Middle East

Iran sees oil reserve potential growing with new discoveries

25 Apr 2017   Iran

Discoveries in the Persian Gulf of petroleum reserves may boost Iran’s ranks in terms of global capacity, a national director said. Ali Vakili, identified by the Iranian Oil Ministry’s official news agency Shana as a managing director for the Fuel Conservation Co. of Iran, told delegates at a domestic oil and gas conference during the week that Iran’s global position as an energy producer could expand. “A golden triangle of oil deposits has been recently discovered in the Persian Gulf, which will most probably improve the country’s rank in holding oil reserves in the world,” Shana reported . “The official said Iran sits atop the world’s fourth largest oil reserves, which may become even bigger with new discoveries.” The director offered no […]

For Aramco Insiders, Prince’s $2 Trillion IPO Valuation Doesn’t Add Up

25 Apr 2017   Saudi Arabia

Officials at Saudi Arabian Oil Co. have told their superiors there is a hitch in the plans to take the state-owned oil company public: It is likely worth at least $500 billion less than the government previously suggested. The country’s deputy crown prince, who is leading a push to overhaul the economy, has pegged the value of the company known as Saudi Aramco at $2 trillion. But officials working on the deal have struggled to come up with a scenario under which Saudi Aramco is worth more than $1.5 trillion,…

Iraq begins final expansion phase at Halfaya oil field aiming to double output

25 Apr 2017   Iraq

Iraq has launched the third and final phase of work to expand its southern Halfaya oil field, aiming to double its output capacity in 2018 to 400,000 barrels per day, a state-run oil company said. Additional facilities to separate crude oil from associated natural gas will be set up as part of Halfaya’s expansion, Adnan Noshi, head of Maysan Oil Co which oversees oilfields in Maysan province, told Reuters on Tuesday. Halfaya, operated by PetroChina, is Maysan Oil’s largest field, producing 200,000 of the company’s total output of 380,000 bpd, Noshi said. Expansion at Halfaya should raise Maysan’s overall output to nearly 600,000 bpd in 2018, he said. Iraq plans to increase its oil output capacity to 5 million bpd before the end of the year. Output stood at more than 4.7 million […]

Production stops falling as Iraq claims OPEC compliance

25 Apr 2017   Iraq

Iraq’s attempts to reduce oil production appear to have leveled off in March, as senior oil officials said they are fully complying with OPEC cuts.The country produced an estimated 4.586 million bpd in March, according to an analysis of field-by-field data gathered by Iraq Oil Report – a .4 percent increase from the February output levels reported by the Oil Ministry to OPEC.Month-to-month oil export levels also held steady: the Oil Ministry reported 3.259 million bpd of federal oil sale… This content is for registered […]

Space May Be Next Frontier for Earth’s Crude Oil Giants: Analyst

24 Apr 2017   Middle East

Navitas says the Middle East could play space mining role Satellites prospecting asteroids could be launched in 5 years The Middle East has an outsize impact on energy here on Earth. One analyst thinks some regional powerhouses may leverage that role into the development of natural resources in space. Countries like the United Arab Emirates and Saudi Arabia are developing space programs and investing in nascent private space commodity initiatives, said Tom James, a partner at energy consultant Navitas Resources. Doing so could give them a foothold in building extraterrestrial reserves of water — a substance likely to fuel travel within space — and other resources that could be used for in-space manufacturing. “Water is the new oil of space,” James said in Singapore. “Middle East investment in space is growing as it works to shift from an oil-based to a knowledge-based economy.” Prospecting satellites can be built for […]

Oil Majors See Huge Opportunity In Eastern Mediterranean

21 Apr 2017   Cyprus, Israel, Oil Supply

Quite suddenly, there is remarkable oil industry news to come out of the East Mediterranean region. If the plan is executed, in the space of seven years the balance of energy security in Western Europe will be radically changed. In geopolitical terms, this will be immense; when the planned Israel-Cyprus-Greece-Italy gas pipeline is built, European countries will be able to cut their ever-increasing dependence on Russian gas supplies. The story of major gas discoveries in the East Mediterranean started in the shallow-water offshore Egypt, with Miocene Nile Delta discoveries progressively stepping out into deeper and deeper water. The first discovery was made by Phillips Petroleum in 1969, when it drilled the play-opening Abu Qir 1 NFW. It discovered gas in the Messinian Abu Madi sandstones. Subsequent exploration was led by the likes of AMOCO, BG, BP, Eni and Shell. There are now over 100 mainly gas and wet gas […]

Saudi Arabia, Kuwait signal likely extension of oil supply cuts

20 Apr 2017   Kuwait, Saudi Arabia

Leading Gulf oil producers Saudi Arabia and Kuwait gave the clearest signal yet that OPEC plans to extend into the second half of the year a deal with non-OPEC producers to curb oil supplies. Consensus is growing among oil producers that their supply restraint agreement should be extended after its initial six-month term, but there is as yet no agreement, Saudi Energy Minister Khalid al-Falih said on Thursday. “There is consensus building but it’s not done yet,” he told reporters on the sidelines of a conference in the United Arab Emirates. Asked about non-OPEC producer Russia, Falih replied: “We are talking to all countries. We have not reached an agreement for sure, but the consensus is building.” Kuwait’s oil minister Essam al-Marzouq, at the same event, said he expected to […]

