The state of Alaska will have less money to spend than expected next year due to a revised estimate of North Slope oil production and fewer tax dollars coming in, state analysts said.
The Department of Revenue spring forecast, which lawmakers use to craft the state budget, predicted Thursday that the state will bring in $364 million less than expected over the next fiscal year, which starts July 1.
The larger-than-expected decline would slash next year's projected budget surplus, which was pegged at $500 million. It now looks to be closer to $200 million and that's only because the report Thursday says the state will bring in $68 million more than expected this fiscal year, which ends June 30. That surplus could be carried over to help offset the projected decline.
Lawmakers warn that trend also could mean the state will be spending more than it earns by fiscal year 2009 as oil production on the North Slope continues a steady decline.
"I thought the oil fairy would save us again in '09 but what we are finding is that it isn't," said Sen. Gary Wilken, R-Fairbanks. "And as we move up and down we are going to find we are in a deficit situation."
Revenue Commissioner Pat Galvin said estimated revenues from oil were revised in three ways since a forecast last fall:
-- State economists opted for a more conservative estimate of oil production because of concerns arising over the Prudhoe Bay shutdown last fall due to leaks from corroded pipes.
"The likelihood of things occurring is greater given that we have a 30-year-old field," said chief economist Michael Williams. Williams also said the revised production estimate reflects problems in counting the barrels of oil from various fields after oil was rerouted to other lines in the wake of the spill.
-- Expected revenues from the new oil tax were lowered when the petroleum production tax payments, which brought in an extra $1 billion over the old tax plan, came in earlier this month at about $90 million less than expected.
The state underestimated operating costs that oil companies would be deducting by about 50 percent while overestimating their capital costs by about 15 percent.
-- State officials also underestimated the amount of credits oil companies would claim under the next tax scheme this year. They now expect companies to claim those credits next year.
The Revenue Department predicts the general fund will have earned a record $4.98 billion by June 30, the end of fiscal year 2007.
But it's not so rosy for next year, when earnings will only bring in $3.5 billion.
Analysts attribute the drop to declining oil prices and the rising cost of shipping oil to the West Coast. Royalties and taxes from North Slope crude make up about 85 percent of the state's revenues.
Meanwhile, the state's long-term forecast continues to look grim.
Though oil production this year is projected to be higher than last year, barring another major disruption, it is on the decline overall.
Revenue officials forecast that production will sink to 682,000 barrels a day by the year 2016 as compared to 764,000 barrels a day next year. That's compared to a peak of 2 million barrels a day in 1988.
Oil prices are also projected to fall over the long term, though prices have been notoriously volatile in recent years.
Gov. Sarah Palin's budget director, Karen Rehfeld, said the state's long-term prospects point to the need to bring Alaska's natural gas to market.
"We struggle because we have so many things that need to get done in this state and there's a lot of pressure on those revenues," Rehfeld said. "And until we get a long-term stable funding source, we are going to have some challenges."
Siberian Energy Group, Inc. announced today that the Company is scheduled to present at The Independent Petroleum Association of America's (IPAA) Oil and Gas Symposium, April 23-25, 2007 at the Sheraton NY Hotel and Towers in New York City.
David Zaikin, Chairman and Chief Executive Officer of Siberian Energy, will give a presentation on the Company followed by a question and answer session on Wednesday, April 25, at 3:20 p.m. EDT. The presentation will be broadcast live over the Internet and will be archived for 12 months. Interested parties may listen to the presentation by visiting the Company's website at: www.siberianenergy.com.
In addition, Siberian Energy will host breakfast roundtables for investors between 7:45 and 8:30 a.m. EDT, on Tuesday, April 24, and Wednesday, April 25.
Siberian Energy's Joint Venture with Baltic Petroleum (E&P) Limited, Zauralneftegaz (ZNG) and Siberian's wholly owned subsidiary, Kondaneftegaz (KNG), hold oil and gas exploration licenses covering over one million acres, strategically located in the Kurgan and Khanty-Mansiysk regions of West Siberia. The West Siberian region accounts for 70% of oil production and 90% of natural gas production in Russia and 7% of global oil production.
