Energy

Saudi King named most powerful person in energy by Forbes

Saudi Arabia's king Abdullah bin Abdulaziz has been named ahead of US President Barack Obama as the world's most powerful person in terms of influence on the world's energy supply chain in a list compiled by business magazine Forbes. The US magazine, which made a list of seven most powerful people, said, their power "is measured not just in petro-dollars, but in the ability to change -- for better or worse -- the fundamental nature of the energy supply chain." Forbes said, when oil prices dipped down to USD 40 a barrel, Saudi Arabia was vocal in its call for US$75 oil barrel -- meaning the 12 OPEC (Organization of Petroleum Exporting Countries) nations would agree to limit production forcing the prices of oil to that level. During October, oil was back at US$80 a barrel. "No other individual in the petro-world has the influence of King Abdullah and his oil ministers," it said.

Oil demand may not reach pre-crisis level

The Organization of the Petroleum Exporting Countries (Opec) has raised its forecast for world oil demand growth slightly but says fuel consumption may not return to levels seen before the global economic slowdown, even if growth recovers. Opec's monthly report raised its estimate for 2010 oil demand growth to 750,000 barrels per day (bpd) compared with its projection of 700,000 last month. It said most signs pointed towards gradual growth in fuel consumption, but there were risks to the downside. "A potentially weak economic recovery along with higher prices are two main factors that may dampen world oil demand in the coming year," the report said. Opec said changes in government policy and behavior could erode demand for fuel, especially in sectors such as transportation. "Even if the expected economic recovery materializes, it remains to be seen whether demand would be able to return to pre-crisis levels." Demand for Opec's own crude would be 28.51 mbpd in 2010, up 110,000 bpd from its previous estimate, based on expectations of higher world demand and steady non-Opec supply.

Abu Dhabi's Gasco awards Technip US$408m contract

Abu Dhabi Gas Industries (GASCO) has awarded a 1.5-billion dirham (US$408.4 million) gas development contract to France's Technip, Gasco said. The contract is for engineering, procurement and commissioning on Gasco's "Asab 3" project, which will be completed in the third quarter of 2012, the firm said in a statement.

Exxon-led group wins Iraq west Qurna field contract

An ExxonMobil-led consortium has beaten rival Russian, French and Chinese groups to secure initial rights to develop Iraq's West Qurna field, adding momentum to Iraq's bid to unlock its oil riches. With reserves of 8.7 billion barrels, West Qurna is among the prized Iraqi fields eyed by Western oil majors as they face flat or lower output at home and stiff competition from Chinese and Indian oil companies in bidding for oil fields elsewhere. "The consortium led by Exxon Mobil, which includes Shell, won the contract to develop West Qurna Phase One oil field," oil ministry spokesman Asim Jihad said. The initial deal was signed in Baghdad but needs cabinet approval before it can be finalized. The 20-year contract is part of a raft of deals Iraq is close to formalizing in a bid to catapult itself to the world's No 3 oil producer after decades of war and economic decline. There is no guarantee that Iraq's next government, elected in a January vote, will honor the deals, but it injects optimism into prospects for Iraq's battered oil sector and a second oil bid round in December after a lackluster June auction.

Kingdom to finalize giant gas plant project

Saudi Arabia will shortly finalize plans to build the largest ever gas plant in the Kingdom to supply utilities and some industries, Saudi Aramco's chief executive, Khalid al-Falih said recently. The new gas plant is expected to process more than 1.8 billion cubic feet per day (cfd) of gas, Falih told the press during an interview on the sidelines of a petrochemical plant inauguration. 'This plant (Wasit) will be the biggest gas plant we have ever built... and this will go a long way to meet rising demand for utilities and some industries,' Falih said. 'It will process all offshore non associated dry gas and this will go a long way to meet rising demand for utilities and some industries.'

Nippon, Iraq start talks on key oil field deal

A Japanese consortium led by Nippon Oil Corp. started talks with Iraqi oil ministry officials to finalize a deal to develop the Nassiriyah oil field in the country's south, an Iraqi oil official said. Nippon, which is teaming up with Japan's Inpex Corp. and JGC Corp., aims at signing an engineering, procurement and construction, or EPC, contract to develop the field with estimated proven crude oil reserves of more than 4.4 billion barrels. The Japanese companies' chief executives are meeting with deputy oil minister for upstream Abdul Kareem Al Leaby, deputy oil minister for downstream Ahmad Al Shammaa and head of the legal and commercial department of the ministry's Petroleum Contracts and Licensing Directorate Sabah Abdulkadhem Al Saadi, the official told Dow Jones Newswires by telephone from Baghdad.

