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   Gold/Mining/EnergyBig Dog's Boom Boom Room

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To: smh who wrote (75861)12/3/2006 12:40:21 PM
From: LoneClone
   of 205756

Disclaimer: inclusion on the list is not an endorsement; companies may also operate in other fields.


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To: CommanderCricket who wrote (75863)12/3/2006 2:52:32 PM
From: Umunhum
   of 205756
From the latest ASPO weekly newsletter:

4. Mexico admits problems

The CEO of Mexico’s state oil company, PEMEX, said the company expects production from its giant Cantarell oil field to decline by an average of 14 percent a year between 2007 and 2015. Cantarell is expected to have an average daily production of 1.8 million b/d in 2006 down from a record 2.13 million b/d in 2004. PEMEX is currently producing around 3.29 million b/d down from 3.38 in 2004. About 1.7 million b/d is exported, mostly to the US.
Mexico says it will need to start spending $18 billion per year on exploration and development of new oil sources in order to offset anticipated declines in oil and natural gas production. Deep-water oil from the Gulf is Mexico’s most promising new source but will require foreign assistance to exploit.
The government has become addicted to PEMEX earnings and currently takes 60 percent of PEMEX’s revenue which now constitute nearly a third of the national budget. In 2005 PEMEX sustained an operating loss of $7 billion.
It is unlikely that PEMEX and the Mexican government can find the revenue to finance heavy exploration costs over the next ten years. President-elect Calderon, who takes office on December 1, has stepped carefully around the sensitive subject of energy reform, and while he favors allowing PEMEX to form alliances for deep-water oil and refining, he hasn't called for a constitutional amendment to open up the industry.
Should Calderon be unable to pass some sort of energy reform in the next year, it seems unlikely that Mexico will be able to continue exporting oil to the US at the current rates much longer. While the government is claiming that Cantarell is going to decline at 14 percent a year, there is evidence that the decline could be much faster.

Lets have a look at how the optimistic scenario works out. Depleting at 14 percent a year the Cantarell’s production is going to look something like this:

Year Barrels of Production per day
2006 - 1,800,000
2007 - 1,548,000
2008 - 1,331,280
2009 - 1,144,900
2010 - 984,614
2011 - 846,768
2012 - 728,221
2013 - 626,270
2014 - 538,592
2015 - 463,189

Meanwhile in Iran we have this little snippet:

In September, Oil Minister Kazem Vaziri-Hamaneh suggested that with no new investment, output from Iran's fields would fall by about 13% a year, roughly twice the rate that outside oil experts had expected. "NIOC is likely to find that even maintaining the status quo is a mounting challenge," says PFC Energy's Rahim.

I wish that we could get accurate data about how things are going in Kuwait with the Burgan field or Saudi Arabia with the Ghawar.

The XLE, CVX, XOM, DVN all broke out to new 52 week closing highs on Friday. The XOI is within 4 points of an all time closing high. The Big Dogs are running. This is what is known as the continuation of the trend in a secular bull market. As Jesse Livermore said in the book Reminiscences of a Stock Operator the hardest thing to do is sit tight and do nothing.

I bought a sizable position in VLO and I absolutely love how the daily chart looks. I’m thinking $64 to $67 sometime in January. Which would just be enough to pay off the mortgage on my condo here. Knowing me though, I’ll probably roll all the profits into COSWF and let the dividends pay it off.

At Tocumen Airport in Panama, flying back to the States for Thanksgiving, I sat next to two guys that worked for Chevron. They are planning on expanding a refinery here in Panama. I asked them what their opinion was on Peak Oil and they thought I was talking about a company called Peak Oil. They had never heard of the term before despite working for Chevron their entire careers (they appeared to be in their late 40’s – early 50’s). One of them was from Houston and the other from London. At first I think they thought I was a quack.

People, we are going to look back at this time period and wish we bought all the oil and oil stocks that we possible could have. Less than one percent of the population is aware that peak oil is near.

As Don Coxe says peak oil might not have happened already but the amount of oil controlled by public companies that you can invest in certainly has peaked.

Was the peak December 2005?

To early to say but the evidence is mounting.

My favorites haven’t changed – The top two have to be COSWF and SU. Followed up by CNQ, ECA and NXY. Buy long life reserves in politically secure areas of the world.

Did anyone’s account hit a 52 week high on Friday? (VVVBG)

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To: Big Dog who wrote (75852)12/3/2006 3:01:11 PM
From: Umunhum
   of 205756
I am pleased to announce the Inaugural Voyage of His Bigness' Great Adventure at Sea.

I hope you picked a ship that has internet access in the cabins. If so, I'm interested.

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From: ldo7912/3/2006 4:18:53 PM
   of 205756
Iran calls for new cut in OPEC oil output
12.03.06, 6:00 AM ET

TEHRAN (XFN-ASIA) - Iran's envoy to OPEC, Hossein Kazempour Ardebili, has called on the oil cartel to agree a new oil output cut at its next meeting to counter an oversupply of crude, official news agency IRNA reported.

'Some factors like the decrease of world economic growth and accumulation of oil and stockpiles of its by-products indicate that the market needs a cut in OPEC oil output again,' IRNA quoted Kazempour Ardebili as saying Sunday.

'There is still oversupply in the market beyond the oil demand and with OPEC's output cut [agreed in October] all the global market demands have been covered,' he said.

The 11 members of OPEC are to hold a ministerial meeting in the Nigerian capital, Abuja, on Dec 14 to decide on a probable output cut in a bid to stabilize oil prices.

Kazempour Ardebili, the representative of OPEC's number two producer, predicted a possible new cut in output would be between 500,000 and 1 mln million barrels per day of crude oil.

'We should wait and see the developments of the crude oil market by the Dec 14 meeting of OPEC in Abuja,' Kazempour Ardebili said.

Nigerian Oil Minister and OPEC president Edmund Daukoru said Friday that he expected OPEC to cut its output quota by at least 500,000 barrels per day when it meets on Dec 14.

'When we meet, we will look at the data and the trend and I do not expect anything less at this meeting,' Daukoru told reporters.

At its last meeting in Qatar in October, OPEC approved a cut in its output quota of 1.2 mln barrels a day to stem falling prices, which have dropped from above 78.00 dollars in July.

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From: ldo7912/3/2006 4:23:18 PM
   of 205756
Chávez moves to diversify Venezuela's energy exports
By Jens Erik Gould
The New York Times
December 1, 2006

President Hugo Chávez is not modest about his energy plans. He wants to build a 5,000-mile long natural gas pipeline that stretches from this remote northern tip of South America to the bottom end of the continent.

Erecting possibly the longest pipeline in the world is the centerpiece of a broader effort by Chávez to strengthen ties among Latin America's economies and shrink their dependence on the United States.

But from the outset, the $20 billion "great gas pipeline of the South," planned to be more than twice as long as the United States border with Mexico, has generated political and environmental controversy at home and abroad.

Chávez, who deeply distrusts the United States and has raised the specter that it may invade Venezuela to seize its oil, is seeking to diversify his country's energy exports away from its biggest client and toward countries as far away as China and as close as Brazil that seem less ideologically averse.

Chávez has strengthened political ties with Brazil and Argentina in recent years. Brazil's president, Luiz Inácio Lula da Silva, accompanied him to inaugurate a new bridge in Venezuela this month as Chávez was campaigning for re-election. The voting is on Dec. 3, with most polls showing Chávez ahead by a wide margin.

And these days, he is dangling Venezuela's significant reserves as an incentive as he asks his neighbors for a long-term natural gas commitment.

During a recent visit to the pipeline's projected starting point, as oil workers and local residents crowded just outside the fishing town of Güiria in Venezuela's northeast Chávez proclaimed, as he stood next to a row of various hoisted national flags: "Here in this South America, from the Caribbean to Patagonia, we'll build a great bloc of political, economic and social power to seek world equilibrium this century, where we don't have one policeman who wants to be the owner of the world."

