Oil Field Equipment by Oil Field equipment

Oil field equipment can consist of many things. I would like to explain some of the largest oil field equipment. A land rig and an off shore rig and the difference between the two.

PumpJackStore.com A drilling land rig is a equipment which creates holes (usually called boreholes) and/or shafts in the ground. Drilling land rigs can be massive structures housing equipment used to drill oil wells, or natural gas extraction wells. They sample sub-surface mineral deposits, test rock, soil and groundwater physical properties. Drilling land rigs can be mobile equipment mounted on trucks, tracks or trailers, or more permanent land not to be confused with marine-based structures (such as oil platforms, commonly called 'offshore oil rigs').

The term "rig" therefore generally refers to the complex of equipment that is used to penetrate the surface of the earth's crust. A drilling land rig would be used on shore. Drilling land rigs can be: • Small and portable, such as those used in mineral exploration drilling. • Huge, capable of drilling through thousands of meters of the Earth's crust. Large "mud pumps" circulate drilling mud (slurry) through the drill bit and the casing, for cooling and removing the "cuttings" while a well is drilled. Hoists in the rig can lift hundreds of tons of pipe. Other equipment can force acid or sand into reservoirs to facilitate extraction of the oil or mineral sample; and permanent living accommodation and catering for crews which may be more than a hundred.

Marine rigs may operate many hundreds of miles or kilometres offshore with infrequent crew rotation. An offshore platform, often referred to as an oil platform or oil rig, is a large structure used to house workers and machinery needed to drill wells in the ocean bed, extract oil and/or natural gas, process the produced fluids, and ship them to shore. Depending on the circumstances, the platform may be attached to the ocean floor, consist of an artificial island, or be floating. Most offshore rigs are located on the continental shelf, though with advances in technology and increasing crude oil prices, drilling and production in deeper waters has become both feasible and economically viable.

A typical offshore rig may have around thirty wellheads located on the platform and directional drilling allows reservoirs to be accessed at both different depths and at remote positions up to 5 miles (8 kilometres) from the platform. Remote subsea wells may also be connected to a platform by flow lines and by umbilical connections; these subsea solutions may consist of single wells or of a manifold center for multiple wells. For more information on oil field equipment please visit PumpJackStore.com

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The Economic Situation of the Oil & Gas Industry by Duncan Freer

The oil and gas industry, including exploration and production, consists of about 7,000 companies who pull in a combined, estimated revenue of around £450 billon. However, the production and associated revenue are fragmented; around 10% of companies generate approximately 60% of this figure. Demand for oil and gas is caused by economic activity, population growth and the need for energy for residential, industrial and transportation uses. The growth of an individual company is determined by the success rate of new finds, as well as the ability to continue to produce from existing sites.

Larger companies have the upper hand, having greater access to capital and the capacity to buy smaller companies or propagate amalgamations. Smaller companies rely on their abilities to focus on and develop expertise in a few geographical areas. In addition, oil and gas competes with other fuel-types, such as coal, nuclear power and hydro-electricity. In addition, other sources of energy are emerging, such as ethanol and bio-diesel and there are other forms of application arriving on the market, such as the new generation of hybrid-electric car.

Oil and gas are found in huge, underground basins that meet certain geological criteria. As well as creating three-dimensional maps of underground structures and using seismic waves to ascertain a site's potential, exploratory drilling is still a major factor in finding oil and gas. Last year, the number of exploratory drillings that took place exceeded 53,500. Once an area has been designated as having promise, the area is cleared and a drilling rig and crew are brought in to begin the process of extracting the resources that have been found.

Oil and gas jobs generally fall in to one of two categories: upstream and downstream. Upstream jobs are found in the process of obtaining oil and gas from natural resources: drilling jobs are upstream jobs. Other jobs are likely to include those in construction and those involved in production facilities. Not all upstream jobs take place on land; for many, part of the attraction of this industry is its variety. Gas and oil fields are also developed below sea level, such as in the North Sea and the sub-sea sites recently discovered in West Africa. These require specialists to find and extract the resources available.

Downstream jobs involve the transportation of oil and gas in their basic forms, the liquefaction of those substances and their processing. While upstream jobs tend to be comparatively more transitory, being based on exploration and ultimate extraction, it is in the downstream category that gas and oil careers are made; while oil rig jobs, for example, will only last as long as the resource is there, marketing jobs can become life-long opportunities as the team packages the combined products across the globe.

The oil and gas industries are two of the world's biggest and most profitable enterprises. They employ huge numbers of staff that work in an incredible range of department, from those on the 'front-line' to those who design advertising campaigns to those who put it in our vehicles.

About the Author
Oil Rig Jobs Jobs Search is a job site dedicated to the specific needs of candidates who work in the Oil and Gas industry. We also provide recruiters with an online service that is effective in terms of cost and ease of use. Contacts For interviews, images or comments contact: John Roberts Marketing Manager Email: john@thejobsearchgroup.com

Competition Commission Approves Norwegian Firm's Bid for Gas Stations by J Hardy

The European Commission approved the proposed acquisition of ConocoPhillips' network of 274 Jet fuel stations in Scandinavia by StatoilHydro of Norway.

StatoilHydro is an integrated oil and gas company that is active in the exploration and production of natural gas and crude oil. StatoilHydro also refines and sells gas and other oil derivatives. The company operates networks of gas stations in Scandinavia under the Statoil, Hydro, and Uno-X brands. Jet Scandinavia, the company being acquired, operates stations under the Jet brand.

In March, StatoilHydro notified the Commission of the purchase of Jet Denmark, Jet Sweden and Jet Norway, all part of Jet Scandinavia. Although Norway is not part of the EU, the entire transaction was subject to approval by the Commission under the European Economic Area agreement. Norway is a part of the European Economic Area, which includes the 27 members of the EU, plus Iceland, Norway and Liechtenstein.

The Commission began an in-depth review of the proposed acquisition in May 2008. The Commission noted concerns that the two companies overlapped in the market for retail motor fuels, and that competition might be affected.

The Commission also had concerns about Jet's disappearance from the market, since Jet was the most efficient low-cost operator in both Norway and Sweden. In addition, Jet had a strong brand and a track record of undercutting competitors' prices.

Following an investigation, the Commission recently released its findings that the proposed transaction as originally planned would raise serious competition concerns in Norway and Sweden, and would reinforce the oligopolistic structure of the Norwegian market. StatoilHydro's position as the largest provider of motor fuels in Norway would be strengthened. In addition, in Sweden StatoilHydro is already the market's largest supplier of motor fuels. By obtaining one of its largest competitors, Jet, the combined company's market share would have been almost double the share of the next largest competitor.

In order to gain approval for the transaction, StatoilHydro agreed to sell 40 stations operating under the Jet brand in Norway, and 158 stations in Sweden operating under the Jet, Hydro, or Uno-X brands. Following this agreement, the Commission found that the transaction would not affect competition in the European Economic Area or any substantial part of it.

About the Author
About the author: Jason Hardy is an avid writer on legal issues, including international writing about many subjects including european antitrust. Eu competition law interests Jason particularly. He resides in Seattle, Washington.

Increase Your Knowledge of the Oil and Gas Industry by avi solutions

Whether you're an experienced oil and gas industry worker or someone seeking to get your foot in the door, taking some time to do your research on the profession and it's recruitment requirements can help you land that "perfect" job. Among all engineers, those working in the petroleum industry can expect the highest starting salaries. Even those working entry-level jobs on offshore oil rigs as roughnecks enjoy high pay as well as great benefits. Because of this, it is no wonder that more and more job-seeking professionals are turning to this constantly booming industry to find a new financially stable line of work.

Extensive research on the internet covers a wide range of oil career possibilities; from exploration and production to pipeline operations and oil and gas refining. Doing research online to find out more information on this exciting field can be a powerful gateway to help job seekers find oil and gas industry jobs. At any single point in time, there are thousands of oil and gas jobs posted all over the internet. The secret is to know where to look and how to determine if the job listing is right for you can be extracted from your research online.

