oil related 041107

Kuwait boosts security at oil fields

Sun Nov 4, 2007 2:45pm GMT

KUWAIT (Reuters) - OPEC-member Kuwait said it is stepping up security at oil fields and at its exploration arm by adding more facilities and staff.

The world's seventh-largest oil exporter said in September it planned to tighten security at energy installations and was coordinating with U.S. authorities.

State-owned Kuwait Oil Company (KOC), in charge of domestic oil output and exploration, said it was adding more facilities such as guard houses, high-tech fences, vehicle barriers and improving gate access.

Fields in the north and west area of the Gulf Arab state posed "a massive security challenge," the company said in its company magazine.

"Unfortunately, in this area we have internal and external KOC facilities, such as oil wells and flow lines flowing outside KOC's fenced area," Saad al-Ajmi, KOC security team leader for the northern and western areas, told the magazine.

The Kuwaiti oil firm was leaning towards the oil security model in Saudi Arabia implemented by state run oil giant Saudi Aramco, said Jim Evans of KOC's security advisory team.

Aramco has said it employs 5000 security guards, and that its armed guards work in close coordination with Saudi government security forces.

KOC had boosted security staff to 415 from just 36-37 in 2005 and aimed to boost staff to 750-800 in about two and half years, the magazine said.

Kuwait increased security around April this year after neighboring Saudi Arabia said it had foiled an al Qaeda-linked plot that included plans to attack oil facilities.

Source: Reuters

Iraq confirms cancellation of Russian oil contract

By Andrew E. Kramer

Sunday, November 4, 2007

BAGHDAD: Guided by U.S. legal advisers, the Iraqi government has canceled a controversial development contract with the Russian company Lukoil for a vast oil field in Iraq's southern desert, freeing it up for potential international investment in the future.

In response, Russian authorities have threatened to revoke a 2004 deal among the Paris Club of creditor nations to forgive $13 billion in Iraqi debt, a senior Iraqi official said.

The field, West Qurna, has estimated reserves of 11 billion barrels, the equivalent of the worldwide proven oil reserves of Exxon Mobil, the largest U.S. oil company. Hussain al-Shahristani, the Iraqi oil minister, said in an interview that the field would be opened to new bidders, perhaps as early as next year.

The contract, which had been signed and later canceled by Saddam Hussein's government, had been in legal limbo since the U.S. invasion. But the Kremlin remained hopeful it could be salvaged until September, when Shahristani traveled to Moscow to inform officials there that the decision to cancel it was final, he said.

The Russian government, newly emboldened in international affairs by its expanding oil wealth, is still backing Lukoil's claim and protesting what it considers selective enforcement of contracts in Iraq.

"We will defend our interests," Dmitri Peskov, the Kremlin spokesman, said in a telephone interview. "It is the government's obligation to defend the interests of our companies in foreign countries."

West Qurna, mapped by Soviet geologists in the 1980s but mostly untapped, is one of a dozen or so supergiant oil fields in the world. They are known in the industry as "elephants," fields so large they can tip the fortunes of companies or countries.

Source: IHT

Iran sees 25,000 bpd output from oil field by Jan

Sun Nov 4, 2007 1:56pm GMT

TEHRAN, Nov 4 (Reuters) - Iran expects to produce 25,000 barrels per day (bpd) from its huge Azadegan oil field by around mid-January, contributing to gradually rising output capacity in the OPEC state, the oil minister said on Sunday.

Gholamhossein Nozari, the caretaker minister who will take on the role permanently if he wins parliament's backing this month, also said U.S. and other sanctions on Iran were not hurting the energy industry in the No. 2 OPEC crude producer.

Iran previously said it expected the first six wells to produce 20,000 bpd in the Azadegan field on Iran's border with Iraq. The field was to have been developed by a Japanese firm until talks collapsed in 2006.

"It seems, God willing, we can produce the first 25,000 (bpd) in the (Iranian) month of Day" which ends on Jan. 20, Nozari told a news conference to mark the signing of a gas deal.

Azadegan, located in the southwestern province of Khuzestan, is Iran's biggest oilfield. In-place reserves have been put at 26 billion barrels.

Japan's INPEX Holdings Inc. (1605.T: Quote, Profile, Research) had been due to develop the field but talks collapsed in 2006, with the Japanese firm citing spiralling investment costs. INPEX retains a 10 percent stake.

India's Essar Group (ESRI.BO: Quote, Profile, Research)(ESRG.BO: Quote, Profile, Research), which has invested in a steel plant in the United States, said in March it was in talks with Iran about developing the field.

But a U.S. governor said on Wednesday he had received a letter in October from the Indian firm saying it would not make any investment in the energy sector in Iran to avoid violating U.S. sanctions that penalise firms who make such investments.

As well as U.S. measures, the U.N. Security Council has slapped limited sanctions on Iran because of Tehran's refusal to halt sensitive nuclear work. But Iranian officials insist sanctions are not hurting the country.

Nozari previously said Iran, flush with windfall oil earnings, would carry out energy projects using its own resources and Iranian firms if foreign parties backed out.

"Despite sanctions and pressures, work, effort, construction and implementing projects in the oil industry are strongly moving ahead," the minister said on Sunday.

