BP and CNPC have won the right to help Iraq develop the Rumaila field. The UK and Chinese companies beat ExxonMobil, the US oil company, which had partnered with Petronas, the Malaysian oil company. BP clinched the contract when it agreed to reduce its fee per barrel from $3.99 to $2.
But the rest of the auction has not gone as smoothly. In fact, so far, the smaller five of the eight oil and gas fields being auctioned off have failed to find a company willing to accept the narrow terms and the relatively low price Iraq is willing to pay for their services. And the future of West Qurna, the biggest of the fields, is looking in doubt after ExxonMobil and CNPC both rejected Iraq’s tougher terms. Royal Dutch Shell has bid for Kirkuk, but no winner has been announced for that field. Read more
Oil hit an eight month high on Tuesday and was on track to post its largest quarterly gain since 1990 as optimism for an economic recovery rather than clear news flow continued to drive crude prices.
The energy market defied predications of a quiet US holiday trading period as US crude again broke through the $72 a barrel level, adding to a 3.7 per cent rise in the previous session. Read more
- Oil watchdog cuts demand forecasts
IEA also says threat of supply crunch has receded (FT)
- EU optimistic on defusing Ukraine gas dispute
But stresses aid dependent on reform of gas sector (FT) Read more
Oil prices rose on Monday as the market shrugged off a bearish report from the International Energy Agency, opting instead to focus on news of further attacks on Nigeria’s energy infrastructure by militants.
The IEA, the oil consuming countries’ watchdog, sharply lowered its medium-term forecast for global oil demand, suggesting that economic fundamentals will prevent a repeat of crude’s surge towards $150 last year.
The IEA lowered its 2008-2013 demand forecast by 3.7 per cent compared with its previous estimate in December, but stressed that the chances of an oil shock had only lessened rather than disappeared altogether. Read more
The global economic recession has rescued the world from an impending oil supply crunch, the consuming countries’ watchdog agency said as it cut its medium-term oil demand forecasts.
The International Energy Agency now expects global oil demand to grow each year by a paltry 0.6 per cent or 540,000 b/d in 2008-2014, pushing consumption from 85.8m b/d to 89m b/d. That is considerably less than 1m b/d average yearly increase the IEA had expected last year. If the lower-end GDP forecasts turn out to be correct, oil demand could actually contract over the period, with consumption at 84.9m b/d in 2014. Read more
Alexey Miller, Gazprom’s chief executive, fired another warning shot at the European Union at Gazprom’s annual shareholder meeting last Friday.
In his speech to the meeting, he accepted that the company was being tested by “unfavorable global financial and economic trends” but said “our company once again proved itself to be highly reliable, stable and able to achieve sustainable development.”
A long-term business strategy that we have been recently implementing has been – and remains – true. Our challenge today is to preserve the accumulated potential and not to miss the new opportunities that emerge in times of crisis.
The good news is that the worst of the downturn seems to be over:
The situation has both stabilized and acquired a positive momentum in the past few months: we are witnessing a steady rise in prices and volumes of hydrocarbon consumption. This gives us grounds for believing that we have already passed the bottom of the energy crisis. And although we still witnessed a considerable reduction in exports in the first quarter of 2009, current foreign client orders have all but returned to last year’s levels.
A dust storm has postponed by a day Iraq’s historic opening of the bids entered by oil companies hoping to develop its large oil reserves. Organisers of the bidding round said the delay was prompted by the closure
of Baghdad’s airport due to poor visibility. They noted that some oil company executives therefore had not been able to make it to Baghdad. The bidding round has been condensed from two days into one and will take place on Tuesday and possibly Wednesday if the weather fails to improve. Whenever it happens, it will mark the first time since the nationalisation of Iraq’s oil industry that international oil companies will be allowed back into Iraq’s fields, which holds the world’s third largest reserves of oil. Many of the world’s biggest oil companies, including ExxonMobil and Chevron, of the US, Europe’s Royal Dutch Shell, BP, Total and Eni are expected to bid. Chinese and Indian companies are also expected to make bids. Hussain Shahristani, Iraq’s oil minister and the architect of the bidding round, last week came under some pressure by Iraqi politicians looking to derail the process. But oil companies expect it to go ahead and have already dispatched senior exectutives towards Baghdad.
The Waxman-Markey bill may have needed many compromises to give it a chance of being passed.
Yet six months ago it was unclear whether even this tough a bill could get through the House.
As Frances Beinecke, president of the Natural Resources Defense Council, put it:
The passage of this legislation, which was almost unimaginable six months ago, will help set our country in a new direction by shifting to a clean energy economy and reducing the carbon pollution that causes global warming.
That said, environmentalists are not giving up hope for stronger legislation. All eyes are now on the Senate, where they hope lawmakers can strengthen the bill before it ends up on President Obama’s desk. Read more