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MEOG - Middle East Oil & Gas Monitor
 

MEOG - Middle East Oil & Gas Monitor

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Weekly publication covering oil & gas news from the Middle East - countries, companies, projects and contracts. Contact me to request a 4 week complimentary trial!

Weekly publication covering oil & gas news from the Middle East - countries, companies, projects and contracts. Contact me to request a 4 week complimentary trial!

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    MEOG - Middle East Oil & Gas Monitor MEOG - Middle East Oil & Gas Monitor Document Transcript

    • 05 February 2013 MEOG  Issue 411  News Analysis Week 05 MIDDLE EAST  Intelligence Published by OIL & GAS MONITOR  NewsBaseCOMMENTARY 2 NEWS THIS WEEK… oil officials await Exxon’s big Iraqi decision Jordan’s natural gas woes return with 2 ExxonMobil in Iraq unrest in Egypt 4MARKET COMMENTARY 5 Iraq is waiting for ExxonMobil to decide whether it will quit the country, and the West Qurna 1 project, North African risks 5 or relinquish its Kurdistan blocks.PIPELINES & TRANSPORT 7 Israel contemplates gas pipeline option to  has been suggested that Baghdad may be It Turkey 7 willing to ease its terms in order to pry the US Bidders line up for new Badra gas pipeline super-major away from the Kurdish region. (Page 2) in Iraq 8 Jordan’s gas woesINVESTMENT 9 Lebanon opens pre-qualification for offshore gas bidding round 9 A fresh wave of unrest in Egypt has further put the Cyprus to sign offshore PSCs with France’s Total 10 boot into Jordan, undermining gas supplies to thePERFORMANCE 10 energy-dependent kingdom. ‘December exports up’ Iran 10  the same time, Jordan has also faced At calls for foreign help after gas rig Iran difficulties in receiving imports of Iraqi oil because sinks in Gulf 11 of border problems. (Page 4) Saudi Aramco gears up to drill with new offshore jack-up 11PROJECTS & COMPANIES 12 Lebanon gas round Sterling Energy looks for the Kurdistan exit door 12 Lebanon is now pre-qualifying companies for its Dhabi moves on next phase of North Abu first offshore gas auction later this year. East Bab oil project 12NEWS IN BRIEF 13  Lebanese government hopes to mirror the The recent success of Israel and Cyprus by unearthingSTATISTICS 21 new offshore gas deposits. (Page 9)For analysis and commentary on these and other stories, plus the latest oil and gas developments, see inside… Copyright © 2013 NewsBase Ltd. www.newsbase.com Edited by Martin Clark All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
    • MEOG 05 February 2013, Week 05 page 2 COMMENTARYIraqi oil officials awaitExxon’s big decisionIraqs federal government in Baghdad is pushing US super-major ExxonMobil for adecision on whether it plans to quit the country for good, or shelve its involvement in thenorthern Kurdistan regionBy Kevin Godier super-major ExxonMobil being pressed to decide between Iraq and Kurdistan US American company is ready to relinquish control of its West Qurna 1 project The Baghdad may be willing to offer greater incentives to persuade it to stay in IraqSenior executives at ExxonMobil are forfeited its assets in the autonomous venture into KRG territory, ExxonMobilpoised to make a decision that could Kurdish region. has quite palpably cut a swathe forprove monumentally divisive for Iraq: ExxonMobil had given a series of others to follow, including France’sthe company must choose between a indications that it was set on pulling out Total SA, Russia’s Gazprom Neft andservices contract at the US$50 billion of West Qurna 1, in favour of the the US’ Chevron Corporation, whichWest Qurna 1 oilfield in the south, and a contracts signed with the KRG in 2011, recently added a third block at Qarasix-block agreement awarded by the but has declined to comment on the Dagh to its Kurdish portfolio and isKurdistan regional government (KRG). impending decision. considering further acquisitions. ExxonMobil’s choice of options sits at Baghdad undoubtedly expects These metaphorical flag plantingsthe very centre of the growing ExxonMobil to take its side, not least have afforded the government in Erbil adisagreement between Baghdad and major PR victory in its turf war with theKurdistan that threatens to fracture central government over how Iraq’s oilIraq’s uneasy federal union a year after ExxonMobil had given and gas assets will be exploited.US troops left the country. indications it was set on The Kurds have run their own A decision one way or the other is due administration and armed forces sinceimminently, Iraqi Oil Minister Abdul pulling out of West Qurna 1991, and have resolved to push aheadKareem Luaibi said on January 27. 1, in favour of the with development of their oil resources Given that Baghdad continues to insist independently of the Baghdad-basedthat it is the sole repository of authority contracts signed with the central government.to grant oil contacts in and control crude KRG The KRG contends that the right toexports from Iraq, ExxonMobil’s final dictate its own oil policy is enshrined inchoice seems set to bring to a head the because the output from West Qurna 1 the countrys federal constitution, but thegrowing friction between the central alone exceeds total current Kurdish central Iraqi government rejectsgovernment and the northern enclave, production capacity. contracts signed by the region as illegalwhich has upped the ante with recent On the other hand, KRG’s Natural and has blacklisted some firms operatingcomments that it hopes to sign contracts Resources Minister Ashti Hawrami has there.with up to three significant oil recently stated that ExxonMobil’scompanies within the next month. contentious deal to operate in the Export options autonomous region is on track, after the The real challenge now being addressedNorth and south US major restated its commitment to by the KRG is to find new ways to sellAccording to a Reuters report on what is seen widely as one of the final Kurdish oil, after it stopped contributingJanuary 30, Iraqi Prime Minister Nuri frontiers for onshore oil exploration. crude exports to the Baghdad-controlledal-Maliki hastily convened a meeting Whichever way the situation swings, pipeline from Kirkuk in the north to thewith ExxonMobil’s chief executive Rex the loss of face for the losing side will Turkish port of Ceyhan in DecemberTillerson in the second half of January, be considerable, at the very least. 2012, in retaliation for huge oil paymentand offered Tillerson substantial delays. incentives to stay in Iraq’s southern Turf waroilfields as long as the company As the first international major to Copyright © 2013 NewsBase Ltd. www.newsbase.com Edited by Martin Clark All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
    • MEOG 05 February 2013, Week 05 page 3 COMMENTARY Fed up with waiting, Erbil has optedfor the alternative of condensate exportsby truck to Turkey. These began last summer, withoutBaghdad’s consent, and hit a high inJanuary 2013 as a result of exports ofcrude oil from Kurdistan’s Taq Taqoilfield, which started at the beginningof this year. Baghdad has repeatedly stated that itconsiders independent exports from theKRG as smuggling. Nevertheless, international oilcompanies have been increasinglyprepared to go against centralgovernment policy in return forKurdistan’s better contract terms andmore secure working environment, asopposed to the bureaucracy andinfrastructure bottlenecks that hamperoil projects in central and southern Iraq.Disputed territory Whether or not ExxonMobil backs Kurdish oil blocks and an alternativeAdding to the political complexity, three away from Kurdistan, oil market pipeline that might export 1 million bpdof ExxonMobil’s blocks are located in observers now believe that the KRG has of crude or more.the so-called “disputed areas”, a set its sights upon a new and ‘game- Baghdad has already accused Ankarahydrocarbon-rich band of territory over changing’ paradigm of financial of complicity in “smuggling” Iraqi oil,which both Baghdad and the Kurds autonomy whereby it will be paid and late last year prevented Turkeysclaim jurisdiction and where Iraqi Arab directly and in full for its exports, as energy minister from attending an oiland Kurdish troops have reinforced opposed to the existing arrangement conference sponsored by ExxonMobil inpositions in a tense standoff since last whereby Baghdad receives the proceeds Kurdistan by denying his planeyear. and then passes on 17% of the revenues. permission to land. Intriguingly, ExxonMobil and Iraqi Given that Kurdish officials have long Of course, the logistics – not toKurdistan officials were recently complained what they end up getting is mention the political ramifications – ofreported to have visited one of the three in fact closer to 10%, the target of an building a pipeline to Turkey, mean thatblocks, the Qara Hansher block, and to independent revenue stream has become such a project will not become manifesthave discussed building a camp there, increasingly attractive to senior KRG anytime soon.according to comments from local politicians. But the intensifying struggle betweenofficials. Iraq’s Sunni, Shi’ite and Kurdish Furthermore, in another move likely Turkish options factions over how to share both powerto heighten tensions further with Although the precise details of any deal and the world’s fourth largest oilBaghdad, the KRG is reportedly have yet to be sculpted, the essence of reserves, which visibly intensified innegotiating with two or three major Erbil’s strategy would appear to be a 2012, is now at the stage where a newinternational companies to operate major collaboration with Turkey to direction seems likely to burst out fromoilfields and expects to announce the transfer Kurdish oil and gas to world the stalemate.outcome in about a month. markets, via the construction of an The extent to which ExxonMobil Hawrami told reporters on the energy corridor that would reduce influences this process remains to besidelines of a late January conference in Ankara’s dependence on Russia and Iran seen, but market observers will beLondon that “we are negotiating with for oil and gas. expecting major clues within the comingtwo to three other significant companies. Analysts envisage that, as a central days or weeks. They will hopefully be announced in a component of this scenario, a Turkishmonth or so”. entity could take a stake in several Copyright © 2013 NewsBase Ltd. www.newsbase.com Edited by Martin Clark All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
