ExxonMobil Announces Significant Oil Find in Gulf of Mexico After Chaotic OPEC Meeting in Vienna

Oil giant ExxonMobil [NYSE- XOM] announced on Wednesday a major discovery in the Gulf of Mexico that could yield as much as 700 million barrels of oil.

Exxon began exploratory drilling at the Hadrian prospect in 2009. The company had finished two wells at the site, located about 250 miles off the Louisiana coast in 7,000 feet of water, and had a rig on location and an approved permit to drill a new well when operations were halted due to the temporary moratorium after the BP oil spill last year.

In March, federal regulators signed off on Exxon's revised permit to drill the new well in the Keathley Canyon area of the Gulf, the company's first approved under the new regulatory regime put in place after last year's spill. The new well extends about 23,000 feet below the sea surface, and the rig is continuing to drill deeper, said company spokesman Patrick McGinn.

"We estimate a recoverable resource of more than 700 million barrels of oil equivalent combined in our Keathley Canyon blocks," Steve Greenlee, president of ExxonMobil Exploration Company, said in a statement. "This is one of the largest discoveries in the Gulf of Mexico in the last decade. More than 85 percent of the resource is oil with additional upside potential."

The announcement came on the same day as a surprise announcement from the OPEC meetings in Vienna that the member states would leave production levels unchanged, causing a jump in oil prices.

OPEC officials said that because of a policy deadlock, the group will maintain present output ceilings with the option of meeting within the next three months to consider a hike.

"We are unable to reach consensus to ... raise our production," OPEC Secretary General Abdullah Al-Badri told reporters, in comments reflecting unusual tensions in the 12-nation Organization of the Petroleum Exporting Countries.

Saudi oil minister Ali Naimi called it "one of the worst meetings, we've ever had," while analysts covering OPEC for more than 20 years said they could not remember any other time that the normally closed group had admitted to such divisions in its ranks.

Some even saw the abortive meeting as a harbinger of demise for the organization, which produces more than a third of the world's petroleum.

"OPEC is ... on the point of break-up," said Marc Ostwald of Monument Securities. "A broader perspective is that the post World War II world order is fracturing in a spectacular fashion, be it the EU/Eurozone, the World Bank/IMF, (or) OPEC."

Other experts were less outspoken but agreed Wednesday's outcome would weaken the image of OPEC as a major regulator of oil markets.

The news caught markets by surprise, sending oil prices sharply higher. Benchmark crude for July delivery was up $1.25 to $100.34 per barrel in morning trading on the New York Mercantile Exchange after trading lower ahead of the OPEC meeting.

Saudi Arabia and other influential Gulf nations had pushed to increase production ceilings to calm markets and ease concerns that crude was overpriced for consumer nations struggling with their economies. Those opposed were led by Iran, the second-strongest producer within the Organization of the Petroleum Exporting Countries.

Oil minister Rafael Ramirez of Venezuela- like Iran, a price hawk - said there was a "very tight" discussion in OPEC, in comments to his nation's state media. Any production increase "could cause a collapse of our price," he added.

While the Saudis and the Iranians are frequently at loggerheads over pricing, past meetings normally fell in behind Saudi Arabia, which produces the lion's share of OPEC output. But this time, the Saudi-Iranian rivalry combined with major political and economic uncertainties to lead to deadlock.

Saudi Arabia, the United Arab Emirates, Kuwait, Algeria and Qatar were reportedly in favor of production increases while Iran, Venezuela, Angola, Ecuador and Iraq were opposed.

Scam Within a Scam- Hackers Hit EU Carbon Credit Exchange, Steal €30 Million in Carbon Credits

Trading on the European Union Carbon Exchange was halted after hackers made off with an estimated €30 million in carbon emission allowances from five European countries in late January.

The Czech Registry for Emissions Trading was one of the worst affected by the hack, losing 7 million euros worth of the pollution permits, known as EU Allowances (EUAs).

Some 2 million EUAs were stolen by hackers from Austria, the Czech Republic, Greece, Estonia and Poland within a few days. Each credit allows the bearer one ton of emissions and is worth 14 euros.

EU authorities say they suspect a phishing scam enabled hackers to log into unsuspecting companies' carbon credit accounts and transfer the allowances to themselves, allowing them to be sold on.

The credits are normally traded between companies that have a shortage of or excess emissions allowances for their current operations, and involve instant payment, meaning hackers can create accounts and then delete them as soon as they are paid.

Investigators in Greece have traced the thefts to at least 8 internet protocol addresses in Romania. Registry officials in Estonia and Germany say they have located some 610,000 allowances stolen from the Czech registry, but the theft not only highlights a lack of security on the international exchanges, but also raises concerns that credits purchased in good faith on the open market could turn out to be stolen from the registries.

Some of the markets reopened with limited activity on Feb 3rd after giving "reasonable reassurances that the minimum security requirements are in place".

It is not the first time the ETS has suffered a security breach. The system was hit by a phishing scam last year that saw 13 European markets shut down, while a cross-border fraud scam in 2008 and 2009 netted criminals 5 million euros, according to Agence France-Presse.

I could go on about how such 'cap and trade' or climate or carbon Exchanges are pretty much worse than useless, but they do a bang up job of explaining that all by themselves- however unintentionally. Hell, Chicago's much-ballyhooed Climate Exchange shut down at the end of 2010.

Leaving aside the fact that such a system would arbitrarily place limits on output from manufacturing, transportation, utilities and energy exploration, how exactly would these trading mechanisms be enforced? It would require a massive bureaucracy and even more red tape- think along the lines of 0bamacare's 1099 mandate, only for air instead of healthcare.

All while obstructing further exploration and drilling for oil in Alaska and the Gulf of Mexico, coal in West Virginia or natural gas in the Marcellus shale. This in turn has already driven up energy costs and will only further America's dependence on energy imported from unstable or belligerent nations.

And if anybody think the above problems will magically go away thanks to some sort arbitrary imposition of cap and trade of carbon exchange scheme, I have a bridge in Brooklyn couple of EU carbon credits to sell you.