Iraq Energy Panel Approves Gas Deal - Oil Minister

- Iraq Energy Panel Approves Gas Deal - Oil Minister

Monday, September 12, 2011
Dow Jones Newswires
AMMAN
by Hassan Hafidh

A top Iraqi government energy committee has approved a deal with Royal Dutch Shell PLC (RDSA) to capture and exploit gas from its giant southern oil fields, the country's oil minister said Sunday.

The Iraqi oil ministry struck a deal in July with Shell and Japan's Mitsubishi Corp. (8058.TO, MSBHY) to develop gas production in southern Iraq. To become valid the deal needs approval from the Baghdad government.

"It was agreed upon by the energy committee and was sent to the cabinet for approval," Abdul Kareem Luaiby told Dow Jones Newswires on the sidelines of an Iraqi energy meeting in Amman, Jordan.

The committee is chaired by the deputy prime minister for energy affairs, Hussein al-Shahristani, and its members include the ministers of oil, electricity and finance.

Luaiby declined to say when exactly the cabinet would approve the deal. The agreement must first be examined by the cabinet's legal and specialized offices, he said.

The 25-year venture calls for an investment of $17.2 billion to create the Basra Gas Company. Baghdad would have a 51% stake, Shell 44% and Mitsubishi 5%.

Some $12.8 billion would be spent on infrastructure and $4.4 billion on construction of a liquefied-natural-gas facility.

Under the agreement, the company must first meet local demand but can export any gas not used by Iraq's fuel-starved power plants. The planned LNG terminal would handle the export of 600 million cubic feet a day.

Baghdad would contribute $5.236 billion to the venture, including some $1.524 billion in existing infrastructure. Shell and Mitsubishi need to contribute nearly $7 billion, and the remaining money will be financed through the venture's returns, according to the summary submitted by Iraq's oil ministry to the country's parliament.

The venture would process associated gas produced from three supergiant Iraqi fields--Rumaila, West Qurna phase 1 and Zubair--all in Basra governorate.

"We are committed to supply the venture with 1.6 billion cubic feet a day from these fields," Luaiby said.

The joint venture would sell produced gas to Iraq's state-owned South Gas Company, at international standard pricing.

Iraq estimates it should make around $31.1 billion over the 25 years of the project from taxes, fees and raw gas sales to the joint venture, the document said.

An Iraqi oil expert, who asked not to be named, however, said Iraq would make nearly $100 billion from the venture because the gas would substitute for the oil currently used to fuel Iraq's power stations.

Iraq would tax Shell and Mitsubishi profits at 35%, he said. The expert said Shell and Mitsubishi will make a 7% profit on the whole venture.

Iraq has natural-gas reserves totaling 112.6 trillion cubic feet, the 10th largest in the world. But it produces only around 1.5 billion cubic feet a day, because of a lack of infrastructure.

Copyright (c) 2011 Dow Jones & Company, Inc.

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Iran Parliament Approves Revolutionary Guard As Oil Minister

- Iran Parliament Approves Revolutionary Guard As Oil Minister

Wednesday, August 03, 2011
Dow Jones Newswires
by Benoit Faucon

Iran's lawmakers Wednesday approved a sanctioned senior official from the powerful Islamic Revolutionary Guard Corps as oil minister, as hardliners scored a major victory in tightening control over the country's most strategically important sector.

Brig. Gen. Rostam Ghasemi, who had been proposed by president Mahmoud Ahmadinejad, was approved by 216 votes from a total of 264, according to Iran's Parliament website.

Ghasemi, who heads Khatam al-Anbiya, the most powerful economic wing of the Revolutionary Guards, will be the first commander from the elite paramilitary force to move into a ministerial post not related to defense.

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Iraq Oil Minister, Shell Confirm Preliminary Gas Accord

- Iraq Oil Minister, Shell Confirm Preliminary Gas Accord

Tuesday, July 12, 2011
Dow Jones Newswires
LONDON
by Hassan Hafidh

Iraq's Oil Minister Tuesday and oil giant Shell reached a preliminary accord on a long-stalled $12 billion gas deal to capture and exploit associated gas from southern Iraq oil fields.

The agreement still needs to be approved by the Iraqi Cabinet.