In January 2007, ZNG began exploratory drilling on its first well, Privolny 1, and expects to report initial results in the second quarter of 2007. The location for a second well, Privolny 2 -- is being determined. In addition, preparations are being made to drill in the southwest of the Mokrousovsky parcel, which is one of the seven blocks covered by ZNG's exploratory licenses.
More recently, KNG applied for nine oil and gas licenses, and is anticipating final approval for four of these in the second quarter of 2007. These prospective license areas have several competitive advantages through their proven oil deposits, proximity to a previously developed river transportation system (through which KNG will be able to deliver equipment for the wells) and proximity to major oil and gas pipelines.
About IPAA
Founded in 1929, The Independent Petroleum Association of America (IPAA) is the national association representing the thousands of independent crude oil and natural gas explorer/producers in the United States. The IPAA Oil & Gas Investment Symposium New York (OGIS New York) is the premier outlet for publicly traded independent exploration and production, and service and supply companies to present their company profiles to the investment community. Last year's Symposium attracted over 1,600 attendees, including more than 700 buy/sell-side analysts and portfolio managers and 100 presenting companies.
About Siberian Energy Group, Inc.
Siberian Energy is a unique, U.S.-based public oil and gas exploration company with 100% of its assets located in West Siberia, Russia. The Company evaluates investment and acquisition opportunities in Russia and Eastern Europe with the goal of bringing a portfolio of natural resource licenses and operating companies to Western investors. Siberian Energy strives to provide an attractive ROI to shareholders by pursuing high-yield investment projects, reducing costs, and adhering to strict principles of transparency, disclosure and environmental consciousness. Additional information may be found at www.siberianenergy.com.
The forward-looking statements contained herein are subject to certain risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis only as of the date hereof. The company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date thereof, and also takes no obligation to update or correct information prepared by third parties that are not paid for by the company. Readers should carefully review the risks described in other documents the company files from time to time with the Securities and Exchange Commission, including Annual Reports, Quarterly Reports and Current Reports on Form 8-K.
Contact:
Contacts:
Siberian Energy Group, Inc.
David Zaikin
Chief Executive Officer
Tel: 212-828-3011
Email: Email Contact
The Global Consulting Group
Rachel Levine
Investor Relations
Tel: 646-284-9439
Email: Email Contact
Ivette Almeida
Media Relations
Tel: 646-284-9455
Email: Email Contact
Source: Siberian Energy Group, Inc.
Oil prices were mixed in Asian trading Friday ahead of the May futures contract's expiry.
Light, sweet crude for May delivery, due to expiry later Friday, rose 31 cents to $62.14 a barrel on the New York Mercantile Exchange midafternoon in Singapore.
"Today's modest rise comes due to short-covering ahead of expiry later, while June, July contracts are down on roll-over from May," said Ken Hasegawa of Tokyo brokerage Himawari CX. Short positions are bets that prices will fall, and when traders cover, or buy back, those short sales, prices rise.
The June contract, which moves to the front month Monday, slipped 17 cents to $63.15. Hasegawa said June crude prices are likely to remain lower with little news to prompt fresh buying.
Brent crude for June slipped 4 cents to $65.90 a barrel at London's ICE Futures exchange.
The May contract tumbled more than $1 Thursday to a one-week low, settling at $61.83 a barrel, as traders focused on inventory buildups at a key Oklahoma oil terminal.
Also stoking inventory concerns was Enbridge Inc.'s announcement that it reopened a pipeline that had been closed due to a leak on Sunday. The line is used to move crude oil from Canada to the Midwest.
Prices were also weighed down by a consultant's report that
Iraq oil reserves could be much larger than initially expected, and reports that China may take more serious steps to slow its economic growth, using less oil. China's gross domestic product grew 11.1 percent in the first quarter.
