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Indian News | International News | Share Prices | Industry Sales Performance | Tankers | Tenders

Crude & Product Prices | Crude oil production | Natural Gas Production | Registered Offices | Links

Indian Petroleum News

          International Petroleum News

       Crude Oil - News

 

 

 

 

 

 

   
 FOB Arab Gulf 

Naphtha

 805.94

HSFO 180 CST

 453.15
HSFO 380 CST 442.93
 Base Oil Iran
SN 150 827.00
SN 500 840.00
Reclaimed Oil 740.00
 
 Singapore
HSFO 180 CST 471.02
HSFO 380 CST 460.80
 

 Cash Crudes

Brent  $/bbl

 - -

Dubai $/bbl

 - -

WTI  $/bbl

 - -
.

IPE Futures

Brent  $/bbl

 90.94
.

Crude Oil Gasoline & Gas

Nymex Crude

 $94.20

IPE Brent

 $92.92

Gasoline 

 $2.3092

Heating Oil

 $2.5472

Natural Gas

 $8.196

Base Oil Europe

SN 150 855.00
SN 500 873.00
BRIGHT STOCK 883.00
 

Oil Company Share Prices                                                                                      Source : BSE

  As on close of 15-01-2008

Today's Closing

Change absolute

Today's High

Today's Low

52 week    High

52 week Low

Balmer Lawrie

598.15

-20.15

612.00

575.10

809.00

380.00

Bharat Petroleum

467.10

-25.10

475.00

438.25

560.00

287.05

Bongaigaon Ref

92.70

-2.40

94.25

90.30

116.80

39.00

Cairn Ind.

241.05

-0.55

244.60

237.50

268.50

111.00

Castrol India Ltd.

287.70

-6.35

304.00

281.35

374.00

205.75

Chennai Petroleum

387.90

-4.90

391.90

379.00

490.05

173.25

Essar Oil

305.05

-10.80

312.00

290.10

360.00

47.80

GAIL India Ltd. 

507.15

-14.15

516.00

490.00

555.00

254.00

Gujarat Petronet

94.45

-1.25

96.90

92.30

114.45

42.50

Gujarat Gas

356.25

-8.30

      362.55

342.25

1550.00

266.00

Gulf Oil Corp. Ltd.

297.75

-9.25

306.00

288.20

1865.00

258.80

Hindustan Petroleum 

349.75

-12.65

356.50

334.25

405.90

222.70

Indian Oil Corp. Ltd.

687.85

-13.15

698.95

672.00

809.90

370.00

Mangalore Refineries

134.10

-2.80

139.20

129.50

149.00

32.00

Oil and Natural Gas

1289.80

-11.80

1299.05

1271.00

1386.90

750.00

Petronet LNG

112.05

-2.00

115.00

109.15

121.90

41.15

Reliance Petroleum

225.25

-6.95

229.90

218.00

295.00

63.10

Reliance Industries Ltd. 

3216.30

-54.30

3252.10

3135.25

3252.10

1250.00

Tide Water Oil India

4022.50

101.50

4180.90

4015.00

5276.00

1640.00

 

Indian Petroleum News

Industry chamber seeks diesel subsidy

 

The Tamilnadu Chamber of Commerce and Industry has urged the Chief Minister to implement the assurance given by the Electricity Minister to provide 60 per cent of the extra cost incurred by industries as diesel subsidy for captive power generation.In a statement here, Mr S. Rethinavelu, President of the Chamber, said that industrial units throughout the State have been facing insurmountable problems due to frequent power sheddings daily. Many are on the verge of closure and that would result in greater unemployment.

 

The Madurai District Tiny And Small Scale Industries Association (Maditssia) has demanded uniform power cut across the State and has strongly objected to the partisan treatment favouring Chennai city.In a telegram sent to the Chief Minister of Tamilnadu, the Minister for Electricity, the Minister for Small Scale Industries and the Chairman of Tamilnadu Electricty Regulatrory Commission, the association pointed out that while the Tamilnadu Electricity Board has announced 5 hours power cut in the district , the power cut to Chennai city is restricted to just one and half hours, violating the basic principle of equal rights.

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M'lore, B'lore to get LNG from GAIL 

 

BANGALORE: Karnataka Government has approved Rs. 7,500 crore investment agreement signed between the Gas Authority of India Limited (GAIL) and the Government for laying gas pipelines between Dabhol and Bangalore, and Kochi-Kanjirkkod-Bangalore-Mangalore.

 

GAIL (India) would invest Rs. 7,575 crore in two pipelines, which will transport liquefied natural gas (LNG) to user industries in South Indian states. Minister for Home V.S. Acharya told the media after the Cabinet meeting that the project would be implemented in two phases.

 

The GAIL would execute the project in which the Urban Infrastructure Development Department is playing a facilitator role. The two pipelines would have capacity to carry16 million cubic metres of gas each. The towns would benefit from the project, which also has the capacity to generate electricity in the region of 5,000 MW - 6,000 MW. The project is expected to be completed in 2012-13, the Minister said.

 

In the part A of the first phase, 402 km pipeline would be laid from Dabhol to Gokak along with spur lines to Belgaum and Goa at an estimated cost of Rs. 1593.47 crore. In part B of the first phase, 570 km pipeline would be laid from Gokak to Bangalore along with spur lines/feeder lines to Bangalore at an estimated cost fo Rs. 2,463.91 crore.

 

In the second phase, 417 km spur lines/feeder lines would be laid to Ratnagiri, Kolhapur, Sangali, Bijapur, Dharwad, Davangere, Harihar, and Tumkur at an estimated cost of Rs. 486.05 crore.For the second project, 1,114 km Kochi-Kanjirkkod-Bangalore-Mangalore pipeline, an investment of Rs. 3,032 crore including foreign exchange component of Rs. 18.57 crore has been approved.

