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Iraq inks $363m power deal with Orascom

Sun, 29 Apr 2012 14:54:55 GMT

Iraq's electricity ministry signed a $363 million power deal with Egypt's Orascom Construction to build a 1,014 megawatt gas power plant in northern Iraq, it said on Thursday.

The contract involves building a plant in Baiji, 180 km (112 miles) north of Baghdad, to install six gas units, each with a capacity of 169 MW, which Iraq bought from Siemens in 2008.

The project is expected to be completed within 21 months, officials have said.

Nearly nine years since the US-led invasion that ousted Saddam Hussein, Iraq's national grid still supplies only a few hours of power each day. Intermittent electricity is one of the public's top complaints.

Iraq plans to boost the grid's capacity by about 1,500 megawatts in the next few months and to add 22,000 MW of production capacity across Iraq, except for the semi-autonomous region of Kurdistan, by the end of 2015, the electricity minister has said.

Iraq's power availability has ranged between 7,000-8,000 megawatts but is due to increase to 9,000-9,500 MW this summer as some power projects come online and others are upgraded.

Iraqi demand for electricity peaked at 15,000 megawatts last year, but the oil-producing nation managed to supply less than half of that. – Reuters

Dana Gas CEO to retire in September

Sun, 29 Apr 2012 14:54:54 GMT

Dana Gas, which has retained advisors to assess options for $1 billion in debt maturing this year, said on Thursday its chief executive will retire in September after three years at the helm.

Ahmed Al-Arbeed will remain on the board of directors, the Gulf Arab region's only listed natural gas firm said in a statement issued after its shareholder meeting in Abu Dhabi.

Dana, which has operations in the UAE, Egypt and Kurdistan and owns a 3-percent stake in Hungarian group MOL, said a committee has been appointed to oversee the search for a replacement for Arbeed.

The Abu Dhabi-listed firm's shares have been battered recently over fears it might struggle to honor the debt.

However, the company said in January that it would meet its debt obligations. The stock is down about 35 per cent this year.

The company hired Blackstone Group as a financial advisor to assess options for its $1 billion Islamic bond maturing in October, two sources told Reuters this week, alongside Deutsche Bank.

Dana, made a quarterly profit of Dh147 million ($40 million), according to Reuters calculations. It had profit of Dh59 million in the year-ago period. – Reuters

Japan sees Iran crude imports fall 36.4pc

Sun, 29 Apr 2012 14:54:54 GMT

Japan's crude oil imports from Iran fell 36.4 per cent in March from a year earlier as Western sanctions take a toll on exports from the Islamic republic, data from the Japanese Ministry of Economy, Trade and Industry (METI) showed on Friday.

Japan, the world's third-biggest oil consumer, is reducing imports even after securing a US waiver from the sanctions. South Korea, India and China, the other three main buyers of Iran's 2.2 million barrels per day of exports, have all cut orders.

Japan's crude purchases from Iran are set to fall by almost 80 percent in April from the first two months of the year, trade sources said last week.

Imports fell to 1.33 million kilolitres (271,000 barrels per day) in March, the METI data showed. For the fiscal year ended in March the decline was 22.4 percent.

The United States last month exempted Japan and 10 EU nations from financial sanctions, citing their efforts to significantly cut purchases, while Iran's top customers China and India remain at risk of such steps.

Still, importers are cutting imports because of EU sanctions on insurance that make it impossible to find coverage for ship carrying the crude.

The United States and Europe are trying to squeeze the revenues Iran makes from its oil exports to force it to halt a nuclear programme they fear will be used to make weapons but which Tehran says is for power generation.-Reuters

Bahrain signs Occidental gas exploration deal

Sun, 29 Apr 2012 14:54:54 GMT

A major agreement has been signed between Bahrain and the US Occidental Petroleum Corporation for deep gas exploration, according to Energy Minister Dr Abdulhussain Mirza.

Occidental will carry out drilling for gas and Bahrain would not be charged for the operations since all drilling costs would be borne by the company for the first seven years. By then it would be known whether they have found results, Dr Mirza said.

The ministry is now in the process of changing the path of oil pipelines in the southern part of the kingdom, he said, adding initial drawing plans will be put out to tender early next year.

With regard to liquefied natural gas Project 9, specialised companies have submitted offers and the winning bidder will be announced once evaluation has been completed, he added.-TradeArabia News Service

New Bapco board of directors named

Sun, 29 Apr 2012 14:54:54 GMT

Energy Minister and National Oil and Gas Authority chairman Dr Abdulhussain Mirza yesterday announced the new board of directors at Bahrain Petroleum Company (Bapco).

The new board, under the chairmanship of Adel Khalil Almoayyed, includes members Dr Ahmed Al Sharyan, Dr Abdul Majeed Ali Al Awadhi, Shaikh Mohamed bin Khalifa Al Khalifa, Faisal Mohammed Al Mahroos, Mohammed Abdulla Al Jamea and Abdul Majeed Bashir Al Ghassab.

Almoayyed expressed hope the new board would succeed in fostering development plans and programmes and projecting the role assumed by all employees and the management towards achieving desired goals.

He thanked Dr Mirza, former chairman and members of the previous board for their valuable role in enhancing the progress of Bapco over the past years.

Almoayyed thanked Bahrain's leadership and pledged to exert extra efforts to improve Bapco's operations, enhance its contributions in the national economy and continue its outstanding performance for sustainable growth.

The new Bapco board and the newly-appointed audit and finance committee would meet prior to the Annual General Assembly meeting on May 24 to review and approve the financial statements for 2011.

It will also take stock of the performance of the company over the past year as well as look at plans and programmes that would move the company forward during this year and the coming years.

Dr Mirza congratulated the board members and wished them success in their responsibilities, adding that the members are all technocrats and possess a wealth of knowledge and experience in the oil and gas sector, having been in senior executive positions in the oil, gas and energy sector over a number of years.

