Saudi Arabia's central region had a significant find, judging by tests and field outlines.

Finally: some big oil. The past month or so has seen some very interesting discoveries. The most public has been the Central Utah Covenant field. The media have been hyping the find, which is guessed to contain at least 100,000,000 bbl of recoverable, good-quality 40¡ API oil. At the extreme optimism end is Doug Strickland, a geologist for the company. “I honestly expect that we’ll find another 10 fields out there and that this is going to be a billion-barrel province,“ said Strickland. But that’s a long way from being proven. If true, it would be the largest US discovery on land in 30 years.
What makes this so odd and exciting it that Central Utah has been explored for 50 years without success, with nearly 60 dry wells drilled in just the past 25 years. Equally intriguing is the fact that the leaseholder is a small, privately held independent, Wolverine Gas & Oil, based in Grand Rapids, Michigan, with 25 employees. The company bought 65,000 acres of leases, with exploration data, from Chevron in 1999. After careful study of the prospect potential, the company tried to find major partners for two years. Unsuccessful, but undaunted, Wolverine put together a collection of private investors and small companies and went to work, worldoil.com said.
The 17-1 Kings Meadow Ranch well, near Sigurd, 130 mi south of Salt Lake City, hit 1,000 ft of sandstone pay in late 2003. It began producing in May 2004. An appraisal, Wolverine-Federal 1, is also producing. Both are reported to be making a modest 850 bopd, which is quite good by Utah standards. Five wells have been drilled so far, and all of them appear to be producers. The closest producing well is a pipsqueak, 45 mi to the southwest. More significant production lies 120 miles to the northeast in different geology. The structure--actually an area comprising a series of hanging wall anticlines in Jurassic sandstone--is about 25 mi wide and 75 mi long, along the deformation front of the Central Utah Overthrust.
The company kept the discovery quiet for 15 months, buying up leasing rights to a half-million acres. Now, a rush is on, with Seiver and surrounding counties inundated with landmen and others looking at land and records. Lease acreage is now selling for $45 to more than $1,000 an acre. The company says it will be drilling another wildcat “within 25 miles“ later this year.
Saudi Arabia’s central region had a significant find, judging by tests and field outlines. Saudi Aramco said the discovery, the Du’eiban-1 well, which lies about 78 mi southeast of Riyadh, should produce 3,300 bopd of sulfur-free 41¡ API oil and 3 MMcfd gas, from a 10,260-ft depth zone.
Another big discovery, again judging from tests and field outlines, was found 200 mi south of Dahran in eastern Saudi Arabia. The Halfa-1 well tested 6,000 bpd of 36¡ API oil and 4.2 MMcfd gas, through a 48/64 choke.
On Alaska’s North Slope, Kerr-McGee and partner, Armstrong Oil and Gas Co., announced discoveries offshore Alaska, in shallow state waters of the Beaufort Sea near Spy Island, north of Milne Point and Kuparuk River fields. The Nikaitchuq-4, a horizontal appraisal, tested at rates up to 1,200 bpd of 16¡17¡ API oil from the Schrader Bluff formation. That reservoir was also encountered 3 mi west, in the Tuvaaq well. Based on those results, the company is drilling a sidetrack well named Kigun.
No test results were announced for Tuvaaq, but based on results so far, “It appears the Schrader Bluff interval might be developed throughout much of our 36,000 acres in the Nikaitchuq and Tuvaaq areas,“ said Dave Hager, Kerr-McGee’s senior vice president for E&P. Last year, the discovery well, Nikaitchuq-1, tested 38¡ API oil.
Kerr-McGee is also finding higher gravity oil in other intervals on the same leases. The company is drilling other appraisals and exploration wells, to test the Sag River formation in the area. Together, the finds could add to as much as 60 million bbl.
Pioneer Natural Resources Co., also in partnership with Armstrong, found similar high API oil in discoveries made in shallow Beaufort Sea waters near where Kerr-McGee drilled last winter. Pioneer is still evaluating its discoveries.
North Slope heavy oil potential. In a related story, Alaskan oil production has been on a steady, moderately paced decline that will likely continue. Heavy oil resources could underpin the long-term viability of the North Slope region, including the TAPS pipeline system. So far, this oil has been largely unrecoverable.
Prudhoe Bay is easily the largest oil field ever found in North America, with Kuparuk River being the US’ second largest oil field by production. But these fields are dwarfed by the heavy oil formations overlying the main producing zones at Prudhoe and Kuparuk. As much as 36 billion bbl of original-oil-in-place lie within the Ugnu, West Sak and Schrader Bluff formations--more than the OOIP of Prudhoe and Kuparuk combined.

