Showing posts with label Lukoil. Show all posts
Showing posts with label Lukoil. Show all posts
[RUSSIA] LUKoil in Probe Over Pipeline
Published | 29-Aug-2008
The Federal Anti-Monopoly Service said Wednesday that it was investigating the country's second-biggest oil producer, LUKoil, on suspicion of barring a smaller rival from using its pipeline in the Komi republic.
A more liberal access to pipelines is one of the key goals that the competition watchdog is pursuing. It is also seeking a government decision that would make Gazprom more accountable in running its pipelines. A small oil producer, Nobel Oil, complained that a LUKoil unit banned it from shipping its associated gas, a byproduct of oil production, via a LUKoil-owned pipeline, the Federal Anti-Monopoly Service said in a statement.
"Having studied the situation, the [service's] Komi branch saw signs of a breach of the law in LUKoil-Komi's actions," the government watchdog said.
Pipeline shipments of gas fall under the law that defends competition, it said. The anti-monopoly service demanded that both sides submit documents about the matter by Sept. 12. A service spokesman declined to elaborate.
LUKoil considers the pipeline its private property, a spokesman said. "Perhaps, we have the right to decide who we give access to," he said on condition of anonymity, citing company policy.
LUKoil will submit the documents by the deadline, the spokesman said.
A Nobel Oil official said that company president Grigory Gurevich was unavailable for comment Wednesday.
Source: The Moscow Times
A more liberal access to pipelines is one of the key goals that the competition watchdog is pursuing. It is also seeking a government decision that would make Gazprom more accountable in running its pipelines. A small oil producer, Nobel Oil, complained that a LUKoil unit banned it from shipping its associated gas, a byproduct of oil production, via a LUKoil-owned pipeline, the Federal Anti-Monopoly Service said in a statement.
"Having studied the situation, the [service's] Komi branch saw signs of a breach of the law in LUKoil-Komi's actions," the government watchdog said.
Pipeline shipments of gas fall under the law that defends competition, it said. The anti-monopoly service demanded that both sides submit documents about the matter by Sept. 12. A service spokesman declined to elaborate.
LUKoil considers the pipeline its private property, a spokesman said. "Perhaps, we have the right to decide who we give access to," he said on condition of anonymity, citing company policy.
LUKoil will submit the documents by the deadline, the spokesman said.
A Nobel Oil official said that company president Grigory Gurevich was unavailable for comment Wednesday.
Source: The Moscow Times
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LUKoil will ask the Federal Anti-Monopoly Service to intervene in a dispute with aluminum firm United Company RusAl over oil coke supplies, the oil company's vice president, Valery Subbotin, told reporters Thursday.
Subbotin said LUKoil, Russia's second-largest oil producer, would appeal to the service in an attempt to get RusAl to pay higher prices for oil coke, which is used in the production of anodes and anode paste in RusAl's smelters.
"We will turn to the Federal Anti-Monopoly Service in order to oblige RusAl to pay market price," Subbotin said. "Coke prices have changed three times. We suggested that they reconsider the price. They refused."
RusAl this month filed a lawsuit against LUKoil for an alleged breach of a long-term contract to supply oil coke to its smelters.
RusAl, the world's largest aluminum producer, said on Aug. 13 that oil coke shipments from LUKoil had almost halved since April and accused the firm of cutting shipments in violation of a supply contract signed in 2006 that runs until April 2011.
RusAl said then that it was buying replacement oil coke from China and Azerbaijan. Subbotin alleged that the firm was importing oil coke at $600 per ton and buying it from LUKoil at $220 per ton.
Source: The Moscow Times
Subbotin said LUKoil, Russia's second-largest oil producer, would appeal to the service in an attempt to get RusAl to pay higher prices for oil coke, which is used in the production of anodes and anode paste in RusAl's smelters.
"We will turn to the Federal Anti-Monopoly Service in order to oblige RusAl to pay market price," Subbotin said. "Coke prices have changed three times. We suggested that they reconsider the price. They refused."
RusAl this month filed a lawsuit against LUKoil for an alleged breach of a long-term contract to supply oil coke to its smelters.
RusAl, the world's largest aluminum producer, said on Aug. 13 that oil coke shipments from LUKoil had almost halved since April and accused the firm of cutting shipments in violation of a supply contract signed in 2006 that runs until April 2011.
