US backs new MENA supply growth, official says

The US recognizes there are many important oil and gas opportunities in the Middle East and North Africa (MENA), Persian Gulf, and Eastern Mediterranean, and intends to ensure they are cooperatively developed in ways that benefit all people in the countries involved, a US Department of State official told a US House subcommittee.

Dramatic shifts in supply and demand worldwide mean the US “can and should continue to play a role in ensuring the stable and reliable flow of energy resources to all consumers,” Amos J. Hochstein, deputy assistant secretary for energy diplomacy at DOS’s Bureau of Energy Resources, told the Foreign Affairs Committee’s Middle East and North Africa Subcommittee.

“Our relations and interests in the Middle East have always been—and will continue to be—strong, multifaceted, deep, complex, and strategic,” he said in his written testimony. “We live in an international global economy with interdependent energy markets.”

The US economy is integrally linked to global markets, and the nation depends on the prosperity of others, just as they depend on the US, he continued. “As a major oil and gas producer, the United States will continue to have a vested self-interest in maintaining market stability because disruptions anywhere affect prices everywhere, even in the US,” Hochstein said.

Traditional overseas producers are adapting to the new dynamic, he maintained. The Organization of Petroleum Exporting Countries has changed from a cartel focused on maximizing prices to a group increasingly interested in market stability, Hochstein said. The US shares this interest and sees opportunities for future engagement, he indicated.

Focus for Iraq

“Within this context, Iraq has emerged from decades of mismanagement and sanctions to resume its role as a major oil supplier,” he told the subcommittee. “The country is still developing, but we are intensely focused on helping Iraq build in improved reliability in its energy sector, and to sharing best practices related to oil and gas production, distribution, and export.”

Qatar’s development of its massive natural gas liquefaction facilities transformed LNG from a niche product to a globally traded commodity, Hochstein observed. “Due to breakthroughs in processing and shipping by Qatar, LNG imports are a fundamental part of strategic energy planning and a core ingredient in the future energy mix of many countries, particularly in Asia and Europe,” he said.

He noted that in the Eastern Mediterranean, gas discoveries offshore Israel and Cyprus and significant potential in Lebanon, Greece, Egypt, and the Palestinian Authority have great promise for regional cooperation as well as economic growth.

“In February, a State Department-facilitated landmark agreement was announced in which Houston-based Noble Energy Inc. will sell gas from Israel’s offshore fields to Jordan starting in 2016,” Hochstein said. “The deal is a strong first step toward providing Jordan with critically needed affordable energy supplies after losing supplies from Egypt due to repeated terrorist attacks on the Sinai pipeline and due to the changing nature of Egypt’s production and consumption patterns.”

Cooperation will allow these resources to be developed in the most economic manner possible while building new bridges for potential future efforts on a wider range of issues, he said.

“Companies operating offshore Israel and Cyprus now face decisions on how best to monetize their remarkable investments,” Hochstein testified. “This is where geopolitical realities and economic imperatives need to converge. We will continue to work with Israel, Cyprus, and the other countries in the region to assist in any way we can.”

Accommodating risk

Developing frontier resources can be risky and capital-intensive, and companies can be deterred from making the necessary investments if they feel the risk is too high, he said. “When investments can be made in places like North Dakota with little legal or political risk, it becomes very hard for developers to find investors for projects in countries with less developed political and judicial systems,” Hochstein said.

Libya is a case in point, he noted. While it has giant, low-cost, and easy-to-extract oil and gas deposits, “political instability and pervasive insecurity have had a devastating effect, and the country’s production potential suffers from massive underinvestment,” Hochstein said.

“At 150,000 b/d, Libya is only producing 10% of what it had achieved just over a year ago, and even the previous amount of 1.5 million b/d is still well below what would theoretically be achievable in a better investment climate,” he said.

Also in North Africa, Algeria is pursuing the next development phase in its mature oil and gas fields and producing from its offshore and unconventional resources, “but has to get the investment conditions right,” he told the subcommittee.

With the correct incentives in place, Algeria has a unique opportunity to reinforce its role as one of Europe’s most reliable suppliers, “a point of critical importance as one component in a multifaceted solution to Europe’s energy diversification efforts,” Hochstein said. “This will require new infrastructure, new exploration, and new ideas.”

