The Barrel

The following article was written by Ben Lando, founder and bureau chief of Iraq Oil Report, a Baghdad-based information service, and contributing editor for Platts. His story is reproduced here with his consent.

Insurgent violence in Baghdad is not new for Iraqis. On the afternoon of January 25, three teams of suicide attackers staged coordinated, vehicle-born bombings of three popular capital hotels. By the morning of January 26, shattered glass was being swept from nearby storefronts and new window panes were being installed.

The Iraqi resolve is born of constant siege. On the morning of January 26, as lives torn apart the day before were being stitched back together, an investigations directorate of the Ministry of Interior was bombed, killing at least 17. Any investor in Iraq has to expect such instability -- both seemingly random and utterly predictable.

Japan's LNG demand is expected to crawl out of its nadir this year on the back of recovering industrial demand.

The big question, though, is how much of the industrial sector recovery will translate into growth in LNG consumption. The general expectation is demand would not go back to levels seen before the September 2008 collapse of Lehman Brothers.

The Bush administration had to be a golden age for the oil and gas industry. The president, although a scion of New England Brahmins and a Yale-man, spoke like a Texan and once ran an oil company, albeit with only middling success.
 
President Bush's administration was sprinkled with officials with ties to the industry. Next door to the White House, in the Eisenhower Executive Office Building, Vice President Dick Cheney, who headed Halliburton between government jobs, invited oil and gas and other energy company executives to secret meetings to help formulate US energy policies. 

OPEC's 24.845 million b/d ceiling, which covers 11 members but not Iraq, has been in place since January 2009. Over the past year, there has sometimes been talk of new cuts possibly being needed. At other times, the talk has been of a possible need to increase quotas.

And as the talk veered between quota cuts and increases, actual production was rising.

After five consecutive months of significant upward revisions to its 2010 world oil demand estimates, the International Energy Agency bucked the trend January 15 by leaving its projection almost unchanged.

It is not clear yet if the Paris-based agency has made a New Year's resolution to achieve more stability in its forecasts, but the changes contained in its latest monthly oil market report were considerably less dramatic than in recent months.

In a statement to the stock exchange dated January 4, Hong Kong-listed China Haisheng Juice Holdings Co said it is paying Wall Street bank Morgan Stanley $7 million to settle lawsuits in the UK and China over hedging contracts.

The out-of-court settlement effectively ends the dispute as the companies have agreed to end legal proceedings over yuan-dollar hedges they had been fighting in courts in the UK and China since last April.

A win for the Wall Street bank?

New smog standards proposed this week by the US Environmental Protection Agency would be the strictest to date limiting ozone pollution.

For Houston, Dallas-Ft. Worth and some other areas of Texas, which still don't meet the old standard, the new regulations would mean finding a way to cut emissions drastically or risk losing federal highway dollars.

Following US-based independent shale jockey Chesapeake Energy's announcement this week that French major Total will buy a 25% stake in its vast Barnett Shale acreage leasehold in north Texas for $2.25 billion, analysts far and wide have weighed in with pretty much a universal thumbs-up on the deal.

They've analyzed the metrics -- the price per Mcfe of proved reserves and production, future production growth potential and other key numbers -- and come up smelling roses on all fronts. And some are starting to question a widely-held industry anticipation, raised last month after ExxonMobil said it would buy independent XTO Energy for $41 billion, that industry should soon expect a wave of corporate acquisitions of gassy shale companies.

In the tally of the economic toll allegedly wrought by Tiger Woods and his national parade of paramours, one oil biggie is taking a low-key stance, and who can blame them?

Chevron, "title sponsor" of the Chevron World Challenge with the Tiger Woods Foundation, is mum about whether it plans to continue its affiliation with the Woods foundation, which according provides educational and youth development scholarships, according to the web site.