The new board's term is three years till March 31, 2015.-TradeArabia News Service

Bahrain to host key petchem conference

Sun, 29 Apr 2012 14:54:53 GMT

More than 3,000 downstream oil and gas professionals are set to converge in Bahrain from May 20 to 23 for the eighth edition of the Middle East Refining and Petrochemicals Conference and Exhibition 2012.

It will be held under the patronage of His Royal Highness Prime Minister Prince Khalifa bin Salman Al Khalifa.

Energy Minister Dr Abdulhussain Mirza thanked the Premier for his support for the conference.

Set against a backdrop of ongoing refining and petrochemical expansion projects in the region, the exhibition and conference has attracted highly respected individuals and companies from around the world, united in a common drive to exchange knowledge, transfer technology and seize business opportunities.

"In order to continue to benefit from previous high oil prices, GCC countries are currently focused on expanding output by adding various new products to their offerings," said Arabian Exhibition Management director of sales and marketing Fawzi Al Shehabi.

"As a result, greater emphasis is being placed on investing in the downstream oil and gas sector both at home and abroad. According to Global Investment House, there are 147 upcoming projects in Saudi Arabia alone, worth an estimated $215 billion, with the main bulk destined for petrochemical projects," he noted.

"Petrotech 2012 represents a timely opportunity for participants to initiate business, and at the same time, serve the needs of the industry as it seeks to progress through strategic collaborations, healthy competition and technological innovations," remarked Al Shehabi said.

The 5,400 sq m exhibition of products and services at the Bahrain International Exhibition and Convention Centre showcases more than 100 companies from 20 countries.

Among them is high-profile participation from the natural resource rich areas of the Gulf.

Regional giants including Bapco, Abu Dhabi National Oil Company, Kuwait National Petroleum Company, Saudi Aramco, Qatar Petroleum, Petro Rabigh, Sadara Chemical Company, Yanbu Aramco Sinopec Refining Co, Industrialisation and Energy Services Company and Tasnee (National Industrialisation Company) are taking flagship stands.

International service industry majors also maintain a strong presence at Petrotech 2012, with Baker Hughes, Dow, Foster Wheeler, UOP and Yokogawa occupying significant exhibition space. A host of smaller specialist companies consolidate this line-up.

More than 90 technical and poster presentations will be delivered during the parallel conference by leading professionals under this year's theme: Creating Value: Technology, Investment and People.

These presentations will share successful case studies and innovative solutions for common challenges allied to refining and petrochemical technologies, plants of the future and human resources.

"Petrotech 2012 is one of the few dedicated events of its kind in the region. The high quality of the technical programme, speakers and exhibition represent an excellent opportunity to network with key players in the industry, including professionals, researchers, experts, key dignitaries, government officials and leading corporations," Al Shehabi said.

Middle East Petrotech 2012 is organised by Arabian Exhibition Management of Bahrain in conjunction with London-based Overseas Exhibition Services, both members of Allworld Exhibitions.-TradeArabia News Service

Iraq oil exports to hit 2.4m bpd in April

Thu, 26 Apr 2012 06:18:49 GMT

Iraq expects oil exports to reach more than 2.4 million barrels per day (bpd) in April and is planning to export 2.9 million bpd in 2013, its oil minister said on Wednesday.

'Hopefully for this month, we will export more than 2.4 million barrels per day,' Abdul-Kareem Luaibi told reporters, adding the bpd estimate for 2013.

Production at Iraq's West Qurna Phase-2 oilfield is expected to hit 500,000 barrels per day (bpd) in 2014, Luaibi said, as drilling of the first oil well began.

Iraq is expected to be the world's biggest source of new oil supplies over the next few years after signing contracts for big development projects with major oil companies. The supergiant oilfield in the south is managed by Russia's Lukoil.

'This is the first oil well out of 23 wells to be drilled as (part of) the first phase of developing the West Qurna Two oilfield,' Luaibi told reporters while getting ready to climb a rig and press a button to start the drilling.

Iraq's oil production had been held back by decades of war and sanctions, but officials say they now expect it to rise quickly.

The head of state-run South Oil Co. said on Friday output from Iraq's southern oilfields was seen reaching 2.75 million bpd by the end of the year.

Lukoil sealed a 20-year deal to develop the virgin West Qurna Phase-2 oilfield in an auction in December 2009, pledging to boost output to a plateau target of 1.8 million bpd in six years.

Its partner, Norway's Statoil, sold its minority stake in the field last month, making Lukoil the sole foreign partner in one of Iraq's biggest new oil projects.

Lukoil said in a statement that drilling operations at five well pads would occur simultaneously and that wells would be as deep as 5,000 metres. It said total investment in the field would be around $25 billion.

'Production from the oilfield will reach 150,000 barrels per day by the end of 2013 and increase steadily to 500,000 barrels in the second half of 2014,' Sergei Nikiforov, a vice president for development and production at Lukoil told reporters at West Qurna, 80 km (53 miles) north of the southern oil city of Basra.

West Qurna-2 is the world's second-largest undeveloped field with recoverable oil reserves of around 14 billion barrels, according to Lukoil.

South Korea's Samsung Engineering signed a $1 billion oilfield service contract with Iraq for the field last month, part of an initial development plan to start production at the field. – Reuters

RAK Petro announces third year of profit

Thu, 26 Apr 2012 06:18:48 GMT

RAK Petroleum, a leading oil and gas exploration and production company, has announced its third consecutive year of profitability registering a Dh15.7 million ($4.27 million) full year net profit for 2011.

Announcing the results for the year ended December 31, 2011, RAK Petroleum said the company recorded a net profit from operations before one-off write downs of Dh75.2 million for 2011, excluding associated company results.

