Monday, October 08, 2007
New tender for Kirkuk crude to be announced
Oil
(Reuters) - Iraq has sold nearly 5 million barrels of Kirkuk crude to buyers in Europe and the United States and plans to issue a new sales tender in the coming days, an Iraqi oil ministry source said on Monday. Shell, BP, Cepsa, Tupras, Erg, and Exxon Mobil had been awarded a total of 5 million barrels, he said. A new tender for 5 million barrels of Kirkuk crude -- the fourth such sale in six weeks -- will be announced in the next few days, the source said.
Through the three previous sales, Iraq's State Oil Marketing Organisation has sold about 12.5 million barrels of Kirkuk crude that is pumped from its northern oilfields and piped to Turkey for export. Repeated sabotage attacks along Iraq's northern pipeline to the Turkish terminal of Ceyhan have kept the export route mostly idle since the U.S.-led invasion in March 2003.
But intermittent flows through the line over the past month have allowed Baghdad once again to ship crude to world markets. "We're moving volume to Ceyhan at a steadier rate," said the source. "So we're studying the possibility of term contracts." The Iraq-Turkey pipeline is Iraq's secondary export route. It relies on its main terminal in the south at Basra for exports of about 1.5 million barrels per day.
Through the three previous sales, Iraq's State Oil Marketing Organisation has sold about 12.5 million barrels of Kirkuk crude that is pumped from its northern oilfields and piped to Turkey for export. Repeated sabotage attacks along Iraq's northern pipeline to the Turkish terminal of Ceyhan have kept the export route mostly idle since the U.S.-led invasion in March 2003.
But intermittent flows through the line over the past month have allowed Baghdad once again to ship crude to world markets. "We're moving volume to Ceyhan at a steadier rate," said the source. "So we're studying the possibility of term contracts." The Iraq-Turkey pipeline is Iraq's secondary export route. It relies on its main terminal in the south at Basra for exports of about 1.5 million barrels per day.
Labels: BP, Cepsa, Ceyhan, Erg, Exxon Mobil, Kirkuk crude, Shell, SOMO, State Oil Marketing Organisation, Tupras
Thursday, August 09, 2007
Total and Chevron to work together in Iraq
Oil
(Times online) - Two of the world’s biggest oil companies have signed an agreement to work together on projects in Iraq in the first clear sign that Western energy companies are preparing to enter the country. Reports yesterday revealed that Total had teamed up with Chevron and that they were putting together plans for Majnoon, the fourth-biggest oilfield in Iraq, with estimated potential reserves of 12 billion barrels.
Elf, now part of Total, negotiated a contract to run Majnoon with Saddam Hussein in the late 1990s. Both Total and Chevron refused to comment, but industry sources said that the two companies had met Iraqi officials to discuss a services agreement to develop the field. While less lucrative than a pro-duction-sharing agreement, where companies discover and sell on the oil, experts said that it would give them a vital foothold for other deals.
Iraq holds an estimated 110 billion barrels of oil, with more than half still to be developed, offering huge opportunities to Western companies desperate for new reserves. So far, companies such as Total, BP, Shell and Exxon have limited themselves to helping the Iraqi Oil Ministry to train junior staff and pull together data recorded under Saddam.
BP, however, is understood to have been asked to look into the potential of Kirkuk in the north. Shell is thought to have studied Rumaila, the country’s biggest oilfield. Muhammad-Ali Zainy, a former oil official in the Iraqi Government, said: “Iraq is the last remaining frontier that offers so much potential. International oil companies will be in Iraq, but in what form it is difficult to tell.”
Iraq is expected to ratify a petroleum law that would allow deals with Western companies to take place next month. However, experts believe that it could take years for companies to feel confident in sending contractors to the unstable country. The Irish-owned Petrel Resources is one of four minnows operating in Iraq under a contract to develop the Subba and Luhais field. Dave Horgan, managing director, said: “The big companies will be chomping at the bit to sign a deal. They will then hope they can delay any work for two or three years until the security scares die down.”
