Schlumberger to buy oilfield gear maker Cameron in $14.8 billion deal

Wed Aug 26, 2015 | 4:53 PM EDT The exterior of a Schlumberger Corporation building is pictured in West Houston January 16, 2015. REUTERS/Richard Carson Schlumberger to buy oilfield gear maker Cameron in...X By Sneha Banerjee and Shubhankar Chakravorty (Reuters) - Schlumberger Ltd (SLB.N) will buy equipment maker Cameron International Corp (CAM.N) for $14.8 billion, as the world's top oilfield services firm scrambles to offer a broader range of products at lower prices to oil companies slashing budgets. The deal, which values Cameron around the market cap it had when oil prices were still $100 a barrel, marks the second big merger among energy services companies since crude prices LCOc1 entered a 60 percent slide last year. Halliburton and Baker Hughes, Schlumberger's rivals, agreed to a $35 billion tie-up in November. Schlumberger said the acquisition will allow it to bundle its offerings, which range from surveying a site to drilling wells, with ones from Cameron that include pressure valves and blowout preventers, one of which was at BP's Macondo well that exploded in 2010. The two companies know each other well. They set up a joint venture, OneSubsea, to target the deepwater industry in 2012. They have been eyeing each other since then, a person familiar with the deal told Reuters who spoke on the condition of anonymity, noting that Schlumberger has a history of acquiring its partners. "The deal should allow a more complete solution to customers and should allow SLB to grow market share," said BMO Capital Markets analyst Daniel Boyd. "Smaller companies offering discrete products and services will likely be at a disadvantage going forward." Schlumberger said the combined company would have pro-forma revenue of $59 billion in 2014. That is 20 percent more than Schlumberger's revenue for 2014 and compares with $57.42 billion generated together by Halliburton Co (HAL.N) and Baker Hughes Inc (BHI.N). The Halliburton and Baker Hughes deal is yet to close as U.S. antitrust enforcers believe the $35 billion merger will lead to higher prices and less innovation, according to a Reuters source. Billions in divestitures are planned in the hope of winning clearance. Schlumberger, in comparison, said it expects no antitrust hurdles and has no plans to divest any part of Cameron's portfolio to get regulatory approval. An anti-trust lawyer described the product lines as complementary. "With SLB-CAM, there is not much in the way of overlapping businesses ... we do not envision an overly difficult antitrust review," Oppenheimer analyst James Schumm said. Cameron's shares were up about 41 percent at $60, below Schlumberger's $66.36 per share cash-and-stock offer, in afternoon trading on Wednesday. Schlumberger's shares fell as much as 7.5 percent to $68.01, their lowest in two-and-a-half years. MACONDO CONNECTION The Macondo well explosion in April 2010 killed 11 workers and spilled millions of barrels of oil into the U.S. Gulf of Mexico. Investigators found Cameron's blowout preventer had battery and wiring troubles that hindered the proper functioning of the devices' blind shear rams, which are designed to slice through drilling pipes and cap a well in an emergency. Cameron agreed to a $250 million settlement with BP PLC (BP.L) to help pay for costs associated with the spill. Schlumberger's offer on Wednesday values Cameron at $12.74 billion, based on the company's diluted shares as of June 30. Cameron shareholders will get $14.44 in cash and 0.716 of a Schlumberger share for each share held. Schlumberger said it expects the deal to add to earnings by the end of the first year after the deal closes. The deal is expected to close in the first quarter of 2016. Goldman Sachs & Co is Schlumberger's financial adviser and Baker Botts LLP and Gibson Dunn & Crutcher LLP are its legal counsel. Cameron's financial adviser is Credit Suisse and Cravath, Swaine & Moore LLP is its legal counsel.

Shell’s offer for BG shows how the energy business is changing

Shell and BG A vote for gas Apr 11th 2015 | From the print edition JAM tomorrow, but never jam today. That was long the lament about Britain’s third-largest energy company, BG Group. In recent years it has been notable for its great prospects, troubled operations, wobbly management—and lately its weak share price, down by 20% in the past 12 months. Now Shell, an Anglo-Dutch giant, has pounced, with a £47 billion ($70 billion) cash-and-shares offer which pays BG shareholders a 50% premium on what their holdings were worth just before the bid. The combined companies’ stockmarket value will be around $250 billion. Barring regulatory objections, the merger will be completed early next year. The deal—one of several involving BG that has been rumoured, on and off, for years—shows that for the beleaguered international oil giants, buying reserves, even juicily priced, is cheaper and easier than finding and developing them. It also highlights the scope for consolidation since the fall in the oil price last year, which has sent companies scrambling to cut costs and pacify investors. In November Halliburton, an oil-services company with headquarters in Houston, bought Baker Hughes, a smaller rival, for $35 billion. This deal, far bigger, boosts Shell’s declining oil and gas reserves by a quarter, and makes the new firm the world’s third-largest gas producer (see chart). Among Western-owned oil and gas firms, it will be second only to ExxonMobil by market capitalisation, and by 2018 its output will overtake that of its American rival. That assuages one worry for Shell’s investors—that it is not replacing its reserves speedily enough to secure its long-term future. But it may not quell another (contradictory) one: that a notoriously spendthrift management is splurging (To indulge in an extravagant expense or luxury: splurged on room service.) cash on acquisitions which it could be returning to shareholders. Shell counters this as follows: it has already said it is cutting capital spending by $15 billion; it now says it will raise asset sales to $30 billion in 2016-18. It also insists it will maintain its dividend and raise its share buy-backs, all to its newly enlarged investor base. It expects the takeover to generate $2.5 billion of cost savings, in everything from purchasing to trading. The deal underlines the way the money is moving in the energy industry. Shell managers highlight the increasing attractiveness of midstream (transport) and downstream (refining and distribution) activities, which offer less risk and fatter margins than finding and developing new oil and gas. One of BG’s strengths, for example, is in the liquefaction, transport and storage of gas. Its fleet of giant tankers will boost Shell’s clout in the world gas market. The purchase also demonstrates that gas is a more promising business than oil. Indeed, Shell is now more Gas Giant than Big Oil. This is not easy money: the global gas industry has been plagued by high costs (much gas is in hard-to-reach places such as the Arctic and deep oceans) and low prices (thanks to competition from other fuels and America’s shale-gas glut). But the market is growing, supplies are abundant and the environmental outlook friendlier than for oil. BG has promising offshore assets, including in east Africa, Kazakhstan and Trinidad. Some are troubled: a big investment in Egypt is beset by political difficulties. Others are doing better. A $20 billion Australian project is now producing gas from coal. Having tripped up in shale ventures in China and America, Shell is now betting heavily on offshore gas. Simon Henry, its finance chief, says he doubts the gas glut will persist. In any case, a bigger and stronger company is better placed to ride it out. Other deals may follow, just as the last oil-price crash in the 1990s brought a wave of mergers. Among possible takeover targets are Tullow, a British oil and gas explorer (whose share price rose by 4.5% on news of the BG deal, having fallen by half since last summer). Such small companies with exciting but risky projects are particularly exposed in current conditions. But bigger acquisitions could be on the horizon too, perhaps even involving BP, Britain’s largest energy company, which no longer looks too big to buy. Absorbing BG will keep Shell busy for a while (particularly given its mixed record in managing previous purchases). But the deal could prompt one of its two main American rivals, Chevron or ExxonMobil, to try to regain dominance by making a move on BP. For all their enthusiasm for the deal, Shell and BG are merging mainly from necessity. Though BG had stopped disappointing shareholders, and had brought in a capable new boss, Helge Lund, from Norway, its fortunes were too closely tied to volatile gas prices; and its main oil partner in Brazil, Petrobras, is mired in a corruption scandal. For its part Shell was struggling to replenish reserves and cut costs. Assuming BG delivers, the deal solves both these problems, and strengthens Shell’s cashflow. The fall in the oil price has highlighted the weaknesses of energy companies that place big, long-term bets on difficult production and exploration projects. When times were good they excited their engineers with the technical challenges, and boosted their executives’ egos with ever-bigger balance-sheets. Firms are now dealing with rising debts—those of the largest American and European energy companies have risen by $31 billion so far this year—and falling share prices, down by a fifth since the summer. They are selling assets in a buyers’ market. Behind the Shell-BG deal, and the speculation of more mergers to come, is an even more fundamental shift in the energy industry. Contrary to some expectations, the oil-price fall has not derailed the American shale boom. The small, flexible and innovative firms that specialise in horizontal drilling and hydraulic fracturing are proving better at cutting costs, raising productivity and adapting to market fluctuations than the lumbering giants who have long dominated the industry. Dinosaurs may mate to ensure the survival of their species. But this is an age of mammals. From the print edition: Business