RusAl said then that it was buying replacement oil coke from China and Azerbaijan. Subbotin alleged that the firm was importing oil coke at $600 per ton and buying it from LUKoil at $220 per ton.
Source: The Moscow Times
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[RUSSIA] Stocks Slide 3.7% as Oil Price Dips Below $120
Published | 06-Aug-2008The country's oil stocks continued their slide Tuesday, pulling the country's MICEX Index down 3.7 percent as the global oil price dropped below $120. Rosneft, the country's largest oil producer, led the way with a fall of 6.8 percent to 216.33 rubles, its steepest drop since its IPO two years ago. LUKoil, Russia's No. 2 producer, fell 4.3 percent, to 1,852.99 rubles, its biggest decline in more than a week.
Plummeting oil prices and the U.S. financial crisis "undermined the domestic stock market terribly and set it up to be sold heavily," said Ronald Smith, head of research at Alfa Bank.
But the trigger for local stocks' woes, including oil stocks, Smith said, was Prime Minister Vladimir Putin's criticism of steel and coal producer Mechel last month, which wiped about $8 billion from the company's market capitalization.
"The Mechel situation reminded investors that Russia is still an emerging market and therefore able to surprise negatively at unpredictable moments," he said. "This triggered a sharp fall in the market, allowing it to catch up to the middle of the pack globally."
Over the last four weeks, the price of oil has fallen 18 percent to $118 from a record of $144 per barrel on July 2, increasing investors' nervousness.
The dollar-denominated RTS Index dropped 4.4 percent to 1,812, its biggest decline since July 25, the day after Putin's comments on Mechel. The ruble-denominated MICEX Index closed at 1,397.46, its lowest level since October 2006.
Both indexes have lost more than 24 percent since May. Another big loser Tuesday was Tatarstan-based oil producer Tatneft, which dropped 5.8 percent on the MICEX. Gazprom Neft shed 6.3 percent, and Surgutneftegaz was down 3.7 percent.
Alexander Potavin, an equity analyst with Antanta-Pioglobal Investment Group, blamed the falling oil stocks on "a change in investment preferences by some big Western companies and speculators."
President Dmitry Medvedev's appeal to state officials and power structures to stop creating "nightmares" for businesses has so far failed to impress foreign investors, he added.
Tom Mundy, an oil and gas analyst at Renaissance Capital, said the weakness in the market would continue in August and possibly part of September.
"Russia's stock markets continue to be strong, and there's still a lot of value to be found," he said. "Investors are likely to stay away this summer but trickle back in September ... after their vacations."
Dipping oil prices are expected to affect all domestic producers equally, analysts said, as investors have already factored in any favoritism of government companies over private ones.
The sliding stock prices, especially in the oil and gas sector, are expected to be short term but would offer investors the opportunities to buy cheap "while the bottom is hard to pick," said Smith, of Alfa Bank.
"The market valuations of Russian oil companies are very cheap, and bargain hunters should soon appear to put a floor under stock prices," he said. "With a sharp correction this August, we are well set up for an autumn rally."
Source: The Moscow Times|By Tai Adelaja
Plummeting oil prices and the U.S. financial crisis "undermined the domestic stock market terribly and set it up to be sold heavily," said Ronald Smith, head of research at Alfa Bank.
But the trigger for local stocks' woes, including oil stocks, Smith said, was Prime Minister Vladimir Putin's criticism of steel and coal producer Mechel last month, which wiped about $8 billion from the company's market capitalization.
"The Mechel situation reminded investors that Russia is still an emerging market and therefore able to surprise negatively at unpredictable moments," he said. "This triggered a sharp fall in the market, allowing it to catch up to the middle of the pack globally."
Over the last four weeks, the price of oil has fallen 18 percent to $118 from a record of $144 per barrel on July 2, increasing investors' nervousness.
The dollar-denominated RTS Index dropped 4.4 percent to 1,812, its biggest decline since July 25, the day after Putin's comments on Mechel. The ruble-denominated MICEX Index closed at 1,397.46, its lowest level since October 2006.
Both indexes have lost more than 24 percent since May. Another big loser Tuesday was Tatarstan-based oil producer Tatneft, which dropped 5.8 percent on the MICEX. Gazprom Neft shed 6.3 percent, and Surgutneftegaz was down 3.7 percent.
