Iran New Fuel Production Lines

With the presidential inauguration of 14 new fuel production lines in the Lavan facility, the capacity of Iran’s production of Euro-4 grade gasoline at the oil refinery will reach 2,800,000 barrels per day.

Additionally, the daily oil refinery capacity at the Lavan field will increase from 30,000 barrels to 60,000 with the launch of the new development projects.

Referring to major expansion of domestic gasoline production, President Ahmadinejad stated that “this commodity is so significant that ill-wishers of the Iranian nation once imposed a massive eight-year war and in other instances imposed sanctions on their gasoline sales [to Iran] to halt the [progress of] nation,”

The president further emphasized that the Iranian oil industry used to be dependent on foreign assistance and equipment imports, but the “oil industry has experienced major developments since the victory of the Islamic Revolution and particularly in recent years.”

According to executives at Lavan Refinery, with the launch of the new treatment facility, the production of liquefied gas will surpass 200 tons, jet fuel production will climb to one million liters, and the production of sulfur granule would soar to 30 tons per day.

Iran attained self-sufficiency in fuel production after its international suppliers stopped selling gasoline to Tehran under US pressure.

With over 137 billion barrels of proven reserves, Iran has the world’s fourth largest oil reserves. Its gas reserves are also estimated at more than 29 trillion cubic meters.


Oil and gas prices First Half, 2013

A general price rally for crude and petroleum products gained strength June 27 with crude up 1.6% in the New York futures market, but the front-month natural gas contract fell 3.4% after the Energy Information Administration reported a bearish injection last week.
Oil prices were up in early trading June 28 during the last market session for the first half of this year. Trading often is volatile when a month, a quarter, and a half-year all end in the same session. But markets appeared relatively calm compared with volatile activity in recent weeks.

“Now that the unfounded demand optimism that began the year has been priced out . . . the outlook for global crude oil demand appears modestly supportive of prices,” said Marc Ground at Standard New York Securities Inc., the Standard Bank Group. “The resilience of the US consumer in the face of the country’s various fiscal hurdles bodes well, although we would warn against extrapolating the recent and abrupt pick-up in some economic indicators.” He expects West Texas Intermediate to average $96/bbl in the third quarter, with North Sea Brent averaging $105/bbl.
Analysts with Barclays Capital Commodities Research said, “The demand side of the equation for crude oil markets does face some speed bumps in terms of tightening balances in our view, which could slow the process of price retracement in the second half of the year. Natural gas prices continued to edge lower this week, with the August contract falling 4.6% [from the previous week] and dropping below $3.75/MMbtu despite a warmer forecast for the near term.”

Chinese demand for crude should hold steady, but “further slowing of China’s economy is a non-negligible risk to our current prediction,” Ground reported. “Renewed sovereign debt problems in the Euro-zone economy also pose another downside risk, although our baseline sees a modest improvement in the region’s economic activity.”
On the supply side, the Organization of Petroleum Exporting Countries seems comfortable with current prices as ministers voted at their last meeting to hold the official production ceiling at 30 million b/d—“leaving the oligopoly as a relatively neutral factor for now,” Ground said. “Ample OPEC spare capacity as well as generous global inventory levels (particularly in the US) should also prevent prices from running away should the global growth outlook improve more significantly than we predict. Some support for prices on the supply side over the coming quarter could be a tighter North Sea market due to heightened maintenance over the summer, and, in our view, slower US production growth in the face of likely disruptions.” The US climatological center predicts a more intense hurricane season this year.

Geopolitical threats to supply also remain ever present. However, Ground said, “Unless there is a significant increase in the likelihood that other oil-producing countries in the region will be drawn into the Syrian conflict, [price] rallies on news-flow surrounding this issue should fade. If anything, the geopolitical premium might ease, given that Iran’s new president appears more moderate, opening the way to perhaps a more conciliatory approach in negotiations surrounding the country’s nuclear program and the possibility of a lifting of sanctions.” But uncertainty remains prior to the president-elect taking office Aug. 3.