Baker Hughes Declares Force Majeure in Iraq

Angry Shi'ites storm Schlumberger camp at Iraq's Rumaila oilfield Mon, Nov 11 18:53 PM EST By Aref Mohammed BASRA, Iraq (Reuters) - Dozens of angry Shi'ite Muslim workers and tribesmen stormed a Schlumberger Ltd camp at one of Iraq's main oilfields and wrecked offices early on Monday after accusing a foreign security adviser of insulting their religion, police and employees at the field said. Oil officials and workers at the Schlumberger drilling site in Rumaila North said the problem started when a security adviser they identified as British asked Iraqi workers to take down a flag and banners depicting a figure revered by Shi'ites. Schlumberger was not immediately available for comment late on Monday. According to workers and officials, when the workers refused to remove the banners, the security adviser went to do so himself and tore one portraying Imam Hussein, whose death more than 1,000 years ago is currently being commemorated by Shi'ites across the world in rituals known as Ashura. In the ensuing row, the security adviser pulled out a gun and fired several shots, wounding an Iraqi worker and drawing dozens of people from a nearby village to join the workers in storming the Schlumberger drilling camp. Officials of the state-run Southern Oil Company said production from the field was not affected by the incident, but oil officials said Schlumberger had suspended its operations in response, not only in Rumaila but at the other oilfields in Basra province. "We received an order from the main administration to stop work until further notice," said an Iraqi engineer working at a Schlumberger project in Zubair oilfield in the south. The protestors smashed up offices and severely beat the foreign security adviser, oil officials and workers said. A photograph taken by a worker at the scene showed a man with blood streaming down his face. He said it was the adviser. Security officials said the man was taken to hospital with serious injuries. Police and the army intervened to restore order and expelled the protesters from the site. "We advised the British security contractor to step back and leave this issue as it is very sensitive for the workers, but instead ... he went himself and removed the banners and tore one of Imam Hussein," said an Iraqi worker, who witnessed the incident. "Workers were provoked and squabbled with the British guy, but he suddenly pulled out a pistol and started shooting, and wounded one Iraqi worker," the man said. On Saturday, an Egyptian worker hired by Baker Hughes Inc to work at a drilling rig in Rumaila removed and tore a flag also depicting a holy Shi'ite figure, prompting Iraqi authorities to terminate his residency and expel him from the country, oil officials said. The workhorse of Iraq's oil industry, Rumaila is operated by BP with China National Petroleum Corp (CNPC) [CNPET.UL}. It has estimated reserves of 17 billion barrels and currently produces around 1.4 million bpd, more than a third of Iraq's total output of over 3 million bpd. "The workers and villagers went on a rampage. It was a fatal mistake from the foreign security guy to provoke local workers," said an oil ministry official, who spoke on condition of anonymity. "When you operate in a mainly Shi'ite community you have to respect their traditions and norms: it's the A B C of how to work in any environment." (Additional reporting and Writing by Ahmed Rasheed; Editing by Isabel Coles, Toni Reinhold) ======================== HOUSTON, Nov. 11, 2013 /PRNewswire/ -- Baker Hughes Incorporated (NYSE: BHI) today announced that a protest incident by local residents occurred last Saturday at a subsidiary's facility near Basrah, Iraq. No injuries were suffered and the facility was secured. The incident is currently under investigation. Due to the significant disruption of business, Baker Hughes has suspended operations in Iraq, and has issued force majeure notices to its customers. "Baker Hughes supports the Iraqi oil industry," commented Martin Craighead, Chairman and Chief Executive Officer of Baker Hughes. "And the safety and welfare of our employees are our top priorities. While we investigate this incident, and until the work environment has stabilized, we are halting activities in Iraq. We hope to resolve this issue in a timely manner, and resume operations in support of our customers and the country of Iraq, as soon as it is safe to do so." Baker Hughes is a leading supplier of oilfield services, products, technology and systems to the worldwide oil and natural gas industry. The company's 60,000-plus employees today work in more than 80 countries helping customers find, evaluate, drill, produce, transport and process hydrocarbon resources. For more information on Baker Hughes' century-long history, visit: www.bakerhughes.com. CONTACTS: Media Relations: Christine Mathers, +1.713.439.8738, christine.mathers@bakerhughes.com Investor Relations: Trey Clark, +1.713.439.8039, trey.clark@bakerhughes.com Eric Holcomb, +1.713.439.8822, eric.s.holcomb@bakerhughes.com SOURCE Baker Hughes Incorporated ======================================= Foreigners flee Iraq oil flare-ups: Workers leave after Shia fury erupts 1 / 1he giant Rumaila oilfield, near Basra, produces a third of Iraq's oil output. The British security man allegedly at the centre of religious unrest works at a camp run by oil services group Schlumberger AP At a time of tremendous religious significance for the Shia, the insensitive actions of a British security man appear to have sparked a major crisis Patrick Cockburn Author Biography Thursday 14 November 2013 63 Print Your friend's email address Your email address Note: We do not store your email address(es) but your IP address will be logged to prevent abuse of this feature. Please read our Legal Terms & Policies A A A Email Ads by Google British Expat In Qatar? £100k+ In UK Pensions? Download A Free Guide To QROPS & Expert Advice Your.QROPSchoices.com/HMRC-listedInvest in Student Rooms Prime Location in Canterbury, UK 9% NET p.a. Assured for 5 years. buystudentaccommodation.orgUSA, Detroit Investment Pre-tenanted Houses from $24K, 22% - 28% NET Yields, Finance Avl. Detroit-Property.co.uk/bmv-houses/Hundreds of foreign workers are being hurriedly evacuated from Basra in southern Iraq following violent protests by Iraqi oil workers and villagers over two incidents. In one of them, a British security man tore down a poster or flag bearing the image of Imam Hussein, a figure highly revered by Shia Muslims. The violence may make international oil companies more nervous about operating in Iraq, which is at the centre of the largest oil development boom in the world. The fighting started on Monday when oil workers refused to remove Shia banners and flags when asked to do so by a British security adviser who then took them down himself – by one account, tearing a poster of Imam Hussein. This happened just before Ashura, the Shia day of mourning for the death of Imam Hussein, the grandson of the Prophet Mohammed, who was killed by the Caliph Yazid at the battle of Kerbala in 680, the anniversary of which falls today. An Iraqi witness was reported as saying: “Workers were provoked and squabbled with the British guy, but he suddenly pulled a pistol and started shooting and wounded one Iraqi worker.” The man was later removed to hospital bleeding heavily. The Iraqi Prime Minister, Nouri al-Maliki, has called for the deportation of the unnamed British security man. Iraqi officials in Basra said he worked for the security firm G4S at a camp run by Schlumberger, the world’s largest oilfield services company. The camp is near the giant Rumaila field, close to the border with Kuwait, which produces a third of Iraq’s oil output. BP and China’s CNPC have been seeking rapidly to raise production at the field. Accounts differ on exactly what happened, but there appear to have been at least two incidents when Shia oil workers and people living in nearby villages believed that images of their most venerated religious figures had been desecrated. “A British employee took down a flag for Hussein and a picture of Imam Ali from the cars of the security company, and