Taking into account the company’s 30 per cent share of DNO International’s profit in 2011 of Dh128.7 million, RAK Petroleum’s net profit before one-off write downs was Dh203.9 million.

The write downs taken at year end 2011 totalled Dh188.2 million following a review of the exploration licenses and consistent with the merger valuation of the company’s assets, it added.

“During 2012, the company has entered a new phase with our transformation to an energy investment company with exposure to 17 licences in seven countries across the Mena region,” said Bijan Mossavar-Rahmani, chairman of the board of directors and RAK Petroleum CEO, speaking ahead of the company’s ordinary general meeting to be held in Ras Al Khaimah on Thursday.

The company had increased its ownership stake in DNO International ASA from 30 to 42.8 per cent following the merger of RAK Petroleum’s operating subsidiaries into DNO International, a transaction approved by both companies’ shareholders in 2011 but with legal closure on January 10.

DNO International is a publicly traded Norwegian oil and gas company with assets predominantly in the Middle East (Kurdistan Region of Iraq, Yemen, Oman, UAE and Tunisia).

Under equity accounting rules for associated companies RAK Petroleum assumes a proportionate share of DNO International’s profit and loss in its own financial results.-TradeArabia News Service

Siemens wins big Iraq power plant deal

Wed, 25 Apr 2012 06:36:14 GMT

Siemens said it has won a major order from Iraqi Ministry of Electricity to supply the control and instrumentation system, field equipment and steam turbine generator spare parts for the country's largest power plant at Al Mussaib.

Upon completion in 2013, the plant will have improved output, increased efficiency and will provide reliable power to help meet the rising electricity demand for the people of Iraq, the company said in a statement.

Siemens said the scope of supply includes new rotating elements for the four 320-megawatt (MW) steam turbines, generator rotors and the complete instrumentation and controls system.

The latest order follows the successful rehabilitation of the control system in unit 2 in 2009 and unit 1 in 2010, it added.

In addition to this, Siemens has also signed two separate contracts with Iraq’s Ministry of Electricity for gas-insulated switchgear (GIS) substations as part of the ministry’s plans to upgrade its 132-kV power transmission network.

Under the first contract, Siemens will supply and carry out civil and supervision works on six 132/33-kV GIS substations at various locations in the country.

The second contract covers the construction of another six 132/33-kV GIS substations on a turnkey basis in Iraq. The contracts for the substations are due to be completed by October 2013, the energy giant said.

Commenting on the deal, Dietmar Siersdorfer, Siemens Energy CEO, Middle East, said, “Iraq is facing acute and critical challenges in providing reliable power to all the country's residents and Siemens is fully committed to assisting the Ministry of Electricity in meeting those challenges.”

“We have a long history in Iraq and the wider Middle East, and understand that this is an issue of utmost importance to the Ministry and the people of Iraq. With our complete portfolio of proven products and service solutions, we are well-positioned to address this issue.”

In addition to the latest order for Al Mussaib power station, Siemens also performed the renovation of the control system in the Al Hartha power station near Basrah in 2010, which was destroyed by a fire.-TradeArabia News Service

Cyber 'attack' hits Iran oil industry

Wed, 25 Apr 2012 06:36:14 GMT

Iran is investigating a suspected cyber attack on its main oil export terminal and on the Oil Ministry itself, Iranian industry sources said on Monday.

A virus was detected inside the control systems of Kharg Island, the country's largest crude oil export facility, but the terminal remained operational, a source at the National Iranian Oil Company (NIOC) said.

The virus, which is likely to be compared to the Stuxnet computer worm which reportedly affected Iranian nuclear facilities in 2009-10, struck late on Sunday.

It hit the internet and communications systems of Iran's Oil Ministry and of its national oil company, the semi-official Mehr news agency reported. Computer systems controlling a number of Iran's other oil facilities have been disconnected from the Internet as a precaution, the agency added.

Hamdullah Mohammadnejad, the head of civil defence at the oil ministry, was reported as saying Iranian authorities had set up a crisis unit and were working out how to neutralise the attacks.

IT systems at the oil minstry and at the national oil company were also disconnected to prevent the spread of any virus, the Mehr news agency said. The oil ministry's own media network, Shana, quoted a spokesman as saying no major damage had been sustained.

Iran's nuclear programme is thought to be the principal target of the Stuxnet worm - discovered in 2010 - the first virus believed to have been specifically designed to subvert industrial systems.

US-based think-tank, the Institute for Science and International Security (ISIS), said that in late 2009 or early 2010 about 1,000 centrifuges - machines used to refine uranium - out of the 9,000 used at Iran's Natanz enrichment plant, had been knocked out by the virus - not enough to seriously harm its operations.

Iran also identified damage inflicted by a similar virus aimed at disrupting industrial processes, called Duqu.

Experts say Duqu appears to be designed to gather data to make it easier to launch future attacks and that very few organisations could have written such complex programs.

Most of the world's oil facilities are controlled by computers, but some processes can be controlled manually when necessary. A shipping source with knowledge of operations at Kharg Island said that NIOC has been prevented from sending out the crude loading programme at the terminal. -Reuters

Gas row not political, say Israel, Egypt

Wed, 25 Apr 2012 06:36:14 GMT

Israel's prime minister has played down Egypt's termination of a gas supply deal after the Israeli finance minister said the move cast a shadow over the peace agreement between the two countries.

Prime Minister Benjamin Netanyahu said the cancellation of the contract supplying Israel with 40 percent of its gas needs, announced on Sunday, resulted from a business rather than a diplomatic dispute.

Egyptian officials also said it was a trade issue, although there have been growing public calls for Egypt to review ties with Israel since the overthrow of Hosni Mubarak, for whom a peace treaty with Israel was a cornerstone of regional policy.

Minister of International Cooperation Faiza Abu el-Naga said the Israeli side was welcome to negotiate a new contract.
Questions over Cairo's attitude to Israel after the dramatic political changes in Egypt appeared anew in the Israeli media, with one headline, in the popular Yedioth Ahronoth daily, reading: "They don't want us".

