Iraq Oil Field Goes to Royal Dutch Shell and Petronas

Iraq Oil Field Goes to Royal Dutch Shell and Petronas

 

By REUTERS

Published: December 11, 2009

 

Royal Dutch Shell and Petronas of Malaysia won the rights Friday to develop one of the world's largest remaining untapped oil fields, as Iraq held its second auction of oil contracts since the U.S.-led invasion of the country in 2003.

The companies proposed that a fee that Iraq would pay them to develop the Majnoon oil field be set at $1.39 per barrel and they pledged to increase output from the field to 1.8 million barrels per day, more than twice what Iraq had expected.

"The fee is less than the Oil Ministry specified," the Iraqi oil minister, Hussain al-Shahristani, said at the auction, which took place under heavy security in Baghdad.

The French oil major Total had joined with China National Petroleum Corp. to bid for the field, which it had sought to develop during Saddam Hussein's rule. As some consolation, Total had a stake in a C.N.P.C.-led consortium that won the rights to the smaller Halfaya oil field.

Iraq is offering 10 oil fields over two days in a rare opportunity for oil companies, from Western majors to Chinese and Indian state-owned giants.

Despite the anticipation, no one bid for the 8.1-billion-barrel East Baghdad field, part of which is under the Sadr City slum in the Iraqi capital. Baghdad is still hit by periodic bombings and oil executives considered it unsafe to invest in that field.

Mr. Shahristani said the Iraqi Oil Ministry would develop the East Baghdad field on its own.

The deals have the potential to lift Iraqi oil output to levels that would rival those of the top oil producers, Saudi Arabia and Russia, and could rattle the geopolitical power balance in the Middle East.

Competition had been expected to be fierce as the auction included the last of Iraq's giant fields, with the Majnoon field holding 12.6 billion barrels. They are among the last untapped fields of their size in the world.

Collectively, the fields on offer hold about as much oil as all that held by Libya, which is a member of the Organization of the Petroleum Exporting Countries.

Iraqi Army helicopters buzzed overhead while convoys of armored sport utility vehicles carrying oil executives hidden behind tinted windows raced through Baghdad to the auction.

Halfaya, with 4.1 billion barrels of reserves, was won by the consortium of C.N.P.C., Total and Petronas. They proposed a fee of $1.40 per barrel and a plateau production target of 535,000 barrels per day.

Also on the auction block were a cluster known as the Eastern Fields in Diyala Province and Qayara, a reservoir in the northern province of Nineveh, where Sunni insurgents are active and Kurdish-Arab disputes have led to tension.

READ MORE - Iraq Oil Field Goes to Royal Dutch Shell and Petronas

Malaysia sees lower Petronas payout

Petronas: Malaysian government sees falling income from its petroleum cash cow.

Malaysia sees lower Petronas payout

Petronas is expected to reduce its contribution to the government's coffers by 14% to 19% on lower crude prices this year.

Upstream staff  Thursday, 10 December, 2009, 02:27 GMT

"We suspect the shortfall will come solely from the petroleum income tax portion, down 35% to 19 billion ringgit ($5.6 billion), while dividend distribution will remain at 30 billion ringgit,'' Maybank Investment Bank said in a report cited in the Star newspaper.

Petronas contributes 74 billion ringgit to the government revenue in the financial year 2009. Some 67 billion ringgit of the contribution went to the federal government and another 6.2 billion ringgit to several oil producing states.

Total revenue of the federal government is expected to fall to 148 billion ringgit next year from 162 billion ringgit in 2009, according to the Star newspaper.

The Economic Report 2009/2010 published in October shows the petroleum income tax standing at 27 billion ringgit at an average $103.69 per barrel in 2008.

The government expects the crude price to fall to $65 per barrel this year. Malaysian crude benchmark Tapis blend fetched $60.70 per barrel on average during the first nine months of 2009.

READ MORE - Malaysia sees lower Petronas payout

SBY berates Pertamina ‘excuses’, demands it take responsibility

Ika Krismantari and Alfian ,  The Jakarta Post ,  Jakarta   |  Tue, 01/06/2009 7:23 AM  |  Headlines

WHEN THE PUMPS RUN DRY: Motorcycle drivers line up at a pump at a fuel station in Palmerah, Jakarta, on Monday. Many fuel stations were out of gasoline despite claims by state oil and gas company Pertamina that it had increased supply to Jakarta and several other cities over the past few days. (JP/Arief Suhardiman)

President Susilo Bambang Yudhoyono on Monday slammed PT Pertamina for "making excuses" about a recent scarcity of Premium gasoline and diesel, saying the state oil and gas company should accept full responsibility for the debacle.

On Sunday, Pertamina brushed aside criticism about its response to the shortages, saying the incident had been isolated to a small numbers of gas stations and that supply delays were mostly due to bank closures during the holiday season and the introduction of a new payment system.