Alexander Potavin, an equity analyst with Antanta-Pioglobal Investment Group, blamed the falling oil stocks on "a change in investment preferences by some big Western companies and speculators."
President Dmitry Medvedev's appeal to state officials and power structures to stop creating "nightmares" for businesses has so far failed to impress foreign investors, he added.
Tom Mundy, an oil and gas analyst at Renaissance Capital, said the weakness in the market would continue in August and possibly part of September.
"Russia's stock markets continue to be strong, and there's still a lot of value to be found," he said. "Investors are likely to stay away this summer but trickle back in September ... after their vacations."
Dipping oil prices are expected to affect all domestic producers equally, analysts said, as investors have already factored in any favoritism of government companies over private ones.
The sliding stock prices, especially in the oil and gas sector, are expected to be short term but would offer investors the opportunities to buy cheap "while the bottom is hard to pick," said Smith, of Alfa Bank.
"The market valuations of Russian oil companies are very cheap, and bargain hunters should soon appear to put a floor under stock prices," he said. "With a sharp correction this August, we are well set up for an autumn rally."
Source: The Moscow Times|By Tai Adelaja
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[EUROASIA] LUKoil to Buy Akpet, a turkish distributor
Published | 29-Jul-2008LUKoil agreed to buy Turkish fuel distributor Akpet for $500 million on Monday, securing 5 percent of Turkey's oil-product retail market as it continues its downstream expansion. LUKoil, the country's second-largest oil producer, plans to double its Turkish market share to 10 percent within a decade after acquiring eight oil-product terminals with total capacity of 300,000 cubic meters, president Vagit Alekperov said.
"LUKoil bought Akpet for a little bit more than $500 million," Alekperov told a news conference in Istanbul after signing the deal with Akpet's owners.
Last month, LUKoil took its first major step into the West European refining business with the $2.1 billion purchase of a 49 percent stake in Italian refiner ERG's Isab di Priolo refinery on Sicily.
![[EUROASIA] LUKoil to Buy Akpet, a turkish distributor](http://bp1.blogger.com/_m50azKGBdwU/SI5LQVZoHiI/AAAAAAAAHIA/2hA6ld6sqBU/s400/luk_2.jpg)
The company, owned 20 percent by U.S. oil major ConocoPhillips, plans to invest $25 billion in refining and retail over the next decade, excluding acquisitions. Its acquisition of Akpet, which operates 693 gas stations in Turkey, also gives LUKoil control of five liquefied natural gas storage tanks with total capacity of 7,650 cubic meters.
It also secures Akpet's three jet-fuel terminals, with capacity of 7,000 cubic meters, and a motor-oil production and packaging plant with capacity to produce 12,000 tons per year.
"The deal fits in well with LUKoil's downstream strategy. LUKoil is proving to be consistent, closely following its strategy of acquiring refining and marketing assets in Europe," Citigroup analyst Alexander Korneyev said in a note.
He said the acquisition price of $700,000 per filling station, excluding other assets, was a fair price — especially compared with the $3 million per station paid when LUKoil bought 75 outlets in Bulgaria this year.
The Akpet acquisition was made by LUKoil's wholly owned subsidiary, LUKoil Eurasia Petrol.
"LUKoil bought Akpet for a little bit more than $500 million," Alekperov told a news conference in Istanbul after signing the deal with Akpet's owners.
Last month, LUKoil took its first major step into the West European refining business with the $2.1 billion purchase of a 49 percent stake in Italian refiner ERG's Isab di Priolo refinery on Sicily.
The company, owned 20 percent by U.S. oil major ConocoPhillips, plans to invest $25 billion in refining and retail over the next decade, excluding acquisitions. Its acquisition of Akpet, which operates 693 gas stations in Turkey, also gives LUKoil control of five liquefied natural gas storage tanks with total capacity of 7,650 cubic meters.It also secures Akpet's three jet-fuel terminals, with capacity of 7,000 cubic meters, and a motor-oil production and packaging plant with capacity to produce 12,000 tons per year.
"The deal fits in well with LUKoil's downstream strategy. LUKoil is proving to be consistent, closely following its strategy of acquiring refining and marketing assets in Europe," Citigroup analyst Alexander Korneyev said in a note.
