Petrobras to borrow $10 bln from CDB, increase oil exports to China

BEIJING, May 19 (Xinhua) -- Petrobras, the national oil company of Brazil, announced Tuesday that it has concluded negotiations with China Development Bank (CDB) for a bilateral loan of 10 billion U.S. dollars.

The money will be used to finance Petrobras' investment plan, which includes the procurement of goods and services from China, the company said.

The interest rate of the loan will be below 6.5 percent, said Sergio Gabrielli, CEO of Petrobras, at a press conference held here Tuesday.

Without releasing details, the two sides agreed to increase actual crude oil exports from Brazil to China.

A long-term export agreement was also signed Tuesday between Petrobras and UNIPEC ASIA, a wholly-owned subsidiary of China Petroleum and Chemical Corporation (Sinopec), Asia's largest refiner by output.

It provides that Petrobras export 150,000 barrels of oil per day to China starting from 2009 and 200,000 barrels of oil per day from 2010 to 2019.

The price of oil exported to China will be decided based on the market, said Gabrielli.

Apart from the agreement, Petrobras and Sinopec signed a memorandum of understanding (MOU) under which the two sides would cooperate in several areas such as exploration, refining, petrochemicals and the supply of related goods and services, said Petrobras.

Sinopec announced in February that it has signed a contract with Petrobras to import 3 million to 5 million tonnes of crude oil from the latter from February 2009 to January 2010 at market price.

Also in February, Sinopec and CDB signed an MOU with Petrobras regarding cooperation in the fields of oil and finance.

According to the memorandum, the annual trade volume between Sinopec and Petrobras will be raised from 3 million tonnes in 2008to between 10 million to 12.5 million tonnes before the end of 2010. Their future oil trading volume will reach 30 million tonnes.

Chinese shares edge up after rebound by coal producers

BEIJING, May 18 (Xinhua) -- Chinese shares reversed an early decline to closely slightly higher Monday, with a strong performance by coal stocks.

The benchmark Shanghai Composite Index edged up 0.28 percent, or 7.52 points, to 2,652.78. The Shenzhen Component Index rose 0.4 percent, or 40.82 points, to 10,314.04.

Combined turnover increased to 180.19 billion yuan (26.50 billion U.S. dollars) from Friday's 169.5 billion yuan.

Shares in Shanghai tumbled below the 2,600 mark in the morning, as financial and real estate stocks led the decline.

A strong rebound in coal stocks reversed the trend as investors took the view that rising oil prices might push up demand for coal, analysts said.

China Shenhua, the nation's biggest coal producer, rose 3.16 percent to 28.05 yuan. Datong Coal Industry gained 9.84 percent to 37.73 yuan.

China Yangtze Power rose 4.11 percent to 14.94 yuan after it announced a 107.5-billion-yuan-purchase of generation units at the Three Gorges Dam, its parent company and the world's largest hydropower project.

The State Council, or cabinet, announced a support plan Monday for the petrochemical industry. The cabinet urged oil producers and refiners to improve their product mix. It also vowed to improve the pricing mechanism for oil products and establish an oil product consumption tax that would be favorable for petrochemical companies.

It also pledged to build 20 oil refining bases, each with a capacity of 10 million tonnes.

However, the news came out after the market closed, too late to have an impact on Monday's trading.

PetroChina, the country's largest oil producer, fell 1.52 percent to 12.97 yuan. Sinopec, Asia's biggest refiner, fell 1.23 percent to 10.46 yuan.

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Shell confirm attack on pipeline in SE Nigeria

LAGOS, June 18 (Xinhua) -- The Royal Dutch Shell Thursday said its Trans Ramos Pipeline at Aghoro-2 community in southeast oil-rich Nigeria's Bayelsa State was attacked Wednesday night.

"SPDC Joint Venture can confirm the Trans Ramos Pipeline at Aghoro-2 community in Bayelsa State was attacked last night (June 17)," Tony Okonedo, manager corporate media relations with Shell Nigeria Exploration Production Company Limited said in a statement reaching here.

"Some oil production has been shut in to avoid potential environmental impact," he added. According to him, relevant government agencies have been informed, and a joint investigation visit is planned.

