Wow,
winter comes on with a fast and furious seriousness where the “Girl
from the North Country” gets to hibernate. OK, is the cold causing
amnesia? Are Alaskans sometimes “Brain Dead” when it comes to
Simple Simon oil resource reasoning? Why in hell are all the resource
news' hounds chomping at the bit this news from SHELL calling it
quits any further exploration in the Chukchi? OK, so “Big Oil”
has once again showed us that we have not a clue as to how this
“Corporate Conglomerate” works in Alaska – even though “Big
Oil” has been our good neighbor for some 40-years by now. It was in
1969 wherein Alaskans were hearing the same damn thing from Prudhoe
Bay - “Dry Hole”! Not bad so far as “Big Oil” has squeezed
well over 16-billion barrels of oil from that weeper and made
$Billions$ in return. Boy, were we fooled! See, SHELL said it's
leaving Alaska because it hit a dry hole in its first attempt to
exploit the Arctic. After spending $billions$, well now what? But
here is the catch most seem not to understand or comprehend. First
and foremost, that money spent for exploration will find its gainful
use as a tax revenue “write-off”, maybe not right away, but it
has the potential to cover-up future revenues $ for $ - so money well
spent. And get-over-it, as “Big Oil” never tells the truth of
what is found during exploration – else it breaks rule number UNO.
Regardless of what was found or not found, such an investment
requires a “Tight Hole”, and more secretive then Hillary's e-mail
servants. The only idiots that spill-the-beans after spudding a well
are the stupid “Independents”, wherein wannabe CEO oil barons
rush to the podium to announce there's “Black Gold” in
them-thar-hills in efforts to excite the Alaska legislatures into a
resource galore orgasm. The “Independents” so far to Alaska have
tried to manipulate the system through lies and cheating, for “Tax
& Revenue” breaks and lucrative handouts from AIDEA. You don't
see “Big Oil” crying for a helping hand handout. See, SHELL isn't
about to tell the truth on what it found during an expensive drilling
season some many miles off the coast of Alaska in the Chukchi. Sure
it sank drill pipe some 6000-ft into unchartered territory, that's an
accomplishment with respect to the short-lived drilling season
finding delays brought on by environmental concerns. And YES, I am in
agreement with some, as to build a transportation infrastructure in
such harsh climates in efforts to “Strike it Rich”, it is a
mind-blowing expedition. I have been in the oil business many years
in Alaska – have witnessed what works and what fails, and in my
thoughts the jury is still out with respect to what SHELL is trying
to accomplish – with respect to actual “development” some fifty
miles offshore Pt. Lay. “Ice Scouring” does not allow for a
pipeline of any design in that arena, we have not the technology to
exploit the resources in such an un-civilized wilderness with present
day technologies. When one looks back at what means of transportation
was envisioned for getting the “Dry Hole” oil out of Prudhoe bay,
in the end it was a carefully designed pipeline – not by specially
designed Boeing 747s or under-ice tanker-submarines. Not even
ice-breaking tankers like the S.S. Manhatten – specially modified
for Arctic travel. It was a pipeline that won favor the investors,
but to build a pipeline offshore in the area that SHELL finds a
fascination, it demonstrates it is not serious. So why spend the loot
for a “Dry Hole”. Because it ain't dry! That is what SHELL wants
you to believe. And sure that company's stock fell 2% after the
announcement, that there was “NO” oil and time to quit – but
what does it really mean? See, that core sample will be analyzed and
that area owned by SHELL with drilling rights will be evaluated. It
will take several years, as the “core samples” are confidential
for a minimum of 2-years then with some clout, the data retrieved by
SHELL could be listed as “Confidential”. So we may never know
what was actually found during SHELL's attempt to delineate...that's
the key “delineate”. See, after analyzing the sample and using
high-tech cross-boundary algorithms, SHELL will then announce that
the area under their Burger Posey prospect contains billions in
