[lateStarter]

From MarketWatch:

On the sidelines of an Organization of Petroleum Exporting Countries meeting here in the Nigerian capital, Khelil said rocketing costs were spurring delays or even cancellations of hydrocarbon projects.

"An LNG (liquefied natural gas) project that cost $1 billion a few years would cost no less than $3.5 billion today and it's even worse for GTL (gas-to-liquids developments)" he said. "This might be what the executive was referring to," he added.

In early December an executive from state-operated Sonatrach told Dow Jones Newswires that Algeria had revised down its 2010 crude production target to between 1.5 million-1.6 million barrels a day from an original goal of 2 million barrels a day.

Analysts said the 2 million barrel a day target was ambitious given that much of the growth would need to come from new fields rather than expanding output at existing projects. Over the past few years, Algeria has discovered several significant new oil and gas fields and has been counting on foreign investment to help meet its targets.

Uncertainties created by its recently-modified hydrocarbon law have caused concern among stakeholders and potential investors, analysts said. Tuesday, Anadarko Petroleum Corp. (APC) Chief Executive Jim Hackett said it is still assessing how Algeria's new windfall oil tax law will affect its investments there. Anadarko's Algerian assets could fall into "two potential categories," and the company plans to consult with its partner, Sonatrach.

"If we don't get the right answer there, we have a lot of protection," he said. "We have a stabilization clause, we have an international arbitration clause; we think we've got legal protection." In a recent visit to Washington D.C., Khelil said that even after the application of windfall taxes, Algeria would maintain "an attractive fiscal regime" for oil companies.

Starting to sound like a common complaint from the producers...

[frankthetank]

Is this due to material costs or labor costs? both? I've noticed what seems like a drop in price (from highs) of building supplies (plywood, etc), but not in things like copper piping. Unsure of the cost of concrete. I bet they use a lot of stainless in building these things?

[rockdoc123]

over the past year day rates for rigs have escalated anywhere from double to triple what they were in 2004. As well the cost for steel (pipe, casing, materials for compressors etc) has escalated due to the high fuel costs. The cost for skilled labor has also increased simply because Saudi Arabia has been offering jobs at elevated salaries.

what is amazing is that the Algerian government completely ignored these pressures when it instigated the new windfall profits tax. If this is applied across the board to all producers there is going to be a considerable number of arbitration notices filed this year. Faced with arbitration on all of the foreign operated fields I would not be surprised to see Algeria reconsider nationalization. The new regs are quite onerous.....before Sonatrach had a backin right for 35%....now they have the right to 55%. As well there is a provision where if oil is over $40/bbl that Sonatrach takes an ever increasing portion of the foreign partners profit oil. My back of the envelope calculation suggests that at current prices the contracotor take drops from its current range of about 25% to 5% or lower. No one in his right mind will participate in any new exploration here as far as I can tell.

[seahorse2]

Rockdoc,

Before you made an important comment, that to avoid a "peak" in oil production before 2014, everything on the new production would have to work out just right. This type of news suggests that counting on this new production coming on-line as anticipated may be too optimistic. Would you agree? What's your personal barometer as to the new production coming on-line in time to avoid a peak before 2014?

[rockdoc123]

Seahorse.....yup you are bang on. In Algeria the escalating costs, the uncertainty with the new regs means that some of the production which was scheduled for 2007 startup from the Berkine Basin has now been stalled until 2009 or later. In the scale of things this isn't a lot of production but if you apply the same issues to everything and start to add all the anticipated production up my guess is trouble is brewing. Remember that CERA, WoodMac etc. all base their projections on what companies announce as startup dates. If you throw some delays into all of it we will definitely have peaked in terms of ultimate production rate....this peak would be a long plateau however given that all of those projects would eventually come on stream. It would be interesting to take apart the various projections and apply a 2 year delay across the board to see what the effect is....I guess I now have my Christmas holiday project!

[seahorse2]

In the end, I think that's good news. It seems the problem with a peak is the rate of decline, if all these things add up to a long plateau, all the better. Also, hopefully you will take time to comment on the Cantarrell thread. It would be nice to have your take on things there. It seems investment, or lack of it, is a big issue there, along with a fairly steep decline rate.