Egyptian politicians welcomed the move to end a deal heavily criticised even under Mubarak. Opposition media and the public accused his government of giving Israel preferential pricing and using the deal to benefit his allies.

Israeli officials say gas has not flowed from Egypt to Israel for most of this year due to a series of attacks on the pipeline running through Egypt's volatile Sinai peninsula.

Israel has turned to more expensive fuel supplies and has warned residents to expect electricity outages this summer.

"We don't see this cut-off of the gas as something that is born out of political developments," Netanyahu told reporters.
"It's actually a business dispute between the Israeli company and the Egyptian company."

Two Israeli officials made a brief trip to Cairo on Monday for talks on the gas deal, Cairo airport sources said, and Egypt's ambassador met Israeli Deputy Foreign Minister Danny Ayalon to "provide clarifications", Israeli media reported.

Israeli Foreign Minister Avigdor Lieberman said in a radio interview that Israel was interested in maintaining its peace treaty with Cairo and he believed "this is also a supreme interest of Egypt".

Egypt was the first of two Arab countries to sign a peace treaty with Israel, in 1979, followed by Jordan in 1994 and the gas deal was the most significant economic agreement to follow. - Reuters

OSBV records 40,000 personnel transfers

Wed, 25 Apr 2012 06:36:13 GMT

Offshore Solutions BV (OSBV), a leader in heave-compensated marine access systems, has achieved more than 40,000 safe personnel transfers from a vessel to offshore platforms on its Offshore Access System (OAS) in the Gulf.

The company, a joint venture between AMEC and Cofely Nederland NV, has also recently secured two new contracts with major operators in Qatar for the safe transfer of personnel to and from offshore platforms, bringing the total of OAS units in the Middle East to three.

This underlines the benefits of the OAS in maintaining operational efficiency, particularly in the adverse weather conditions Qatar experiences over the winter months, during which time the ability to transfer personnel to an offshore installation by helicopter or boat landing is severely restricted, a statement said.

It is the only heave-compensated gangway on the market that can remain permanently connected to an offshore installation in sea states of up to three metres significant wave height, the statement added.

With six years global experience, the company’s OAS has made in excess of 7,700 operational connections and transferred more than 123,000 personnel.

Lindsay Young, managing director of OSBV, said: “We continue to build on our impressive track record offshore Qatar, with three units now in the country. These latest successes for the OAS highlight the effectiveness of the system in The Gulf and its ability to ensure continued operations in challenging conditions.”

“The operational and safety benefits of the OAS are widely recognised. It can dramatically improve efficiency and optimise the workforce, which will ultimately lead to considerable cost reductions,” he added.

Offshore Solutions has been operating in Qatar since 2010, and as a result of growing demand for the OAS in The Gulf, the company has underlined its commitment to the region by registering a branch office in Qatar.

“We have been continually developing our business in Qatar since our first contract with Shell”, Young continued.

“The three units, and potential of more before the end of this year, have secured our position in the Middle East and our base in Qatar will allow us to capitalise on these opportunities and grow the business further.” – TradeArabia News Service

Iran 'squeezed by Asia oil import cutbacks'

Wed, 25 Apr 2012 06:36:13 GMT

Virtually every day there is news on how Iran's oil exports to Asia are being squeezed by Western sanctions, but the question that still remains unresolved is just how much pain is Tehran feeling.

The latest sign that Iran may be starting to feel the pinch is that half of the Islamic Republic's tanker fleet is being used for floating storage, presumably because buyers for cargoes can't be found, says Clyde Russell, a Reuters market analyst in an article.

As much as 33 million barrels of oil are being held on tankers and shore-based storage at Iran's main Kharg Island terminal is also said to be full at 23 million barrels.

Add to this reports of declining purchases by major buyers China, Japan, South Korea and India, the threat of a total European ban on imports from July and the difficulty of insuring cargoes even for countries still willing to buy and you would think Iran's rulers might start getting concerned.

The National Iranian Oil Company, like most state-controlled producers, isn't exactly forthcoming in what it says publicly, but what it has acknowledged is that its exports have dropped to 2.1 million barrels a day, down from 2.3 million in the year ended March 19.

A decline of only 200,000 barrels a day sounds too small, based upon what buyers of Iranian crude are stating. Based on latest figures, it would appear that China, South Korea and Japan, the major Asian buyers of Iranian crude, have cut imports by a combined 600,000 barrels a day.

This includes a 54 percent cut by China in March to 253,000 barrels a day, an almost 40 percent drop in March by South Korea to 154,000 barrels a day and reports that Japan is cutting its April imports to 75,000 barrels a day, a cut of as much as 77 percent from the first two months of 2012.

Add to this smaller reductions by India and other nations, such as South Africa, and it would appear that Iran should be able to sell not much more than 1.5 million barrels a day from this month onwards, and potentially much less if Europe does push ahead with its ban.

Of course, the above numbers assume everybody is being 100 percent honest, and that Iranian crude isn't being transshipped, blended in offshore storage or any other myriad of ways to circumvent Western sanctions.

Certainly, if you talk to oil traders, everybody denies they are doing anything dodgy, as you would expect, but some will acknowledge that it's possible to get around sanctions if you are determined enough.

But even if Iran is still managing to shift its oil, the costs of doing so must be rising, and the revenue is also likely to be falling as Tehran is forced to offer bigger discounts.

If it's accurate that Iran is losing about 600,000 barrels a day in exports to Asia, that amounts to $660 million a day in lost revenue, assuming a price of $110 a barrel. This equates to more than $24 billion a year, and this doesn't include the impact if Europe does go ahead and ban the import of the 700,000 barrels a day of Iranian oil it had been purchasing.