He said the acquisition price of $700,000 per filling station, excluding other assets, was a fair price — especially compared with the $3 million per station paid when LUKoil bought 75 outlets in Bulgaria this year.
The Akpet acquisition was made by LUKoil's wholly owned subsidiary, LUKoil Eurasia Petrol.
Source: The Moscow Times|
[ENERGY AGREEMENT] Lukoil Overseas and PDVSA sign agreement Junin-3 block in Venezuela
Published | 23-Jul-2008
Today in Moscow Vagit Alekperov, the President of LUKOIL, and Rafael Ramirez Carreño, the President of PDVSA, State Petroleum Company of Venezuela, have signed an Agreement on Joint Study of Junin-3 block in the Orinoco heavy oil belt (Guarico state, Venezuela). The Agreement was signed in the presence of the leaders of the Russian Federation and Bolivarian Republic of Venezuela Dmitry Medvedev and Hugo Chavez Frias.A joint study will be performed to evaluate the project pertaining to production of extra heavy oil, its further refining on the territory of Venezuela and export overseas. Expenses for the study will be shared by the parties on an equal basis. The Agreement will be effective within two years with a possibility of extension. The previous agreement on Junin-3 was signed by LUKOIL and PDVSA on October 12, 2005 for the term of three years. Obligations on this agreement, related to quantitative assessment and certification of heavy oil reserves in the area of 678 square kilometers, have been fully discharged. The results of these studies were certified by Ryder Scott, independent engineering company, and officially approved by the Ministry of Energy and Petroleum of Venezuela.
Vagit Alekperov, President of LUKOIL, said, “Signing of the new agreement is an important stage in the development of our co-operation with Venezuela, which has a strategic format for the development of the Company’s international activity”.
Source: Scandinavian Oil and Gas
[RUSSIA] Oil Tax Pledge Buoys Markets
Published | 18-May-2008Markets surged after the swearing-in of Dmitry Medvedev as president in a pomp-filled ceremony Wednesday and a tax-cutting speech by Vladimir Putin the day after, when he was approved as prime minister.
The RTS, Russia's benchmark index, rose 2 percent Wednesday, the day of the inauguration, while the MICEX Index fared a little better, increasing by 2.7 percent.
Oil stocks were buoyed by Putin's announcement Thursday that taxes on oil exploration would be cut significantly, pushing LUKoil up 6.4 percent and Rosneft up 6.7 percent on the day.
The RTS closed Thursday, the last day of trading before the Victory Day national holiday, up by 7.6 percent to 2283.99 points, while MICEX, where most trading takes place, rose 7.7 percent to 1795.67 points.
The RTS Oil & Gas Index rose 9.2 percent over the four days of trading, and in London on Friday Gazprom added 3.4 percent, LUKoil 4 percent and Rosneft 3 percent.
While Russia has been caught up in the maelstrom of the global financial crisis, which has sent global markets tumbling since the beginning of the year, analysts have noted large inflows into Russia-focused funds over the same period.
The MSCI Russia Index outperformed the global emerging-market index by 10.5 percent over the week and, having lagged behind the global benchmark in the year to date, it is now outperforming by almost 4 percent. According to EPFR Global, a total of $1.4 billion has been invested into Russia funds so far this year, compared with an outflow of $5.2 billion from China funds and a loss of $455 million from India funds.
Yet Russian markets still appear undervalued, as Bloomberg noted that stocks on the RTS are currently trading at an average of 9.52 times earnings, making it the worst-performing stock market among Europe's 10 largest.
Investors said one reason for this was that the Russian market was dominated by oil stocks, which typically have lower price-to-earning ratios than manufacturing or consumer stocks. Added to that, some investors have still shied away from the market in light of the political changeover.
"There has been a bit of a misunderstanding about what the transfer of power means in Russia," said James Fenkner, a director at Red Star Asset Management. "There has been a lot of pessimism in Russia, too, and we have seen big Russian sellers of Gazprom. This has lifted over the last couple of days."
The week's double coronation sparked a spurt of market activity in what has otherwise been a quiet couple of weeks, with many Russian-based buyers and sellers out of town for the traditional May vacation.
