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Thursday, February 07, 2008

ConocoPhilips Wants NL to Stop Gouging Oil Companies

The Financial Post is reporting today that a spokesman for oil giant, ConocoPhillips says the company is "having a hard time" justifying drilling a major exploration well offshore Newfoundland under what they are calling a, “controversial”, energy policy introduced by Premier Danny Williams last year.

According to the report Kevin Meyers, president of ConocoPhillips' Canadian subsidiary, said yesterday one of the challenges is that the new provincial regime involves the province taking an equity stake if the well produces a discovery, but not sharing in the cost of exploration.

"That makes it a much more tolerable risk scenario for them - if you find something and it's economic then they participate," Mr. Meyers said in an interview.

"But it does add an extra burden on the people who have to carry the exploration cost.”

I’m sure all Newfoundlanders and Labradorians will join me in expressing our deepest sympathy for the stockholders and board members of ConocoPhillips who recently reported a net income of $4.4 billion, or $2.71 a share, for the last quarter alone, up from $3.2 billion, or $1.91 a share, for the same quarter in 2006.

According to Mr. Meyers “ConocoPhillips is being very open with Newfoundland about the need to improve its fiscal framework.”

"We are having a very hard time coming up with a justification -- given the risk associated with an exploration well…We want to, we are excited enough about the geology, but it's making the numbers work."

Give me a break and while you're at it, cry me a river Mr. Meyers. By the way, if you don't feel that exploring a well off the shore of Newfoundland and Labrador will bring you the returns you want why not spend your exploration dollars in Venesuela or perhaps Russia?


Anonymous said...

Is this guy for real .Or,are you kidd'in us.Your joke'in right !!!

Anonymous said...

From today's Telegram:


ConocoPhillips Canada isn't repeating its reported concerns about the provincial government's energy plan and the high cost of exploration drilling off Newfoundland's south coast.

In fact, the company isn't speaking at all - except through a statement issued late Friday afternoon. The company says its position on the Laurentian Basin was "incorrectly portrayed in media coverage."

It also says it has been working with the provincial government to better understand the energy plan released in September.

"The implication portrayed in (Friday's) National Post article is that ConocoPhillips is challenging the province and the premier and that is simply not the case," said the statement from Cathy Cram, ConocoPhillips vice-president of communications. The company didn't say when it expects to begin drilling in the Laurentian Basin, an area estimated to contain eight trillion to nine trillion cubic feet of natural gas.

Last May, ConocoPhillips said the earliest it could drill a well in that basin was sometime in 2009, if a deepwater rig was available.

A story in Friday's National Post said the company's Canadian subsidiary is "having a hard time" justifying drilling an exploration well off Newfoundland's south coast under the province's energy plan unveiled last year. The plan outlined the province's expectations of a 10-per-cent equity stake in "future offshore petroleum projects that require development plan approval, where it fits our strategic long-term objectives."...

Anonymous said...

God. Are we without shame?

Attacking a poor helpless oil company like that.


NL-ExPatriate said...

"Laurentian Basin, an area estimated to contain eight trillion to nine trillion cubic feet of natural gas."

That's just amazing! The potential if it can be landed in NL and shipped to market via a Natural Gas pipeline is just incomprehensible.

Consider that a NG pipeline would be cheaper to build than electrical power lines. A NG pipeline would be impervious to weather unlike electrical lines. NG pipelines act as a storage reservoir and wouldn't have any line loss unlike Electrical lines.

Those same NG pipelines if built to hydrogen specs could be used to transport Hydrogen either from converting NG into hydrogen through the Steam Methane Reforming process or NG until Hydrogen inevitably becomes the preferred energy source for mobile usage.

Now consider that the infrastructure for dispersing Hydrogen is already in place via the existing NG pipelines which is the biggest draw back with replacing the current fossil fuel energy economy and the writing is one the wall.

Our abundance of hydro, tidal, and wind energy could easily be used to manufacture hydrogen for export.

For more info on the inevitable Hydricity energy economy read David Sanbourn Scott's book Smelling Land, The hydrogen defense against climate catastrophe.

NDA said...

Your closing comments are on the mark, patriot. If they don't like it, they can hit the road.

Anonymous said...

The reality is that there is a oil crises about to hit. The producing countries are using more of their oil this combined with depletion and increased demand simply mean that that demand is starting to out strip supply. Oil is hovering around $90 US and is as a result of the shortfall of supply only going to go higher.

The remarks of the Oil executive remained me of Daniel Day Lewis' character in there will be blood, or of the coal exec who bought mineral rights in Appalachia for a few cents per acre. This is a resource that should be put to use for the province, not for an out of Province company or group.

The Province is sharing in the cost of production The giving up of any of the Provinces non renewable resources at current dollars when the oil could be worth far more ten or fifteen years down the road is that not a cost?

The province should tell Conoco that they will give them the same deal the Saudis did. After all this is a limited resource that belongs to the people of the province, and it is only going to get more valuable with time, if they do not want a piece of it then they can take a walk.

There are other companies out there who would be glad to give the province a bigger piece of the pie, and who will be glad to give it.

Patriot said...

Hi all,

Today someone sent me a comment that included a link they wanted me to add to this site. I didn't publish the post since it was off topic but the link can be found in my links section.