tore them down with a knife,” Ali Shaddad, a member of Basra’s provincial council, told Agence France-Presse. “This provoked a group of workers and they went and hit him repeatedly.” At least part of this incident was caught on a video uploaded to YouTube, It shows a man in a flak jacket being dragged from a white vehicle and hit repeatedly by men in dark blue T-shirts, who carry long sticks and spades. He falls occasionally but generally manages to stay on his feet before he is rescued by Iraqi soldiers. In the background is the wall of a Schlumberger camp, topped with barbed wire. An Iraqi field engineer employed by Schlumberger describes the incident, saying it started at 10am on Monday when an Iraqi driver working for the security team attached a Shia holy flag to the antenna of one of the vehicles. He was asked to remove it by the head of security and refused, so “the team leader jumped up on the car and he tear up [sic] which made the Iraqi driver and his colleagues [all Shia] to be angry”. They reportedly called in protesters from outside the company to join the attack. The days leading up to Ashura are always a particularly sensitive time in Iraq, with millions of Shia involved in the mourning ceremonies. The Iraqi Oil Report website said that BP, the main operator at Rumaila, was scaling back its workforce and that employees of Baker Hughes and Schlumberger “were massed at Basra airport”. There were conflicting reports about whether the oil services companies were shutting down their operations. In an earlier incident affecting Baker Hughes, an Egyptian worker had removed the flags commemorating Imam Ali and Imam Hussein from company vehicles. Protests prompted Iraqi authorities to arrest the Egyptian on charges of insulting a religion, while Baker Hughes suspended its operations in the country and declared force majeure because of “a significant disruption of business”. In general, the international oil companies that have poured into Iraq in recent years are barely affected by the violence which is killing about 1,000 civilians a month. Most are Shia caught by blasts from car bombs and suicide bombers driving vehicles packed with explosives. The number of incidents and casualties has reached a level not seen since 2008, at the end of the last round of the Shia-Sunni civil war in which tens of thousands were killed. The deaths are mostly in the cities and towns of central and northern Iraq, while the oil companies are developing fields around Basra in the far south. Their foreign workers live in fortified camps, protected by security companies, and move in well-protected convoys. At this time of year, Shia-dominated districts in Iraq are a forest of banners and flags, and walls are covered with portraits of revered religious leaders past and present. Some 41 people, mostly Shia pilgrims, have been killed so far during the Ashura festival by bombings that bear the hallmarks of al-Qa’ida. In one attack, 17 pilgrims died and 65 were wounded by a suicide bomber who targeted a procession of pilgrims north of Baquba, near Baghdad, in a mixed Sunni-Shia province notorious for its violence. Two million Shia are expected to make pilgrimage to the shrine of Imam Hussein in Kerbala today, protected by 35,000 soldiers. As part of the ritual, the mourners beat and cut their heads and chests and whip themselves with chains to emphasise their grief and as a sign of remorse for failing to defend Imam Hussein. The quality of security firms in Iraq varies enormously. Some are highly disciplined and discreet, while others have been trigger-happy – making them extremely unpopular. ============================== Hi manu19, hope all is well with you. You wrote that I have not posted for some time "because of the banality, emptiness,shallowness, and macho sad point scoring of the last few months", where as,. I have actually posted a few times. My last post was on Friday though it was on an O/T subject and in response to a post by TRINDERM. You say ,"after today's RNS re the December 13 court hearing it is IMO important to have your opinions on what may happen re the appeal and the time scales." . I believe earlier Hub also made a similar request of me and or SK. As you and others know, I have been posting on this bb for a long time and tried to help others with any legal opinions, explanations relevant to the Excalibur case. Indeed I was very active whilst the trial was in progress. I have also posted generally on GKP and participated in OT discussions when the bb was quiet. What distinguishes me from most other posters, is that I post on this www under my own real name and am easily identified. I made this decision when I first joined the iii forum, because I wanted people to know, that what i wrote was always genuiune, that I have nothing to hide and I would never be personally / gratuitously offensive in any of my responses to anyone. The fact that I could be identified helped me to focus on the wording of everything I wrote, so that I would never regret my statements. Equally I expected others to respect that in their responses to me in my real name they would be a litle more sensitive in their choice of words. However, after Friday I decided I would never post on the GKP bb again although I did not originally intend to say anything about it. I simply decided that I would not post again. My only reason for giving my reasons now is because you have specifically asked me. With the constant, bickering, personally offensive atacks, etc the quality of this bb has sadly deteriorated to a level beyond recognition. You are right,that it has driven off many good posters, and the bb has now been successfully hijacked by many negative and offensive individuals who either deliberately set out to disrupt and stifle good discussion / debate or through their short sighted offensive responses to others have contributed to this bb's downfall. I had been toying with the idea of giving up with this bb for some time but what finally made up my mind was a personally offensive (to me) post by Zoso75 titled "The Prize" on Friday, at 10.11. It was obviously a source of some amusement to 4 others including mrgreystone, The Bully, geejay13, and The Golden vision who voted it up. The view that I take, is that whilst I am willing to help others in any way I can, I do not expect to be subjected to offensive language using my real name with which to do so. There are many inadequate and bitter people hiding behind their keyboards using pseudonymes who dont mind trading insults with each other. In real life I wouldn't give any of them the time of day, so I'll be dam ned, if I help them out here with my legal opinion. And in case anyone suggests that my position is a bit harsh on other genuine posters, let me say that whilst doubless there are still many genuine people posting and reading this bb, there was not even ONE single poster who spoke out (on my behalf) against the offensive nature of the post. Everyone bears some degree of responsibility for the deterioration and inevitable eventual downfall of this bb even if that responibility is merely passive. This is the reason why I have spoken out against others like pilchard9, Trinderm etc for using offensive language. However, quite clearly my view is not shared. I have herefore decided that I will henceforth not contribute any further to this bb. My genuine best wishes to all decent readers and posters. Elikkos =============== After alleged offenses against Shiite religious observances, two separate mob attacks at the Rumaila field left a British contractor hospitalized and forced Baker Hughes and Schlumberger to shut down operations. Turmoil in Basra oil sector after violent religious controversy Flares burn at the Rumaila oil field. (REUTERS/Atef Hassan) By Ali Abu Iraq, Ben Lando and Staff of Iraq Oil Report Published Wednesday, November 13th, 2013Two international oil services companies have suspended operations in southern Iraq following two different altercations between western contractors and Iraqi workers at the Rumaila oil field.Iraqi Prime Minister Nouri al-Maliki has issued stern warnings to both oil sector contractors and Iraqi workers, who came into conflict