Japan’s consortium that includes Nippon Oil Corp, is at deadlock with Iraq over development of Nasiriyah oil field. The Iraqi Government has become more reluctant to enter into individual negotiations after awarding concessions to International Oil Companies. The field has the ability to produce up to 600,000 bpd which can be sufficient to account for 10% of japan’s daily oil consumption. (RIGZONE)
Qatar’s Ras Laffan 3, a 70% Qatar Petroleum 30% ExxonMobil Joint Venture, to start production of RL3 Train 7 with 7.8 million tonnes per year LNG plant. Qatar continues to develop its vast 900 trillion cubic feet of natural gas from its giant North Field. (RIGZONE)
Yemen to invest $ 1.5 billion to boost power generation by 1,400 MW to end constant outages in the country. (AMEinfo)
Production at Joint Venture between Huntsman Corp and Zamil Group of Saudi has started. The 50-50 JV facility that costed $ 288 million will start production with capacity of 27,215 tonnes per year of ethylene amines. The facility will add 6.5% to global ethylene amines global supply. The product will be marketed by Huntsman in Asia & Europe. (ArabianOilandGas)
As reported in Al Neft, Oil Service Companies are gearing for Iraq Invasion. The FT EnergySource notes that spending on oil service contracts in Iraq could grow to as much as as $ 5 billion a year from current $ 500 million. The margins on Oil company contracts could be as high as 20-40%, far better than the margins that their own clients will enjoy in Iraq. (FT Energy Source)
The Chairman of Emirates Airlines says that the airline was never used as a bargaining chip to obtain Abu Dhabi’s financial help. The Airline contributes 40 billion dirham to Dubai’s economy and has 150 wide-body aircraft and 8 super-jumbo A 380. (WSJ)
In 2009 Credit Suisse distributed shares in what is known as the Partner Asset Facility (made up of toxic assets at the time of mortgage backed securities) to its 2000 investment bankers instead of cash bonuses. The plan was originally billed as a way for Credit Suisse bankers to “eat their own cooking.” Although the plan was originally groused by CS bankers, the $5 billion pool of toxic assets returned 72% for full year 2009. (WSJ)
Good views in this Video by Jeff Rubin, former Chief Economist at CIBC World Markets on the oil markets, global economy & climate change. He is the author of Why Your World Is About To Get A Whole Lot Smaller.
The major point is that at $150 oil price, Distance will cost money. High Fuel cost coupled with Carbon Tariffs, manufacturing cost advantage of exporting countries like China will cease. Regions such as North America, will have to go back to manufacturing and agriculture at home.
The Oil Trader’s blog reports on Schork’s view on the Oil markets.
Aref Energy Holding, a subsidiary of Kuwaiti Investment company Aref Investment Group to sell 95% of its 50% stake in US company GeoGas for $ 117 million. The company is reported to make $ 70 million profit from the sale. (AMEinfo)
ENOC is focusing on Exploration & Production and storage to counter tight margins according to CFO. ENOC which abandoned its bid for the rest of Dragon Oil couple of months ago, reported revenues of $ 8.5 billion down from last years $12 billion. (AMEinfo)
Oil Monthly report (can be downloaded as PDF) main points:
Algeria’s Sonatrach will not folow Russia’s Gazprom and offer gas at spot prices. The slack gas market is promoting several major players of offering gas at spot prices (immediate delivery instead of established long term contracts) as demand in Europe remains sluggish.
Sonatrach which supplies 20% of Europe’s gas did however say that they may from time to time offer some cargoes on the spot market. Sonatrach’s revenues for full year 2009 was $ 43 billion compared to $ 76 billion in 2008, in line with expectations.(Maktoob Business)
Al Neft > The idea of creating an OPEC like forum for gas producers which was floated around last year was dismissed by Gazprom, the world’s largest gas producer. At the time they said that the nature of the gas market does not lend itself to the creation of an OPEC like Forum. Nevertheless, Gazprom did say at the time that they will continue to have dialogue with the major Gas producers such as Algeria, Qatar, Iran, Nigeria and Venezuela.
The lack of a Gas OPEC forum and the decline / convergence of LNG gas prices, is promoting producing countries to take market share from each other. Gas & LNG customers are having plenty of suppliers to choose from. The risk going forward is that the Gas market might become way over-supplied putting further downward pressure on gas prices. It maybe a good idea for the Gas producing countries to brush up their reading on “Game Theory”.
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