Oil is the lifeblood of modern civilization and almost has single-handedly made industrial civilization possible. We are more than just dependent on oil, we are addicted to it. With the global demand for oil continuing to grow, have you considered investing in oil and gas with a self directed IRA? It could be an ideal way to grow and produce yields for your retirement with a producing well.

Hi Steve, Thanks for taking time from your busy schedule!

1-Would you tell our readers what your company does?

Well Enhancement Services increases production by creating horizontal laterals in oil and gas wells. Our laterals extend from the wellbore out 300 ft into the producing formation. We create these horizontal laterals in all directions and at multiple operating depths with typically three or fours laterals per depth. In other words, we open up the well in order to allow oil and gas to move more freely to the wellbore, thus increasing the drainage radius. We believe that we can allow wells to drain an addition 15% of the oil that is in place.

Hi Dr. Schmidt, thanks for taking the time out of your busy day! I know the GasGun® is in high demand these days, would you mind telling our readers a little bit about your company?

It is my pleasure to speak with you today!

J Integral Engineering was formed in 1992. In 1994, we won a Small Business Innovation Research grant from the Department of Energy to develop, test, optimize, and commercialize the use of progressively burning solid propellants for the economical stimulation of oil and gas wells. The concept, initially conceived from a research study I helped conduct at Sandia National Laboratories in the early 1970's, was field-tested and a practical design was optimized.

Indonesia has installed electrical generating capacity estimated at 24.7 gigawatts, with 80 percent coming from thermal (oil, gas, and coal) sources, 18% from hydropower, and 2% from geothermal. Prior to the Asian financial crisis, Indonesia had plans for a rapid expansion of power generation, based mainly on opening up Indonesias power market to Independent Power Producers (IPPs). The crisis led to severe financial strains on state-utility Perusahaan Listrik Negara (PLN), which made it difficult to pay for all of the power for which it had signed contracts with IPPs. PLN has over $5 billion in debt, which has grown markedly in terms of local currency due to the decline in the value of the rupiah. The Indonesian government has been unwilling to take over the commercial debts of PLN.

Indonesia is facing an electricity supply crisis, due to underinvestment in power generation capacity. Intermittent blackouts are a problem across Java. Demand for electrical power is expected to grow by approximately 6-7 percent per year. The majority of Indonesias electricity generation is currently fueled by oil, but efforts are underway to shift generation to lower-cost coal and gas-powered facilities. Hydropower also is being expanded. Sumitomos 1,320-MW Tanjung Jati B plant in Central Java, a 730-MW plant at Cilegon in West Java financed by Mitsubishi, and a Chinese-funded 600-MW station at Cilacap on the southern coast are all due to be commissioned in mid-2006. However, after these projects are completed, after long delays, there is a lack of adequate new capacity "in the pipeline" to meet the countrys needs.
In January 2003, the World Bank announced that it was planning to finance three micro-hydropower plants in the Indonesian province of Papua (Irian Jaya). A feasibility study on all of the areas water sources has already been conducted, and the results are being studied. By building these facilities, the World Bank hopes to improve services to the local population as well as to encourage development activities in the province.

In October 2003, the World Bank approved a $141 million loan to Indonesia for the purpose of improving the power sector on Java and Bali, which use approximately 80% of Indonesias power generation capacity. The project includes support for a corporate and financial restructuring plan for PLN and technical assistance for a restructuring program for state gas company, Perusahaan Gas Negara (PGN), that will provide for increased natural gas supplies for electricity generation. The restructuring plan requires that PLN must restructure two of its subsidiaries, PT Indonesia Power and PT Pembangkit Jawa Bali (PJB). The two together supply about 80% of the power supply for Java and Bali, according to reports.
In 2003, the government renegotiated 26 power plant projects with the IPPs. Of those, five projects will be taken over by the government, in cooperation with PLN and Pertamina. Legislation enected in September 2002, which would have facilitated competition in electricity generation by 2007, was overturned by the Indonesian constitutional court in December 2004. Substitute legislation was enacted in February 2005 which clears the way for full private ownership of electricity generation assets. The Indonesian government sees the need for 24 gigawatts of additional generating capacity by 2013, but foreign investors have largely avoided the Indonesian power sector in recent years due to the poor financial condition of PLN and the uncertain legal climate.

Aside from the lack of adequate investment in generating capacity, long-haul transmission also remains a problem. For example, the 3,200-MW Paiton power plant in East Java, which is the countrys largest, has inadequate transmission lines to central and western Java, preventing transmission of electricity from an area with a local surplus to an area with inadequate supplies.

Indonesia has proven natural gas reserves of 90.3 trillion cubic feet (Tcf). Most of the countrys natural gas reserves are located near the Arun field in Aceh, around the Badak field in East Kalimantan, in smaller fields offshore Java, the Kangean Block offshore East Java, a number of blocks in Irian Jaya, and the Natuna D-Alpha field, the largest in Southeast Asia. Despite its significant natural gas reserves and its position as the worlds largest exporter of liquefied natural gas (LNG), Indonesia still relies on oil to supply about half of its own energy needs. About 68% of Indonesias LNG exports go to Japan, 19% to South Korea, and the remainder to Taiwan. As Indonesias oil production has leveled off in recent years, the country has tried to shift towards using its natural gas resources for power generation. However, the domestic natural gas distribution infrastructure is inadequate.The main domestic customers for natural gas are fertilizer plants and petrochemical plants, followed by power generators.