when foreigners working for Baker Hughes and security officers working for Schlumberger allegedly tore down posters and iconography of Imam Hussein, an act considered i... =============== Oil expats evacuate Basra, lasting impact of unrest unclear Flares burn at the Rumaila oil field. (BEN VAN HEUVELEN/Iraq Oil Report/Metrography) By Ali Abu Iraq, Ben Lando and Staff of Iraq Oil Report Published Thursday, November 14th, 2013Hundreds of expatriate workers were evacuating Basra on chartered flights Wednesday and Thursday following violent protests that sent one British national to the hospital.Rumaila operator BP has begun temporarily scaling down its foreign workforce, and expatriate workers of at least two oil service and drilling firms, Baker Hughes and Schlumberger, were massed at the Basra airport."Baker and Schlumberger are evacuating and will shut down operations for the time being, declaring force maj... =============== BP extends olive branch to Kirkuk over field development Iraqi Oil Minister Abdel Karim Luaibi (second from right) introduces Kirkuk province governor Najmaldin Karim (right) to BP CEO Bob Dudley (left) before a meeting on Nov. 6, 2013. (MARWAN IBRAHIM/AFP/Getty Images) By Kamaran al-Najar and Ben Lando of Iraq Oil Report Published Thursday, November 7th, 2013BP CEO Bob Dudley met with the Kirkuk governor on Wednesday in an attempt to remove local opposition to developing the field that has been a key flashpoint of Iraq's territorial disputes.Dudley and Oil Minister Abdul Karim Luaibi met with Governor Najmaldin Karim and other Kirkuk provincial government officials in Kirkuk, and went to the state-run North Oil Company's (NOC) headquarters for a briefing on Kirkuk field development plans. The delegation then traveled to Baghdad to meet with Prim... ============ Nassiriya project bid postponed to Jan. 23 The Nassiriya oil field in Dhi Qar province. (STAFF/Iraq Oil Report) By Ben Lando of Iraq Oil Report Published Friday, November 22nd, 2013Iraq has pushed back its joint oil field and refinery bidding round for Nassiriya to Jan. 23 - a month-long delay to give the Oil Ministry time to create improved contract terms in response to investors' demands. ============== UPDATE: Exxon splits West Qurna 1 stake with CNPC and Pertamina A worker adjusts the valve of an oil pipe at the West Qurna 1 oilfield in Basra on Nov. 28, 2010. (ATEF HASSAN/Reuters) By Ben Lando and Staff of Iraq Oil Report Published Thursday, November 28th, 2013ExxonMobil has reduced its stake in the 9.1 billion barrel West Qurna 1 field from 60 percent to 25 percent – but will still be the operator – following a signing ceremony in Baghdad on Thursday.The move is part of ExxonMobil's plan to de-risk its Iraq assets."The final process … has been completed and the agreement has been signed," said Assem Jihad, the Oil Ministry spokesperson.PetroChina, the China National Petroleum Corp. (CNPC) subsidiary, now has 25 percent. Indonesia's ... ================ So, here's what I got up to during my first day in Erbil, Iraq. Firstly, I'm in Erbil to attend the Kurdistan Oil and Gas conference, and to meet with potential clients. I have some contacts here already, through a local services supplier (Oilserv) but also from work we have done globally, and in the UAE. I flew in on the Qatar airways flight from Doha, landing at about 15.00. I struck up a conversation with the late 20's gent sat next to me. As with everybody I have met thus far, he was delighted to openly and honestly tell me his story. He was a Kurd who has lived many years in North London. The fates conspired to have him give up his job in The City, gather some investment and open a machine shop in Erbil, about 3 or 4 years ago. The first 18 months were tough, as they worked to build their brand and reputation, with a mix of marketing and adherence to quality regulations. They supply light to medium machining and repairs to the drilling sector, and their level of operations is directly related to drilling activity - so a steady rise. They struggle to meet demand. I've been in that situation (and still am now) and I mentioned that the challenge is growth whilst maintaining quality and on time delivery. He noted that the labour market here is tough, as the locals lack the skills required and so he has many migrant workers from India and Pakistan. There's a lot of expense in that with flights, housing, visas, etc. He has a training program in place now, and is taking on local people. He says that this is looked on favourably by the KRG, but the benefits are not that tangible just yet. The youth here are keen to have an education, and to learn vocations, but the work ethic doesn't match western expectations. He's a great contact to have, offered his help, if needed. He has the sort of business, and attitude, that my company may well need in the future. As Kurdistan in visa on arrival, once off the flight I went to the window market "Visas" but one of the staff saw my UK passport and told me I could go directly to the passport control window. There my passport was given the usual once over, but no perticular interest, was stamped and handed back. In. No drama, no fuss, and free. I had arranged a car from the Rotana Hotel to pick me up at the airport. The Rotana has a large desk at the exit from customs, and I was met by a friendly young chap with a handshake and a smile. He drove me to the hotel. He's a Syrian Kurd, and on hearing I'm Scottish he made some comparisons and contrasts with the Scottish vote on independence, and the Syrian Kurdish desire for separation. These were, of course, more contrasts than comparisons. He's studying English, as he sees it as an essential skill to have. He's right. He speak Arabic and Kurdish, too. At the hotel, my bags went through an airport type scanner, and I had to walk through a metal detector. The car park had a few big (I think) Cadillac hotel cars and a bunch of Land Cruisers kitted out for off road use. There was the usual mix of oilfield guys, business types and security folk dandering about. I checked in ($235 per night, room only - higher from Sunday as the conference is on) and was told that wifi is $30 extra per day. I wasn't having any of that, as for my stay it would be $210 extra, so I asked what local sim cards were available. I'll get back to that. After checking in, I headed up to the 7th floor, which it turns out I'm sharing with the UK embassy. There's a desk as you come out of the lifts, and you can't go right, unless you wish to mess with the jeans and t-shirt wearing Brits sat there shooting the breeze. You can figure out who they might be. Room is like any other 4/5 star business hotel: Immaculate, everything you need. European sockets were a surprise, as most of the region takes UK plugs. So, I decide I need to go get myself some data. The concierge arranged a local cab for me, as the hotel cars are silly money. I'm told that I should pay no more than 5000 for the trip (it's about 1000 Dinars = £1). The driver (in Arabic) declares it'll be 7000 as it's Friday. That much I understood, but I don't speak Arabic. I know "sabbah" is 7, though. I have a laugh and say that makes me feel at home, which is translated by one of the hotel staff. He grins, but shrugs in a a "that's the deal, mate" sort of way. Anyhoo, I jump in and off we go. I'm not sure what the taxi was, but it had a Volvo steering wheel. It wasn't no Volvo. I'll pay more attention next time, as I was busier looking out the windows. Rather than describe the streets (reminded me of Romania) I'll take some pics. You can see on Google, in any case. What initially seemed like a driving free for all, does seem to have some rules. I don't know what they are, but somebody seems to. The scariest thing are all the central gaps in the 3/4 lane main roads through the town. These are all made use of, and it's a "nudge out until you're so in the way someone slams on the brakes" system. We were hurtling along at, maybe, 60mph, but it felt like 90 in whatever this shaky jalopy was. Terrifying, but I sort of got used to it. It's not as aggressive as Qatar driving, anyway. So, I get to the Family Mall, where people seem to be arriving from