Exclusive: China gathers state-led consortium for Aramco IPO – sources

20 Apr 2017   China, Saudi Arabia

China is creating a consortium, including state-owned oil giants and banks and its sovereign wealth fund, that will act as a cornerstone investor in the initial public offering of Saudi Aramco, people with knowledge of the discussions told Reuters. Saudi Aramco, a key exporter to China along with Russia’s Rosneft ( ROSN.MM ), is due to list next year, with a potential $100 billion equity sale that is expected to be the world’s largest to date. The planned Chinese investment makes it more likely that the national energy giant would seek a listing in Asia, with Hong Kong currently the frontrunner among bourses in the region, the same people said. Reuters reported earlier this month that Saudi Aramco’s board would meet in Shanghai in May, its first meeting in […]

Saudi Minister Wants OPEC Oil-Production Deal Extended, Perhaps for Less Than 6 Months

20 Apr 2017   OPEC, Saudi Arabia

An extension to an agreement by members of the Organization of the Petroleum Exporting Countries and producers outside the group to cut crude-oil production is most likely needed, but perhaps not for as long as another six months, Saudi Arabia’s energy minister Khalid al-Falih said Thursday. A preliminary agreement has been reached, though not all OPEC ministers have signed on, Mr. Falih said at an energy-sector event. …

Russia To Help Build 2 Nuclear Power Plants In Iran

20 Apr 2017   Iran, Nuclear, Russia

Russian experts will help the Atomic Energy Organization of Iran build two 1,000-MW nuclear power plants, Iran’s Energy Minister told media. Construction will start soon, Hamid Chitchian also said, adding that a third joint power plant construction project with Russia, which will have a capacity of 1,400 MW, has already begun. The announcement is part of deepening ties between Moscow and Tehran, expanding into a growing number of industries, from oil to defense and fisheries. Earlier this year, Russian Energy Minister Alexander Novak said that Russian companies are “keen” on strengthening their ties with Iran, not least in the power plant construction sector. Energy-hungry Iran plans several more such projects, and it’s likely that Russian companies will be among the preferred bidders. Yesterday, Iran’s ambassador to Russia said in a statement that Tehran would be happy to strengthen bilateral ties further, noting their joint stance on the political situation […]

Iran May Keep Same Oil Output If Others Extend Cuts, Kuwait Says

19 Apr 2017   Iran

Kuwait oil minister says Iran cooperating with OPEC on output Iran’s oil production has stabilized after rising in 2016 Iran will probably be allowed to keep its oil production unchanged if OPEC decides to extend its six-month agreement on output cuts beyond June, Kuwaiti Oil Minister Issam Almarzooq said. “I think they will keep the same level if the deal is extended,” Almarzooq, who chairs the committee monitoring the cuts, said Wednesday in an interview in Abu Dhabi. Kuwait was the first country to call for extending the production cuts beyond June. Oil prices will increase as demand improves, chipping away at oil inventories in the second half, he said. Iran was allowed to increase its output under the deal as the nation rebuilds from international sanctions that crippled its energy industry. Since sanctions were eased in January 2016, Iran’s oil production has climbed 35 percent, according to data […]

Reeling From Low Oil Prices, Saudis Look To Freeze Megaprojects

18 Apr 2017   Prices, Saudi Arabia

Saudi Arabia will start reviewing a number of multi-billion-dollar infrastructure and development project—remnants from a better past when crude oil prices were in three-digit territory. Some of these, according to government sources, will be shelved and others will be restructured. The review is part of urgent reforms prompted by the oil price rout from 2014, which saw Saudi Arabia plunge into a budget deficit for the first time in its history. As part of efforts to reform the oil-reliant economy, last year Deputy Crown Prince Mohammed bin Salman removed from their positions the Kingdom’s long-serving oil and finance ministers, Ali al-Naimi and Ibrahim al-Assaf. At the time, the Finance Minister defended these same megaprojects that will now be scrutinized by the Bureau of Capital and Operational Spending Rationalization, saying that when the investment decisions were made, the economic outlook was very different from where it was in 2016. At […]

Iran Boosts Gas-Output Capacity With New Projects at Giant Field

18 Apr 2017   Iran

Iran boosts output by inaugurating six projects at the giant South Pars offshore field. (Bloomberg) — Iran, holder of the world’s biggest natural gas reserves, boosted output by inaugurating six projects at the giant South Pars offshore field. The country raised total production capacity at South Pars to 570 million cubic meters a day of gas, putting it almost on par with neighboring Qatar, which produces from an adjacent portion of the same deposit, Oil Minister Bijan Namdar Zanganeh said Sunday at a ceremony in the port city of Assaluyeh. Iran invested $20 billion to complete the six projects, or phases, President Hassan Rouhani said at the event. Iran is on track to out-produce Qatar, the world’s biggest exporter of liquefied natural gas, at the Persian Gulf deposit. Iranian officials want to gain market share for gas shipments and attract foreign investment, even as U.S. President Donald Trump ratchets […]