Some of this lost revenue will have been offset by higher crude prices, with Brent having gained 10.2 percent so far this year, although the current price of around $118 a barrel is down from the peak this year above $126 in early March.

If you further assume that the dispute over Iran's nuclear program had never happened, then a reasonable scenario would be Iranian exports of about 2.3 million barrels a day and an oil price of about $100. This yields annual revenue around $84 billion, so if Iranian export losses are 600,000 barrels a day at a cost $24 billion a year, it means Tehran is foregoing more than a quarter of its potential oil revenue.

Is this enough to hurt the government badly enough for it to seek ways of compromising on its nuclear activities, which Iran claims is entirely for civilian power generation, while Western nations fear it is aimed at developing weapons. The answer to that question may come at the next round of talks between Iran and world powers, scheduled to be held next month in Baghdad. -Reuters. (Clyde Russell is a Reuters market analyst. The views expressed are his own.)

Iran oil ministry 'fends off' cyber attack

Wed, 25 Apr 2012 06:36:13 GMT

The Iranian oil ministry said on Tuesday its IT systems had suffered no lasting damage from a suspected cyber attack, but its experts would require two or three days to investigate and address the impact of the virus.

The virus hit the internet and communications systems of the oil ministry and national oil company late on Sunday, forcing Iran to disconnect the control systems of Kharg Island, which handles the vast majority of Iran's crude exports, and a number of other oil facilities.

'Fortunately, because of the rapid measures taken by our experts, this ministry has sustained no damage to its computer data,' the head of the ministry's civil defence team, Hamdullah Mohammadnejad, said.

Iranian state news agency Irna quoted him as saying the cause of the problem was being identified and it would take two to three days for the issue to be resolved.

'All units with the oil industry back up their data on a daily and long-term basis. But in cases where information has been impaired to any extent, the backup data is being replaced,' he added.

The oil ministry set up a crisis unit and disconnected IT systems at its headquarters, the national oil company and at its oil terminals but said all operations units continued to function normally. An industry source said oil was being loaded at Kharg island on Tuesday.

'Fortunately our international oil selling division has not been affected,' Irna quoted a senior ministry official as saying in an earlier report. 'There is no panic, but this shows we have shortcomings in our security systems.'

The virus is likely to draw comparisons with the Stuxnet computer worm which affected Iranian nuclear facilities in 2009-10. Iranian officials have accused the US and Israel of trying to sabotage its nuclear programme through viruses like Stuxnet.

Security specialists say the latest problems in Iran's IT systems could be an attempt to impair Iran's ability to trade in oil, or might even have been a technical failure.

The US and its allies have imposed increasingly tough sanctions against Iran's oil industry over its nuclear programme, which they believe is geared towards producing nuclear bombs. Iran says the nuclear programme is for peaceful purposes only.

EU member states have significantly reduced any orders of Iranian oil in anticipation of a total ban set to be implemented across the European Union in July. - Reuters

Iraq exports first oil cargo from new terminal

Wed, 25 Apr 2012 06:36:13 GMT

Iraq exported its first cargo of crude oil of two million barrels from its second new floating terminal in the Gulf on Tuesday, shipping data tracked by Reuters showed.

Data showed the A Whale vessel left the second new floating Single Point Mooring (SPM) terminal to deliver the crude to India's state-run Indian Oil Corp. – Reuters

Iran has huge problems on oil exports: Gunvor

Wed, 25 Apr 2012 06:36:12 GMT

Iran is experiencing "huge problems" exporting oil but there is unlikely to be a sharp drop in volumes after the European Union oil embargo comes into effect from July 1, the chief executive of oil trader Gunvor said.

Western financial sanctions have already cut into Iranian oil exports but there is considerable uncertainty over how the EU restrictions, due to take full effect in July, will impact the Islamic Republic's global sales.

As well as making Europe's around 740,000 barrels per day of imports illegal, it will also prohibit EU insurers from covering Iranian oil exports anywhere in the world.

Asked about Iranian oil exports, Torbjorn Tornqvist said on the sidelines of an FT commodities conference: "They have huge problems. The Iranians are suffering...It's going to be a gradual thing though. There won't be anything major in July."

He added that Iran will be the single most important factor determining oil prices in 2012. Geneva-based Gunvor does not trade Iranian oil, he said.

Tornqvist said that global oil supplies are now more comfortable than at the start of year but said he does not expect futures prices to move into contango, a market structure typically associated with ample supplies.

"Oil stocks are much more comfortable now. Maybe there will be a mini contango at the front but along the curve, I doubt there will be a contango," he said.

Swiss-based Gunvor, co-owned by a Russian tycoon, said it had no plans to purchase further refining assets in Europe after agreeing to buy the Belgian plant of insolvent refiner Petroplus in early March. He said the plant will continue to process oil under Gunvor ownership and will not be converted to a storage terminal.

"We will run it as a refinery. It fits perfectly into our trading business at the moment," he said. "But refining is not an easy business and we still see structural overcapacity in Europe." - Reuters

Tihama Power to expand Saudi plants

Mon, 23 Apr 2012 10:42:48 GMT

International Power and Saudi Oger have announced the signing of Energy Conversion Agreements (ECAs) for an expansion of their joint venture Tihama's power plants in Saudi Arabia.

The expansion follows an award from Saudi Aramco. International Power is owned 70 per cent by GDF Suez.

The expansion of 532 MW and 868 tons/hr of steam at three of Tihama’s four sites - Ju’aymah, Shedgum and Uthmaniyah - located at Saudi Aramco’s gas and oil refineries will be backed by long-term ECAs through to 2026.

Engineering, procurement and construction will be carried out by Hyundai Heavy Industries of South Korea and General Electric will supply the gas turbines.

Importantly, the technology to be used for the expansion will ensure additional power output with lower carbon footprint. Construction at all three sites is expected to start in May 2012 with a phased commencement of commercial operations between late 2014 and mid 2015.