Labels: BP, Chevron, Elf, Kirkuk, Majnoon, Muhammad-Ali Zainy, Petrel Resources, Rumaila field, Shell, Subba and Luhais field, Total
Thursday, April 26, 2007
Iraq needs $2.5 bn to rebuild power sector
Electricity
(Reuters) - Iraq must lure between $2 billion and $2.5 billion per year in international aid and investment if it is to rebuild its devastated power sector, the country's electricity minister said on Wednesday.The minister, Karim Hasan, was in London to enlist the help of energy companies including BP. Power cuts are a daily occurrence, especially in the capital Baghdad, as a result of nearly three decades of war damage, poor maintenance because of sanctions and due to sabotage. "We rebuild and they destroy every day," Hasan said, referring to the sabotage attacks.
He said he was seeking to protect the country's power plants with security forces, including around 7,000 "power police," but added: "I can't secure the power transmission.""Many people have died because of the lack of electricity. Most of the hospitals are not working because of a shortage of electricity," he told reporters. Oil refineries and oil production have also been affected by unreliable electricity supplies. Iraq's oil output is stuck at around two million barrels per day (bpd), compared with the nearly three million bpd just before the U.S.-led invasion began in March 2003.
To try to improve power generation, a 10-year plan was agreed in 2006, with the support of the international community, to add about 2,000 megawatts to current generating capacity of around 5,000 megawatts. Funding will come from $2 billion per year of government money, but the overall cost will be around $4 billion to $4.5 billion, leaving a gap of $2 billion to $2.5 billion, Hasan said. "We urge donors to fulfil the commitments they made at the Madrid conference (on reconstruction in Iraq)," Hasan said. "We also need to ask the power industries to contribute."
In Britain, he said he was holding meetings with all the big power generators and with BP about a gas project in the south of the country. "We also discussed with them a gas master plan," Hasan said. BP was not immediately available for comment. Iraq's vast energy reserves offer a big incentive for oil and gas companies considering investment in Iraq. But analysts said financial incentives for power firms willing to work in Iraq might not outweigh the dangers. "You could command a security premimum, but most people involved in electricity networks are reasonably risk averse people," said Sebastian Eyre of John Hall Associates. "The chances are there are other places you can go."
Labels: aid, BP, electricity, Iraq, Karim Hasan
Tuesday, April 17, 2007
BP will wait for security, oil law before working in Iraq
Oil, Business
(Reuters) - Energy giant BP is interested in working on a range of oil and gas projects in Iraq, but is waiting for the country's parliament to pass an oil law and for security to improve before increasing its role, a senior BP executive said on Monday. International companies have been jostling for position as they look for a potentially lucrative stake in Iraq's oil future. The country holds the world's third largest oil reserves and needs billions of dollars of investment to boost output and overhaul ageing infrastructure.
"Eventually where we get involved will be up to Iraq," Steve Peacock, president of BP's Middle East and South Asia Exploration and Production unit, told reporters at an energy conference in Dubai. "But I think we can help in all areas: enhanced oil recovery from existing fields, in discovered and not developed fields, or in exploration."
A draft oil law that Iraq's cabinet endorsed in February is awaiting parliament's ratification. Peacock said it would take some time after the law is passed for contracts to be negotiated and for BP to send people to work in Iraq because of the security situation in the country. "Physical security on the ground... may be the thing that takes the longest," he said.
BP would also wait for assurance that any contracts would survive changes in government, he said. BP has been providing assistance to Iraq's oil company in the south around the Rumaila field, he said. The North and South Rumaila fields are already partially developed and have combined potential output capacity of 500,000 barrels per day.
BP would not look at involvement in Iraq's Kurdish region in the north until the oil law had been passed, even though security in the region is better than elsewhere in the country, he said. The United Arab Emirates' Dana Gas said on Sunday it had signed agreements with the Kurdish regional government to study development of its gas reserves.
"Eventually where we get involved will be up to Iraq," Steve Peacock, president of BP's Middle East and South Asia Exploration and Production unit, told reporters at an energy conference in Dubai. "But I think we can help in all areas: enhanced oil recovery from existing fields, in discovered and not developed fields, or in exploration."
A draft oil law that Iraq's cabinet endorsed in February is awaiting parliament's ratification. Peacock said it would take some time after the law is passed for contracts to be negotiated and for BP to send people to work in Iraq because of the security situation in the country. "Physical security on the ground... may be the thing that takes the longest," he said.