For the first time since January, the RTS was back above 2,200 points, led by the metals and mining sector. Coal firm Raspadaskaya attracted interest on the news that it planned to list Global Depositary Receipts in London, while steel companies Severstal and NLMK soared on Lehman Brothers coverage and high steel prices.
Oil prices hit another record high, soaring well above $120 per barrel, buoying oil stocks. Big names such as Gazprom and LUKoil did well, but investors were wary to place bets that it's a real recovery.
The recovery, said Fenkner, is "very specific." "Oil and metals have completely recovered, but what hasn't quite recovered is everything else."
"Telecoms are in the gutter, and retails are also doing pretty poorly," he said. Unified Energy Systems, which is to be broken up shortly, has started to climb back over the last two weeks after a sell-off, closing Thursday at $1.06 per share.
Unified Energy Systems, is "very cheap," said Alexander Kotikov, a utilities analyst at Troika Dialog. When Unified Energy Systems, is de-listed on Jun. 6, shareholders will receive holdings in a basket of 23 different companies, ranging from generating firms to transmission entities, in return for their UES shares.
Analysts have valuations for the majority of the basket of stocks, and UES is trading at a "deep discount" to that basket, Kotikov said.
"It represented a fantastic arbitrage opportunity, and still does," he said.
Source: The Moscow Times|By Catrina Stewart
The RTS, Russia's benchmark index, rose 2 percent Wednesday, the day of the inauguration, while the MICEX Index fared a little better, increasing by 2.7 percent.
Oil stocks were buoyed by Putin's announcement Thursday that taxes on oil exploration would be cut significantly, pushing LUKoil up 6.4 percent and Rosneft up 6.7 percent on the day.
The RTS closed Thursday, the last day of trading before the Victory Day national holiday, up by 7.6 percent to 2283.99 points, while MICEX, where most trading takes place, rose 7.7 percent to 1795.67 points.
The RTS Oil & Gas Index rose 9.2 percent over the four days of trading, and in London on Friday Gazprom added 3.4 percent, LUKoil 4 percent and Rosneft 3 percent.
While Russia has been caught up in the maelstrom of the global financial crisis, which has sent global markets tumbling since the beginning of the year, analysts have noted large inflows into Russia-focused funds over the same period.
The MSCI Russia Index outperformed the global emerging-market index by 10.5 percent over the week and, having lagged behind the global benchmark in the year to date, it is now outperforming by almost 4 percent. According to EPFR Global, a total of $1.4 billion has been invested into Russia funds so far this year, compared with an outflow of $5.2 billion from China funds and a loss of $455 million from India funds.
Yet Russian markets still appear undervalued, as Bloomberg noted that stocks on the RTS are currently trading at an average of 9.52 times earnings, making it the worst-performing stock market among Europe's 10 largest.
Investors said one reason for this was that the Russian market was dominated by oil stocks, which typically have lower price-to-earning ratios than manufacturing or consumer stocks. Added to that, some investors have still shied away from the market in light of the political changeover.
"There has been a bit of a misunderstanding about what the transfer of power means in Russia," said James Fenkner, a director at Red Star Asset Management. "There has been a lot of pessimism in Russia, too, and we have seen big Russian sellers of Gazprom. This has lifted over the last couple of days."
The week's double coronation sparked a spurt of market activity in what has otherwise been a quiet couple of weeks, with many Russian-based buyers and sellers out of town for the traditional May vacation.
For the first time since January, the RTS was back above 2,200 points, led by the metals and mining sector. Coal firm Raspadaskaya attracted interest on the news that it planned to list Global Depositary Receipts in London, while steel companies Severstal and NLMK soared on Lehman Brothers coverage and high steel prices.
Oil prices hit another record high, soaring well above $120 per barrel, buoying oil stocks. Big names such as Gazprom and LUKoil did well, but investors were wary to place bets that it's a real recovery.
The recovery, said Fenkner, is "very specific." "Oil and metals have completely recovered, but what hasn't quite recovered is everything else."
"Telecoms are in the gutter, and retails are also doing pretty poorly," he said. Unified Energy Systems, which is to be broken up shortly, has started to climb back over the last two weeks after a sell-off, closing Thursday at $1.06 per share.
