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Latin America, which holds approximately one-fourth of the world’s recoverable shale oil and gas reserves, is poised to reap the benefits of the North American shale revolution between now and 2025.  Ranked by shale reserves, the five largest countries in Latin America are: Argentina (802 tcf) Mexico (681 tcf) Venezuela (167 tcf) Colombia (55 tcf) Bolivia (48 tcf) Argentina has emerged as a potential shale oil superpower as it now has the second-largest shale gas reserves (behind China with 1.1 tcf) and the fourth-largest oil reserves.  It has the shale oil potential of 27b barrels of oil and 802 tcf of...
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Pemex plans to increase shale activity in the next few years, budgeting over $575m in 2014, highlighting some 200 shale gas opportunities in five geologic provinces in eastern Mexico, and opening up the bidding process for drilling shale fields. It aims to attract as much as $1t in energy investment to exploit Mexico’s shale oil and gas reserves, on the back of the energy sector reform signed by President Enrique Pena Nieto in August 2014. Based on similarities with Eagle Ford shale in Texas, Mexico’s Eagle Ford shale this is considered to be the country’s top-ranked prospect for shale exploitation. Other...
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Posted by on in Shale
In Colombia, shale potential is mainly present in three of its 23 basins: the Middle Magdalena Valley (MMVB), Llanos, and Catatumbo basins, amounting to a total shale gas reserve of 55 tcf. Potential shale formations are also believed to exist in the Caguan-Putamayo, Cesar-Rancheria, and Eastern Cordillera basin. So far, shale exploration has been predominantly focused on the MMVB region. The primary source rock in the MMVB is the high quality La Luna formation, which can be compared to those of the Eagle Ford shale formation in the US. This region is estimated to have 18 tcf TRR shale gas, roughly...
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Terrafugia’s production of the first U.S. Federal approved flying car, the Transition, suggests that we have taken a huge step closer to accomplishing a Sci-Fi like story. However, the recent global demonstrations on environment served to remind us that the key question we need to be answering is what fuels will various forms of transportation run on in the future? Research within this arena has revolved on a number of different alternatives. Hydrogen in theory is an ideal fuel since it provides more energy per kilogram than petrol and only produces water as an exhaust.  When NASA scientists really needed a...
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BSI has committed to reduce its carbon footprint per revenue dollar for fiscal year 2015 by 63%. This follows a 21% reduction in absolute carbon emission during 2014. As a consulting firm we do not emit any carbon through manufacturing or conversion itself, which constitutes ‘Scope 1 emissions’ according to the standard guidelines of GHG Protocol for businesses developed jointly by World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD). We do, however, occupy workspace and travel on airplanes (‘Scope 2 emissions’), and commute to work (‘Scope 3 emissions’). We are reducing our footprint by increasing local...
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The spotlight on recent events in the Middle East, while understandably focused on ISIS and the coalition battling it, has overshadowed the potential emergence of a Kurdish state, which would dramatically change the energy landscape in Iraq, Turkey, and, by extension, Europe. Some have observed that ISIS may control oil production. In fact, ISIS’s current oil production capacity is only around 25,000-40,000 barrels per day and it would be difficult to foresee that the group would be allowed any future control over any oil production facility. The more interesting potential outcome of these events is suggested by the image above, in...
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In their book “Ecological Economics” Daly and Farley wrote: “We almost certainly will never exhaust fossil fuel stocks in physical terms, because there will always remain some stocks that are too energy-intensive or too expensive to recover.” Technological advances have enabled us  to continuously readjust our fossil fuel reserve forecasts, but they will eventually have their limits. It is a scientific fact that it takes 9.8 joules of energy to lift 1 kg one meter and there is no techonological advance that can change that fact. Additionally, a fossil fuel is recoverable only if the net energy gain from extraction is...
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At first glance Liberia doesn’t seem as corrupt as its West African neighbors – it received 41 out of 100 on Transparency International’s Corruption Perception Index (higher is better; 90 was the best score and 8 was the worst). Many African countries with newfound oil reserves received similarly disturbing scores – Chad scored 19; Angola 22; Cameroon 26; Cote d’Ivoire and Equatorial Guinea 29; Mozambique, Mauritania, and Sierra Leone 31; Niger 33; Tanzania 35; and Gabon 38. Still, Liberia has spent the past year dealing with scandals related to bribery of government officials by its oil company executives who tried, unsuccessfully,...
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Ghana National Petroleum has 15% ownership of the Deepwater Tano Contract Area. The other 85% of the ownership went to Tullow (47%), Kosmos Energy (17%), Anadarko Petroleum (17%), Sabre Oil & Gas Holdings Ltd, a wholly owned subsidiary of Petro SA (4%) (percentages are approximate). In contrast, Sonangal holds 41% of the Mafumeira Sul project in Angola (Chevron holds 39%, Total holds 10 percent, and ENI holds 10%), and NNPC holds 40% of the Escravos project in Nigeria (Chevron holds 60%). How can Chad, Côte d’Ivoire, Liberia, Mauritania, Cameroon, Niger, Gabon, Namibia, Sierra Leone, and Equatorial Guinea get a higher percentage...
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Bahrain’s National Oil and Gas Authority (NOGA)’s LNG import terminal project seems to be on path for a 7-year cycle: NOGA initiated partnering steps in 2010, and is forecasting completion for 2017. During a ‘prequalification’ round, NOGA came up with an initial short list of potential EPC firms, then it enlarged the bid list to include a maximum number of responses (21). The bid turned out to be premature, but it did result in two ongoing ‘discussion partners’ (Shell and Vitol). NOGA took several years to iron out governance issues. It had originally considered a joint venture with Independent Terminal Bahrain...
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Pemex is investing in offshore oil exploration and production to reverse a 25% drop in oil production levels over the past 10 years, and to secure its claim to domestic offshore oil leases before foreign oil companies gain access to them. Mexican oil industry reform passed in 2012 and 2013 paved the way for more offshore investment, and in 2013 Pemex announced plans to buy 8-12 new jackup rigs – supporting its goal to be the world’s most prolific jackup operator. Pemex is in a hurry to lock in its investment and drilling plans, as new legislation opens up offshore...
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Budgeting and controlling investment costs for Latin American oil and gas projects can be particularly tricky. If investors and owners don’t use reliable information in negotiating with EPCs and equipment suppliers, their projects may suffer from a proliferation of risk buffers and safety margins that cumulatively make them unviable. Or, even worse, they may proceed with the projects and then suffer financially disastrous cost overruns. Costs vary widely across Latin America, and between Latin America and other regions. Labor costs, third country national participation, and local employee benefit adders are particular to each country. Local productivity differentials, local content requirements, and...
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Most people assume that the economics of one energy technology will prevail over the others for extended stretches of time. Sure, large oil companies such as Chevron and Saudi Aramco fund small research and development projects aimed at leveraging possible interaction between the technologies, for example offshore wind powering oil and gas rigs, or solar-powered field offices, with many of the more futuristic projects being proposed and executed under academic research grants. However, less developed energy technologies get relatively little attention. In the current paradigm, wind, waves and sun are often perceived mostly as nuisances that complicate offshore installation and equipment...
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The DONG-Siemens offshore wind collaboration, a long-term relationship that began in 1991 and has involved over 930 turbines used across more than 13 windfarm projects, is a model of sustainable and long-term supply chain organization for strategic partnerships in offshore wind. The way the relationship has played out  leverages economies of scale of the WTG, and takes advantage of reductions in cost over time due to learning curve effects, without sacrificing commercial independence. Many companies in the industry are seeking the optimal form of interaction with customer and suppliers of key components and services (preferred supplier, partnership, direct investment, etc. -...
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In contrast to other windfarm owners and developers that have established supply chains that achieve economies of scale through standardization, and replication of proven, reliable, and cost-efficient technologies and processes, Mainstream Renewable Power (MRP) has locked in a high-cost supply chain for its Neart Na Gaoithe windfarm. This could explain why the Department of Energy and Climate Change’s Final Investment Decision Enabling for Renewables (FIDeR) regime classified the windfarm as "unaffordable." In what way is the supply chain configuration expensive? The group appointed an exclusive preferred supplier (Siemens), apparently before deciding on the technology platform or negotiating price or terms. Although this is...