The oil and gas, or petroleum, industry is truly one that is multinational. One can learn from reading articles on the web that the majority of the world's oil comes from places in the Middle East like Saudi Arabia, the United States, Russia, Canada, and Iraq. You don't need to do your research, however, to realize that the demand for refined petroleum has never been higher. Gas prices are high and rising, as demand outstrips supply. Oil companies are forced to find ways to extract more oil from known reserves and to find new ways of getting oil. In short, the need for oil and gas job workers is fairly high now and will only increase in the coming years.

Learning the fundamentals of the oil and gas jobs available provides a basic introduction to the industry and can even give a job seeker a peek at "new employee orientation". For example researching your prospective new line of work will provide a non-technical review of upstream (exploration and production), midstream (gas processing and transportation) and downstream (refining and marketing) operations currently available in the oil and gas industry.

Increasing your knowledge of the oil and gas industry, the jobs the industry can provide, as well as the stability of these jobs, will only empower you, the job-seeking individual. With empowerment comes confidence and confidence is key to applying for and getting one of these exciting new careers in the oil and gas industry. With so many positions available and so many prospective job seekers vying for the same position it is imperative to try and put yourself in a position to present yourself as an asset. With knowledge of the industry, you will be one step ahead of the game.

About the Author
Frank Cullen is MD of Oil and gas vacancies. The company is a leading Job Board providing job availability for oil jobs, gas jobs and jobs oil gas.

Asian Coal-Bed Methane Brews As a Potential Hot Energy Play

Massive stores of methane gas buried deep inside Asia's coal beds could be shaping up as the next hot energy play.

Trillions of cubic meters of clean-burning methane are trapped in Asia's coal deposits. The gas -- which produces lower levels of air pollution and carbon emissions than oil or coal -- could be used to meet some of the region's huge power needs. Merrill Lynch says China alone holds nearly 30 trillion cubic meters of methane gas, about three times the U.S. amount.

Coal-bed methane, already widely used in North America, accounts for about 10% of U.S. natural-gas production. But Asia's methane stores have been largely untapped because of logistics and extraction costs.

Now, high-energy prices are making Asia's methane more attractive. New technology and government incentives in China and India aimed at reducing carbon emissions are also bringing down costs. And concerns about falling supplies of traditional energy sources continue to boost the search for other ones: Last week, both Exxon Mobil and Royal Dutch Shell reported declining oil production.

"The basic fact is we're running out of conventional sources of oil and natural gas," says Eric Nuttall, an analyst at Sprott Asset Management of Toronto. "As companies seek out unconventional sources of natural gas, coal-bed methane is the most viable."

The hedge-fund and mutual-fund manager holds more than $5 billion in assets and owns shares of a Canadian-based methane company, Pacific Asia China Energy. The Toronto-traded company has signed two production-sharing contracts with the Chinese government and is negotiating others.

Major oil companies including Chevron and ConcocoPhilips have already locked in exploration rights to methane projects in China. Numerous smaller companies specializing in coal-bed-methane extraction have been forming partnerships in China and India. Since many of these companies don't yet have commercial gas sales, their share prices haven't run up the way those of many companies producing other forms of alternative energy have.

Investing in methane carries plenty of risk. Some of the companies are small, with thinly traded and volatile stocks. Also, China's highly regulated, fragmented energy industry can create uncertainties. To participate in it, foreign companies must partner with state-owned China United Coal Bed Methane.

It is unclear if plans to tap Asia's methane-gas stores will pan out. Companies face fewer exploration risks than those looking for oil, as methane usually is found where it is expected to be. But extracting the gas means overcoming technical challenges that can raise costs and reduce the recoverable volume.

"It's an educated gamble," says Sprott's Mr. Nuttall about companies' efforts. "The question is, will they be able to extract methane at an economical rate?"

Some coal-bed-methane projects will have another revenue stream as the global carbon market matures. Energy produced from methane gas generates lower carbon emissions than coal. Analysts say that means companies may be able to sell carbon credits, boosting revenue by up to 20%. Many European nations place caps on the greenhouse gases companies can produce. Companies can offset their emissions by buying carbon credits from developing-world projects that reduce greenhouse-gas emissions.

"The carbon credits provide that extra incentive and can make these projects commercially viable," says Shane Spurway, director of Asian carbon markets for Fortis bank in Hong Kong.
Pacific Asia China Energy, or PACE, is still in the pilot phase of its first project in Guizhou. Their geological and petroleum engineering consultant, Sproule International of Calgary, has estimated that the company's first block contains a "most likely case" methane-gas resource of 5.2 trillion cubic feet "We know the gas is there," says Craig Christy, PACE spokesman. "Now we've got to determine whether we can produce it commercially."

Mr. Nuttall estimates PACE could potentially produce about 1.8 trillion cubic feet of methane from its first project. At today's prices, he says, that is a value of close to $1 billion for a company whose market capitalization is about $47 million. He is bullish on the prospects PACE, whose shares trade at about 47 U.S. cents.

PACE also hopes to develop a business to extract methane from coal mines before miners go in. Methane the gas which famously kills canaries -- is the source of dozens of fatal explosions in Chinese coal mines every year.

Hong Kong-based Green Dragon Gas, which listed on London's AIM stock exchange a year ago, is one of the companies closest to commercial production. Merrill Lynch says among foreign companies in China, Green Dragon has the largest coal-bed-methane deposit and it has five production-sharing contracts providing access to 18 trillion cubic feet of gas.

Energy-research firm Netherland, Sewell & Associates estimates the value of Green Dragon's initial recoverable methane deposits at about $4.7 billion. The company's market capitalization is about $600 million. So far in 2007, Green Dragon's shares have been roughly flat, though they have risen about 17% since the end of April. Some analysts think there is room for growth. In London trading yesterday, its stock traded at $6.34. Shares of Green Dragon are "relatively undervalued, because the market hasn't factored what will happen when they start production," says David Yip, a utilities analyst at Merrill Lynch in Hong Kong. "It represents the purest clean-energy play in China."

Last week, London-listed Great Eastern Energy became the first company to extract and sell coal-bed methane commercially in India. It is investing $150 million to drill a total of 103 wells in the state of Bengal. By some estimates, India has the world's fourth-largest coal reserves. Analysts say the Gurgaon, India-based firm has already moved beyond the riskiest phase of exploration and pilot drilling and is moving into production.

Arden Partners, a London securities firm, has a "buy" on the stock. James Elston, a director of the energy research firm Palladian Energy -- who has analyzed Great Eastern Energy on behalf of Arden -- estimates that the company's net asset value is about 218 pence ($4.41) a share, based on analysis of their recoverable methane reserves. The shares traded yesterday around 150 pence.

About GEECL:
Great Eastern Energy Corporation Ltd(GEECL) is the first Private Sector Company in India that entered this field. It is a part of the YKM Holdings Group. In December 2005, GEECL became the first Indian Company to be listed on the London Stock Exchange's Alternative Investment Market (AIM). The company is run by Yogendra Kumar Modi, the Executive Chairman and Managing Director. The senior management of GEECL include Mr. Prashant Modi, President & Chief Operating Officer.

About the Author
For further information please contact
Dolly Tayal, Genesis B-M
dolly.tayal@bm.com - +91 9899101140

What is the Outlook for the Availability of Fossil Fuels?

I think this article is comparable to the people who slow down on the highway to look at an automobile accident. You are not involved in the accident, yet you surely are curious about what is happening. At the present time we can sense the presence of a disaster, but we do not have enough information to feel that we can get involved.

My push to adopt renewable energies is based on our continued polluting of the environment with the burning of fossil fuels. We know that we must slow down this pollution so that our quality of life will not be severely degraded. There is another piece of information needed to prod us into action, and that is how long do we have before we run out of fossil fuels? As a current member of the earth, I am concerned that we leave future generation's sufficient energy to bridge the gap from fossil to renewable fuels. This, to me, is looking at the car wreck. How long do we have until we are the ones involved in the wreck?

The majority of Americans now think that climate change is a problem and that global warming is real. But there still is not a sense of urgency. Every year the US emits CO2 that equals the equivalent weight of 1.2 billion elephants (2 trillion pounds using average size elephants). It is time to stop ignoring 1.2 billion elephants in the room. It is time to implement a plan that will adopt renewable energies at a pace to stabilize the environment from CO2 pollution and then, hopefully, start to reduce the amount of pollution we must derive this plan with an eye to how long our reserves of fossil fuels will last. Once we derive this plan we then can look at future generations and inform them "Here is the plan".