work. There's a queue to get in, as people go through 2 metal detectors. Once in, there's all the familiar names, such as Nokia, Timberland, Merrel, Mothercare, Carrefour (French origin supermarket - popular in the middle east) and I think I saw a Baskin Robins. There are some little local concessions, too. The biggest surprise were a Hublot store, right opposite a Vertu shop. These are high Dollar items. My mission, however, was data. I had a wander around, and noticed that there were a mix of Arabs and Kurds and a few others, too. Predominantly men, with a few ladies, too. The local women are beautiful: dark and fierce looking, very Turkish. The men are also dark, with a bit of menace (but that's solely from my perspective, though: they are the friendliest bunch). After trying to find the "Fast Link" Chinese made wifi dongle in a couple of electronic stores, I was pointed to a local shop, next to Nokia. There, the 2 staff were great. They talked me through how it worked (sim card goes into a 4G enabled bit of hardware, which then converts the data into a wifi signal for your laptop/iphone/whatever. It's about the size of a cell phone; I use one in Doha, too) and one of them nipped round to the exchange place round the corner, to change my Dollars, as they don't take cards. They took a scan of my passport, and filled in a form for the network provider. Instead of noting down my Qatar phone number, he just laughed and made one up for the form. So, in about 3 minutes, I had 30gig of data, and a nice 4G router for about $150, versus the £210 on offer from the hotel for one week of data - only in the hotel. This means I'll have wifi when at the conference - so can make immediate updates if anything groovy happens. I celebrated with a coffee at a cafe in the mall. It cost me about $5 (i did think it was £6.50, but I had my sums wrong). In any case, I thought I was getting the special tourist rate, but no, it really was more expensive than London. I then headed back to the hotel with another local driver. Same thing: I offer "Hamsa", and he counters with "Sabbah". Hey ho. So, I get back to the hotel, check mail, etc, an notice I'm hungry. I've been hearing chatter about the German Bar from some Oilserv folks, so I jump in another car, and head there. This time my driver is a 21 yr old local guy, and he speaks English. This, he want s to improve, as he sees it as a route into one of the multinationals moving into town, be it a hotel, or any other business. He's friendly, and smart enough. He drops me at the place, and I'm taken with it immediately. It's a basic one story building, enclosed by a wall, with some trees, creating a courtyard out front. Everyone is sitting outside - about 60 folks, same sort of mix as the hotel - and there's a pallet burning on a big iron grate built between some long, German style tables. There's a stage to one side and, worryingly, a big, brightly lit Jaegermiester machine sat on the bar. As I'm only in a shirt and light sweater, I grab a seat near the fire (my hair is a bit smoky this morning) and order a draft beer (as good as you'll get anywhere) and a decent steak with mashed potatoes. I'm joined at the table by a long haired fellow from Syria, and we get chatting. We talk about all sorts, including the state of Syria, but many about globalisation and his views that humanity are cannon fodder for a very select few. Tough to argue with, to be fair. He's here building a hotel, and hopes to set up a jazz bar. He reckons that weapons and the like are too prevalent here to risk setting up a nightclub, as having that along with young, drunk people packed in together is asking for trouble. He says he sees fights over women every weekend, and they get nasty. He asks who I work for, and when I tell him says "no effing way!" It turns out he knows one of our UK engineers who's based in Abu Dhabi, and was at his wedding, recently. Sure enough, there's photos of the two goons grinning away. I think I need to get used to this sort of thing. We are joined by two of his friends. One is a local to Erbil, who has had a few failed start up restaurants, but who's main business is oilfield logistics (yes, I'll be grilling him about trucks) and the other is a Syrian studying Petroleum Engineering in Kirkuk (not as much "ook" sound as I've been making). Good guys, and we got into rounds of drinks - mainly beer, with the odd Glenfiddich (choice sorely lacking). It didn't get out of hand,as these guys had a 6am start. I also met a couple of Brits there towards the end, one of whom gave me his card. I noticed that they had their logo on a banner at the stage. I was given a lift back to the hotel in a gangster issue AudiA4. I fancied one more before bed, so mooched into the hotel bar. I took a seat there with a beer, and was almost immediately invited to join 2 young ladies and a burly local chap, who were drinking wine. The chap was very quiet, and I took him to be their minder. They were both Swedish Kurds, with looks to match (man, this place is cool) working in film. One is the producer of a new, local, TV show. They are doing the first Kurdish soap opera, and say it needs to be pretty "sexy" to be successful. They were passionate, outspoken (a little scary, but utterly superb with it) and proud. I was belly laughing for about an hour, until the bar closed. Hugs and goodbyes, and I hit the sack. It's foggy this morning. I'm heading to the citadel, and looking forward to the day. Later, Rob. PS. I don't read all the iii threads, so if you'd like to know something (like the chap who asked about Cassandra recycling) then do so on this thread. Also, I've had a load of requests to add people on facebook. Don't be upset if I don't. I just had a cull, and also I don't know which of you are people I don't much like on iii. I'll respond to messages, though. ================ Author Rcmacf View Profile Add to favourites Ignore Date posted Saturday 14:40 Subject Rob in Erbil - Day 2 Votes for this Posting Voted 134 times. Message Day 2. Underwear: Black So, the morning was a slow start, following the late evening. There must have been a change in the wind last night, as not only was it foggy, but there was the unmistakable scent of oil town in the air as I woke up. It's a dull smell of oil mixed with the faint pong of eggs, from the h2s. This comes in from the oilfields and Doha, Ploeisti, Cabinda, Taft, Fiere all smell the same when it does. I checked my mails, and pinged off a few to those who's cards I acquired. I skipped breakfast, and instead went round the corner to the Costa-Rica coffee joint. This was originally set up as an actual Costa branch, but the Baghdad govt removed the permission for the folk here to use the actual Costa name (for whatever reason, but jealousy is touted) and so the would-be franchisees slapped on the "-rica" bit on the end.I ordered a latte and an orange juice. The orange came from one of those machines that lops the oranges in half, then squeezes out the juice. I happily took it outside for a seat in the sun (next to a 6 lane road). The latte arrived, but was tea. Due to my accent the "tte" part was heard more then the "lat" part, and so tea it was. No biggie, life all good. I finished up and walked the few hundred yards back to the hotel. The taxi drivers at the front of the hotel are usually the same guys, so they recognised me. One agreed to take me to the citadel, or "Qalat" (which makes me think of Caliphet) for "Hamsa", which is only 5000 Dinars, as it was no longer Friday. Ha. So, off we went. It turns out that these drivers had had a pow-wow, and decided that I am, in fact, Italian. I accepted the compliment, but pointed out the error. It must be my shoes. Shoes are of great importance in Erbil, I was to see. Erbil has a system of roads running in rings around it, as seconds on google maps will show you. Unfortunately, the spokes aren't as good as the wheel, if you get me, so the routes can be circuitous. I try to put my misplaced fears aside as we drive down little back streets that look remarkably like something out of Black Hawk Down. I remind myself I'm safe, and that in any case I don't have my Leatherman with me. Not sure what I'd do