UK Ministry of Defense Deems Wind Towers a National Security Threat

UK Ministry of Defense Deems Wind Towers a National Security Threat Twenty-plus years on, the collapse of the USSR in 1991 threatened massive Western defense budgets, bereft of a major enemy like the “Evil Empire.” Western militaries conveniently found a new global enemy a decade later following the terrorist attacks on 11 September 2001, and since then, they have struggled in the light of invasions of Iraq and Afghanistan to adapt their strategies to cope with the new threat, making defending the “homeland” the highest priority. While the U.S. created the “Department of Homeland Security,” Washington’s less prosperous European allies have been forced to seek solutions to indigenous defense largely by themselves beyond NATO. Except that the NATO charter Chapter 5 stipulates that an attack upon a member state will be met by the entire coalition. European democracies have scrambled to define both national and European Union security issues, particularly since the global economic downturn, which began in 2008, forcing hard choices amongst European defense ministries. Furthermore, many European nations now have significant post-colonial immigration populations, ramping up security concerns, from both indigenous citizens and ongoing concerns of foreign aggression. Defending the United Kingdom’s territorial, maritime and aerial space is the primary mission of Britain’s Ministry of Defense. A laudable objective, but, in a time of declining MOD revenues amid energy imports, perhaps, a wind farm too far? Needless to say, security encompasses protecting the country access to energy, so anything that reduces the kingdom’s dependency on foreign energy imports must be a good thing, correct? Apparently not. The latest threat to Britain? Wind power, apparently. The MOD has come out against two proposed 115 foot wind power towers in Cornwall, which they assert are so big they could look like planes on monitoring equipment. The MOD assert that the wind towers green energy devices could confuse computer systems designed to protect the UK and identify the turbines as a threat , triggering the MOD to send in fighter aircraft to investigate, and while the RAF was preoccupied, allowing real enemies to sneak into British airspace, and accordingly, are against their construction. The unpatriotic British citizens attempting to undermine British aerial defense are Richard and Ian Lobb, who want to install the 50 kilowatt towers on their adjacent farms in St Ewe, Cornwall. The ever vigilant MOD which warned the installation would cause "unacceptable interference" to an air traffic control radar 30 miles away in Wembury, Devon. According to the MOD, "Wind turbines have been shown to have detrimental effects on the performance of MoD ATC radars. These effects include the desensitisation of radar in the vicinity of the turbines, and the creation of 'false' aircraft returns which air traffic controllers must treat as real. The desensitisation of radar could result in aircraft not being detected by the radar and therefore not presented to air traffic controllers. The creation of 'false' aircraft display on the radar leads to increased workload for both controllers and aircrews and may have a significant operati onal impact. Furthermore, real aircraft returns can be obscured by the turbine's radar returns, making the tracking of conflicting, unknown aircraft much more difficult." A tad of history and geography here. Radar installations along the English Channel were crucial in Britain winning the crucial Battle of Britain in 1940 against Hitler’s Luftwaffe, so Britain’s RAF is hardly unfamiliar with the principles of radar, more than seventy years later. Secondly, how does a stationary object generate a hostile radar signature, unlike an incoming aircraft moving at hundreds of miles per hour? Thirdly, virtually all of the RAF’s interception missions during the Cold War and after were against Soviet, and now Russian military aircraft approaching from the northeast, across the North Sea. Cornwall, in Britain’s extreme southwest, is geographically rather distant from this area. So, who’s to send the threats? France? Spain? Argentina? The people of Cornwall deserve their green energy, and the MOD officials should be chastised for their ramping up of a non-existent problem. The Armada was over four centuries ago, World War Two over 70 years ago – the people of Cornwall deserve electricity from renewable energy sources, as it hardly seems to be a threat to national security beyond those MOD boffins who have apparently spent too much time at the pub over lunch hour. Source: http://oilprice.com/Alternative-Energy/Wind-Power/UK-Ministry-of-Defense-Deems-Wind-Towers-a-National-Security-Threat.html By. John C.K. Daly of Oilprice.com

Is Tunisia the New Hot Spot for Energy Investors? Interview with John Nelson

