Three-part series that goes on a revealing journey through the world’s oil-producing regions, beyond the familiar territory of the Middle East. Nick Fraser Storyville Series Editor Now that the oil price appears to be rising inexorably at the pumps, newspapers are full of gloomy predictions related to our increasing addiction to perishable reserves of oil. Bill Cran’s series takes a somewhat different approach. We are in fact still amply supplied with oil on planet earth. The problem is that most of it lies in what we cosseted addicts regard as the wrong places. Getting enough oil to fill George Bush’s SUV requires dealing with nasty governments or destroying the wilderness. But the relationship between oil companies, consumers and those who live where the oil is extracted is changing very rapidly. It is becoming possible for native populations to obstruct oil companies. Cran’s series leaves one with the feeling that there are no easy answers – but that, given the hysteria surrounding the subject, is no bad thing. It’s also ravishingly shot.

http://video.google.com/videoplay?docid=2778637338220112606&hl=en

EXTRACT: Futures and forward contracts are intrinsically different instruments than securities which are derived from the capital markets (e.g., fixed income or equities). This is under-appreciated.

Derivatives are risk management tools, a “zero-sum game,” fundamentally different from the “rising tide raises all ships” concept of the capital formation markets. While, there is an established theoretical basis and considerable empirical evidence that link investment in capital market assets to positive expected returns over time, notwithstanding the recent surge in commodity prices, the same cannot be said about commodities.

http://www.nakedcapitalism.com/2008/05/is-commodities-boom-driven-by.html

See last 3 years of US vehicle milieage.

North Sea oil find starts Dana gushing
Apr 23 2008
Shares in Dana Petroleum rose 17.4 per cent after the company said it had struck oil in the North Sea, a discovery that could lift its output by about a fifth, if successfully developed. Read more »
http://www.ft.com/cms/s/7fa4c3d4-1162-11dd-a93b-0000779fd2ac,s01=1.html

Colombia sitting on big oil reserves

Colombia’s heavy oil area could hold 20bn barrels of recoverable resources, giving the country greater reserves than leading producers such as Mexico and Algeria, said its natural resources agency.

Foreign investment in Colombia’s oil and gas industry is booming, and the country hopes to lift oil production to 1m barrels a day in the next decade, from about 550,000 b/d currently.

Colombia’s heavy oil potential is dwarfed by that of its neighbour Venezuela, which is estimated to have at least 240bn barrels recoverable in its Orinoco belt region. But Colombia has the great advantage of welcoming foreign investment.

http://www.ft.com/cms/s/e7ab6bcc-0014-11dd-825a-000077b07658,dwp_uuid=f2b40164-cfea-11dc-9309-0000779fd2ac.html

Not much but every drop helps right now. Tim