Shankar Krishnamoorthy, president and CEO of IPR-GDF Suez Middle East, Turkey & Africa, said: “We are delighted with the continued trust that Saudi Aramco has placed in Tihama Power. This expansion of Tihama Power further consolidates International Power’s leadership position in the Middle East market. It also further enhances the contracted portion of our global asset portfolio and demonstrates our commitment and flexibility to meet the exacting standards of performance that valued customers like Saudi Aramco expect from International Power.”

Joseph Aboudiwan, head of Saudi Oger Utilities Division, said: “Saudi Oger’s active role in the development of this expansion underscores our deep commitment to the realization of private utility schemes in the Kingdom of Saudi Arabia and regionally. We would like to take this opportunity to thank our valued client Saudi Aramco for their trust in Tihama Power, and thank Tihama Power's management and staff for building this trust over the years.

'As a major shareholder in Tihama Power, Saudi Oger is committed to ensuring that this expansion is successfully completed to the full satisfaction of Saudi Aramco.”

The joint venture of International Power and Saudi Oger was originally awarded four 20-year ECAs by Saudi Aramco in 2003 to develop, own and operate four cogeneration plants in Saudi Arabia. The existing four cogeneration plants have a total generating capacity of 1,063 MW and 2,000 tons of steam per hour.

The plants were commissioned in 2006 under a special purpose vehicle company, Tihama Power Generation Company, owned 60 per cent by International Power and 40 per cent by Saudi Oger. -- TradeArabia News Service

$38 trillion 'needed to meet energy demand'

Mon, 23 Apr 2012 10:42:48 GMT

The global energy industry must invest a whopping $38 trillion to build the energy supply infrastructure by 2035 to keep up with an added 40 per cent rising energy consumption in the same time span, said a report by World Economic Forum (WEF).

The energy systems of 124 countries are currently not ready for a transition to a sustainable and secure energy architecture required to harness economic growth, the WEF stated in its report 'New Energy Architecture: Enabling an Effective Transition,' released today.

WEF pointed out that the existing energy architecture was inadequate for balancing economic, environmental and energy security needs and added that country-specific approach was needed to enable effective transformation.

The way energy is produced, distributed and consumed is currently undergoing fundamental change of almost unprecedented proportion, it added.

The report, produced in collaboration with Accenture, revealed that countries which are managing the transition to a new energy architecture will have to deal with trade-offs and difficult choices, ranging from Germany’s nuclear shutdown following the Fukushima disaster and Nigeria’s removal of energy subsidies, to France’s ban on hydraulic fracturing.

According to the report, petro-states continue to struggle to maximize the value of their assets in a sustainable manner that supports economic diversification.

The countries in the developing world, meanwhile, are focusing on economic growth and development, often at the expense of environmental sustainability, while a number of nations continue to struggle to supply citizens with basic energy needs; estimates show that 1.3 billion people worldwide are still without access to electricity at all, it added.

“Never before have we experienced such pressure for change in the way we source, supply and consume energy,” explained Roberto Bocca, senior director, head of energy industries, WEF.

“Decision-makers must understand how they are being impacted by the changing dynamics and how they can effectively create desired change, especially as the choices they make will determine the speed, direction and cost of the transition,” he remarked.

Two in-depth country studies on India and Japan highlight practical applications that can lead to a new energy architecture.

The study on India underlines the challenges posed by supply bottlenecks, which present a considerable risk to the nation’s growth story, and suggests that India considers creating a unified energy regulator to support the expansion of its renewables sector, promote the development of decentralized distribution and generation to expand energy access, and rationalize energy prices through the gradual phase-out of subsidies.

The study on Japan underlines the “crisis of confidence” currently faced in its energy sector and suggests that the country considers establishing a fully independent regulatory agency, complete a full cost benefit analysis of market liberalization in the electricity sector and support the development of pan-Asian energy infrastructure.

“The scale and complexity of the energy industry demands a patient and incremental approach to managing change,” remarked Arthur Hanna, the managing director, Energy Industry, Accenture, United Kingdom, and member of the WEF’s Global Agenda Council on New Energy Architecture.

“Our approach helps nations take stock of their energy architecture challenges and identify practical and cost-effective solutions,” he noted.

The New Energy Architecture report outlines a methodology designed to assist decision-makers in driving an effective transition.

While there is no one-size-fits-all solution, the report highlights different archetypes of change for nations to: rationalize and re-organize their mature energy systems; capitalize on significant hydrocarbon reserves; grow their energy supply to support economic expansion; and access basic energy services at affordable prices.

To achieve long-term objectives countries within each of the archetypes, enabling environments need to be created through policy initiatives, technology, infrastructure, market structures and human capacity, all connected by the flow of information., said the report.-TradeArabia News Service

Egypt firms cancel gas deal with Israel

Mon, 23 Apr 2012 07:10:53 GMT

Egyptian energy companies, citing a trade dispute, have terminated a deal to supply Israel with natural gas in a step that may further erode bilateral ties strained by a popular revolt that toppled president Hosni Mubarak last year.

An Israeli partner in the business made the step public on Sunday but an Egyptian firm said the decision to cancel the deal had been made on Thursday.

Israel, which relies on Egypt for 40 percent of its natural gas supply, worried about facing further energy cuts after a series of sabotage attacks on the pipeline running through the volatile Sinai peninsula contributed to shortages.

Israeli Finance Minister Yuval Steinitz expressed "great concern" about the suspension, saying it had set "a dangerous precedent which casts a shadow on the peace agreements and the peaceful atmosphere between Egypt and Israel".

Egypt was the first of two Arab countries to sign a peace treaty with Israel, in 1979, followed by Jordan in 1994.

The Egyptian decision was announced in Israel by Ampal-American Israel Corporation, partner in the East Mediterranean Gas Company (EMG), which operates a cross-border pipeline supplying gas to Israel.