Is Tunisia the New Hot Spot for Energy Investors? Interview with John Nelson Until recently Tunisia was considered to be a minor league and relatively underexplored venue in Africa's rapidly expanding oil & gas scene. This situation has quickly changed with new bid rounds and forced relinquishments creating an opportunity for new companies to come in. Major American E & P companies like Shell have jumped at the opportunity to acquire ground that had been dominated for decades with little to no work conducted, mostly by European State oil & gas companies in this former French protectorate. For the first time major spending has been committed to test Tunisian basins which are arguably equally prolific as those in neighbouring environments with more work performed, such as Libya. Tunisia is now in focus for investors because exploration is increasing within the producing Pelagian Basin, which leads us to ask the following questions: Should Tunisia now be on energy investors watch list? Is Shell just the start of “big oil” making inroads into the country? And which are the plays that people should be watching? To help us look at the developing situation in the region we managed to speak with oil industry veteran John Nelson. John Nelson is CEO of Canadian-listed Africa Hydrocarbons Inc. (NFK). A veteran geologist, Nelson spent much of his career in East and Central Africa—much of it for Mobil Oil--studying regional and mapping rift basins at a time when no one else was shopping around in Africa's interior. Over his 27 years in the industry, Nelson has also had junior E & P experience, recently serving as CEO for Lion Energy Corp., which was bought out by Africa Oil Corp 'AOI' in 2011 as a way for AOI to gain access to their impressive Kenyan land package that John had put together. Africa Hydrocarbons Inc has a 47.5% interest in the Bouhajla Block, located onshore Tun isia and surrounded by major Shell Oil. In an exclusive interview with Oilprice.com, Nelson discusses: What makes Tunisia a great game for the juniors How Tunisia's geology compares to the East African Rift What's hot in Tunisia: conventional or unconventional plays? Why security isn't as grave a concern as one would think What some of the next great exploration areas will be for juniors Why it's a lack of capital, not venues that is holding new entrants back How to mitigate risk in Somalia Why Ethiopia may be about t o see its first major discovery Why things are moving—but slowly—in Eritrea How close we are to commercial viability in Kenya Interview by. James Stafford of Oilprice.com James Stafford: Is Tunisia right now a venue for the juniors or majors, and what makes Tunisia a good venue for small companies? John Nelson: There is a good cross-section of different sized oil companies exploring and operating in Tunisia. Some of the majors are present such as ENI, Total, CNOOC and Shell; however, most of the activity is with the smaller companies. Junior companies can be very successful on projects that may not meet the economic threshold of the majors, but can propel juniors quickly to mid-tier producers. This makes Tunisia a good place for smaller companies to explore. The basins in Tunisia are well established and understood. Services for seismic and drilling are available. There is a capable work force and French rule of law. Infrastructure in the way of roads and pipelines can be found across the country. Fiscal terms are good and the government is stable and reasonable to deal with. There are a number of smaller Canadian companies already there. James Stafford: Can you tell us a bit about Tunisia's potential. What is the biggest field and what are the best exploration prospects? John Nelson: There is a lot of geological diversity in Tunisia which creates a number of different play types to explore for. The biggest onshore oil field is the Sidi el Kilani field in north central Tunisia. This field has produced over 50 Million barrels of light sweet crude from a small number of wells. In fact it is the similarities in Africa Hydrocarbon's targets to Sidi el Kilani that got me interested enough in the "home run" size of the first drillable target, to decide to come and run this company. James Stafford: How does the geology compare to the East Africa and the East Africa Rift System? John Nelson: The geology of Tunisia is not exactly like that of the great Tertiary rift system of east Africa. There are of course some geological similarities on a smaller scale where extension has caused the formation of horst and graben structures in some areas of Tunisia. In general what we are looking for is actually arguably more straight forward. James Stafford: What's the business atmosphere right now in Tunisia? John Nelson: Business as usual. We have not seen any significant risks or changes in business practices since we have been involved there. In terms of North Africa, Tunisia is probably at the top as a jurisdiction in which to do business, and stability of the politics, etc. The economy seems to be doing well. There is construction going on in many of the