TPT March 2009

Oil & Gas News

the sharp drop in crude oil prices – from midsummer highs of nearly $150 per barrel to under $40 in late December – has made Kuwaitis skeptical of expensive speculative undertakings. The project, in which Kuwait was to hold a $7.5 billion stake, had been criticized in the country as a waste of public funds, and lawmakers threatened to challenge it in parliament if it were launched. This could have meant new trouble for the prime minister, Sheik Nasser Al Mohammed Al Sabah, who had been reappointed only recently after surviving another political crisis. ■ The cancellation of K-Dow Petrochemicals, which was to be headquartered in the Detroit area, dealt a blow to Dow Chemical, which earlier in December had announced it was cutting some 11 per cent of its work force, closing 20 plants, and selling off several businesses to reduce costs in the US financial downturn. The largest US chemicals company had depended on the deal to help it repay some $13 billion in debt and assist in the acquisition of Philadelphia-based rival Rohm & Haas, a deal that has now fallen through with both companies headed to court over breach of agreement. In a brief statement on 28 December 28, an ‘extremely disappointed’ Dow said it was evaluating its options under the provisions of the joint-venture agreement with Kuwait. The company also said. “Dow remains committed to its Middle East strategy.” China National Offshore Oil Co Limited (CNOOC Ltd) has said it expects its crude oil and natural gas production this year to rise 16 per cent to 18 per cent over 2008. The Hong Kong-listed unit of China National Offshore Oil Corp, China’s largest offshore oil and gas producer, CNOOC Ltd also said it plans to boost its capital expenditure for 2009 by 19 per cent. On its website 20 January, the company posted these budget allocations: for development, $4.38 billion; production, $1.12 billion; exploration, $1.11 billion. CNOOC Ltd estimated that its net production will reach 225 million to 231 million barrels of oil equivalent (BOE) in 2009, compared with an estimated 194 million to 196 million BOE for 2008. As reported in People’s Daily (Beijing), Fu Chengyu, chairman and CEO of CNOOC Ltd, said that the company has kept up a stable pace of business despite the decline in oil prices in the second half of 2008. If its projections materialize, CNOOC Ltd will achieve a reserve replacement ratio of over 100 per cent in 2009. Eight of the ten new company projects expected to come onstream in 2009 are offshore China. The two overseas are OML130, in Nigeria, and the Tangguh liquefied national gas (LNG) project in Indonesia. Elsewhere in oil and gas . . . ■ According to the Wall Street Journal (20 January), experts say Israel’s offensive in Gaza will ‘certainly have an effect’ on that country’s status as an energy corridor, without construing what that effect might be. A 158-mile Israeli pipeline runs from the Mediterranean port of Ashkelon to the Red Sea port of Eilat, and holds potential as an alternate to the Suez Canal for oil transport between former Soviet Union producers and customers in Asia. The pipeline’s capacity of 400,000 barrels a day is not China’s ambitious CNOOC Limited is expecting a busy year

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M arch 2009

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