Nigeria's major militant group in the oil-rich Niger Delta region the Movement for the Emancipation of the Niger Delta (MEND) said Wednesday its fighter destroyed a major crude oil pipeline in southeast in Bayelsa state belonging to Royal Dutch Shell as it continues its campaign against foreign oil companies.

Nigerian militants claim destroying major Shell pipeline

LAGOS, June 18 (Xinhua) -- Nigeria's major militant group in the oil rich Niger Delta region the Movement for the Emancipation of the Niger Delta (MEND) said its fighter destroyed a major crude oil pipeline in southeast in Bayelsa state belonging to Royal Dutch Shell as it continues its campaign against foreign oil companies.

"At about 20:30 Hrs (2030 GMT) of Wednesday, June 17, 2009, fighters from MEND in furtherance of Hurricane Piper Alpha (our campaign to cripple the entire oil and gas export of the Federal Republic of Nigeria), destroyed with high explosives a major crude oil trunk line in Bayelsa state belonging to Shell," the group spokesman Jomo Gbomo said in a statement reaching here. Full story

Iran opens largest Mideast gas injection project

TEHRAN, June 8 (Xinhua) -- The largest gas injection project in Mideast was inaugurated on Monday in Iran's southwestern province of Khuzestan, the official IRNA news agency reported.

The inauguration ceremony, attended by Iranian Oil Minister Gholam-Hossein Nozaria and other Oil Ministry officials, was held in the Aghajari oilfield, situated some 125 km away from Khuzestan's capital city of Ahvaz, said the report.

The project aims at "injecting two billion cubic feet of natural gas per day in order to increase the production of Iran's crude oil by 130,000 barrels a day," which, according to Nozari, "would be one of the best ways to maximize the use of oil reserves."

According to Oil and Gas Journal, as of January 2009, Iran has an estimated proven oil reserves of 136.2 billion barrels, or roughly 10 percent of the world's total proven petroleum.

Iran is OPEC's second-largest exporter after Saudi Arabia, and the fourth-largest exporter of crude oil worldwide after Saudi Arabia, Russia and Norway.

Iraq's Kurdistan starts oil exports

BAGHDAD, June 1 (Xinhua) -- Iraq's autonomous region of Kurdistan started
Monday its first oil exports through the country's northern national pipelines.

In a ceremony attended by Iraq's President Jalal Talabani and president of
the Kurdish Regional Government (KRG) Massud Barzani, the workers at Taq Taq oil
field in Arbil province turned on the pumps announcing the beginning of first
oil exports from the Kurdish region.

The Kurdish region is exporting the oil via Iraqi pipelines that convey the
Iraqi oil from the northern oilfields of Kirkuk to the Turkish Mediterranean
port of Ceyhan.

"It is a historic day. We are proud of this success, and this achievement
will serve the interests of all Iraqis, particularly the Kurds," Barzani said in
the ceremony.

Iraq's KRG has a large degree of self-rule and has a profound disagreement
with Iraq's central government in Baghdad over oil production deals signed by
the KRG.

However, Iraq has approved that the KRG to export crude oil through its
national pipelines to be marketed by Iraq's State Oil Marketing Organization
(SOMO) and the revenue will be deposited to the federal Iraq account.

Earlier, the KRG said that around 60,000 barrels per day (bpd) will be
exported from the Tawke Field in Duhuk province, and that some 40,000 bpd will
be conveyed by tankers from Taq Taq oil field in Arbil province to the northern
national pipelines.

Khalid Salih, a KRG spokesman, said Monday that his regional government
hopes that it would produce 250,000 bpd by mid-2010 and up to 1 million bpd
within the next two or three years.

Oil prices rise, but unlikely to spike again

BEIJING, May 23 (Xinhua) -- Crude oil prices are
likely to continue rising, but there will be no major spike in the market in the
coming months as world oil consumption still remains weak, analysts said.

Global crude prices, which plummeted from 147.27 U.S.
dollars per barrel to below 40 dollars last year, have witnessed a moderate yet
steady rebound over the past months, reaching 61.5 dollars on Thursday at the
New York oil market, marking a three-month high.

The reason for the recent rally is that the U.S.
government reported a surprise decline in crude and gasoline inventories as the
driving season approaches, Wall Street Strategies' senior research analyst,
Conley Turner, said.