"It's only excuses from the Pertamina management, who said it's [because of] holidays [and] introducing a new system. That's wrong," Yudhoyono said in a speech on the opening day of trading at the stock market Monday.

"There is no such thing as holidays when it comes to serving the people. There is no such excuse.

"The state cannot sleep when running the government to serve the people. This applies to all government officials in the country. Centrally and locally."

As the sole distributor of subsidized fuels in the country, Pertamina has come under severe criticism amid a spate of recent fuel shortages.

Pertamina came under fire recently for a recent scarcity of 3-kilogram liquefied petroleum gas (LPG) canisters that made a mockery of the company's drive for the public to convert from kerosene to the gas.

Even the President has boarded the Pertamina slander wagon.

Monday's outcry was Yudhoyono's second aimed at Pertamina's management, which has been headed by Ari Sumarno since 2006. He first chided the company in mid 2008 amid a shortage of LPG.

Pertamina aims to reduce the government's fuel subsidy by promoting the use of LPG to replace the heavily subsidized kerosene. Lack of preparation has marred the program from the outset.

Many believe Pertamina's problems could be alleviated were the government to allow the private sector to share the burden of distributing fuels.

Existing regulations allow private firms to distribute subsidized and nonsubsidized fuels, but the government has so far retained Pertamina as the sole distributor of the subsidized fuels, claiming those other companies do not have a sufficiently large network of gas stations.

So far, other distributors operating in the country, including the local arms of Royal Dutch Shell Plc. and Malaysian state oil and gas firm Petroliam Nasional Bhd. (Petronas), are allowed only to distribute nonsubsidized fuels.

Pertamina claimed Monday that the distribution of Premium gasoline and diesel in the country had returned to normal.

However, Pertamina's spokesperson Anang Rizkani Noor said a number of gas stations in greater Jakarta were still at risk of running out of fuels because they were still awaiting late deliveries.

There are about 600 gas stations in greater Jakarta.

READ MORE - SBY berates Pertamina ‘excuses’, demands it take responsibility

Petronas signs accord with two firms on Uzbek project

KUALA LUMPUR: Petronas has signed a heads of agreement with Uzbekneftegaz (UNG) and Sasol Ltd of South Africa to develop the Uzbekistan gas-to-liquids (GTL) project.

The partners are currently in negotiations with the Uzbekistan government on the detailed requirements of the project and plan to proceed with the implementation of the next phase of the project.

The negotiations would also include setting up a joint-venture company, Petronas said in a statement yesterday.

It said the partnership would further enhance its presence in Uzbekistan's oil and gas sector, as Petronas was already involved in some upstream ventures in the central Asian nation.

Among the projects are development and production of Urga, Kuanish and Ackhalak group of oil fields via the Urga production-sharing agreement and exploration of oil blocks in the Uzbekistan part of the Aral Sea and Surkhansi and Baisun Investment Blocks.

Petronas also said it was currently undertaking a joint study with UNG, Uzbekistan's national oil and gas company, for cooperation in the development of downstream petrochemical projects in Uzbekistan.

The proposed plant could be bigger than Sasol's Qatar facility, the largest such plant in the world, Lean Strauss, a general manager at Johannesburg-based Sasol, said in a speech on March 9, a Bloomberg report said.

Uzbekistan will soon become a net oil importer, boosting the need for local fuel production, Strauss said. The country has 61.6 trillion cu ft of gas reserves, according to BP Plcs Statistical Review of World Energy June 2008.

The Uzbekistan plant could produce as much as 40,000 barrels a day of transport fuels and would need about 3 trillion cubic feet of gas, Strauss said.

The Qatari plant, in which Sasol has a 49% stake, has the capacity to produce 34,000 barrels of oil equivalent per day. — Agencies

Petronas planned to invest more than US$750mil in oil and gas projects in Uzbekistan, Interfax reported in November, citing Uzbek President Islam Karimov. — Agencies

