Feb 2000

Brazil’s Petrobras is transforming itself from a state-run monopoly into a corporation that aims to become a fully-integrated energy company by 2010 and has unveiled an ambitious strategic plan to achieve this.

Petrobras’s directors appear aware of the changes that need to be implemented to create a new company, but admit the task is large as a monopoly culture dating back 40 years is unravelled.

Now that Brazil’s upstream sector is being opened up to foreign participation, Texaco, which has been involved in the country’s downstream sector for nearly 40 years, is heading upstream.

Spain’s insatiable appetite for gas will force Enagás back to the international market before long, despite last year’s start-up of deliveries from two new sources. Portugal, supplied with gas through Spain’s importing infrastructure, is also planning for brisk consumption growth. Algeria is well placed to win the Iberian peninsula’s new contracts.

Following the restructuring of Portugal’s oil and gas holding company, a strategic partner has emerged, but the government is still firmly in control.

Differing strategies are being adopted by Canadian utilities as they face up to power deregulation and there is doubt about which method will be successful.

Proposals to produce natural gas in Canada’s far north, and Alaska’s North Slope, and to run pipelines to markets in the US are more substantive than earlier schemes.

Growing environmental concerns, and uncompetitive legal and fiscal regimes are an obstacle to development in some countries.

THE ORINOCO extra-heavy oil belt is thought to contain over 1.3 trillion barrels of oil, of which at least 270bn are calculated to be recoverable with current technology. The technical and financial challenges of exploiting this vast resource were far beyond the capacity of the nation’s oil industry.

The authorities have improved the fiscal terms for the hydrocarbons sector in an effort to enhance the prospects for a new licensing round after the failure of the third round, reports Michael Sterling from Cape Town

Development of the Azadegan oilfield is seen as gauging foreign appetite for Iran’s upstream sector in 2000.

Most energy companies have invested heavily over the last few years in IT systems to support their trading activity, but despite this automation, many companies are unaware that incorrect data are a constant Achilles’ heel, writes Mark Powell, of Saladin

For some time, energy companies have sought a more holistic approach to risk management, forcing insurers to underwrite a wider array of business risks with increasingly complex solutions. In the UK, the advent of new corporate governance legislation is likely to fuel this trend. Risk engineering may be the solution, says Fulvio Caldelari, head of risk engineering, at Zurich Energy.

The UK’s tax authorities have agreed to delay the introduction of new guidelines for the tax treatment of equity swaps, an obscure and complex operational activity for UK North Sea oil producers.

African energy ministers, US government officials, representatives from the US’s private sector and other interested parties met recently in Tucson, Arizona, in an effort to direct more investment to Africa.

CROSS-BORDER MERGERS and acquisitions in the global electricity sector rose in number by more than a third for the second consecutive year in 1999, but their value decreased from a high of almost $50 billion in 1998, by nearly a quarter, to $37.9 billion. The figures, released by PricewaterhouseCoopers in its annual analysis of M&A activity in the industry, show a total of 124 major deals were struck last year, up 35 per cent for the second year running. The average size of disclosed deals fell from $740 million in 1998 to $440 million last year.

While quantification and measurement are important pieces in developing an understanding of the complete operational risk picture, there is no substitute for making certain the operational risk “basics” are firmly in place

Windpower is one weapon in the arsenal to combat global warming. But its “Gucci” image - perpetuated by its relatively high price - is holding it back. So, how can its critics be swayed?

Ernest S. Liu, who headed the coverage of the electricity industry for Goldman Sachs Group, has announced his retirement after 27 years at the firm.

Reliability is currently the hot issue in the US restructuring debate. With a comprehensive deregulation bill due this year, Congress has a prime opportunity to address the issue. Two industry views are presented here

Deregulation of the energy markets has opened countless opportunities for the sharp-minded business player. During this transition though, clear strategies for asset management are crucial for future success

After facing an almost terminal economic collapse at the end of the 1980s, India has made strenuous efforts to restructure the electricity sector. But where is this leading the industry in the 21st Century?