The US government and US companies are eager to help wherever they can to provide the most useful assistance to Algeria, he said.

Contact Nick Snow at nicks@pennwell.com.

Related Articles

Shell cuts $15 billion in spending for 2015-17

01/30/2015 Royal Dutch Shell PLC has curtailed more than $15 billion in potential spending over the next 3 years, but is not “not overreacting to current low ...

Victoria extends drilling, fracing ban

01/30/2015 The new Victorian Labor government of premier Daniel Andrews has extended the coal seam gas (CSG) exploration and hydraulic fracturing ban in the s...

Chevron’s $35 billion capital budget down 13% from last year

01/30/2015 Chevron Corp. will allocate $35 billion in its capital and exploratory investment program for 2015, including $4 billion of planned expenditures by...

US Senate passes bill approving Keystone XL pipeline project

01/30/2015 The US Senate has passed a bill approving construction of the proposed Keystone XL crude oil pipeline by a 62-36 vote after 3 weeks of debate. Nine...

Oxy cuts capital budget by a third

01/30/2015 In the midst of falling oil prices, Occidental Petroleum Corp., Houston, expects to reduce its total capital spending for 2015 to $5.8 billion from...

MARKET WATCH: NYMEX natural gas prices drop after storage report

01/30/2015 US natural gas closed at its lowest price in more than 2 years on the New York market Jan. 29 following the government’s weekly gas storage report,...

Pennsylvania governor reinstates state forest drilling moratorium

01/29/2015 Pennsylvania Gov. Tom Wolf (D) signed an executive order fully reinstating a 2010 moratorium on new oil and gas leases in state forests and parks. ...

PwC: Low oil prices might drive surge in restructuring in 2015

01/29/2015 Mergers and acquisitions (M&A) in the oil and gas industry hit 10-year highs in terms of deal value and volume in 2014, according to a report f...

DOE could meet 45-day LNG export decision deadline, Senate panel told

01/29/2015 The US Department of Energy would have no trouble meeting a 45-day deadline to reach a national interest determination for proposed LNG export faci...
White Papers

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by

The impact of aging infrastructure in process manufacturing industries

Process manufacturing companies in the oil and gas, utilities, chemicals and natural resource industri...
Sponsored by

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...
Available Webcasts


Cognitive Solutions for Upstream Oil and Gas

When Fri, Jun 12, 2015

The oil & gas sector is under pressure on all sides. Reserves are limited and it’s becoming increasingly expensive to find and extract new resources. Margins are already being squeezed in an industry where one wrong decision can cost millions. Analyzing data used in energy exploration can save millions of dollars as we develop ways to predict where and how to extract the world’s massive energy reserves.

This session with IBM Subject Matter Experts will discuss how IBM Cognitive Solutions contribute to the oil and gas industry using predictive analytics and cognitive computing, as well as real time streaming for exploration and drilling.

register:WEBCAST


The Alternative Fuel Movement: Four Need-to-Know Excise Tax Complexities

When Thu, Jun 4, 2015

Discussion on how to approach, and ultimately embrace, the alternative fuel market by pulling back the veil on excise tax complexities. Taxes may be an aggravating part of daily operations, but their accuracy is crucial in your path towards business success.

register:WEBCAST



On Demand

Prevention, Detection and Mitigation of pipeline leaks in the modern world

Thu, Apr 30, 2015

Preventing, detecting and mitigating leaks or commodity releases from pipelines are a top priority for all pipeline companies. This presentation will look at various aspects related to preventing, detecting and mitigating pipeline commodity releases from a generic and conceptual point of view, while at the same time look at the variety of offerings available from Schneider Electric to meet some of the requirements associated with pipeline integrity management. 

register:WEBCAST


Global LNG: Adjusting to New Realities

Fri, Mar 20, 2015

Oil & Gas Journal’s March 20, 2015, webcast will look at how global LNG trade will be affected over the next 12-24 months by falling crude oil prices and changing patterns and pressures of demand. Will US LNG production play a role in balancing markets? Or will it add to a growing global oversupply of LNG for markets remote from easier natural gas supply? Will new buyers with marginal credit, smaller requirements, or great need for flexibility begin to look attractive to suppliers? How will high-cost, mega-projects in Australia respond to new construction cost trends?

register:WEBCAST


Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected