NEW YORK (AP) - In an April 14 story about the energy sector, The Associated
Press reported erroneously that Kevin Book is an analyst for Calyon Securities.
He works for Friedman, Billings, Ramsey.
A correct version follows.
NEW YORK (AP) -- Following is a summary of top stories in the energy sector
Monday afternoon.
Crude Prices Rise
Oil prices are close to last week's trading record of $112.21 a barrel.
Light, sweet crude for May delivery rose $1.62 to settle at $111.76 a barrel
as the dollar weakened. Many investors regard commodities such as oil as a hedge
against a weak dollar and inflation. Also, a weaker dollar makes oil cheaper to
investors overseas.
At the pump, the national average price of a gallon of gas edged lower
overnight to $3.373 a gallon, 0.1 cent shy of a new record set Sunday, according
to a survey of stations by AAA and the Oil Price Information Service. Still,
prices are 0.8 cent higher than Friday, and almost 53 cents higher than a year
ago.
In other Nymex trading, May gasoline futures added 1.45 cents to settle at
$2.8218 a gallon, and May heating oil futures rose 0.54 cent to settle at
$3.2029 a gallon.
Natural gas rose 15.2 cents to settle at $10.053 per 1,000 cubic feet.
Oil Chief Says Brazil Has Another Huge Oil Field Offshore
A deepwater exploration area off Brazil's coast could hold as much as 33
billion barrels of oil, making it the world's third-largest reserve and the
largest discovery in decades, according to the head of the country's National
Petroleum Agency. State-run oil company Petrobras declined immediate comment.
The discovery could be the world's third largest reserve and four times
larger than the offshore Tupi oil field announced last November. Petrobras
followed up with a blockbuster find of natural gas in the Jupiter offshore field
in February.
Petrobras shares soared $8.78, or 7.8 percent, to $121.63 in afternoon
trading.
Brazil's current proven oil reserves are 11.8 billion barrels, according to
the U.S. Energy Department. The U.S. has 21.8 billion barrels in proven
reserves.
"You're talking about a reserve the size of total U.S. reserves," said Citi
Investment Research analyst Tim Evans. "It's a big, big number."
Brazil Deepwater Deals For Norway Companies
Norwegian companies Seadrill and MPF Corp. have oil drilling contracts with
Brazil's Petrobras worth at least $4.7 billion.
Seadrill has six-year contracts worth $4.1 billion for three deepwater
drilling rigs under construction in South Korea and Singapore. The first two
rigs are to begin drilling early next year. The third rig will start operations
in 2010. Deepwater rigs can operate at depths of 3,500 feet or more.
Dahlman Rose & Co. analyst Omar Notka said the three units will earn
dayrates above $600,000 per day. That exceeds the analyst's industry forecast
for deepwater rig dayrates of $350,000 to $520,000 in fiscal 2009 and 2010.
"All three contracts will substantially paydown the cost of these units over
the term of the contract," he said.
Separately, MPF said it won a three-year contract with Petrobras for a
deepwater drilling and production ship. It will be delivered late next year.
Notka said the dayrate will be between $510,000 and $540,000 per day.
Petrobras has an option to extend the deal by two years for a total value of
$965 million.
Notka says the contracts are "further proof that longer-term demand for
deepwater rigs is strong with visibility now extending into the back half of the
next decade."
Bush May Ask Mandatory Measures Against Global Warming
The White House may be ready to support some mandatory measures to address
global warming. The Washington Times reports that President Bush could ask
Congress as early as this week to pass measures to slow global warming. No word
on exactly what those measures might be.
U.S. negotiators will be in Paris this week for the third Major Economies
Meeting on Energy Security and Climate Change. Delegates will discuss an
agreement on global warming that could go into effect after 2012.
"If the White House does indeed declare an activist stance, we think this
could be positive on a short-term trading basis for climate-friendly
power-generation technologies," said Friedman, Billings, Ramsey analyst Kevin
Book.
Book said that includes wind-power companies like Kaydon Corp. and Zoltek
Cos., solar companies First Solar, Evergreen Solar and Sunpower, and nuclear
generators like Exelon.
Coal producers -- Peabody Energy and Massey Energy among others -- could
experience short-term negative effects, the analyst said. Book said that goes
for refiners and oil sands producers as well.
"Natural gas emits fewer greenhouse emissions per BTU than coal," said Book.
"A bid on gas could prove positive for exploration and production names like
Anadarko Petroleum and Chesapeake Energy."
Mexico Opposition Bucks New Oil Law
Opposition lawmakers continued protests in Mexico's lower house of Congress,
where they have been camped out for almost a week to protest an oil reform
proposal.
Oil production in Mexico, one of the top three suppliers to the U.S., is
declining, and reform advocates say state oil company Petroleos Mexicanos
(Pemex) needs outside resources and technology to explore for reserves. The bill
would allow Pemex to partner with private companies for exploration and
refining.
Opponents claim the bill will lead to the government selling off parts of
Pemex, threatening national sovereignty and jobs in the sector.
The coordinator of Mexico's ruling conservative party in the Senate says it
is unlikely Congress would approve the bill by April 30, when the legislative
session ends.
Pakistan Wants China Pipelines
Pakistani President Pervez Musharraf wants Beijing to build oil and gas
pipelines linking his country with China's west as the two countries expand
commercial ties.
China is sharply increasing oil and gas imports to fuel its booming economy,
and Musharraf said he hoped it would see Pakistan as an "energy and trade
corridor" to the Middle East.
Pakistan abuts China's west but trade was limited for years due to rugged
mountain terrain on the border. Commercial ties have grown in recent years.
China's dominant mobile phone company bought control of Pakistan's fifth-largest
mobile carrier last year.
--Compiled by AP Business Writer Greg Stec. Questions or comments can be
directed to gstec@ap.org.
Copyright 2008 Associated Press. All rights reserved. This material may not be
published, broadcast, rewritten, or redistributed.
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