"The Iraqi Oil Minister Abdul Kareem Luaiby announced today that Iraq has signed an initial contract with Shell and Japan's Mitsubishi to develop gas production in southern Iraq," the Iraqi statement said.

A Shell statement said the Anglo-Dutch oil giant was "very pleased the Basrah Gas Company Joint Venture agreements have been initialized" and that the Anglo-Dutch giant will now "look forward" to Cabinet approval.

The long-delayed agreement is important to Iraq's goals of boosting long-term oil production, because of the need to produce "associated" natural gas produced concurrently with rising oil output.

The two sides signed an initial agreement in 2008 to begin negotiations, but the talks have been delayed mainly over the pricing of produced gas that the joint venture would sell to the Iraqi government for much-needed power generation in Iraq. It wasn't immediately clear Tuesday how the agreement resolved the long-standing impasse.

The deal concerns the huge volumes of gas from three giant southern oil fields: Rumaila, Zubair and West Qurna Phase 1.

Deputy Oil Minister Ahmed al-Shammaa, who was present at the signing ceremony, said that the deal would help to increase Iraq's gas production to more than 2.5 billion cubic feet a day.

Iraq, holder of the world's 11th gas reserves, produces some 1.5 billion cubic feet a day, with half of that amount is being flared daily, because of lack of infrastructure to produce and market the gas.

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Iran Oil Minister Accuses IEA of Breaching Principles

- Iran Oil Minister Accuses IEA of Breaching Principles

Monday, June 27, 2011
Dow Jones Newswires
VIENNA
by Benoit Faucon & Neena Rai

Amplifying criticism by oil producers of last week's release of oil from emergency stockpiles, Iran's oil minister Mohammad Aliabadi Monday accused the International Energy Agency of violating "principles" that limit when energy-consuming countries can tap reserves.

Alibabadi's comments, which preceded a formal energy dialogue between OPEC and the European Union later Monday, underscored how the IEA's controversial emergency release is straining relations between producers and consumers. The remarks came amid new signs Monday that suggested OPEC member Saudi Arabia will continue to raise output and as the IEA disclosed new details about its emergency release of oil.

Aliabadi, who is also OPEC president, said the IEA's move flouted the agency's commitment to respect market forces. His comments echoed other remarks in recent days by figures from the Organization of Petroleum Exporting Countries, who have said the IEA's move was aimed at lowering oil prices, not in responding to a true oil supply crisis. OPEC produces about one-third of the world's oil and meets regularly to try to influence oil prices.

"They, the IEA, have these principles. Why are they not abiding by those principles?" he said.

"Instead they are intervening in the market," Aliabadi said. "We believe that prices have to be set by markets."

An IEA spokesman Monday had no immediate comment on Aliabadi's remarks.

IEA officials have emphasized that they undertook the emergency release, just the third in agency history, in response to a lengthy outage of Libyan crude and not in an effort to reduce oil prices. The IEA is a Paris-based energy watchdog that represents the governments of the U.S. and other energy-consuming countries.

Some IEA members, including Germany and Japan, released equal amounts of oil and refined products, while the United States, released only crude oil, according to IEA data released Monday. Still other countries, including France and Italy, released refined products and not crude, according to the data.

In total, an additional 41.6 million of the 60.6 million in emergency oil will come from crude oil with the rest coming from refined product, according to the data.

Oil prices continued to decline Monday following the IEA's actions and as markets continued to fret over the Greek debt crisis. Light, sweet crude for August delivery traded down $1.11, or 1.3%, to $90.05, on the New York Mercantile Exchange. Brent crude on the ICE Futures Europe exchange fell $1, or 0.1%, to $104.12 a barrel.

Many market watchers anticipate that some leading OPEC producers will proceed with plans to raise oil output, in spite of the IEA's action. Following the breakdown of OPEC talks on June 8, Saudi Arabia, Kuwait and the United Arab Emirates signalled they would unilaterally boost oil output to meet expected demand. The thinking is that even if the IEA oil goes to industrialized countries, the additional oil from OPEC members could go to Asia.

An official with Maersk Tankers, one of the world's largest owners of crude oil carriers, said Monday he expects an increase in July and August crude shipments from Saudi Arabia to Asia.