"The rally in oil is also supported by the fact that
there is a sense of growing optimism among market participants that the economy
is not getting worse and is in fact, turning a corner," Turner said.

However, analysts also warned that the current oil
price levels were not in line with the underlying weak global economic
conditions. They said that runaway crude oil prices were therefore unlikely to
be seen in the coming months.

"If you have a look at the fundamentals in the market
at the moment, the inventories in the U.S. are still at 19-year highs and
there's no real indication that demand has re-entered the market yet," Ben
Westmore, an energy analyst at the National Australia Bank, said.

The International Energy Agency (IEA) said on Friday
that global oil demand would hit a 28-year low this year because optimism about
an economic recovery was not reviving the appetite for energy.

The rebound in oil prices is largely connected with
the performances of the financial markets, instead of the balance of supply and
demand, the Paris-based organization said, adding that the world's oil demand
has shown no signs of recovery with the absence of fundamentals to back the oil
market.

Xie Guozhong, an independent economist in China, also
believes that the recent price rebound cannot be explained by analyzing the
balance of supply and demand, as financial markets play a major role in pushing
up prices.

The large scale stimulus packages launched by some
developed economies boosted capital flow into the international oil market
raising prices, Xie, a former Morgan Stanley chief economist for the
Asia-Pacific region, said.

Judging by the current global economic situation,
analysts said oil prices may occasionally rise above 63 U.S. dollars per barrel,
but it was unlikely to see any major price hikes this year. They said for the
most part oil prices would fluctuate between 50 and 60 dollars.

According to a short-term outlook released last week
by the Energy Information Administration of the U.S. Energy Department, prices
are expected to average about 55 dollars per barrel for the rest of 2009, and 58
dollars per barrel in 2010.

Venezuela nationalizes 60 oil service companies

CARACAS, May 8 (Xinhua) -- The Venezuelan government on Friday started the process to nationalize 60 oil service contractors and place them under the control of the state oil company, Petroleos de Venezuela.

President Hugo Chavez was greeted by workers dressed in red and waving the company's flags on the Lake of Maracaibo in the oil rich state of Zulia, as he toured the newly expropriated installations.

"We are advancing the construction of socialism," Chavez told state television, as he spoke and shook hands with employees. "The profit will now stay with the workers," he added.

Chavez said the takeover would lead to an "around-20-percent" cut in production cost as a result of better management and improved efficiency.

With the move, 300 boats, several ports and more than 8,000 workers will now be absorbed by the state oil giant, according to Oil Minister Rafael Ramirez, who accompanied Chavez in touring around the facilities.

The expropriations followed the approval of the Organic Law by the National Assembly on Thursday which cleared the way for the nationalization of the service companies in all primary hydrocarbons operations.

The law will affect contractors dealing with water, vapor or gas injection, gas compression, staff and materials transportation, replacement of pipelines and vessel maintenance.

Chavez said that the measure represented a "socialist offensive" which would eliminate the monopoly of the contracting companies and guarantee the welfare of thousands of Venezuelan workers.

Venezuela, which relies on oil income for over 93 percent of its export earnings, has been greatly affected by the rapid decline in oil prices.

Petroleos de Venezuela has recently begun seeking for previously unsolicited foreign investment in the oil rich Orinoco Belt as well as renegotiation of current contracts with some foreign companies to reduce costs.

Following the victory in a February referendum which will allow him to run for president again when his term expires in 2012, Chavez has pushed forward a series of similar reforms.

In March, the government nationalized several rice factories apart from taking over some key ports previously run by state governments to bring them under the control of national government.

In 2007, Chavez nationalized oil projects worth billions of dollars, leading oil giants Exxon Mobil and Conoco Phillips to quit the nation and sue for compensation.

Chinese ministry rules out sudden fuel price hike

BEIJING,May 9-- The government ruled out
any immediate increase in fuel prices on Friday despite increasing market
speculation about a possible hike, top pricing officials said.

Officials at the National Development and Reform
Commission (NDRC) said the recent oil price rise on the global market indicated
that the domestic fuel prices should be raised.

But Xu Kunlin, deputy director of NDRC's pricing
department, told a news briefing on Friday that the authorities would only
increase prices after further careful consideration.

