Baker Hughes acquires software technology company Perfomix

Baker Hughes stated the acquisition of Perfomix, a Texas-based oilfield software technology company focused on solutions to enhance oil and gas operations' performance. Perfomix will operate as a wholly-owned subsidiary of Baker Hughes and will be integrated into the company' s remote operations services organization.

Perfomix offers a data and advisory services delivery platform to support drilling, pressure pumping, completions and production operations, and regulatory reporting requirements. The addition of Perfomix will expand the Baker Hughes portfolio of field devices integration, real-time data management, visualization, and analytics software, thus complementing existing capabilities with a modern, elastically scalable and standards-based technology platform.

Providing useful resources, articles and writings on crude oil, other petroleum products, energy and gas. By Tolfem Investments Limited, online.

Proposed tax plan could pay oil dividends to California residents

Billionaire environmentalist Tom Steyer is lobbying for a new law in California that would force energy companies to share as much as $2 billion of the state’s oil wealth with residents.

The proceeds would come from an “extraction tax” -- fees producers would pay on their crude oil output. Similar taxes already exist in most major drilling states such as Texas and North Dakota, with California a longtime holdout.

The tax might be used to pay a dividend directly to California residents, such as the one paid to Alaskans from that state’s oil revenue, according to a proposal Steyer will unveil today in a town hall meeting in San Jose, California. It might also be used to fund savings accounts for newborns or middle class tax cuts. A 9.9% per barrel tax on California oil production would yield $1.5 billion to $2 billion annually, Steyer estimates.

The former hedge fund manager, who has pledged to raise and spend as much as $100 million on climate-related political advocacy this year, is focusing on drilling in California. Steyer’s campaign is poised to galvanize opposition to the oil industry as the state weighs the costs and benefits of accelerated drilling in the largest undeveloped crude formation in the U.S.

“We’re trying to do a grassroots campaign here,” Steyer said in an interview. “We’re trying to engage the people of California on this in a way that could make a difference.”

Steyer has been an active force in California politics, successfully backing a 2012 proposition to close a corporate tax loophole and a 2010 proposition that would have undercut state laws aimed at reducing greenhouse gas emissions.

His newest “Fair Shake” campaign includes a proposal to ban hydraulic fracturing unless two thirds of a county’s residents vote to approve it.

The energy industry has beaten back previous efforts to introduce a production tax in California, most notably in 2006 when a proposition backed by Hollywood producer Steve Bing was defeated by more than 700,000 votes.

That campaign was among the most expensive in state history, with both sides spending more than $140 million, according to the Institute of Governmental Studies at the University of California-Berkeley. Chevron Corp. spent more than $30 million to defeat the proposal.

“As the largest oil and gas producer headquartered in California, Chevron provides significant economic value to the state through taxes and royalties, investments and job creation,” said Kurt Glaubitz, a Chevron spokesman. “This proposal will hinder our state’s fragile economy, increase business and consumer costs and discourage job creation.”

California residents in some areas are showing increasing hostility to new drilling plans as companies such as Occidental Petroleum Corp. seek to tap the state’s vast Monterey shale. The formation, which stretches almost from Los Angeles to San Jose, may hold as many as 15 billion bbl of oil, according to a 2011 report from the U.S. Energy Information Administration.

The city of Carson and Santa Cruz County have temporarily halted drilling, and Los Angeles is weighing a similar proposal. More than 60 other communities in the state are considering such measures, according to CREDO, an activist group sponsoring and tracking petitions for moratoriums.

California Governor Jerry Brown, a Democrat, has introduced new regulations to govern the practice of fracing.

The town hall today in San Jose is meant to start a discussion on how funds from a potential extraction tax would be used, said Steyer, who spent millions last year through his political action committee NextGen Climate Action to oppose construction of the Keystone XL pipeline. Keystone XL, still awaiting U.S. approval, would carry crude from Canada’s oil sands to Gulf Coast refineries.

Steyer’s California campaign will first seek to push its initiatives through the state legislature. He declined to say whether he would consider a ballot proposition to force a statewide vote.

“When Californians have voted through elected representatives or direct democracy on this issue, they always reach the same conclusion,” said Tupper Hull, a spokesman for the Western States Petroleum Association in Sacramento. “It’s bad policy for the business climate in California, and bad policy for consumers.”

Thirty states have some form of an oil and gas production tax, including every major producer except California and Pennsylvania, according to the National Conference of State Legislatures. Texas uses its “severance” tax on production, which collected about $4.5 billion in revenue last year, to help fund public education.

