$25b to be spent on new refinery

Juhel Browne jbrowne@trinidadexpress.com

Thursday, February 14th 2008

A new oil refinery carded for Pointe-a-Pierre is set to cost the State up to US$4 billion ($25 billion).

Energy Minister Conrad Enill made the announcement yesterday, three years after one of his predecessors in office, Eric Williams, had disclosed the Cabinet was looking at the establishment of a second oil refinery, as the existing State-owned Petrotrin complex was undergoing a $2 billion upgrade.

“A new refinery is estimated to cost US$3-4 billion and would be export oriented. This refinery is to be located at a site at the (Petrotrin) Pointe-a-Pierre refinery complex,” Enill said while delivering the feature address at the BG T&T and First Citizens Energy Luncheon Series at the Hyatt Regency Hotel at the Waterfront, Port of Spain.

Enill’s address yesterday was his first major speech since his appointment as Energy Minister after the November 5 general election.

It also marked the first time that Prime Minister Patrick Manning, who attended yesterday’s event, did not deliver the feature address at the Energy Luncheon Series, which suffered briefly from a power outage at the Hyatt. The power outage occurred about three minutes after Manning arrived, during the playing of the national anthem over loud speakers, but this did not stop the proceedings. Those in attendance sang the national anthem and both BG T&T president, Derek Hudson, and First Citizens chief executive officer, Larry Howai, delivered their addresses without the benefit of a sound system, until the electrical supply returned 10 minutes later.

The sound system was fully restored by the time Enill stood at the podium to deliver his address, as he said the Government had identified the need for new refining operations in Trinidad and Tobago, due to the strategic link in the energy value chain.

At present, Petrotrin does not have the capacity to refine the light-sweet crude extract from the oil reserves located off the East coast.

Saudi firm to build $3b refinery in Bangladesh

(MENAFN) Saudi Arabia’s Hi-Tech International Group (HTIG) and Cosmopolitan Oil Refinery Management Limited (CPORML) of Bangladesh signed a deal to set up a $3 billion oil refinery with a capacity to produce 300,000 barrels of oil products a day, Gulf News reported.

The plant will be set up with 100 percent foreign direct investment (FDI) and it will import more than five million tons of crude oil from Saudi Arabia, the companies said in a joint statement. The entire final product will be exported in neighboring counties, they added.

The production capacity of the proposed refinery will be more than three times of the state-run Bangladesh Eastern Refinery Limited (BERL), the lone refinery plant in the country, the statement said.

Bangladesh imports 3.8 million tons of fuel every year, including about 1.5 million tons of crude oil, officials said.

Dubai investor in Hambantota oil refinery

By Tharindri Rupesinghe Plans to build an oil refinery in Hambantota are to be finalized within the next fortnight, according to Dr. Sarath Amunugama, Minister of Enterprise Development and Investment Promotion. Speaking at Friday’s Imexpro 2008 Foreign Trade Promotion Exhibition, he confirmed that the oil refinery is to be a project of a Dubai-based private investor. He says that the initial discussions will result in them signing the agreement in two weeks time.

Elaborating on the project, Foreign Secretary Dr. Palitha Kohona (also present at the event) said that the oil will be brought in from the Middle East, refined in Hambantota and then re-exported. “This oil will not be for local consumption,” he said adding that the investors were “very enthusiastic” over the venture. According to Amunugama, the project will be a $1 billion investment that will be handled by the private firm.

OPEC not to blame for US recession

Sat, 19 Jan 2008 19:41:26
OPEC Secretary General Abdullah al-Badri has stressed that the economic crisis in the US is not the consequence of high oil prices.

In an interview with Der Spiegel, Libyan national al-Badri said the recession in the US economy was ‘home-made’, caused by the subprime mortgage crisis and other financial market problems as well as the lack of American refinery capacity.

In a Tuesday meeting with Saudi King Abdullah, President George W. Bush called on the Organization of Petroleum Exporting Countries (OPEC) to increase oil production.

Al-Badri said if there was a need for an increase in oil production, OPEC would not ‘hesitate’ to do so, as it has the capacity to raise output up to six million barrels per day by 2012, ‘but at present we see no need for this’.

He said OPEC favored ’stable prices’ in the market and added that it was ‘highly unlikely’ that oil would reach USD 200.00 per barrel.

Al-Badri also noted that there had been a ‘lively discussion’ in the November OPEC summit about switching to the euro from the dollar for oil trading. “Such a switch in the main currency could be made, but it will need time,” he said.