Ampal said the Egyptian General Petroleum Corporation and Egyptian Natural Gas Holding Company had told EMG they were "terminating the gas and purchase agreement".

The company gave no reasons for the Egyptian decision but said legal redress was under consideration. "EMG considers the termination attempt unlawful and in bad faith, and consequently demanded its withdrawal," Ampal said in a written statement.

Mohamed Shoeib, chairman of the Egyptian company EGAS, confirmed the decision, saying the 20-year-old deal with Israel had been terminated on Thursday. Shoeib told Egypt's Hayat TV that "EGAS ended the deal because the other party didn't fulfil its commitments".

The Egyptian decision followed a dispute over damages caused by a series of blasts on the pipeline supplying Israel, via the Sinai desert region on its border where lawlessness has risen since President Hosni Mubarak's overthrow in 2011.

Explosions have caused extensive disruptions in service in the past year, and Israel has warned residents to expect electricity outages in high demand summer months, and that it needed to speed up efforts to seek alternative supply lines.

Ampal and two other companies have been seeking $8 billion in damages from Egypt for not safeguarding their investment against the pipeline blasts.

It said EMG "initiated arbitration" against EGPC and EGAS last October, accusing the Egyptian firms of a "longstanding failure to supply the gas quantities owed".

Ampal said in its statement on Sunday that in light of the cancellation, EMG, Ampal and EMG's other international shareholders were "considering their options and legal remedies as well as approaching the various governments" concerned.

Shoeib denied the decision bore any diplomatic significance. "It is a trade dispute not a political issue," he said. - Reuters

Dewa defers $1.3bn power project indefinitely

Sun, 22 Apr 2012 11:11:47 GMT

Dubai Electricity and Water Authority (Dewa) said it has deferred plans to build the $1.3 billion Hassyan independent power and water project, citing increased efficiency at existing power plants.

"The Hassyan power plant project can be deferred until a later date," the state company said, adding that it had raised power production capacity elsewhere while demand growth had slowed.

Demand for cooling and fresh water have driven rapidly rising use of electricity in Dubai. But the government has been forced to reassess many of its projects following its standstill debt announcement in 2009.

Located 60 km south-west of Dubai in the United Arab Emirates, the Hassyan power and water complex was expected to have a total production capacity of 900 megawatts of power and 720 million gallons per day of desalinated water.

The government of Dubai owns DEWA, while the Dubai Supreme Council of Energy is responsible for ensuring energy supplies in the emirate.

Abu Dhabi National Energy Company in December identified itself and its consortium partners Marubeni of Japan and South Korea's SK E&S Co Ltd as the lowest bidders for the project.

"We are still waiting to hear the consequences of this decision from them," said Taqa spokesman said on Thursday, without elaborating.

Some bidders said the decision may even damage the government's future project plans. "It's disappointing. In the future bidders may think twice," said an executive from one of the international companies that had bid for the project.

The Hassyan project had attracted a lot of interest from banks and was the government's first use of the public-private partnership (PPP) model to fund construction of a project.

Dubai has also launched plans to build a solar park with a potential capacity of 1,000 MW to help reduce its energy imports. The first solar plant in the park will have a capacity of 10 MW and is planned to commence operations by end-2013. – Reuters

Exxon dropped from Iraq rights bidders

Sun, 22 Apr 2012 11:11:47 GMT

US energy giant Exxon Mobil Corp is not on the finalised list of 47 pre-qualified bidders for the next round of Iraq energy exploration rights, a statement posted on the oil ministry website showed on Thursday.

The world's largest publicly traded energy company was still on the list in early February but has since been removed, while Syrian General Oil has been added as a pre-qualified bidder.

'The Final Tender Protocol and the definitive model Contract have been issued to all prequalified companies,' Abdul Mahdy Al-Ameedi, director general of the Petroleum Contracts and Licensing Directorate (PCLD), said in a statement.

'We are looking forward to welcoming all participating companies in Baghdad.'

Exxon has angered Baghdad by signing an exploration deal with the Kurdistan Regional Government (KRG), which the central government considers illegal.

Last year Iraq's Oil Ministry excluded US-based Hess Corp from competing in the auction after it signed deals with the KRG. Iraq's oil and gas fields have suffered from decades of neglect because of war and economic sanctions.

The bidding for 12 new exploration blocs, which has been repeatedly delayed but is now due to be held May 30-31, is expected to add 29 trillion cubic feet of gas and 10 billion barrels of oil to Iraqi reserves.

Iraq improved the terms of the blocks in February after complaints by several prospective bidders that the deals were unattractive.

The upcoming auction will focus mainly on gas exploration rights, and the blocks are mostly in remote parts of western and central Iraq, making them riskier investments since the sites are harder to protect against insurgent attacks.

Companies will be able to extract gas discovered in the blocks immediately, but the Iraqi government has retained the option to prevent companies from extracting oil in exchange for paying them compensation.

Exxon, which has a large and growing portfolio of conventional and unconventional gas assets around the world, many in far less challenging environments than Iraq, was unavailable for immediate comment. – Reuters

Yemen LNG to return to normal exports in May

Sun, 22 Apr 2012 11:11:47 GMT

Six cargoes of liquefied natural gas exports from Yemen LNG had to be cancelled due to the attack on its supply line last month, but all cargoes will be loaded on schedule in May, Yemen LNG said in a statement on Thursday.

The company said it expects to complete its annual maintenance shutdown on Friday, nine days ahead of the original schedule, which was brought forward after the gas line was sabotaged on March 30.

"We will increase LNG production to redeliver as much of the cancelled cargoes as possible before year end," Yemen LNG General Manager Francois Rafin said.

"We are confident in the prompt reinforcement of the surveillance and protection of the pipeline; the mobilization of a new security deployment is already in progress."

