TPT May 2008

Oil & Gas News

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.

©Richie Lyon. Image from BigStockPhoto.com

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