TPT May 2008

Oil & Gas

News

2008

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of the country; but it is uncertain when these aspects would be

ready for discussion.

Iraq commands the world’s third-largest oil reserves, totalling

more than 115 billion barrels. Its average production for

February was 2.4 million barrels per day; exports averaged

1.93 million bpd. Since the US-led invasion in March 2003,

attacks on oil infrastructure have held back production, which

recovered to pre-war levels only at the end of 2007. While there

is no accurate study on how much Iraq loses to oil smugglers,

the parliamentary committee on oil, gas, and natural resources

estimates the losses at nearly 10 per cent of total revenue:

about $5 billion a year.

■

In Tehran, on 6 April, President Mahmoud Ahmadinejad of Iran

urged members of the Organization of Petroleum Exporting

Countries (OPEC) to form a joint bank and to stop pricing oil

trades in US dollars. According to the official website of the

Iranian government, Mr Ahmadinejad advised OPEC Secretary

General Abdalla Salem el-Badri that the cartel

“should establish

a joint bank as well as having joint currency”.

The depreciation

of the American currency, in which oil is priced on the world

market, concerns producers by contributing to rising crude

prices and eroding the value of their dollar reserves. This is not

the first time that Iran has urged OPEC members to shift sales

away from the dollar. But its proposal to trade oil in a basket of

currencies is not supported by leading producer Saudi Arabia

and others.

■

Russia’s lower house of parliament, the State Duma, on

2 April backed restrictions limiting foreign investment in oil and

gas, among other key sectors such as aerospace and mining.

The legislation stipulates that private foreign companies would

need authorization to buy more than 50 per cent of a Russian

company in one of 42

‘strategic’

major industrial sectors. Foreign

state-controlled companies would need permission to acquire a

stake of more than 25 per cent in a Russian company on the

list. A commission made up of Russian economic and security

officials would review such deals. In its final reading the bill was

passed by a vote of 384-55. It goes next to the upper house, the

Federation Council, where passage is considered likely, and to

the president for his signature.

■

According to the newspaper

Nezavisimaya Gazeta

, the Russian

state-owned gas conglomerate Gazprom has lowered its gas

extraction forecasts through the year 2020. The company

announced on 2 April that, starting in twelve months, it intends

to extract only 620 to 640 billion cubic metres of gas per year. By

Gazprom’s estimates, this rate will cover only two-thirds of the

940 billion cubic metres that Russia needs to extract annually.

While company officials said that independent firms would

make up the deficit, industry experts were doubtful of the ability

of these companies to close the gap. The Russian-language

paper, noting that Gazprom is unlikely to break its contracts with

foreign companies, expects the average consumer to bear the

effects of any gas shortage.

■

A class-action lawsuit brought in Ecuador by 30,000 jungle

settlers and Indians charges that Chevron Corp (San Ramon,

California), failed to clean up billions of gallons of toxic

wastewater produced in the Amazon jungle by Texaco Petroleum

Co, a Chevron acquisition from 2001. On 2 April, a court-

appointed expert recommended that Chevron be required to

pay up to $16 billion for the alleged pollution, but there has been

no judgment as yet. Chevron denied the allegation, claiming

that Texaco, which pulled out of Ecuador in 1992 after 30 years

of operations there, met all of its environmental obligations in

a $40 million cleanup approved by the government at Quito in

1998. Chevron has also complained that Texaco was singled

out as a violator despite its minority-shareholder status in an

agreement with Petroecuador, the state-owned oil company.

■

In an effort to speed up talks over the long-delayed sales,

President Evo Morales set a 30 April deadline for the Bolivian

subsidiaries of British Petroleum, Ashmore Energy International

(also British), and Repsol (of Spain) to be returned to state

control. Each of the three companies owns some part of the

former Bolivian state energy company YPFB that was privatized

in the 1990s. Mr Morales’s nationalization in 2006 of Bolivia’s oil

and gas sector called for these subsidiaries to be sold back to

the state.

■

Aker Kvaerner ASA, of Norway, on 3 April announced a $223

million deal to provide offshore oil production equipment to

Brazil’s government-run oil company Petrobras over the next

three years. The Norwegian engineering and construction group

said that the contract of its subsidiary Aker Kvaerner Oil & Gas

do Brasil with Petrobras covers 45 subsea

‘trees’

– assemblies

of fittings placed on the seabed in the extraction of offshore oil.

The agreement also covers tool-sets and other supplies for the

equipment. The work is to be carried out at Aker Kvaerner’s

manufacturing facility in Curitiba, Brazil. The Norwegian group

also announced that it was changing its name to Aker Solutions

ASA, effective immediately, to simplify its corporate identity and

emphasize its ties with other companies in the Aker ASA group.

■

The British oil exploration company Premier Oil Plc was expected

to sign a final gas sales agreement in April with Indonesia’s

state power firm PT Perusahaan Listrik Negara (PLN), an official

of that country’s energy watchdog BPMIGAS said on 3 April.

Premier in December 2007 signed an agreement to supply 149

trillion btu of gas to PLN over the 15-year period commencing

in 2010. As reported by

The Guardian

(UK), Edi Purwanto,

deputy chief of BPMIGAS, told reporters in Jakarta that Premier

was expected to sign additional gas sales agreements with

SembCorp Gas, a

unit of SembCorp

Industries,

also

in April. The deal

follows an earlier

contract Indonesia

had with SembCorp

to supply 325

million cubic feet of

gas per day from its

gas field in Natuna.