 

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Sri Lanka should strike oil soon

 

It is expected that Sri Lanka will strike oil in the near future as Cairn Lanka (Pvt) Limited is in the process of completing the detailed study to facilitate its efforts, a senior official from Cairn India said. “The support given by the Government in this endeavour is very encouraging. We received its fullest cooperation and we are happy with the progress,” he said.

 

The Government of Sri Lanka and Cairn India signed the Petroleum Resource Agreement (PRA) for the exploration licence for oil and natural gases in the Mannar Basin on July 7, 2008. The Board of Investment and Cairn Lanka (Pvt) Limited subsequently entered into an agreement on September 10, 2008, committing an initial investment of more than $110 million towards the exploration of hydrocarbons. Cairn Lanka will be the only player in Sri Lanka in the event of oil exploration.

 

The oil exploration is based on past studies and also fresh studies conducted by Cairn and the Block SL 2007-01-001 which is offshore North West Sri Lanka and covers approximately 3,000 km in water depths of 200 metres to 1,800 metres was awarded to the company. The work program includes proposals to acquire 5,000 kilometres of 2D, 1,000 km of 3D seismic and drill three wells in the initial three years of the eight-year exploration period.

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No respite for Indian shippers in '09 on low oil, demand

 

MUMBAI  - A drop in tanker freight rates and weak oil is likely to hurt shippers in the next few quarters and profitability will be under pressure as rates may not touch the 2008 peaks very soon, officials said.On an average, freight rates of tankers, a cargo ship used to carry crude oil and liquids, have fallen about 40-60 percent over last year. Though there are signs of a recovery, rates are not seen touching their 2008 peak, they added.

 

"We believe the tanker market is going through an unusual period because of inventories and summer (weak seasonal demand) - both the factors compounding at the same time", Yuddhishthir Khatau, managing director of Varun Shipping said."I don't see a recovery going back to the previous periods."Weak oil demand, with major world economies slipping into recession, and a cut in crude oil supply are pressurising the rates and corporate earnings.

 

Oil prices have slumped from a peak of over $147 a barrel hit in July 2008 to around $60 as the global financial crisis dealt a sharp blow to demand and investments in the sector.Indian shippers saw poor numbers in the Jan-March quarter on weak freight and charter hire income with Great Eastern Shipping Company, Essar Shipping and Mercator Lines seeing a fall in profits or muted growth.

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Deora sees role in KG row, calls meet

 

The oil ministry is likely to assess next week the impact of the Bombay High Court’s verdict on the RIL vs RNRL case on government’s revenue and the  gas utilisation policy. The meeting will be attended by oil minister Murli Deora, secretary RS Pandey and senior officials. Some legal experts will also be present in the meeting to interpret the court’s verdict and suggest a way forward, a ministry official said, requesting anonymity.

 

The government, which will be earning close to $9 billion from RIL as profit share, may intervene in the RIL vs RNRL case to protect national interest, he said. Meanwhile, fertiliser secretary Atul Chaturvedi told he would seek clarification from the petroleum ministry that gas supply from RIL’s K-G basin to the fertiliser units would not be disrupted due to the court order.

 

The fertiliser industry on Wednesday expressed concerns that allocation of gas to RNRL would mean supply to them would be interrupted. The sector tops the gas allocation priority list. “I believe the judgement should not make a difference to our existing contracts that have been entered as per the government (gas utilisation) policy,” he said.

 

The gas policy, which was put in place soon after the government approved RIL’s price of $4.2 per unit as per a directive by the empowered group of ministers (eGoM), provides for fertiliser companies to get the gas first, followed by power plants that are sitting on idle capacity for want of gas. This allocation policy has been the basis to provide gas to RIL’s first set of consumers. However, this policy will not hold good if RIL gives the gas to RNRL.

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Petroleum Bazaar 

 

Iran approves ONGC Videsh gas commerciality report of Farsi block

 

New Delhi, The gas commerciality report of ONGC Videsh Ltd (OVL) and its consortium partners on the discovery made in Iran’s Farsi offshore block has got the nod of the National Iranian Oil Corporation (NIOC). Official sources told Business Line that NIOC has formally accepted the commerciality report of the gas discovery.

 

With this, Indian companies can now work towards the development of the gas field. Iran follows a bidding mechanism for giving development rights. According to estimates, the block holds recoverable gas reserves of about 12.5 trillion cubic feet. In December last year, OVL and its partners Indian Oil Corporation and Oil India Ltd had submitted the commerciality report for the approval of NIOC.

 

The Indian companies plan to invest close to $3 billion to develop the gas field. The Indian companies have invested $90 million so far in the field. Though the reservoir is mainly gas, OVL and its consortium have also struck oil in the field. The block is estimated to hold in place reserves of more than 1 billion barrels of oil. This was the first block where OVL, as an operator, had struck oil and gas.

 

 

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Petroleum Bazaar 

 

Taiwan imports 785,380 tonnes of LNG from Nigeria, Equatorial Guinea

 

Taiwan, Asia’s thirdn largest liquefied natural gas importer, purchased a total of 535,000 kiloliters or 785,380 tonnes of spot Liquefied Natural Gas cargos from Nigeria and Equatorial Guinea in November, the Bureau of Energy, said in an e-mailed statement. Nigeria is investing a lot on LNG to earn more revenue and end gas flaring in the country, with the Nigeria LNG Limited, the nation’s current exporter of LNG, reputed as the fastest growing LNG company in the world

 

Available statistics showed the island purchased 19 per cent more of the cleaner-burning fuel during the month to meet demand from state utility, Taiwan Power Company. Accordingly, the island imported 1.59 million kiloliters, or 721,500 metric tonnes of the fuel in November, compared with 607,000 tonnes a year earlier, data from the Bureau showed. The LNG import bill was $485m, or $672.5 a tonne, compared with $682.7m, or $748.26 a tonne, in October.