The OPEC chief did not comment on a suggestion that Russia could join the organization and said Russian President Vladimir Putin’s proposal to Algeria, Iran and Qatar to form a separate organization had long-term prospects, as gas suppliers were generally tied into contracts for as long as 30 years.

$33mn Engro LNG terminal to be operative in 2009

KARACHI: The Engro’s $33 million LNG Terminal project is scheduled to be completed in early 2009.

The Engro Vopak Terminal Ltd (EVTL) already owns and operates a modern liquid chemicals and LPG terminal at the Port Bin Qasim.

In order to facilitate Pakistan’s growing chemical industry with its bulk liquid and gaseous product requirements, EVTL is actively leveraging its strengths in the pursuit of LNG terminal under patronisation of the federal government.

Engro sources told APP here Friday that a 223MW power project, which is estimated to cost $228 million, is also expected to be completed by the fourth quarter of 2009.

Engro Energy (Pvt) Limited was formed in February 2006 to pursue business in energy sector and identified a power project based on low BTU, high H2S gas from Qadirpur gas field. The project is unique as it would convert low BTU high sulphur content permeate gas, which is currently being wasted and flared, into much needed electric power by the country.

The sources pointed out that Engro has diversified its operations and invested in joint ventures/subsidiaries engaged in chemical terminal and storage, PVC resin manufacturing and marketing, control and automation businesses, food and energy sector. app

EU to set Finland 38 pct renewables goal-report

* Reuters
* Saturday January 19 2008

HELSINKI, Jan 19 (Reuters) – The European Commission will ask Finland to increase its renewable energy output by around a third to 38 percent in draft proposals to be unveiled next week, Finnish public broadcaster YLE said on Saturday. The Commission is due to spell out on Wednesday how it intends to cut greenhouse gas emissions responsible for climate change, share out the burden of cuts in carbon dioxide (CO2) and increase the use of renewable energy sources.

“According to information obtained by YLE from sources at the negotiations, Finland should produce 38 percent of its energy from renewable energy sources by 2020,” YLE said.
The commission is also set to propose Finland cut its CO2 emissions from transport and agriculture by 16 percent compared to levels in 2005. YLE said the figures were draft numbers that were still under discussion. YLE quoted Finland’s energy minister Mauri Pekkarinen as saying Finland could live with the numbers, but last week the minister said in a speech the EU targets were too ambitious.

The Finnish news agency STT, citing unofficial information, said the Commission would ask Sweden — the EU’s best renewable energy performer — to increase to 50 percent from 39.8 percent the proportion of its energy produced from renewable sources.EU leaders agreed last March to cut greenhouse gas emissions by 20 percent in 2020 from 1990 levels, as well as use renewable sources for 20 percent of power production and biofuels for 10 percent of transport fuel by the same date. (Reporting by Sami Torma; Editing by Jon Boyle)

Oil demand to peak before supply: BP

17 Jan 2008, 1900 hrs IST

LONDON: World oil production may peak in the coming years, but it will be because of a decline in demand for petroleum rather than constraint on supply, a BP economist said.

The comments come in the wake of remarks from other industry officials who in recent months have questioned mainstream supply forecasts, suggesting a peak in output may be closer than the industry has previously admitted.

“I believe there is a realistic possibility that world oil production will peak within the next generation as a result of peaking demand,” BP Special Economic Advisor Peter Davies told a meeting at parliament organized by a group of lawmakers looking into peak oil.

A rally in oil prices, which hit a record high above $100 a barrel earlier this month, is leading to growing interest in peak oil — the view that supply has reached, or will soon reach, a high point and then fall.

London-based BP, the world’s third-largest fully publicly traded oil company by market value, dismisses the view that there is a problem with the amount of oil left in the ground.

Statistics complied by BP show the world has proven oil reserves of 1.2 trillion barrels, enough to sustain current output for 40 years.

Rather, Davies said environmental regulations, including efforts to reduce greenhouse gas emissions, could cause consumers to move away from oil.

“I think we will run out of demand before we run out of supply,” he said. “There’s a distinct possibility that global oil consumption could peak as a result of climate policies.

The BP economist said there were also concerns whether there is enough investment. Many major producing countries ban foreign investment in their oilfields or allow it on terms the oil firms deem uncompetitive.

“An imminent peak in oil production is not likely,” Davies said. “Valid concerns remain over investment, especially in resource-rich regions.”

Davies said it was possible to boost world oil production to 100 million barrels per day, a rate senior figures, such as the chief executive of French oil company Total, have questioned in recent months.

The world is expected to need more than 100 million bpd of oil later this century, according to forecasts from the International Energy Agency and others, up from around 86 million bpd now.