    • MEOG 05 February 2013, Week 05 page 4 COMMENTARYJordan’s natural gas woesreturn with unrest in EgyptCivil unrest in Egypt has created havoc with Jordans energy supplies, undermining analready frail domestic economyBy Charles Coe Disruptions to gas supplies from Egypt have brought more misery for Jordan Erratic energy supplies and a struggling economy make Jordan ripe for rebellion country is building new storage capacity and contemplating an LNG import project TheThe return of civil unrest to the streets of Furthermore, Cairo was having supplies would return to the 240 mmcfEgypt has led to further energy problems trouble paying the foreign companies in (6.79 MMcm) per day rate, the officialin Jordan, which has seen natural gas Egypt producing the gas. said, adding that he expected Amman toimports through the Arab Gas Pipeline demand compensation from the(AGP) decline to around 80 million Jordan protests Egyptians.cubic feet (2.3 MMcm) per day. Jordan (and Israel) was forced to turn to This new supply disruption followed importing petroleum products at Iraq issuesan agreement made just weeks earlier international prices in order to generate Jordan’s energy problems were furtherbetween the two countries in which electricity. complicated during January with theEgypt agreed to restore pre-revolution The country’s total energy bill for closure of the border with Iraq, whichshipments of natural gas to Jordan. 2012 is likely to amount to more than prevented some 10,000 bpd of crude oil Jordan once depended on Egyptian US$6 billion. from being trucked to Jordan’s refinerygas to generate 80% of its electricity. The cost to the government for energy at Zarqa. In 2012, that slipped to about 18%. subsidies for last year is put at around Despite any good intentions that Gas deliveries from Egypt once might exist between Iraq and Jordan,amounted to some 240 mmcf per day , political unrest in a neighbouring(6.79 MMcm). Jordan once depended on country – this time Iraq – again created That changed in February 2011 after Egyptian gas to generate problems for Amman.the Mubarak regime was overthrown In December, Amman and Baghdadand Egypt’s security system broke 80% of its electricity signed an agreement for the constructiondown. of a 1 million bpd crude pipeline US$1.7 billion. Criminal elements in the Sinai, running from Haditha in Iraq to Jordan’s The crisis has brought demonstratorswhether Islamic militants or Bedouin Red Sea port city of Aqaba, but when out onto the streets of Jordan’s cities,gangsters, began to attack the pipeline the project will get started remains a where despite the turmoil that otherinfrastructure in the peninsula without guess. Arab countries are enduring, peopleknowing which pipes led to Israel and The Minister of Planning and have so far maintained their restraint.which to the AGP and Jordan, Syria and International Co-operation, Jaafar The recent agreement with Cairo toLebanon. Hassan, told a recent gathering at the resume supplies suggested that Jordan The attacks continued throughout University of Jordan that 2012 had been would see some relief from high fuel2012 until Egypt’s pipeline shipments one of the most difficult years that costs this year, but that appears now notstopped altogether. Jordan had faced since the early 1990s, to be the case. The situation was complicated by the and warned that there would be no quick “There is a feeling that wheneverfact that revolutionary Egypt was fix for the country’s energy dilemma – anything goes wrong in Egypt, the firstexperiencing its own energy shortage, although efforts were under way.  thing that goes is Jordan’s gas supplies,”resulting in gas meant for export through the news agency al-Bawaba quoted athe AGP or the two LNG plants on the Jordanian government official as sayingMediterranean coast being redirected to last week.domestic use. Egypt had not indicated when gas Copyright © 2013 NewsBase Ltd. www.newsbase.com Edited by Martin Clark All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
    • MEOG 05 February 2013, Week 05 page 5 COMMENTARY He said that Arab and international terminal will be financed with money LNG delivery system at the Red Seadonors had come to realise the from a US$5 billion grant provided by port of Aqaba is also underseriousness of Jordan’s energy situation Gulf Co-operation Council (GCC) consideration.and had agreed to extend assistance to members Saudi Arabia, Kuwait, Qatar The money from the GCC is meant toAmman as it implemented a reform and the UAE. help Jordan and King Abdullah II copeprogramme. Each country is contributing US$1.25 with mounting problems while it is still billion. possible.Energy investments The Jordanian government will Jordan’s dire economic circumstancesHassan drew attention to plans to build a allocate US$150 million from the grant makes the country ripe for civil unrest,7 million barrel capacity crude storage to develop renewable energy sources, but its close proximity to the GCC andfacility in Aqaba – part of the pipeline particularly solar, and it is examining its border with Saudi Arabia makes theproject with Iraq, which also includes a the possibility of exploring for and prospect of an uprising in Jordan evenspur line and 3 million barrel storage developing unconventional sources of more unattractive to Riyadh than all thefacility at Zarqa. fuel. revolutions in other Arab countries.  The Aqaba tank farm and a loading The prospect of building an offshore MARKET COMMENTARYNorth African risksHigher political risk suggests crude oil prices will keep risingBy David FlanaganOman crude oil futures prices moved But these are usually characterised by With low coal, gas and power priceshigher again in Week 5, driven by a pipeline damage and interruption, or oil is the only energy commodity whichfurther intensificaton of market agitation sabotage of machinery or transport links. is clearly rising in price.regarding political risk. The Algerian situation tended to So what comes next? There are other factors at play, but the suggest something aimed more at With a steeply rising crude oil marketchief concern among traders lies in the discouraging Western participation or (and we can now see Brent futuresescalating tension in Africa, especially involvement of any kind in Middle leading the pack in terms ofMali, and whether this could spread east Eastern and North African (MENA) oil benchmarks), various effects are nowinto Middle Eastern states. and gas activity. likely to emerge. Clearly, Maghreb and Central African They therefore represented to traders a China is notorious for seeing dangernations have a certain, albeit modest, somewhat more worrying angle in terms in rapidly escalating oil prices, since it isdegree of importance in terms of oil and of trading risk with the MENA energy so dependent on imported crude oil.gas production, for example Sudan. area. Hence it will be no surprise at all if it But the real fear in the oil trading Hence the magnified effect of the now starts buying crude oil in responsemarket is that localised unrest turns into event in terms of impact of current to the escalating market to stoke up itsa wider and more threatening trend political risk evaluations on global oil reserves.across the Middle East. prices. Chinas strategic reserve policy is not A further concern on the political side entirely clear to outsiders, but one thingis the fallout from the hostage crisis at Stock markets which is certain is that it uses currentthe gas production installation in The current price rally in the oil market purchases for its strategic reserve as aAlgeria. is also mirrored in many ways by rallies means of hedging against further rapid Energy sector installations have of in various stock markets in recent days. rises in oil prices.course been targets of politically The level of speculative capital inflow Traders may well expect that Chinesemotivated action in such locations as to the oil market is obviously now crude oil imports in February begin toYemen, Iraq and other energy moving higher. rise, if they did not already start to do soproduction areas. This is not entirely surprising. in late January.  Copyright © 2013 NewsBase Ltd. www.newsbase.com Edited by Martin Clark All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
    • MEOG 05 February 2013, Week 05 page 6 MARKET COMMENTARY Chinas monthly import data are not quick and meaningful increases inreleased until a week or so after the OPEC output are realistic. On the marketsmonth-end. The Dubai Mercantile Exchange (DME) So we will not know for sure how Not all bad news Oman futures contract for March 2013China will react. It is not all bad news. Saudi Arabian and delivery began the week on January 28 But if its previous behaviour is United Arab Emirates production levels at a settlement price of US$108.71 peranything to go by, China may emerge as are viewed optimistically in the market, barrel.a big buyer of crude oil in February. based on offshore rig development and The March contract expired soon output trends. after, and the April delivery future tookOPEC reaction But this optimism is of course based over as front month contract.Another consequence lies in the reaction partly on predictions, and therefore The April contract then escalatedof the Organisation of Petroleum traders are wary of being too reliant on gradually, first to a settlement price ofExporting Countries (OPEC). such optimism. US$110.61 per barrel on February 1. High prices are great news for A further question mark for the oil Then after the weekend the contractproducers, up to a point. trading market is now emerging from climbed again on February 4 to a This is especially true for smaller the corporate sector. settlement price of US$111.53 perOPEC members, whose reliance on With weaker performance in certain barrel.revenues from crude oil production is areas from such operators as Shell, This latest trading session has seengreater. ExxonMobil, Chevron, and indeed from DME Oman crude oil futures prices But OPEC does not like volatility, and the upstream engineering sector such as climbing above the US$110 per barrelits smaller members lose out most if Italian operator Saipem, global oil mark for the first time in a number ofprices fall back as quickly as they have majors and service providers may also weeks, and reflects the agitation nowrisen. reign in activity. pervasive in the Middle Eastern oil So will this mean an upturn in OPEC This will send shivers down many trading sector.output? spines in the oil trading market, if they DMEs oil trade volumes, in terms of The key question here is whether think that future output growth prospects average daily trades, have beenOPEC can expand output rapidly if oil are no longer looking quite as rosy as extremely healthy in December andprices continue to rise. they were. January, with trades of around 5,000 lots Back in December 2012, OPEC And the old-fashioned problem of or higher each day.elected not to change output quotas, and how to calm the nerves of oil traders, February has started slowly, althoughmay now, with hindsight, be thinking and quell their herding mentality will with only a couple of days to take intothat it should have been more also now arise. consideration, few conclusions can beperspicacious. Many of these features are bullish for drawn. But with oil output already running at oil prices, so we should be prepared for However, it seems virtually certainhistorically quite high levels (and for a some further hikes in oil prices in the that volumes will escalate as marketlong time), many will be wondering if coming days. activity intensifies.  Settlement price - DME Oman Futures, Monday February 4, 2013Product Price ($) Change* ($)Oman crude 111.53 0.92Apr 2013 (bbl) Source: Dubai Mercantile Exchange (*Change on previous trading day’s settlement price) Copyright © 2013 NewsBase Ltd. www.newsbase.com Edited by Martin Clark All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
