State Oil Company Research Articles

Las Perspectivas del Sector Energetico Uruguayo: Importación, Refinado y Distribución de Derivados del Petróleo

Este trabajo de exploración inicial con foco en el sector energético, constituye un aporte que busca establecer relaciones entre algunos procesos de cambio en curso y en especial, el impacto de aspectos culturales y tecnológicos en el desarrollo nacional, donde la idea de "Uruguay Innovador" está introduciéndose gradualmente en escena política y social.

Comments: Mexico's Challenge

Editor's column Four months after major oil reform was approved in Mexico, the country's oil industry is struggling. Oil production in the country—one of the world's top producers and suppliers—peaked in 2003 at 3.46 million BOPD, with the heralded Cantarell field supplying approximately two-thirds of that total. But by February of this year, production had declined by almost a third to 2.64 million BOPD with Cantarell's share dropping to just over 700,000 BOPD. Located in the Gulf of Campeche, Cantarell is one of the largest oil fields in the world and has been the backbone of Mexico's production strength. Output at the field began in 1979 but gradually declined because of falling reservoir pressure. In 1997, state oil company Pemex began a massive nitrogen-injection project designed to maintain reservoir pressure and reverse the decline. The plan worked and, by 2004, output at the field had doubled to more than 2 million BOPD. But the field soon began to decline again and its faster-than-expected drop may be irreversible. Now, Pemex, as well as the government, which relies heavily on oil revenue, are searching for ways to develop new resources to compensate. Pemex is seeking outside financing to fund an ambitious investment program. It wants to spend a total of USD 19 billion this year, primarily on upstream exploration and development, and is hoping to maintain overall country production at 2.75 million BOPD and gas output at 65 billion cubic ft/D. Its most promising oil targets are the offshore Ku Maloob Zaap field, where output has grown to 800,000 BOPD—now Mexico's largest field—and Chicontepec, a complex onshore field that currently produces only 145,000 BOPD but has great potential. Pemex plans to drill 1,000 new wells at Chicontepec this year, and also plans to explore more in the deepwater Gulf of Mexico. Upstream development and Pemex's operations have been hamstrung by the country's constitution, which has all but prohibited private investment in the oil sector since 1938 when the oil industry was nationalized. Significant reforms are now taking place but their success depends on how, and how quickly, the reforms are implemented and whether they will be enough to attract outside investment. After considerable debate, the government made several key regulatory changes last November, including provisions that reduce Pemex's tax burden, allow the company more oversight of its budget, enhance its ability to raise debt, and give it more flexibility in licensing terms. In addition, four independent members will join Pemex's board, which will create new contract models. Analysts believe that service companies and local firms will find the changes promising, but international oil companies may need more enticement before they invest in Mexico's upstream. Already, the Mexican state oil company has awarded contracts totaling more than USD 5.39 billion this year, a boost for service companies during a year when many companies are making major spending cuts.

State Support and Resource Hosting - New Preconditions for Outperformance in the Natural Resource Sector

The historic resource sector dominance by OPEC and major oil companies is well documented. An emergent new class of Russian and Chinese state oil companies are however using legal, regulatory and financial state backing to gain global resource access. Market reaction and post-acquisition performance metrics for 185 material worldwide major resource asset deals in the period 2000-2006 are used to demonstrate that post-acquisition outperformance in the energy sector is achieved by oil and gas asset acquirors with either state support or sustainable access to domestic reserves.

