Russian crude won't hit Mideast prices to Asia
Russian crude exports to the Pacific will not hurt prices of Middle Eastern crude sold to Asia, Qatar Oil Minister Abdullah al-Attiyah said in late March. His comments echo what the Organization of the Petroleum Exporting Countries (OPEC) members, including top exporter Saudi Arabia, said in the previous week. Russia started selling its new ESPO Blend crude from the Far East port of Kozmino from late 2009, a first step towards expanding its exports into Asian markets. Russia's pipeline monopoly Transneft will boost exports of ESPO crude oil in April by 7.9 per cent on a daily basis from March to 1.3 million tons. Asked if ESPO will hurt prices of rival Middle Eastern grades, Attiyah said Middle East crude still has an advantage. "It is close to the markets, it reduces costs of transportation. The price of crude is determined by market forces." Saudi Arabian Oil Minister Ali al-Naimi told reporters in Vienna that Russia's rising crude shipments to Asian markets via the Pacific Ocean pose no threat to Middle Eastern producers' position as the largest suppliers to the region. Soaring oil demand from China and other developing Asian economies will absorb rising production from Russia and Iraq over coming years, they said. However, the head of Libya's delegation said OPEC had less room to raise production as global oil use recovers because of Russia's increasing output.
Qatar-related gas issuers may be downgraded, according to Moody's
Ratings agency Moody's said it may downgrade four Qatari government-related issuers, saying they lack a formal agreement guaranteeing government support and it should not be assumed that Qatar would back any debt if troubles arise. It said natural gas firms Ras Laffan I, Ras Laffan II, Ras Laffan 3 and gas transport company Nakilat Inc were under its microscope. The move comes just three weeks after Moody's downgraded seven firms in the rival Gulf energy exporting emirate of Abu Dhabi, citing a lack of explicit guarantees of government support for the entities. The issue of explicit guarantees on the debt of government-owned firms has been a crucial point for ratings agencies following Dubai World's US$26 billion debt crisis in November. At the time, investors had widely counted on the Dubai government to back the debt of its state-owned conglomerate but were shocked when Dubai distanced itself from Dubai World's financial woes. Andrew Davison, senior credit officer at Moody's, said in a statement that Ras Laffan I, II and 3 and Nakilat were all highly dependent on implicit assumptions of government support. Qatar is the world's largest exporter of liquefied natural gas.
Egypt secures US$50m loan for energy plan
Egypt has secured a US$50 million loan from the Abu Dhabi Development Fund, in a step towards funding a five-year plan aimed at meeting the country's growing energy demand, a newspaper reported. Egypt aims to add 9,200 megawatts of electricity to its capacity of about 25,000 megawatts under the 2007-2012 plan, and more than triple its installed power capacity by 2027 at a cost of about US$100-120 billion. "The sector has managed to raise most of the necessary capital needed for the 2007-2012 plan, to help meet growing demand for energy in the country," the daily al-Mal quoted Electricity and Energy Minister Hassan Younes as saying. The fund, which is providing the US$50 million loan, is an Abu Dhabi government owned agency operating in about 53 countries with grants and loans valued at US$3.5 billion. Around 99.1 per cent of Egyptians have access to electricity.
CNOOC set to seal Iraq deal
The Iraqi cabinet is expected soon to approve a contract with China National Offshore Oil Corp. (CNOOC) to develop the 2.5 billion barrel Missan oil field complex in southern Iraq, Oil Minister Hussein al-Shahristani was quoted as saying. That would bring to 11 the number of contracts signed for fields awarded from Iraq's two licensing rounds last year and would see China consolidate its position in Iraq's upstream, where it is already in pole position based on companies' percentage shares of estimated reserves.
LUKOIL to begin drilling in Iraq
Russia's largest privately held oil company, LUKoil, plans to drill the first exploration well at the West Qurna-2 oil field in Iraq, LUKoil CEO Vagit Alekperov said. "We'll start drilling the first exploration well at the end of the year," Alekperov said, adding that the company's specialists were already working at the site. On January 31, LUKoil signed a 20-year contract to develop Iraq's massive West Qurna-2 oil field. LUKoil will develop the 12.88 billion-barrel oil field in the Basra province in southern Iraq as a consortium with Norway's StatoilHydro. The consortium, in which the Russian company holds 56.25% and StatoilHydro 18.75 per cent, won the tender for the oil field in December 2009. The Iraqi National Oil Company will also join the consortium and hold a 25 per cent stake in the project. LUKoil was involved in the development of the first phase of West Qurna and signed a contract with the Saddam Hussein regime to develop the second stage, but the deal was frozen in 2002. Alekperov earlier said that the international consortium led by LUKoil would invest some US$30 billion in the development of the West Qurna-2 oil field.
Kuwait Energy finds new oilfield in Egypt
Kuwait Energy Company, one of the fastest growing independent oil and gas exploration and production companies in the Middle East, announced the discovery of a new oil well in the northern area of Burg El-Arab (BEA) field in the Egyptian western desert, one of its producing assets in Egypt’s Western Desert. The newly discovered well BEA N-1X is located in a separate fault block in the northern part of the field. The well was production tested on December 22, 2009 and produced at an initial rate of 280 barrels of 33 API oil per day with no water. KEC believes that there is excellent exploration potential within the Burg El-Arab block, both in the current producing horizons as well as in the deeper Jurassic formation. KEC made this discovery only two months after taking over operatorship. The operatorship of BEA was transferred from Gharib Oil Fields to KEC on August 4, 2009 as part of the agreement whereby KEC acquired a further 25 per cent working interest from Gharib Oil Fields, increasing KEC’s total working interest in the BEA field to 75 per cent.
Kuwait to have nuclear power 'within 7 years'
Kuwait is aiming to have a nuclear power station operational within seven years, a Kuwaiti minister told the Kuwait News Agency (KUNA). Kuwait's Minister of Electricity and Water Bader Al-Shuraiaan made the announcement while attending an international conference in Paris on peaceful usage of nuclear energy. KUNA also reported that HH the Amir Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah has formed a special committee to undertake the task of acquiring and using the nuclear energy in line with international treaties and resolutions. A special team has also been assigned to decide on the site for the nuclear reactor and Al-Shuraiaan said it was likely to be up and running in seven years. The minister also said that there are plans to launch a solar power station and that several foreign companies have tendered for investment in the venture.