 

Taiwan’s LNG import bill has dropped 23 per cent from a record $873.03 a tonne in August in line with a drop in crude oil prices. Oil futures in New York have slumped 74 per cent from an all-time high of $147.27 a barrel in July. The island imports more than 95 per cent of its gas needs, with generators accounting for about 80 per cent of LNG consumption. The island also imported LNG from Malaysia, Indonesia and Qatar, under multi-year contracts.

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Petroleum Bazaar 

 

OVL consortium to invest $5 billion in Iranian gas fields

 

NEW DELHI: Giving thrust to exploration of oil and gas assets abroad, Ol and Natural Gas Corporation Videsh Ltd (OVL) in partnership with Indian Oil Corporation (IOC) and Oil India Ltd (OIL) has outlined a plan to invest around $5 billion over the next four years to produce gas from the Farsi block discovered in offshore Iran.

 

Official sources said that a detailed investment and development plan had been submitted to the Iranian authorities for approval. Iran had in September 2008 upheld commercial aspect of the Farsi block. The discovery, which was subsequently named Farzad gas field, could possibly hold in place reserves of up to 21.68 trillion cubic feet (tcf), of which recoverable reserves may be 12.8 tcf.

 

Although, the Indian companies want to ship the gas to India in the form of liquefied natural gas (LNG), the Iranian authorities have not responded to this as yet. OVL and IOC have 40 per cent stake each in the 3,500 sq. km Farsi offshore block that was awarded to the consortium in 2002. OIL has the remaining 20 per cent. The three firms had also found oil on the block and in November 2008 submitted commerciality report of the discovery. Iran has not yet approved the commerciality of the oil find, which may hold reserves of up to one billion barrels.

 

If the consortium gets the developmental rights, it will be paid a 15 per cent rate of return over and above the investments it makes. Iran’s State-owned National Iranian Oil Company (NIOC) is the owner of the oil and gas found in that country. Iranian law does not allow foreign firms ownership of oil and gas and they get a fixed fee for their effort in discovering hydrocarbons and bringing them into production. NIOC also has the marketing rights and the Indian consortium has requested them to allocate the gas to it for converting it into LNG, the sources said.

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Petroleum Bazaar 

 

Pertamina Says New Fuel Could Cut LPG Import Bill

 

State oil and gas firm PT Pertamina said it would cut imports of liquefied petroleum gas by 800,000 tons from 2011, when it starts to promote dimethyl ether as a substitute for LPG.His comments would appear to signal a major rethink on the government’s much touted but seriously delayed LPG conversion program.

 

Dimethyl ether (DME) is a gas with a similar chemical structure to LPG. It is typically produced from hydrocarbons, including coal-bed methane and natural gas, and is a cheaper alternative to LPG. It can also be used in diesel engines. Hanung Budya, Pertamina’s deputy director of marketing and trading, said that dimethyl ether was preferable to LPG as it cost 20 percent less. “It is also clean burning,” he said. “In addition, it will benefit the national budget as the government won’t have to rely on costly imports for the LPG program.”

 

The LPG program, which is aimed at encouraging people to switch from kerosene to LPG for cooking, is expected to save the government Rp 20 trillion ($1.92 billion) this year by replacing 4.1 million kiloliters of kerosene. Nationwide LPG consumption is forecast to jump this year by about 50 percent to three million tons as Pertamina continues to roll out the conversion program .

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Fluor Announces Cancellation of Kuwaiti Refinery Contract

 

Fluor Corporation today announced that it has received notification from Kuwait National Petroleum Company (KNPC) to stop work on the utilities and offsites for the al-Zour refinery. Fluor has approximately 300 employees performing engineering work on the project. The remaining contract value of approximately $2.1 billion will be removed from the company’s backlog in the first quarter.

 

Fluor Corporation (NYSE: FLR) designs, builds and maintains many of the world's most challenging and complex projects. Through its global network of offices on six continents, the company provides comprehensive capabilities and world-class expertise in the fields of engineering, procurement, construction, commissioning, operations, maintenance and project management. Headquartered in Irving, Texas, Fluor is a FORTUNE 200 company and had revenues of $22.3 billion in 2008.

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Petroleum Bazaar 

 

Govt gears for petro price hike

 

The government is contemplating an increase in the retail prices of petrol and diesel following the persistent surge in global oil prices in recent months ,with studies carried out by the Petroleum Ministry showing that the overall impact of higher transport fuel costs might not be significantly high.

 

While the quantum of increase has not yet been decided, the Petroleum Ministry has carried out a study to find out to whether raising fuel prices could worsen the price line in a year when monsoons are expected be weak.The study looked at six combinations of two broad scenarios -- a one rupee per litre hike each in the price of petrol and diesel and a three rupees per litre increase in each of the transport fuels.

 

As global crude oil prices breached the $70 a barrel mark earlier this month, from $32 six months ago, state-owned oil marketing companies--Indian Oil Corporation (IOC), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) are losing Rs 6 per litre on sale of petrol and Rs 3 per litre on that of diesel.

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Petroleum Bazaar 

 

Regulator rejects oil refiners’ plan to trim shipping bills

 

Bangalore: A move by state-run oil refining firms to cut their annual shipping bills for importing crude oil has been thwarted by the country’s maritime regulator.The Directorate General of Shipping (DGS) has rejected requests from state-run oil refiners to hire foreign ships for five years and longer to import crude. Oil firms led by Indian Oil Corp. Ltd (IOC) had approached the regulator last year, claiming that longer contracts would check volatility in shipping costs, secure lower freight rates and cut their annual shipping bills.

Local preference: An oil tanker. Indian firms are allowed to hire foreign ships for up to two years only when Indian vessels are not available. Eddie Seal / BloombergForeign ships can be hired by local entities for transporting their export or import cargo only when Indian ships are not available. Hiring foreign ships also requires permission from DGS.Hiring an Indian ship does not require permission from the regulator. DGS currently allows local entities, both public and private, to hire foreign ships for up to two years.