The Oil Curtain and the Evolution of National Oil Companies

Management Sketch out the global landscape of reserves and production and its most salient features would be the growing appetite for oil and gas and the drive for reserves replacement from frontiers and mature fields. In the background lie the cycles of "feast or famine" and the long lead times that govern investment and returns. Tantalizingly hidden away is the essence of the industry—petroleum reserves. The Oil Curtain neatly symbolizes resource sovereignty and separates the hydrocarbon "haves" from the "have nots." It has led to the major part of proved global oil reserves being booked by national or state oil companies (NOCs). To illustrate the change of ownership, in 1971 NOCs held 30% of total global reserves while international oil companies (IOCs) held 70%. Today NOCs have increased their share to 93% while IOCs hold 7%. What caused such a dramatic reversal in fortune? Since the early 1900s the importance of oil in financial, political, and strategic matters has been bubbling up to the surface. Eventually, this led to a pressing need for producing states to control oil. Mexico was first to "shut" the oil curtain by nationalizing its oil assets and forming the wholly state-owned Pemex (Petróleos Mexicanos) in 1938. By 1960, resource sovereignty had fully matured into a global force and the Central Bank of Oil—the Organization of the Petroleum Exporting Countries (OPEC)—was created. OPEC's central message was clear: oil was too important to leave in the hands of foreigners. It would seek to regulate "oil rents" and end arbitrary payments from foreign oil companies. OPEC's thinking was shaped threefold. First, deals favored foreign oil companies and foreign governments, not producing states. Foreign oil companies also controlled an outward flow of profits, which were often the greater part of producing countries’ gross domestic product. Generally, beneficiaries were foreign governments either directly through shareholder dividends or indirectly through taxes. Secondly, foreigners took vital political decisions affecting the sovereignty of producing countries. Oil production, foreign exchange earnings through oil sales, and ultimately, national debt were being dictated by foreign oil companies. Lastly, the military and naval campaigns of the Second World War combined with the utility of oil in general transportation left no doubt that oil was a primary strategic asset.

The Resistible Rise of State Control in the Russian Oil Industry

A noted British specialist on Russia's economy reviews the rise of direct state control in that country's oil industry in light of international experience. The author notes Russia's unusual position among major oil-exporting countries in the extent of private ownership of its oil industry. The expansion of the country's state-controlled companies is analyzed and discussed, along with the relationship between state and private oil companies operating in Russia. The paper presents arguments to the effect that in current Russian circumstances the political elite's objectives of maintaining a monopoly on power and siphoning off resource rents may be served as well or better by private companies controlled by allies than by state concerns. It is suggested that any judgement that the oil industry will in time be wholly or very largely nationalized is therefore premature. Journal of Economic Literature, Classification Numbers: L720, P260, P280, Q400. 3 tables, 37 references.

Enter the Dragon? Chinese Oil Companies & Resistance in the Niger Delta

This article explores the ramifications of the entry of Chinese state oil companies into the volatile Niger Delta for the politics of local resistance in the region ‐ until recently, virtually the preserve of Western oil multinationals and smaller Independents. The entry of Chinese oil companies in the context of a ‘new’ scramble for Africa's resources, and as a response to strategic moves by the Nigerian petro‐state and ruling elite to increase oil revenues, and diversify its near‐total dependence on Western actors, oil technology, markets and conditionalities, has drawn a quick response from the local communities in the Niger Delta. On 29 April 2006, an Ijaw youth militia, the Movement for the Emancipation of the Niger Delta (MEND), exploded a car bomb in the city of Warri, warning the Chinese oil companies to stay away from the Niger Delta, and further threatening that they would be treated as ‘thieves’ and attacked. Since then, there have been reports of the kidnapping and subsequent release of some Chinese oil workers in the region. What is the potential impact of the entry of Chinese oil capital on the fragile oil environment and the human rights situation in this volatile oil‐rich region? Does the existing evidence suggest a fundamental difference in local responses to Chinese and Western oil capital in the Niger Delta? What explanations can be advanced for the local response to the entry of Chinese oil companies in the Niger Delta? The paper also analyzes the likely response of the Chinese oil companies to the perceived threat(s) that local resistance in the Niger Delta could pose to their extractive, profit and energy security interests, given their antecedents in other African new oil states, particularly Sudan, where Chinese companies or Chinese oil workers were targeted by rebels, and were deeply involved with the state and dominant elite in mining oil and repressing local resistance. This assumes further significance in the securitization of the Niger Delta's oil within the context of a post‐9/11 US‐led (militarised) energy security paradigm that has placed the region in the context of an energy‐rich Gulf of Guinea, which is central to Western global strategic interests. While demonstrating that a clear anti‐Chinese oil position does not as yet exist in the Niger Delta, the article critically examines the prospects for the future of the forces and trajectories of local resistance in the Niger Delta.