Providing useful resources, articles and writings on crude oil, other petroleum products, energy and gas. By Tolfem Investments Limited, online.

Kashagan leak probe hindered by Caspian Sea ice, Total says

A probe into the cause of a leak at Kazakhstan’s largest oilfield depends on inspection of offshore installations that has to wait until ice melts on the Caspian Sea, one of the partners in the project said.

“It’s melting as we speak,” Arnaud Breuillac, Total SA head of exploration and production, said at an oil conference in Paris. “Until we have the result of this analysis, we can’t say what is the extent of the problem or how long it’ll take to fix it.”

Output may resume at the end of the year after 180 km (112 mi) of pipelines are inspected, the field’s biggest stakeholder KazMunaiGaz National Co. has said. A full inspection of both oil and gas pipelines, each about 90 km long, was done using a probe known as an intelligent pig.

Kashagan, where production began in September after being delayed several times from the original plan in 2005, was producing about 60,000 bpd before a leak stopped the field on Oct. 9. The project included drilling from a man-made island to unlock crude 4.2 km under the seabed in a pressurized reservoir with a high concentration of poisonous sour gas.

“We have to confirm data from intelligent pigging inside the pipeline with calibrations from outside” to understand the data, Breuillac said today. “Hopefully we should know soon the potential work that has to be done to repair the problem.”

Should production start up this year “it would not be much,” he said.

Exxon Mobil Corp., Royal Dutch Shell Plc, Total and Eni SpA each hold 16.81% in the project. Japan’s Inpex Corp. owns 7.56%. State-owned KazMunaiGaz National Co. retains 16.88%. China National Petroleum Corp. bought an 8.33% stake in September.

Providing useful resources, articles and writings on crude oil, other petroleum products, energy and gas. By Tolfem Investments Limited, online.

Canada needs to push harder on Gateway pipeline, Alberta minister says

Canada’s federal government isn’t doing enough to build support for Enbridge Inc.’s proposed pipeline to ship crude from the oil sands to the nation’s Pacific coast, said Alberta Finance Minister Doug Horner.

“The federal government needs to step up here a little bit” to convince aboriginal groups and the general public that the Northern Gateway pipeline is in the nation’s interest, Horner said in an interview at Bloomberg headquarters in New York. “We’ve suggested to them that they may want to get involved.”

Opposition by aboriginal groups and environmentalists is clouding Canada’s plans to develop Alberta’s oil sands, home to the world’s third-largest recoverable crude reserves. Producers such as Royal Dutch Shell Plc and Total SA are counting on projects such as Northern Gateway and TransCanada Corp.’s Keystone XL to ease a transportation bottleneck that has suppressed the price of Canada’s heavy crude, costing the economy C$50 million ($46 million) a day, according to the Canadian Chamber of Commerce.

The federal government should make it clear the pipeline is of national economic importance, said Horner. “You have to remember that a lot of what we do in western Canada creates economic activity and jobs in eastern Canada,” he said.

Harper’s government must decide whether to approve Northern Gateway by June. A regulatory panel said in December the project could move ahead under certain conditions.

British Columbia, the country’s westernmost province, has said it will only back the project if it meets five conditions, including greater engagement with aboriginals and increased financial benefits for the province. Local communities say there’s too much risk and too little benefit to having an oil pipeline cross their region.

Canadian Finance Minister Joe Oliver, who was the country’s natural resources minister until last month, told reporters today the government is constrained in what it can say until the cabinet issues its decision.

Horner’s comments followed a speech by former Canadian prime minister Brian Mulroney in which he called for a “strong national commitment” to export the nation’s natural resources to markets around the world, in particular Asia.

“We cannot sit back, contemplating our collective navel and expect customers to knock on our door,” Mulroney said yesterday. “We have to demonstrate convincingly that we are capable of doing what is required to earn their confidence that we are a reliable, efficient source of supply.”

Horner said he’s “cautiously optimistic” the U.S. will approve TransCanada Corp.’s Keystone XL pipeline, which would link the oil sands to refineries along the Gulf Coast.

President Barack Obama’s administration is reviewing the route, which was first proposed in 2008.

“We are not just focused on Keystone,” Horner said. “We are looking at all three of the opportunities that are there today -- that’s east coast, west coast and to the south.”

Horner also said he is “seriously considering” running to succeed Alison Redford as leader of Alberta’s ruling Progressive Conservative Party. Redford stepped down last month amid questions about her expenses and leadership.

Horner is also speaking today to the Canadian Association of New York.

Providing useful resources, articles and writings on crude oil, other petroleum products, energy and gas. By Tolfem Investments Limited, online.