The development of modern civilization has been dependent on both the availability and the advancement of energy. We have witnessed a progression from animal and steam power to the internal combustion engine and electricity generation and to the harnessing of alternative sources of energy. Because of our reliance on energy sources, it is also important to understand the impact of energy use on the environment. All aspects of energy, the way it is produced, distributed, and consumed, can affect local, regional, and global environments through land use and degradation, air pollution and global climate change via greenhouse gas emissions.

Over the foreseeable future, it is very likely that fossil fuels will remain our largest source of energy. However, fossil fuels are finite resources and there is concern not only about both domestic supply and U.S. reliance on foreign supplies but, also, with the increasing cost of these fuels.

The research on the longevity of fossil fuels is an exciting adventure in itself. I will touch on some of the theories before I conclude this series of articles. Given the slack of a decade or two, the best summation of the longevity of fossil fuels is presented in "Wikipedia, Fossil fuel: Years of production left in the ground with the most optimistic reserve estimates (Oil & Gas Journal, World Oil)".

Oil: = 45 years Gas: = 72 years Coal: = 252 years
With the slack of plus or minus 10 years, most projections are consistent with the Wikipedia numbers. . The popular Hubert peak theory projects that for any given geographical area, from an individual oil-producing region to the planet as a whole, the rate of petroleum oil production tend to follow a bell-shaped curve. "Olduvai revisited 2008" from The Oil Drum blog is an amazing study. This theory was first laid out by Richard Duncan in1989 when he observed that world energy per capita had been declining for a decade. The Olduvai waveform for oil starts in 1950 which is consistent with the Wikipedia projections that the waveform will be completed by 2053.

The energy consumption of a nation is proportional to its Gross National Product (GNP).i.e. (The higher the GNP of a nation, then the higher its consumption.).To maintain our accustomed standard of living, we require the amount of energy that we are burning now to maintain our lifestyles. With the depletion of fossil fuels this will require renewable fuels to fill in the gap.
How do we hammer this information into a plan? A roadmap needs to be derived that utilizes the adoption of solar, wind, geothermal and biomass energies into our energy consumptions needs. Technologies such as stuffing CO2 into caves should not be adopted until they are proven. A plan that incorporates renewable energies with fossils fuels usage would be more realistic for our country to follow.

How do we proceed?
We must continue tax incentives for the renewable energy sectors to incubate their growth. Our House of Representatives in Congress has passed a bill to renew the energy tax incentives that are due to expire December 31, 2008. President Bush threatens to veto this bill because it taxes the Oil Industry $19 billion dollars from multi-billion dollar profits. The president's premise is that the oil companies require these profits to continue exploration of new oil. Politics aside, we desperately need to find new sources of renewable energy.

We need to demand that our local and national leaders produce renewable energy action plans. There are pockets of leadership like Arizona and California. This leadership needs to be at a national level to be successful for the USA. Once this is accomplished we will be well on our way for future generations.

About the Author
have a BS and MS in Metallurgical Engineering. Thirty six years spent in the development of semiconductors. Business experience in start up business plan. Currently, an oyster farmer and interested in helping the environment by deploying solar energy. Visit my Blog, http://environmentalhelp.typepad.com/ for continued information on renewable energy E Mail: p_calhoun@bellsouth.net

Exploring the world of Oil and Gas: Possible Careers

In today's society, news headlines are fixated on the price of oil and gas, as overseas negotiations and an ongoing battle in the Middle East continue to affect the perception of this vital commodity. However, behind the scenes - there are plenty of employees who make decisions, transport the oil, and facilitate business deals for the United States. When looking to learn more about the careers centered on oil and gas, consider the following employment possibilities:

Exploration Manager

Discovering vital oil and gas deposits is a valuable job in this day and age that will only continue to increase in importance as resources become scarcer. An exploration manager leads and operates the expeditions to discover more oil and gas. While evaluating the possibilities and value of a potential site, knowledge of federal, state, and local regulations is a must. A bachelor's degree (and preferably a master's degree) is required in this field. Those with eight to 10 years of experience are most likely chosen for this position. The average yearly salary for this career choice is between $157,665 and $208,954.

Oilwell Pumper

While you are quite familiar with the employee who may pump your gas at a service station, have you ever stopped to think how oil is manufactured? An oilwell pumper is responsible for the daily maintenance and care of oil wells. They operate the injection equipment and oversee oil production - making sure to keep in line with standard operating procedures. This kind of pumper will keep reports and make assessments of the volume and pressure of gas and oil contained inside of a well. A high school diploma or its equivalent is needed for consideration. Zero to two years of experience within the field is suggested, as you should display a familiarity regarding the concepts, practices, and procedures within this particular field. Usually, a supervisor or manager manages their progress and projects. The typical salary for this job is between $35,348 and $57,176.

Pipeline Engineer

A pipeline engineer may work with natural and/or liquid gases - heading projects; working with operations and marketing; selecting pipeline routes; reviewing construction sketches; conducting financial tracking and reporting; and provide technical training to other members of the staff. The ideal candidate for this type of position has five to 15 years of experience in transmission size pipeline engineering, and a bachelor's degree in engineering. Preference is usually given to those with a PE certification. The salary for this job varies. For instance, in Texas - you can expect to earn up to $105,000, which is usually contingent upon the amount of experience you possess.

Gas Supply Manager

As a gas supply manager, you are responsible for getting a hold of the required supplies of gas for various companies. Contract negotiation with acceptable sources become a major part of this job, as well as making sure that all conditions are fulfilled. You will oversee the appropriate transport and storage of these gas supplies. Over time, you will create a working relationship with suppliers. A bachelor's degree is required for this position - coupled with at least 10 years of experience in the field. Experience in a related area is also accepted. The average yearly salary for a gas supply manager is found between $89,001 and $136,754.

Rate Analyst

Energy operational costs are the focus of this particular job, which has employees analyzing the gathering and transporting rates for gas. Having knowledge of Federal Energy Regulatory Commission policies is a must with this career. Most often, an advanced degree within an area of specialty is expected. The majority of rate analysts have four to six years of experience in the field already under their belt. A variety of different tasks are expected of this job position, which typically earns between $61,482 and $78,854.

Electric and Gas Operations Superintendent

As an electric and gas operations superintendent, your responsibility is to oversee the work crews in charge of constructing, maintaining, and repairing systems associated with electricity and gas. A superintendent creates plans and watches over the process of their employees by managing crew supervisors. A bachelor's degree is sometimes required for this position, as well as at least eight years of experience within the field. The job also centers on a variety of various concepts, practices, and procedures. In this particular career path, extensive experience and judgment truly come in handy when planning and setting goals. Of course, a superintendent is expected to lead and guide the work of other employees. The earning potential for this job is between $71,607 and $106,982.

College Courses

To get an idea of the potential college courses associated with a career in oil and gas - you may face Oil & Gas Field Operations, Hydrocarbons, Oil Field Production, Oil Field Processing, intense labs, field experience, and testing on wastewater treatment, crude oil handling, artificial lift systems, and drilling techniques.

About the Author

Search and post jobs, resume, read job informations, government jobs, online jobs, federal jobs, hot jobs, usa jobs, canada jobs, at Seek4Jobs.net.

Indonesia Petroleum and Gas Mining Industry Market Research

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PT. Dataindo Inti Swakarsa makes no representation to any other person with regard to the completeness or accuracy of the data or information contained herein, and it accepts no responsibility and disclaims all liability (save for liability which cannot be lawfully disclaimed) for loss or damage whatsoever suffered or incurred by any other person resulting from the use of, or reliance upon, the features, functions, tools, data or information contained herein. Information provided is not financial product advice. This report contains general information only. It is not intended as financial product advice and must not be relied upon as such. You should consider obtaining independent advice tailored to your specific circumstances before making any financial decisions. Copyright in this publication is owned by PT. Dataindo Inti Swakarsa. The publication is sold on the basis that the purchaser agrees not to copy the material contained within it for other than the purchasers own purposes. In the event that the purchaser uses or quotes from the material in this publication - in papers, reports, or opinions prepared for any other person - it is agreed that it will be sourced to: PT. Dataindo Inti Swakarsa
Definition
Petroleum and Gas Mining in Indonesia consists of firms mainly engaged in producing crude oil and condensate, and in treating these products on site to produce liquefied petroleum gas (LPG) and liquefied natural gas (LNG).

