Information – Oil Gas Future Energy
Oil continues to advance on supply concerns
Oil continues to advance on supply concerns
Reuters Published: February 19, 2008, 00:35
London: Oil advanced for a fourth day on Monday, supported by an escalating row between Opec member Venezuela and oil major ExxonMobil.
The quarrel between Venezuela and Exxon has helped oil bounce back from this year’s low of $86.11, but worries about a slowdown in top oil consumer the United States could prevent a return to record highs of $100 a barrel struck in early January.
US crude was up 80 cents at $96.30 a barrel by 1515 GMT. On Friday it had closed four cents higher at $95.50, after touching a one-month high of $96.67.
London Brent crude was up 70 cents at $95.33.
“Oil prices are remaining at firm levels, buttressed by perceived supply side risks,” David Moore, a resource analyst at the Commonwealth Bank of Australia, said in a research note. There is also evidence of investors moving back into oil, which could point to further price strength.
Speculators on the New York Mercantile Exchange, for example, increased net long positions last week, according to data from the Commodity Futures Trading Commission.
Net crude long positions increased to 39,922 in the week ending February 12, up from to 27,448 in the previous week.
Dolphin achieves 2b scfd daily production target
Dolphin achieves 2b scfd daily production target
(Staff Report) KHALEEJ TIMES 12 February 2008
ABU DHABI — Dolphin Energy Limited has achieved its target daily production rate of 2 billion standard cubic feet of gas a day (scfd), the equivalent in energy terms of over 350,000 barrels of oil equivalent.
Dolphin’s initial supplies of processed natural gas from Qatar to UAE began to flow in July 2007. Since then, Dolphin Energy has been transporting gas through the company’s export pipeline in ever increasing quantities. Production has gradually been ramped up as
all elements of the company’s complex gas processing plant at Qatar’s Ras Laffan have been tested and commissioned.
The gas is produced from Dolphin’s 24 production wells offshore Qatar. It is then processed at Ras Laffan Gas Project Plant and the natural gas compressed and flowed through the 48 inch, 364 kilometre subsea export pipeline — the longest and largest in the Middle East.
Dolphin’s CEO, Ahmed Ali Al Sayegh, said that Dolphin has been able to achieve its agreed maximum daily production rate under its agreement with Qatar, whose support for this project has been essential to its success.
He added that next target is to meet daily target consistently, and the company will shortly be able to fulfill its gas sales agreement to supply Oman. Dolphin Energy has contracted to supply Oman with up to 200 million scf/day of gas in the second half of 2008. It is the culmination of a vision started nine-years ago by Qatar, the UAE and Oman.
Opec could lower output to keep crude above $80
Opec could lower output to keep crude above $80
Bloomberg Published: February 08, 2008, 20:57
Dubai: The Organisation of Petroleum Exporting Countries (Opec) may cut crude production when it meets next month to keep the price above $80 a barrel, oil ministry officials from four of the group’s nations said.
Prices of at least $85 are likely lead to no change in supplies when ministers gather on March 5 in Vienna, said two of the four officials, who asked not to be identified because Opec’s deliberations are private. A third said $80 a barrel would be a signal to pump less, and a fourth delegate said $70 would be unacceptable to most of Opec’s 13 members.
The combination of falling crude prices and the dollar’s 12 per cent drop in the past year on a trade-weighted basis puts pressure on Opec to reduce supplies as slowing econ-omies in the US and Eur-ope threaten energy demand. Oil fell 30 per cent and the group reduced production quotas three times in 2001, the year of the last US recession.
“Opec wants to protect $80 a barrel,” said Johannes Benigni, a managing director at Vienna-based consultant JBC Energy, who attended the latest Opec meeting when the group left its supply levels unchanged. “I got the clear impression from Opec that that’s the number they want to defend,” Benigni said. “It wasn’t Opec’s fault it moved above $80, but now it’s there, they justify keeping it.”
Gains
Crude oil prices gained 49 per cent in the past year and reached a record $100.09 a barrel on January 3. They dropped 12 per cent since then.