"We anticipate that crude oil transportation from Saudi to Asia should be even stronger than it was for June," said Claus Gronborg, head of crude for Maersk Tankers. Maersk Tankers, is a unit of Danish industrial conglomerate A.P. Moller-Maersk A/S.

Gronborg said it was "too early" to predict how it would impact the global shipping market.

"How the IEA news will impact the market short term will depend on where the extra oil goes to. Long term, we do not expect the release of Strategic Petroleum Reserve to have any impact."

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New Oil Minister Likely to Represent Iran at OPEC Meeting

- New Oil Minister Likely to Represent Iran at OPEC Meeting

Friday, June 03, 2011
Dow Jones Newswires
by Benoit Faucon

Iran's new oil ministry caretaker is likely to represent Iran at the next meeting of the Organization of Petroleum Exporting Countries, a person familiar with the matter said Friday.

That would logically make him the chairman of the crucial oil policy meeting Wednesday in Vienna, with the Islamic Republic having assumed the group's rotating presidency this year.

Late Thursday, Iranian president Mahmoud Ahmadinejad appointed Mohammad Aliabadi as the caretaker of the oil ministry, bowing to parliamentary pressure against his previous decision to run the ministry himself.

Aliabadi, a close Ahmadinejad loyalist, is better known as the head of Iran's National Olympic Committee and as the former head of its National Sports Organization.

"He has worked closely with the president," the person said.

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Former Libyan Oil Minister Defects to Italy

- Former Libyan Oil Minister Defects to Italy

Wednesday, June 01, 2011
Deutsche Presse-Agentur (dpa)

Former Libyan oil minister Shokri Ghanem defected to Italy on Wednesday, telling journalists in Rome that he could no longer work in the current situation in his county.

Ghanem, who used to represent Libya at OPEC, said he was joining the rebels fighting Moamer Gaddafi.

He said he wanted to work for democracy in his country.

On Tuesday, eight Libyan military officers, including five generals, appeared in Rome to say they were part of a group of up to 120 military officials defecting from Gaddafi's regime.

Copyright 2011 dpa Deutsche Presse-Agentur GmbH

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Iran Economy Minister May Attend OPEC Meeting June 8

- Iran Economy Minister May Attend OPEC Meeting June 8

Tuesday, May 31, 2011
Dow Jones Newswires
by Benoit Faucon

Iran's Economy Minister Shamseddin Hosseini may represent the Islamic Republic at the next meeting of the Organization of Petroleum Exporting Countries, a person familiar with the matter said over the weekend.

"It's a possibility," the person familiar with the matter said.

The considerations are bringing some clarity over who could chair the gathering at a key juncture for the producer group.

Iran's Oil Ministry caretaker head, President Mahmoud Ahmadinejad, has told officials he wouldn't attend, breaking away from earlier governmental statements that he would come.

Attendance by the economy minister, who would represent the holder of the presidency Iran, would make sense for the country at a time of increased budgetary needs from oil revenues.

But Iran's OPEC governor Muhammad Ali Khatibi said last week that "we are waiting for a decision from the president."

OPEC will have to decide June 8 in Vienna if it increases its output quotas or keeps them unchanged.

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Top Iraqi Panel Asks Oil Ministry to Review Shell Gas Deal -Minister

(Dow Jones Newswires), March 22, 2011

The Iraqi Council of Ministers' energy committee has returned to the Oil Ministry a draft deal with Shell to produce gas from southern Iraq oil fields, in order to review the economics of the pact before submitting it to the cabinet for approval, the country's oil minister said Tuesday.

"God willing, next week we will submit clear views on economics of the contract to the cabinet's Energy Committee," Abdul Kareem al-Luaibi said of the long-awaited $12 billion deal. "Then the Energy Committee will discuss it before submitting specific recommendations to the Council of Ministers."
The minister didn't elaborate on the economics of the deal.

The Energy Committee is headed by Deputy Prime Minister for Energy Affairs, Hussein al-Shahristani, with oil, electricity and water resources ministers also members of the committee.
Shell would hold 44% of the venture, Mitsubishi 5%, and Iraq state-owned South Gas Co. the remaining 51%.

The goal is to capture and produced gas at fields near the oil hub of Basra, including the supergiant Rumaila. Shell in early 2010 finalized contracts with Iraq to produce oil from two super oil fields in southern Iraq.

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