Crude oil prices have slumped more than 6 percent since March 29, when they hit a six-month closing high on concern
Iran's capture of 15 U.K. marines and sailors could lead to armed conflict.
Geopolitical factors continue to be a concern for the market as traders look to the situation in Nigeria, where there have been scattered reports of violence this week ahead of Saturday's presidential elections.
Nigeria is the world's eighth-largest oil exporter and a main supplier to the United States. Last week, 21 Nigerians were killed in violence surrounding state elections.
In other Nymex trading, heating oil futures fell marginally to $1.8024 a gallon while natural gas prices dropped 2.6 cents to $7.466 per 1,000 cubic feet.
Toronto stocks headed for a higher open on Friday, reversing some of the previous session's sharp losses, as a rally in oil prices and merger and acquisition frenzy help the resource-laced market shake off concerns over interest rate hikes in commodities-hungry China.
On the M&A front, mining company Dynatec Corp. will be in the spotlight after rival Sherritt International Corp. launched a friendly takeover bid worth C$1.6 billion.
"The mining sector is ripe for a series of takeovers," said Joe Ismail, technical analyst at Maison Placements Canada. "We will see the consolidation wave reaching the junior gold miners as well as the junior energy stocks in the next 12 months."
In the telecom sector, BCE Inc. will be in focus again after The Globe and Mail said New York-based private equity firm Kohlberg Kravis Roberts is eyeing control of one-third of the company. Earlier this week, BCE said it was in talks with major Canadian pensions funds and KKR over a potential going private transaction.
Also on the mergers and acquisition front, Groupe Laperriere & Verreault will attract investor attention after saying it will sell its mineral business to Danish engineering group FLSmidth for about C$950 million and spin off to shareholders its water treatment and pulp and paper units.
On the commodities front, the TSX energy group, which makes up nearly 30 percent of the composite index, will find support in buoyant oil prices. U.S. crude oil futures gained 80 cents, to $62.63, bouncing back from a recent slump.
On the earnings front, Corel Corp. will be in focus after reporting a larger quarterly loss after the bell on Thursday as operating expenses surged, but the results still topped forecasts.
The S&P/TSX composite index tumbled 1 percent, or 137.26 points on Thursday, to close at 13,574.70 as fears of interest rate hikes in China that could dampen demand for commodities sent Toronto's main index retreating from record highs, along with other major equities market around the world.
($1=$1.13 Canadian)
Oil prices rose early Friday ahead of the weekend presidential election in Nigeria where gunmen attacked a boat carrying oil workers near the nation's southern oil region.
Traders also were positioning ahead of the May contract's expiration on Friday, which kept the June contract gains minimal.
The electoral period in Nigeria — Africa's largest oil producer and a main supplier to the United States — has been chaotic. At least 49 people have died in violence since April 14 and many more were reported dead in political violence before last weekend's state vote.
Officials said Friday that gunmen attacked a boat carrying oil workers to an offshore rig in waters off Nigeria's unruly south, wounding six, officials said. Security forces drove off the attackers, a private security official said.
Light, sweet crude for May delivery rose 65 cents to $62.48 a barrel in morning trading on the New York Mercantile Exchange. The June contract, which moves to the front month Monday, rose 12 cents to $63.44.
Brent crude for June rose 26 cents to $66.20 a barrel at London's ICE Futures exchange.
"With so many reasons for there to be short-covering ... it would be natural for prices to advance briskly on what everyone will say are fears over Nigeria's weekend election," said Peter Beutel of Cameron Hanover.
"If that happens, then this market still has the ability to rise on this type of news. And, since that ability correlates much more closely with bullish markets, price strength on Nigeria fears today could tell us we are still in a bullish market."
More than 150 foreigners have been kidnapped over the past year in Nigeria's southern region where crude is pumped in Africa's largest producer. Stepped-up violence has trimmed Nigeria's daily production by about one quarter, helping send global crude prices higher.