    • MEOG 05 February 2013, Week 05 page 7 MARKET COMMENTARY Market Projections for Week 07 Various features now point to a bull market for oil in the days ahead. Higher political risk, oil majors seeing more volatile returns, and the possible output volatility, which we may see as a result of these features, all look like bullish price signals for the oil market. Added to that is the likely influx of speculative cash flows into oil trading, as well as hedging behaviour (on the buy side) by such players as China. All in all, Week 7 is likely to show a further bullish mood in the oil trading market. Accordingly, we should expect the price of the DME Oman crude oil future for April delivery to rise. Price Projection for Week 7, 2013: DME Oman crude oil futures (April delivery): US$110-US$115 per barrel PIPELINES & TRANSPORTIsrael contemplates gaspipeline option to TurkeyThere is one country in the East economical way for Israel to export its The largest foreign operator in Israel –Mediterranean that could serve as an gas discoveries, which are currently in fact, the company that has made allanchor to receive Israeli gas by pipeline, estimated at some 28 trillion cubic feet the gas discoveries in Israel – is NobleShaul Zemach, Director-General of the (792 billion cubic metres). Energy of the US, and it is also operatorMinistry of Energy and Water, stated at The Israeli government has yet to of Block 12 in Cyprus.a conference in Israel on January 29. determine its export policy. Noble and the government of Cyprus According to a report in Globes Last year, Zemach headed a are discussing the development of BlockOnline, Zemach did not openly mention committee that delivered a report on 12, where 5-8 trillion cubic feet (142-Turkey by name, but said it was clear export policy and made 223 bcm) of natural gas was discoveredwhich country the Israeli official was recommendations. in December 2011, and the creation onreferring to. With annual demand expected to an LNG plant on the island’s southern Zemach suggested that despite the reach 50 bcm in the coming years, coast.political tensions between Israel and Turkey is keen to secure new sources of Noble would like to use the planned[Turkey], the idea of gas exports to natural gas supply. Cypriot facility to export natural gas[Turkey] via a subsea pipeline through It has been negotiating with Iraqi from the Leviathan field, which is inthe East Mediterranean was practical, Kurdistan for gas supplies, even though Israeli territory and which it discoveredGlobes said. the Turkish army continues to be in December 2010. “This isn’t out of the question,” engaged in a war with Turkish Kurds. During the recent Eurasian EconomicGlobes quoted Zemach as saying. While there are indeed a number of Summit in Istanbul, Turkey’s Deputy “There are quite a few geopolitical geopolitical barriers hindering an Minister for Energy and Naturalbarriers, but if we know how to create Israel/Turkey gas pipeline project, the Resources Murat Mercan told Israelithe right conditions, it is possible. Gas big stumbling block for Ankara is envoy Michael Lotem that any co-should be used as a stabilising factor Cyprus. operative venture between Turkey andwhich leads to co-operation between Turkey has made it clear that any deal Israel would be hindered by Israel’scountries and includes multinationals it makes with Israel would mean that natural gas development co-operationand international parties with an interest Israel would have to stop its energy with Cyprus.in regional stability.” association with Cyprus. But it remains to be seen if a subsea Recently, a top ranking Turkish gas pipeline from Israel to Turkey reallyofficial sent a message to Israel saying Complications is possible. that a pipeline might be the most That wouldn’t be easy. Copyright © 2013 NewsBase Ltd. www.newsbase.com Edited by Martin Clark All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
    • MEOG 05 February 2013, Week 05 page 8 PIPELINES & TRANSPORT If it is legal for one country to lay a A pipeline stretching from Israel to But how could it do that if Israelpipeline through the EEZ of another Turkey would have to pass through the ended energy co-operation with Cypruscountry then it might work, but that offshore territories of Lebanon and to do business with Turkey?doesn’t mean that the offended country Syria, Israel’s staunch enemies. As Zemach said: “The gas should bewould not resent having an enemy’s If it were unable to pass through those used as a stabilising factor which wouldpipeline running through its territorial waters, then the pipeline would have to help bring about co-operation betweenwaters. pass through Cypriot waters. the countries.” Bidders line up for newBadra gas pipeline in IraqSix international and regional companies in three main packages: pipeline; tank International oil companies operatingare preparing to submit technical and farm and central processing facility in Iraq are planning mega investments tocommercial bids by 19 February for an (CPF). utilise associated gas for powerengineering, procurement and While the UK’s Petrofac has already generation, rather than flaring it.construction (EPC) contract to fabricate been awarded a US$2 billion contract At present, Iraq flares 23 mcm perand install a natural gas pipeline in Iraq. for the CPF, construction bids are due to day. The companies are: Larsen and be submitted by mid-February for the Ali Khudhier, director-general of theToubro and Dodsal, both of India; storage tank contract, and to assist in state-owned South Gas Company (SGC)Athens-based Consolidated Contractors evaluating EPC contracts for the said last year at an industry event inInternational Company; Saipem of Italy; pipeline tender. Dubai that Iraq was keen on purchasingParis-based Technip and CAT of The tank farm will consist of two new equipment for investment inLebanon. reducing gas flaring in both old and new Estimated to be worth US$250 fields.million, the scope of works for the The pipeline will transport “We need US$12 billion over a six-contract includes a 105-km pipeline of year period,” he said then, adding a18 inches (457 mm) in diameter that will associated gas produced major part of this would be invested bybe laid between the Badra oilfield and from the oilfield to be used those companies now operating withinthe 150-MW Zubeida power plant. the licensing rounds. Both places are located in the southern as feedstock for power According to him, SGC has alreadyWasit province. generation prepared a plan to tap the gas and use it The pipeline will transport associated for power generation and petrochemicalgas produced from the oilfield to be storage units, each of 35,000 cubic production domestically.used as feedstock for power generation. metres, and will also entail the “The vast bulk of gas flared in Iraq It will have a nameplate capacity of 4 installation of booster pumps and slug comes from the Rumaila, West Qurna 1million cubic metres per day, which will catchers. and Zubair oilfields in Basra Province.be increased at a later date. The contract is estimated to be worth These fields, on the basis of The UK’s Mott MacDonald has US$450 million. development deals signed with consortiaprepared the front-end engineering and Gazprom plans to complete all onsite led respectively by BP, ExxonMobil anddesign (FEED) package for the planned facilities by the third quarter of 2015. Eni, are set to more than triple outputfacility and will also act as project The Russian energy company leads over the next seven years. There will bemanagement consultant to the client, the development of the 3 billion barrel a need to invest in infrastructure toRussia’s Gazprom. Badra oilfield, along with Turkey’s harness the gas. Our current capacity is The Badra oilfield is being developed TPAO, Malaysia’s Petronas and South just about 12 mcm per day,” Khudhierat an estimated cost of US$2.75 billion Korea’s KOGAS. said.  Copyright © 2013 NewsBase Ltd. www.newsbase.com Edited by Martin Clark All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
    • MEOG 05 February 2013, Week 05 page 9 INVESTMENTLebanon opens pre-qualificationfor offshore gas bidding roundLebanon is this week to begin acceptingpre-qualification applications frominternational oil companies that want toplace bids in the country’s first licensinground, which is scheduled to open inMay. The pre-qualification round was dueto open on February 4. Criteria for pre-qualification must beapproved by the Lebanese cabinet beforebidding opens. According to the Ministry of Energyand Water website, only qualifiedcompanies will be invited to apply foran “Exploration and ProductionAgreement” in the first licensing round. Bids will be accepted from approvedcompanies that have formed themselvesinto consortia of at least three members. companies. square kilometre area. The website states that the purpose of The Petroleum Administration is not In December Rowlands said the datapre-qualification is to establish the fact authorised to communicate with the suggested that reserves in the area couldthat the company is a legal entity, the press or with the companies placing amount to 25 trillion cubic feet (708company’s financial strength and its bids. billion cubic metres).capacity to finance ongoing and Pre-qualified companies or consortiaprospective oil and gas activities, to Interest high will be announced on March 31.demonstrate the company’s technical Meanwhile, interest among international The licensing round is to open on Maycompetence, and to determine the oil firms in the Lebanon offshore is 2 and last for six months.company’s quality, health, safety and reported to be growing. The ministry is looking to sign its firstenvironment standards. An energy conference in Beirut last offshore exploration agreements by Companies may pre-qualify as December was attended by more than March 2014.operator or non-operator/rights holder. 150 international and Lebanese A map of designated blocks has yet to Once pre-qualification status is companies. appear on the ministry’s website.granted, the ministry website says, it David Rowlands, CEO of Spectrum, According to the US Geologicalshall remain valid for three years. which conducted a large seismic survey Survey, the Levant Basin, in which All pre-qualified companies are of Lebanon’s southern waters last Lebanon’s East Mediterranean offshorerequired to notify the Petroleum autumn, was quoted by Beirut’s Daily acreage lies, has estimated natural gasAuthority whenever there is an adverse Star on January 31 as saying a reserves of 122 trillion cubic feet (3,455material change in their status. reassessment of the 3-D data showed bcm) and crude oil deposits of some 1.7 The six-member Petroleum that Lebanon’s offshore hydrocarbon billion barrels.Administration, formed late last year, reserves could be larger than originally Some 35 trillion cubic feet (991 bcm)will prepare all the technical and legal anticipated. of natural gas has been discovered bywork prior to negotiating with the He said there was a growing list of US company Noble Energy in Israelicompanies and to review applications, companies that had expressed an interest and Cypriot waters. but the Ministry of Energy and Water in the Lebanon offshore.will carry out negotiations with the Spectrum’s survey covered a 3,000- Copyright © 2013 NewsBase Ltd. www.newsbase.com Edited by Martin Clark All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