“The run-up to and then the Federal Reserve Bank’s actual tapering of quantitative easing, most likely to begin in September, should keep upward pressure on the dollar,” Ground predicted. “This we believe will keep upside in oil prices, premised on an improving demand story, contained. In fact, we view the dollar’s reaction (and the related reaction in interest rates) to a paring in Fed bond purchases as a major downside risk to our price forecasts. A trimming of quantitative easing might also dampen the enthusiasm of the speculative market, although we feel that investor interest could be maintained if tapering is accompanied by an improving crude oil demand outlook.”

In other news, Barclays Capital analysts reported, “Discounts on Canadian crude oil have narrowed significantly since the start of the year. The heavy West Canadian Select grade (ex-Hardisty) was trading at a deep discount of $42.5/bbl to WTI in December, narrowing to current levels of around $16/bbl.”

The equity market rallied June 27 “for the third day in a row as investors became more comfortable with the Fed’s complicated message,” said analysts in the Houston office of Raymond James & Associates Inc. The Standard & Poor’s 500 Index closed 0.6% higher while the Dow Jones Industrial Average gained 0.8%. The Oil Service Index advanced 0.5%, but the SIG Oil Exploration & Production Index dropped 0.7%.
Energy prices.

The August contract for benchmark US light, sweet crudes climbed $1.55 to $97.05/bbl June 27 on the New York Mercantile Exchange. The September contract rose $1.48 to $96.89/bbl. On the US spot market, WTI at Cushing, Okla., was up $1.55 to $97.05/bbl.
Heating oil for July delivery rebound by 3.51¢ to $2.89/gal on NYMEX. Reformulated stock for oxygenate blending for the same month took back 1.2¢ to $2.74/gal.

The new front-month August natural gas contract fell 15.5¢ to $3.58/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., inched up 0.9¢ to $3.74/MMbtu.
In London, the August IPE contract for North Sea Brent gained $1.16 to $102.82/bbl. Gas oil for July escalated $19 to $882.75/tonne.
The average price for OPEC’s basket of 12 benchmark crudes increased 98¢ to $99:39/bbl.


New Oil field Discovery Nigeria Offshore

Afren plc announces that the high impact Ogo-1 well located on the OPL 310 licence offshore Nigeria has discovered a significant light oil accumulation, based on the results of drilling and wireline logs.

The Ogo-1 well has been drilled to a total measured depth of 10,518 ft (10,402 ft true vertical depth subsea), and has encountered a gross hydrocarbon section of 524 ft, with 216 ft of net stacked pay. The well was targeting 78 mmboe of gross P50 prospective resources, but based on evidence to date, targeted resources are likely to be significantly in excess of previous estimates. Further evaluation using wireline log analysis is currently underway prior to extending the well to a total measured depth of 11,800 ft (11,684 ft true vertical depth subsea) to target further high potential zones.

The Ogo-1 discovery, testing a four-way dip-closed structure in the Turonian, Cenomanian, and Albian sandstone reservoirs, confirms the extension of the same Cretaceous sandstones that have yielded other significant discoveries along the West African Transform Margin.

Following the completion of drilling operations at Ogo-1, the Partners intend to drill a planned side-track, Ogo-1 ST, which will test a new play of stratigraphically trapped sediments that pinch-out onto the basement high targeting 124 mmboe of gross P50 prospective resources.

Osman Shahenshah, Chief Executive of Afren, commented:
“The discovery of oil in the Ogo-1 well opens up a new oil basin in an under-explored region and represents a possible extension of the West African Transform Margin. Based on evidence to date, targeted resources are likely to be significantly in excess of previous estimates, with some high-potential zones still to be drilled. We look forward to working with our Partners to realise the full potential of Ogo and our additional prospects on the license. The Ogo-1 exploration success follows a series of recent discoveries, Okoro Field Extension, Ebok North Fault Block and Okwok in Nigeria and Simrit-2 and Simrit-3 on the Ain Sifni Block in the Kurdistan region of Iraq.”


OGP report and Oil & Gas Future

The International Association of Oil & Gas Producers (OGP) has released the latest edition of its annual Safety Performance Indicators report.

The report, covering 2012 data, shows that the number of fatalities per 100 million hours worked, the Fatal Accident Rate, has fallen in the last ten years.

“Safety in our operations is a top priority for the industry and we strive to improve our record constantly,” says OGP Executive Director Michael Engell-Jensen.