Activities
The primary activities of firms in this industry are :
- Crude oil mining.
- Condensate production.
- Natural gas mining.
- Natural gas purification.
- Liquid natural gas production
- Liquid petroleum gas production

Outlook

The bright economic growth in 2006 and a better forecast in 2007 seem to have little effect on the investment climate in the oil and gas industry, notably for foreign direct investment. The industry seems not conducive yet due to inconsistencies in government regulations and policies. This can be seen from oil and gas investment, which has been declining since 2000 until 2005 while the rest of the world, is enjoying windfall investments and profits. The regulation relating to this industry was not encouraging to new investors. For example, investors are subject to tax and retribution during exploration. They are also subjected to luxury goods tax and high import duty for heavy equipment. In addition, bureaucracy problems since the autonomy regulation has caused investors not only face the central government, but also local government 'fees'. These all bring increasing administration cost.

To anticipate an investment slowdown the government has applied new splits to attract new investors. Prior, the composition was divided into 85 percent for the government and 15 percent for investors. Currently, with the new regulation, it splits to 75 percent for the government and 25 percent for investors.

These splits in regulations are expected to attract investors and hopefully in the near future oil and gas exploration investment will increase. The other obstacle faced by this industry is lack of technology, which has resulted in less oil production.

Exports of crude oil are expected to continue declining due to lower production and increasing domestic demand. As a result, crude oil imports are expected to increase. At the same time gas exports are expected to remain strong but decline overall. Japan, Korea and China still dominate the market for crude oil and gas exports, while the imports are still dominated by Saudi Arabia, Nigeria and Malaysia. From 2005 to 2008, Pertamina (which operates Arun) must defer 6 cargoes to Japanese and Korean buyers due to the GOI requirement to provide low-cost natural gas to national fertilizer plants. The GOI has a policy to support fertilizer plants with subsidized gas.

The cost of the GOI policy to support the national fertilizer industry is high. Arun's six-cargo deferment last year cost Indonesia about $ 130 million in LNG revenues. The GOI wants Arun to supply gas instead to two Aceh fertilizer plants at a subsidized price of $ 2.30/mmbtu, about one-third its LNG value. The combined effect of declining production and support to the fertilizer industry could lead Indonesia to defer, or spot purchase, as many as 14 Arun cargoes in 2006 and 28 Arun cargoes in 2007.

At Bontang, the costs of GOI support to the fertilizer industry are even higher. Although there is no gas supply agreement between Pertamina and the petroleum companies (Unocal, Total and VICO), it diverts 400-450 mmcfd of gas from LNG production for sale to the fertilizer industry. That gas volume is the equivalent to 40-45 LNG cargoes, or the same number of Bontang cargoes that Indonesia will cancel to its Asian buyers this year. The value of the cancelled cargoes is estimated at $800-900 million, of which the GOI would have netted half. Instead, Pertamina will sell the gas domestically to the fertilizer industry for under than $2.50/mmbtu, less than half the average Bontang LNG contract price.

Producers from the manufacturing industry, of which the natural oil and gas industry is a part of, are expected to maximise their production capacity to satisfy an expectation of demand growth internationally. Additionally, this growth is encouraged by the fact that the world demand for natural oil and gas products will remain strong and exporters' accesses in financing and other essential infrastructures will remain open.

In Indonesia, oil-mining companies mainly consist of Pertamina and its subsidiaries. Private companies with production sharing contract projects (either domestic or foreign company) play a lesser role.

Most contracts signed are production-sharing contracts. At present, there are 72 PSCs covering 105 work areas on land and offshore in Indonesia. Of the 105 works areas, 60 are still in the exploration stage and 45 are already in the production stage, with the enhanced oil recovery (EOR) technique being applied in eight work areas.

Today, more than 100 companies have signed oil contracts with Pertamina, of which only 27 have been productive. This totals 22 companies operating under production sharing contracts, 4 companies under technical assistance contracts and one under a joint-operation contract.

More information of this report visit: http://www.disb2b.com/front/industryintelligencereport.php?klui=K2210

About the Author

PT. Dataindo Inti Swakarsa, Email: info@disb2b.com, Web: http://www.disb2b.com

KFG Resources Prepares for Seismic to Redevelop Salt Dome

In Mississippi, just a few kilometres from the town of Natchez, KFG Resources (TSX.V: KFG) is about to try something that CEO Bob Kadane believes will create significant value for his company's shareholders.

Buried beneath the Fayette field is the Fayette salt dome - the last hydrocarbon-bearing salt dome of its kind in the region that has not been redeveloped. In February 2008, KFG will carry out the first 3D seismic imaging survey on the Fayette salt dome in which it holds a 100% working interest. The data from the seismic survey will be analysed with existing data from more than 100 well logs to determine the best fifteen or more targets for a drill program to be started this summer. The goal will be to drill through multiple oil and gas formations in the shallow Wilcox Formation (from 3,500 to 3,900) and the Lower Tuscaloosa (9,600 feet).

Salt domes like the Fayette were deposited millions of years ago when the shores of the Gulf of Mexico were located far inland from their current position. As waters evaporated, they left thick pockets of salt in layers. Over the millennia, these were buried by sand, soil and sediment. Over time, the thick layers of salt bowed in the centre and penetrated upward through the existing strata of rock - hence the "dome" shape of the structures. The salt is hard and impenetrable; the upward bending of the salt formed traps or pockets where oil and gas collected, often in large quantities.

There are numerous salt features located in the area surrounding Natchez. While most have been thoroughly explored and exploited from the 1930s until the present, the Fayette Salt Dome has seen only limited exploration.

Of the 4,000 acres that comprise the Fayette field and salt dome, only a fraction has been explored. Historically, exploration companies have drilled 29 deep holes on the east side of the dome. The west side, however, has only seen eight deep drill holes - which makes the west side a priority target.

The problem with mapping on the west side of the dome, Kadane says, "has been that the drill holes are too far apart to make any logical conclusions from the surface mapping (well logs). Some of them had small quantities of oil and gas production, so they could be the edge of a larger untapped reservoir. These old wells are 1,000 to 2,000 feet apart and you could have a reservoir easily run right between them and not even know it. And that's what the seismic will tell us."

3-D seismic surveys, or "seismics" as they are commonly called, use sound waves to locate rock formations in the earth that are associated with oil and gas. Acoustic vibrations are created either by a controlled explosion, or more often, by use of a vibration truck, which thumps the ground creating waves that radiate into the earth. The sound waves are reflected off subterranean rock, sediment, salt and other layers. The length of time required for the waves to travel through layers of varying densities is used to create a profile of the structure. With the use of computers, 3-D seismics have becomes incredibly detailed and complex. Billions of data points are compiled to create a three dimensional image of the underground structures thus dramatically reducing the element of chance in drilling wells.

Then there are the well logs from more than fifty previously drilled wells in the Fayette field. These well logs are like electric cardiogram images depicting a foot by foot image of the types of hydrocarbons present down a well hole. With the log data, the presence of hydrocarbons is measured up and down the drill hole and outward about 20 feet in all directions.

In addition, Kadane says, 3D seismic survey signatures will show areas of undepleted shallow gas as well as the undepleted oil reserves. In all, this adds up to a potentially huge amount of hydrocarbons.

Although KFG's earlier plans to recomplete its existing three Lower Tuscaloosa gas condensate wells were successful, they represented only the initial phase of hydrocarbon recovery from the Fayette field. With those online, the Fayette Field is presently producing 20 barrels of oil and 250 MCF of gas per day. Kadane says these were just a fraction of what could be underground here.

"If I walk away from this with just five successful wells, I'm going to be disappointed, Kadane says."