Saudi Arabian oil minister Ali Al Naimi, who sets policy for Opec’s largest producer, declined to comment to reporters on prices or production levels at the last meeting. Al Naimi said only that the outlook for supply and demand is “sound”.
Opec may maintain current levels when it meets on March 5, “if the market is as it is now,” Opec Secretary-General Abdullah Al Badri told reporters on February 5 in London. The group pumped 32.12 million barrels a day last month, according to estimates. “It is not in our interests to see a recession, whether in the US or worldwide,” Al Badri said last month in Nicosia.
Opec held three meetings in 2007, down from six the previous year. The group is likely to gather more frequently to monitor the US economy, said officials.
“$80 is probably a new price floor,” said Olivier Jakob, managing director of Zug, Switzerland-based Petromatrix GmbH. “On a nominal basis it looks high, but if you adjust it for the falling dollar, it is closer to the average of 2006 and 2007 of $58 a barrel.”
Exxon to freeze $12 bn Venezuelan assets
TNN
NEW YORK: Exxon Mobil has won court orders freezing up to $12 billion in Venezuelan assets around the world as it fights for compensation for operations lost to President Hugo Chavez’s nationalisation drive.
The largest US company sought the asset freeze to guarantee repayment should it win arbitration over the Cerro Negro heavy oil project. The move is the boldest challenge yet by an international oil major against any of the governments around the world that have moved to increase their holds on natural resources as energy and commodity prices have soared.
“To me it sounds like a very aggressive tactic,” said Stephen Zamora, professor of international law at the University of Houston Law Centre. “I can’t really say that I’m aware this has been used in other investment disputes. They may be trying to get the government to settle.”
Exxon —which last week posted the largest ever year’s profit by a US company —said on Thursday it has received court orders in Britain, the Netherlands and the Netherlands Antilles each freezing up to $12 billion in assets of Venezuela state oil firm PDVSA. An Exxon spokeswoman said the total that could be frozen worldwide was $12 billion.
Exxon also won a court order from the US District Court for the Southern District of New York in December freezing more than $300 million belonging to PDVSA, seeking to guarantee repayment should it win the arbitration. PDVSA, one of the largest suppliers of crude oil to the US, was not immediately available for comment. The White House and the US State Department also declined to comment.
Venezuela’s sovereign bonds sold off after the court orders surfaced. Left-winger Chavez, who regularly clashes with the Bush administration, took over Exxon Mobil and ConocoPhillips stakes in multi-billion-dollar heavy oil projects in Venezuela’s oil region last June. The move was part of the left-wing leader’s drive to nationalise key industries including utilities and telecommunications companies owned by private companies.
The news comes as a tough blow to Chavez, who suffered a stinging defeat in a December referendum that would have let him run indefinitely for re-election and enshrine socialism as the OPEC nation’s economic system. PDVSA is already facing growing debt and increasing operational problems that analysts attribute to underinvestment caused by the company’s massive contributions to Chavez’s social programmes.
The South American nation has an extensive overseas refining network, including the Citgo refining and marketing branch in the US. Exxon said in court filings that recent estimates have placed PDVSA’s global asset value —including its operations in Venezuela —at over $62 billion.
PDVSA’s European refining assets, principally a 50% share in the German refining joint venture Ruhr Oel, were held through a Netherlands Company PDV Europa, according to filings PDVSA made with the US Securities and Exchange Commission in 2006. Exxon filed for arbitration in September with the International Centre for Settlement of Investment Disputes.
Exxon has not specified how much it wants for the 41.7% stake in the Cerro Negro project, but it has said its remaining book investment in the project was about $750 million at the time the assets were expropriated. The move underscores Exxon’s reputation for toughness in dealing with foes as varied as governments and fishermen, as it has been willing to wage prolonged legal battles to defend its interests around the world.
Amy Meyers Jaffe, energy policy researcher at Rice’s Baker Institute, said the case could have far-reaching implications. “These are precedents that are going to be important for what people can and cannot do in the oil industry,” she said. ConocoPhillips spokesman William Tanner said his company “continues to discuss an amicable resolution regarding the assets that were expropriated in Venezuela”. Conoco filed for arbitration over the dispute in November.