The safety report is OGP’s largest annual reporting project. The latest edition provides an analysis of the safety performance of 49 OGP member companies, representing 3.7 billion work hours and operations in 107 countries.

In 2012, participating OGP member companies reported 88 fatalities which occurred in 52 separate incidents. The Fatal Accident Rate was down by 52% compared with the 2003 rate, showing an overall downward trend over the last ten years. The rate increased however by 27% compared with 2011; a single incident (a gas leak and explosion of a pipeline in which 31 people lost their lives) had a predominant effect on the 2012 rate.

The largest proportion of fatalities (44%) were reported in the ‘Explosions or burns’ category with ‘Caught in, under or between’ being the second largest (18%).

Lost time injury frequency increase

Lost Time Injury Frequency (fatalities and lost work day cases per million work hours) increased by 12% to 0.48 in 2012, representing an additional 307 lost time injuries.

Participating companies reported 53,325 workdays lost through injuries.

The most frequently reported incident category was ‘Struck by,’ which accounted for 408 lost work day cases, 24% of the total. The category ‘Caught in, under or between’ accounted for 21% of the total (352 lost work day cases). Both categories also accounted for the largest proportions of lost work day cases reported in 2011 with very similar values to 2012 (25% and 19% respectively).

Source: OGP-Your-Oil-and-Gas-News

Growing Oil Prices in Asia

(AFP) / 19 June 2013

Oil prices turned higher in Asian trade Wednesday, as investors await the outcome of a US Federal Reserve meeting for clues on when it will begin scaling back its massive stimulus programme.
New York’s main contract, light sweet crude for delivery in July, was up 17 cents to $98.61 a barrel and Brent North Sea crude for August delivery added 12 cents to $106.14 in the afternoon.

Markets have been in turmoil for weeks on speculation the US central bank will announce a tightening of its $85 billion-a-month asset-buying programme, known as quantitative easing.

“Trading is quiet today as investors are looking to the US Fed meeting for direction,” Desmond Chua, market analyst at CMC Markets in Singapore, said.

“If the US Fed decides on a more gradualist approach to tapering quantitative easing, that is likely to push oil prices up,” he said.

The US Fed’s Federal Open Market Committee will issue a statement later on Wednesday after a two-day policy meeting, which will be quickly followed by a briefing from Fed chairman Ben Bernanke.

Some analysts say Bernanke would likely signal the Fed is close to tapering the purchases, but would temper that by arguing that a move would depend on conditions in the world’s largest economy. A mixed bag of US data recently has pointed to an uncertain recovery.

Leaders from the influential Group of Eight nations on Tuesday called for a peace conference for the country and agreed to push for a transitional government that could include defectors from President Bashar Al Assad’s regime.

Source: Khaleej Times

Record increase on Abu Dhabi Oil Prices

Haseeb Haider / 20 June 2013

Abu Dhabi grew 7.7 per cent year on year in 2012, on higher oil prices. “The flexibility of Abu Dhabi economy combined with the huge financial surpluses, strong growth in non-oil sectors, high oil prices, along with several other significant factors have all contributed to the stability and sustained growth of the local economy,” said Statistics Centre – Abu Dhabi, or Scad.
Abu Dhabi’s GDP at current prices reached a record Dh911.6 billion in 2012, up from Dh846.7 billion in 2011, according to a report released by Scad.

The preliminary data announced by the statistical gathering agency also indicate a rise in the annual growth rate of non-oil sectors to 9.6 per cent, surpassing all earlier forecasts and estimates, underlining the “robustness, stability and competitive advantage of the economy, boosting its appeal to local and foreign investors.”

Abu Dhabi showed a significant growth in oil and non-oil sectors at current prices achieved a net gain of Dh64.9 billion, surpassing all forecasts and estimates. The GDP time series indicates that the Abu Dhabi GDP at current prices has doubled 2.4 times from 2005 to 2012, increasing form Dh383.430 billion to Dh911.591 billion during this period.

The non-oil activities and sectors contributed about 43.5 per cent of Abu Dhabi’s GDP at current prices in 2012, and 48 per cent at constant prices for the same year.