He points out that every other similar salt feature in the Gulf Region that has seen 3D seismic survey data used in conjunction with down-hole well log data has been successful in finding new oil and gas reservoirs in just about every producing horizon.

The Fayette field is structurally similar to oil company Denbury's (NYSE: DNR) numerous projects in Louisiana and Mississippi, including other salt domes that Denbury has drilled for primary recovery or pumped CO2 into for secondary recovery. Denbury is one of the largest oil and natural gas operator in Mississippi and owns the largest reserves of CO2 used for secondary oil recovery east of the Mississippi River. In recent years, Denbury has systematically acquired many of the known salt formations throughout Mississippi and Louisiana.

"These old producing fields with salt features have been redeveloped by Denbury and others by doing exactly what we're doing - 3D seismics and well logs - and then redrilling the areas and finding new reservoir traps, new fault traps, deeper beds, shallower beds. The reason there are still untapped resources down there is that using well logs alone didn't give enough indication for the zones to be successfully tested for hydrocarbons."

Historically, more than two million barrels of oil and 8 billion cubic feet of gas were produced from the Lower Tuscaloosa formation at Fayette. Kadane emphasises that most of the historical production was from the east side of the Fayette salt dome, which has seen most of the drilling.

"There no reason I can think of why the same or similar won't be possible to find on the west side, where only eight holes have been drilled," he points out.

While KFG focuses on drilling the untapped side of the salt dome, there remains another value-opportunity to consider as well. The Denbury model of secondary recovery using CO2 requires substantial capital to initiate, but is a very profitable model for that company. Kadane says the secondary model is one he is considering - once the company has the seismic data.

"It has been every economic for companies like Denbury to revisit these older depleted reservoirs throughout Louisiana and Mississippi," Kadane says. "Another object of the 3D then is to figure out exactly where the old depleted reservoirs are so you'll know where to put your injection wells for a secondary recovery project.

"We've already been approached by Denbury to sell Fayette and we would have done a JV, but I wasn't about to sell it. They've done their homework - they know what's there."

KFG Resources has 42,147,311 net shares outstanding and presently trades at $0.09 per share.

This article is intended for information purposes only, and is not a recommendation to buy or sell the equities of any company mentioned herein. It is based on sources believed to be reliable, but no warranty as to accuracy is expressed or implied. The opinions expressed in the article are those of the author except where statements are attributed to individuals other than the author, in which case the opinions are those of the individual to whom they are attributed.

About the Author

Resourcex Investor is an internationally distributed newsletter about emerging junior resource companies. Sign up for a free 1-month trial to our newsletter and get instant access to news and investing tips that have helped many of our readers make more money. http://www.resourcex.com

Chukchi Sea Lease Sale 193 Announces Feb 6, 2008

The Alaskan wilderness and surrounding seas have long been coveted by oil and mining companies for their richness in natural resources, but strict regulations and controversial environmental issues have prevented widespread efforts from taking place.

Currently debated is the Chukchi Sea lease sale 193. The Chukchi Sea area in question lies 25 miles off the north-western coast of Alaska. Reservoirs below are thought to contain 15 million barrels of recoverable oil and 76 trillion cubic feet of natural gas. The sea bed, lying between 95ft and 262ft, could be easily accessed by off shore drilling rigs. This icy sea is also one of two environmentally sensitive habitats of arctic polar bears, a species whose endangerment is also currently in debate. Impending decisions on the protection of their habitat could significantly limit development by the oil industry in the Chukchi Sea.

The Department of the Interior Minerals Management Service has proposed the sale of 29.4 million acres for oil and gas exploration to be held on Feb 6, 2008. This would be the first sale in this region in fifteen years. Oil and gas exploration and extraction companies will bid for the rights of 5355 blocks of territory and the MMS would collect a 12.5% royalty on revenue from all parcels. Advocates for the sale believe this could help bolster the faltering U.S. economy by providing a security that comes from reduced reliance on foreign oil supply.

Politicians, including Senator John Kerry, are advocates for delaying the sale until a decision can be made about the Polar Bears endangermenet. Delaying the sale by as much as three years would allow scientists more time to conduct studies on how further commercial activity may cause imbalance in this region. Scientists also seek to develop an understanding of how global warming is impacting habitat. Polar bears are carnivores and scavengers that live and hunt for food off the ice floes of the Chukchi Sea. When the ice melts the bears either drown or are forced inland, which limits their access to their staple food sources: seal, walruses, and narwhal and beluga whale carcasses.

Some have questioned why the proposed sale is to take place before the decisions about the polar bear habitat, however it seems there is little that can be done to stop the sale now. The Alaska Wilderness League expects companies like Exxon, Shell, and Statoil to be bidding on the sale. Companies like Triple Diamond Energy Corp could also benefit from further oil developments in the region.

About the Author

About the Author: Robert Jent is President & CEO of Triple Diamond Energy Corp. Triple Diamond Energy is an independent producer of oil and natural gas. Located in the Dallas area, the company specializes in acquiring the highest quality prime oil and gas properties

KFG Resources in Search of the Wilcox Formation's Riches

High oil prices have a habit of creating winners and losers. It's a complex equation, to be sure, since price hikes are the result of multiple causes, including the fact that "easy" oil reserves are increasingly difficult to come by.

For oilmen with the correct experience and some faith in serendipity, high oil prices indicate the opening - or reopening - of giant swathes of land for drilling and production, and the potential for big profits.

I spoke with Bob Kadane, the president of KFG Resources (TSX.V:KFG) about how oil prices have had an effect on one formation in particular - the Wilcox Oil and Gas Formation - and learned a lot about the true story behind petroleum exploration in the US that every investor should know. It's a fascinating story.

First off, the stakes are huge. While proponents of the peak oil theory may be correct in stating that oil reserves worldwide are increasingly depleted, there is still room for substantial oil production from the Wilcox Formation.

For example, using a geology-based assessment methodology, the U.S. Geological Survey in 2007 estimated 110 million barrels of undiscovered oil, approximately 3 trillion cubic feet of gas and over 500 million barrels of natural gas liquids throughout the Wilcox Formation. Much of that would be contained in Mississippi and Louisiana, where KFG Resources is will soon be drilling.

The Wilcox Formation is located some 6,500 feet below sea level in Mississippi and Louisiana, inland from the Gulf of Mexico. It is just one of many strata of the earth buried underground by millions of years of erosion and land movement caused by wind, water and tectonic motion.

The last time the sand, silt and clay that comprise the Wilcox Formation were exposed to air was about 50 million years ago, during the early Eocene period, when the earth's poles were covered by forests and the shoreline of the Gulf of Mexico lay many kilometers inland from where it is found today.

Huge pockets of oil formed by decomposing plant matter from distant epochs populate the Wilcox Formation, which can be harder to find than other oil reserves due to the fact that the oils are not kept in place by thick shale beds or other rock that are relatively easy to spot using seismic. Instead, the formation is up to 2,500 feet thick, and mostly sand. As such, other, more traditional methods are used to find deposits in the oil rich formation.

Just how rich? Well, as mentioned earlier, USGS has reported more than 100 million barrels of oil plus gas and natural gas liquids geologically proven in the area. But what about the standard petroleum measure of "barrels per acre foot"?

According to Kadane, the standard oil reservoir in the Rocky Mountains might yield from 75 to 250 barrels of oil per acre foot - meaning that one foot of sand over one acre of land would yield between 75 and 250 barrels, depending on such factors as porosity and oil content.

I did my own homework, too: A search of other companies producing oil reveals a high of 400 barrels per acre foot in Nevada, 350 in Texas, 300 in Oklahoma and so on. The numbers vary, of course, and in oil rich areas such as Alberta and the Middle East, they are much higher.

But the Wilcox Formation yields an average of 600 barrels per acre foot, Kadane says.

"I have been associated with some reservoirs that have recovered in excess of 1,000 per acre foot - it's a high porosity sand," he noted.

Simply put, Kadane says, "It makes the Wilcox Formation - if you can find it - probably the most profitable return on your investment on shore in the United States. It's elusive but it makes a very lucrative target once you're able to pin it down and find it."