    • MEOG 05 February 2013, Week 05 page 10 INVESTMENTCyprus to sign offshorePSCs with France’s TotalCyprus expects to sign two production- The contracts are expected to be plans to see the start of construction ofsharing contracts (PSCs) with France’s similar to three PSCs signed with a joint an LNG export facility by 2015.Total for two offshore blocks this week, venture between Italy’s Eni and South Sylikiotis said the country’s objectivethe head of the Cyprus Energy Service Korea’s KOGAS in late January. was for a Cyprus LNG facility to exporttold MEOG during a recent interview. Those agreements call for more 2-D not only Cypriot natural gas, but also Solon Kassinis, Director of the Energy and 3-D seismic to be acquired and for that produced by Israel and Lebanon.Service, an arm of the Ministry of one well to be drilled during the initial The Cyprus National HydrocarbonCommerce, Industry and Tourism, said three-year exploration period. Company, known by its Greek acronymthe contracts would first be approved by If the well is successful, Eni/KOGAS KRETYK, is negotiating with Noblethe Council of Ministers and then they will be obliged to drill another. Energy about the development of Blockwould be signed with representatives The PSCs can be extended twice for 12, where the gas resource in thefrom Total, who are arriving in Cyprus two years, and with each extension 25% Aphrodite field has been estimated at 5-this week. of the block must be relinquished. 8 trillion cubic feet (142-227 bcm). Total will be awarded PSCs for Once Cyprus awards the PSCs to Noble will build an underwater gasBlocks 10 and 11, which lie at the Total it will have six offshore blocks pipeline to the island’s southern coast,southern edge of Cyprus’s exclusive under contract counting Block 12, which where the planned LNG plant will beeconomic zone (EEZ) along the was awarded to Noble in 2008. located at Vassilikos. Noble will also bemaritime border with Egypt and west of Meanwhile, Minister of Commerce involved in creating the LNG facility,Block 12, where natural gas was Neoklis Sylikiotis told a press which is due to come on stream in 2019.discovered in December 2011 by Noble conference in Nicosia on February 1 that Energy. the government was proceeding with PERFORMANCEIran ‘December exports up’Following reports that Iran’s December 1.45 million bpd following several that is far from pushing Iran in acrude exports hit 1.4 million barrels per interviews with analysts and shipping corner."day – their highest level since fresh sources. According Reuters, higher Decembersanctions were introduced by the Prior to the introduction of the exports were driven by demand fromEuropean Union (EU) in July – a sanctions, Iran was exporting around 2.2 Asia, with countries such as China, Indialeading analyst has said that in million bpd. and Japan continuing to purchase largecombination with high oil prices, this is In a report on January 30 Olivier volumes, as well as the expansion oflikely to mean that the sanctions are Jakob, managing director of consultants Iran’s tanker fleet.currently ineffective. Petromatrix in Switzerland, said that The latter has helped the Islamic On January 18, the International "with exports close to 1.5 million bpd republic bypass restrictions that haveEnergy Agency (IEA) said in its and Brent crude above US$110 a barrel made insuring its cargoes difficult, whilemonthly release that Iran’s crude Iran does not really care anymore about gaining accurate export figures hasshipments were 1.2 million bpd during the sanctions". become harder as the country has turnedthe month. He added: "The export revenues from off satellite tracking signals on the However, on January 31, Reuters Iran are now equivalent to exporting at majority of its vessels. claimed that this figure actually stood at full capacity in a market at US$81 and Copyright © 2013 NewsBase Ltd. www.newsbase.com Edited by Martin Clark All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
    • MEOG 05 February 2013, Week 05 page 11 PERFORMANCE Although fresh sanctions are due to be step up pressure on China to lower its relationship,” she said.imposed by the US next month Elena Iranian purchases in the near future. “I would be very surprised if ObamaMcGovern, oil and gas analyst at “The implications of preventing were to take China to task on IranianBusiness Monitor International, told Chinese imports from Iran would be too imports.” Reuters that Washington was unlikely to damaging to the (US-China) bilateralIran calls for foreign helpafter gas rig sinks in GulfAn Iranian rig has sunk to the Gulf sea- international assistance to help recover near the site and in Tehran to plot stepsbed after an accident during installation. the gas platform, the Mehr news agency to recover the giant structure. According to reports, the US$40 reported last week. The official told Mehr that calls formillion platform’s huge metal support Iran’s energy sector is currently help had been put out to severaljacket plunged 80 metres below the subject to a wide range of international international firms that might have thesurface after a crane broke during sanctions, which means the country is expert equipment needed to recover theinstallation. typically used to going it alone. rig to the surface. Workers rushed to get off the rig – “Without the help of foreign The structure was one of four plannedwhich belongs to a company linked to companies ... it is forecast that it won’t for a project in the giant South Pars gasIran’s Revolutionary Guard – as it be possible to retrieve the jacket for field, led by a NIOC subsidiary anddisappeared into Iran’s South Pars gas several months,” an unidentified services company Sadra, and weighsfield in about 10 seconds. National Iranian Oil Company (NIOC) more than 1,000 tonnes.  And, following the incident, Tehran official told Mehr.has taken the unusual step of asking for Crisis groups have also been set upSaudi Aramco gears up to drillwith new offshore jack-upSaudi Arabia’s state-owned oil giant rig ahead of schedule in October compared with the traditional air-Saudi Aramco is gearing up to start following its construction at the Keppel cooling of other facilities.drilling with its latest and recently FELS shipyard in Singapore. Aramco is expected to use a recordacquired rig, underscoring the group’s The new offshore jack-up will be the number of rigs this year, both onshoreintentions of exploring in ever deeper second to be owned and fully operated and offshore, for all aspects of work.waters. by Aramco. Local industry analysts anticipate the The new rig is capable of It is also the first offshore jack-up rig company might use as many as 170 rigsaccommodating 114 personnel and is that the company ordered to be built this year, up from 133 at the end ofequipped with jack-up legs more than from scratch to fit the Gulf’s unique 2012.400 feet (124 metres) long, which will offshore fields. Schlumberger has said it too expectsallow it to operate in the Gulf’s deepest The new rig is equipped with six the rig count to grow, but from 134 tofields of Marjan, Karan, Arabiya and engine/generator sets, plus a 54-motor 160, driven by “continued shallow-waterHasbah. jacking system that will allow it to carry exploration, along with Saudi Aramco The state-of-the-art rig has the ability a greater load than the normal 36-motor starting a deepwater rig in the Redto drill as deep as 30,000 feet (9,300 rigs. Sea”.metres). The rig’s water-cooling system will Saudi Aramco took possession of the also enable quicker heat removal Copyright © 2013 NewsBase Ltd. www.newsbase.com Edited by Martin Clark All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
    • MEOG 05 February 2013, Week 05 page 12 PROJECTS & COMPANIESSterling Energy looks forthe Kurdistan exit doorNot all companies have struck it lucky and adding to, our remaining high sector.in Iraq’s northern Kurdistan region. potential exploration interests in UK-listed Afren plc may also be A succession of disappointing results Africa,” said Sterling’s chief executive looking for a buyer for its Kurdishin the field mean the UK’s Sterling officer Angus MacAskill. assets.Energy is looking to quit. The London-listed company The company has hired a corporate The company has now told the commenced seismic work on the block finance firm, Steen Associates, to lookKurdish Regional Government that in 2012. into selling its projects in Kurdistan andseismic data from the Sangaw North Test rates from five early wells found eastern Africa, to focus on its mainblock provided little justification to natural gas but not in commercial assets in Nigeria, The Sunday Timescontinue with drilling operations there. quantities. reported at the weekend. The Sangaw North block sits about 80 The semi-autonomous Kurdish China’s Sinopec and US oil companymiles (128km) south of the Kurdish government placed restrictions on oil ExxonMobil could be interested incapital Erbil. exports in response to ongoing political buying the assets, which could fetch up “While we are naturally very battles with the central government in to US1.6 billion, the newspaperdisappointed to have been unsuccessful Baghdad over the oil sector. Ongoing reported. in our exploration efforts in Kurdistan, political turmoil is in part to blame forwe now look forward to focusing on, restrictions on Iraqs post-war energyAbu Dhabi moves on next phaseof North East Bab oil projectAbu Dhabi Company for Onshore Oil and export, gas compression, gas at 2.5 million bpd and which is sourcedOperations (Adco) is moving ahead with dehydration and a utilities system. from Adco, Abu Dhabi Marinethe next phase development of its North The additional water and gas injection Operating Company (Adma-Opco) andEast Bab (NEB) oilfield, with the facilities will be required to sustain Zakum Development Company.appointment of the UK’s Mott reservoir pressure and allow carbon Overall, Abu Dhabi has set a target ofMacDonald as the project management dioxide-based enhanced oil recovery attaining total production capacity of 3.5consultant. (EOR) techniques. million bpd by 2017. Called NEB phase 3, the project will The development is estimated to cost A large chunk of Adco’s new outputaim at further development of the three US$1.5-2 billion and the next stage in will come from the Qusahwira, Bida al-onshore fields of al-Dabbiya, Rumaitha the project implementation will be the Qemzam and the NEB fields.and Shanyel to produce an additional selection of a front-end engineering and Called a 1.8 million bpd project,110,000 barrels per day of crude oil by design (FEED) contractor. engineering, procurement and2016. The NEB project is part of Adco’s construction (EPC) tenders worth a total Scope of works for phase 3 of NEB plans to increase a production capacity of about US$1.5-2 billion have alreadywill include the installation of oil of 1.8 million bpd over the next five been awarded.gathering, water injection, gas injection years. The project aims to develop the threeand water supply systems, as well as Adco accounts for 65% of the UAE’s onshore acreages, increasing to 1.8facilities for oil processing, oil storage total oil production, currently estimated million bpd.  Copyright © 2013 NewsBase Ltd. www.newsbase.com Edited by Martin Clark All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