Contradiction of space, centralization of capital, and the hybrid state oil company: The case of Russia

A new species of capital has emerged from the development of inter-capitalist competition in the oil industry. Oil-producing states have fused with financial and productive/extractive capital, foreign and domestic, into hybrid state oil companies. These are centralized monopolies that transcend the historical geographical opposition between private transnational oil companies and national oil companies. As partially nationalized state monopolies, they allow oil-producing states access to global capital markets, while retaining the control of the state over the flow of foreign capital into the domestic oil industry. They thus mediate the contradiction between the integration of capital at the transnational level and its territorial fragmentation at the national scale, only to internalize it in the process. I examine this process in the case of the ongoing consolidation of the Russian oil industry under state control, focusing on two inter-related contradictions: an attempt by the Russian state to liberalize the oil industry, yet shield it against the expansion and control of foreign oil companies; and the dependence of the state on foreign financial capital in the very process of consolidating control over the oil industry.

Application of Kraljic's Purchasing Portfolio Matrix in an Undeveloped Logistics Infrastructure: The Staatsolie Suriname Case

ABSTRACT The Kraljic matrix has received large-scale adoption, especially in Western Europe, as a tool for developing differentiated purchasing strategies. However, it is not clear whether the Kraljic matrix could be applied by companies operating in remote conditions in a country or region where the logistics infrastructure is not well developed. This paper reports on a literature study that is aimed at identifying the necessary adaptations to the Kraljic matrix when applied under remote conditions. Based on an action research project within the State Oil Company of Suriname, the usefulness of the adapted Kraljic approach has been explored.

Comments: Nigeria's Reforms

Editor's column Nigeria is the latest major oil and gas producer to reform its oil structure and national oil company (NOC) to take advantage of high oil prices and increasingly valuable hydrocarbon resources. Nigeria's new president, Umaru Yar'Adua, took office less than a year ago but has wasted little time trying to revitalize an oil industry that has been plagued in the past by sabotage, worker strikes, and charges of corruption. Leading the reforms are several prominent industry figures who have lent credibility to the initiative, including Emmanuel Egbogah, an SPE director who was an adviser to Malaysian state oil company Petronas for several years; Rilwanu Lukman, a past long-term secretary general of OPEC; and Tony Chukwueke, who worked for Shell, the largest international oil company (IOC) producer in the country, for almost 3 decades. In an interview beginning on page 26, Egbogah, special adviser to the Nigerian president on petroleum matters, lays out the reforms and the thinking behind them. The reforms in Africa's biggest oil exporter will put more pressure on IOCs, which by now are getting used to national oil concerns wresting more control and revenues from oil projects. But these reforms are likely to go over better than the changes that have taken place in Venezuela and Russia, for example, and could benefit IOCs in the long term. Nigerian projects have been hampered by worker unrest and lack of financing on the government's end, which has slowed progress significantly on some major projects. Nigeria has been producing about 2.2 million BOPD, although its production capacity is anywhere from 2.47 million BOPD (according to the International Energy Agency) to 3 million BOPD (according to the Nigerian government). With reserves of 35 billion bbl, Nigeria accounts for 60% of proven oil reserves in the strategically important Gulf of Guinea. The renegotiation of contracts will increase the profits of Nigeria at the expense of the IOCs. Many of the existing contracts between the state oil company, the Nigerian National Petroleum Corporation (NNPC), and private companies were signed when oil was valued in the USD 20/bbl range. Six joint ventures between the Nigerian government and Shell, ExxonMobil, Chevron, Eni, and Total account for 90% of the country's production. With the majority stake in each of the projects, Nigeria provided the larger financial contribution, but it sometimes had difficulty making the cash call. Lacking the money to meet its joint-venture requirements for deepwater exploration in the Gulf of Guinea in the 1990s, Nigeria signed agreements that allowed IOCs to invest their capital and recoup their own costs before sharing profits with the government. Several big finds have been made since then, including Shell's Bonga field and Chevron's Agbami field. It is those agreements in particular that the government wants to revisit. The reforms will also allow NNPC, which was formed in 1977, to operate more nimbly, like other NOCs, such as Petronas. Many NOCs are now negotiating tougher contract terms at home while exploring new areas abroad. The measures could also help the country develop its vast reserves of gas and a liquefied-natural-gas industry.