[nth]

Just an fyi, Algeria is producing over their OPEC quota.
These delays will allow Algeria to abide by their quota.

[oddone]

Days of clashing between unemployed Algerian youth, protesting against high food prices.

From the article in http://english.ahram.org.eg/NewsContent/2/8/3424/World/Region/Two-dead,--injured-in-Algeria-riots-minister.aspx

"About 75 percent of Algerians are under the age of 30, and 20 percent of the youth are unemployed, according to the International Monetary Fund."

This is only the beginning...

[dolanbaker]

Peak Population!
With a demographic like that, it's more like "lift off!

The seeds of a mass starvation or migration perhaps, but not peak population.

[scas]

It'll be Rwanda all over again.

The problem with exponential growth is that when we found out we have food shortages, it's already too late.

[oddone]

Well, I mean "Peak population" in the sense that there is no way to sustain this population, and at one stage a dieoff will begin.

[Tanada]

http://www.usatoday.com/story/news/worl ... /13084329/

An Air Algerie flight en route to Algiers from Burkina Faso with 116 people aboard — including 50 French citizens — crashed Thursday in northeastern Mali, the airlines said.

The airlines said on its Twitter account that the plane went down about 40 miles from the Malian city of Gao. It did not give any additional details.

"The plane disappeared at Gao (in Mali), (300 miles) from the Algerian border. Several nationalities are among the victims," Prime Minister Abdelmalek Sellal was cited as saying by Algerian radio, the French news agency AFP reports.

Ouagadougou Airport in Burkina Faso says on its Facebook page that the passengers on the flight included two European officials of French nationality stationed in Ouagadougou as well as Mariela Castro niece of Fidel Castro, former president of Cuba. Mariela Castro told Globovision that the report was erroneous.

More at the link above. The airliner rerouted to avoid bad weather and flew over territory contested by rebels in Mali, the same group that seized Timbuktu last year. France lost quite a few citizens this time.

[dorlomin]

I'd be willing to bet crash due to mechanical failure this time. Although bomb is possible and pilot error. A sophisticated AA system would be far down my list this time round, unless people have more info.

[Subjectivist]

I'd be willing to bet crash due to mechanical failure this time. Although bomb is possible and pilot error. A sophisticated AA system would be far down my list this time round, unless people have more info.

Looks like you are right, based on the USA Today website.

However, a senior French official said it was unlikely that fighters in Mali had weaponry that could shoot down a plane, the Associated Press reports. The official, who spoke on condition of anonymity because she was not authorized to speak for attribution, said the fighters have shoulder-fired weapons that could not hit an aircraft at cruising altitude.

Though crashes of commercial passenger planes have become rare, it's not unprecedented for them to occur within a short time period.

[Tanada]

Not everyone believes it was a simple accident.

20.54 According to Henry Samuel in Paris, there is speculation the plane crash might have been an act of terrorism.

Kidal is the birthplace of a Tuareg uprising that plunged Mali into chaos in 2012, leading to a coup in the capital Bamako and the occupation of the northern half of the country by militants linked to Al Qaeda in the Islamic Maghreb (AQIM).

A French-led intervention last year dispersed the extremists, but the Tuaregs still pose a serious threat in the north, as do a string of other fractious Islamist groups.

While AH5017 clearly changed direction due to bad weather, some experts doubted a storm could have caused a crash.

Jean Serrat, a former airline pilot, said the causes were more likely to be “either a terror strike on board” or a missile strike like the one that brought down MH17 last Thursday, killing 298 people – 194 of them Dutch.

Laurent Fabius, the French foreign minister, said: “We cannot, we must not rule out any theory before having all the evidence at our disposal.”