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The last 12 months have seen the unraveling of many Round 3 offshore UK windfarm plans. Both Vattenfall and RWE, although they are still committed to some major successful projects, have decided to curtail their future spending on renewables (mostly wind) by nearly half. RWE pulled out of the Atlantic Array. Others have scaled back the size and/or number of planned projects in light of a sluggish political / consenting process and strong opposition from environmentalists. Even the enticement of huge subsidies (for example, from the European Investment Bank, or EIB) can only tie up capital and business plans for so long....
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Siemens Project Ventures GmbH has apparently not decided which type of wind turbine foundation to use for its 600 MW Hornsea One project (Heron Wind) in the North Sea, despite having chosen Siemens' own SWT-6.0-154 wind turbines for the project (a joint venture with Mainstream Renewable Power and DONG). Five years ago, monopiles would have been out of the question in that water depth (25-40 meters), and the prospect of using gravity base foundations would have raised many engineering questions, leaving jackets as the default choice. Today, due to the advent of extra-long monopiles, there is a renewed debate on the...
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Innogy's Nordsea windfarm program is a model for supply chain leverage. The program is being constructed in three independent projects (Nordsea 1, Nordsea 2, and Nordsea 3). Each of the three was consented and will be constructed separately. This diversifies financial, legal, and regulatory risks. However, from a procurement and operational point of view, the projects are essentially replicas of each other, thereby allowing for standardization of processes, technologies, suppliers, and governance. The capacity of each project is similar, ranging from 295 MW to 369 MW. All three projects will utilize the same turbine make and model: the Senvion (formerly REpower) 6.2M 126....
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What size and number of wind turbine generators (WTGs) should RWE choose to produce the targeted power output from its Triton Knoll and other windfarms? Using small turbines (3.6's) can minimize upfront per-unit costs (in significant part by leveraging economies of scale for ordering many units at once) and produce reliable and predictable operating and maintenance costs, but this choice requires more turbines to generate the same power, and at some point the units may go "out of service" or "no longer be supported" (think of your old software) by Siemens, potentially driving a need to train and develop in-house maintenance...
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Has anyone thought of deploying seismic survey vessels of the type that are used to do 3D and 4D surveys for subsea oil reservoirs, to locate the missing Malaysia Airlines jet (assuming it is under the sea, which seems to be a significant assumption this point)? I am not well-versed in the scientific aspects of seismic surveying -- perhaps someone with relevant expertise could fill us in on the technical feasibility of this?...
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Last week's Topsides conference in Galveston fostered discussion on a wide range of valuable "project supply chain" optimization ideas and case studies. Some observations from my supply chain perspective: It is refreshing to see that the number and value of standardization initiatives is gaining ground. Modular design of vessels, platforms, and production systems is significantly compressing project timetables and yielding large cost benefits. Innovative work vessel design is helping to reduce transit time and maintenance costs by allowing unconventional transportation options and in-situ installation and maintenance directly in deep water. Material and technology substitution is always being improved, for example aluminum...
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The World Future Energy Summit in Abu Dhabi this week will provide interesting overview and policy perspectives on the need for solar, wind, geothermal, and other renewables. We all need to better understand the economics of some of these technologies in order to pave the way for them to gain critical mass and a sustainable investment base. If you know of conferences that focus on the cost and revenue economics of renewables, please reply to this post with a Comment....
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The upcoming Wind Developer Congress this week in Berlin should be interesting. I'm hoping that it will help owners, developers, OEMs, and lenders to develop procurement strategies that assure availability of long lead time equipment and services, while improving their assessment of financial and operational risks, such as regulatory hurdles and uncertainty of future lead times for wind turbines, installation services, and electrical equipment. In addition to furthering BSI's work evaluating the financial potential of specific projects through supply chain optimization, I'm looking forward to learning more about energy storage and design improvements that can accelerate payback for offshore wind in general....
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