The non-oil activities achieved high growth rates of about 9.6 per cent at current prices and 7.7 per cent at constant prices over the past year.

There has been an upward trend in non-oil activities over the course of the past few years, with the non-oil GDP at constant prices growing from Dh200.209 billion in 2005 to Dh325.433 billion in 2012.

Abu Dhabi has made huge strides and achieved a high level of diversity in a short span of time becoming a business hub. for concluding major business deals.

Buoyed by oil revenues going into infrastructure, in recent years Abu Dhabi economy has advanced in leaps and bounds and has evolved into regional, financial, commercial and tourist hotspot.

Oil accounted for 56.5 per cent of the Abu Dhabi’s GDP at current prices and only for 52 per cent of the GDP at constant prices in 2012 despite the considerable rise in oil prices during the past years.

The real estate and education sectors grew 15 per cent in 2012, while wholesale and retail trade grew 14.5 per cent, followed by transport and storage 13.4 per cent.

Manufacturing activities achieved a record growth rate of 11.2 per cent followed by the electricity, gas, and water by10.1 per cent.

Source: Khaleej Times

Oil Prices Falls – US Economy

Oil prices fell Thursday, a day after the Federal Reserve indicated it could begin to wind down its massive stimulus program later this year, as long as the US economy remains on the upswing.
U.S. benchmark oil for July delivery fell $2.08 to $96.16 per barrel by late afternoon Bangkok time in electronic trading on the New York Mercantile Exchange.

The contact dropped 20 cents to finish at $98.24 a barrel on the Nymex on Wednesday, when Fed chairman Ben Bernanke suggested that he was optimistic about the U.S. economy — and that the Fed might start scaling back its massive $85 billion a month government bond purchases later this year if conditions continue to improve.

The Fed’s stimulus program has been a boon to stock and commodities markets, where investors have turned in search of returns that outgun those on bonds.

Analysts said the slump in oil prices could be just a short-term response to a change in U.S. central bank policy. In the medium term, the scaling back of such a loose monetary policy will be “a positive for the oil market, suggesting that the economy is on a sustainable growth trajectory,” said Caroline Bain, lead commodities analyst for The Economist Intelligence Unit.

Separately, the American Petroleum Institute said U.S. crude stocks fell by about 4.3 million barrels for the week ending June 14 to 362 million barrels. That contrasted with figures given by the U.S. Energy Information Administration, which said that crude inventories grew by 300,000 for the week. Analysts expected supplies to drop by 1 million barrels.

Brent crude, a benchmark for many international oil varieties, fell $1.80 to $104.32 a barrel on the ICE Futures exchange in London.

Source: Khaleej Times

Brent oil futures rebounded above $105 a barrel

Brent crude was up 32 cents at $105.27 a barrel at 1000 GMT on Friday, on track to end the week marginally higher

London: Brent oil futures rebounded above $105 (Dh386) a barrel on concern over the war in Syria and continuing weakness for the dollar.

Though Syria is not key to global oil supply, investors are worried that escalation in the civil war could drag in other countries and plunge the whole oil-producing region into conflict.
“Crude oil has been trading in a range for more than a month … With the escalation in Syria, the buying on the dips is probably going to be stronger as the geopolitical premium needs to be increased,” Petromatrix analyst Olivier Jakob said.
Brent crude was up 32 cents at $105.27 a barrel at 10am GMT on Friday, on track to end the week marginally higher.

The contract has rebounded from a weekly low of $101.82 on Tuesday, partly driven by a weaker dollar.
US oil was 27 cents higher at $96.95 a barrel, trading at the highest level in nearly a month, and was also set to rise slightly on the week.

President Barack Obama authorised the shipment of US weapons to Syrian rebels for the first time after the White House said it had proof that the Syrian government used chemical weapons against rebels.
“We’re seeing the Syrian situation worsen … all the foreign backers are upping their stakes in Syria and none of them can really be sure what the consequences will be,” Richard Mallinson, a consultant at Energy Aspects, said.