In other Nymex trading, heating oil futures rose less than a cent to $1.8091 a gallon, while natural gas dropped 13.2 cents to $7.360 per 1,000 cubic feet. Gasoline futures rose 1.32 cent to $2.1020 a gallon.
The price increases came after an abrupt drop the day before. The May contract tumbled more than $1 Thursday to a one-week low, settling at $61.83 a barrel, as traders focused on inventory buildups at a key Oklahoma oil terminal.
Also stoking inventory concerns was Enbridge Inc.'s announcement that it reopened a pipeline that had been closed due to a leak on Sunday. The line is used to move crude oil from Canada to the Midwest.
Prices were further weighed down by a consultant's report that
Iraq oil reserves could be much larger than initially expected, and reports that China may take more serious steps to slow its economic growth, thus using less oil. China's gross domestic product grew 11.1 percent in the first quarter.
Crude oil prices had slumped more than 6 percent since March 29, when they hit a six-month closing high as
Iran's capture of 15 U.K. marines and sailors raised fears of an armed conflict.
Oil prices rose nearly $1 a barrel Friday ahead of the weekend presidential election in Nigeria, where gunmen attacked a boat carrying oil workers near the nation's southern oil region.
Traders also were positioning ahead of the May contract's expiration on Friday, which kept the June contract gains minimal.
The electoral period in Nigeria — Africa's largest oil producer and a main supplier to the United States — has been chaotic. At least 49 people have died in violence since April 14 and many more were reported dead in political violence before last weekend's state vote.
Officials said Friday that gunmen attacked a boat carrying oil workers to an offshore rig in waters off Nigeria's unruly south, wounding six, officials said. Security forces drove off the attackers, a private security official said.
Light, sweet crude for May delivery rose 97 cents to $62.80 a barrel in midday trading on the New York Mercantile Exchange. The June contract, which moves to the front month Monday, rose 39 cents to $63.71.
Brent crude for June rose 31 cents to $66.25 a barrel at London's ICE Futures exchange.
"With so many reasons for there to be short-covering ... it would be natural for prices to advance briskly on what everyone will say are fears over Nigeria's weekend election," said Peter Beutel of Cameron Hanover.
"If that happens, then this market still has the ability to rise on this type of news. And, since that ability correlates much more closely with bullish markets, price strength on Nigeria fears today could tell us we are still in a bullish market."
More than 150 foreigners have been kidnapped over the past year in Nigeria's southern region where crude is pumped in Africa's largest producer. Stepped-up violence has trimmed Nigeria's daily production by about one quarter, helping send global crude prices higher.
In other Nymex trading, heating oil futures rose 1.31 cent to $1.8189 a gallon, while natural gas dropped 11 cents to $7.382 per 1,000 cubic feet. Gasoline futures rose 1.72 cent to $2.1060 a gallon.
The price increases came after an abrupt drop the day before. The May contract tumbled more than $1 Thursday to a one-week low, settling at $61.83 a barrel, as traders focused on inventory buildups at a key Oklahoma oil terminal.
Also stoking inventory concerns was Enbridge Inc.'s announcement that it reopened a pipeline that had been closed due to a leak on Sunday. The line is used to move crude oil from Canada to the Midwest.
Prices were further weighed down by a consultant's report that
Iraq oil reserves could be much larger than initially expected, and reports that China may take more serious steps to slow its economic growth, thus using less oil. China's gross domestic product grew 11.1 percent in the first quarter.
Crude oil prices had slumped more than 6 percent since March 29, when they hit a six-month closing high as
Iran's capture of 15 U.K. marines and sailors raised fears of an armed conflict.
Biotechnology was first applied in medicine, then farming. Today, dozens of lifesaving drugs are on the market, while many crops are genetically engineered to withstand weed killers.
Now, a 2-year-old push to develop alternative fuels is driving biotechnology's growth into the industrial sector.
Thousands of corporate executives and scientists gather this weekend in Orlando, Fla. for an industry trade show specifically aimed at touting biotechnology's so-called third wave, industrial applications. The word on everyone's lips: ethanol.