    • MEOG 05 February 2013, Week 05 page 13 NEWS IN BRIEFThe following news items are sourced benefited from Irans reduced exports. In Iraq’s January crude shipments from thefrom local and international news addition to Saudi Arabia and Iraq, also southern oilfields were higher by aroundsources. Angola, Venezuela and Russia are seen 75,000 bpd compared to previousNewsBase is not responsible for the as countries which have ramped up monthlevels of 2.02 million bpd.contents of the stories and gives no shipments to plug the shortfall from Iraq has set a target to export around 2.2warranty for their factual accuracy. Iran. million bpd from the south, but bad Saudi production cuts at the end of the weather and maintenance work at Iraq’sOIL year (700,000 bpd) have been largely giant Rumaila oilfield have disrupted caused due to weak global demand. exports, oil officials said.Iran to face 12% OPEC’s latest report indicated world OPEC member Iraq has the world’sdecline in Asian oil supply will comfortably outstrip demand in the first half of 2013. fourth-largest oil reserves and is targeting exports of 6 million bpd byimports Iranian exports to China have been 2017.Asian crude oil imports from Iran have reduced by 21% to 438,448 barrels per REUTERS, January 3, 2013fallen around 25% in 2012. Analysts day (bpd) in 2012, while the deepestexpect that overall Iranian crude oil reduction was made by Japan, which cut Kurds warn BP notshipments to Asia will decrease by 40% of imports to 189,076 bpd. to drill for Baghdadanother 12% in 2013, largely due to U.S. South Korea cut imports by 36% to The escalating dispute between Iraqssanctions pressure. 153,400 bpd and India reduced central government and the Kurds overAsian customers will however be able to purchases by 1.7% to 315,200 bpd. oil and land went up a notch after thesource their refineries due to alternative Some analysts expect that China’s Kurdistan Regional Government warnedsupply options. Iranian crude imports will be cut by oil giant BP not to help BaghdadNews agency Reuters stated that Asias another 5-10% in 2013. upgrade an oil field in disputed territory.main oil buyers cut imports from Iran to REUTERS, February 1, 2013 BP, which appears to be committed toan average of 1.09 million barrels perday in 2012, Available government and Iraq oil exports rise Iraq, secured a major production-sharing to 2.359 million bpd contract from Baghdad in 2009 toindustry data shows that there are also develop the Rumaila superfield in theplanned cuts in term contracts for 2013 in January south.which point to further reductions of at Iraq’s oil exports climbed to 2.359 Now its reported to be close to anleast 135,000 bpd. million barrels per day (bpd) in January agreement with Baghdad to upgrade theSome analysts warn that overall cuts from 2.340 million bpd the previous declining Kirkuk oil fields in the north.would have to be deeper to secure month, oil ministry officials said. These straddle the border betweenfurther waivers from the U.S. sanctions Iraq shipped 2.095 million bpd from the Kurdistan and territory controlled bythat are aimed at forcing Iran to halt its southern oil hub of Basra and 264,000 Baghdad.nuclear programme and which have bpd from the northern fields around The semiautonomous Kurds claim themade shipping and paying for Iranian oil Kirkuk, including 11,000 barrels trucked Kirkuk region is historically part of theirdifficult, cutting overall exports by more to Jordan, they said. turf and want to get their hands on its oilthan half in 2012. Slowing exports from the Kurdish reserves, which constitute about one-Total costs for Iran are becoming region and repeated attacks on the major third of Iraqs proven reserves of 143.1staggering. Reuters reports that Asian export line to Ceyhan port in Turkey billion barrels.cuts have already cost Iran US$14 have significantly reduced Iraq’s So the last thing they want is for BP --billion worth of oil exports for the year. shipments from the north. or anyone else -- to arrest the fieldsThe implications for Asian refiners are The Kurdish Regional Government decline to strengthen Iraqs claim.expected to be minimal, as there is an (KRG) and the central government in "Iraqs citizens are simply tired ofabundance of alternative supplies, Baghdad have been locked in a lengthy Baghdads ... language of threat andmainly from the Middle East. Almost all dispute over oil payments to producers intimidation, which in the cynicalof Irans exports flow to Asia. in the Kurdish area. pursuit of narrow political agendas only REUTERS, January 31, 2013 serves to create division and strife," said The dispute was further aggravated atIranian crude cuts the start of January with the beginning KRG President Massoud Barzani. support Arabian of independent crude oil exports by the KRG via truck to Turkey, a blow toexports Baghdad’s claim to full control overIn 2012, Arab crude oil producers have Iraqi oil. Copyright © 2013 NewsBase Ltd. www.newsbase.com Edited by Martin Clark All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
    • MEOG 05 February 2013, Week 05 page 14 NEWS IN BRIEFThe confrontation is fast becoming a in which hundreds of Shiites have been passed a critical milestone last year bymajor threat to Iraqs stability and unity slaughtered in recent months. producing 3 million barrels a day ofand has hamstrung Prime Minister Nouri He cannot afford to let the KRG defy crude oil for the first time since 1990,al-Malikis drive to entrench his him. If the Kurds, who sit on 45 billion before the Persian Gulf War, reachingauthority since U.S. forces withdrew in barrels of oil, decide to go it alone, that 3.4 million barrels a day by December.2011. would encourage other grumbling Given its access to vast reserves at lowThe dispute went toxic in October 2011 regions, including the Shiite-controlled costs, Baghdad is poised to play awhen the KRG defied the central south that sits on two-thirds of Iraqs oil pivotal role in determining whether thegovernment by signing a six-block reserves, to pursue greater autonomy. worlds growing thirst for oil drives upexploration deal with Exxon Mobil, the Maliki last week met with Exxon Chief fuel prices to debilitating levels inworlds largest oil company. Executive Officer Rex Tillerson in coming years.Baghdad branded that illegal. The Baghdad in an effort to persuade him to "Iraq has a potential as a game-changer"Kurds, who control three northeastern abandon the companys Kurdish in the volatile global oil market, saidprovinces, responded by signing deals enterprise. Maria van der Hoeven, executivewith Chevron Corp. of the United States, What infuriated Maliki about Exxon director of the Paris-based InternationalTotal of France and Gazprom of Russia. signing with the Kurds is that it did so Energy Agency (IEA). Already, sheLike Exxon, they were fed up with knowing it would forfeit its 60 percent noted, Iraq has moved up to be theBaghdads bureaucratic morass, stake in the $50 billion West Qurna field worlds third-largest oil exporter and iscorruption, supply delays and stingy in the south, one of the biggest in Iraq, now on a path to be much more,production-sharing contracts and that it secured under a deal with becoming a "strategic source of worldfavored the KRGs more lucrative deals Baghdad in 2010. oil supply" in the years ahead. Iraq evenand better operating conditions. But Exxon has shown no sign of quitting has hopes of supplanting Saudi ArabiaWith a long-delayed Oil Law snarled in Kurdistan despite Baghdads pressure. as the globes biggest oil producer.Iraqs fractious Parliament since 2007, Nor is theres any indication the KRGs Iraq is perhaps the only country left inthe Kurds action undermined Baghdads burgeoning energy program is slowing the world that has huge stores of whatclaim to be the sole authority in the down. insiders call "cheap oil" -- untappedenergy sector, and heightened the Its stopped pumping oil into the Iraqi reserves that can be extracted throughprospect of the independence-minded pipeline network for export, and is relatively inexpensive, traditionalKurds breaking away. trucking oil north through Turkey for drilling techniques rather than having toThis perilous crisis is certain to deepen export via its Ceyhan terminal on the employ costly technologies such aseven more following the KRGs Mediterranean. hydraulic fracturing and deep-seadisclosure Sunday its negotiating with Turkey, with scarce energy resources of exploration -- as in the U.S. -- to tap"two or three other significant its own, is firmly allied with the KRG. It reserves of oil found offshore or in deepcompanies" it didnt identify. has plans to build oil and gas pipelines underground shale formations.A military confrontation is a distinct to Ceyhan to give the landlocked Kurds The boon of cheap oil is the ironic resultpossibility. For weeks, heavily armed an independent direct export route. of Iraqs many years outside theforces from both sides have been locked European oil companies are buying a economic mainstream, when ongoingin an uneasy standoff along Kurdistans growing volume of Kurdish crude and wars and an international oil embargosouthern boundary, centered on the more majors may follow the path to enforced by the United Nations ensuredbitterly contested oil-rich region of Kurdistan. that the nations oil treasures were leftKirkuk. Chevron, indeed, has added a third block mostly untouched in the ground.This political fault line could be to its Kurdish operation and is eyeing The gusher of oil starting to flow fromwidened if Exxon goes ahead with other prospects there. Iraqi wells couldnt come at a betterexploratory drilling, expected this UPI, January 30, 2013 time. Demand for oil is escalating insummer, in three of its blocks that lie in Iraqs flood of cheap oil could rock quickly emerging markets such as Chinadisputed territory. world markets and India, where the use of cars isMalikis Shiite-dominated coalition is The US is not the only nation surging, and other major oil exportersunder growing pressure from minority experiencing a renaissance in oil such as Russia and Saudi Arabia appearSunnis opposed to his increasingly production. to be reaching limits of their abilities todictatorial style, as well as the Kurds Sidelined for two decades by war, ratchet up production in major ways. and daily attacks by a resurgent al-Qaida sanctions and political instability, Iraq Copyright © 2013 NewsBase Ltd. www.newsbase.com Edited by Martin Clark All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