Development under patrimonial conditions: Suriname's state oil company as a development agent

This article analyses the conditions under which the Surinamese State Oil Company (Staatsolie) has been consolidated, not only as an oil producer, but also as a development agent. Staatsolie's chances of success seemed rather slim at its creation in the early 1980s, mainly because of the non-developmental, patrimonial character of Surinamese politics and the nature of Suriname's state, which has traditionally been oriented toward patronage and clientelism. The analysis documents the origins of Staatsolie and focuses on its commitment to the acquisition and further development of technological and managerial expertise. At present, Staatsolie ranks among the most successful companies in Suriname and its contributions to the economy of this small middle-income country are considerable. The success of Staatsolie's attempt to become a development agent is attributed, in particular, to the company's double strategy. The internal part of this strategy, derived from the management vision and ideological commitment of the company's leadership, was aimed at developing technological and management skills. The external part of the strategy was aimed at steering away from political influences on the company and playing out, politically, the formal-legal position of the firm in the petroleum sector. After 25 years of Staatsolie, it is argued that the same factors that were responsible for the company's success may turn out to be the main challenges for the years ahead.

Of Note: Chavez's Populism Threatens the Economic Engine of His Revolution

Chavez's Populism Threatens the Economic Engine of His Revolution Ben Deering  Oil-rich states are getting richer. With higher commodity prices worldwide, extractive industries are proving very profitable. Indeed, governments are noticing the upsurge in profit, and are actively seeking more control over national resources. In Venezuela, such policies have already taken a large toll on current, and possibly future, energy production. To finance his extensive social spending increases and aid grants to political allies, Venezuelan President Hugo Chavez has increased the government's control of and taxes on the country's energy sector. Among President Chavez's largest targets has been the state-owned oil company Petróleos de Venezuela (PDVSA). Beyond simply relying on higher oil prices and taxes to generate income, in 2005 Mr. Chavez required PDVSA to spend roughly $4.4 billion of its $19.5 billion budget on social programs. This left only around $3 billion for critical investment projects after meeting the company's expenses—an astonishingly low figure given that PDVSA's wells have a natural decline rate of 25 percent per year, requiring an estimated $2.5 billion of investment annually to maintain current production levels.1 In 2006, the amount PDVSA set aside for social expenses rose to above $6 billion. Additionally, PDVSA revenues are siphoned off to fund the Fondo Nacional del Desarollo (Fonden), the government's national development fund. According to the finance ministry, as of July 7th the Fonden had received $4.6 billion from PDVSA since its inception in late 2005.2 Unfortunately, it is not just energy revenues that Venezuela uses inefficiently. The state's consumer-oriented energy subsidies keep prices low, and encourage Venezuelans to consume the highest level of electricity per capita in South America.3 Venezuela is also among the world's leaders in the amount of energy required to produce a unit of GDP. To this list, Venezuela can add inefficient human capital management. Shortly after his election, Chavez declared his desire to overhaul what he has called a "state within a state." His initial attempts to reform the state oil company met considerable resistance from large segments of the company's own management who had in prior years operated increasingly independently. Their independence ran directly counter to Mr. Chávez's vision for the company's role in a Venezuelan socialist renaissance. When many of [End Page 159] the company managers participated in the December 2002–February 2003 general strike, Chavez responded by firing over 20,000 of the company's 45,000 employees. 4 Although Venezuela has large oil reserves, President Chavez's policies are crippling production. Underinvestment in capital needs, awarding of oil service contracts based on companies' ideological orientation, and politically motivated layoffs of experienced personnel have combined to diminish current production and the future potential of Venezuela's complex oil reservoirs. The country's 79.7 billion barrels of proven conventional oil reserves, 151 trillion cubic feet of natural gas, and roughly 270 billion barrels of reserves of extra-heavy oil in the Orinoco Belt, mean that it remains the most important oil and gas producer in the hemisphere. Yet its output has fallen substantially.5 In February 1999 when Mr. Chavez took office, PDVSA was producing 3.3 million bbl/d and only 200,000 bbl/d was being produced by private oil companies. Currently, Venezuela's production capacity stands at 2.6 million bbl/d, but for the above stated reasons, PDVSA's overall capacity has dropped 1.8 million bbl/d. Venezuela is failing to meet its potential. Although Venezuela houses roughly three-times the number of oil reserves compared to the United States, America produces four-times as many barrels of oil per day. Overall, Venezuela's oil sector is now starved of technology, capital, and experience. Consequently, Venezuela has seen a pronounced slowdown in oil revenue growth from 62 percent in 2005 to just 21 percent for the first six months of 2006, despite strong world...

Latin America ponders nationalist energy policies

Latin American politicians who cheered the nationalist energy policies of Venezuela's President, Hugo Chavez may be having second thoughts following the nationalization of foreign oil and gas holdings by Bolivia (see 'Gas and Power', May 2005). As well as affecting companies from the US and Europe, the move had a severe impact on another Latin American country, Brazil, whose state oil company, Petrobras, was Bolivia's largest producer of natural gas. Bolivia, in turn, represented the principal foreign asset of Petrobras, as well as being an important supplier of gas to Brazil. Petrobras announced that it was cancelling future investments in Bolivia, and Brazil's President, Luiz Ignacio Lula da Silva flew to Argentina for a crisis summit with other Latin American leaders to discuss the continent's energy security.

Sorption of methyl tert-butyl ether and benzene in fine-grained materials from northern Illinois and the Chalco Basin, Mexico

Methyl tert-butyl ether (MTBE) is a gasoline oxygenate additive used to enhance gasoline combustion by lowering carbon monoxide and hydrocarbon emissions, thus reducing air pollution. However, it has been identified as the second most common volatile organic contaminant of urban aquifers in the United States. Methyl tert-butyl ether has also been blended into two types of gasoline sold in Mexico by the state oil company (Petrleos Mexicanos) but is currently not monitored in groundwater. Early research on MTBE determined that it is unable to sorb to soils and sediments. The objective of this study is to determine if fine-grained materials with high organic matter (0.25–15.3%) have the potential for sorption of MTBE. The experiment consisted of sorption isotherms of loess from DeKalb, Illinois, and lacustrine sediments from Chalco, Mexico. Experiments were performed with various concentrations of MTBE and benzene (10, 50, 100, 500, and 1000 g/L) at 25C and 10C. Methyl tert-butyl ether showed a retardation factor (R) as high as 1.856 0.0130 for lacustrine sediments and 1.095 0.0010 for loess at 25C. Benzene showed retardation factors as high as 1.996 0.0150 in lacustrine sediments and 1.775 0.0050 in loess at 25C. These results showed that sorption, and therefore, the retardation of MTBE in groundwater, is possible in fine-grained materials especially with high organic matter. This research increases the understanding of the fate and transport of MTBE and improves the knowledge to implement the optimal remediation method for sites contaminated by MTBE.

Cupiagua Uncertainties Offer Insight Into Piedemonte Exploration Prospects in Colombia

BP Colombia has been producing gas and condensate since 1996 from the heavily fractured Cupiagua reservoir, located in the Piedemonte area of Colombia, 195 km northwest of the capital city of Bogotá (Fig. 1). The field contains an extremely rich gas condensate with a yield of about 280 STB/MMscf. Field data confirm that the natural-fracture network in Cupiagua has a major influence on recovery and well production performance. Although fractures apparently play a major role in the recovery potential of the field, it is very difficult to predict their behavior. For starters, reservoir data are not good enough to characterize fracture density and orientation in the formation more than 200 m from a well-bore. Hence, a multitude of fracture patterns are possible. Each pattern can lead to a recovery that differs markedly from the others. Secondly, on a practical level, it is not possible to create multiple detailed models representing the range of possible patterns in a realistic time period. Ecopetrol, the Colombian state oil company, is directing its exploration efforts within the Piedemonte trend where the Cupiagua field is located. This is an area of extensive tectonic activity, so fractures are expected within the hydrocarbon structures. Ecopetrol seeks to benefit from the experience of BP with Cupiagua and is using the field as a benchmark for evaluating the potential of its exploration prospects. Instead of using simple volumetric methods and assumed recovery factors, which are notoriously unreliable under these conditions, Ecopetrol is building on the ideas used by BP to obtain better estimates of its potential in this region. Cupiagua Field-Development Decisions To maximize recovery and brake the decline, BP Colombia has implemented a gas-reinjection plan since early in the field life when the pressure was still above dewpoint. Injection above saturation pressure allows maximizing recovery from gas/condensate reservoirs. However, with a voidage/replacement ratio of roughly 0.8, injection clearly cannot arrest the falling pressure. The average reservoir pressure is about 5,000 psia—significantly below the dewpoint, so condensate accumulation is widespread. Under these conditions, given the richness of the gas, the condensate saturation can exceed 35% of formation pore volume. Although gas injection is less effective below dewpoint, BP has pursued its injection strategy because the gas vaporizes a large fraction of the liquid, increasing recovery, and provides pressure support, boosting well rates. Reservoir modeling reveals the potential gains achievable with injection. Under natural depletion, a maximum recovery of 18% of initial equivalent oil in place (IEOIP) is achievable. However, with gas injection, the recovery can exceed 60%. Furthermore, the modeling shows that this maximum recovery can be reached with the injection of less than 3 pore volumes of gas. Apparently, gas reinjection is the obvious development strategy.