Yemen's oil and gas pipelines have been repeatedly sabotaged since anti-government protests last year created a power vacuum that militants have exploited.

It is not clear if the pipeline has been repaired yet and the company was not available for immediate comment. – Reuters

Adnoc to build fuel terminal in Sharjah

Sun, 22 Apr 2012 11:11:47 GMT

Abu Dhabi National Oil Company (Adnoc) is to start building an oil products import terminal in Sharjah in June, industry sources said.

This will help meet demand for power and vehicle fuel in the poorer northern parts of the UAE.

Drivers in the northern emirates, many of whom have long suffered from mid-summer power cuts thanks to fuel shortages, have faced long queues to fill up at Adnoc's gas stations since Dubai-based Enoc pulled out last June.

Adnoc, which can sell fuel below international prices thanks to its big upstream business in Abu Dhabi, is to build the fuel import terminal in the port of Hamriyah over the next two years to meet strong demand in northern parts of the country.

"Adnoc is supplying the power stations in the northern emirates but currently they're supplying via trucks from Jebel Ali," a Hamriyah shipping industry source said. "Once they have their facility here it will be easier.
Hamriyah port has easy access to all of the northern emirates.
They will supply to power stations and pump stations."

Adnoc has been trucking fuel from the port to the southeast of Dubai to power plants in the northern parts of the UAE for years and a Gulf terminal offers a convenient bypass around busy Dubai.

Adnoc has appointed Abu Dhabi Oil Refining Company (Takreer) to build the terminal in Sharjah's Hamriyah free zone that will include oil storage tanks and a jetty for oil products.

China's Sinopec has been awarded one engineering procurement construction (EPC) contract for the project, which includes building a terminal with 12 storage tanks capable of holding 241,000 cu m of fuel in total.

A Takreer official said Sinopec was expected to start work within two months and that the project should be completed and handed over to owner Adnoc Distribution by end-2014. - Reuters

Iraq unveils oil, gas exploration auction details

Sun, 22 Apr 2012 11:11:47 GMT

Baghdad has unveiled a list of signing bonuses and the final contract for a forthcoming energy auction, the latest stage in a bold oil expansion plan that moves on from developing existing oilfields to searching for new reserves.

After targeting production capacity in three post-war licensing rounds, Baghdad is now focusing a fourth tender mostly on finding gas in remote parts of western and central Iraq.

The country is potentially one of the world's last great unexplored territories after decades of neglect due to wars and sanctions.

According to a 'Final Tender Protocol' obtained by Reuters, the 12 oil and gas exploration blocks up for grabs on May 30-31 could net the central government up to $235 million in non-recoverable signing fees if they are all taken up.

Those companies awarded contracts will each be obligated to spend a minimum of $90 million to $130 million, depending on the block.

Companies will be able to extract gas discovered in the blocks immediately, but the Iraqi government has retained the option to make companies wait up to seven years to start extracting oil and pay them compensation in exchange.

The auction was repeatedly pushed back as potential bidders had strong complaints about the terms of the initial service contract. Baghdad made some improvements in February.

'It was a move in the right direction, but there is still potential for a delay in development - especially if oil is found,' said a senior oil executive. The definitive model contract issued on Friday has only minor changes compared with the draft, said an Iraqi oil official.

'The economic terms in the final contract are more lucrative and favourable to the foreign firms compared to the service contracts of the previous rounds,' he said.

US oil major Exxon Mobil did not make the final list of 47 pre-qualified bidders for the fourth round, because it had signed a deal with the semi-autonomous Kurdish north.

But Exxon, along with other companies that have existing Iraqi licenses such as BP, Eni and Royal Dutch Shell, may look to explore for oil below and beside their existing oilfield projects, instead of competing for new assets.

Total has also provoked Baghdad by expressing interest in Kurdistan. But Chief Executive Christophe de Margerie, long a critic of Iraq's service contracts, said the French major will not seek deals in the exploration round.

'The majors that participated and were successful in the (first three) oil rounds have their fill of southern Iraq by now,' said a Western oil company source.

The fourth round could present an opportunity for those not involved in Iraq's upstream such as oil major Chevron, for trading companies and Middle Eastern energy firms.

'There are a number of newcomers on the shortlist that have lots of money,' said a Western industry source.

Following its earlier oil licensing rounds, Iraq raised its proven oil reserves by 25 percent to 143 billion barrels, and experts say tens of billions of barrels are still to be found.

Baghdad now wants to prove up even more. The 12 blocks on offer are expected to add 29 trillion cubic feet of gas and 10 billion barrels of oil to reserves.

The government is also keen to show that it is tackling an acute power crisis by searching for more gas.

Industry sources say the potentially gas-rich blocks on offer are attractive but that Baghdad has no clear strategy for the transport and use of any resulting gas production, which could make some loath to bid.

Political instability in nearby Syria, a destination and transit route for proposed gas pipeline exports, may also give some investors cold feet.

Iraq already has significant volumes of associated gas that are produced alongside oil at the giant southern fields of Rumaila, West Qurna-1 and Zubair. But most of that is flared. For those hoping to find oil, the big prize is Block 9 in the southeast near the border with Iran.-Reuters

Qatar fund boosts stake in Total

Sun, 22 Apr 2012 11:11:46 GMT

Qatar Holding, a unit of the Gulf nation's sovereign wealth fund, has increased its stake in French oil group Total to 3 per cent and is undecided on buying more shares, Qatar Holding's chief executive said on Sunday.

'This is good for both sides - it is good to be in Total. They have a huge investment in Qatar,' Ahmad al-Sayed told reporters on the sideslines of a conference.

'It is very open. We haven't decided yet,' he said when asked if Qatar would buy more in Total.

In mid-March, business newspaper Les Echos reported that Qatar had bought 2 per cent of the company, becoming one of its leading shareholders.-Reuters