According to the fuel pricing mechanism announced on
Friday, China will adjust its fuel prices when global crude oil costs fluctuate
more than 4 percent over 22 straight working days.

The global crude oil price has been increasing since
March, rising from 35 U.S. dollars a barrel to around 58 U.S. dollars on
Thursday.

This was the first time the government made public
its fuel pricing mechanism since it announced last December that it would link
domestic gasoline and diesel prices to the international market.

Xu said many oil traders had engaged in speculative
dealing in recent days amid rumors of a price hike. "To prevent speculative
trading, we will not adjust oil prices exactly in line with the benchmarks set
in the regulation."

"And of course, we will not increase the prices today
(Friday) so that they can profit from speculation," Xu said.

The government raised the benchmark retail price of
gasoline by 290 yuan (42 U.S. dollars) per ton, or 5 percent, and diesel by 180
yuan per ton, or 3.7 percent, on March 25.

Xu said the price revisions show the new pricing
mechanism that took effect on Jan 1 means the government can respond accordingly
to international oil price changes.

He said the government would take the global economic
situation into account when deciding the adjustment of oil prices. "For example,
if the U.S. economy continues to worsen and oil prices come down, we will not
increase prices in the short term."

To prevent speculation, Xu ruled out announcing the
timing of oil price adjustment in advance. "I don't think we need transparency
in this regard."

Cao Changqing, director of the NDRC pricing
department, said the Chinese government has tracked the trend of several oil
markets worldwide.

China only monitored the oil price in Singapore in
the 1990s. "We've learnt a lesson from that because that created many massive
profit-making opportunities for speculators," he said.

PetroChina said on its website that China's
ex-factory gasoline and diesel prices are linked to the prices of Brent, Dubai
and Cinta crude oil, and it will also take into account transportation,
processing, tax and refining costs.

(Source: China Daily)

Iraqi oil minister says OPEC likely to cut production

Graphics shows the price of crude oil futures in the past 13 months. The price of light, sweet crude oil for March delivery rose 85 cents to settle at 41.17 dollars a barrel on the New York Mercantile Exchange on Feb. 5, 2009. (Xinhua/Meng Lijing)
Photo Gallery

BAGHDAD, Feb. 7 (Xinhua) -- OPEC members are expected
to decide to cut oil production in March in an attempt to raise oil price to70
U.S. dollars a barrel, Iraqi Oil Minister said on Saturday.

"OPEC members will meet in March, and there is an
intention to decide further cut to raise prices," Hussein al-Shahristani told
reporters at a symposium on oil and gas industry development.

"We expect a cut that the crude prices will be more
than 70 dollars a barrel," Shahristani said in Baghdad's Rasheed Hotel.

However, Shahristani said that the raise of the oil price will be achieved gradually and not necessary in the coming months.

A petrol station in front of the OPEC headquarters is pictured in Vienna October 24, 2008. (Xinhua/Reuters File Photo)
Photo Gallery

Shahristani also criticized the red tape in Iraq,
blaming it for the delay of efforts to boost the country's oil production.

He also hoped that Iraq could rapidly achieves oil
sector reconstruction and to form a national oil company, which can conclude oil
deals without waiting for cabinet approval.

Iraq is a member of the Organization of Petroleum
Exporting Countries (OPEC). The organization is not bounding Iraq by its
production quotas because of the country's dilapidated oil infrastructure.

Iraq oil reserve is reportedly to be the world's
third-largest, which needs billions of dollars investment to overhaul its oil
industry infrastructure and increase oil and gas output after decades of wars
and sanctions.

Iranian president submits $89-billion budget

TEHRAN, Jan. 27 (Xinhua) -- Iran's President Mahmoud Ahmadinejad on Tuesday submitted to Majlis (parliament) an 890-trillion-rial (89-billion-U.S. dollar) budget bill for the next Iranian calendar year (to start on March 21), the official IRNA news agency reported.

Noting that "the government has made great efforts to reduce the country's dependence on oil resources," Ahmadinejad said the falling oil prices have "created an opportunity for a structural change in the budget and decreasing dependence on oil resources."

"While economizing the expenses in the budget bill, the government has allocated more expenditures to health and treatment, water, agriculture, environment and natural resources in the next year budget bill," he was quoted as saying.

