2006

In the wake of Hurricane Katrina, the Minerals Management Service (MMS) is delaying implementation until Jan. 1, 2006 of a final rule that had been due to go into effect Monday, Sept. 26. The rule will adjust some existing fees and implement several new fees for services the agency currently provides to the offshore oil and gas industry.

Regulatory hearings on Canada’s entry in the arctic pipeline race have been postponed until 2006, prompting the Northwest Territories government to warn that the C$7-billion (US$5.6-billion) Mackenzie Gas Project could be shelved. The lag gives Alaska a chance to take over the North American lead in northern supply development, territorial energy minister Brendan Bell said.

Energy merchant markets are predicted to grow 30% between 2002 and 2006, with oil and natural gas majors and financial service firms dominating the market, while asset-based traders — particularly in power — reengage, according to a report by Massachusetts-based Energy Insights. On the horizon, the study predicted there will be even more participation by financial institutions between 2008 and 2010.

Consent order in hand, Chevron Corp. and Texaco Inc. became the latest of the majors to merge, after the U.S. Federal Trade Commission (FTC) gave its approval on Friday. The new company, ChevronTexaco Corp., moves to fifth place on the majors’ list, following arduous negotiations that began more than two years ago (see Daily GPI, June 4, 1999). The companies finally came to terms last October and cinched the deal after Texaco agreed to spin off several of its businesses (see Daily GPI, Aug. 13; Oct. 17, 2000).

Exploration and production (E&P) companies may see 2005-2006 cash flow estimates 10-30% higher, with the average target upside about 10%, said Lehman Brothers Tuesday. The financial analyst raised the natural gas price forecast by $0.25-1.00, to range between $6.00 and $6.25/MMBtu, and put oil price estimates $5-8/boe higher to $40-45/bbl.

Exploration and production (E&P) companies may see 2005-2006 cash flow estimates 10-30% higher, with the average target upside about 10%, said Lehman Brothers Tuesday. The financial analyst raised the natural gas price forecast by $0.25-1.00, to range between $6.00 and $6.25/MMBtu, and put oil price estimates $5-8/boe higher to $40-45/bbl.

The president’s budget for fiscal year 2006 calls for the Minerals Management Service (MMS) to increase base rentals by about 25-27% for leases in the Gulf of Mexico due to inflation since the base rates were set in the mid 1990s. The agency said last Wednesday in a Federal Register notice that it is taking comments through April 1 on the base rate hike and a proposed sliding scale escalator, which it says is designed to encourage more deepwater exploration.

The president’s budget for fiscal year 2006 calls for the Minerals Management Service (MMS) to increase base rentals by about 25-27% for leases in the Gulf of Mexico due to inflation since the base rates were set in the mid 1990s. The agency said on Wednesday in a Federal Register notice that it is taking comments through April 1 on the base rate hike and a proposed delayed sliding scale escalator, which it says is designed to encourage more deepwater exploration.

Forget previously discussed concerns about 2006, it’s the summer of 2005 that’s worrying California state energy officials who gathered to review an update of the state Energy Action Plan last Tuesday. Dominating their discussions were “what-if” questions and proposed contingencies, including everything from mandatory load-reduction programs to accelerated power plant-building and delayed plant closings for older units.