cities. The country has not suffered at the same level from debt and poor fiscal mgmt like some of the Eurozone countries on the northern Mediterranean side. The country, like many countries these days, has unemployment issues especially with the younger generation. James Stafford: So if Big Oil is not looking in Tunisia, how does that help NFK? John Nelson: It is hard to compete against majors when it comes to acquiring sizeable acreage and making commitments. It allows smaller companies to cost effectively get positioned and undertake exploration initiatives. However, if a significant discovery is made then Big Oil may appear back on the scene to partner with or acquire small companies like NFK. Sh ell Oil surrounds our Block now but we were there first and were able to position ourselves with over 130,000 acres. James Stafford: Africa Hydrocarbons has a nice piece of contiguous acreage in Tunisia. Can you tell us a bit about the two blocks in question and where you are right now in the exploration process? John Nelson: We have a 47.5% interest in two adjoining concessions, the Bouhajla and Ktititir blocks, located in north central Tunisia and only 25 kms west of the Sidi el Kilani oil field. The blocks were acquired approximately 3 years ago when the govt made them available for bidding after being off the market for over 25 years. Our local partners were there first, and that is the opportunity. James Stafford: What are you chasing here? Conventional or unconventional plays? What do you think you'll hit with drilling? John Nelson: We have several conventional type prospects and leads on our blocks and that is what we will be targeting initially. Our first well will be testing a fractured carbonate chalk reservoir, which is very similar to what is found producing at Sidi el Kilani. Last year, Shell acquired a large land position around us and have committed to spending over $150MM on their blocks. We have heard that Shell and others have an interest in testing shale (also called “unconventional”) plays within the region. The possibility for an unconventional play type also exists on our acreage but we have chosen what we believe is the "low hanging fruit" to target first. James Stafford: You've mentioned before the ability to “de-risk” exploration and development in Tunisia. Can you take us through the math here and demonstrate the economic feasibility of operating in Tunisia? John Nelson: Our situation is somewhat unique compared to many others in Tunisia or exploring in other remote parts of Africa. Only 25 kms from our block is the facility and pipeline for the Sidi el Kilani oil field. The facility was built to handle up to 25,000 bbls/d but now is only handling 1000 bbls/d. So there is much excess capacity in this nearby facility. There is also a pipeline in place from the field all the way to the port facility on the coast that is also under-utilized. That means it won't take much time or money to get any future production on stream. As a result, we can still be profitable in the event of a smaller discovery size due to the infrastructure already being in place. It also allows the option to truck oil to the facility to obtain some cash flow while onsite facilities and a short pipeline are built to Sidi el Kilani if we make a discovery. In other words if we are successful on our first well next month, we should be able to start cash flowing very very quickly. James Stafford: Do you need a major operator in there like Tullow with Africa Oil in Kenya? What happens if you make a discovery? Can you develop it cost-effectively? John Nelson: In our situation we do not need the expertise or deep pockets of a large partner. In the event of a discovery we would be able to adequately finance a development project. We anticipate that fewer than five wells would be needed to optimize drainage of our first target area, which is substantially larger than the area of production of 50 million barrels at Sidi el Kilani James Stafford: How does the cost of drilling wells compare in Tunisia, Kenya, Somalia …? John Nelson: Our costs to drill a 2500m well is in the area of $7 million. The cost seems excessive compared to drilling costs in North America, but on an interna tional scale it is reasonable. This actually isn't very deep, and given the size of the target, not very expensive. We also have easy terrain and a network of roads in our area of Tunisia. Access is pretty easy and services are relatively close if needed. In more remote projects such as in Puntland, Kenya, Ethiopia or other areas far from infrastructure, the drilling cost of a similar well may be well over $50MM. James Stafford: Outside of Tunisia, where should smaller companies be looking? Can you rank the prospects for us here in terms of junior capabilities and potential? John Nelson: Juniors provide a valuable service to the industry by often being the first entrants into a new area or applying new technology to older areas. There are niches in most parts of the