More at the link, http://www.telegraph.co.uk/news/worldne ... -live.html

[Keith_McClary]

Obviously Putin dunnit. Here's proof:

(That's not snow, it's a Sahara sandstorm. )

[Newfie]

They found it.

http://apnews.excite.com/article/201407 ... 5c801.html

PARIS (AP) — French officials dispatched a military unit to secure the site in restive northern Mali where an Air Algerie plane crashed with the loss of 116 people. France's interior minister said Friday that terrorism cannot be excluded as a cause for the tragedy, though it was likely due to bad weather.
French president Francois Hollande announced Friday that there were no survivors in the crash of the MD-83 aircraft, owned by Spanish company Swiftair and leased by Algeria's flagship carrier, which disappeared from radar less than an hour after it took off early Thursday from Burkina Faso's capital, Ouagadougou, for Algiers. The plane had requested permission to change course due to bad weather.

[Subjectivist]

"The mission found, on the site, pieces of the plane, this team found on the site, sadly, remains of dead bodies. We were not able to evaluate exactly what is the situation as night began to fall and this team has confirmed that it has seen the remains of the plane, totally burned out and scattered on the ground," he said.

There were few clear indications of what might have happened to the aircraft.

Burkino Faso Transport Minister Jean Bertin Ouedrago said it asked to change route at 2.38am Irish time because of a storm in the area.

"I can confirm that it has crashed," the Algerian official told Reuters, declining to be identified or give any details about what had happened to the aircraft on its way north.

Almost half of the passengers were French citizens, an airline official said.

Niger security sources said planes were flying over the border region with Mali to search for the flight.

France's aviation watchdog said this afternoon that the jet was checked "two or three days ago" and was "in good condition", France's aviation watchdog said.

Patrick Gandil, head of the French civil aviation authority, said the McDonnell Douglas MD-83 "passed through France in Marseille two or three days ago.

"We examined it and we found almost nothing, it was really in good condition," Mr Gandil said.

Algeria's state news agency APS said authorities lost contact with flight AH 5017 an hour after it took off from Burkina Faso, but other officials gave differing accounts of the times of contact, adding to confusion about the plane's fate.

http://www.rte.ie/news/2014/0724/632783-air-algerie/

More at the link, seems like they are having trouble getting investigators on scene. It has been over 24 hours and they arrived just before dark today.

[Tanada]

The original is in french at the link, I used Google Translate for the quote.

In Algeria, the oil giant Sonatrach has just suspended its shale gas exploitation in the experimental fields of In Salah, north of the Wilaya of Tamanrasset. Information revealed Wednesday, January 20 by El Khabar.

The shale gas development work in southern Algeria have continued for several weeks. Sonatrach has decided that suspension following the slump in the price of oil barrel, hovering lately around $ 30 and causing the fall in shale gas. A question of profitability so.

Sonatrach can no longer cope with the costs of exploration, which was not a concern to the launch of the work end of 2014, when the price of oil still grazed $ 100. The Algerian government relied on the exploitation of unconventional gas to compensate for loss of income black gold.

Demonstrations parts of In Salah in January 2015 had won several Algerian cities in April. Protests against "threats to the environment and health" posed by hydraulic fracturing technique used to extract shale gas. But the power had not receded.

She was plummeting oil prices won the fight started there a year by thousands of Algerians to In Salah? Sonatrach officials say they do not renounce the exploitation of shale gas, but that the recovery will depend on a rise in the price of oil to 80 dollars.

http://www.rfi.fr/afrique/20160121-alge ... -sonatrach

[ROCKMAN]

T - I wonder what might have been lost in the translation. lol. The article doesn't make much sense. First what does the price of oil have to do with developing NG? Especially since the article talks about NG production potentially offsetting the loss of oil revenue.

Some details about Algeria and NG:

Algeria is the leading natural gas producer in Africa, the second-largest natural gas supplier to Europe, and is among the top three oil producers in Africa. Algeria is estimated to hold the third-largest amount of shale gas resources in the world. However, gross natural gas and crude oil production have gradually declined in recent years, mainly because new production and infrastructure projects have repeatedly been delayed. Algeria became a member of OPEC in 1969, shortly after it began oil production in 1958. Algeria's economy is heavily reliant on revenues generated from its hydrocarbon sector, which account for about 30% of the country's GDP, more than 95% of export earnings, and 60% of budget revenues, according to the International Monetary Fund (IMF).