In other geopolitical news, millions of Iranians voted to choose between six candidates to replace incumbent president Mahmoud Ahmadinejad, but none is seen as challenging the Islamic Republic’s 34-year-old system of clerical rule.
Analysts say the outcome is unlikely to have any short-term impact on oil because any improvement in relations with the West over Iran’s nuclear programme will take time to translate into a change in policy.
“Sanctions on oil are probably going to be among the last [issue] to be addressed, because they are the biggest lever the West has,” Mallinson said.
Oil has risen this week in spite of forecasts of “sluggish” demand growth by industry bodies such as the International Energy Agency.

“The key driver of oil has been the weakness in the dollar rather than any fundamental factors,” said Ric Spooner, chief market analyst at CMC Markets.
The dollar remained in the doldrums on Friday after hitting a four-month low against a basket of currencies in early trade.

A weaker dollar supports oil by making it cheaper for holders of other currencies.
– Reuters


Sudan to shut South Sudan oil flow

Khartoum: Sudan on Sunday prepared to stop the oil flow from South Sudan on the orders of President Omar Al Bashir but an expert said the process could take weeks.

Bashir said petroleum companies working in South Sudan will be informed about “shutting down the pipeline” from Sunday, the official SUNA news agency reported.

The order came after Sudan’s leader warned the South over backing rebels, who analysts say humiliated the authorities with recent attacks.

South Sudan’s government in Juba denies supporting insurgents in the north.

I think if you do it properly it would take 45 days,” to stop the oil without causing damage, said the independent expert who asked not to be further identified.
“It’s not like opening and closing a water tap.”

At a press conference scheduled for 1100 GMT Sudan’s Information Minister Ahmad Bilal Osman was expected to comment further on relations with South Sudan.

This will be the second closure of South Sudan’s oil wells and the Sudanese pipeline system in about 18 months.
Production had only resumed in early April after the two countries agreed on detailed timetables to normalise relations, after intermittent border clashes, by implementing the oil deal and eight other security and economic pacts.
In early 2012 the South stopped its crude production after accusing Khartoum of theft in a dispute over export fees.
The previous shutdown “went very well”, the expert said, adding Sudan’s oil ministry has enough experience to safely close the system and its pipeline running 1,500 kilometres to the Port Sudan terminal.

Thousands of wells on the South Sudanese side will need to be shut one by one and the pipeline flushed, he said.
“You need to evacuate the oil somewhere,” the expert said.

“If they do not do that properly the oil will gel. It’s not easy to reverse it to liquid again.”
The expert was not sure what point the oil had reached in the pipeline but said “it should be close to Port Sudan”.
Bashir warned on May 27 that he would block the oil if the South’s government provides assistance to rebels fighting in South Kordofan and Blue Nile states, or in the Darfur region.

Khartoum has long accused South Sudan of supporting rebels in the north, a complaint which for months held up implementation of the oil and security pacts.
Bashir’s late-May threat came at a ceremony following the army’s recapture of Abu Kershola in the far north of South Kordofan.
Rebels held Abu Kershola and its garrison for a month after seizing it during a coordinated attack on several areas including the strategic and previously peaceful town of Umm Rawaba in North Kordofan.
Analysts called the initial attack a humiliation for the authorities.

More recently there were very strong rumours that the “liberation” of Abu Kershola only resulted from a withdrawal by rebels of the Sudan Revolutionary Front coalition, one Sudan analyst told AFP.
“The problem is that nobody has seen any evidence” of continued South Sudanese support to the insurgents, the analyst said.

“They (Sudan) have their own internal difficulties and they want to use South Sudan as a scapegoat,” South Sudanese Information Minister Barnaba Marial Benjamin told AFP .
South Sudan split from Sudan in July 2011 in the wake of a referendum vote for independence under a peace deal that ended a 22-year civil war.

Independence left key issues unresolved, including how much the landlocked South should pay for shipping its oil through Sudan’s export infrastructure.

In a March report the Small Arms Survey, a Swiss-based independent research project, said it found no evidence of weapons supplies from Juba to the Sudan People’s Liberation Movement-North (SPLM-N) after the South’s independence.
“There are, however, some reports that both SPLM-N and JEM are benefiting from other kinds of assistance,” including logistics, fuel and food, the report said.

SPLM-N has been fighting for two years in South Kordofan and Blue Nile states.

Analysts say they have been assisted by JEM, the Justice and Equality Movement of Darfur.

Source: Gulf News