Kadane was born and raised in communities that lay on the earth above the Wilcox Formation. Starting in the 1940s, Kadane's father drilled the same formation to great success. Kadane recalls his father putting dynamite into a well to get the oil flowing in about 1942 - when he opened the valve, a huge geyser of oil shot some 150 feet into the sky. Kadane still has a 16-millimeter film of the event, he says.

The Wilcox Formation lost favor due to its low success ratio and the fact that modern technology, such as seismic, doesn't help much in finding its reserves. To find Wilcox oil and gas, oilmen like Kadane use traditional methods and wisdom gained through experience to improve chances of success. To profit from them, you have to know everyone working the Wilcox Formation, where they are drilling, and where they have succeeded and failed.

"The last Wilcox well we found that amounted to anything was 1989. We haven't done a lot there since then, and that field still produces and is part of our main reserve and is almost 20 years old. It's just three wells and it's produced about 1.3 million barrels, I think."

Now that peak oil has emerged to be a law rather than a theory, and with prices up and American supply diminished, the math is right again to make a success of the Wilcox Formation.

"In the Wilcox Formation, the success rate on wildcat drilling - which means no production within a mile or so, or virgin, undrilled land - is between 10 and 15 percent," explains Kadane. "The success rate of offset is in the 50 percent range in terms of success." That indicates that in many cases it will be most prudent to drill next to where other teams have already drilled, but failed to find the goods.

"With the price of oil and gas above $70 per barrel, suddenly new exploration companies are down in the Louisiana Salt Basin area. The higher price of oil makes the lower success rate more profitable.

"You see, when more players are in the field drilling, it helps to eliminate where oil is not, and tells you where it may be. Lot of people do one or two holes where there should be oil. Sometimes, if they come up dry, they give up. You go in there and drill a third or fourth hole, because you know it's there - and bingo, you hit paydirt. So the other guys have in essence done the work already.

"By going in and completing more holes you know your chances of hitting oil have improved without spending a dime."

The other players at KFG add the other essential ingredients to the brew that Kadane predicts will see success in 2008. President of Operations Stephen Guido owns a drilling rig good to below 10,000 feet. Geologist Dave Easom has 25 years experience in the area and has worked closely with seismologist Pitman Calhoun, who is said to be one of the best lower Tuscaloosa and Wilcox seismologists in that whole part of the country. Kadane says that Calhoun and Easom have completed three 3D seismology shoots in the Lower Tuscaloosa Formation in the region, all of them successful.

"I've got a network of guys who know what they're doing," he emphasizes. "They've been there and done that here since they were kids. They know every player on the scene and every dip in every field in the state of Louisiana."

Coming Up: In the next piece, I'll talk about how KFG Resources plans to use 3D seismic data with subsurface well log data to create a drilling plan to hit both the Wilcox Formation and the Lower Tuscaloosa - simultaneously.

This article is intended for information purposes only, and is not a recommendation to buy or sell the equities of any company mentioned herein. It is based on sources believed to be reliable, but no warranty as to accuracy is expressed or implied. The opinions expressed in the article are those of the author except where statements are attributed to individuals other than the author, in which case the opinions are those of the individual to whom they are attributed.

About the Author

Resourcex Investor is an internationally distributed newsletter about emerging junior resource companies. Sign up for a free 1-month trial to our newsletter and get instant access to news and investing tips that have helped many of our readers make more money. http://www.resourcex.com

Exploring the world of Oil and Gas: Possible Careers

In today's society, news headlines are fixated on the price of oil and gas, as overseas negotiations and an ongoing battle in the Middle East continue to affect the perception of this vital commodity. However, behind the scenes - there are plenty of employees who make decisions, transport the oil, and facilitate business deals for the United States. When looking to learn more about the careers centered on oil and gas, consider the following employment possibilities:

Exploration Manager

Discovering vital oil and gas deposits is a valuable job in this day and age that will only continue to increase in importance as resources become scarcer. An exploration manager leads and operates the expeditions to discover more oil and gas. While evaluating the possibilities and value of a potential site, knowledge of federal, state, and local regulations is a must. A bachelor's degree (and preferably a master's degree) is required in this field. Those with eight to 10 years of experience are most likely chosen for this position. The average yearly salary for this career choice is between $157,665 and $208,954.

Oilwell Pumper

While you are quite familiar with the employee who may pump your gas at a service station, have you ever stopped to think how oil is manufactured? An oilwell pumper is responsible for the daily maintenance and care of oil wells. They operate the injection equipment and oversee oil production - making sure to keep in line with standard operating procedures. This kind of pumper will keep reports and make assessments of the volume and pressure of gas and oil contained inside of a well. A high school diploma or its equivalent is needed for consideration. Zero to two years of experience within the field is suggested, as you should display a familiarity regarding the concepts, practices, and procedures within this particular field. Usually, a supervisor or manager manages their progress and projects. The typical salary for this job is between $35,348 and $57,176.

Pipeline Engineer

A pipeline engineer may work with natural and/or liquid gases - heading projects; working with operations and marketing; selecting pipeline routes; reviewing construction sketches; conducting financial tracking and reporting; and provide technical training to other members of the staff. The ideal candidate for this type of position has five to 15 years of experience in transmission size pipeline engineering, and a bachelor's degree in engineering. Preference is usually given to those with a PE certification. The salary for this job varies. For instance, in Texas - you can expect to earn up to $105,000, which is usually contingent upon the amount of experience you possess.

Gas Supply Manager

As a gas supply manager, you are responsible for getting a hold of the required supplies of gas for various companies. Contract negotiation with acceptable sources become a major part of this job, as well as making sure that all conditions are fulfilled. You will oversee the appropriate transport and storage of these gas supplies. Over time, you will create a working relationship with suppliers. A bachelor's degree is required for this position - coupled with at least 10 years of experience in the field. Experience in a related area is also accepted. The average yearly salary for a gas supply manager is found between $89,001 and $136,754.

Rate Analyst

Energy operational costs are the focus of this particular job, which has employees analyzing the gathering and transporting rates for gas. Having knowledge of Federal Energy Regulatory Commission policies is a must with this career. Most often, an advanced degree within an area of specialty is expected. The majority of rate analysts have four to six years of experience in the field already under their belt. A variety of different tasks are expected of this job position, which typically earns between $61,482 and $78,854.

Electric and Gas Operations Superintendent

As an electric and gas operations superintendent, your responsibility is to oversee the work crews in charge of constructing, maintaining, and repairing systems associated with electricity and gas. A superintendent creates plans and watches over the process of their employees by managing crew supervisors. A bachelor's degree is sometimes required for this position, as well as at least eight years of experience within the field. The job also centers on a variety of various concepts, practices, and procedures. In this particular career path, extensive experience and judgment truly come in handy when planning and setting goals. Of course, a superintendent is expected to lead and guide the work of other employees. The earning potential for this job is between $71,607 and $106,982.

College Courses

To get an idea of the potential college courses associated with a career in oil and gas - you may face Oil & Gas Field Operations, Hydrocarbons, Oil Field Production, Oil Field Processing, intense labs, field experience, and testing on wastewater treatment, crude oil handling, artificial lift systems, and drilling techniques.

About the Author

Search and post jobs, resume, read job informations, government jobs, online jobs, federal jobs, hot jobs, usa jobs, canada jobs, at Seek4Jobs.net.

Palestine’s Natural Gas Confusion

alestinian officials secured a deal with British Gas in the late 1990s allowing the exploration and drilling for natural gas and oil reserves in the Mediterranean Sea. In September of 2000, President Yasser Arafat himself watched anxiously as their hopes were rewarded with a huge flame shooting into the sky from a British Gas well 22 miles off the coast of the Gaza Strip. Arafat called the impressive showing of anticipated wealth a “gift to God to us, to our people, to our children,” stating further that the reserves would “provide a solid foundation for our economy, for establishing an independent state with holy Jerusalem as its capital.” In the eight years since this discovery, political jockeying and grappling has much stymied the exportation efforts of Palestine, hindering their ability to truly maximize their reserves and boost economic growth.