Structural interpretation of the deepwater Gunashli Field, facilitated by 4-C OBS seismic data

The ACG Field (Azeri, Chirag, Gunashli) was discovered by the State Oil Company of the Azerbaijan Republic (SOCAR). Since 1980 SOCAR has been producing oil from the northwest end of the structure, known as Shallow Water Gunashli (SWG). In 1994 the Azerbaijan International Oil Company (AIOC) signed a 30-year Production Sharing Agreement (PSA) with the state. AIOC began production from the central part of the field, Chirag, in late 1997. Chirag currently produces approximately 140 000 b/d. Azeri achieved first oil in early 2005. Development drilling will start at DWG in late 2005 with first oil due in 2008. BP now operates on behalf of the AIOC partners

Indonesia fights off oil and gas crises

Rising domestic consumption and falling output have turned Indonesia into a net importer of oil, forcing it to consider withdrawing from OPEC. In recent years, Jakarta has depended on gas for its export revenues. Now, the gas industry is in trouble. Output from the Arun gas fields is declining and the state oil and gas company, Pertamina, was recently forced to delay LNG shipments to its three largest customers. The government is looking for new investment in an attempt to stave off an energy crisis, but foreign companies are unhappy about business conditions there. Meanwhile, oil and gas consumption is rising rapidly thanks to a system of domestic price subsidies, which the government has been unable to end. The delay to much needed reforms in the energy sector threatens not only the oil and gas industries but the economic and political stability of the country as well.

SOCIAL AND ENVIRONMENTAL IMPACTS OF WORLD BANK/IMF‐FUNDED ECONOMIC RESTRUCTURING IN BOLIVIA: AN ANALYSIS OF ENRON AND SHELL'S HYDROCARBONS PROJECTS

ABSTRACTWith the spectacular financial collapse of Enron in 2001, Enron and Shell's Rio San Miguel‐Cuiabá gas pipeline gained international notoriety for degrading the last, most intact dry tropical forest in the world, Bolivia's Chiquitano forest. The paper uses specific case studies, including the case of the Cuiabá pipeline, to examine how economic restructuring sponsored by the World Bank, International Monetary Fund (IMF) and Inter‐American Development Bank (IDB) facilitated the entrance of multinational oil corporations that have caused significant social and environmental impacts in Bolivia. The paper explores the influence of international financial institutions and multinational oil corporations on Bolivian state institutions, particularly their ability to regulate and address impacts caused by developments in the hydrocarbons sector. It concludes that neoliberal policies, which resulted in partial privatisation of the state oil company and in expanded control over natural resources by multinational corporations (MNCs), were detrimental to sensitive ecosystems and indigenous inhabitants.