Iran boasts of economic break from oil

18 Apr 2017   Iran

During the first 11 months of the Iranian calendar year, non-oil exports have grown more than 30 percent, state media reported Monday. Ali Khamenei , the ruling cleric in Iran, has called for a so-called resistance economy, one that limits exposure to international market shocks and sanctions pressures in part by weaning itself off oil for revenue. According to the official Islamic Republic News Agency, non-oil exports for the 11 months ending March 20 were up 33 percent. IRNA reported that, under President Hassan Rouhani , there were three unidentified “unfinished” national development plans yet to be started that could contribute to the resistance economy. With more than a dozen candidates, including former President Mahmoud Ahmadinejad , entering the race to challenge Rouhani, the English-language Iran […]

Saudis Target 30 Solar, Wind Projects in $50 Billion Pledge

18 Apr 2017   Saudi Arabia, Solar, Wind

World’s biggest exporter of crude seeks to wean itself off oil Government to tender for 400 megawatts of wind in 4th quarter Saudi Arabia will develop 30 solar and wind projects over the next 10 years as part of the kingdom’s $50 billion program to boost power generation and cut its oil consumption. The world’s biggest exporter of crude oil will produce 10 percent of its power from renewables by 2023, Energy Minister Khalid Al-Falih said Monday at a conference in Riyadh. It also plans to generate an unspecified amount of electricity from nuclear plants. The country is currently seeking bids to build 700 megawatts of wind and solar power capacity in a first round of tenders. It plans a second tender round for rights to build 400 megawatts more of wind power and an additional 620 megawatts of solar plants, Turki Al Shehri, head of the ministry’s renewable […]

Iran Ready To Join OPEC’s Production Cut Extension

18 Apr 2017   Iran

Iran, which has been exempted from the OPEC oil production cut agreement closed last November, is now ready to join the initiative as long as there is consensus among the cartel’s members. That’s what Oil Minister Bijan Zanganeh told media yesterday, adding that most OPEC members seem to be already in favor of the extension. The minister did not go into any details as to how much Iran would be willing to cut off its daily output or from what monthly production level the cut will be effected. The remarks suggest that Iran has reached an oil output level that it is comfortable with for the time being, or that serves as a sufficient base for it to continue to ramp up production until May 25, when OPEC will meet in Vienna to decided on the extension. The country was exempted from the initial agreement and allowed to increase […]

Saudi’s Falih says too soon to discuss extending oil output pact: Arabiya TV

18 Apr 2017   Saudi Arabia

The level of compliance among OPEC and non-OPEC oil producers with a global deal to cut output is very good, above 100 percent, but it is premature to talk about extending the deal, Saudi Energy Minister Khalid al-Falih said on Monday.Speaking to Al-Arabiya television on the sidelines of a renewable energy investment conference, Falih said he saw a consensus within OPEC on stabilizing the oil market, and that producers would do whatever was necessary to achieve that goal, whether it took six months or more.But he insisted it was too early to discuss whether extending the six-month production deal beyond June would be necessary. Producers will look at the expected condition of the market over the next two years, and will be cautious when making their decision on any extension, Falih told Arabiya.

Saudi Wealth Fund to Get Airports in Step Toward Privatization

18 Apr 2017   Saudi Arabia

Operators will become companies before handover to state fund Government seeking to sell assets amid depressed crude prices Saudi Arabia will transfer airports to its sovereign wealth fund by mid-2018, as part of a nationwide privatization drive spurred by low oil prices. Airports will be turned into companies before being handed over to the Public Investment Fund , to help improve accountability, Faisal Al-Sugair, chairman of Saudi Civil Aviation Holding Co., said in a phone interview. The transfer will also boost oversight as the General Authority of Civil Authority will no longer be both an operator and regulator, he said. The kingdom aims to win investment in airports as its seeks to revive an aviation industry that’s been dwarfed by competitors in nearby Dubai and Qatar. It’s also looking at privatizing seaports as depressed crude prices weigh on state spending plans. The wealth fund will take over Saudi Civil […]

Europe eyeing referendum results from potential energy partner Turkey

18 Apr 2017   Turkey

European leaders called on authorities in Turkey, a potential energy partner, to seek unity after a weekend referendum consolidated power around the president. Turkish President Tayyip Erdogan barely won the plurality in a national referendum he said was a response to an attempted coup last year. “The fact that the outcome of the referendum is ‘yes’ shows that our people accept the presidential system of government,” he said in a statement . “For first time in the history of the republic, we have changed our governmental system through civilian politics, which is of paramount importance.” The country’s geographical position as a bridge between Central Asia, the Middle East and Europe is indicative of its diplomatic fluidity and Turkish […]