    • MEOG 05 February 2013, Week 05 page 15 NEWS IN BRIEFIn fact, the IEA is projecting that most a barrel by 2030 because of fast-growing control of the nations northern oil fieldsof Iraqs oil production -- which Iraqs demand in emerging countries. in Kurdish territory.leaders hope will top Saudi Arabias 11 But it could be much worse. Should Iraq Authorities in the semiautonomousmillion barrels a day at 13.5 million fail to realize its potential, the world Kurdish region defied Baghdads wishesbarrels eventually -- will be funneled to could face a future punctuated by oil in recent years and negotiated contractsChina and other expanding Asian crises, with prices skyrocketing as new with major oil companies such as Exxonmarkets rather than its traditional sources of supply are unable to keep up Mobil Corp. to develop the fields -- amarkets in the U.S. and Europe, filling a with robustly growing demand. move made possible by the lack of acritical gap in world oil supplies that "Success is not assured, and failure to national law or consensus governingshould alleviate pressure on prices in the achieve the anticipated increase in Iraqs who controls the oil fields and how theyears ahead. oil supply would put global oil markets revenues that come from them are to beSurging demand on course for troubled waters," said divided among the regions.Even using conservative estimates, the Fatih Birol, the agencys chief The conflict recently boiled over intoIEA expects Iraq to more than double its economist, adding that the "health of the armed clashes, with tensions incurrent production to 6.1 million barrels global economy" is at stake. particular centered on a plan by Exxona day by 2020 and 8.3 million by 2030, Obstacles to overcome Mobile to drill in an area of disputedenabling the country to supply 45 But it will not be easy for Iraq to scrape territory claimed by Baghdad. Thepercent of the increase in global oil up the mountain of cash needed to national government threatened to senddemand by 2035. Within two decades, upgrade its tattered oil-producing in the army, if necessary, to prevent theIEA analysts expect Iraq to surpass facilities and overcome a legacy of drilling, and raised the threat of a widerRussia to become the second-largest oil instability and violence that has war with Iraqi Kurds if the company didexporter. hindered production in the past. not back off.Iraq is coming back on the scene just Years of war and neglect have left Iraqi Much intrigue has swirled around Exxonwhen demand for oil was poised to oil fields with considerable damage that Mobil because of its conflict with thesurge in a way that threatens to drive up will require major efforts to reverse. Iraq Baghdad government, including reportsoil and gasoline prices to destabilizing also will have to make large investments that the oil giant might sell its stake inlevels. The world got a glimpse of what in its electrical, natural gas and water the mammoth West Qurna oil field insurging demand in emerging markets systems as well as in better oil transport, the south to the China Nationalcan do to oil prices when the price of storage and drilling facilities. Petroleum Corp. for $50 billion.premium crude shot up to an Iraq will have to make some hard Baghdad also has showed its displeasureunprecedented $145 a barrel in July choices to come up with the cash to with other oil companies doing business2008 -- the last time the world economy make these major upgrades. Iraqs $115 with the Kurds by refusing to includewas experiencing robust growth. billion of yearly revenues from oil them in deals to develop Iraqs super-Economists say the 2008 spike in oil exports provides nearly three-quarters of giant southern oil fields around Basra,prices played a role in sending the U.S. the income that the government and the which contain the largest reserves of oil.economy into recession even before the nations citizens depend on for basic "Chevron was recently told it was notglobal financial crisis hit months later. needs and services. The nation would qualified to do business with IraqThe global economy has been too weak have to devote a significant share of because of deals with Kurdistan," saidsince 2008 to stoke such high prices, those revenues -- about 10 percent -- in Ben Lando, editor of the Platts Iraq Oilwith demand for oil in the U.S., Europe the next decade to improving its oil Report. The territorial dispute has putand Japan -- still the biggest consuming fields and facilities. global oil companies in a difficultblocs -- stable or in decline. Still, even But Mr. Birol noted that the payoff is position, he said. The Kurdishin a weak economy, premium crude on enormous if Iraq makes the required authorities offer more lucrativethe London exchange has been trading investments: a near doubling of its oil production-sharing agreements, but thewell above $100 for several years. revenues to $5 trillion in the next most plentiful oil reserves are in theThe IEA said Iraq will need to boost decade. He said Iraq also could become south, where the Baghdad government isproduction to prevent another a major exporter of natural gas if it offering them skimpy fees for assistancedestabilizing spike in prices the next makes needed investments. in exploiting the oil. time the world economy is firing on all But perhaps the most nettlesomecylinders. It estimates that if things go problems the nation will have towell and Iraq is able to make the hefty overcome are political. In particular, it$530 billion of investments needed to must resolve a festering dispute betweentriple production in coming years, world the government in Baghdad and theoil prices still will rise gradually to $215 Kurdish regional government over Copyright © 2013 NewsBase Ltd. www.newsbase.com Edited by Martin Clark All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
    • MEOG 05 February 2013, Week 05 page 16 NEWS IN BRIEF"They have to decide whether to invest this summer," Mr. Henderson said, The canal is currently being protected byin Kurdistan or the rest of Iraq," Mr. adding that this should "be a priority for the Egyptian army, using cameras andLando said. "Its really a political issue the second Obama administration." helicopters to guard traffic through themore than anything else." James Jeffrey, a former U.S. ambassador 193 kilometers-long canal that earnedViolence hampers drillingOil companies to Iraq, agreed. US$5.13 billion in tolls in 2012. Atfor years avoided working in Iraq "The U.S. has been very active trying to present, cargo can’t be released at Portbecause of the threat of violence against work out arrangements where everybody Said, at the mouth of the canal.company personnel and facilities. That cooperates and oil and eventually gas Inchcape also reported that operations atis still a concern, although the level of from the north is exported in the Ain Sukhna Port stopped on Januaryviolence is down from the peak during cooperation with Baghdad," he told 31 due to a strike by contractors, whilethe U.S.-led military mission in 2006, Platts Energy Week. "The latest deal bad weather also caused delays at otherMr. Lando said. has fallen through. People are back ports along the canal."Violence continues to be horrible for arguing, and more needs to be done to During 2011, the Suez Canal reportedIraqis," but "it hasnt really gone into the ensure that a solution satisfactory to that 17,799 ships went through theoil sector that much. You havent seen everybody can be achieved because this canal, which connects the Red Sea withattacks on refineries," he said. A recent involves military as well as energy the Mediterranean Sea, carrying 691.8kidnapping of foreign oil company politics." million tons of cargo.workers was tribal-related rather than Despite the public rhetoric, he said, the BLOOMBERG, February 1, 2013the work of the al Qaeda terrorist Kurds and central government havenetwork, he said. cooperated on the shipment of oil when Iran gas to reachThe global standoff with Iran that has it benefits them. Iraq next summer:raised fears about disruptions of oiltraffic in the Strait of Hormuz, the "Everybody is playing a veiled as well as open game here," he said. "A great Oil Ministry officialshipping lane for most of Iraqs oil, is deal is at stake, not only in energy, but Iran Oil Ministry spokesman says thealso not much of a concern in Baghdad, in the political stability of Iraq, where country will start exporting natural gashe said. Iran frequently threatens to shut we lost so many people, and therefore I to Baghdad by next summer via andown the strait in retaliation for the know the U.S. government is very under-construction pipeline between theWests sanctions over nuclear activities, energetically engaged in trying to find a two countries.but the Iraqis "dont think its going to solution." Alireza Nikzad-Rahbar said onhappen," he said. WASHINGTON TIMES, February Wednesday that the "friendship"Regardless of the violence and political 3, 2013 pipeline project between Iran, Iraq andfeuds, Iraq represents one of the last and Syria, is the most important projectmost promising unexplored territories on GAS currently pursued by the ministry.Earth for oil companies at a time when The official said if the project is carriedconventional oil production is declining Suez Canal out according to schedule, the gas pipeline between Iran and Iraq will bein most other nations, he said.Iraq has the fourth-largest proven protected by completed next summer, adding thatreserves in the world of 143 million Egyptian Army tripartite talks are underway to extendbarrels of crude, but "the country is only The Egyptian army is currently the pipeline to Syria.about 30 percent to 40 percent maintaining shipping services through He noted that the pipeline would beexplored," said Mr. Lando. "Theres a lot the Suez Canal. Egypt’s main designed in such a way that it would beof opportunity to find more oil." thoroughfare handles around 8% of able to deliver gas to other MuslimPrior to the clashes that broke out in world trade. countries like Jordan and Lebanon in theNovember, Baghdad and Kurdish Global maritime agent Inchcape future.authorities had reached some tentative Shipping Services stated that the army is The 56-inch pipeline will start fromcompromises in their dispute, including protecting the canal amid unrest that’s Assaluyeh, near South Pars Gas Field ina move by Baghdad to tolerate some suspended some port services. southern Iran, and will continue into theKurdish exports through a pipeline Sources have indicated that the canal is a neighboring Iraq to feed three Iraqigoing through Turkey that had been shut controlled military zone, therefore there power plants running on gas. down for years. are no transit issues. The agency hasn’t"Washington is the only outside actor been providing ship supplies orwith the power and experience to push organizing crew changes since JanuaryBaghdad and the [Kurds] toward 29 for vessels calling at Egypt becauseformalizing the compromises achieved they can’t guarantee safety to ports. Copyright © 2013 NewsBase Ltd. www.newsbase.com Edited by Martin Clark All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
