Excerpts: U.S. oil and gas production growing June 14, 2012

+++U.S. Could Out Produce Russia, Saudi Arabia in Oil and Gas
SOURCE: Naharnet (lebanon) 14 June '12:"U.S. Could Out Produce Russia, Saudi
Arabia in Oil and Gas", Agence France Presse

SUBJECT:U.S. oil and gas production growing

QUOTE:"The U.S. is seeing a dramatic surge in oil and gas production"

FULL TEXT:The United States is seeing a dramatic surge in oil and gas
production and could overtake the world's biggest producers, Russia and
Saudi Arabia, in another decade, a U.S. official said here Tuesday.

"Some of the numbers are eye-popping," Daniel Sullivan, commissioner in
Alaska's department of natural resources, told a panel of experts at the
International Economic Forum of the Americas in Montreal.

In the last quarter the U.S. produced six million barrels of conventional
and unconventional oil a day, he said, adding: "We haven't done that in 15
years."

Since 2008, the U.S. added 1.6 million barrels of additional oil, and in
2011, the U.S. registered the largest increase in oil production of any
country outside of OPEC, he told hundreds of participants.

These figures compared to a daily output in March of about 9.923 million
barrels a day by Saudi Arabia, the largest producer of the OPEC nations, and
9.920 million by Russia, according to the industry data compiler Joint
Organizations Data Initiative.

Sullivan said the respected consultancy, PFC Energy, had estimated that by
2020, "the U.S. could be the largest hydrocarbon producer -- that's oil and
gas -- in the world, overtaking Russia and Saudi Arabia."

In Alaska alone, the potential off the coast was viewed as the largest of
any country, about 40 billion barrels in conventional oil, according to the
U.S. Geological Survey.

U.S. President Barack Obama has indicated that offshore oil resources could
help mitigate global disruptions in supply, and his administration has tried
to craft an energy strategy that balances business interests with
environmental concerns, especially in the Arctic.

In November the Obama administration proposed a new plan for offshore oil
and gas leases in the Gulf of Mexico and off the coast of Alaska, including
the environmentally sensitive Arctic.

But it did not open up for exploration the politically sensitive Atlantic or
Pacific coastlines, or the eastern Gulf of Mexico along the Florida coast.

Unless it faces a last minute challenge, Shell is expected to begin drilling
test wells off northern Alaska in July, opening up new possibilities for oil
exploration in a previously untapped, pristine environment.

Sullivan argued that the benefits of the shift in energy security could be
substantial, especially in terms of growth and jobs for a country where half
the U.S. trade deficit is due to imports of oil.

He said in 2010-2011, there were 600,000 jobs created in the shale oil and
gas industry.

But addressing the same audience, the chairman of the World Energy Council
drew a more somber global picture.

Pierre Gadonneix said the economic crisis meant energy demands had slowed
down, even though they were starting to grow again, and that oil prices
remained high.

"Future growth is threatened by the prospect of climate change and the drain
on our natural resources," he said, adding the main challenges would be to
improve the security of energy supply, to improve competitiveness and to
struggle against "energy poverty."

"We must recall that more than 1.3 billion people still do not have access
to electricity in developing and developed countries," he said.

Pointing to "big accidents", chiefly in the Gulf of Mexico where a BP oil
spill in 2010 unleashed five million barrels of oil into the seas, Gadonneix
urged plant operators and governments to agree on global standards for
operations.

Countries struggling to become economically efficient and feed global demand
for energy increases also spoke at the forum.

Iraq's Vice President Khudier Mosa Jafer Alkhuzaie said the country's "oil
industry was the engine for the entire economy."

Iraq had huge reserves of oil -- more than 103 billion barrels -- along with
large reserves of natural gas.

"We expect investments in this area will help us develop the oil industry in
Iraq," he said, pointing to a fiscal law adopted in 2006 that lowers
obligations imposed on foreign companies and "facilitates the liberty of
movement for foreigners and their capital."

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Sue Lerner - Associate, IMRA