 

However, the number of Indian supertankers available to carry crude is fewer than what the oil firms need.“The maritime regulator has told us that the present system will continue in the best interests of developing India’s shipping fleet,” said an executive at IOC. He did not want to be named because of company policy.An official at the regulator confirmed the development. He also declined to be named. The oil firms’ demand was also opposed by the local industry body, the Indian National Shipowners’ Association (Insa).

 

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Petroleum Bazaar 

 

Ukraine puts more than 3 bcm gas in storage

 

KIEV - Ukraine has placed 3.1 billion cubic metres of gas into underground storage over two months at the start of a programme to ensure supplies ahead of next winter, Prime Minister Yulia Tymoshenko said on Friday.Tymoshenko disclosed the figure to local officials a day after state energy firm Naftogaz suggested that European gas companies should consider buying gas from Russia and storing it in Ukraine to avoid any recurrence of supply disruptions.

 

The European Union's Executive Commission on Thursday called on Naftogaz, which faces severe financial difficulties, to seal an agreement with Russia to ensure uninterrupted gas flows.Ukraine has long tried to store supplies of gas in preparation for winter, but Naftogaz's financial position had ruled out purchases in the first quarter of 2009.

 

Volumes of imports from Russian giant Gazprom (GAZP.MM) have been well below levels set down in a New Year 10-year supply agreement Tymoshenko signed to end a three-week supply cutoff that affected hundreds of thousands of European customers.Tymoshenko told the meeting of officials that Ukraine intended to boost imports in July, when the price of Russian gas is due to fall.

 

"This month, we are to pay $250 million and next month we will have to pay $1 billion," she said.Naftogaz says it expects gas prices to decline to $219 per 1,000 cubic metres from $270 in the second quarter and $360 in the first quarter. Ukraine hopes the price will fall further to $162 in the final quarter of 2009.Tymoshenko this week said she hoped to raise credits of about $4 billion to make necessary gas purchases.

 

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International Petroleum News

Japan Energy to refine 9 pct less crude y/y in July-Sept

 

TOKYO - Japan Energy Corp, the nation's sixth-biggest oil refiner, said on Wednesday it plans to cut its crude oil processing volumes for July-September by 9 percent from the same period a year earlier, citing slow domestic demand. Japan Energy, the refining unit of Nippon Mining Holdings Inc , plans to refine 5.31 million kilolitres  of crude oil including condensate in the third quarter, a company spokesman said. For the April-June period, Japan Energy estimated its crude refining volume at 5.14 million kl, including condensate, down 9 percent from a year earlier and down from its initial plan of 5.20 million kl.

 

Savoy Energy Corporation Signs Letter of Intent to Create Joint Venture for Oil Exploration in Fiji Savoy Energy Corporation announced that the company has signed a Letter of Intent (LOI) with Masi Corp Holdings Limited to create a joint venture in Fiji. The companies will seek to formalize a joint venture/ partnership that would create a new combined entity designed to license properties in Fiji for Oil Exploration and drilling rights.

 

The Pacific Islands Applied Geoscience Commission's report "Fiji Petroleum Data Package" states; "Over twenty structural reefal traps have been identified on the seismic lines in the Late Miocene and Pliocene sequences, mostly in Bligh Water Basin. Estimates of potential un-risked recoverable reserves are 270 million barrels of oil (mmbo) per structure. If structural-stratigraphic trapping occurs, recoverable reserves could increase to over 1 billion barrels of oil per structure."

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Petroleum Bazaar 

EnCore Oil confirms talks to sell Breagh discovery stake

 

British oil and gas explorer EnCore Oil Plc (EO.L) said on Thursday it was looking to dispose of some assets, and was in advanced stage to sell equity interest in the Breagh gas discovery in the UK North Sea."Our relatively conservative strategy has, I believe, helped us weather the storm better than some," said Chief Executive Alan Booth in a statement.

 

The company confirmed it, and its partners, were in exclusive negotiations with a third party for the sale of an aggregate 70 percent equity stake in the Breagh gas discovery.EnCore intends to sell the whole of its 15 percent equity in this and the adjacent licences, the company said.The partners in Breagh are Sterling Resources Ltd (SLG.V), which owns 45 percent stake, Faroe Petroleum Plc (FPM.L) and Stratic Energy Corp (SE.L), both hold 10 percent each, Regenersys owns 15 percent and the remaining 5 percent is held by Petro Ventures.

 

The Bristol-based company said plans were underway to drill an appraisal well on the Cladhan light oil discovery in the UK Northern North Sea, and Ceres in the UK Southern North Sea was expected to begin first production in the fourth quarter of this year.EnCore is seeking an additional farm-in partner to drill a well on the Bennett prospect possibly in 2010, the company said.

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Petroleum Bazaar 

Crude extends gains above $70 on Nigeria attacks

 

TOKYO - U.S. crude futures extended gains above $70 a barrel on Friday, after jumping 2.3 percent the previous session on renewed rebel attacks against oil facilities in Nigeria and optimism about an economic recovery. Crude settled up $1.56 at $70.23 after a rally on Wall Street fuelled by optimism the economic recession was easing -- a prospect that could spell a recovery in ailing world energy demand.

 

In the latest in a string of attacks in Nigeria, Africa's biggest oil producer, the Movement for the Emancipation of the Niger Delta (MEND), said it had sabotaged the Billie-Krakama pipeline in Rivers State, which supplies one of the country's main export terminals. Adding to the gains, Exxon Mobil (XOM.N: Quote, Profile, Research) told environmental regulators in Texas that its huge Baytown refinery suffered an operational glitch that triggered flaring.

 

U.S. gross domestic product fell at a 5.5 percent annual rate in the first quarter, slightly less than previously thought, the government reported, though there was weakness in activity and demand was soft.BP Plc reported flaring at its 475,000-barrel-per-day refinery in Texas City, Texas, on Thursday, according to a filing with state environmental regulators.