Oil market rebalancing, demand expected to rise: Aramco CEO

The oil market is rebalancing in the short term, and demand will continue to grow in the long term, Saudi Aramco Chief Executive Amin Nasser said at the Columbia University Energy Summit on Friday. In the short term, the oil market has a surplus, but Nasser said that supplies are falling behind what will be required in coming years. “The future market situation will be increasingly on firmer grounds, though volatility could continue until the rebalancing takes firmer hold and inventory withdrawals assume a more consistent trend,” he said. In both 2018 and 2019, Aramco expects demand to continue to grow, and Nasser said he expects the growth will continue into the years ahead. “I believe that peak demand is […]

Saudi Aramco chief warns of looming oil shortage

The head of Saudi Arabia’s state energy giant has warned of a looming oil shortage as a $1tn drop in investments into future production takes effect.  Amin Nasser, chief executive of Saudi Aramco, the world’s largest oil producing company, said on Friday that 20m barrels a day in future production capacity was required to meet demand growth and offset natural field declines in the coming years. “That is a lot of production capacity, and the investments we now see coming back — which are mostly smaller and shorter term — are not going to be enough to get us there,” he said at the Columbia University Energy Summit in New York.  Mr Nasser said that the oil market was getting closer to rebalancing supply and demand, but the short-term market still points to a surplus as US drilling rig levels rise and growth in shale output returns.  Even so, he said it was not enough to meet supplies required in the coming years, which were “falling behind substantially”. About $1tn in oil and gas investments had been deferred and cancelled since the oil downturn began in 2014.

Kurdistan pushes for independence referendum

15 Apr 2017   Iraq

The quest for independence has been a perennial feature of political rhetoric in Kurdistan, but now leaders are taking significant new steps in pursuit of that aspiration.The Kurdistan region’s top political parties have agreed to hold a non-binding referendum on independence, while also launching parallel efforts to secure foreign support and to plan for the logistics of statehood.”We’ve made it crystal clear that holding a referendum is a legitimate right of our nation, and we will p… This content is for registered users. […]

Iran vows to match Qatar in terms of overall energy production

15 Apr 2017   Iran, Qatar

Iran says it could match Qatar with it production goals. Both sides share in the development of a giant Persian Gulf field that Iran calls South Pars. File photo by Maryam Rahmanian/UPI. April 14 (UPI) — Iran could go tit-for-tat on production trends with Qatar given recent developments at a Persian Gulf oil and gas field, the Iranian oil minister said. Iran’s Oil Ministry last month said production started from the oil layer in the South Pars field complex in the Persian Gulf for the first time. Using a floating production and offloading vessel, or FPSO, the ministry said production could reach a net peak capacity of 35,000 barrels per day at some point this month. The oil ministry estimates the field, which Iran shares with Qatar, holds more than 14 billion barrels of oil. Oil Minister Bijan Zangeneh said on the sidelines of a conference with the Iranian […]

Saudi Arabia, Iraq, Kuwait Aim for $60 a Barrel Oil Price

Some of OPEC’s biggest oil producers, including Saudi Arabia, are now targeting $60 a barrel as the level where they want to push crude prices, OPEC officials said, signaling they will support additional production cuts next month. Saudi Arabia, Iraq and Kuwait believe $60 a barrel will lift their economies and allow for more energy-industry investment, the officials said, without jumpstarting too much American shale output, which…

Iran Ramps Up Oil Output As OPEC Production Falls

14 Apr 2017   Iran

The OPEC Monthly Oil Market Report is out with OPEC’s crude oil production numbers for March 2017. All data is through March 2017 and is in thousand barrels per day. (Click to enlarge) Looking at the above chart it seems obvious what most OPEC nations were doing. They announced in the summer of 2016 that there would likely be quota cuts beginning in 2017. And those cuts would be a percentage of their current production. So everyone began making heroic attempts to increase production by the end of 2016. Now, after everyone who felt that they should cut, has cut, they are right back to the level that they were at before the cuts were proposed. (Click to enlarge) There is always a considerable difference between what the OPEC nations say they are producing and what the “Secondary Sources” say they are producing. The March MOMR had Saudi producing […]

Saudi Arabia Said Likely to Support OPEC Extending Output Cuts

12 Apr 2017   OPEC, Saudi Arabia

Riyadh hasn’t taken a final decision on the production curbs OPEC will meet in Vienna late next month to discuss its policy Saudi Arabia is likely to support extending OPEC output cuts into the second half of 2017 in an effort to boost oil prices, according to a person familiar with the kingdom’s internal discussions. The Organization of Petroleum Exporting Countries is scheduled to gather in Vienna on May 25 to discuss whether to roll over for another six months the 1.2 million barrels a day in production cuts it implemented in January. Several OPEC countries, including Kuwait, have expressed public support for an extension. While Riyadh is likely to support extending the curbs to end a three-year oil glut, the kingdom hasn’t taken a final decision yet, the person said, asking not to be identified because the conversations aren’t public. Saudi Arabia, the world’s largest oil exporter, will […]