That geopolitical aim is, in fact, the project's biggest hurdle, energy analysts maintain. They say that Chávez's decision to give his ideological goals priority over profit jeopardizes the success of the project.

"You don't build a pipeline for political reasons," said Robert Ebel, energy analyst at the Center for Strategic and International Studies in Washington. "It should be a financially viable operation."

Though Venezuela could reap higher profit margins by exporting liquefied natural gas to higher-price markets like the United States, Venezuelan officials acknowledge that is not their goal.

"It's not that the economic part doesn't matter," said Ángel González, general director of exploration and production at the Energy Ministry, "but it's really not the most important part of this project."

Venezuela is not the only country to use gas pipelines for political influence. Critics in the United States accused Russia of using energy politics after its giant company Gazprom stopped supplying Ukraine in an effort to raise prices at the start of the year. Still, it is not clear that Chávez can muster long- term support in South America for a huge pipeline that would take at least a decade to complete. There is already skepticism and bickering over other energy deals, analysts say.

"Does political will last that long?" asked Michelle Billig of the PIRA Energy Group in New York, a consulting firm.

Brazil, for instance, may be wary of committing itself to a new pipeline with Venezuela after Chávez applauded Bolivia's nationalization of energy industries earlier this year. That move jeopardized the natural gas investments of Petrobras, Brazil's state-owned oil company, in Bolivia, said Anne Korin, co-director of the Institute for the Analysis of Global Security in Washington.

Argentina and Brazil, expected to be the project's largest users, would find themselves dependent for supplies of gas on Venezuela and Bolivia, nations that have shown themselves to be politically volatile. Venezuela halted oil exports during a two-month national strike starting late in 2002, and tensions in Bolivia over how to manage energy resources have helped topple two recent presidents. Paraguay and Uruguay would also take part in the pipeline. "In South America there is no project more challenging than this one in its history," said Ricardo Savini, a business development manager for Petrobras. He said his company could take part in the pipeline if feasibility studies turned out favorable.

Venezuela's natural gas reserves, though largely undeveloped, are the second largest in the hemisphere. Over the years, gas has taken a back seat to petroleum in Venezuela, one of the world's leading oil exporters.

The Chávez government has made laws more attractive for investors in gas. That contrasts sharply with the blunt measures that have wrested control from foreign companies producing oil. Chevron has already found enough gas in the Plataforma Deltana area in the east for Venezuela to begin processing liquefied natural gas. Chevron expects to export that gas to United States and European markets through a $5.6 billion L.N.G. complex that the state oil company, Petróleos de Venezuela, plans to build outside Güiria.

Now, the state company also wants the complex to feed the transcontinental pipeline and says those plans are a higher priority than exporting liquefied gas.

Energy analysts say it will be a tall order for Venezuela's budding gas industry to produce enough for both the LNG plant and the pipeline, especially when current output does not even satisfy domestic demand for natural gas.

The pipeline also faces resistance from environmental groups because it would cut through the Brazilian Amazon and cross several large rivers to reach its destinations. Watchdog groups, like Greenpeace and the Nature Conservatory, say it could devastate some of the least-developed and least- studied areas in the dense rainforest and that the influx of temporary laborers could bring diseases to remote indigenous communities.

"It will be terrible," said Paulo Adario, Amazon campaign coordinator for Greenpeace. "The environmental impact seems very high."

There is concern in Güiria, too, a town of 35,000 people. A month after Chavez inaugurated the groundbreaking of the gas complex on the environmentally sensitive Paria peninsula in September, the monument built for his nationally televised speech was still littered with the empty water bottles and soda cans from those who attended.

"You manage a project that you supposedly consider won't create any environmental impact on an international level - and then you do this," said Rodolfo Foucault, a Güiria resident, when he saw the trash on an otherwise unspoiled coastline.