Venezuela’s benchmark global bond due 2027 lost 2.375 points in price to be bid 98.938, while total returns offered by the country’s debt slipped 1.52% according to the JP Morgan EMBI+ index.
Refinery losses and costs hit BP profit
Refinery losses and costs hit BP profit
Reuters Published: February 05, 2008, 23:41
London: British Petroleum (BP) reported a big drop in profits due to refining losses, rising costs and service station write-downs but higher production, planned job and cost cuts and a more generous dividend policy pushed its shares higher.
The third-largest Western oil company by market capitalisation said yesterday that full-year replacement cost (RC) profits fell 22 per cent to $17.29 billion, despite crude prices soaring in 2007 before hitting a record above $100 per barrel in January.
Fourth-quarter RC profit, which strips out unrealised gains on fuel inventories, fell 24 per cent to $2.97 billion. Underlying profits were below analysts’ forecast range.
“Our fourth-quarter results were very disappointing,” chief executive Tony Hayward said.
Last week, rival Exxon Mobil reported a 14 per cent rise in net income, while Chevron reported a 29 per cent rise and Royal Dutch Shell’s profits, calculated on a comparable basis, rose 11 per cent.
Weak crude processing margins led to a $1.3 billion loss at BP’s mainly US-based refining division while the planned sale of its US service station network forced the London-based company to take a $600 million charge.
However, there were signs of recovery in the quarter, with an almost two per cent rise in production to 3.907 million barrels of oil equivalent per day (boepd) compared to the same period in 2006, the first rise after nine quarters of falling output.
The company said it expected output to grow in 2008 and average four million boepd in 2009.
Excluding non-operating items, which amounted to a net charge of $1.03 billion, the fourth-quarter replacement cost profit was $4.002 billion.
BP investors also cheered a planned reduction in corporate overheads by 15-20 per cent, which will be achieved by axing 5,000 jobs and outsourcing another 9,500 jobs to franchisees.
BP announced a 31 per cent rise in its fourth-quarter dividend compared to 2006, and said in future it would have a bias for distributing cash to shareholders via dividends, rather than buybacks.
This is in line with the strategy followed by rival Royal Dutch Shell Plc.
The company has also raised the forward oil price it uses when deciding whether to invest in projects to $60 from $40 per barrel, suggesting it may be more aggressive in pursuing opportunities.
BP has suffered a series of problems in recent years. A blast at its Texas City refinery in 2005 which killed 15 workers, and which regulators blamed on cost cutting, ended up costing the company billions in settlements and lost profits.
Quality Energy to build $13b refinery
Quality Energy to build $13b refinery
Bloomberg Published: February 05, 2008, 23:41
Abu Dhabi: Quality Energy Petro Holding International, which is owned by a member of Abu Dhabi’s Al Otaiba family, plans to build a $13 billion oil refinery in the UAE and seek Iranian crude as feedstock.
Quality Energy will construct the 500,000-barrel-a-day plant with the government of Russia’s Chel-yabinsk region, in which the company plans to invest $100 billion between now and 2012, according to chairman Adil Al Otaiba.
“The Chelyabinsk government is negotiating with the Iranian government to provide the crude for the UAE refinery,” Al Otaiba said.
Quality Energy is in talks with the rulers of one of the UAE’s northern emirates about building the plant, he said, without giving a date for the start of construction.
Iran has made several overtures in recent months to pursue joint ventures with other countries, including Russia, amid international sanctions over its nuclear programme.
The nation’s foreign minister said on December 13 that Iran and Russia would collaborate to develop gas deposits.
The UAE already has a gas-supply contract with Iran signed by Sharjah-based Crescent Petroleum. The fuel has been delayed since November 2005 while Iran, holder of the world’s second-largest gas reserves after Russia, demands a higher price.
Quality Energy will start building a $4.5 billion refinery in Chelyabinsk in 2009, once the region’s government concludes talks with oil companies including Itera Holding, Rosneft Oil and Lukoil to secure one million tonnes of crude a month.
“The Russian government will guarantee crude supplies to the refinery for 15 years,” Al Otaiba said.