    • MEOG 05 February 2013, Week 05 page 17 NEWS IN BRIEFThe South Pars Gas Field, which is to Egypt and Iraqs Kurdistan region, the US. Upon arrival the Fairmountshared with Qatar, holds about 14 reached an agreement with creditors in Summit and Fairmount Alpine assistedtrillion cubic meters of gas, or about December to amend terms of a $920 in the launching and installationeight percent of the total world reserves, million Islamic bond, which it had failed operations.and more than 18 billion barrels of to pay at maturity in October. The Israeli Tamar gas field was in 2009liquefied natural gas resources. "With the agreement with the sukuk- the largest deepwater natural gasIran, which sits on the worlds second holders announced, the focus now is on discovery, of which production islargest natural gas reserves after Russia, receivables collection, boosting the scheduled to start Q2 2013. Fairmountis making efforts to up its gas management team, and realising the Marine is a marine contractor for oceanproduction by increasing foreign and value of the assets through an towage and heavy lift transportation,domestic investments, especially in international listing," Crescent Chief headquartered in Rotterdam, theSouth Pars Gas Field. Executive Majid Jafar, who is also a Netherlands. PRESS TV, February 1, 2013 board member of Dana, told Reuters by Fairmount’s fleet of tugs consists of five phone. modern super tugs of 205 tons bollardAdira Energy issues Dana, in which Crescent Petroleum has pull each, especially designed for longGabriella offshore a 20 percent stake, said it collected $301 distance towing, and a multipurposeIsrael update million from its share of receivables in Egypt and Kurdistan region of Iraq in support vessel. Fairmount Marine is part of Louis Dreyfus Armateurs Group.In an official statement Adira Energy 2012. PA, January 30, 2013reports that it has not placed its share of The companys cash balance rose by 47the cash collateral, due to material percent to $165 million by the end of PETROCHEMICALSbreaches of the Agreement by Modiin. last year, while total assets reached $3.5On December 24, 2012, Adira Energyentered into an Agreement with Modiin billion at the end of Dec. Official: Iran, IraqEnergy and Brownstone Energy setting Dana Gas, which has operations in the UAE, Egypt and Kurdistan, made agree on investmentout, among other terms and conditions, quarterly profit of 114 million dirhams, in petrochemicalsthe collateral required to place a Letter according to Reuters calculations. It had sectorof Credit in favor of the rig contractor. profit of 147 million dirhams in the Managing director of Irans Arvand FreeAccording to Jeffrey E. Walter , Chief year-ago period. Trade Zone (FTZ) Mohebat RaeesiExecutive Officer of Adira Energy, the "We are now preparing to develop our announced on Monday that Iran and Iraqcompany is currently working with three recent discoveries in Egypt and the have struck agreements in severalModiin to resolve these issues so that Zora offshore gas field in the UAE. economic areas, including investment inthe License partners can move forward These projects will enable us to boost the petrochemical sector.with the drilling of the Gabriella well, the growth that our operations have He made the remarks on Monday after awhich is expected to begin in March achieved consistently over the past meeting with director general of Iraqs2013. seven years," said Rashid Al-Jarwan, free zones who visited Arvand FTZ in OILVOICE, February 1, 2013 executive director and acting chief Southern Iran. executive officer of Dana Gas.UAEs Dana Gas REUTERS, February 3, 2013 "Development of rail and sea2012 net profit rises transportations as well as investment in SERVICES the industrial sector, specially inby 20% petrochemical and downstream industries are among issues agreed upon Fairmount deliversDana Gas, the Abu Dhabi-listed energyfirm which defaulted on an Islamic in the Iran-Iraq joint meeting," Raeesibond, said on Sunday its full-year net Tamar field jacket said.profit for 2012 rose 20 percent on the Earlier this month, an Iranian trade Tug boats Fairmount Summit andback of higher oil prices and lower official said Iran and Iraq are top trade Fairmount Alpine report the delivery ofcosts. partners, and added that the value of the new build Noble Tamar jacket atDanas 2012 net profit rose to $165 financial interactions between the two location in the Tamar gas field in themillion from the $138 million it posted neighboring countries has exceeded Eastern Mediterranean.in 2011, the company said in a $10bln in the current Iranian year (ends The two tugs have towed the barge onstatement. March 20, 2013).  which the jacket was loaded from theThe company, hit by delays on US to the field South-East of Cyprus.payments for its supplies of natural gas The 18,500 ton Tamar jacket is built in Copyright © 2013 NewsBase Ltd. www.newsbase.com Edited by Martin Clark All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
    • MEOG 05 February 2013, Week 05 page 18 NEWS IN BRIEF supplying natural gas to neighboring reflects an increase of 5.19 percentSecretary-General of Iran-Iraq Joint Iraq by the summer of 2013. compared with revenue of FY2011. OutChamber of Commerce Jahanbakhsh Head of the National Iranian Gas of which, SR189 billion was earned bySanjabi made the remarks at a seminar Company Javad Oji said Iran has SABIC, which equates nearly 61 percenton trade and investment opportunities in completed more than 25 percent of a of the aggregate value.the Iraqi Kurdistan region which was pipeline to Iraq that could carry up to 25 During 2012, Saudi Kayan commencedheld in Isfahan Chamber of Commerce million cubic meters per day of its and expanded operational capacity ofon Saturday. natural gas to Iraq. many commercial operations including"The financial interactions between FNA, February 4, 2013 olefins, ethylene glycol, polypropylene,Iranian and Iraqi businessmen have hit high density polyethylene and Amines$10.7bln now," he said. Saudi petchem etc.Sanjabi noted that the private sectors of sector revenues The company remained at top in termsthe two countries are planning toincrease the value of trade transactions exceed SAR310 of percentage growth. Its revenue increased by 295 percent to recordbetween Iran and Iraq up to $12bln billion SR9.5 billion.before the end of the current year. Saudi Arabia is the most prominent Alujain Corporation and Saudi IndustrialSanjabi said that a high-ranking Iraqi producer in the global petrochemical Investment Group are other significanttrade and economic delegation was industry. The Kingdom holds advancers, growing 43 percent and 27slated to pay a visit to Iran in a bid to approximately one-fifth of the worlds percent respectively.expand mutual cooperation and boost proven oil reserves, which is considered Core operating profitability oftrade transactions between the two to be the worlds largest reserve base. petrochemical sector declinedcountries. Saudi Arabia is producing more than significantly, mainly due to decrease in"A high-ranking trade and economic two-third of the total GCC overall product prices.delegation comprising 200 active petrochemical capacity, the Gulf Total operating income for FY 2012businessmen of (Iraqs) private and Petrochemicals and Chemicals reported SR 53 billion compared withgovernment sectors will soon travel to Association (GPCA) reported recently. SR 64.25 billion for FY 2011, aIran," said. Strong infrastructure, substantial decrease of 17.52 percent.Last month, Iranian Ambassador to reserves of cheaply extractable Three out of 14 companies including ,Baghdad Hassan Danayeefar announced feedstock and supportive government National Petrochemical (Petrochem),that the value of the trade ties between policies help domestic producers to Sahara Petrochemical Company andIran and Iraq will exceed $12bln this enjoy competitive advantage globally. Saudi Kayan showed operating lossesyear thanks to the two countries Despite challenging market conditions, during 2012.growing cooperation. the Saudi petrochemicals sector is On the positive side, PetrorabighIrans exports to Iraq worth some $11 continuing to show strong growth. operating income increasedbillion last year and the figure is At the end of 2012, the sector accounted exceptionally by 536 percent, itexpected to exceed $12 billion this year, for more than 31.4 percent of the total achieved SR 654 million during FY2012Danayeefar said in a meeting with a market capitalization on the Saudi Stock compared with SR103 million ofgroup of Iranian and Iraqi entrepreneurs Exchange, reaching at the level of SR FY2011.in Tehran at the time. 440 billion roughly. Alujain Corporations operating incomeHe also said that Iraqs free economy has SABIC (Saudi Basic Industries Corp.) is also increased by 127 percent duringcreated a suitable room for the countrys the flagship company among 14 listed 2012. The petrochemical sectorexporters to play key roles in the world companies, representing 61.2 of the total managed to earn an adequate margin ofmarkets and the opportunity should be value of petrochemical sector. 10.9 percent, generating SR 33.85seized by Iranian companies to present SABIC is also the biggest billion as net Income during fiscal yeartheir products to that country. petrochemicals company in the GCC 2012. SABIC dominated theIran and Iraq have enjoyed growing ties region, reflecting 19.2 percent of the profitability, contributing SR24.7 or 73ever since the overthrow of the former total market capitalization on the Saudi percent of the consolidated value.Iraqi dictator, Saddam Hussein, in 2003. stock exchange. Unfortunately, its bottom line decreasedBoth sides are working on a series of The total market capitalization of by 15.47 percent, which is attributed toplans to take wide strides in expanding Tadawul (market) stands at SR 1.4 the decrease in sales prices for certaintheir ties, in economic fields in trillion at end of December 2012. products, despite higher sales andparticular. The Kingdoms 14 petrochemical production volumes. Iranian energy officials said in companies all generated around SRSeptember that the country will start 310.5 billion as revenue during 2012, Copyright © 2013 NewsBase Ltd. www.newsbase.com Edited by Martin Clark All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