Still, many locals are eager for Petróleos de Venezuela's promise to spend more than $1 billion on infrastructure and local industries in Sucre, the northeastern state where Güiria is situated.

"We want the development for our community," said Antonio Calazán, who fishes mackerel and shark off the Güiria coast.

While even critics are optimistic that the state oil company will keep its promise to build the liquefied natural gas plant, many say that the pipeline will be the latest in a long line of Venezuelan energy plans that never got off the ground or are significantly delayed. For example, Mariscal Sucre, a promising offshore natural gas project, has been stalled for more than a decade.

Government officials have yet to disclose details on its routes or costs, saying that technical teams from each country are performing preliminary studies. A model of the gas complex in the lounge at Güiria's tiny airport does not offer any clues either, nor does it illustrate what part of the plant's terminal will feed the transcontinental line.

There was no actual construction to be seen along the main road cutting through the plant site in Güiria other than the monument that Chávez inaugurated - and even that appeared abandoned. The wind had torn down the young coconut trees that provided the president's television backdrop, and the paint on the plaque was already peeling.

Chávez and his energy officials continue to champion the proposal. They have even devised a slogan for Güiria on the plaque, which Carlos Figueredo, Petróleos de Venezuela's general manager for offshore natural gas, repeated at an industry conference in October in Sucre state.

"We have called Güiria the place where the gas is born that unites the people," he said. "That gives you an idea of the magnitude that we're looking at."

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From: ChanceIs12/3/2006 4:45:39 PM
   of 205756
Morales Nationalizes Bolivia Natural Gas

>>>Many thoughts:

1) These things tend to go like dominoes - first it was oil in Bolivia, now NG - although this was apparently anticipated. We had Bolivia, then Russia, then......

2) Daniel Yergin may be quite wrong looking forward (Hubbert's Peak) I commend his book, "The Prize," which is the history of oil, which is the history of nationalization of oil assets developed by the French, British, Dutch, and Americans.

3) Such actions do not encourage further western investment. It is the West which by in large has the requisite production technology. Said technology is asked and has to do more each year as crude/gas becomes less accessible in increasingly difficult geological formations.

4) Historically, the removal of foreign management has resulted in production declines.

Sure am glad that I have a chunk of domestic, land based NG production. Canadian isn't bad either.<<<

Sunday December 3, 1:17 pm ET

By Dan Keane, Associated Press Writer

Bolivian President Evo Morales Signs Into Law Contracts Nationalizing Natural Gas

LA PAZ, Bolivia (AP) -- President Evo Morales signed into law Sunday contracts giving the government control over foreign energy companies' operations, completing a process begun May 1 with the nationalization of Bolivia's petroleum industry.

The deals, signed by the companies last month, also grant Morales' government a majority share of the foreign companies' revenues generated in Bolivia. Companies that signed contracts include Brazilian state energy giant Petroleo Brasileiro SA (Petrobras), Spanish-Argentine Repsol YPF, France's Total SA, and British Gas, a unit of BG Group PLC.

Morales also announced Sunday that Royal Dutch Shell PLC had agreed to transfer to his government majority control of its Bolivian subsidiary Transredes, which operates the country's largest network of gas pipelines.

Bolivia's natural gas reserves are South America's largest after Venezuela's.

"We thank the Bolivian people who have struggled to recover their natural resources," Morales said in a signing ceremony at the presidential palace in the capital of La Paz. "We have now completed the first step. This process will continue next year with the recovery of other natural resources benefiting the Bolivian people."

Morales has said he also plans to nationalize Bolivia's mining sector.

Bolivia's first Indian president, Morales has vowed to reverse centuries of dominance by the country's European-descended minority, granting greater political and economic power to the poor indigenous majority.

Morales recently returned from a trip to Nigeria, which like Bolivia remains bitterly poor despite its vast petroleum reserves. On Sunday he said he hoped that nationalization initiatives similar to his own might lift oil-rich African nations from poverty.

"If we want to free ourselves as a people, if we want to resolve our social and economic problems, we must both liberate human beings and liberate their economies -- their natural resources, especially," Morales said. "Only then will there be justice and equality."

The contracts signed by the president Sunday were ratified by Bolivia's Senate in a hastily called session Tuesday night, during which lawmakers from Morales' Movement Toward Socialism party also pushed through a sweeping land-reform bill and an open-ended military cooperation pact with Venezuelan President Hugo Chavez.

The session ended a boycott by conservative lawmakers who intended to block Morales' reforms. But opposition leaders have questioned the legality of the session, in which assistants of two absent senators were called in to vote.

Completion of oil and natural gas nationalization has given Morales a sizable political boost. A poll published this week in the Bolivian newspaper La Razon found Morales' approval rating leaping to 67 percent in November from a low of 50 percent in October.

The poll of 1,019 residents in Bolivia's four largest cities was conducted Nov. 13-20 and had a margin of error of 3 percent points.

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From: quehubo12/3/2006 5:26:59 PM
   of 205756
Time to start thinking about what if it happens again?

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To: cyesp who wrote (75775)12/3/2006 5:47:04 PM
From: Dennis Roth
   of 205756
US demand for ethanol seen raising gas use in fertilizer industry

Knoxville, Tennessee (Platts)--1Dec2006

Even with natural gas prices expected to remain high, the US ammonia
fertilizer industry is likely to increase its demand for the feedstock by
100,000 to 200,000 Mcf/d in 2007, an analyst said.

Fertilizer production has been historically variable with the cost of
gas, since the feedstock makes up some 70-90% of the total cost of
manufacturing anhydrous ammonia. Several plants in North America have been
idled either seasonally or permanently as a result of rising gas prices since
the early 2000s.

The Fertilizer Institute has said 17 US ammonia plants have shut down
since 1999 because of high gas prices.

What is different now is that demand for corn-based ethanol has risen
dramatically, notes Bank of America analyst Robert Morris.

"In fact, we expect ammonia demand to increase 5-10% next year due to
increased fertilizer usage resulting from higher demand for corn as a result
of increased ethanol demand as a blending component in gasoline replacing
MTBE," Morris said in a report Thursday. Corn is the key ingredient in ethanol
production, and is also one of the most fertilizer-intensive crops in the
country, he added.

Also spurring US fertilizer production is the trend of decreased imports
of ammonia, Morris said. Although imports of the product rose about 65%
between 1999 and 2004, imports next year are expected to be flat, he said.

US fertilizer plants will likely continue to run even though ammonia
product prices are currently flat while gas prices are high, a situation that
has created a negative margin, Morris said. He said, however, that he expects
ammonia prices to rise in the first quarter as plants ramp up production in
anticipation of the spring planting season.

Acreage dedicated to corn is expected to increase roughly 6% to 84
million acres in 2007 versus a 3% decrease this year. As a result, Morris said
he expects North American ammonia capacity utilization to increase to 90% next
year from an estimated 85% this year, resulting in increased natural gas
demand. When operating at full capacity, he estimates that the ammonia
industry would represent about 2.5% of annual domestic gas consumption.

--Stephanie Seay,

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To: Umunhum who wrote (75868)12/3/2006 6:30:18 PM
From: Big Dog
   of 205756
The ship is the Star Princess.

...and I don't know about the internet, but here is one nice feature:

Wedding chapel featuring wedding-at-sea program officiated by the ship's captain.

dianna ????


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From: quehubo12/3/2006 8:42:45 PM
   of 205756
EIA 914 updated last week for September.

Texas where most of the land drilling effort is being felt is little better in September than in May.

Has the GOM rolled over?

Overall USA production flat with all this activity leading up to September. USA Drilling really ramped between March and October in the USA, maybe we will feel its impact soon. Then again the Canadian gas directed counted dropped more than the US count rose.

The last 12 weeks we averaged about 90 less gas directed rigs in NA then we did in the first 12 weeks.

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