recoverable resources. With that, it is then considered and included
in the company's portfolio and the stock value realizes that
interest. It is like money in the bank! But SHELL will play out the
waiting game as it is all part of this game. See, it is a spy verses
spy type of game. Case in point: A few years after Prudhoe Bay came
on-line - because of that “dry hole” - Big Oil heard the call to
“Go West”. And soon we heard about another “Dry Hole” called
Kuparuk. Now just shy out-of-reach the Kuparuk/West Sak boundaries is
the NPR – the National Petroleum Reserve. Now “Big Oil” faked
some samples in an area called the Colville in Henderson Bay, when
EXXON was trying to outwit ARCO. Guess who won, as the only thing
left to ARCO is a bunch of AM/PM stores in California! See, EXXON
drilled in the Colville as did ARCO, so samples once confidential
soon became “Public”. Now after the “Confidential” expired
and ARCO sold out to Conocco, in come the “Independents” from
Texas who don't have the deap pockets budget to do their own
exploration so request “core samples” that have by now become
“Public Information”. So to save a buck, it uses “Big Oils”
research and soon wants to look for the real McCoy “Dry Hole”,
which happens and “Big Oil” is still laughing at Pioneer Natural
Resources – the 1st Independent that thought it could
pull a fast one. So most have no idea this game that is played out by
“Big Oil” in Alaska. And time is on their side, as SHELL's “I
QUIT” was news for about 3-seconds Alaskan time and now the reality
game commences and all we learn is more doom & gloom from those
trying to cover and comprehend what it all means. Anyway, in a few
years when oil prices rebound, SHELL will have delineated the Burger
field and then able to add that forecast to its portfolio. The intent
by SHELL was not to actually recover any “Black Gold”, but
utilize the potential to shore up its “Reserves”. Look, going
back to “Pioneer”, which also called it quits in Alaska. That
company's stock has cratered since oil prices started to be
controlled again by “Big Oil”, in efforts to squash the
“Independents”. The only reason the Pioneer CEO still has a
$20-million salary is the fact the “Reserves” the company
acknowledges – oil still in the ground – it provides value and is
keeping the stock safe for the time being – SELL! So that
$billions$ thrown out by SHELL to fight the harsh environment and
fight the environmentalists opposed to any crapping in the Arctic,
the results have far reaching interests you and I are condemned to
try and understand. And here is another intersecting interest. Alaska
Governor Bill Walker just returned from Japan, in efforts to try and
pull a fast one on EXXON and sell LNG to our friends. OK, so Bill
says the sale's pitch went well? What went well, the fact they
laughed Bill back to the 49er with egg on his face! See, Japan is on
the forefront of becoming an “Independent” energy producer. No
not with nuclear power plants that fall apart during a rain storm and
fallout that cause cows to piss out blue milk, but by 2020 that small
nation will be self-sufficient to supply 100% of its energy needs –
and not from LNG imported from Alaska. It has mandated that by 2020
it will be using gas hydrates found offshore to boil water. So, that
is only 5-years from now. And if it takes 5-years to build Walker's
“Pipe Dream” to deliver LNG, wow we will end up with the biggest
“Dry Hole” of ever and then the “Big Quit” may have some
semblance of Sarah Palin's lagacy. Look, get over it, an Alaskan
World Class LNG project was DOA some 30-years ago and never found the
interest it needed to fruition. The only natural gas pipeline project
that finds merit today in Alaska is an instate line to Fairbanks,
maybe a tie-in to the Beluga pipeline down south Anchorage way.
That's it! No big sales contracts to 3rd world nations and
in the meantime, well SHELL proves it can “shell” it out and make
a ROI that mesmerizes even with an “I QUIT” attitude. And when
finally we hear the same from “Big Oil” with respect to “Our”
stranded natural gas, then maybe we can find room to get that gas to
wherein it's needed and deserved, wherein the “Export Ban” finds
true meaning with “I QUIT”!
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