Energy sector responds to recruitment crisis

While the oil and gas industry around the world is dealing with huge challenges due to the significant shift in demand for oil, gas and energy products, one of the biggest problems it faces is the lack of new talent entering the sector. According to Leor Rotchild from the World Petroleum Council Youth Committee, the average age of an oil and gas employee is 50 years old and there will be an estimated 38 per cent shortage of engineers and geoscientists in the industry by 2010. The organizers of the biennial International Petroleum Technology Conference, taking place in Doha, Qatar from 7 to 9 December, have responded to the concerns for new talent with new features at the conference designed to open the industry up to young people. Oil and gas recruitment was hit hard due to the vast redundancies in the 1980s and 1990s, which resulted in an 85 per cent drop in petroleum-related undergraduate enrolment between 1982 and 2003, according to Rotchild. The Education Day at the IPTC, on the 8th of December, will introduce regional high school students to petroleum engineering. They will be able to hear from professionals such as David Khemakhem from ExxonMobil and Louai Machhour from Total about why the sector has attractive career potential.

BP and CNPC to develop Iraq's super-giant Rumaila field

BP and China National Petroleum Corporation (CNPC), said they have signed a technical service contract with Iraq's state-owned South Oil Company (SOC) to expand production from the Rumaila oilfield, near Basra in southern Iraq. The signing follows BP's successful bid for the contract with CNPC in Baghdad in June. The consortium led by BP (38 per cent) with partners CNPC (37 per cent) and the Iraq government's representative State Oil Marketing Organisation (SOMO - 25 per cent), has agreed to nearly triple the Rumaila field's output to almost three million barrels of oil a day (b/d), which would make it the world's second largest producing oilfield. BP and CNPC said they plan to invest approximately $15 billion in cash over the 20-year lifetime of the contract with the intention of increasing plateau production to 2.85 million b/d in the second half of the next decade.

Shell delays Qatargas 4 LNG plant by a year

Royal Dutch Shell said it had delayed one of its largest schemes by around a year with start-up for the US$8 billion Qatargas 4 liquefied natural gas project now planned for late 2010 and the first cargo possibly pushed into 2011. The delay, which a Shell spokeswoman said was due to contractors struggling to keep up with the pace of developments in Qatar's gas industry, will make it harder for the Anglo-Dutch oil major to turn around a long run of falling production. "We had been planning for a start-up in early 2010 but now we expect that to come in late 2010," the spokeswoman, adding the slippage represented a delay of 10 months. She declined to say when first cargoes would load but a statement from the company said ramp-up of the project could continue into 2011, raising the prospect the facility may not be in a position to load ships until then.

Aramco, Shell to start clean diesel unit by year-end

Saudi Aramco is expected to bring online a new 90,000 barrels per day (bpd) clean diesel unit at its joint-venture refinery with Royal Dutch Shell by December, a company source said. The new addition at the 305,000 bpd refinery is undergoing commissioning, the source said. "The project was completed in October and the unit is under commissioning," the source said. The new unit has the potential to produce about 90,000 bpd of ultra-low-sulphur diesel, the source said.

Iraq minister says three oilfields to pump 6 million barrels

Iraq expects three of its oilfields will together pump more than 6 million barrels a day once foreign companies complete development work they were awarded this year. BP Plc and other international oil companies have signed contracts for the Rumaila, Zubair and West Qurna fields, which were originally offered in Iraq's first post-war licensing round in June. "Total production from the three fields exceeds 6 million barrels a day and this is higher than what we were hoping for from all the eight fields in the first bid round," Oil Minister Hussain al-Shahristani said.

Halliburton awarded South Ghawar drilling contract by Saudi Aramco

Halliburton, a provider of products and services to the energy industry, has secured from Saudi Aramco the integrated turnkey drilling contract for the South Ghawar field, located approximately 200km from Dhahran, Saudi Arabia. The contract would involve work in Uthmaniyah, Haradh, Hawiyah and Shedgum. The five-year contract, with an option for an additional five-year period, calls for the provision of drilling rigs, directional and horizontal drilling, logging while drilling, cementing, mud engineering, wireline logging, completion, perforating, and other well construction activities, including engineering and management of the entire drilling operations.

Kuwait, Iraq technical talks over joint oil fields ongoing

Technical negotiations between Kuwait and Iraq are ongoing in order to achieve best exploitation of joint oil fields, said Assistant Oil Undersecretary for Technical Affairs Ali bin Sabt in November. He said that negotiations were ongoing to select a mechanism that would guarantee the rights of the two sides justly, as well as their interests. He added that several international case studies of relevance were currently being looked at, to help arrive at a joint agreement..

Technip to set up Saudi engineering centre

French oil and gas field services provider Technip said it would form a 50/50 joint venture with Saudi engineering services firm SaudConsult to set up an engineering centre in Saudi Arabia. The center will offer services such as front end engineering design, detailed engineering, procurement and construction management. The tie-up, which is pending regulatory clearance, is expected to start operation by the middle of next year, creating some 500 jobs. The partners did not give financial details of the agreement. Technip's chief executive, Thierry Pilenko, said the project was part of the company's strategy to get closer to the Middle East market.