“I believe 100 million barrels per day is achievable,” Davies said. “This is achievable in resource terms but it does come down to how much investment is going to take place.”

Petronas to start work in south Sudan oil block

• Reuters
• Friday January 18 2008

By Skye Wheeler

JUBA, Sudan, Jan 18 (Reuters) – Malaysia’s Petronas got permission from south Sudan’s government on Friday to begin oil exploration in block 5B, after agreeing to let Moldova’s Ascom Group keep part of the concession, an official said.”Petronas from tomorrow will move into the location 5B,” the south’s minister for industry and mining, John Luk, said. He is also a member of Sudan’s National Petroleum Commission (NPC), the country’s top decision-making body on oil matters.

During decades of civil war in Sudan’s south, oil contracts signed with the northern government were declared void by the southern rebels, who entered deals with smaller companies like Ascom to begin oil exploration in their areas.Following a 2005 peace deal, the NPC mediated the conflicts of interest and in July last year agreed Petronas could keep its share in Block 5B provided it allowed Ascom, already working in the area, a share in the venture.

Block 5B lies partly in the swampy Jonglei state. Jonglei governor Kuol Manyang Juuk told Petronas, at a Friday meeting in the south’s capital Juba, that he would allow it access for the first time.It was not immediately clear what percentage of the concession Ascom would take. “We have a committee to assess… They will come up with Ascom’s investment so that is taken into consideration when determining that share,” Luk said.

Block 5B, covering more than 20,000 square km (7,723 sq miles), is operated by the consortium WNPOC (White Nile Petroleum Operating Company) led by Petronas and including India’s ONGC Videsh, Sudan’s state-owned Sudapet and Nilepet and Sweden’s Lundin Petroleum.”It was a compromise between the two levels of government (state and national) that Ascom will join the consortium. Ascom will be a part of you, whatever,” Luk told WNPC members. He said Petronas equipment to conduct seismic testing in the area is already on the River Nile in vessels that would be unloaded in the 5B area on Saturday.

Luk said all petroleum companies should work more closely with the semi-autonomous southern government. “They must have presence in Juba and in the state capitals…for all the companies but starting with WNPOC,” he said.Around 2 million people died in the north-south conflict that analysts say was partly fuelled by the discovery of oil. Under the peace deal, south Sudan receives 50 percent of revenues generated from wells in the south.Another company also signed by the former southern rebels, Britain’s White Nile lost its right to part of the massive Block Ba to Khartoum-signed French giant Total in an NPC ruling last year. (Editing by Opheera McDoom and Anthony Barker)

Oil hits new peak as commodities boom

Wed Feb 27, 2008 5:38am EST
By Santosh Menon

LONDON (Reuters) – Oil powered to a new record above $102 a barrel on Wednesday, closing in on its inflation-adjusted peak, as a slumping dollar on lacklustre U.S. economic data triggered a surge across commodities markets.

U.S. crude stood 67 cents higher at $101.51 a barrel by 0425 EST, off its latest highs of $102.08 but still edging closer to the inflation-adjusted peak of $102.53 seen in 1980.

London Brent crude climbed 64 cents to $100.14 a barrel, after earlier hitting a record of $100.30.

The dollar extended losses to fall to fresh record lows against the euro and two-week lows against the yen after reports showed U.S. consumer confidence at its lowest in five years.

A weak dollar can sometimes trigger commodities buying as investors seek to preserve their nominal value in other currencies.

Most commodities markets pushed higher on Wednesday with gold hitting a new record and copper, aluminium and silver hovering near multi-year peaks.

Investors view these metals as a hedge against the dollar and an alternative to other financial markets.

Oil has also lately been supported by growing winter fuel demand in the United States and Europe amid falling temperatures, and indications from OPEC that the exporter group will not increase
production at its meeting next week.

“(OPEC) appears reluctant to heed requests from Western leaders to add more barrels to the market in order to soften prices and appears
to be heading for an unchanged scenario when it meets next Wednesday,” said Robert Laughlin at MF Global.

On Tuesday, OPEC’s president said members would agree not to raise production, in part because of fears of a demand slowdown.

In the United States, crude oil supplies are forecast to have risen last week by 2.5 million barrels, the seventh increase in a row, as
refineries undergoing maintenance have built up stocks.

A Reuters poll of industry analysts predicted U.S. distillates stocks, including heating oil and diesel, would maintain their
seasonal decline, down 2.1 million barrels, due to cold temperatures and a dip in production and imports.

The U.S. government data is due at 1530 GMT on Wednesday.

(Additional reporting by Luke Pachymuthu in Singapore; Editing by
James Jukwey)

© Reuters 2007.