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Middle East

UAE Energy Minister says oil glut could run for years


Oversupply in crude markets could take months or even years to fix depending on when producers outside OPEC cut their output, Abu Dhabi-based The National reported, citing comments by UAE Energy Minister Suhail Al Mazrouei. “We are experiencing an obvious oversupply in the market that needs time to be absorbed,” the newspaper reported Mazrouei as saying. The United Arab Emirates supported the November decision by the Organization of Petroleum Exporting Countries to maintain production, The National reported Mazrouei as saying.

Middle East

Gulf Keystone Petroleum hits production target


Gulf Keystone Petroleum said seven wells are now producing at its Shaikan production facilities. A further well is expected to come online this month in the Kurdistan region of Iraq where operations are taking place. The company said total daily production has been gradually increasing since last month, with the company’s 400,000 gross barrels of oil per day target being reached shortly before New Year.

Middle East

Attacks on Syria gas plants


Suicide attackers have targeted two natural gas facilities in the central Syrian province of Homs, killing eight people, officials said. State news agency Sana also reported the attacks, saying guards opened fire at the attackers as they drove towards the plants, forcing them to detonate their bombs before reaching their targets.

Middle East

Iraq cabinet approves lower spending plan on oil’s drop


Iraq’s cabinet approved a smaller 2015 spending plan than the government expected because of the collapse in oil, which provides most government revenue. The budget, based on a $60 a barrel price for oil, stands at 123 trillion dinars ($103 billion), Saad Al-Hadithi, spokesman for the office of the prime minister, said. The budget deficit was set at 23 trillion dinars and total revenue at 99.8 trillion dinars, including oil revenue of 84 trillion dinars, Obaid Mahal, deputy secretary general of the cabinet, said.

Middle East

Iran said to discount light crude to Asia to deepest in 14 years


Iran is said to be offering its main crude grade to customers in Asia at the deepest discount in 14 years, taking a cue from Saudi Arabia in trimming price differentials. National Iranian Oil Co. cut its official selling price for January shipments of light crude to Asia to a discount of $1.80 a barrel below the regional benchmark as Middle Eastern producers vie to keep selling in the region, according to four people with knowledge of the decision. An official at NIOC’s crude-marketing department in Tehran declined to comment.

Middle East

Oil resumes drop as Iran sees $40 if there’s OPEC discord


Brent resumed its decline as an Iranian official predicted a further slump in prices if solidarity among OPEC members falters. West Texas Intermediate in New York also erased yesterday’s gains. Futures slid as much as 1.6% in London after snapping a five-day losing streak. Crude could fall to as low as $40 a barrel amid a price war or if divisions emerge in the Organization of Petroleum Exporting Countries, said an official at Iran’s oil ministry.

Middle East

Lukoil’s West Qurna adds $1.25billion to earnings, boosts output


OAO Lukoil’s West Qurna-2 project in Iraq is beginning to pay back, adding $1.25 billion to earnings in the third quarter, according to the company. The addition helped prop up earnings before interest, taxation, depreciation and amortization, which fell 2.4 percent to $5.34 billion after oil prices weakened, the Moscow-based company said in an e-mailed statement today. Net income dropped 48 percent to $1.62 billion. “Ebitda turned out stronger because of higher sales in Iraq,” Alexander Kornilov, an oil and gas analyst at Alfa Bank, said by e-mail. The Iraqi project contributed 22 percent to Ebitda, he said. Revenue rose 6.2 percent to $39 billion.