The 180,000-barrel-a-day plant, slated for completion in 2012, will be fully funded by Quality, which has already secured a loan for 70 per cent of the total amount.
The Chelyabinsk government will supply the crude in return for a 25 per cent stake in the refinery, Al Otaiba said.
Opec keeps all options on output open in March
Opec keeps all options on output open in March
Reuters Published: February 04, 2008, 20:19
London, Kuwait City: Senior Opec officials downplayed talk of a change in oil output when the group meets again in a month’s time, saying a decision would hinge on the health of the global economy.
The Organisation of Petroleum Exporting Countries agreed at a meeting on Friday to keep output unchanged, but Gulf producer Kuwait acting oil minister Mohammad Al Olaim said Opec would discuss increasing crude oil production levels when its ministers meet in March, the official Kuwait News Agency reported while Iran and Venezuela have suggested a cut may be in order at the March 5 meeting.
“Everything is possible according to the market. We really cannot decide at this time,” Opec Secretary-General Abdullah Al Badri told reporters on the sidelines of a London energy conference.
“Come March, we will see what we can do.”
The group’s president, Chakib Khelil, who is also Algeria’s energy minister, said it was premature to predict what Opec would decide in March in Vienna.
“It’s too early,” he told Reuters.
Al Olaim said Opec was keen to maintain oil market stability and supply the world with enough oil but in response to market needs rather than speculation and geopolitical factors that the group cannot influence.
Nagging at the minds of ministers is the risk of the United States, the world’s biggest oil consumer, tipping into recession and eroding demand for fuel.
“We don’t know what’s going to happen … We don’t know whether the economy is going to pick up or get worse. We don’t know what non-Opec is going to do. All of those aspects are going to have an impact on our decision.”
The leading Opec producer Saudi Arabia said on Sunday that oil output policy would depend on the level of world oil inventories at the time of the March meeting.
While the latest indicators showed that while global economic growth was retreating, growth in some developing countries such as China and India was providing some balance, Kuwait acting oil minister said.
The United States had raised concerns last month that world markets needed more oil. Oil prices steadied at below $89 a barrel yesterday, after worries over a potential US recession knocked prices three per cent lower late last week.
Comment: Kuwait eyes supply rise
Kuwait acting oil minister said Mohammad Al Olaim said the producer group would review oil markets closely ahead of the meeting, the agency added.
But Iran wants the group to discuss cutting crude oil output at its March meeting, as stocks are expected to increase.
Iran and Venezuela said Opec may need to curb output in March to defend prices against a drop in demand, should the United States slip into recession.
OPEC freezes oil output amid cooler prices
OPEC freezes oil output amid cooler prices
(AFP) 1 February 2008
VIENNA – OPEC left unchanged its oil production ceiling on Friday, snubbing US demands for an increase as the cartel focuses on supporting prices which have fallen 10 percent since the start of the year.
‘We all agreed to keep things as they are,’ Nigeria’s Minister of State for Energy, Odein Ajumogobia, told reporters following conclusion of OPEC’s meeting in the Austrian capital.
Saudi Arabia, the oil cartel’s most influential member and the world’s biggest producer of crude, said on going into the meeting that it saw no need to change official output of the Organisation of Petroleum Exporting Countries.
‘Had there been a need to take any measures concerning supply and demand, we would have taken them. But the current situation shows that the market fundamentals are sound,’ Saudi Arabian Oil Minister Ali Al Nuaimi told the pan-Arab daily Al Hayat in an interview published on Friday.
OPEC, which pumps 40 percent of world oil, decided to keep official daily output at 29.67 million oil barrels.
A freeze is be a snub to the United States after President George W. Bush recently urged OPEC to increase output to help bring down high oil prices that stunt economic growth and fuel inflation.
However, lower oil prices are not welcomed by crude producers as their export income drops.
Since striking a high above 100 dollars at the start of the year, the price of oil has slid owing to fears of a US recession and a global economic slowdown. But crude futures are still almost double the level of a year ago.
A US recession would dent demand for crude in the world’s biggest energy market and send oil prices sliding further, OPEC fears.