After decades of unfulfilled promise and billions in government corn subsidies, energy companies may finally be able to produce ethanol easily and inexpensively thanks to breakthroughs in biotechnology.
Most of the 5 billion gallons of ethanol produced annually in the United States is still made by fermenting corn, but the crop is expensive and its use in biofuels cuts into the nation's food supply. So the Canadian biotech company Iogen Corp. has developed a method for deriving ethanol from a variety of plants including wheat, oats and barley. Others are genetically engineering microbes to produce enzymes that will convert the cellulose in crop waste, wood chips and other plants into ethanol.
President Bush helped breathe new life into this once-sleepy biotech sector by touting the need to ramp up production of this "cellulosic ethanol" in his last two State of the Union speeches.
The president wants to reduce the country's oil consumption by 20 percent within 10 years and he sees alternative fuels as the way to get there. Bush visited the North Carolina biotechnology company Novozymes Inc. last month to underscore the industry's vital role in accomplishing that ambitious goal.
Government agencies led by the Department of Energy are sinking millions into biotech projects aimed at making ethanol more efficiently. And startups dedicated to turning plants into fuel have captured the fancy of deep-pocketed venture capitalists like Vinod Khosla. The billionaire co-founder of Sun Microsystems Inc. is investing hundreds of millions of dollars in green technology and will be a featured speaker this year at the World Congress on Industrial Biotechnology & Bioprocessing.
Other heavy hitters attending the conference include University of California scientist Jay Keasling, Discover magazine's Scientist of the Year in 2006 and a leader in the burgeoning "synthetic biology" field, which aims to create living species that will spit out drugs and fuel.
Oil companies are also investing heavily in biotechnology these days, and executives from ConocoPhillips Co., Chevron Corp. and Shell Oil Corp. will also be on hand at Walt Disney World for the conference, which starts Thursday.
By contrast, these annual gatherings have historically been sleepy affairs. Last year's industrial biotech meeting, sponsored by the Biotechnology Industry Organization, drew little interest even though it was held in Hawaii in January. That state's lieutenant governor may have been the biggest draw.
Past conferences have featured discussions on topics like biotech's role in manufacturing enzymes used to help laundry detergent break down dirt and give blue jeans the stone-washed look. But this year's meeting will be focused on the industry's role in making ethanol and other alternative fuels.
The DOE has awarded up to $385 million over four years to six companies to develop ethanol.
"We are moving into a very diversified fuel era," said Ron Pernick, who co-founded Portland, Ore.-based Clean Edge, which tracks venture capital investment. "Private investment is really taking off."
Pernick said venture capital investment in biofuels has increased from less than $1 million in 2004 to $20.5 million in 2005 to $813 million last year. Much of that investment is flowing to biotechnology companies that genetically engineer microbes that produce enzymes needed to break down crops into alcohol.
At least one industrial biotechnology company has radically remade itself into an energy company in hopes the alternative fuel craze is here to stay.
San Diego's Diversa Corp., which has lost $329.5 million since its inception in 1994, bought the Cambridge, Mass.-based ethanol company Celunol in January for $154.7 million in stock, plus debt financing. The Celunol management team will take over the new energy company once the deal is approved.
Still, even industrial biotechnology's adherents concede that commercial success in the alternative energy industry is years away if ever.
"Taking any invention from the lab to the marketplace is a long-term process and takes a lot of patience," said Celunol spokesman John Howe, who said the company's plan to convert sugar cane into ethanol will take many years to become profitable.
Others wonder if trend to making more ethanol has created a bubble that may soon burst.
Economist Lester Brown, who launched the Washington-based think tank Earth Policy Institute, said it's easier to make automobiles more fuel efficient than it is to radically alter the country's fuel supply.
"If we were to raise fuel efficiency standards, we could save as much oil as the president wants," Brown said. "Ethanol is not a winning ticket."
source news : truthabouttrade.org