BP would also wait for assurance that any contracts would survive changes in government, he said. BP has been providing assistance to Iraq's oil company in the south around the Rumaila field, he said. The North and South Rumaila fields are already partially developed and have combined potential output capacity of 500,000 barrels per day.
BP would not look at involvement in Iraq's Kurdish region in the north until the oil law had been passed, even though security in the region is better than elsewhere in the country, he said. The United Arab Emirates' Dana Gas said on Sunday it had signed agreements with the Kurdish regional government to study development of its gas reserves.
Labels: BP, oil, Rumaila field, Steve Peacock
Saturday, March 10, 2007
British diplomats tried to influence Iraqi oil law in favour of UK businesses
Oil
(Al Jazeera)
A social justice group has obtained documents showing that the British government tried to influence a new Iraqi oil law in favour of UK businesses. The London-based Platform group said on Friday that the documents showed British diplomats tried to exclude Iraqi oil firms in favour of firms such as BP and Shell. Greg Muttitt, an oil campaigner with Platform, told People and Power programme aired on Al Jazeera on Friday, that the British government was "using their position as a military occupier to influence and shape the future of the country's economy in the interests of powerful companies".
British diplomats have been involved in "extensive efforts since at least 2004 to push for companies such as BP and Shell to receive long-term contracts, which would give them exclusive rights to extract Iraq's huge oilfields", Platform said in a press release on Friday.
The group said they were able to prove this using documents obtained under Britain's freedom of information act. Muttitt said Iraqis have been "excluded" from the oil law while the British foreign office played a "central role in supporting the efforts of the oil companies to lobby the Iraqi government".
A social justice group has obtained documents showing that the British government tried to influence a new Iraqi oil law in favour of UK businesses. The London-based Platform group said on Friday that the documents showed British diplomats tried to exclude Iraqi oil firms in favour of firms such as BP and Shell. Greg Muttitt, an oil campaigner with Platform, told People and Power programme aired on Al Jazeera on Friday, that the British government was "using their position as a military occupier to influence and shape the future of the country's economy in the interests of powerful companies".
British diplomats have been involved in "extensive efforts since at least 2004 to push for companies such as BP and Shell to receive long-term contracts, which would give them exclusive rights to extract Iraq's huge oilfields", Platform said in a press release on Friday.
The group said they were able to prove this using documents obtained under Britain's freedom of information act. Muttitt said Iraqis have been "excluded" from the oil law while the British foreign office played a "central role in supporting the efforts of the oil companies to lobby the Iraqi government".
Speaking to Al Jazeera's People and Power programme broadcast on Friday, Kim Howells, a British foreign office minister, denied those claims, saying, "This is paranoia gone completely loopy ... If we were interested in the oil, we would have done those dirty deals that some of the other countries did with Saddam Hussain and the gangsters who ran his regime." He also accused campaigners of seeking to promote their own causes at the expense of the Iraqis.
Speaking to People in Power, David Horgan, managing director of Petrel Resources, said: "If you worry too much about a perfect solution, you will get no solution. What's right is what works. The oil industry and business people generally are very good at getting things done." Petrel Resources was awarded a development service contract for Iraq's Subba and Luhais oil field in September 2005.
Critics have also said the new legislation, which aims to share oil revenues between 18 provinces making allocations based on population levels, will aggravate sectarians tensions in Iraq. Isam Al-Chalabi, Iraq's former oil minister, has called the oil law "ambiguous and unclear". He said: "If it's accepted in its present form certainly it will not be a new beginning to the betterment of the people. On the contrary, it is only adding fuel to the fire."
Speaking to People in Power, David Horgan, managing director of Petrel Resources, said: "If you worry too much about a perfect solution, you will get no solution. What's right is what works. The oil industry and business people generally are very good at getting things done." Petrel Resources was awarded a development service contract for Iraq's Subba and Luhais oil field in September 2005.
Critics have also said the new legislation, which aims to share oil revenues between 18 provinces making allocations based on population levels, will aggravate sectarians tensions in Iraq. Isam Al-Chalabi, Iraq's former oil minister, has called the oil law "ambiguous and unclear". He said: "If it's accepted in its present form certainly it will not be a new beginning to the betterment of the people. On the contrary, it is only adding fuel to the fire."
Labels: BP, British government, draft oil law, Kim Howells, Petrol Resources, Platform group, Shell, Uk