Saudi Arabia Said to Cut Oil Output to Lowest Since January

12 Apr 2017   Saudi Arabia

Kingdom said to pump 9.9 million barrels a day in March Production increased in February to refill storage tanks Saudi Arabia pared its oil production last month to the lowest since January, staying below the output level it pledged to maintain as part of a global deal to reduce crude supplies, according to a person with knowledge of the data. The biggest producer in OPEC cut output by 111,000 barrels a day last month to 9.9 million a day, according to the person, who asked not to be identified because the information isn’t public. Production had increased in February to 10.011 million barrels a day as the country replenished its own storage tanks. Saudi Arabia and Russia are leading the agreement by the Organization of Petroleum Exporting Countries and other producers to curtail oil supplies and end a three-year surplus. Under the accord reached in December, Saudi Arabia pledged […]

Saudis to Seek Bids for 700-Megawatt Wind and Solar Projects

11 Apr 2017   Saudi Arabia

Energy Ministry qualifies 51 companies to bid for power plants First Solar, renewables unit of EDF among qualified companies Saudi Arabia will begin seeking bids next week from renewable-energy companies to build wind and solar plants with a combined capacity of 700 megawatts as part of the kingdom’s $50 billion program to boost power generation and cut its oil consumption. Energy Minister Khalid Al Falih will announce a request for proposals for the projects, the next phase in the country’s bidding process, at a conference next week in Riyadh, the ministry said Monday in an emailed statement. The ministry qualified 27 companies to bid for a 300-megawatt solar plant and 24 firms for a 400-megawatt wind farm. The project is part of a plan to transform the Saudi economy by weaning it off oil and creating new industries. Other Middle Eastern countries including the United Arab Emirates, Jordan and […]

Iran sees foreign investments in energy sector stable

11 Apr 2017   Iran

Iran expects more, not less, foreign investments in its oil and natural gas sector because of fewer sanctions restrictions, the oil minister said. Iranian Oil Minister Bijan Zangeneh said foreign companies will invest in the nation’s energy sector to the fullest extent of the law. Few outside companies are working closely with Iran, though the minister said he doesn’t expect investments to wane. “If we are told that cooperation with a certain company is banned based on the law, we would follow suit, but this must first become ascertained for us before we stop our interactions with them,” he was quoted by SHANA, the ministry’s official news agency, as saying. The National Iranian Oil Co. in December said it expected to award roughly […]

Exclusive – Saudis, oil majors discuss gas investments ahead of giant IPO

11 Apr 2017   Saudi Arabia

Saudi Arabia and international oil companies have discussed gas venture opportunities inside the kingdom and abroad as part of the top crude-exporting country’s drive to diversify investments before the listing of national energy giant Saudi Aramco. Saudi officials explored investment opportunities with firms including BP ( BP.L ) and Chevron ( CVX.N ) to help develop its gas reserves, the world’s sixth largest, at a time of booming energy demand at home, four industry sources told Reuters. Aramco has also looked into investing in gas ventures abroad, including with Italy’s Eni ( ENI.MI ), the sources said. The development revives memories of talks between Aramco and global majors at the end of the 1990s and early 2000s, known as the Saudi gas initiative. Most of those talks collapsed as the parties disagreed over returns on investment. This time, Aramco is gearing up for a share listing next year, aiming […]

Iranian oil exports dip in March, floating storage almost cleared

11 Apr 2017   Iran

Exports fall to 2.35 million b/d Flows to India jump but relations could sour over Farzad B row Floating storage barrels dwindle Fall in European spot demand from stiffer competition Iran’s crude oil and condensate exports in March fell slightly from the previous month as refinery runs picked up but the OPEC producer has managed to clear almost all of its oil in floating storage. Iran, which is allowed special status to increase output slightly under the recent OPEC deal, could be switching its focus to improving returns for its oil from maximizing its market share over a year after coming out of the sanctions doldrums, as its output begins to plateau. Total estimated export volume on Aframaxes, Suezmaxes and VLCCs from Iranian ports in March dropped to 2.35 million b/d from 2.41 million b/d in February, data from cFlow, S&P Global Platts trade flow software, showed. Article continues […]

Iran security body reviewing new IPC oil contracts: minister

10 Apr 2017   Iran

DUBAI Iran’s top security body is still reviewing the Iran Petroleum Contract (IPC) model, Oil Minister Bijan Zanganeh was quoted as saying on Sunday, as the contracts aimed at attracting foreign investors appear to face fresh delays. In January, Iran named 29 companies from more than a dozen countries as being allowed to bid for oil and gas projects under the IPC, which Tehran hopes will boost production after years of sanctions. But the IPC model has been delayed several times due to opposition from hardline rivals of President Hassan Rouhani. “The new oil contracts (IPCs) are currently being reviewed by the Supreme National Security Council,” Zanganeh told parliament, the students’ news agency ISNA reported. Zanganeh did not elaborate or say how long the review might take, ISNA and other agencies reported. The IPC model ends a buy-back system dating back more than 20 years under which Iran did […]