with it, probably just hurt myself. I see the citadel up ahead, but the direct route goes through some sort of govt complex, hence the detour. There are a few AK-47 wielding dudes in army fatigues, and big steel barrier preventing entry onto the direct route to the citadel. The extra time gives the driver a chance to make a deal. Now, as I've already told these guys I'm Scottish, yet they reckon I'm Italian, I know there's a communication gap. The driver was offering me one of the following, but I can't be sure which... Either he was offering me his watch for $2, he was offering me $2 for my watch, or he was offering me his watch and $2 for my watch. In any case, I'm wearing an Oris, so it was no dice. As we came into the centre of town, I heard the call to prayer, and then I swear I heard jingle bells from some place. We arrive at the road which immediately encircles the Qalat, and I get out. If north is midday, I get out at about 10 o'clock, and start an anti-clockwise walk around the entire structure. It's dilapidated, and interesting, but my attention is more taken with the sprawling market on the Qalat ring road, and the back streets. Where I start it is mainly shops selling suits, shirts, menswear and leather bags. There are some money changing guys with odd perspex boxes full of notes. I see one of them has 100 x fake $100 bills for sale. I think about it, but then consider the consequences if stopped in Doha. I think they are sort of funny, and would use them to wrap xmas gifts or something, but Qataris may not see it that way... at all. The markets cover about 3/4 of the circumference of the citadel, and go fairly deep into the surrounds. If you can't buy it there, well, you just can't buy it. It felt like it was predominantly men there, but I came across the textile selling area, and that was full of women. Everywhere, and I mean everywhere, there were shoes. If you were on a street with no shoes for sale, then you could have them repaired, or shined. I took a seat at a (sort of) cafe, which consisted of a bench, some little tables, and a stove, and had some Iraqi style tea - super strong and super sweet. Cost me 12p - that won't get you much mall coffee. As I sat there, a chap of about 10 walked past with a single pair of men's shoes, and offered them for sale to me, and all the others there. It's worth noting that nobody paid any great attention to me more than anyone else, and this kid didn't try to push his wares on me any harder. Certainly different to my experiences elsewhere, such as India or Greece. I put this down to the same looks that get me taken for Italian. I sort of blend in. Ok, I'm dressed like a European, but then the local guys have a sense of style, and if they can't find what they need at the souk, they have it fitted, or made for not much money. There's no excuse for not looking good in Erbil. So, shoes all over the place. Nobody took these from the kid. After my tea I wandered further into the markets. There were quite a few Arabic sweet stalls, and some spice shops. In one of these there was a kid cutting hair. Yep, in the spice shop. Dangling from the ceiling of many of the sweet shops were long, black ropes of shiny, plasticky somethings. I asked one chap what they were and he pointed to a bag of walnuts, and a bag of raisins. He sliced one open and gave me some to taste. They are walnuts coated with congealed raisin juice, I think. Tasted ok, not too sweet, but not my sort of thing. Each of the sweet shops have Turkish delight in them, but it is of a much firmer consistency than we would recognise, and comes in some pretty big lumps. I took some photos, but it's not a touristy place, and I didn't want people thinking that their lives are just a show for me, so I was careful with where and who I photographed. Not out of a sense of fear, just out of respect, and the understanding that I don't know how my actions would be perceived. The market wouldn't be considered clean in western terms, and I didn't feel all that comfy eating from some of the stalls, and I'm usually right into it. The hangover held me back. There are quite a few restaurants there - very basic, and I would be happy to eat at those, but they were all packed out. One thing I don't understand about the market dynamics here is how 6 stalls who all sell water pumps, of the same brand and model, and not much else, can all be next to each other and all be successful. It's a model you see throughout the middle east, and I've never really managed to get it. No matter. So, as you move round to about 3pm the shops become more hardware and building supplies, and eventually become carpentry workshops and the like. By this point the English has dropped off the shop signs, and things are a bit more falling apart. Just before I get round full circle I pass a private school, going by the signs, and a few govt buildings. It's round at about North that there is a road leading up to the citadel itself, and the Ahmady gate. I walk up, and see there's a lot of restoration and construction work going on, so it's not possible to get to the walls, and walk all the way around. I take a brief stroll inside, but there's not a great deal I can see besides some ruined walls and old buildings. The restoration is in full flow, though. I take some snaps of the big flag and pole in the centre, and head on back down. Keeping pace with me are some local kids. One is about 14, and has a big cigar in his fingers. Styling. I put a bunch of photos in the same dropbox folder as this. Hope it works: http://dl.dropboxusercontent.com/u/62680872/Erbil/2013-11-30%2014.38.56.jpg At the bottom of the road I took up to the citadel, I found a guy with a kart of pastries. I bought one from him for about 80p (deffo skinned me). I started by asking him for one in Arabic. He broke into English, and we had a short chat about his wares - he had a queue so i didn't want to take too long. There's a photo of him wrapping a pastry for me. He couldn't really explain what was inside it, and having eaten it, I can't either. It was like filo pastry, dripping in sugary water and filled with a marshmallow/cream hybrid - but not Turkish delight. It weighed in somewhere between 6 and 8 million calories. I ate up, and went looking for a cab. One last thing on the citadel, as I walked down the hill, I noticed I was looking into a school courtyard below. The kids were in the courtyard, and a bell went to call them into the class. It was a jingle bells doorbell chime, played over the tannoy. Sanity restored, kinda. Nothing there today that's going to have much effect on our investment, but I'll tell you this much, if we need water pumps, we're sorted. I've got an early start tomorrow morning, so if there's anything to report from this evening, it'll be later in the day. That's also why today's stuff is being posted now. ================ UPDATE 1-Chevron lifts force majeure at Angolan oil platform Thu, Nov 29 13:30 PM EST * Follows major disruptions to exports in W. Africa * Kuito loadings resume after repair work GENEVA, Nov 29 (Reuters) - U.S. oil major Chevron's Angolan subsidiary Cabinda Gulf Oil Company lifted a month-long force majeure at the Kuito offshore oil terminal on Nov. 27, Chevron said on Thursday The end of force majeure will likely come as a relief to oil traders active in the west African market where theft and flooding in Nigeria has also caused disruptions to exports. A Chevron spokesman added that there was no impact on production at Kuito as the necessary repair work on a mooring line coincided with planned maintenance. Still, the repairs affected oil loadings at the terminal over the past month, although these resumed this week, Chevron added. Angola is Africa's second largest oil producer after Nigeria and the Kuito platform typically loads two 920,000 barrel tankers a month. Shell also lifted the last of three force majeures on its Nigerian oil and gas exports on Thursday, declaring production restored for Forcados crude. But force majeures, a clause that allows companies to suspend contractual obligations in the face of unexpected events, on Nigerian grades operated by Exxon Mobil and Eni remain in place. =================