In July 2005, Palestinian’s chief export hope, Israel, signed a deal to import natural gas not from its gas-rich neighbor, Palestine, but instead circumventing them to import their natural gas fuel needs from Egypt. Purely a move motivated by politics, Prime Minister Ariel Sharon opposed any financial agreement made with the Palestinian Authority fearing that any monies exchanged would be used to support terrorist operations against Israel. This Israeli deal squashed initial Palestinian hopes that the gas trade would motivate the formation of new jobs in Gaza and earn $40 million to $45 million in taxes annually to help assist in bolstering their government towards eventual statehood.

The Gaza Marine field promises a yield of approximately 1.2 trillion cubic feet of natural gas in its ample reserve. This large reserve of gas has the ability to provide much more than Palestine’s energy needs, which are minimal. British Gas entered into the last stages of talks, nearly reaching an agreement with Egypt as recently as 2006 to export a minimum of 1.5 billion cubic yards of natural gas annually for 50 years through a proposed Gaza-E Arish pipeline. This proposed deal was thrown a major road block by then British Prime Minister Tony Blair who decided that British Gas should give Israel one more chance at making the gas deal with Palestine, insisting that the gas could provide a large part of the energy needs of Israel’s rapidly growing economy. Though Israeli leaders recognized this growing need for gas, their opposition to trade with Palestine once again hobbled the hopeful bridging of gaps between the two. This has resulted in British Gas and Palestine resuming talks with Egypt, hoping to finalize a deal in early 2008, putting an end to the confusion which began with hope and anticipation of wealth nearly a decade earlier.

About the Author

About the Author: Robert Jent is the president of Triple Diamond Energy Corp. Triple Diamond Energy specializes in acquiring the highest quality prime oil and gas properties. For more information, visit http://www.triplediamondenergycorp.blogspot.com.

KFG Resources in Search of the Wilcox Formation's Riches

High oil prices have a habit of creating winners and losers. It's a complex equation, to be sure, since price hikes are the result of multiple causes, including the fact that "easy" oil reserves are increasingly difficult to come by.

For oilmen with the correct experience and some faith in serendipity, high oil prices indicate the opening - or reopening - of giant swathes of land for drilling and production, and the potential for big profits.

I spoke with Bob Kadane, the president of KFG Resources (TSX.V:KFG) about how oil prices have had an effect on one formation in particular - the Wilcox Oil and Gas Formation - and learned a lot about the true story behind petroleum exploration in the US that every investor should know. It's a fascinating story.

First off, the stakes are huge. While proponents of the peak oil theory may be correct in stating that oil reserves worldwide are increasingly depleted, there is still room for substantial oil production from the Wilcox Formation.

For example, using a geology-based assessment methodology, the U.S. Geological Survey in 2007 estimated 110 million barrels of undiscovered oil, approximately 3 trillion cubic feet of gas and over 500 million barrels of natural gas liquids throughout the Wilcox Formation. Much of that would be contained in Mississippi and Louisiana, where KFG Resources is will soon be drilling.

The Wilcox Formation is located some 6,500 feet below sea level in Mississippi and Louisiana, inland from the Gulf of Mexico. It is just one of many strata of the earth buried underground by millions of years of erosion and land movement caused by wind, water and tectonic motion.

The last time the sand, silt and clay that comprise the Wilcox Formation were exposed to air was about 50 million years ago, during the early Eocene period, when the earth's poles were covered by forests and the shoreline of the Gulf of Mexico lay many kilometers inland from where it is found today.

Huge pockets of oil formed by decomposing plant matter from distant epochs populate the Wilcox Formation, which can be harder to find than other oil reserves due to the fact that the oils are not kept in place by thick shale beds or other rock that are relatively easy to spot using seismic. Instead, the formation is up to 2,500 feet thick, and mostly sand. As such, other, more traditional methods are used to find deposits in the oil rich formation.

Just how rich? Well, as mentioned earlier, USGS has reported more than 100 million barrels of oil plus gas and natural gas liquids geologically proven in the area. But what about the standard petroleum measure of "barrels per acre foot"?

According to Kadane, the standard oil reservoir in the Rocky Mountains might yield from 75 to 250 barrels of oil per acre foot - meaning that one foot of sand over one acre of land would yield between 75 and 250 barrels, depending on such factors as porosity and oil content.

I did my own homework, too: A search of other companies producing oil reveals a high of 400 barrels per acre foot in Nevada, 350 in Texas, 300 in Oklahoma and so on. The numbers vary, of course, and in oil rich areas such as Alberta and the Middle East, they are much higher.

But the Wilcox Formation yields an average of 600 barrels per acre foot, Kadane says.

"I have been associated with some reservoirs that have recovered in excess of 1,000 per acre foot - it's a high porosity sand," he noted.

Simply put, Kadane says, "It makes the Wilcox Formation - if you can find it - probably the most profitable return on your investment on shore in the United States. It's elusive but it makes a very lucrative target once you're able to pin it down and find it."

Kadane was born and raised in communities that lay on the earth above the Wilcox Formation. Starting in the 1940s, Kadane's father drilled the same formation to great success. Kadane recalls his father putting dynamite into a well to get the oil flowing in about 1942 - when he opened the valve, a huge geyser of oil shot some 150 feet into the sky. Kadane still has a 16-millimeter film of the event, he says.

The Wilcox Formation lost favor due to its low success ratio and the fact that modern technology, such as seismic, doesn't help much in finding its reserves. To find Wilcox oil and gas, oilmen like Kadane use traditional methods and wisdom gained through experience to improve chances of success. To profit from them, you have to know everyone working the Wilcox Formation, where they are drilling, and where they have succeeded and failed.

"The last Wilcox well we found that amounted to anything was 1989. We haven't done a lot there since then, and that field still produces and is part of our main reserve and is almost 20 years old. It's just three wells and it's produced about 1.3 million barrels, I think."

Now that peak oil has emerged to be a law rather than a theory, and with prices up and American supply diminished, the math is right again to make a success of the Wilcox Formation.

"In the Wilcox Formation, the success rate on wildcat drilling - which means no production within a mile or so, or virgin, undrilled land - is between 10 and 15 percent," explains Kadane. "The success rate of offset is in the 50 percent range in terms of success." That indicates that in many cases it will be most prudent to drill next to where other teams have already drilled, but failed to find the goods.

"With the price of oil and gas above $70 per barrel, suddenly new exploration companies are down in the Louisiana Salt Basin area. The higher price of oil makes the lower success rate more profitable.

"You see, when more players are in the field drilling, it helps to eliminate where oil is not, and tells you where it may be. Lot of people do one or two holes where there should be oil. Sometimes, if they come up dry, they give up. You go in there and drill a third or fourth hole, because you know it's there - and bingo, you hit paydirt. So the other guys have in essence done the work already.

"By going in and completing more holes you know your chances of hitting oil have improved without spending a dime."

The other players at KFG add the other essential ingredients to the brew that Kadane predicts will see success in 2008. President of Operations Stephen Guido owns a drilling rig good to below 10,000 feet. Geologist Dave Easom has 25 years experience in the area and has worked closely with seismologist Pitman Calhoun, who is said to be one of the best lower Tuscaloosa and Wilcox seismologists in that whole part of the country. Kadane says that Calhoun and Easom have completed three 3D seismology shoots in the Lower Tuscaloosa Formation in the region, all of them successful.

"I've got a network of guys who know what they're doing," he emphasizes. "They've been there and done that here since they were kids. They know every player on the scene and every dip in every field in the state of Louisiana."

Coming Up: In the next piece, I'll talk about how KFG Resources plans to use 3D seismic data with subsurface well log data to create a drilling plan to hit both the Wilcox Formation and the Lower Tuscaloosa - simultaneously.

This article is intended for information purposes only, and is not a recommendation to buy or sell the equities of any company mentioned herein. It is based on sources believed to be reliable, but no warranty as to accuracy is expressed or implied. The opinions expressed in the article are those of the author except where statements are attributed to individuals other than the author, in which case the opinions are those of the individual to whom they are attributed.

About the Author

Resourcex Investor is an internationally distributed newsletter about emerging junior resource companies. Sign up for a free 1-month trial to our newsletter and get instant access to news and investing tips that have helped many of our readers make more money. http://www.resourcex.com

Mexico’s Oil Output

Oil was not discovered in Mexico until after the turn of the twentieth century. Commercial production of crude oil started in 1901 and by 1911 Mexico began to export oil.