Missiles Hitting Producer of 0.04% of Global Oil Rocks Crude

8 Apr 2017   Syria

While Syria makes only 0.04 percent of global petroleum supplies — less than Cuba, New Zealand or Pakistan — it calls one of the world’s biggest producing regions its neighborhood. The nation borders Iraq, the second-biggest member in the Organization of Petroleum Exporting Countries, while other producing giants such as Saudi Arabia and Iran lie just beyond. The Turkish port of Ceyhan, from where shipments including those from Kurdistan are exported, is also close. Apart from its proximity to the Middle East nations, the ongoing conflict in Syria involves Russia and the U.S., two other major crude producers. Global oil prices jumped more than 2 percent on Friday on news the U.S. launched a cruise missile attack against the nation, two days after Bashar al-Assad’s regime used poison gas to kill scores of civilians. The task of military planners was made riskier by the presence of Russian forces in […]

Oil Heads Higher As Iran And Saudi Arabia Draw On Reserves

7 Apr 2017   Iran, Saudi Arabia

Oil is ticking higher today, as speculators continue to bet on the prospect of the market tightening. As Nonfarm payrolls beckon tomorrow, hark, here are five things to consider in oil markets today. 1) While total global floating storage is ticking lower, it is still holding above 100 million barrels. Two areas where we are seeing it gradually drawn down is off Singapore / Malaysia, and in the Persian Gulf. After being over 30 million barrels as recently as October, Iranian floating storage has been siphoned to supplement exports – underscoring the Persian Gulf state’s struggles to boost domestic production. This week we have seen Iranian barrels drop to 5 million barrels, while barrels offshore of United Arab Emirates have halved in the last week, dropping to just under 10 million barrels. (Click to enlarge) 2) We have seen a distinct change in appetite from China, as March deliveries […]

Most Middle East Oil Producers Won’t Break Even This Year

7 Apr 2017   Middle East

Most crude oil producers in the Middle East, Africa and the emerging economies of Europe (EEMEA) won’t be able to patch up their budgets this year, Fitch Ratings warned, forecasting an average price of $52.50 a barrel for the commodity in 2017, up from $45.10 a barrel for 2016. The exceptions are Kuwait, Qatar, and the Republic of Congo, all of which sport breakeven prices around the forecast 2017 average, with Kuwait actually having a breakeven level significantly below $52.50 a barrel at $45. For Qatar, the figure is $51 a barrel and for Congo it is $52 a barrel. Still, Fitch notes that the low breakeven price enjoyed by Kuwait is related not just to low production costs, but also to the high oil production rate per capita and the projected investment income from its sovereign wealth fund. Another 11 producing countries, however, need much higher oil prices, […]

Saudi Arabia Vs. Russia: The Next Oil Price War

International oil markets could be heading towards a new war, as leading OPEC and non-OPEC producers are vying for increased stakes. The unexpected cooperation between OPEC and non-OPEC countries, instigated by the full support of Saudi Arabia (OPEC) and Russia (non-OPEC) has brought some stabilization to the crude markets for almost half a year. The expected crude oil price crisis has been averted, it seems, leaving enough room when looking at the fundamentals to a bull market in the coming months. As long as Saudi Arabia, Russia and some other major producers (UAE, Kuwait), are supporting a production cut extension, financials will be seeing some light at the end of the tunnel. The effects of the 2nd shale oil revolution, as some have stated, have been mostly mitigated by a reasonably high compliance of OPEC and non-OPEC members to the agreed upon cuts, while geopolitical and security issues have […]

Kurdish oil developer says it’s primed for growth

7 Apr 2017   Iraq

Gulf Keystone Petroleum, an operator in the Kurdish north of Iraq, said in a regular update to shareholders it’s “primed for future development.” Gulf Keystone said the average production from its flagship Shaikan oil field in the Kurdish north of Iraq was 34,749 barrels per day, at the upper end of its guidance. Production during the first quarter averaged 36,293 bpd. The company, which has headquarters in London, was the target of an unsolicited takeover from rival Iraqi player DNO, a Norwegian oil company. In 2015, Gulf Keystone mulled possible partnerships, but emerged last year with an agreement with the majority of its creditors and shareholders to restructure its debt obligations CEO Jon Ferrier said the company is […]

Iran struggles to expand oil exports as sea storage cleared

6 Apr 2017   Iran

Iran has sold all the oil it had stored for years at sea and Tehran is now struggling to keep exports growing as it grapples with production constraints, shipping and oil sources say. Since the easing of international sanctions in January 2016, Iran tried to make up for lost sales by releasing millions of barrels parked on tankers offshore. Tanker tracking and oil sources said Iran had sold its last stocks from the floating storage in the past two weeks. Much of the oil stored was condensate, a very light grade of crude. With no more stocks at sea, Iran has lost a vital resource that had propped up exports. “We do think that (floating storage) has been the […]