    • MEOG 05 February 2013, Week 05 page 19 NEWS IN BRIEFFurthermore, the heavyweight Saudi landscape. North America, for the first for the eventuality — to be able toArabian Fertilizers Co. (SAFCO) time in decades, is approaching the navigate properly into the productsshowed a maximum net profit margin of much sought after independence from market too.77.6 percent. the Middle Eastern oil. Even Australia is Three new refineries, in various parts ofSaudi-listed petrochemical companies now reporting hundreds of billions of the Kingdom, each able to processtotal assets grew to SR 596 billion, barrels in new finds. Shale gas, tight oil, 400,000 barrels per day (bpd) of mainlyrecording a yearly growth of over two shale oil, off-shore oil and gas — all are heavy crude, in different stages ofpercent. combining to give a completely new construction at this very moment, wouldSABICs assets are amounting to SR 338 identity to the emerging scenario — a soon be presenting Aramco with abillion, a relative sector share of 57 glut like situation indeed. portfolio of products to market. Andpercent. National Industrialization Co. We are living in a changed world. Aramco needed to be prepared for it!and Saudi Industrial Investment Group Energy planners in Riyadh and indeed Of this, Satorp, the largest addition totopped on percentage basis, both Dhahran are fully aware of it. And are global refining capacity since 2009, theachieved nearly 14 percent higher value reacting accordingly. A new strategy is Aramco joint venture with French oilof total assets in 2012. in work. And although this new strategy major Total, is expected to go on streamAt Saudi Stock Market, the has a number of salient features, yet one during the second half of the year. Workpetrochemical sector has been showing a of the most important components of on Yasref, the refining joint venturepositive drive since the start of 2012. this strategy is to add value to crude between Aramco and China’s Sinopec,The sectors index added a healthy return instead of selling it as it is. “More of our on the Red Sea coast is also moving innearly 16.5 percent at the end of the first liquids production can travel farther full steam and this venture is expected toquarter of 2012, crossing the 7,000 down the value chain, rather than being go on stream by late 2014. And then thepoints mark. Subsequently, it could not exported as crude oil, refined products strategically important Jizan refinery issustain upward momentum due to wide or natural gas liquids,” Saudi Aramco also set to come on stream in 2017.fluctuation in oil prices. The index now declares on its web page. Prince Indeed the world’s largest crudefinally closed lower by 6.04 percent, Faisal bin Turki, the advisor at the exporter has not invested tens of billionstrimming back 6,000 points-mark to end Ministry of Petroleum and Minerals, too of dollars raising refinery capacity, toat 5,856.41 point on December 31, 2012. has been underlining that his ministry 3.5 million bpd by 2016, for no reason.Saudi Arabias benchmark stock index was currently stressing the need to focus Logic seconds the move too. This(TASI) achieved a return of 5.98 percent on manufacturing valued-added transition, from just selling crude toduring 2012, closing at 6,801.22 points. products. produce and be able to sell more value-Nama Chemicals Co. outdid the rest of And we continue to see the added products, is not only aimed atthe petrochemical issues, marching manifestation of the strategy — in one diversifying the economy only, but byhigher roughly 29 percent to SR 12.85 at form or the other — on almost a daily using the heavy and sour crude forthe end of 2012. basis. Riyadh is moving ahead, rather in refining, these ventures would also takeSaudi Industrial Investment Group and a fast pace, on the global chemical care of the type of crude, for which thereheavyweight Saudi Arabian Fertilizers highway — so as to add value to its are currently not many takers in theCo. (SAFCO) followed it, advancing 19 crude. Besides adding value, this would world. The scenario forces the Kingdompercent and 15 percent respectively. also add jobs and business in the to sell those at a discount to other ARAB NEWS, ZAWYA, February Kingdom. The almost $20 billion joint grades. That situation should now be 3, 2013 venture between Saudi Aramco and taken care of. A smart move indeed — Dow Chemical is a clear expression of killing two birds at the same time!Saudi refining seriousness of the planners on the issue. And the global refining industry too isinitiatives add value And in the meantime, Saudi Aramco has taking note of the development(s). Ato oil sector also joined hands with Sinochem too for another venture on the west coast. rush seems on to capitalize on this development. Only last week, GraceAdding value is the new mantra. But this is just one aspect of the value Catalysts Technologies organized a two-Unveiled a few years back, this new addition strategy. Refining is another day workshop for refining professionalsstrategy is now fully in operation. Saudi major plank, of the new Saudi offensive. in Yanbu. Grace, one of the largest fluidArabia and other regional oil producers The Kingdom is now moving ahead on catalytic cracking (FCC) catalystare endeavoring to diversify their this trajectory too — and at a fast pace. producers, dominates the region with aeconomy — away from crude. When early in 2012, Saudi Aramco market segment share of over 70 percentChanging crude fortunes have almost announced setting a product trading arm, in Europe, Middle East & Africaforced it upon them. New, emerging, oil there was indeed a specific reason (EMEA) since 2000 — and indeed forfrontiers are changing the global crude behind it. Aramco was preparing itself reasons.  Copyright © 2013 NewsBase Ltd. www.newsbase.com Edited by Martin Clark All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
    • MEOG 05 February 2013, Week 05 page 20 NEWS IN BRIEFThe two-day refining workshop was The development operation of Lavan China, in the meantime is alsowell attended by engineers and operators and Tabriz oil refineries’ gasoline endeavoring to generate enough refiningfrom most existing Saudi refineries, production units will be completed by capacity. As per the State Council’s 12thKFUPM and the Aramco headquarters the end of current Iranian calendar year five-year plan for energy development,in Dhahran, initiating an intense debate, in March this year, Alireza Zeighami the Chinese crude oil refining capacity isespecially on unit optimization and deputy Iranian oil minister revealed to be raised to 620 million tons andtroubleshooting aspects of refineries. recently. output of refined oil products to 330During the workshop, one could Work on the gasoline units of Isfahan million tons by 2015. The nation’s crudedefinitely sense a feeling of urgency, and Bandar Abbas oil refineries’ are also processing capacity is already set toamong the budding refining leaders of expected to be completed by April, 2013 increase by 39.5 million metric tons athe Kingdom, to master the art and and March 2014, respectively. year to 614 million a year in 2013, whileindeed the science of refining. And According to the deputy minister, after actual throughput is to climb 5.4 percentindeed there is rationale behind — one all these developments, the Iranian to 489 million tons, China Nationalcan’t really negate. gasoline production is set to touch 70 Petroleum Corp. said recently in itsAnd this development is not limited to million liters per day by the end of April annual report.Saudi Arabia only. Despite all the this year, as against the current 55 Refining is all set to take a major strideproblems and sanctions, Iran is also to million liters/day capacity. This would — all around — and Dhahran hasinvest $122 billion in the refining sector reduce Iranian dependence on imports to definitely leapt into an early lead in thisby the end of its Fifth Five-Year meet its galloping gasoline needs. Its direction.Economic Development Plan (March current average gasoline consumption SAUDI GAZETTE, February 3,2016). stands at 64 million liters/day. 2013 Copyright © 2013 NewsBase Ltd. www.newsbase.com Edited by Martin Clark All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
    • MEOG 05 February 2013, Week 05 page 21 STATISTICS Middle East oil rig count 300 250 200 Abu Dhabi Iraq Kuwait 150 Oman Saudi Syria 100 Yemen Other 50 0 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12Source: Baker Hughes Middle East gas rig count 80 70 60 50 Kuwait Oman 40 Pakistan Saudi 30 Other 20 10 0 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12Source: Baker Hughes Copyright © 2013 NewsBase Ltd. www.newsbase.com Edited by Martin Clark All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
    • MEOG 05 February 2013, Week 05 page 22 STATISTICS Middle East onshore rig count 300 250 200 Abu Dhabi Iraq Kuwait 150 Oman Pakistan Saudi 100 Syria Yemen Other 50 0 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12Source: Baker Hughes Middle East offshore rig count 40 35 30 25 Abu Dhabi Qatar 20 Saudi Other 15 10 5 0 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12Source: Baker Hughes Copyright © 2013 NewsBase Ltd. www.newsbase.com Edited by Martin Clark All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
    • MEOG 05 February 2013, Week 05 page 23 STATISTICS World oil production in 2011-12 90 80 70 60 Million barrels per day 50 40 30 20 10 0 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Africa FSU Latin America Middle East Europe North America Asia Source: IEA World oil demand in 2011-12 100 90 80 70Million barrels per day 60 50 40 30 20 10 0 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Africa FSU Latin America Middle East Europe North America AsiaSource: IEA Copyright © 2013 NewsBase Ltd. www.newsbase.com Edited by Martin Clark All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
    • MEOG 05 February 2013, Week 05 Back Page NEWSBASE INFORMATION HEADLINES FROM A SELECTION OF NEWSBASE MONITORS THIS WEEK CUSTOMERS INCLUDEOil and Gas SectorAfrOilZambia has launched a bid round for 23 blocks, with adeadline of August 7.AsianOilIndonesia has opened 24 new blocks for exploration andproduction contracts.ChinaOilPetroChina plans to buy a crude and a fuel pipeline fromCNPC for US$1.4 billion.EurOilThe merger of Spains Gas Natural and Union Fenosashould be finalised in September.FSU OGMBGs president says a decision on Phase 3 developmentat Karachaganak will be made by the end of the year.GLNGThe Dragon LNG terminal in Wales will open in mid-2009despite strike action.LatAmOilPDVSA has issued a US$3 billion bond to help pay offservice debts.NorthAmOilRepublican Representatives have unveiled a controversialenergy plan. For further details on the stories above and NewsBase’s entire product range: tel: +44 (0) 131 478 7000 e-mail: news@newsbase.com Copyright © 2013 NewsBase Ltd. www.newsbase.com