Iraq’s oil revival could be a gusher for Houston firms
“It’s going to mean a lot of jobs for Houston and a sizable amount of income for these major services companies,” said Wayne Kelley, managing director of RSK [UK] Ltd, an oil and gas advisory firm in Houston.
Exxon In Iraq Marks New Era For IOCs
One of the so-far unanswered questions regarding the scramble by so many international oil companies to secure service contracts in Iraq — Exxon Mobil in particular — is exactly why they are so interested, especially after their initial disdain. After all, the stated remuneration is a meager $1.90 per barrel in the case of West Qurna-1, which Exxon and Royal Dutch Shell will be redeveloping. The answer could be buried in a US Securities and Exchange Commission (SEC) document that sets out new rules for how and when operators can book reserves, including those associated with service contracts.
By Wayne Kelley, Richard Bishop and Ron Harrell. Sunday, October 24, 2009 edition of the Houston Chronicle, Viewpoints.
The August 25 edition of the New York Times, “Peak Oil Is a Waste of Energy,” contends that there is no danger of near-term decline of production rates because great volumes of oil are believed yet to be discovered. This simplistic view fails to recognize that an aging handful of giant and super-giant fields (only 320 of the world’s 16,000 oil fields) provide nearly 60 percent of global oil supply. We provide an alternative view that field size, not just total undiscovered volumes, will determine future production rates and costs.
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Topic: Iraq’s Stunted Oil Production
Pete Dominick of the Stand Up! with Pete Dominick radio show interviews Wayne Kelley about Iraq’s Stunted Oil Production. Their discussion was heard on Sirius channel 110 and XM Radio channel 130 on October 14, 2009.
Audio will be provided as it becomes available.
Click HERE to Visit the Stand Up! with Pete Dominick website.
As Iraq Seeks Oil Investors, They See an Uncertain Bet
“The lack of infrastructure and graft are looming issues, but even if they are mitigated, the terms the Iraqis have been offering are not competitive with alternate uses of funds by international oil companies,” Mr. Kelley said.
Kirby Wells, Wayne L. Kelley and Richard S. Bishop, RSK (UK) Limited, USA, examine the potential for cost overruns in Santos Basin pre-salt development and the potential strain on the operators financial capacity. Published in the October 2009 issue of Oilfield Technology.
Rightfully, much is made of the Brazilian Santos Basin pre-salt potential. Attention has been paid to the technical challenges of developing fields near the limits of water depth, distance from shore and sub-salt completion capability. There has also been interest in the costs of proposed technical solutions. The purpose of this article, however, is to examine the impact of the scale and rate of investment upon the capacity of the operators and financial markets to fund the development.
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RSK [UK] Limited’s experts and advisors have formulated a proposal to model the world’s giant oil fields.
RSK’s managing director, Wayne Kelley was recently featured on NPR’s All Things Considered program. Mr. Kelley discussed the prospect of oil development plans in Iraq and the need for development by foreign oil companies.
RSK’s managing director, Wayne Kelly discusses the significance of new short-term service contracts made available to foreign oil companies in Iraq:
It was meant to be the rising tide that would lift the Iraqi economy out of years of war and sanctions, to finance reconstruction and guarantee cheap global supplies.
Yet, five years on, big oil is only just starting to move cautiously into Iraq and, despite record prices, experts caution against another false dawn of optimism. Four oil giants – Exxon Mobil, Shell, Total and BP – are to announce next week no-bid contracts to start servicing the creaking Iraqi oil infrastructure, crippled for decades by lack of investment and often targeted by insurgents.
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Hope arises for Iraqi oil production
“If foreign oil companies provide money and technical know-how in deals more ambitious than those now being negotiated, Iraq realistically could pump an extra 3.5 million barrels per day into the global oil market within two to three years, says Wayne Kelley, director of RSK, an oil consulting company that has studied Iraq’s oil sector for clients including the U.S. and Iraqi governments.”
RSK adds new 3D visualization system.
HOUSTON – RSK (UK) Ltd. has implemented a new 3D visualization center using a Barco Galaxy HN-12 projection system.
The new projection system, controlled with mouse and keyboard, can project local and networked sources simultaneously in windows that can be resized, moved, or overlapped. This allows RSK teams to display multiple geologic modeling, reservoir modeling, and well development modeling tools at once on the theater’s large glass screen. The Galaxy NH-12 can display both stereo 3D and non-stereo data at 1080p HD resolution.
“RSK wanted to visualize all facets of geo-data on a large intuitive display, so our technical teams could collaborate, analyze, and make better informed decisions more efficiently,” said Wayne Kelley, managing director at RSK.
Arctic Reserve – Oil Industry, Environment, Proponants
“Yesterday we heard about some prominent Canadians who want to harmonize our energy policy with that of the United States. Today, the U-S energy policy is poised to occupy another controversial territory.”
“The Arctic National Wildlife Reserve, known as ANWR – covers 7.7-million-hectares of land in northern Alaska. Nearly half of it is designated as wilderness which means it’s protected from development. But there’s a 600-thousand hectare plain on the Arctic coast that isn’t protected, an area environmentalists say is the biological heart of the refuge.”
Kirkuk: Can It Be Solved?
“In the aftermath of the Iraq war, new stressors were unleashed. Manifested in four broad categories—people, oil, free market dynamics, and security—they require careful management to ensure Kirkuk and likely the rest of Iraq doesn’t fracture along several different seams.”
Big Oil Steps Aside in Battle Over Arctic
“George W. Bush first proposed drilling for oil in a small part of the Arctic National Wildlife Refuge in Alaska in 2000, after oil industry experts helped his presidential campaign develop an energy plan. Five years later, he is pushing the proposal again, saying the nation urgently needs to increase domestic production.”
“Wayne Kelley, who worked in Alaska as a petroleum engineer for Halliburton, the oil services corporation, and is now managing director of RSK, an oil consulting company, said the refuge’s potential could “only be determined by drilling.”
“The enthusiasm of government officials about ANWR exceeds that of industry because oil companies are driven by market forces, investing resources in direct proportion to the economic potential, and the evidence so far about ANWR is not promising.”
Iraq Is Soliciting Bids To Help Determine How Much Oil It Has
“Iraq has an immense amount of oil, but no one knows in detail just how much is there, not even the country’s oil ministry.”
“So the ministry is undertaking the first comprehensive evaluation in decades of the two biggest fields now in production, at Rumaila in the south and Kirkuk in the north. And it has invited dozens of foreign energy companies to compete for the job of sizing them up.”
“While foreign companies may be asked to help with continuing operations, the oil ministry will retain ownership of all production from the Rumaila and Kirkuk fields.”
THE STRUGGLE FOR IRAQ: RESOURCES; Oil Experts See Long-Term Risk To Iraqi Underground Reserves
“As the Bush administration spends hundreds of millions of dollars to repair the pipes and pumps above ground that carry Iraq’s oil, it has not addressed serious problems with Iraq’s underground oil reservoirs, which American and Iraqi experts say could severely limit the amount of oil those fields produce.”
“In northern Iraq, the large but aging Kirkuk field suffers from too much water seeping into its oil deposits, the experts say, and similar problems are evident in the sprawling oil fields in southern Iraq.”
“Experts familiar with the Iraqi oil industry have said years of poor management damaged the fields, and some warn that the current drive to rapidly return the fields to prewar capacity risks reducing their productivity in the long run.”