world. Myanmar is opening up. New opportunities may now come up in Venezuela. The rift basins of Niger, Chad and Sudan are attracting n ew investment. The new discoveries off of Israel are opening up a lot of new exploration initiatives there that look quite attractive. There is not so much a shortage of ideas and opportunities as there is a shortage of capital to pursue them. James Stafford: We understand that you have experience in Somalia—specifically in Puntland. Can you debunk any myths about working in Somalia and take us through the challenges? John Nelson: There were a lot of concerns about security issues both onshore Puntland as well as piracy in the offshore. It took a lot of careful planning to mitigate much of the risk. Local communities were engaged, informed and employed. Our security people worked with the govt and contractors to remove any possible threats along transportation routes. The airstrip and drilling camp were well protected. In the end, all the people and equipment were mobilized and the drilling took place wi thout incident. James Stafford: What about Ethiopia and Eritrea? Eritrea seems open for business now after preferring to focus on its mineral resources for so long--and thanks to the new technology on the scene--and it's got Red Sea territory that is virtually unexplored. John Nelson: Eritrea has been slow to open up to oil and gas exploration despite a fairly high level of interest. New laws and policy changes move slowly in many parts of Africa. Eritrea has been explored in the past and there are known oil seeps there. No major discoveries have been made yet. James Stafford: How do you view prospects in Ethiopia, as a possible extension of finds in Kenya? John Nelson: Ethiopia has a variety of play types throughout the country that are soon to be drilled. Africa Oil is currently drilling in SW Ethiopia along the Tertiary rift trend that extends north of Kenya. They may make the first significant oil discovery for Ethiopia in that area. James Stafford: How close are we to commercial viability in Kenya, and what do you think the next year to year and a half will show? John Nelson: Tullow and Africa Oil are close to determining commerciality. The recent testing suggests the rates and accumulations may be sufficient. Some additional drilling success in some of the other sub-basins on their acreage in blocks 10BA and 10BB as well as in Ethiopia will help initiate further development decisions. There is a lot of drilling and testing to be done over the next couple years. I am pretty sure the results will lead to major infrastructure plans for the area. It will take time--years--due to the remoteness and current lack of infrastructure in the area as well as political involvement of neighbouring countries. James Stafford: So what can we expect by the end of the year from Africa Hydrocarbons? What do potential investors need to know? John Nelson: We anticipate drilling our first well in April and should know the results in May. In over 27 years, I haven't seen many wells with this kind of risk-reward—a $7 million well that is geologically so similar to a proven field only 25 km away where one well produced more than 20 million barrels. We have worked up the target with 2-D and 3-D seismic that are remarkably clear, and that give us what we call in the business a "play chance" that is much much higher than your typical International exploration well. Usually with a target this size you are looking at a 10%-15% chance of success - we have heard our chances rated by third parties between 28% and into the low 30% chance of success. This is actually a geometric difference in probabilities - really an order of magnitude. With success on our first well, w e would look to start production from Bouhajla North, and follow in that area by preparing to penetrate the reservoir again with new wells. We would also establish a reserve and resource calculation to highlight the size of the produceable reservoir in that area. Concurrently we would develop an inventory of prospects all over our acreage which we would develop with additional seismic programs. Real success just on our first well would turn us from an explorer into an intermediate producer immediately. James Stafford: What happens if you hit—what kind of NPV do we get compared to current market cap. John Nelson: Well James, if we don't hit we are backstopped by cash in the treasury as well as our land position and additional targets which we would then set our sights on. But with a discovery similar to a Sidi el Kilani well, our NPV10 based on our 47.5% working interest would be close to $100MM, which is about 10 times the current market capitalization of the company of $9 million - we will know within 8 weeks. . James Stafford: Thanks for taking the time to speak with us John. Source: http://oilprice.com/Interviews/Is-Tunisia-the-New-Hot-Spot-for-Energy-Investors-Interview-with-John-Nelson.html

Gas Starts Flowing from Israel's Levant Basin, What Now?

