Archive for '2011'

    Iran: Ahmadinejad to propose Aliabadi as permanent oil minister

    July 15, 2011 10:28 AM by Eric Watkins
    Iran’s President Mahmoud Ahmadinejad plans to nominate a new oil minister later this month, with the current caretaker minister, Mohammad Aliabadi, being put forward for the permanent post.

    “As per previous practice, those ministers who are already serving on the posts will be nominated,” said Mohammad Reza Mirtajedini, vice-president in charge of parliamentary affairs.

    In addition to the oil minister, Ahmadinejad will nominate three other ministers: Industry, Mines and Trade; Cooperatives, Labor and Social Affairs; and Sports and Youth.

    Iran’s state news agency said that parliament would debate the suitability of the ministers and vote to approve them or not within a week of their nomination, now scheduled for July 24.

    Observers said the vote will serve as a referendum on Ahmadinejad, who has angered leading figures in Iran, including the Guardian Council, a powerful body of clerics and jurists appointed by Supreme Leader Ali Khamenei and parliament (OGJ, May 20, 2011).

    Ahmadinejad will be nominating Aliabadi to a parliament that is already highly critical of his dismissal of former Oil Minister Massoud Mirkazemi in May and his further attempt to appoint himself to the position.

    Aliabadi, who attended the fractious June 8 meeting of the Organization of the Petroleum Exporting Countries, himself is hardly a favorite candidate among parliamentarians.

    The head of parliament's energy committee said that Aliabadi, who was serving as head of Iran's Olympic Committee at the time of his appointment to the oil ministry, was the “worst choice” and that he would damage Iran's energy sector.

    At the time, Ahmadinejad defended his decision, saying that he was only implementing a plan to merge the oil ministry with the energy ministry, but critics viewed his move as an effort to take control of the country’s oil and gas revenues.

    Contact Eric Watkins at hippalus@yahoo.com

    South Sudan forms oil marketing venture with Glencore

    July 15, 2011 10:26 AM by Eric Watkins
    South Sudan’s state-owned Nilepet has formed a joint venture firm with Glencore International Plc that will begin marketing oil produced by the newly founded country.

    “This joint venture will help the Republic of South Sudan develop its national oil company through skills transfer and training, and be responsible for marketing the crude oil from July 9 onwards,” said Information Minister Barnaba Marial Benjamin.

    The new firm, called PetroNile, will market South Sudan’s output of about 375,000 b/d of oil, which is produced mainly by China National Petroleum Corp., Malaysia’s Petroliam Nasional Bhd. and India’s Oil & Natural Gas Corp.

    Under the 2005 peace agreement brokered between the two states, revenues from the South’s production were formerly shared equally with the North. But that agreement expired on July 9 with the founding of the new nation, and a new one has yet to be established.

    Currently, the South’s oil is exported via two pipelines leading through northern Sudan to an export facility on the Red Sea. But Juba is considering plans to build a new export pipeline in an effort to free itself of any further control by the North.

    South Sudan’s Oil Minister Luol Deng said recently that his country is in talks about a pipeline to Ethiopia, which receives about 80% of its oil from the Sudan – a tidy figure for the new nation. But Ethiopia is land-locked and cannot provide South Sudan with an outlet to world markets.

    Kenya represents another possibility. South Sudan’s Roads and Transport Minister Anthony Makana recently announced plans for a 200 km pipeline from Juba to Kisumu in Kenya.

    Last year, Toyota Tsusho, the trading arm of the Japanese carmaker, said it was developing plans to build a $1.5 billion pipeline to run from Juba to the Kenyan island of Lamu.

    That possibility remains on the table according to South Sudan’s Director of Energy Arkangelo Okwang, who recently confirmed that his country has been in contact “from time to time” with Toyota Kenya.

    Not least, the South Sudanese also are looking into the possibility of a pipeline to the south that would join with a pipeline under consideration in Uganda that would carry oil to Kenya’s Indian Ocean Port of Mombasa.

    International oil companies have long championed the idea of such a pipeline from Uganda, but a plan for its development has yet to be agreed as Ugandan officials prefer to refine their oil and market it as products.

    Contact Eric Watkins at hippalus@yahoo.com

    BP shrugs off tax woes to invest in UK's North Sea

    July 15, 2011 10:23 AM by Eric Watkins
    BP PLC underlined its commitment to the UK's North Sea by announcing a plan to invest £3 billion to redevelop its Schiehallion and Loyal oil fields west of the Shetland Islands.

    BP’s decision, described by one company executive as “an important milestone” for the firm, comes despite the recently imposed sharp uptick in taxes levied by the British government on oil and gas production in the country.

    "This important milestone is consistent with BP's strategy to sustain a material, high quality business in the North Sea region," said Trevor Garlick, BP regional president for the North Sea.

    BP said that Schiehallion and Loyal have produced nearly 400 million bbl of oil since production started in 1998 and that an estimated 450 million bbl of resource is still available.