UPDATE 4-Schlumberger sees hit from fracking price pressures

Mon, Mar 26 15:23 PM EDT

* N.America liquids basins start seeing price pressure in Q1

* Schlumberger shares down 1.2 pct, Baker Hughes off 1.6 pct

* Market leader Halliburton rises, seen as better placed

By Braden Reddall

NEW ORLEANS, March 26 (Reuters) - Schlumberger Ltd, the world's largest oilfield services company, said profits would be hurt by downward pricing pressure for hydraulic fracturing services, which had now reached North American liquids-producing basins as well.

Chief Executive Paal Kibsgaard said that on top of the price squeeze, already widely seen in natural gas areas due to weak gas prices, the shift of pressure pumping equipment to liquids-rich basins was reducing utilization while also adding to costs.

"Together these factors will have an impact on our results both in North America, and overall, in this and in the coming quarters,"

Kibsgaard said in a speech to kick off the Howard Weil Energy Conference in New Orleans on Monday.

The use of hydraulic fracturing, or fracking, around the many U.S. shale basins has boosted natural gas production while stemming (To make headway against: )a decades-long trend of falling U.S. oil production.

"There is some slackening of demand in the gas plays and there has been migration to liquids plays. So there's more supply coming online and it is normal that pricing would come down," said David Vaucher, an analyst with IHS-Cambridge Energy Research Associates in Houston.
Vaucher highlighted the challenge of getting all those materials to so many wells. "Looking at just pressure pumping is a little myopic," he said. "There is upward pressure for all other things that are still required for fracking jobs."


But other supplies remain scarce in general, from rigs to frack crews, water, sand and synthetic proppants used to keep cracks in shale rock open to get the hydrocarbons out.



HALLIBURTON UP

Shares of Schlumberger, which makes most of its money outside North America, fell 1.2 percent to $72.28, while rival Baker Hughes Inc dropped 1.6 percent to $43.03.

Baker Hughes gave a profit warning last week, in addition to a warning in January, about the impact of disruptions from its fracking crew relocations and supply shortages.

But shares of Halliburton, the market leader in North American pressure pumping, rose 0.8 percent on Monday.

"We believe (Halliburton) has a much better developed supply-chain network, and while not immune to near-term frictions, will likely post much better margins than its peers in North America," Sterne Agee Analyst Stephen Gengaro wrote on Monday as he cut profit estimates for Baker Hughes.

Nabors Industries Ltd, the No. 6 in North American pressure pumping, sees an increasingly competitive market in 2012 and a U.S. land rig count "flat to slightly down" in the second half of 2012. But the company said that with 72 percent of its 2012 operating income under contract, the downside was limited.

Nabors also spelled out plans to sell its helicopter business and well service rigs in Canada, some of its offshore rigs, as well as its oil and gas properties. Dahlman Rose's James Crandell expects those sales to raise about $1 billion.

Outside North America, Schlumberger saw steady growth from deepwater activity and exploration, as well as key land markets.

"The medium-term outlook for the oil and gas industry remains positive, driven by the narrow cushion of spare oil capacity and the growing demand for natural gas," Kibsgaard said in his first presentation to the conference after taking over as CEO from Andrew Gould last August.

Barclays believes international growth could offset the near-term weakness in North America. "We think this softness is largely due to transitory issues and some pricing pressure in pressure pumping," analysts at the bank wrote on Monday.

Bernard Duroc-Danner, an economics Ph.D. who runs oilfield services company Weatherford International Ltd , said the pressure pumping market may get even tougher as a result of building decisions made three months ago in response to what were then healthy margins.

"Beyond the 'gas very bad, oil very very good' phenomenon, pressure pumping has dynamics of its own insofar as there is a quite sizeable amount of capacity just waiting to come on the market," Duroc-Danner told the conference.

The industry has attempted to rein in this expansion. Superior Energy Services Inc, for one, cut its pressure pumping capacity growth plan this year by about one-quarter.