The EU plans to pursue legally binding restrictions.

The European Union says it will push for legally binding global restrictions on greenhouse gas emissions.
A spokeswoman’s comments came after the announcement of a voluntary pact, based on new technology, between the US and five Asia-Pacific states.
She also told BBC News that the new pact was unlikely to bring a significant reduction in emissions.
The EU’s intention to pursue further legally binding reductions could lead to political disputes later this year, bbc.co.uk reported.

’Superior’ Deal
The new pact will allow signed-up countries--currently the United States, Australia, China, India, South Korea and Japan--to set goals for reducing greenhouse gas emissions individually, with no enforcement mechanism.
The core approach is to develop clean technologies, such as low-emission coal-fired power stations, which can be used in developing countries as their energy needs increase.
The signatories argue it complements, rather than weakens, the 1997 Kyoto agreement, which imposes targets on industrialized countries to cut their emissions.
Speaking at the announcement, which came during the Regional Forum of the Association of South-East Asian Nations (ASEAN) in Laos, US Deputy Secretary of State, Robert Zoellick, said the six nations “view this as a complement, not an alternative“ to Kyoto.
Both the US and Australia have refused to ratify Kyoto, which came into effect earlier this year--partly, they say, because big developing countries like India and China escape emissions limits.
Australian Foreign Minister Alexander Downer told BBC News: “Our view is you really need to focus on technological change to solve the climate change problem... and you do have to involve the major developing countries, which are very substantial emitters.“
A Chinese spokesman called the pact a “win-win solution“ for developing countries.
But environmental groups argue that the new agreement undermines the Kyoto Protocol, and will make the process of agreeing a successor treaty more difficult. The Geneva-based Worldwide Fund for Nature (WWF) said: “A deal on climate change that doesn’t limit pollution is the same as a peace plan that allows guns to be fired.“

’No Substitute’
The European Commission’s environment spokeswoman Barbara Helferrich told the BBC News website that Europe remained committed to further legally binding reductions in emissions.
“We welcome any initiative that can combat climate change, but this has to be seen in a global context,“ she said.
“If it is simply technology and clean coal, it is no substitute for agreements like the Kyoto Protocol and we do not expect it to have a real impact on climate change.
“There will have to be binding global agreements, but on what scale and what basis is yet to be decided.“
The designated forum for making those decisions is the next round of United Nations climate negotiations, which opens in Montreal in November-- shortly after the Asia-Pacific grouping holds its first meeting in Adelaide.
There is concern in environmental circles that the United States and Australia will present the new pact as evidence that a “son-of-Kyoto“-style treaty is not needed.
Europe, which for many years has been the leading pro-Kyoto force, is unlikely to agree.

A soldier is reflected in a pool of oil while on patrol in Iraq.