 

U.S. stocks rallied on Thursday as investors were relieved Federal Reserve Chairman Ben Bernanke withstood a barrage of pointed questions from Congress on the Bank of America-MerrillLynch deal relatively unscathed. * The dollar fell against most major currencies on Thursday, tracking a change in U.S. stocks, which rose as investors expressed optimism that economic deterioration was ebbing.

 

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Petroleum Bazaar 

 

Gasoline prices down in Texas, nationwide

 

IRVING, Texas — Prices at the gasoline pump are down slightly in Texas. The statewide average settled at $2.53, compared to $2.55 one week ago.The association says the nationwide gasoline average is $2.67, down 1 cent from the previous Thursday.Houston and San Antonio tied with the least expensive gas, at $2.49 a gallon. El Paso had the most expensive gasoline in Texas, costing $2.61.

 

AAA spokesman Dan Ronan (ROH'-nan) says the lower prices are not expected to have a major impact on the number of people traveling over July 4 weekend.AAA Texas is projecting about 3.2 million Texans will travel over the holiday period, about 3 percent fewer than last year, with about 2.8 million likely driving.

 

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Sinopec acquires Addax for $7.2bn

 

SINOPEC, an acronym for China National Petroleum Corporation has paid C$8.27 billion (US$7.24 billion or N1.06 trillion) for Addax Petroleum after the Canadian-based outfit gave the nod to the Chinese giant’s C$52.80 per share takeover offer.It was also gathered that Sinopec is set to drill its first exploration well in the Nigeria-Sao Tome and Principe Joint Development Zone in July after a lengthy delay caused by a shortage of deepwater rigs.

 

The offer for Addax is a 47 per cent premium to the company’s closing price on the Toronto Stock Exchange on June5, the day before it announced it was in talks with a number of companies regarding a potential takeover. Talk of several bidders for Addax have been touted in the market over the past month including China National Petroleum Corporation, China National Offshore Oil Corporation andKorea National Oil Company.

 

Meanwhile, efforts to speed up exploration in Block 2 come as Sinopec moves to takeover Addax Petroleum Ltd., one of its partners in the joint development zone, or JDZ.The TransOcean SEDCO-702 deepwater rig is due to arrive at Block 2 around July 1 and drilling will start immediately afterwards, said an official with the JDZ.Sinopec secured the production and sharing contract on the block in 2006, but hasn’t been able to drill up to now due to a shortage of deepwater rigs, a Sinopec official and the JDZ official said.

 

They declined to speculate on the Sinopec-operated block’s potential reserves, but industry reports point to a pre-drill resource estimate of about 275 million barrels.China, the world’s second largest oil consumer, is keen to find more oil and gas reserves, especially when asset valuations are low due to the sharp decline in oil prices since July last year. Light, sweet crude on the New York Mercantile Exchange is currently trading more than 50% below its peak above $147 a barrel.

 

 

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Chevron Sells Fuels Marketing Business in Nigeria

 

Chevron Corporation announced that its subsidiary Chevron Africa Holdings Limited has agreed to sell Chevron Nigeria Holdings Limited to Corlay Global S.A, a Panamanian company owned by an African-based consortium composed of MRS Holdings Limited and Petroci Holdings. Chevron Nigeria Holdings Ltd. is a Bermudan company that holds 60 percent of the issued shares of Chevron Oil Nigeria PLC, a publically listed operator and owner of downstream marketing assets in Nigeria. Chevron's upstream operations in Nigeria are not affected by the sale.

 

The transaction is subject to Bermuda regulatory consent and is expected to close quickly."This sale is in line with our ongoing effort to concentrate downstream resources and capital on strategic global assets," said Mike Wirth, executive vice president, Global Downstream, Chevron. "We are increasing efficiency and improving returns by shrinking our marketing footprint to better align with our refining operations."

 

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Ecuador and Petrobras reach deal

 

Ecuador will receive an average of 60% of oil production for Block 18, operated by Brazilian giant Petrobras, up from the current 51%, Mining and Oil Minister Derlis Palacios said. President Rafael Correa said over the weekend that Petrobras has agreed to sign a new temporary oil participation deal for Block 18. The temporary deal will be changed in one year to a service contract.

 

Under the current participation contracts, the state receives a percentage of profits from oil production. Under the new service provider contracts, companies would be paid a production fee and be reimbursed for investment costs, although all of the recovered crude oil will belong to the state. Petrobras currently produces about 32,000 barrels of oil a day from Block 18, said.

 

"According the agreement signed on Friday, the state will increase its participation in the block oil production to 60%. In exchange, the windfall tax for the company will be reduced from the current 99% to 70%," Palacios said. Palacios added that although the temporary contract is for a year, he hopes to sign a service contract quickly, "maybe in around three months" because it could benefit both the government and the company.

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Venezuela supports OPEC production cuts

 

CARACAS, Venezuela - Oil Minister Rafael Ramirez said today that Venezuela hopes OPEC cuts production quotas at Friday’s meeting in Vienna.Ramirez said it’s "obvious" that members of the Organization of Petroleum Exporting Countries agree there needs to be an immediate production cut this year.The organization "then needs to evaluate the situation in December’s meeting to make another cut at the beginning of 2009," Ramirez said in comments reported by Venezuela’s Energy Ministry.

 

 Venezuela is a founding member of OPEC, which imposes production quotas on member countries to regulate oil prices. The organization had planned to convene Nov. 18, but suddenly moved the meeting up to Friday — signifying a concern over oil prices that have fallen below US$70 a barrel.Other OPEC members have expressed their support for production cuts to boost prices. Iran on Thursday called on OPEC to slash output by 2 million barrels per day.

 

Ramirez did not specify how much Venezuela hoped to cut quotas, but said it’s essential that oil-producing nations limit supply."If consuming countries continue building inventories, next year could register a collapse in the price of oil," he said.Analysts say the move would benefit Venezuela while requiring it to do little in terms of production.

