Category Archives: Energy

Oil Price Above US$50/BBL

US oil prices (WTI) settled above US$50 per barrel on Monday, the first time for several months.  WTI futures rose 95% with many technical indicators showing a strong buy.  Likely automated trading followed the momentum.   Brent rose to US$50.20 a barrel in the ICE.

What drove this?  Likely a combination of rapidly declining US storage and the Saudi announcement that it will limit exports. The other drivers in the markets which is likely to limit the upside is US fracking which becomes increasingly profitable at these prices and recovery from the supply glut and the lack of OPEC restraint of the last few years.

We now have the perfect storm for speculative price moves, with declining inventories and a commitment to supply restriction plus continuing growth in demand.  While increasing US supply on any price uptick will see a cap on prices, the EIA announced that production in May was less than previously anticipated.

Fukishima Radiation Release – in Perspective

Fukushima Reactor-1 after the hydrogen explosion

There has been much written on Fukushima and sadly much of it is ill-informed and misleading.  Here we take estimates of radiation release from the most authoritative sources and calculate various radiation equivalents:

  1. Radiation release is listed in Peta 10^15 becquerels and becquerels.  You are naturally radioactive at 5kBq and a banana is about 150 Bq.
  2. Hiroshimas –  total radiation release in multiples of the radiation release from the Hiroshima fission blast (89 TBq)
  3. Mega-tonnes  – the mass of TNT equivalent in fission explosions required to produce the same amount of released radiation
  4. Radium  – the weight of Radium in tonnes required to produce the  same radiation release

A comparison using various metrics for the release of radiation from various accidents and weapons testing

First Production from Bangka by Chevron Indonesia

Chevron Indonesia has started production from the Bangka Field in the Kutei Basin offshore East Kalimantan following an investment decision by the company in 2014 and subsequent Indonesian government approvals.  Development drilling commenced in September 2014.

Chevron Production platform


The 60,000 km2 Kutei basin extends from the central highlands of Borneo, across the eastern coast of the island and into the Makassar Strait. It is the largest Tertiary basin in Indonesia with up to 15 km of sediment.  The Kutei is an extensional basin in a foreland tectonic setting. Extension began in the Mid Eocene with subsequent thermal sag, and isostatic subsidence.  Rapid, high volume, sedimentation related to uplift and inversion began in the Early Miocene.

Syn-rift deposition in the Eocene was focused in small, localised depocenters within individual half-grabens.  The initial graben fill is highly variable due to the wide zone of rifting, and ranges from fully terrestrial in the western basin, to entirely marine in the eastern basin.  Syn-rift sedimentation following the initial graben fill is variable across the basin, but several distinct facies tracts have been identified. Non marine, deltaic, shallow marine, deep marine and carbonate platform syn-rift deposits are found in the basin.

Sag phase deposition began in the Upper Eocene to Oligocene. A regional depocenter developed in response to marine transgression. The eastern basin, already influenced by marine conditions quickly transitioned to a deep marine depositional environment, while the western basin transitioned more slowly. A thick marine shale was deposited across much of the basin, while carbonate sedimentation continued on along the basin margin and across topographic highs.

Large carbonate platforms developed along the basin margins as the result of shallowing marine environments in the early phases of the Late Oligocene tectonic inversion combined with a marine regression. As tectonic uplift of central Borneo continued into the lower Miocene, the westernmost portion of the Kutai Basin was inverted above sea level, forming the Upper Kutai Basin.\n\nIn the Early Miocene large amounts of clastic sediment derived from the rising central mountains, and the now inverted Paleogene flowed into the lower Kutai Basin. Basin inversion in the middle Miocene and Pliocene saw a shift in the deltaic depo-centre eastwards into the Makassar Straight.

Neogene sediments in the vicinity of the modern Mahakam delta are up to 9 kilometres thick with total sediment thickness of up to 15 km.

Production & Development

In the Kutei Basin in East Kalimantan, most of the Chevron production has come from 14 offshore fields in the shelf area within the East Kalimantan PSC, with the remainder from the deepwater West Seno Field in the Makassar Strait PSC.\n\nThe development will be the first deep-water subsea tieback thus far in Indonesia and will utilise subsea well connections to the West Seno FPU.  It will also be Indonesia’s first deepwater flexible pipeline and the first single deepwater umbilical installed.

Nameplate production capacity in this initial development stage is 110 MMcf/d of natural gas and 4,000 b/d of condensate. Chevron has a 62% operating interest in the Bangka project with ENI SA holding a 20% interest and Tip Top Energy Ltd with 18% interest.