Earning community trust in Ecuador

Land seismic crews have to adapt to working in every kind of environment around the world. In this illustrated article Gehrig Schultz and Norberto Soto describe how one PGS Onshore operation found the solution to carrying out seismic acquisition in a jungle region of Ecuador in the face of objections, local and international. At the edge of the Amazon jungle a short flight east of the cool mountain valley where the Andean capital, Quito, sits surrounded by high snow capped peaks and a smoking volcano, PGS Onshore’s Crew 360 has been busy meeting the challenge of seismic acquisition in the jungle and the special local conditions that govern such surveys. The crew is acquiring its second 3D survey in Ecuador’s oil rich Oriente Basin for state oil company, PetroProduccion, as part of a project to redevelop the mature Sacha Field. Discovery of the Sacha Field and other nearby giant fields attracted immigration to the area by poor peasants called ‘colonos’ pursuing economic opportunities and free land. The colonization, in turn, led to commercial development, including logging, mining and agriculture. In Ecuador, as in any developing nation, forested lands were cleared to support this growing population. Today, the oil boom’s economic opportunities have been replaced by increasing poverty as the ‘colonos’ can now only operate marginal cattle ranches and small struggling coffee, cocoa and oil palm plantations. The poor jungle soils only produced profitable crop yields for three or fours years, until minerals were depleted from the thin jungle soils. The worldwide collapse of coffee prices has eliminated the main source of income for many small farmers. Small groups of traditional indigenous tribes still inhabit the remote, undisturbed jungle areas, living very much in the way they have for centuries. Environmental damage during the early years of oil field development has led local farmers and indigenous groups to distrust the petroleum industry. This distrust led local stakeholders and international non-governmental organizations (NGOs) to actively challenge oil exploration activity in the area, with demands for reclamation of damaged areas and a share in the benefits from the production. The biggest challenge in executing a 3D survey in Ecuador’s Oriente region is operating a high quality seismic crew safely and efficiently in this complex and turbulent social environment. Evidence of the complex social environment is demonstrated by recent job delays and cancellations in the area. One major international seismic company finally declared force majeure on a project and closed its Ecuadorian operation after repeated protests and even temporary confinement of its field crews. Six months of standby due to constant permit problems and conflicts with NGOs on the block adjacent to Sacha, where PGS Onshore is present, caused another competitor to cease operations. Other contractors have been delayed months and reportedly have had thousands of dollars of seismic recording equipment destroyed by sabotage.

ベトナム・ランドン油田 海上油田開発・生産拡大への挑戦

In October 1992, a Production Sharing Contract of Block 15-02, offshore southern Vietnam, was signed between Petro Vietnam (Vietnam State Oil Company) and ex-Mitsubishi Oil Company (present-Nippon Oil Company Ltd.).Following exploration activities, Rang Dong oil field has been tracking the phased development steps of increasing oil production level. A fractured reservoir in Granite basement is one of this field's characteristics, which shows severe uncertainty in the fracture distribution and connectivity. To mitigate the risk of these uncertainties, phased development, where reserve has been confirmed by pre-drilling, has been adopted. Also, extended reach horizontal drilling has become common for development well planning to penetrate multiple fractures to enhance well productivity.History of development of Rang Dong oil field to cope with its reservoir uncertainties and difficulties in increasing its production levels with increasing production facilities, is presented in this paper.

Shallow electromagnetic exploration for hydrocarbons at Sergipe-Alagoas Basin, Brazil

Brazil covers a large surface area and about 6 436 000 km2, including the continental margin, are covered by sediments. The onshore portion, 4 885 000 km2, is divided into more than 20 Proterozoic, Paleozoic, and Tertiary basins (Figure 1)—most being virtually unexplored or underexplored for oil and gas. Petroleum exploration began in 1954 with the creation of Petrobras (Brazilian State Oil Company) and implementation of the state monopoly. Exploration has mainly focused on the offshore continental margin. Two major exceptions are Reconcavo and Sergipe-Alagoas basins which have been explored since the 1960s. Figure 1. Distribution of onshore sedimentary basins in Brazil. In 1997 a new petroleum law opened the country to all segments of the oil industry and created a new government agency—ANP (Agencia Nacional de Petroleo)—which is responsible, among other things, for awarding exploration and producing licenses. Since the end of the state monopoly, more than 34 companies have operated in Brazil. In 1999-2002, ANP held four licensing rounds that offered several areas for exploration in almost all onshore sedimentary basins. The 1997 law requires that all submitted bids be preceded by geologic and geophysical studies. The high cost of onshore exploration justifies the use of shallow geophysical and geochemical methods to reduce the inherent risk and focus the exploration efforts. Recent work has shown that oil reservoirs can be overlain by alteration plumes that can be mapped with geochemistry and/or shallow geophysical surveys. Geochemical prospecting, which has been around since the 1930s, can provide evidence of migration of hydrocarbons because that migration often changed some physical properties of the capping rocks. These changes can, in some cases, be detected by geophysical methods. The motivation for the work described in this article was to study the near-surface electromagnetic response of hydrocarbon …