 

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Nigeria's daily oil production to drop to 1.6 mln barrel 

 

LAGOS-- Following the decision by the Organization of Petroleum Exporting Countries (OPEC) to cut production by an additional 2.2 million barrels per day, Nigeria will produce about 1.584 million barrels of crude oil per day by January 1, 2009, far below the 2.29 million barrels per day production estimated in the 2009 budget.

 

Lagos-base Business Day reported on Thursday that in November, following a 113,000 barrels -per day cut, Nigeria produced 1.903 million barrels per day, according to a figure given in the organization's Oil Market Report for December. With another 319,000 barrels per day OPEC cut for Nigeria which takes effect January 1, the nation's crude oil export will dip to 1.584 million barrels per day.

 

Meanwhile, oil rose just a bit over 40 U.S. dollars on Monday, reinforcing the fact that the Nigerian economy will face turbulent times in 2009. With the OPEC production cuts and falling prices, many of federal government's projections in the 2009 budget might not be met except prices rise again. Nigeria has also based its 2009 budget on 45 U.S. dollars per barrel for its oil revenues as the international oil price has crashed to slightly more than 40 U.S. dollars per barrel this week.

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Gasoline prices on the rise

 

A average cost of a gallon of regular unleaded was $2.51 Tuesday, up 36 cents from a month ago, according to survey results released by travel services company AAA. The average cost of a gallon of unleaded gasoline in Utah is $2.51, up 36 cents from just one month ago. As if that doesn't get consumers' attention, travel services company AAA said the increase since January -- in Utah and nationally -- is the largest over a nearly six-month period in nine years.

 

The state's unleaded average is up nearly 72 percent since Jan. 1, when the unleaded average was only $1.46 per gallon, AAA reported. Nationally, the increase was 62 percent. Perhaps the only upside for Utah drivers is that the state still has the 14th-lowest unleaded pump prices, AAA said. The national average is $2.62 a gallon.

 

Experts say much of the increase at the pump can be attributed to the rising price of crude oil. Although crude settled above $70 a barrel Tuesday for the first time this year, gasoline prices nationally failed to rise overnight for the first time in 42 days, signaling a possible break for motorists as summer driving shifts into high gear, not a series of continued increases.

 

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Oil steady as Caspian Sea pipeline restarts

 

Crude oil was little changed after dropping more than $US6 a barrel on August 22, the most in percentage terms for more than three years, as BP resumed flows through a Caspian Sea pipeline.The Baku-Tbilisi-Ceyhan pipeline, which moves oil from Azerbaijan through Georgia to Turkey's Mediterranean coast, may resume full operations within days after a fire halted exports, a BP spokeswoman said August 23. Oil also fell on August 22 as the dollar strengthened.

 

''The pipeline restart was a contributing factor, putting more supply in the market,'' said Jonathan Barratt, managing director of Commodity Broking Services in Sydney. ''Oil is trading in a very volatile, wide range. The volatility is telling me that a base is trying to form'' and prices won't sink much further, he said.Crude oil for October delivery was at $US114.45 a barrel, down 14 cents, in after-hours electronic trading on the New York Mercantile Exchange in morning trade in Singapore.

 

Oil fell $US6.59 on August 22, or 5.4%, to $US114.59 a barrel, the biggest drop since December 27, 2004. In dollar terms, it was the biggest decline since January 17, 1991, when US-led forces expelled Iraq from Kuwait. The October contract, which had jumped 4.9% the previous day, still rose 0.6% for the week.The price swings indicate that fundamental factors aren't the only influence in the market, Barratt said.

 

 

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ICE Brent Crude Up $2 In Saudi Summit Aftermath

 

 

Crude oil futures rose over $2 a barrel in London Monday after a weekend oil summit in Saudi Arabia failed to cool prices. "The debate regarding 'high' oil prices is no less transparent today than it was on Friday...We fear that since the Saudis did not give this market a reason to sell, the market will interpret that as a reason to buy," said Stephen Schork, editor of the Schork Report energy newsletter. At 0844 GMT, the front-month August Brent contract on London's ICE futures exchange was up $2.21 at $137.07 a barrel. The front-month August contract on the New York Mercantile Exchange was trading $1.97 higher at $137.33 a barrel. The ICE's gasoil contract for July delivery was up $11.25 at $1,244.25 a metric ton, while Nymex gasoline for July delivery was up 398 points at 347.90 cents a gallon.

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Govt likely to increase prices of light diesel oil, kerosene oil

 

ISLAMABAD: The government is likely to increase the price of light diesel oil (LDO) by Rs 1.50 per litre and the price of kerosene oil by Rs 2 per litre with effect from October 1.Sources said that the Petroleum Ministry has moved a summary to Prime Minister Yousuf Raza Gilani in this regard.The ministry has proposed that the price of kerosene oil should be increased by Rs 2 per litre. They said that there were different proposals regarding the increase in LDO price, which ranged from Rs 1. 50 per litre to Rs 3.50 per litre.

 

According to the sources, the ministry has also informed the prime minister that if the prices were kept unchanged in the next fortnight, the government would have to allocate Rs 25 billion in subsidy to cap the oil prices, and the prime minister would have to approve Rs 25 billion in differential claims to be paid to the consumers.The sources also said that the ministry has not proposed a reduction in the price of petrol, adding that it was the prime minister’s prerogative.

 

They said that the government had decided to end the subsidy on petroleum products by the end of December following a commitment with the World Bank.They said that currently the subsidy on petroleum products ranged from Rs 10 per litre to Rs 11 per litre but the government intended to end it completely by December. They said that the government was not giving a subsidy on petrol rather it was recovering Rs 20 per litre as Petroleum Development Levy (PDL) on petrol from the consumers to enhance its revenue collection.

 

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Shell, Repsol sign preliminary agreement on Iranian gas 

AMSTERDAM, Netherlands: European oil companies Royal Dutch Shell PLC and Repsol YPF SA have signed a preliminary agreement with Iran's state oil company on developing gas fields in the Persian Gulf, a Shell spokeswoman said Monday. "We've signed an upstream service agreement as part of our work to assess the feasibility of the project" known as South Pars, Sarah Smallhorn said. 