Kuwait’s acting oil minister, Mohammed Al Aleem, had said Thursday that the 13-member OPEC was ‘a little worried about the impact of a slowdown or a recession in the United States’ on oil prices.
‘The price, for the time being, has been going a little bit down,’ he said.
‘Within three weeks, it’s been about 10 dollars. We have to see why, what the problem is, and whether it’s going to continue at the same pace.’
New York’s main oil futures contract, light sweet crude for delivery in March, was 41 cents lower at 91.34 dollars per barrel following OPEC’s output decision.
This compared with a record high of 100.09 dollars reached on January 3.
‘We have no option now’ but to hold output, Qatar’s Minister of Energy and Industry Abdullah bin Hamad Al Attiyah had said on his arrival in Vienna on Thursday.
‘We are very concerned about the world economy … The American economy will (influence) oil prices,’ he told reporters.
OPEC’s meeting on Friday was an extraordinary get-together that was scheduled at the group’s last official gathering on December 5 in Abu Dhabi.
There, OPEC decided against increasing production, insisting the market was well supplied and that high prices were caused by speculative activity, not a reaction to the demand and supply situation.
The next OPEC meeting is due next month in Vienna.
OPEC comprises Algeria, Angola, Ecuador, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela.
Iraq is the only member without an output quota owing to unrest in the country, while analysts say OPEC is in fact producing above its official ceiling by about 180,000 barrels of oil each day.
Gasco wins the Shaikh Khalifa Excellence Award for 2007
Gasco wins the Shaikh Khalifa Excellence Award for 2007
Gasco was awarded the Shaikh Khalifa Excellence Award from H. H. General Sheikh Mohammed Bin Zayed Al-Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, in the presence of H.E. Yousef Omair Bin Yousef, Secretary General of the Supreme Petroleum Council and ADNOC’s Chief Executive Officer and H.E. Abdulla Al Suwaidi, Deputy CEO & Director, E&P. The award was recieved by Mohammed Sahoo AlSuwaidi, General Manager of Gasco.
‘Excellence’ is one of the values we actively promote across all areas of our organization- and hence this award conferred on us fills us with a profound sense of professional achievement.
The Award, instituted by the Abu Dhabi Chamber of Commerce under the patronage of Shaikh Khalifa Bin Zayed Al Nahyan is given each year to an organization that qualifies on the basis of a set of standards and stringent evaluation criteria. The Award Criteria, that form the basis for evaluation by an expert team of Assessors, covers our results in the areas of People Management, Business Performance, Customer Processes and Societal Contributions. Our approaches to producing these results are also evaluated.
This is the first year of our entry into the Award cycle, and to be rated high in an excellence scale is testimony to the high levels of efficiency, effectiveness and professionalism all of us are able to bring on to our work
Opec to pump more oil if necessary, says Al Hamili
Opec to pump more oil if necessary, says Al Hamili
(Wam)31 January 2008
ABU DHABI – In a bid to strike a balance in the world oil market, Opec will take every measure deemed necessary to keep market stability, including pumping more oil, UAE Minister of Energy Mohammed bin Dha’en Al Hamili said.
Speaking to the news agency shortly before travelling to Vienna for the extraordinary Opec meeting which will open tomorrow, Al Hamili expressed concerns that world oil prices might remain volatile due to the current state of global economy which, he said, is exacerbated by the mortgage crisis in the US. The UAE official, however, observed that demands for crude oil “usually recedes during the second quarter of the year due to seasonal factors”.
Al Hamili remained non-committal on whether or not Opec would increase output in view of the of the current market volatility.
“Any decision to maintain or increase the current production ceiling will be based on informed opinions, studies and analyses that will be presented to the ministers,” he said.
Al Hamili further said that market and economic conditions indicate that world economy is heading towards recession. “Nevertheless, it is predicted that global economy will continue to grow by 4.8 per cent during 2008, a growth rate that is closer to last year’s level.”
While underling Opec commitment to strike a balance between supply and demand, Al Hamili cited weakening US dollar, speculators, US housing sector crisis, among others, as the main factors responsible for oil prices volatility.
Opec oil accounts for about 40 per cent of the world’s needs.
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