    “The investment of circa £3 billion in the re-development of the fields will take production out to 2035 and possibly beyond,” BP said.

    BP said it has developed a strong track record west of Shetland over the past two decades and will use the latest technology to maximize recovery from these fields.

    It said the Quad 204 project involves replacing the existing Schiehallion Floating, Production, Storage and Offloading vessel with a new FPSO which is scheduled to be installed in 2015.

    The new vessel will be 270 m long by 52 m wide and able to process and export up to 130,000 b/d of oil, and store more than 1 million bbl of oil.

    BP said there will also be “a major investment” in the upgrading and replacement of the subsea facilities to enable the full development of the reserves.

    The new facilities are scheduled to commence production in 2016.

    BP’s investment decision came just four months after the UK’s Treasury raised the supplementary tax on oil and gas sold at prices exceeding $75/bbl to 32% from 20% -- a rise that energy companies warned would jeopardize their investment plans.

    However, Norway’s state-owned Statoil has since revived its Mariner project in the North Sea while Centrica has reopened a large gas field that was deliberately left dormant after the tax increase.

    BP acknowledged that the tax change would affect the value of the project, but it said the decision was justified by the size and scale of the development.

    "Like all investments in the UK continental shelf the value in the project for the companies involved has been reduced because of the tax change," said BP. "The tax increase certainly didn't make the decision any easier, however the size and scale of this development means we are able to progress."

    Justine Greening, the economic secretary to the UK’s Treasury, welcomed the “good news for the UK,” which she said showed that the “North Sea basin remains an attractive area for significant levels of new investment.”

    BP will have a 36.3% stake in the new FPSO, along with Shell 36.3%, Hess Ltd 12.90%, Statoil (UK) Ltd 4.84%, OMV (UK) Ltd. 4.84% and Murphy Petroleum 4.84%.

    Contact Eric Watkins at hippalus@yahoo.com

    Diplomat: Libya’s rebel-held oil facilities ?largely undamaged’

    June 27, 2011 1:04 PM by Eric Watkins
    With Libya’s oil infrastructure thought to be largely undamaged in rebel-held areas of the country, a British diplomat said that exports of oil could resume within 3-4 weeks following the fall of the embattled leader leader Moammar Gadhafi.

    "We don't think the oil infrastructure has been particularly badly damaged physically,” said a British diplomat. “The current estimate is that in the east they can start pumping within three or four weeks.”

    The statement followed other reports that have emerged in recent weeks, with some saying that output from Libya could reach 355,000 b/d from rebel-held areas and others saying it would be marginal and not up to full capacity until 2015.

    A report by Goldman Sachs Group Inc. said that Libya’s oil exports could rise by as much as 355,000 b/d from areas held by rebel forces and up to 585,000 b/d if Gadhafi is removed from power and production resumes from western fields currently held by his government.

    Earlier, however, the International Energy Agency said that the North African country’s oil production faces a “long haul” to make a full recovery in the wake of the civil war gripping the land and that it will not return to full capacity until 2015.

    The British diplomat’s remarks came as word emerged of a team of officials from the US, UK, Italy, Turkey, Denmark and other nations which has spent several weeks in eastern Libya discussing scenarios with opposition leaders.

    "We are planning carefully and comprehensively for the days, weeks and months after Gadhafi has gone," said the diplomat. The plans, due for completion next week, include a proposed timetable for resuming oil production in areas of the country now held by forces opposed to Gadhafi.

    Rebels have held the eastern part of Libya since the outbreak of hostilities in February, and they sold their first tanker full of crude to US refiner Tesoro in April.

    Following the sale to Tesoro, the rebels scaled back their plans to export more oil after rocket attacks by Gadhafi’s forces seriously damaged a pumping station and production facilities at southeast Messla oil field on Apr. 4.

    Another attack hit a pumping station halfway along the 510 km pipeline from Messla to Tobruk port, killing eight rebels serving as guards (OGJ Online, May 17, 2011).

    Rebel Oil and Finance Minister Ali Tarhouni, without specifying a timeline, has since said that the opposition National Transitional Council hoped to “soon” resume oil production of as much as 100,000 b/d (OGJ Online, June 9, 2011).

    Contact Eric Watkins at hippalus@yahoo.com

    Sudan: Obama urges ceasefire in oil-rich south

    June 20, 2011 4:44 PM by Eric Watkins
    US President Barack Obama urged the Khartoum-based government of northern Sudan to end its military operations against southern opponents in the oil-rich border state of South Kordofan, a scene of intense fighting in recent weeks.

    "The government of Sudan must prevent a further escalation of this crisis by ceasing its military actions immediately, including aerial bombardments, forced displacements and campaigns of intimidation," said Obama, who renewed the US commitment to the peace process underway in the region.

    For several weeks, Khartoum’s military forces have been fighting southern-aligned armed groups in Southern Kordofan, the north's main oil state along the border 500

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