Smallhorn said the agreement, signed with National Iranian Oil Co. Saturday, follows a framework agreement the companies signed in 2004, but the final go-ahead for the project was not expected for another year — an apparent delay, since Shell said in February 2006 it then expected final approval in about a year. 

The United States and its allies have been pressuring banks and oil companies to pull out of oil and gas projects in Iran, due to Tehran's pursuit of nuclear technology for what it says are nonmilitary purposes. Some analysts believe oil companies may ultimately have to choose between doing business with the U.S. or Iran. Both Shell and Repsol have operations in the U.S., while Iran has the second largest reserves of natural gas worldwide, after Russia.

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Russian ministries see no sense in forming natural gas cartel 

MOSCOW, - Russia's economics and industry and energy ministries see no economic justification for establishing an international natural gas cartel as proposed by Iran, experts said Monday. Iranian Supreme Leader Ali Khamenei spoke Sunday in favor of setting up "a cooperation organization in the gas sphere, similar to OPEC." 

A spokesman for the Economic Development and Trade Ministry said, "I don't understand why Russia would need to create a gas cartel - I don't see any sense in this. The more so as Iran is now coming under serious external pressure." The official said Russia should be guided by demand alone, and should not coordinate its actions with anyone. 

"Why should we undertake commitments to synchronize our actions, why force ourselves into regulation frameworks which could boil down to setting quotas?" the official said. He also said Khamenei's proposal was more political than economic. 

The official said the Organization of Petroleum Exporting Countries was established as a means of putting pressure on the U.S., and of regulating oil supplies to that county. Industry and Energy Minister Viktor Khristenko said earlier there are no objective grounds for a cartel agreement in the gas sphere. 

"A gas OPEC? I can't make such forecasts. The more so as I am not the initiator of such documents, and I don't believe we should follow a cartel agreement path," Khristenko said last week during a visit to Algeria. OPEC was founded in 1960 by major oil suppliers Venezuela, Iraq, Iran, Kuwait and Saudi Arabia. The South American nation, a long-time sufferer from oil monopolies, initiated its establishment. Today the organization also includes Algeria, Angola, Indonesia, Libya, Nigeria, Qatar and the United Arab Emirates. 

OPEC's main aim is to coordinate the oil policy of its member states to protect their interests and ensure stable prices on world oil markets. Russia is the largest oil-producing nation outside the cartel and has the world's largest gas reserves.

 

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Essar set to begin coal bed methane production in Ranigunj

 

Durgapur,  Essar is set to begin CBM (coal bed methane) production at Ranigunj (East) block in West Bengal in six months. The company has completed drilling 15 production wells and put in place the allied facilities in line with the phase-I of the minimum work programme. The programme, estimated to cost $20 million (about Rs 100 crore), ended in May.

 

The initial production is estimated to be 0.05 to 0.1 mmscmd (million standard cubic metre a day), to be ramped up to 2.5-3 mmscmd from a total of 700 wells to be drilled in six years at an estimated $400-450 million (approximately Rs 2,000 crore). “We plan to market CBM as a cheaper alternative to fuel oil. We will also explore the possibility of marketing CNG as auto fuel in Durgapur and its adjoining area,” Mr Prem Sawhney, Chief Operating Officer – clean coal business of Essar Exploration and Production India Ltd, told.

 

Essar E&P is a wholly owned subsidiary of Essar Oil. Fuel oil is now nearly three times costlier the Reliance D6 gas sold at $4.2/mBtu.Located about 160 km from Kolkata, Ranigunj (East ) is spread over 500 sq. km. near Durgapur in Burdwan district. “Most of our 15 production wells have started producing gas which is currently flared. We are now setting two gas gathering stations and linking the same with production wells.

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No agreement yet on price of crude

 

Production from Cairn Energy India Ltd's (CEIL) RJ-ON-90/1 field in Rajasthan is unlikely to commence by June-end, 2009 deadline as differences continued to persist between the Scottish E&P firm and the government-nominated offtakers on the benchmark price for the crude. But ministry is keen on buyers offtaking the crude from the block, and with respect to that, the ministry has finally decided to put a cap on the timeline by which both the government-nominated offtakers as well as the energy firm ought to reach some sort of agreement.

 

"Cairn Energy is ready to commence supply of crude from the RJ-ON-90/1 field, so we are hoping that the production will start by mid July. In case, there's no consensus on the benchmark price, a provisional price would be adopted for the initial period of production," said some highly placed sources in the ministry.A suitable price formula was supposed to have been evolved within a week from April, 28 2009, when the ministry helped steer a meeting between the contractor and the offtakers, failing which a provisional price was to be adopted.

 

"We are in the process of finalising the provisonal price right now as some of the demands made by the offtakers are unacceptable," revealed a reliable Cairn Energy source close to the development.The government nominated offtakers -- namely, IOC, HPCL and MRPL -- have been pressing for discounts of 14-15% on the crude oil, which is likely to be benchmarked against Bonny Light, but that provision is unacceptable to the contractor, since the PSC provisions of RJ-ON-90/1 make it clear that the contractor does not have to afford any discounts on the crude price.

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ONGC awards offshore supply vessel contracts in record time

 

Mumbai: In a bid to tide over the acute shortage in availability of offshore supply vessels (OSVs), ONGC has, last week, finalised tenders and awarded contracts for hiring 11 vessels in a record time of about one month, as part of its preparations for the forthcoming bidding for NELP-8.

 

The oil explorer floated tenders on February 10, inviting bids from Indian and foreign OSV owners, opened the bids on February 26 and completed awarding of the contracts last week. The vessels will be under contract with ONGC for a three-year period. ONGC had also introduced some stringent clauses in the bidding process this time, insisting that all the bidders should have their vessels ready for mobilisation.