The budget is based on global oil prices of 37.5 dollars per barrel, much lower than the high of nearly 147 dollars seen in the middle of 2008.

The Iranian economy is dominated by oil and gas exports which constituted 70 percent of government revenue as of 2008.

High oil prices in recent years have enabled "Iran to amass nearly 80 billion U.S. dollars in foreign exchange reserves." Yet the increased revenue has not eased economic hardships, which include double-digit unemployment and "inflation which climbed to 26 percent as of December 2008," said the report.

Iran had the highest annual inflation rate among Middle East countries, according to the report of the Central Bank of Iran (CBI) released in November.

CBI chief Mahmoud Bahmani said on Saturday that the country would reduce the inflation rate in the following months.

Iraq's oil exports reach 56 mln barrels in December 2008

BAGHDAD, Jan. 25 (Xinhua) -- Iraq said that its oil exports reached 56.2 million barrels in December last year, an Oil Ministry statement said on Sunday.

According to the statement, 43.4 million barrels were exported through Basra terminals in the Gulf, while 12.8 million barrels were exported through Turkey's port of Ceyhan, adding the oil was purchased by 23 international oil companies.

The statement, meanwhile, showed that the month's revenues from the country's crude oil exports were about 1.943 billion dollars, with an average price of about 34.57 per barrel.

However, the revenues from December were fallen from 2.299 billion dollars in November, when the average of the oil price was about 43.54 a barrel.

Iraq oil reserve is reportedly to be the world's third-largest, which needs billions of dollars investment to overhaul its oil industry infrastructure and increase oil and gas output after 13 years of sanctions and war.

Oil prices continue decline on swine flu fears

NEW YORK, April 28 (Xinhua) -- Crude prices fell for the second day on Tuesday as concerns over the swine flu outbreak weighed the markets.

The swine flu virus which has killed more than 100 people in Mexico has spread to more countries. The number of confirmed human swine flu cases in the United States has risen to 64 on Tuesday.

Investors are worrying that the outbreak of swine flu could curb the global economy recovery and further depress fuel demand.

The prices were also dragged down by a forecast on U.S. crude inventories. Analysts said the U.S. inventories would rise 2.1 million barrels last week due to slumping demand.

Light, sweet crude futures for June delivery was down 22 cents to settle at 49.92 U.S. dollars a barrel on the New York Mercantile Exchange. London Brent fell 33 cents to 49.99 dollars a barrel.

OPEC weekly oil prices stand above $50

VIENNA, April 20 (Xinhua) -- The weekly average prices of the Organization of Petroleum Exporting Countries (OPEC) crude oil rebounded to 51.43 U.S. dollars per barrel last week, representing a rise of 0.09 dollars from the previous week, the Vienna-based cartel said Monday.

In the five trading days last week, the daily average oil prices were maintained at above 50 dollars, with the maximum fluctuation of 0.85 dollars, according to the data published by OPEC.

Analysts believed that the U.S. stock market continued to rise, the SP 500 index rose consecutively for six weeks, as the consumer confidence index from the University of Michigan in April reached the peak value since September 2008, which enhanced investors' confidence in the economic recovery and to some extent boosted the rebound of oil prices.

In addition, it was believed that the drop in OPEC crude oil supply also supported the oil prices.

OPEC has reduced its oil production by an overall 4.2 million barrels per day since last September in a bid to prevent the further drop of oil prices which peaked at 147 dollars per barrel in July 2008 and fluctuated this year between 40 and 50 dollars.

The current average OPEC oil export volume is 22.24 million barrels per day, representing a drop of 560,000 barrels from early April.

Nevertheless, some experts pointed out that the fact that U.S. crude oil inventories hit a new high of 19 years also could not be ignored. Before the high inventories decrease, the international crude oil prices will continue to maintain a concussion.

The oil minister of the United Arab Emirates (UAE), Mohammed Al-Hamli, said Monday that the oil price of 50 dollars per barrel not only can promote the process of global economic recovery, but also create possibility for investment.

He also said that despite of the current low oil prices, the UAE would continue to expand the oil production capacity.

At the end of May, the OPEC oil ministerial conference will be held in Vienna to discuss the future oil production strategy.