Oil and gas brass from around the world are power-lunching at the Calgary Petroleum Club this week. They’re here for the Canadian Petroleum Institute’s international executive-development program.
Along with Alberta prime rib, here are some new statistics for the execs to chew over – courtesy of veteran oilpatch chronicler Ian Doig.
Doig’s tartly worded Doig’s Digest newsletter has prompted many a CEO to order extra wine with lunch, especially if he or she is on the writer’s skewer in that particular issue.
In his just-released 10th annual Canadian Energy Ventures Abroad compendium, Doig reports that in 2002, Canadian exploration and production companies boosted their international oil production by 46 per cent and their natural gas production by 64 per cent over the previous year.
In less than a decade, production abroad by firms flying the Maple Leaf has increased to almost 890,000 barrels a day (b/d) of crude oil and liquids, compared with just 136,000 b/d in 1993.
Gas production abroad has jumped to more than one billion cubic feet a day, compared with only 328 million cu. ft./d in 1993.
The figures show not only the
growing global reach of the Canadian industry, but the declining hold of the Western Canadian Sedimentary Basin on the home-grown industry.
Canadian firms spent 13 per cent of their capital expenditures outside Canada last year, Doig notes.
The five heavyweights with the largest international crude oil and
liquids production are Talisman Energy Inc., Petro-Canada, Nexen Inc., PetroKazakhstan Inc.
(formerly Hurricane Hydrocarbons Ltd.), and EnCana
Corp.
For international gas
production, the top five
are EnCana, Talisman,
Petro-Can, Nexen and Canadian Natural Resources Limited.
Alberta’s big oil and gas producers aren’t the only industry players spreading their wings to faraway places.
Precision Drilling Corp., Canada’s largest
oilfield services company, has landed a $339-million US contract extension to drill more natural gas wells in Mexico.
The development is a key part of Precision CEO Hank Swartout’s plan to produce half the company’s revenue from foreign sources by 2005.
Precision and partner BJ Services Company of Houston will drill another 285 gas wells for the Mexican state oil company Petroleos Mexicanos (Pemex) in the Burgos basin in northern Mexico. Precision will ship another three rigs to the country, bringing its rig fleet
there to 10.
Pemex first hired Precision in 2001 to drill 240 wells in the Burgos basin, estimated to hold up to 75 trillion cubic feet of untapped gas.
Energy Minister Murray Smith has been hinting that the Alberta government might again dole out natural gas and electricity rebates to homeowners this winter, when some analysts expect gas prices could hit record highs.
For most people, the cash refunds burn a hole in the pocket faster than hot coals.
Why not spend the
$2 billion instead (which is what the rebates cost the province two years ago) on an energy-smart legacy?
Create an incentives
program to encourage homeowners to buy energy-efficient furnaces and do energy upgrades on their houses.
Or pay the rebates to lower-income householders who add wind-generated electricity to their power consumption. The turbines will keep turning –
producing clean energy for all Albertans – long after the cash is gone.
If “lead batter” Nexen Inc.’s financial results are any indication, second-quarter oilpatch earnings could hit home runs for several companies.
Nexen reported last week that its cash flow per share increased 41 per cent for the second quarter of 2003 compared with the same period last year, while its second-quarter earnings per share rose by 177 per cent.
Driven by record oil production in the Gulf of Mexico, strong commodity prices and a reduced Canadian income tax rate on oil and gas income, Nexen’s net income increased to $263 million, or $2.05 per share, in second-quarter 2003 compared with $101 million, or 74 cents per share, in the previous year.
Husky Energy Inc. releases its
second-quarter results this week and EnCana Corp. next week. Look for similar stellar results.
Energy companies now have the right to knock again if a leaseholder of public land shuts the door on oil and gas development.
There about five million acres of public land in Alberta leased for grazing and cultivation. Until now, if a leaseholder refused access for oil and gas exploration, the company had no right of review.
Under the new Agricultural Dispositions Statutes Amendment Act 2003, if a dispute is related to compensation for access and damages on a lease, the company can go to the Surface Rights Board and apply for a right-of-entry order to explore. The regulatory board can also issue an order for compensation.
The new law puts a lot of responsibility on the Surface Rights Board to weigh the greater public interest in deciding whether to grant, over the objections of the leaseholder, use of the land by an oil and gas company.
That means the board should and must – for every application – consider all the values of the public land,
including grazing, recreational and environmental.