An Oil Giant Is Still Burning Through Its Cash Pile

6 Apr 2017   Saudi Arabia

The depletion of Saudi Arabia’s currency reserves shows no sign of abating It was meant to be a given that a rebound in oil prices would slow the depletion of Saudi Arabia’s foreign-currency reserves. That hasn’t happened yet, and economists are wondering why. Net foreign assets held by the Saudi central bank have fallen by an average $6.5 billion a month over the past year, and now stand at just over $500 billion – having peaked at $737 billion in 2014 when oil prices were above $100 a barrel. The drop in January and February was $11.8 billion and $9.8 billion respectively, the latest data show. “The burn rate is a cause of concern because it shows no sign of abating,” said Mohamed Abu Basha, a Cairo-based economist at EFG-Hermes. “It can’t be explained by government spending alone. They haven’t sold domestic bonds, so that could be a reason, […]

Gulf’s $24 Billion Bond Bonanza Meets Cash Need in Cheap Oil Era

Middle East international bond sales are off to the strongest ever start to a year as borrower demand for funds outstrips the firepower of local banks in an era of depressed oil prices. Hard-currency bond issuance from the six-nation Gulf Cooperation Council, which accounts for the bulk of the region’s capital markets and includes Saudi Arabia, its largest economy, more than quadrupled in the first quarter from a year earlier, according to Bloomberg data. In contrast, syndicated lending, traditionally the preferred source of capital for GCC borrowers, is having its worst year since 2010, declining 73 percent in the first three months of the year. “It is mainly the sovereigns that have issued this year and they are very conscious about not sapping liquidity in the local banking system so that access to credit to the small and medium sized companies is not hindered,” said Anita Yadav, head of […]

Exxon, Qatar Petroleum to tap Cypriot waters

6 Apr 2017   Cyprus

An exploration campaign off the coast of Cyprus is planned by 2018 following a study of the reserve potential, a Qatari energy company said Wednesday. Cypriot President Nicos Anastasiades hosted representatives from Qatar Petroleum and Exxon Mobil for the signing of an exploration and production contract offshore. Qatar Petroleum CEO Saad al-Kaabi said in a statement that moving into the Mediterranean was a prospect of mutual benefits. “This agreement expands our international upstream footprint into the eastern Mediterranean for what we hope is one of the most promising opportunities in this area,” he said. Qatar Petroleum and Exxon secured the rights to develop Cypriot waters in a licensing round last year. International interest in oil and gas exploration has […]

OPEC’s No.2 Goes Rogue: Plans 600,000 Bpd Oil Output Increase

6 Apr 2017   Iraq

Iraq has plans to boost its crude oil production by 600,000 bpd to 5 million bpd by the end of this year, regardless of its participation in OPEC’s production cut deal. Iraq is the cartel’s second-biggest exporter of crude and has been the most disinclined of all parties to the agreement since its inception, with a lot of observers expecting it to be the first one to cheat. Iraq’s first problem is that as much as 95 percent of its budget revenues come from crude oil. There are no viable alternatives in sight for revenues at the moment. The second problem that the country has to contend with is its war with Islamic State, which makes these revenues more important than ever. Amid the final push against IS in Mosul, Iraq is working hard to ensure the sustainable growth of its oil and gas industry—OPEC deal or no OPEC […]

Obliterating ISIS May Hamper Iraqi Oil Production

6 Apr 2017   Iraq

Iraq says it cut output by 300,000 bpd in March, taking production down to an average of 4.464 million barrels per day (mb/d). That puts Iraq at about 98 percent compliance with the OPEC deal. But Iraq’s oil production could fall involuntarily if a dispute between the central government and the Kurdish Regional Government (KRG) continues to escalate. Some of the oil fields around Kirkuk, in northern Iraq, are controlled by the semi-autonomous region of Kurdistan, while others are controlled by the federal government of Iraq. Back in 2014, when ISIS burst onto the scene, territory was quickly swallowed up by the militant group. Amid the chaos, the Kurds swept in and seized parts of territory in and around Kirkuk as the Iraqi government appeared too weak to defend the city and its oil fields. While the bulk of Iraq’s oil is produced from the massive oil fields in […]

Iraq starts new oil contract review

5 Apr 2017   Iraq

The Oil Ministry plans to develop a new contract model for future projects and has contracted Iraqi-Norwegian consultant Farouk al-Kasim as it explores adjustments to existing TSCs. Lukoil Vice President Gati al-Jebouri (left) speaks on a panel about IOC investment at the Iraq Energy Forum in Baghdad, April 2, 2017. (Source: Iraq Energy Institute) Iraq is undertaking a new review of its oil contracts in an effort to better align the interests of the government and international oil companies.Oil Minister Jabbar al-Luiebi said that, as the ministry solicits investment in new upstream projects, it is likely to move away from the technical service contracts (TSC) that have structured Iraq’s relationship with oil companies since 2009.”The future contracts, we will have different models,” Luiebi said in an interview Tuesday with Iraq O… This content is for registered users. Please login to continue. If you are not a registered user, you […]