 

It has made it clear to the winning bidders to ensure that they mobilise their OSVs before April 30. Earlier, the oil company had faced delays in getting the vessels from the winning bidders even after awarding the contracts. Interestingly, this time Indian shipping companies totally edged out their foreign competitors, bagging all the 11 contracts for a total of $200 million.

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India Reliance leases Vopak oil storage in Singapore

 

SINGAPORE - India's Reliance Industries has leased 100,000 cubic metres (cu m) of clean oil products storage in Singapore, further expanding its global presence as the private oil refiner prepares to commission its new mega-refinery.Reliance , which has been actively marketing products from the new 580,000 barrels per day (bpd) refinery in Jamnagar on India's western Gujarat state, already has storage in the Mediterranean and Caribbean, industry sources had said.

 

The tank capacity in the Singapore oil hub was leased from Dutch oil and chemicals storage operator Royal Vopak NV, industry sources said on Tuesday."The Reliance storage is part of the new Vopak capacity that came online these last few weeks," one industry source told .Reliance did not respond to Reuters queries on the matter.

 

Vopak started operating 320,000 cu m of expanded capacity at its Banyan facility in early-November, bringing its total storage capacity for fuel and chemicals in Singapore to more than 2.5 million cu m.A source familiar with storage operations in Singapore said the new Vopak capacity has been fully leased.

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New oil find in Oseberg area       

 

StatoilHydro has completed the drilling of an exploration well in the Curran prospect in the western part of Oseberg in the North Sea, and reports results showing a small oil discovery in the upper part of the Brent group. Exploration well 30/8-4 S was drilled by the Transocean Winner semi-submersible drilling unit. Hydrocarbons were struck in the upper parts of the Brent group and drilling was terminated in Middle Jurassic rocks.

 

"We have made a small oil discovery in the Curran prospect south of the Tune field," says Tom Dreyer, vice president for exploration in this part of the North Sea."With today's oil price the field is not quite commercial but that could change in the time to come," he says. "In any case, we are pleased to have proven more resources near our installations in the Oseberg area."

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First LNG Commissioning Cargo Arrives at South Hook Terminal

 

Exxon Mobil Corporation today announced the first Liquefied Natural Gas (LNG) cargo arrived at the South Hook LNG receiving terminal in Milford Haven, Wales. The terminal adds to the UK’s LNG import capacity and energy diversity with the ability to deliver up to 2 billion cubic feet of gas daily into the natural gas grid when it reaches full operational capacity in 2009.

 

South Hook LNG Terminal Company Ltd. is owned by Qatar Petroleum (67.5 percent), ExxonMobil (24.15 percent) and Total (8.35 percent). The terminal forms part of the wider Qatargas II joint venture, which will supply gas to the UK from Qatar’s North Field. The terminal, which is being completed in two phases, includes five LNG storage tanks, a regasification plant, ship unloading systems and a jetty to allow berthing of the world’s largest LNG vessels.

 

“The arrival of the commissioning cargo into South Hook is a significant milestone in the development of the Qatargas II project, the world's first full LNG value chain investment,” said Mr. Faisal Al Suwaidi, Chairman and Chief Executive Officer of Qatargas Operating Company. “ExxonMobil has been a strong partner with Qatar Petroleum offering innovative technologies and expertise that have helped transform our regional gas resource into a global supply of clean-burning energy.”

 

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China's coal-to-liquids projects buffeted by changing policy

 

China's coal-to-liquids projects buffeted by changing policy, economics (2) Price changes affect the economic viability of CTL projects, but the issue of energy security persists.In 2003, when world oil prices were high and supply was tight, Chinese companies crowded into CTL projects. The central government called for a series of pilot CTL projects during the 11th Five-Year Plan period (2006-2010) to lay the foundation for industrial-scale production.

 

"It is very important to promote industrial-scale coal liquefaction," said Zhao Shuanglian, vice-chairman of the Inner Mongolia Autonomous Region. With CTL projects, "we can turn coal mines into oil fields to ensure energy security for China.” Take the Shenhua direct CTL facility. The project, which will have an annual capacity of 5 million tonnes, will be implemented in two stages.

 

In the first stage, there will be three production lines with combined annual capacity of 3.2 million tonnes. The first pilot production line, which proved successful in the December trial, will be able to convert 3.5 million tonnes of coal annually to 1.08 million tonnes of diesel oil and naphtha, equivalent to a 100 million-tonne oilfield in annual output. According to Zhang Xiwu, board chairman of Shenhua Group, if everything goes smoothly with the first 1 million-tonne pilot production line, the business will build two more lines of about the same size, for a planned total of 3.2 million tonnes.

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Pakistan may sign LNG deal with Qatar

 

Pakistan is negotiating to buy 1.5mn tonnes a year of liquefied natural gas from Qatar and may sign an agreement within six weeks, adviser to Pakistan’s Prime Minister on petroleum and natural resources, Dr Asim Hussain, told.A Gulf Times correspondent adds that Pakistan’s Federal Minister for Investment, Senator Waqar Ahmad Khan, who was in town, had discussions with Qatar’s Deputy Premier and Energy and Industry Minister HE Abdullah bin Hamad al-Attiyah.

 

Pakistan authorised Sui Southern Gas Company to act as the buyer of the fuel and Qatar designated Royal Dutch Shell Plc as the seller, Dr Hussain explained to Bloomberg.The price being discussed for a five-year supply agreement would be at “oil parity” and deliveries would start next year.Pakistan had sought as much as 3.2mn tonnes. LNG from Qatar, the world’s biggest producer, will help supply Pakistan until a gas pipeline from Iran is completed in a “couple of years,” Dr Hussain stated.

 

Pakistan consumed 1.1tn cu ft (31bn cu m) of natural gas in 2007, all of which was domestically produced, US Energy Department data show.Qatar plans to more than double its LNG output to 77mn tonnes a year by the end of 2010. The country’s two LNG producing companies, QatarGas and RasGas, have nine units in operation.

 

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