Given how much political steam it has generated, experts say that President George W. Bush’s flagship energy policy will do little to address America’s reliance on foreign oil or its gas-guzzling excess.
A hefty 1,724-page energy bill now awaits Bush’s signature after going through Congress last week to end one of the most drawn-out political dramas of his four years in office.
The president staked his personal prestige on enacting a measure that he says will address one of the most serious national security problems facing the nation--its dependence on oil from the volatile Middle East.
Foreign oil accounts for 58 percent of total consumption in the United States. That figure will rise to 68 percent by 2025, according to government projections, according to AFP.
Philip Clapp, president of the National Environmental Trust, said all sides of the rancorous debate that accompanied the energy bill’s passage had missed the point.
“Both Republicans and Democrats are completely paralyzed in addressing the nation’s three big energy challenges--reducing our dependence on Middle East oil, reducing gasoline prices for consumers, and beginning to shift our economy to renewable energy technologies,“ he said.
“On all three issues, the bill is a big fat zero.“
Jerry Taylor, director of natural resource studies at the free-market Cato Institute, said the bill was a case study in special-interest politics from an administration that, from Bush down, is not short of former oil men.
“The bill is larded with subsidies, tax preferences and miscellaneous handouts to an energy industry that--with prices this high--are in no need of taxpayer assistance,“ he said.
The legislation, which Bush says he will soon sign into law, includes 14.5 billion dollars in tax breaks over the next 10 years, mostly for coal, oil, natural gas, nuclear and utilities.
But it also includes incentives to develop alternative energy sources such as wind and water, along with tax breaks for hybrid cars powered by gasoline and electricity.
The final bill was shorn of several of Bush’s key goals, including opening an untouched Arctic wildlife reserve in Alaska to oil drilling.
Analysts said the legislation will do nothing to make US cars more fuel-efficient, the single biggest measure that could rein in the influence of imported oil to the US economy.
“Everyone agrees that that really has to be a component of a serious policy to reduce imports,“ said Rick Mueller, senior oil analyst at ESAI Energy Security Analysis.
“The winners really are the energy industry,“ he said.
Even the bill’s supporters have toned down their rhetoric of what the measure can achieve in the short term, playing down hopes that it will reduce record-high petrol pump prices.
“It is a good first step,“ said Representative Richard Pombo (news, bio, voting record), the Republican chairman of the House resources committee.
“It’s a way to move forward. There is a lot of things that we were able to get into this bill that over a period of time will increase domestic production,“ he said.
The bill foresees a stock-take of offshore oil deposits lying off the US coasts. Environmentalists fear that will open the way to exploration in areas that are currently protected.
The Arctic National Wildlife Refuge may yet be tapped for the 16 billion barrels of oil that the White House says lies under it--more than the oil of Texas, Louisiana, Florida, Nevada, Utah, Idaho and New Mexico combined.
The administration hopes a budget measure passing through Congress in the autumn would enable “responsible development“ of the 19.6 million acre (7.9 million hectare) region.

An oil company has said it plans to drill for gas off the Pembrokeshire coast--the first commercial drilling off Wales for 11 years.
Marathon Oil plans to invest £12m drilling 21 miles off Milford Haven.
The company said the gas reserves--which were not commercially viable in 1994--are now more valuable due to increases in energy prices.
A drilling rig is due to be moved into position in the Irish Sea to begin the operation in early October.

Increased Prices
Marathon Oil, which has interests in the North Sea, Norway and the Kinsale Oil field off Ireland, first explored the Dragon Field, off Milford Haven in 1994, but drilled just one well before deciding the venture was not commercially viable, bbc.co.uk said.
But a spokesman for the company said that the gas reserves are now more attractive because of increases in energy prices.
The company added that plans to develop Milford Haven as a UK energy industry hub had encouraged them to take a new look at the area.
Drilling will take place at a point 21 miles off St David’s Head--on the median line between Wales and Ireland.
Marathon’s project manager for the Dragon Field, Mike O’Neill, said developments in Milford Haven in the energy industry gave the company access to potential markets.
He added: “There is great potential that Milford Haven will become one of the major liquefied natural gas hubs for the UK.
“The fact that the LNG plants are being built there means that the national grid will be extended from it’s point outside Swansea to Milford Haven which gives us potentially direct access into the market place.
“There is potential that gas-fired power stations will be also built in that area which gives us access to a local market.“
’Renewable energy’
Environmental pressure group Friends of the Earth Cymru said it was important the project would not have an impact on wildlife in the Irish Sea, but added it believed gas was cleaner than some other forms of energy.
Spokesperson Gordon James said: “Although priority must be given to renewable energy systems, such as wind, water and solar power, there is a role for gas as it is cleaner than oil and coal.
“It is also imperative that no harm is caused to wildlife like dolphins and porpoise in the Irish Sea by the extraction of gas 20 miles off the Pembrokeshire coast.“
The gas drilling proposals follow plans by Malaysian company Petronas to ship LNG--gas cooled down to liquid form to make it easier to transport--from all over the world to two new terminals in Milford Haven.
The proposed development would turn Milford Haven into a major centre for importing LNG.
The increase in traffic could also see Milford Haven become one of the UK’s busiest ports.