Production capacity in Iran was climbing gradually, with sustainable capacity, based on the current trend, expected to hit 4.2 million bpd by the end of the Iranian year in March, the minister said, up from around 4 million bpd this summer.

Nozari said total capacity was running at about 4.3 million bpd but this level could not be sustained because of maintenance requirements.

Source: Reuters

How Japan lost Iran to China?

Shirzad Azad

It has recently become a popular dictum in Japan that whatever the Japanese lose, it finds its way into the hands of the Chinese. Based on such impression, China’s latest adroitness to put itself at the top list of Iran’s trading partners provides only a tiny case of how the rising dubious dragon is conquering Japan’s oversea markets one after another.

In a matter of one year since the time the Chinese ambassador to Iran announced last year that his country would become Iran’s primary trade partner in the near future, China replaced Japan for the first time to stand as the Persian Gulf country’s biggest trading ally. Iran had already decided to have Beijing replace Tokyo as the No 1 importer of Iranian oil.

While the trade volume between Iran and China in 1998 was US $1.215 billion, recent data shows that the two-way trade volume between two nations has decupled in less than a decade. The volume of Sino-Iranian trade exceeded 9 billion in 2005, and Iran’s imports from China rose by 360 percent between 2000 and 2005. Imports and exports between two Asian countries in 2006 surged 43 percent from the previous year to $14.45 billion, toppling $12.30 billion for two-way trade among the two partners.

Iran’s Eastward looking foreign policy and its vacillation toward the West might had been influential in China’s gains in that country, however, Japan’s declining share of economic interests in Iran is attributed with some other reasons.

China’s soaring energy needs has been a key element to approach Iran. Growing Sino-Iranian ties and their close partnership for fuel resources have progressed to a new stage. China’s increasing thirst for oil has made it imperative for the dragon using its oil-time lion friend as leverage to get closer to the resource-rich Middle East.

The Japanese, on the other side, are talking of a new partnership with the Arab countries alongside the Persian Gulf. The fall of the Saddam regime in Iraq has also relatively facilitated the ground for Japanese companies to invest in that turmoil-torn country.

Japan’s dilatory tactics to postpone the development of massive Azadegan oil field, mainly because of American pressures, left the Iranians with no option but to cancel the lucrative contract last year, even though the Japanese don’t like to see that the Azadegan prize finds its fate in the hands of the Chinese.

Considering Iran’s nuclear issue, whenever a top Chinese official meet the Iranians, he or she often emphasizes that the nuclear program is Iran’s legitimate right and it is not the business of the West to oppose Iran’s policy. Chin’s diplomatic dexterity succeeds when it skillfully afford to assuage the West with voting against Iran in the UN Security Council. The Chinese then simply justify their double-crossing behavior toward the Iranians saying “we are sorry, but we can’t jeopardize our huge economic market in the United States and hopefully you understand our position”.

Japan for its own part opposes Iran’s nuclear policy directly or indirectly, and when it comes to vote in key international institutions working on the nuclear problem, the Japanese feel no hesitation to raise their hands in favor of their Western allies. Japan has also been fully committed in implementing those bodies’ decisions and resolutions on Iran’s nuclear issue.

After all, Chinese smiling diplomacy and face-to-face contacts with the Iranians pay off enormously. There is even a rivalry among the Chinese leaders for Iran visit. China’ top communist officials from the president to the chairman of national people’s congress and from the foreign minister to the chief of many other ministries have all paid a visit to Iran.

Hardly any season passes without a VIP visit from Beijing to Tehran. Chinese industries and businesses are even more enthusiastic to go Iran for new opportunities. Tehran trip has become a routine business for many top managers of Chinese companies from automakers to textile producers.

Compared to their communist counterparts in China, Japanese top political leaders have so far been reluctant, or better to say cautious, for face-to-face contacts and direct communications with Iranian officials. Former Prime Minister Takeo Fukuda, father of current Prime Minister Yasuo Fukuda, was the first and the last Japanese leader who visited Iran around three decades ago.

Despite China’s recent surge in Iran, the relationship between Japan and Iran in political, economic and cultural aspects is moving forward in fairly good conditions. Early this week, Iran appointed the outgoing Tehran’s ambassador to Tokyo as deputy minister for European and American affairs in the ministry of foreign affairs. At the same time, Iran also appointed the deputy minister for legal and international affairs of the same ministry as Iran’s new ambassador to Japan. Iran’s current foreign minister was once the country’s ambassador to Japan as well. Such appointments indicate how Iran regards Japan as an important partner and a major weight in regional and global affairs.

With 11.5 percent of the total, Iran is still Japan’s third largest provider of crude oil. Saudi Arabia and the United Arab Emirates stand in first and second place with 31.1 percent and 25.4 percent, respectively.

Although less than 10000, Iranians are the biggest community of foreigners in Japan from a Middle East country. The biggest numbers of Japanese citizens, who have ever associated with a West Asian nation, are those Japanese who have established a family relationship mainly through marriage with an Iranian either in Japan and North America or in Iran. The Japanese rising star and popular baseball player Yu Darvish, who comes from an Iranian father and a Japanese mother, is only one outcome of such connections between the Japanese and the Iranians.

Source: thepeoplesvoice