Unified Energy Systems, is "very cheap," said Alexander Kotikov, a utilities analyst at Troika Dialog. When Unified Energy Systems, is de-listed on Jun. 6, shareholders will receive holdings in a basket of 23 different companies, ranging from generating firms to transmission entities, in return for their UES shares.
Analysts have valuations for the majority of the basket of stocks, and UES is trading at a "deep discount" to that basket, Kotikov said.
"It represented a fantastic arbitrage opportunity, and still does," he said.
[EUROASIA] Vagit Alekperov, Leonid Fedun bought more of LUKOIL. Russia
Published | 14-May-2008LUKOIL chief Vagit Alekperov and vice president Leonid Fedun spent $1.6 billion to widen their stakes in the company. As a result, Vagit Alekperov currently owns 20.4 percent, nearly as much as LUKOIL biggest holder ConocoPhillips of the United States of America. Top managers bought out the stakes at the price above the market one, but the implementation of plans of Russia’s new PM Vladimir Putin in part of introducing benefits in the oil sector will make the investment very profitable.
It was announced on LSE yesterday that LUKOIL chief Vagit Alekperov and vice president Leonid Fedun clinched deals May 6 to widen their ownership in the company. Vagit Alekperov acquired 11.13 million stocks (1.3 percent in LUKOIL), having paid 24.57 billion rubles ($1.03 billion) to widen the stake to 20.4 percent. Fedun bought 6.7 million stocks (0.8 percent) for 15.15 billion rubles ($637.4 million). The actual size of his stake is unknown, but Leonid Fedun owned 8.3 percent a year ago.
![[EUROASIA] Vagit Alekperov, Leonid Fedun bought more of LUKOIL. Russia](http://bp2.blogger.com/_m50azKGBdwU/SCp7VdlxD-I/AAAAAAAAG2s/-Y236Lmc43Q/s400/KMO_088197_12814_1_t208.jpg)
In ownership, Vagit Alekperov is currently the second to the company’s strategic holder ConocoPhillips that controls 20.6 percent in LUKOIL. The aggregate ownership of the management stood at 28 percent as of past May. If the stakes of other managers haven’t changed and Leonid Fedun has bought only those 6.7 million stocks during the year, LUKOIL chiefs own a third of the company now.
![[EUROASIA] Vagit Alekperov, Leonid Fedun bought more of LUKOIL. Russia](http://bp2.blogger.com/_m50azKGBdwU/SCp7VdlxD_I/AAAAAAAAG20/HMRb4o3qjK4/s400/KMO_088197_57591_1_t208.jpg)
According to LSE, Gatecraft Limited sold the stocks to Vagit Alekperov and Leonid Fedun. But that firm is affiliated to IFD Kapital, where Leonid Fedun is the biggest holder and Vagit Alekperov owns a stake as well. In essence, top managers of LUKOIL bought stocks from themselves May 6. LUKOIL declined to comment on the deal yesterday, people in IFD Kapital acknowledged the affiliation with Gatecraft Limited but refused to elaborate on details of the deal.
![[EUROASIA] Vagit Alekperov, Leonid Fedun bought more of LUKOIL. Russia](http://bp1.blogger.com/_m50azKGBdwU/SCp7VNlxD9I/AAAAAAAAG2k/jCb74C48da0/s400/KMO_088197_03258_1_t208.jpg)
Source: Kommersant
MIDDLE EAST: Iraq names 36 eligible oil companies
Published | 14-Apr-2008The Iraqi Oil Ministry has released the names of 36 international oil companies which it says have the ability to securely develop the country’s rich oilfields.
The U.S. appears set to earn the lion’s share of the spoils, with some seven companies on Baghdad’s rulers’ list of pre-qualified oil firms: 120 companies from a around the world had taken part in the selection process. Baghdad and its advisors had examined technical merits, financing, company legal structures, training for Iraqies and health and safety records.
The list does not include a number of oil companies already developing northern Iraq’s Kurdish oilfields, where at least Norwegian and Irish companies are already working with the Kurdish Regional Authority.
The following companies have been given the go-ahead to bid for acreage in Iraq’s coming first licensing round:
The U.S. appears set to earn the lion’s share of the spoils, with some seven companies on Baghdad’s rulers’ list of pre-qualified oil firms: 120 companies from a around the world had taken part in the selection process. Baghdad and its advisors had examined technical merits, financing, company legal structures, training for Iraqies and health and safety records.