Indonesias economic growth surpassed expectations in 2004, and accelerating growth has continued into 2005. Indonesias real gross domestic product (GDP) grew at a rate of 5.1 percent in 2004, up from 4.9 percent in 2003. Real GDP growth is forecast to be 5.5 percent for 2005, although imbalances in the macroeconomic picture, such as increasing budget deficits caused by oil price subsidies on the local market, could lead to future problems.
Tension exists between the central government in Jakarta and leadership at the regional level. The distribution of oil and gas revenues between the central government in Jakarta and regional governments in areas which produce oil and gas has been regularly disputed. Since Indonesias transition to democracy in 1999, the countrys regional governments have been pressing for a greater share of oil and gas revenues.
While Indonesia is still a member of the Organization of Petroleum Exporting Countries (OPEC), it became a slight net importer of oil in 2004, and its oil production has continued to decline. The current government is reportedly considering leaving OPEC, but no decision to do so has been announced.

A shortage of oil storage space in Singapore has spurred expansion of the countrys independent storage facilities. Singapores major oil refineries hold 88 million barrels of storage capacity, or 88 percent of the countrys total storage capacity. Singapores independent storage operators have a total current capacity of 24.4 million barrels, although this number will grow as companies bring new facilities on line. Over the last five years Singapores independent storage providers have reportedly been running at above 90 percent capacity. In May 2006 Vopak began operations at its fourth storage terminal in Singapore, adding 2.1 million barrels of capacity at its Banyan site on Jurong Island. Oiltanking expects to complete a new facility in August 2006, also at Banyan, that would add 1.5 million barrels of storage capacity. Oiltanking anticipates that the new site would store clean petroleum products and will be linked by pipeline to its existing storage terminal on the island and also Shells Bukom refinery. Another new storage project comes from Horizon Terminals, a subsidiary of Dubai-based Emirates National Oil Corporation (ENOC), which expects to finish constructing a 5.3 million barrel storage terminal on Jurong Island by the end of 2006, likely adding a second phase in mid-2007.

While this growth in petroleum storage in Singapore is driven by high regional oil demand, some independent analysts have expressed concern that the new terminals may lead to excess capacity. In 2006, construction began on the joint Hin Leong Trading/PetroChina Universal Terminal on Jurong Island, which will reportedly have a storage capacity of 14.2 million barrels. In April 2006, Singapore also greenlighted the development of storage facilities in underground rock caverns on Jurong Island with a potential capacity of up to 20.1 million barrels. Phase 1 of the project is scheduled to begin in late 2006 and add 8.8 million barrels of new storage capacity by 2009, with a possible Phase 2 adding an additional 11.3 million barrels in future years if there is sufficient demand. The underground caverns will store petroleum liquids and products like naptha and gasoil.

Azerbaijan becoming independent in 1991, has attracted significant international interest in its oil and natural gas reserves. Foreign investors are helping the country develop its rich oil and natural gas reserves in the Caspian Sea basin, and completion and possible expansion of new pipelines, especially the BTC (Baku-Tbilisi Ceyhan) pipeline, will allow Azerbaijan to become an important energy exporter over the next decade. Oil production growth in Azerbaijan comes primarily from the Azeri-Chirag-Guneshli (ACG) field. Azerbaijan can become a large natural gas provider to Turkey and to Europe.

Proven oil reserves in Angola have tripled in the last seven years. According to the Oil and Gas Journal (OGJ), Angola had proven oil reserves of 5.4 billion barrels as of January 2006. The majority of the reserves are located in Angolas offshore blocks. The most prolific offshore blocks have been Blocks 15 and Zero. Proven reserves are also located onshore near the city of Soyo. The majority of Angolan oil is medium to light crude (30 degrees to 40 degrees API) with a low sulphur content (0.12 percent to 0.14 percent).

Malaysia contains 75 trillion cubic feet (Tcf) of proven natural gas reserves. Natural gas production has been rising steadily in recent years, reaching 1.9 Tcf in 2003. Natural gas consumption in 2003 was estimated at 1.0 Tcf, with LNG exports of around 0.9 Tcf (mostly to Japan, South Korea, and Taiwan).
One of the most active areas in Malaysia for gas exploration and development is the Malaysia-Thailand Joint Development Area (JDA), located in the lower part of the Gulf of Thailand and governed by the Malaysia-Thailand Joint Authority (MTJA). The MTJA was established by the two governments for joint exploration of the once-disputed JDA. The JDA covers blocks A-18 and B-17 to C-19. A 50:50 partnership between Petronas and Amerada Hess is developing block A-18, while the Petroleum Authority of Thailand (PTT) and Petronas also share equal interests in the remaining blocks.