a new board apologising for the sins of the old before you know it.


    Shell Eyes New LNG plan for Browse
    BY: PAUL GARVEY The Australian October 11, 2012 12:00AM
    A SENIOR Royal Dutch Shell executive has done little to dampen growing speculation that the company will push its revolutionary floating liquefied natural gas (FLNG) technology as a solution to the ongoing controversy over the $US45 billion Browse project in Western Australia.

    In an exclusive interview with The Australian, Shell's director of projects & technology Matthias Bichsel would not rule out considering FLNG as a development option for Browse.

    "All the various opportunities in Australia, they should be illuminated through different lenses. That's all I can say at this moment," Dr Bichsel said when asked if FLNG could solve the ongoing debate over Browse.

    But Dr Bichsel stressed that FLNG technology was an ideal solution for gasfields that are far from shore, and where potential coastal LNG plant sites have high levels of environmental and/or social sensitivity.

    "FLNG allows you, from an environmental point of view, to (produce LNG) without disturbing coastlines or building a big facility in some pristine environment. Where you have that, it may help you with a solution," he said.

    Browse operator Woodside Petroleum is leading a study into the development of the huge Browse gas fields through a 12 million tonne per year onshore LNG plant at James Price Point, north of Broome.

    The James Price Point proposal has faced strong opposition from environmental groups concerned about the project's impact on the Kimberley coastline, and has divided local indigenous groups in the area.

    Woodside is set to complete a separate study into the economics of the James Price Point option next year, at which point Woodside, Shell and the other parties in the project -- BHP Billiton, BP and Japan's Mitsubishi and Mitsui -- will decide whether to go ahead with what analysts estimate would be a $US45bn development.

    Speculation that Browse could be developed through one or more of Shell's planned fleet of FLNG ships has grown since the company decided to buy Chevron's stake in the project in late August.

    Under that deal, Shell paid $US450 million in cash and handed over interests in two other gasfields in return for Chevron's 16.7 per cent stake in Browse.

    Shell's decision caught analysts by surprise, as the company -- together with Chevron and BHP Billiton -- was widely considered to be privately concerned about the feasibility of the James Price Point plan.

    The Australian understands that members of the WA government, which has been a strong advocate for the proposed James Price Point plant, have privately expressed concerns that Shell's growing stake in Browse could boost the case for a FLNG solution.

    The various partners within the Browse venture are believed to have long held divergent views over the best development options for Browse, with Shell, Chevron and BHP thought to have previously pushed for the gas to be piped 1000km south to the existing North West Shelf LNG plant.

    An exhaustive recent analysis of the North West Shelf pipeline option by analysts at JPMorgan estimated that it would only be $US2bn cheaper than the James Price Point plan, as it would require three of the older LNG processing units at the North West Shelf to be rebuilt.

  6. CONT...

    Woodside and its partners in Browse are committed to studying the economics of the James Price Point option under the terms of a retention lease held held over the project. The partners are set to receive a final analysis of James Price Point within months, and the joint venture is due to decide whether to go ahead by mid-2013. If the partners decide development of Browse through James Price Point is not economic, they would need to apply for a new retention lease. The size of the Browse field is larger than other projects earmarked for exploitation via FLNG, and would probably require multiple vessels.

    A spokesman for Woodside said the company was focused on taking the James Price Point plan through to a final investment decision next year.

    "Woodside is committed to meeting our Retention Lease obligations which require the earliest commercial development of the Browse resources," the spokesman said.

    "This underpins our commitment to completing our technical and commercial evaluation of locating the development's processing facilities at the State Government's proposed LNG Precinct near James Price Point."

    Dr Bichsel said Shell was working on future versions of its FLNG vessels that could produce up to 6 million tonnes a year of LNG.

    "We have an ability to do much larger fields too," he said.