The list does not include a number of oil companies already developing northern Iraq’s Kurdish oilfields, where at least Norwegian and Irish companies are already working with the Kurdish Regional Authority.
The following companies have been given the go-ahead to bid for acreage in Iraq’s coming first licensing round:
Source: Scandinavian Oil
IRAQ: Chevron in talks with Iraq to boost production in oil field
Published | 12-Apr-2008Oil giants Chevron Corp. and Total have confirmed that they are in discussions with the Iraqi Oil Ministry to increase production in an important oil field in southern Iraq.
The discussions are aimed at finalizing a two-year deal, or technical support agreement, to boost production at the West Qurna Stage 1 oil field near Iraq's second-largest city of Basra.
Chevron and Total confirmed their involvement in the discussions in e-mails received today by The Associated Press.
"Chevron is interested in helping the Iraq government's objectives to develop its oil and gas industry," Chevron spokesman Kurt Glaubitz said in an e-mail. Total spokeswoman Lisa Wyler confirmed the French company's involvement.
Basra, about 340 miles southeast of Baghdad, has been the scene of sporadic attacks and clashes since the U.S.-led invasion in 2003. The latest fighting broke out March 25 when the government launched an operation against Shiite militants, who remain in control of several neighborhoods.
West Qurna field, located about 40 miles west of Basra, is among Iraq's 10 "super giant" fields with its reserves estimated between 15 to 21 billion barrels, according to Iraqi Oil Ministry and Energy Information Administration.
The Ministry intends to add 100,000 barrels per day to the field's current capacity of 180,000 bpd. Its estimated pre-2003 production capacity stood at 250,000 bpd, the ministry's figures show.
In 1997, the Russian Lukoil oil giant struck a $3.7 billion deal with former Iraqi leader Saddam Hussein to drill at the West Qurna field. However, Saddam canceled the contract in 2002. The Russians hoped they would be able to revive it when Moscow wrote off most of Iraq's $12.9 billion debt.
The Iraqi Oil Ministry has said it also is negotiating with Royal Dutch Shell PLC, BP PLC, ExxonMobil Corp. to increase crude production in four other fields and under the same agreement. Iraq has the world's third-largest oil reserves, totaling more than 115 billion barrels. Iraq's average production for February was 2.4 million barrels per day and exports averaged 1.93 million barrels per day.
The discussions are aimed at finalizing a two-year deal, or technical support agreement, to boost production at the West Qurna Stage 1 oil field near Iraq's second-largest city of Basra.
Chevron and Total confirmed their involvement in the discussions in e-mails received today by The Associated Press.
"Chevron is interested in helping the Iraq government's objectives to develop its oil and gas industry," Chevron spokesman Kurt Glaubitz said in an e-mail. Total spokeswoman Lisa Wyler confirmed the French company's involvement.
Basra, about 340 miles southeast of Baghdad, has been the scene of sporadic attacks and clashes since the U.S.-led invasion in 2003. The latest fighting broke out March 25 when the government launched an operation against Shiite militants, who remain in control of several neighborhoods.
West Qurna field, located about 40 miles west of Basra, is among Iraq's 10 "super giant" fields with its reserves estimated between 15 to 21 billion barrels, according to Iraqi Oil Ministry and Energy Information Administration.
The Ministry intends to add 100,000 barrels per day to the field's current capacity of 180,000 bpd. Its estimated pre-2003 production capacity stood at 250,000 bpd, the ministry's figures show.
In 1997, the Russian Lukoil oil giant struck a $3.7 billion deal with former Iraqi leader Saddam Hussein to drill at the West Qurna field. However, Saddam canceled the contract in 2002. The Russians hoped they would be able to revive it when Moscow wrote off most of Iraq's $12.9 billion debt.
The Iraqi Oil Ministry has said it also is negotiating with Royal Dutch Shell PLC, BP PLC, ExxonMobil Corp. to increase crude production in four other fields and under the same agreement. Iraq has the world's third-largest oil reserves, totaling more than 115 billion barrels. Iraq's average production for February was 2.4 million barrels per day and exports averaged 1.93 million barrels per day.
Source: Associated Press