This follows the huge ramp-up in the past few years. Dan Pickering, of Tudor, Pickering, Holt, sees available hydraulic horsepower by year-end at 19 million horsepower, or 2-1/2 times more than in 2009. A typical frack job uses up about 50,000 hp. === Jul. 22, 2012 6:44 PM ET Experts: Some fracking critics use bad science By KEVIN BEGOS, Associated Press AIM Share FILE - In this file photo from Nov. 3, 2010, documentary filmmaker Josh Fox speaks at a rally of protestors against Marcellus Shale drilling and hydraulic fracturing in Pittsburgh. Researchers say the claim that fracking has been linked to increased cancer rates in Texas is simply wrong. Fox, an Oscar-nominated filmmaker who uses the claim in a new film, declined to acknowledge the error when told of researchers who say he's doing a disservice to people with cancer by misrepresenting health data. (AP Photo/Keith Srakocic, File) More News Video APNewsBreak: EPA reviews part of power plant rule Jul. 20, 20125:32 PM ET Judge slaps mining company with $2 million penalty Jul. 20, 20123:44 PM ET NM fuel spill threatens Albuquerque water supply Jul. 20, 20126:31 AM ET US insurer won't cover gas drill fracking exposure Jul. 12, 201210:12 PM ET Electric rates not falling along with fuel costs Jul. 11, 20122:54 PM ET PITTSBURGH (AP) — In the debate over natural gas drilling, the companies are often the ones accused of twisting the facts. But scientists say opponents sometimes mislead the public, too. Critics of fracking often raise alarms about groundwater pollution, air pollution, and cancer risks, and there are still many uncertainties. But some of the claims have little — or nothing— to back them. For example, reports that breast cancer rates rose in a region with heavy gas drilling are false, researchers told The Associated Press. Fears that natural radioactivity in drilling waste could contaminate drinking water aren't being confirmed by monitoring, either. And concerns about air pollution from the industry often don't acknowledge that natural gas is a far cleaner burning fuel than coal. "The debate is becoming very emotional. And basically not using science" on either side, said Avner Vengosh, a Duke University professor studying groundwater contamination who has been praised and criticized by both sides. Shale gas drilling has attracted national attention because advances in technology have unlocked billions of dollars of gas reserves, leading to a boom in production, jobs, and profits, as well as concerns about pollution and public health. Shale is a gas-rich rock formation thousands of feet underground, and the gas is freed through a process called hydraulic fracturing, or fracking, in which large volumes of water, plus sand and chemicals, are injected to break the rock apart. The Marcellus Shale covers large parts of Pennsylvania, New York, Ohio and West Virginia, while the Barnett Shale is in north Texas. Many other shale deposits have been discovered. One of the clearest examples of a misleading claim comes from north Texas, where gas drilling began in the Barnett Shale about 10 years ago. Opponents of fracking say breast cancer rates have spiked exactly where intensive drilling is taking place — and nowhere else in the state. The claim is used in a letter that was sent to New York's Gov. Andrew Cuomo by environmental groups and by Josh Fox, the Oscar-nominated director of "Gasland," a film that criticizes the industry. Fox, who lives in Brooklyn, has a new short film called "The Sky is Pink." But researchers haven't seen a spike in breast cancer rates in the area, said Simon Craddock Lee, a professor of medical anthropology at the University of Texas Southwestern Medical Center in Dallas. David Risser, an epidemiologist with the Texas Cancer Registry, said in an email that researchers checked state health data and found no evidence of an increase in the counties where the spike supposedly occurred. And Susan G. Komen for the Cure, a major cancer advocacy group based in Dallas, said it sees no evidence of a spike, either. "We don't," said Chandini Portteus, Komen's vice president of research, adding that they sympathize with people's fears and concerns, but "what we do know is a little bit, and what we don't know is a lot" about breast cancer and the environment. Yet Fox tells viewers in an ominous voice that "In Texas, as throughout the United States, cancer rates fell — except in one place— in the Barnett Shale." Lee called the claims of an increase "a classic case of the ecological fallacy" because they falsely suggest that breast cancer is linked to just one factor. In fact, diet, lifestyle and access to health care also play key roles. Fox responded to questions by citing a press release from the Centers for Disease Control and Prevention that doesn't support his claim, and a newspaper story that Risser said is "not based on a careful statistical analysis of the data." When Fox was told that Texas cancer researchers said rates didn't increase, he replied in an email that the claim of unusually high breast cancer rates was "widely reported" and said there is "more than enough evidence to warrant much deeper study." Another instance where fears haven't been confirmed by science is the concern that radioactivity in drilling fluids could threaten drinking water supplies. Critics of fracking note the deep underground water that comes up along with gas has high levels of natural radioactivity. Since much of that water, called flowback, was once being discharged into municipal sewage treatment plants and then rivers in Pennsylvania, there was concern about public water supplies. But in western Pennsylvania, the Pittsburgh Water and Sewer Authority did extensive tests and didn't find a problem in area rivers. State environmental officials said monitoring at public water supply intakes across the state showed non-detectable levels of radiation, and the two cases that showed anything were at background levels. Concerns about the potential problem also led to regulatory changes. An analysis by The Associated Press of data from Pennsylvania found that of the 10.1 million barrels of shale wastewater generated in the last half of 2011, about 97 percent was either recycled, sent to deep-injection wells, or sent to a treatment plant that doesn't discharge into waterways. Critics of fracking also repeat claims of extreme air pollution threats, even as evidence mounts that the natural gas boom is in some ways contributing to cleaner air. Marcellus air pollution "will cause a massive public health crisis," claims a section of the Marcellus Shale Protest website. Yet data from the U.S. Energy Information Administration show that the shale gas boom is helping to turn many large power plants away from coal, which emits far more pollution. And the U.S. Environmental Protection Agency passed new rules to force drillers to limit releases of methane from wells and pumping stations. Some environmental groups now say that natural gas is having a positive effect on air quality. Earlier this year, the group PennFuture said gas is a much cleaner burning fuel, and it called gas-fired power plants "orders of magnitude cleaner" than coal plants. Marcellus Shale Protest said in response to a question about its claims that "any possible benefit in electric generation must be weighed against the direct harm from the industrial processes of gas extraction." One expert said there's an actual psychological process at work that sometimes blinds people to science, on the fracking debate and many others. "You can literally put facts in front of people, and they will just ignore them," said Mark Lubell, the director of the Center for Environmental Policy and Behavior at the University of California, Davis. Lubell said the situation, which happens on both sides of a debate, is called "motivated reasoning." Rational people insist on believing things that aren't true, in part because of feedback from other people who share their views, he said. Vengosh noted the problem of spinning science isn't new, or limited to one side in the gas drilling controversy. For example, industry supporters have claimed that drilling never pollutes water wells, when state regulators have confirmed cases where it has. He says the key point is that science is slow, and research into gas drilling's many possible effects are in the early stages, and much more work remains to be done. "Everyone takes what they want to see," Vengosh said, adding that he hopes that the fracking debate will become more civilized as scientists obtain more hard data. Associated Press ============