Middle East

Iraqi forces drive IS from oil town


Iraqi government forces have driven Islamic State militants out from their remaining strongholds inside the oil refinery town of Beiji. Officials said it is a key victory over the terror group that has captured much of northern and western Iraq in a summer offensive. The Iraqi troops, backed by allied Sunni militiamen, also lifted the Islamic State group’s siege of the oil refinery, Iraq’s largest, and hoisted Iraq’s red, white and black flags atop the sprawling complex hosting the facility. The officials said the army used loudspeakers to warn the small number of residents still holed up in the town to stay indoors while bomb squads detonated booby-trapped houses and remaining bombs planted on the roads. State Iraqi television also reported the “liberation of Beiji”, quoting the top army commander there, General Abdul-Wahab al-Saadi. Islamic State extremists captured Beiji during their summer offensive. The Iraqi forces had collapsed in the face of that onslaught but have since partially regrouped and went on the offensive, with Beiji the biggest area they have recaptured to date. Since August, the Iraqi military has been aided by air strikes from a US-led coalition targeting Islamic State positions in Iraq and in neighbouring Syria. The two officials said fierce battles were fought early on Friday around the refinery and that government warplanes hit Islamic State positions around the facility on the northern edge of the town. The refinery’s capacity of some 320,000 barrels a day accounts for a quarter of Iraq’s refining capacity. Beiji will now likely be a base for staging a push to take back Saddam Hussein’s home town of Tikrit to the south. Government forces tried to retake Tikrit earlier this year, but their campaign stalled and the city remains in Islamic State hands.

Middle East

Iraq’s Kurds form oil company separate from central government


Iraq’s semi-autonomous Kurdish government approved plans to create an oil exploration and production company separate from the central government and a sovereign wealth fund to take in all energy revenue. A bill to create the company for oil exploration and production, with shares to be sold to the public, was approved by the cabinet of the Kurdistan Regional Government, Kurdish Prime Minister Nechirvian Barzani said in a statement yesterday. A separate initiative approved by the cabinet would create a Kurdish fund for oil and gas revenue. Both draft laws need to be approved by the KRG’s parliament. The KRG, which started crude oil exports by pipeline through Turkey this year, wants to control sales of oil pumped from fields in the Kurdish region in the north of Iraq to boost its financial independence from the central government in Baghdad. The Kurdish region holds 45 billion barrels of oil reserves, while the rest of Iraq has 150 billion barrels, the world’s fifth-largest known deposits.

Middle East

Middle East a key market for service sector


The Middle East will be one of the key markets for oilfield services companies, it has been suggested. Corporate advisory firm Simmons & Company International believe that with countries in the area maximising recovery from maturing assets the region will be central to the industry for decades. The Aberdeen-headquartered company has claimed there is an increasing willingness amongst governments and the national oil companies to build relationships with foreign companies to sector bring know-how and technology into the region.

Middle East

Iraq army take back refinery town


Iraqi soldiers battling the Islamic State group have reportedly recaptured the heart of the town of Beiji, home to the country’s largest oil refinery. Retaking Beiji could allow Iraqi forces a base to attack neighbouring Tikrit, taken by the extremists after their lightning advance this summer. It also represents a morale boost for Iraq’s beleaguered security forces after many of its troops fled the militant offensive. State television quoted the top army commander in Beiji, General Abdul-Wahab al-Saadi, as saying troops recaptured the city’s local government and police headquarters at the centre of the town. He later spoke to the station by telephone but the line appeared to be cut off after he said his forces were meeting stiff resistance. A senior military official in Beiji confirmed the recapture of the city centre but added that intense clashes continued elsewhere in the town. He said 75% of Beiji was now in the hands of government troops.

Middle East

Oil at the heart of Kurdish pay delay


The Kurdish government is unable to pay government salaries as the cost of battling Islamic State puts strain on the finances of a US partner in the struggle against the militant group. Peshmerga fighters have played a central role in slowing the advance of Islamic State militants even as the semi- autonomous Kurdish region of northern Iraq has been locked in a dispute with the central government in Baghdad over oil. The Kurdish Regional Government has struck deals with oil companies and collected the revenue. The Iraqi government says it should control the country’s oil deals, and has withheld the budget for the region since the beginning of the year.

Middle East

Gas plant hit in Syria air strikes


US-led coalition warplanes bombed Islamic State group positions across four provinces in northern and eastern Syria overnight, hitting a grain silo as well as the country’s largest gas plant, activists said. Washington and its Arab allies opened their air assault against the extremist group last week, going after its military facilities, training camps, heavy weapons and oil installations. The campaign expands on the air strikes the United States has been carrying out against the militants in Iraq since early August.