In 1923 Bucarelli Agreements committed the United States and Mexico to regard titles held by foreign oil companies as concessions by the Mexican government rather than as outright ownership claims. And in 1925 President Plutarco Elías Calles decreed that foreign oil companies must register their titles in Mexico and limited their concessions.

Largely as a result of increased international demand generated by World War I, Mexico's oil production peaked in 1921 at 193 million barrels (25 percent of world production). Mexico was second only to the United States in petroleum output and led the world in oil exports during much of the 1920s.

Giving the Mexican government a monopoly in the exploration, production, refining, and distribution of oil and natural gas, and in the manufacture and sale of basic petrochemicals, President Lázaro Cárdenas nationalized the petroleum industry in 1938. This left the oil companies uncomfortable. The United States government soon pressured the oil companies to come to terms with Mexico as a result of President Franklin D. Roosevelt's Good Neighbor Policy. In 1943 Mexico and the oil companies reached a final settlement under which the companies received US$24 million (a fraction of the book value) as compensation.

Mexico's oil output expanded at an average annual rate of 6 percent between 1938 and 1971. And production increased from 44 million barrels in 1938 to 78 million barrels in 1951 alone. Domestic demand progressively exceeded output, and in 1957 Mexico became a net importer of petroleum products. Production then rose to 177 million barrels by 1971 with the exploitation of new oil fields.

Extensive oil discoveries in the 1970s increased Mexico's domestic output and export revenues. Almost every drilling operation conducted after 1972 struck oil. In 1973 oil production surpassed the peak of 190 million barrels achieved in the early 1920s.

However, by early 1993, both crude oil production and exports had begun to decline. Down from almost 80 percent in 1982, in 1995 the oil sector generated slightly more than 10 percent of Mexico's export income. In 1995 Mexico was the world's sixth-largest producer of crude oil. In the Western Hemisphere, only the United States produced more oil than Mexico. Directly behind Mexico was Venezuela.

The Mexican government invested heavily to increase the capacity of existing refineries and construct new ones so that, by the early 1990s, some 40 percent of Mexico's crude petroleum output was refined domestically. In 1993 Mexico had the world's eighth largest crude petroleum reserves, amounting to some 5 percent of the world's total. Mexico's reserves are sufficient to guarantee the current production levels for fifty years.

Since the nationalization of the oil industry in 1938, the state-owned Pemex has monopolized the production and marketing of hydrocarbons. In August 1993, it became known that the government was considering proposals to allow private companies to buy, sell, and distribute imported gasoline, natural gas, and petrochemicals, and to invest in new pipelines.

In early 1996, the government unveiled its Program for the Development and Restructuring of the Energy Sector. The plan is intended to increase Mexico's petroleum exports, improve its competitiveness in the international energy market, and contribute to more balanced regional development, which it has.

Companies in the United States’ oil sector, like {a href=“http://tdecorp.blogspot.com/2007/12/Mexico’s-oil- output.html"}Triple Diamond Energy Corporation continue to look at Mexico’s oil output and assess any potential business dealings.

About the Author

Chris Jent is the Chief Marketing Officer of Triple Diamond Energy Corp. Triple Diamond Energy specializes in acquiring the highest quality prime oil and gas properties. For more information, visit http://www.triplediamondenergycorp.blogspot.com.

Russian Arctic Claims

Russia continues to be the country possessing the largest proven natural gas reserves on the planet as well as the largest exporter of oil after Saudi Arabia. The mismanagement of their resources combined with limited technology has rendered may of their vast resources unsalvageable with their continued denial of foreign intervention further limiting successful extraction efforts. Current projected estimates show that Russia's large reserves, with no expansion or increased operations are dwindling, and will be nearly tapped by 2030. Instead of asking for assistance from highly experienced and specialized foreign oil outfits, Russia has instead opted for increasing their range by laying claim to a disputed 460,800 square mile swath of ice-covered Arctic seabed estimated to hold billions of unproven hydrocarbon reserves.

In 2001, Russia issued documents before the United Nations claiming that the Lomonosov Ridge, making up a large portion of the Arctic Ocean's seafloor, was actually an extension of the Siberian continental shelf and should be recognized as part of Russia, theirs to explore and exploit. The 1982 International Convention on the Law of the Sea established a zone of twelve miles off of all coastal countries and an even further reaching 200 mile economic zone for each country to have exclusive rights for drilling and exploration. Russia's claim to the Lomonosov Ridge extends far beyond this 200 mile economic zone however, and the United Nations has thus far denied their claims.

Russia continues their exploration of the Arctic in hopes to show the United Nations that they deserve to explore and begin drilling, for the rewards could be immense. In order to extend their 200 mile economic zone, Russia must prove the structure of the continental shelf of the ridge is similar to the geological structure of the underwater landmass extension within their territory. The lure of the ridge has to be its estimated 10 billion tons of untapped reserves. These reserves would provide Russia with the boom necessary to continue to flex its might as one of the world's most powerful natural resource holders. Not only would the petroleum and natural gas extracted help provide the energy needs of their citizenry, but the monies collected from exports would be tremendous as worldwide supplies continue to diminish and the price of oil continues to increase.

The United States and Canada are watching ever so closely, hoping Russia's claims are denied once again. Perhaps the United Nations will equally divide the Arctic giving drilling rights to all bordering countries. Until then, large natural gas and oil companies like Triple Diamond Energy Corp. will continue to develop new techniques for drilling deep beneath snow and ice in order to extract the bounty beneath.

About the Author

About the Author: Robert Jent is the president of Triple Diamond Energy Corp. Triple Diamond Energy specializes in acquiring the highest quality prime oil and gas properties. For more information, visit http://www.triplediamondenergycorp.blogspot.com.

Oil & Gas Industry

The Oil and Gas Industry is one of the most important and dramatically changing global industries there is.

Obtained naturally from beneath the surface of the earth, crude oil or petroleum is an inflammable liquid that is collected beneath the seas in the form of oil reservoirs through years of plant and animal decomposition as well as deposition of layers of silt and mud materials. From time immemorial, crude oil has been put to several uses and today, Oil accounts for a major portion of the world's energy consumption.

History If we were to trace the history of oil and gas, we would have to look way back to historical references of oil usage in Persia, Egypt and Mesopotamia. During the 8th century, tar (which is derived from petroleum) was being used for paving roads. By the 9th and 10th century, the discovery and exploration of oil reserves became eminent. Drilling below the sea beds for crude oil paved the path for the entrance and the rise in importance of the oil and gas industry in the overall world economy. The discovery and use of oil & gas by the 20th century led to an increase in the demand for commodities such as petroleum, now heavily traded among nations. In the UK, it is the Department of Trade and Industry that regulates the activities and development of the oil and gas industry.

Majors Players A number of entities together constitute the oil and gas industry.

1) Those involved in the exploration, overall development and production of natural gas or crude oil.

2) Those taking care of the transportation, retailing, and end users.

3) Other contracted drilling agencies and service companies. Some of the major Oil Companies operating in the world market today include BP, Shell, Chevron, ExxonMobil (Esso), ConocoPhillips, and Total S.A.

Oil Usage Developed countries use the maximum amount of oil and there is a growing demand for oil and natural gas by most developing countries as well. Though it is difficult to give an exact estimate, it has been stated that the world consumes over 30 billion barrels of oil per year. Oil Production Some of the biggest producers of oil in the world include

Russia Saudi Arabia USA Iran China

There has been a continuous rise in demand for oil and gas throughout the world leading to a rise in its prices. This was inevitable since petroleum is a non renewable resource and it is hard to match supplies with such a drastic increase in its demand year after year. Moreover, there are signs of negative effects on sea life as well as the overall environment through discharge of chemicals.

What Lies Ahead? Industry experts predict that in the future, such increasing demands on the supply reserves of oil will eventually lead to a decline in the overall global oil production as well as sky rocketing oil prices.

It is high time that the nation looks towards alternative sources of energy such as wave and tidal power, wind power, solar power and bio fuels to reduce such frightening pressures on oil and gas in the world.

About the Author

David Pritchard is webmaster for www.crest-enviro.com