Gas Starts Flowing from Israel's Levant Basin, What Now? The first gas has started flowing from Israel's supergiant Tamar gasfield in the Levant Basin. Where it will go will redraw the Mediterranean energy map and the geopolitics that goes along with it. The Tamar field stakeholders announced on 30 March that the gas had started flowing, raising the value of Texas-based Noble Energy Inc. (NYSE: NBL), which holds a 36% stake, and Israel's two Delek Group subsidiaries, which each hold a 15.6% stake. F or now, the gas is being pumped to mainland Israel, where it will feed the domestic market, but exports should begin in 2-3 years. What Israel has in mind is the European market, via a hoped-for undersea Mediterranean pipeline to Turkey, which has the infrastructure to get it to Europe. The competition for this prized market is stiff. In total, the Mediterranean's Levant Basin has an estimated total of 122 trillion cubic feet of gas and 1.7 billion barrels of oil. Lebanon and Cyprus are eyeing the same market for their own Levant Basin gas resources. Cyprus has found gas in its section of the basin, and Lebanon has announced a tender for exploration off its shoreline. The Greek Cypriot government believes it is sitting on an amazing 60 trillion cubic feet of gas, but these are early days—these aren't proven reserves and commercial viability could be years away. In the best-case scenario, production could feasibly begin in five years. Exports are even f urther afield, with some analysts suggesting 2020 as a start date. Israel has the upper hand right now in terms of development and production, but it lacks the infrastructure without Turkey. Israel was originally hoping to lay a pipeline that would traverse both Cyprus and Turkey, but there are too many political pitfalls to this plan (whichwould essentially mean a final resolution to the Turkey-Cyprus spat). The ideal would have been a pipeline that connects all the Levant Basin resources—including Lebanon, Israel, Cyprus and Turkey—but this is the stuff of geopolitical dreams. In the end, it is shaping up that an Israel-Turkey pipeline is not only possible, but coming to fruition. Earlier this month an official apology from the Israeli prime minister to his Turkish counterpart for some high-level grievances was engineered by US Preside nt Barack Obama. It was an unprecedented move by Israel and one that illustrates how important this pipeline is for Israel. An apology was really the only thing keeping Turkey from green-lighting this pipeline project without a backlash at home. This Israel-Turkey pipeline makes Lebanon and Cyprus nervous. It essentially cuts them out of the equation. Politics for now will keep Lebanon from connecting up to any Israeli pipeline, and Turkey won't have a connector to Cyprus. Russia's Gazprom, of course, is not keen to lose its stranglehold on the European market. To that end, it's jumped in on Tamar itself, obtaining exclusive rights from Israel to develop the field's liquefied natural gas (LNG). Here's the plan: Russia is hoping to divert Israeli gas exports to Europe by banking on these resources being turned into LNG for Russian export to Asian markets instead. Russia is willing to invest heavily in a $5 billion floating LNG facility to thi s end. In return it gets exclusive rights to purchase and export Tamar LNG. (Gazprom has signed the deal but it still awaits final approval from Israel). For Israel, this is a windfall. There is an estimated 425 billion cubic meters (16 trillion cubic feet of gas in its Leviathan field, plus the 250 billion cubic meters in the Tamar field, which is now officially pumping. All this gas is worth about $240 billion on the European market, and Tamar gas alone could boost Israel's GDP by 1% annually. For now, the Tamar gas will result in a decline in the price of electricity for Israelis by way of reducing the production costs for the state utility. For Europe, it will mean newfound power to deal with Russia differently like it did with the recent Cypriot bailout package that came along with a harsh lesson for Russian oligarchs who are seeing their Cypriot banks holdings sequestered. Source: http://oilprice.com/Alternative-Energy/Nuclear-Power/Gas-Starts-Flowing-from-Israels-Levant-Basin-What-Now.html By. Jen Alic of Oilprice.com