Click on the headline (link) for the full text.

Many more articles are available through the Energy Bulletin homepage

Oil and gas exploration falls to lowest level in five years
The Independent, Sarah Arnott
North Sea oil and gas exploration dropped by 35 per cent last year, taking it back to levels last seen five years ago, according to figures published by Deloitte yesterday.

Only 78 new wells were drilled in 2009, compared with 121 in 2008. Exploration activity was down by almost half, appraisals by a quarter. Meanwhile, new drilling in the Norwegian North Sea shot up by 18 per cent last year thanks to a more generous tax regime.

In Norway there is a 78 per cent tax benefit on wells that turn out to be dry, which considerably reduces the risk of exploration. Although there were some changes to the UK fiscal regime in the 2009 Budget, the measures are too narrowly targeted to make a real difference. Once up and running, oil production is also by far the most highly taxed part of the British economy, with its own special rate of 50 per cent, rising to 75 per cent for older fields.

"The North Sea is in decline as a source of hydrocarbons and although there are companies out prospecting for more, Britain has no real incentives to encourage them and slow down the decline," Graham Sadler, the managing director of Deloitte's Petroleum Services Group, said. "There has been some tinkering, but only incremental adjustments, nothing like the sweeping changes that would bring the UK in line with Norway."...
(15 Jan 2010)

World Future Energy Summit-Christophe de Margerie: Big Oil's Straight Talker
Vivienne Walt, Time Magazine
It is past midnight in a jet high above the Persian Gulf, and one of the key figures in global energy shows no sign of retiring. Instead, Christophe de Margerie, CEO of the French oil giant Total, zeroes in on a favorite target: criticisms of oil companies by environmental groups, gathered in Copenhagen for the U.N. Climate Summit. "People say they are inventing electric cars," de Margerie says, puffing on a Marlboro. "Well, where is the electricity coming from? Flowers? Maybe someday. But what is available now is oil and gas."

The argument is delivered in de Margerie's trademark style: blunt and impassioned, with an almost cocky certitude. He credits his confidence to years spent traveling — "moving my ass," as he calls it — and witnessing the world up close. All that time on the road has convinced him of this: oil supplies will soon run seriously short, and until we come up with something better we need to make sure we suck every last drop from every last nook and cranny on the planet. "We don't know everything," he says. "But on oil reserves and production we know a lot. And it's our duty to speak out."

It helps that the person doing the talking heads one of the biggest energy firms on the planet. A decade after it bought its French competitor Elf Aquitaine, Total has ballooned into the world's sixth largest publicly traded energy company, according to Energy Intelligence Research. By market capitalization, the company is worth around $150 billion and returned profits in 2008 of $21 billion. From its skyscraper headquarters on the edge of Paris, de Margerie oversees operations and 97,000 staff in more than 130 countries. But as the company has grown, so too have doubts about how Total, and other oil giants, will survive the coming decades. As oil becomes increasingly difficult to find and extract, and as governments embrace cleaner sources of energy, won't those most invested in finite resources become irrelevant?...
(16 Jan 2010)

Have we reached peak oil?
Paul A. Larson, Morningstar
Remember the summer of 2008, when oil was approaching $150 per barrel and topping the headlines? The oil story quickly faded to the background when the financial crisis hit full-steam that September; we had bigger things to worry about in terms of the potential collapse of the worldwide financial system. Meanwhile, the deepening recession greatly reduced demand for oil. The price per barrel fell precipitously.
But while the world is awash in an excess supply of oil at the moment, I am convinced that the supply/demand balance of oil over the longer term is a critical issue that bears watching.

Oil is so important because it is, at the moment, the primary source of transportation fuel, and transport costs affect the entire economy. Low oil prices cut the cost of doing business and help reduce geographic barriers, while high oil prices act as a "tax" on the entire system and force us to act more locally.

I recently sat down with a group of Morningstar's energy analysts to discuss the idea of "peak oil." In this article, I will define the issue and share the group's insights...
(18 Jan 2010)

Oil Shortages to Reappear in 2011, Goldman Sachs Says
Grant Smith, bloomberg.com
Goldman Sachs Group Inc. said that shortages will reappear in the crude oil market as supply fails to keep pace with a recovery in demand.

Global oil consumption will return to levels seen before the financial crisis by the third quarter of this year, Goldman analyst Jeffrey Currie said in a presentation in London today. At the same time, projects to bring new oil to consumers are still lagging as a result of the credit crunch, he said.

“By 2011, the market is back to capacity constraints,” Currie said in slides shown with the presentation. “The financial crisis created a collapse in company returns which has significantly interrupted the investment phase.”

Crude oil futures traded around $78 a barrel in New York today, having recovered 78 percent last year with the passing of the biggest economic shock since World War II.

Investment into new oil capacity is being held up because “political impediments on the flow of capital are still very large,” Currie said at the conference...
(18 Jan 2010)