This Non-OPEC Member Just Called For An Extension Of The OPEC Deal

4 Apr 2017   Oman, OPEC

Non-OPEC Oman will continue to cap its crude oil output at 970,000 bpd this year if OPEC and non-OPEC countries were to extend the production cuts through the end of 2017, according to a senior Omani government official. “We support any initiative that will lift oil prices. If that means extending the current agreement beyond the first six months, we will not block it,” Salim bin Nasser Al Aufi, undersecretary at the Ministry of Oil and Gas, said at a media briefing on Monday, as quoted by Times of Oman. Still, the official was quick to add: “However, we need to know the details – how long it is going to continue.” Oman is part of the group of 11 non-OPEC producers—including Russia—that had agreed to act jointly with the cartel to cut oil supply, and that pledged a total production cut of 558,000 bpd. In January, Oman said […]

OPEC’s Barkindo says ‘encouraged’ by Iraq’s progress towards cut compliance

4 Apr 2017   Iraq, OPEC

OPEC Secretary General Mohammed Barkindo said he has emerged “encouraged” from a meeting over the weekend with Iraqi officials about the country’s compliance levels with the OPEC/non-OPEC production cuts agreed late last year. “We cannot seek anything less” than 100% compliance, Barkindo said Sunday at the Iraq Energy Forum in Baghdad. “Full implementation of the OPEC agreement is crucial.” Iraq has faced criticism for not fully complying with its required cut, but officials with the Iraqi oil ministry have pointed to the country’s sharp fall in exports as evidence it is complying. Iraq’s declared exports are 276,000 b/d lower than they were in December, the last month before the agreement went into force. The agreement, however, covers production not exports, and Iraq’s declared output of 4.464 million b/d for March remains 113,000 b/d above its quota of 4.351 million b/d under the deal. Falah Alamri, Iraq’s OPEC governor and […]

Qatar restarts development of world’s biggest gas field

4 Apr 2017   Qatar

Saad Al Kaabi, chief executive of Qatar Petroleum, speaks to reporters in Doha, Qatar April 3, 2017. Qatar has lifted a self-imposed moratorium on development of the world’s biggest natural gas field, the chief executive of Qatar Petroleum said on Monday, as the world’s top LNG exporter looks to see off an expected rise in competition. Qatar declared a moratorium in 2005 on the development of the North Field, which it shares with Iran, to give Doha time to study the impact on the reservoir from a rapid rise in output. The vast offshore gas field, which Doha calls the North Field and Iran calls South Pars, accounts for nearly all of Qatar’s gas production and around 60 percent of its export revenue. “We have completed most of our projects and now is a good time to lift the moratorium,” QP Chief Executive Saad al-Kaabi told reporters in Doha. […]

Qatar to increase gas production by 10 percent

4 Apr 2017   Qatar

Natural gas production from a field in the Persian Gulf will increase by 10 percent to position Qatar as a stronger energy leader, a top executive said. Qatar Petroleum said it aims to start work on a new project in the southern sector of the North Field gas project offshore. It shares the field with Iran, which calls it South Pars. Saad al-Kaabi, the company’s president and CEO, said the new project will increase North Field production by about 10 percent. “This new project will further strengthen Qatar’s leading position as a major player in the global gas industry and underline the pivotal role of the country’s oil and gas industry as the maintstay of the national […]

Boeing Agrees to First Plane Sale to Iran Under Trump

4 Apr 2017   Iran

Boeing Co. has agreed to sell planes to an Iranian airline for the first time since U.S. President Donald Trump, a critic of closer ties with Tehran, took office. Boeing said it had signed a memorandum of agreement with Iran Aseman Airlines for the potential sale of up to 60 Boeing 737 Max single-aisle planes. Plane deliveries would begin in 2022, the company said Tuesday. The transaction, which still needs to be…

Is An Iraqi Production Slowdown Inevitable?

4 Apr 2017   Iraq

A tremendous amount of digital, and real, ink has been spilled on the ongoing oil crash, much of it has been focused on U.S. shale production. Yet, the country that has grown production the most over the last two years, Iraq, has only been mentioned in passing by most observers. Between 2014 and 2016, global oil production grew by 3.3m barrels, 33 percent of that increase, or 1.1m barrels came from a single country: Iraq. If Iraq had maintained its pre-crisis production level of 3.3m barrels, the oil crisis would have been much shallower. Understanding where Iraq’s production is heading is key to understanding where oil prices will go, but like most things, understanding the future requires that you understand the past. In 2009, six years after the U.S. invasion of Iraq, Iraq undertook a series of licencing rounds for the development of its giant southern oil fields. That […]