READ MORE - Petronas signs accord with two firms on Uzbek project

Safety Tips

	Tip 1: Where to buy your gas
	Buy your Gas PETRONAS and accessories from AUTHORISED Gas PETRONAS DEALERS as they are your guarantee of quality products and reliable service.
	Tip 2: Do's and Dont's
	Always keep your gas cylinder in an upright position with the valve at the top. Never keep the cylinder in the horizontal position DO keep your doors and windows open for proper ventilation while cooking.  DO NOT place hot appliances on your gas cylinder. DO keep curtains away from your stove or burner.  NEVER leave your cooking unattended. If you are not cooking for a length of time, turn off the gas supply at the regulator The correct way to light a non-automatic stove or oven is: First, light a match Then, put the flame to the burner Lastly, turn on the stove's knob or valve
	Tip 3: Gas Tank Positioning
	Position your gas cooker higher than the gas cylinder. Keep a distance of 1 to 1.5 meters between your gas cylinder and any open flame or heat source, such as electrical appliances unless your gas cylinder is stored in a well-ventilated gas compartment designed for the storage. The correct way to light a non-automatic stove or oven is: First, light a match Then, put the flame to the burner Lastly, turn on the stove's knob or valve
	Tip 4: Detecting a Gas Leak
	Gas odour is the most common and effective indication of a gas leak. Mercaptan is added to LPG as an odourant as its peculiar odour will alert you of a leak. Some insects like the smell of the odourant and will swarm around the area of a gas leak. Thus keep a look out for heavy insect activities near your gas cylinder/joints. Sound is also a good indicator when there is a gas leak. Listen for a hissing sound. Applying a mild soap solution to the valve/regulator joint and hose can also detect a gas leak as soap bubbles will form at the site of the leak
	Tip 5: Preventive Steps
	Check regulator, hose and clips periodically and replace them as soon as they are worn out. It is recommended to replace hoses and clips every two years and regulators every five years. When changing your gas cylinder, ensure the following: There is no naked flame nearby The gas stove is switched off and the valve is closed The gas cylinder is handled carefully. DO NOT drop or drag the cylinder
	Tip 6: How to Install a Regulator
	Before installing the regulator, ensure that the rubber seal in the cylinder valve is in place. DO NOT use cylinders without rubber seals Place the regulator onto the valve with its control level (red line) pointing downwards Turn the level clockwise to the 9 o'clock position. This will lock the regulator to the valve To switch on the gas, turn the lever further clockwise to the 12 o'clock position To switch off the gas, turn the lever anti-clockwise back to the 9 o'clock position To disconnect the regulator from the valve, turn the lever anti-clockwise to the 6 o'clock position and remove the regulator
	Tip 7: What to Do If There Is a Gas Leak?
	Turn off your regulator and gas stove Open ALL doors and windows DO NOT turn on/off any electrical appliances or switches Notify your gas dealer immediately
	Tip 8: What to Do If There Is a Gas Fire?
	Switch off the gas supply immediately DO NOT panic. Raise the alarm and get everyone out of the premises Fight the fire if you can, but DO NOT take undue risks Close the door to contain the fire
	Tip 9: What to Do If the Flame Goes Off While Cooking?
	Switch off the gas stove Ventilate the room to disperse the gas Reignite the stove ONLY when there is no smell of gas
	Tip 10: A Safety Checklist for Your Home:
	Are your curtains away from your stove? Is the supply hose in good condition and tightly fitted? Is the rubber seal in the cylinder valve present? Do you know how to turn off the regulator that controls the gas supply? Do you know how to check all gas connections for leakage? Is your cylinder at least 1 to 1.5 meters from any open flame or other heat sources? Is the cylinder in a properly ventilated area? Do you have a fire extinguisher in your home?

READ MORE - Safety Tips

Green areas instead of gas stations on city's plan

Triwik Kurniasari ,  THE JAKARTA POST ,  JAKARTA   |  Thu, 03/19/2009 3:00 PM  |  City

The city plans to revive a program aimed at rejuvenating green areas in the capital, by closing down 25 gas stations and converting them into public parks.

Head of parks and cemeteries agency, Ery Basworo, said Wednesday the administration had allocated a budget of Rp 75 million to close down each gas station.

"It will be expensive to demolish the gas stations. We don't have much of a budget for that this year," Ery said at City Hall.

"So the first step will be to close every gas station along the city's green areas.

"We will do this in September. We will inform every gas station owner before we do that," he said, adding that the agency proposed to carry out the project in 2008, but the City Council had rejected it.

He said the administration owned the land the gas stations were built on and had rented it out to businesses.

"The gas station owners will not get any compensation because they do not own the land," he said.

"An exception will be made if the gas station owner has proof that they own the land," said Ery.

He added the agency had teamed up with the city's legal bureau to prepare for any possible lawsuits from gas station owners.

According to the agency, the gas stations occupied about 5 hectares of the city's green areas.

Some of the gas stations are in Central Jakarta, on Jl. Gereja Theresia, Jl. Diponegoro, Jl. Hayam Wuruk and Jl. Kwitang Raya, while others are in South Jakarta, on Jl. Suryo/Senopati, Jl. Lapangan Roos and Jl. Melawai Raya.

Green areas in the capital have shrunk with the burgeoning of skyscrapers, shopping centers, apartments, hotels and office buildings, which started in the early 1970s.

Deputy Governor Prijanto said green areas in the capital currently accounted for 9.9 percent of the city's area.

The administration's objective is to increase the city's green areas to 13.94 percent of the total area of Jakarta (63,744 hectares) by 2010, which is far below the 30 percent set by the central government.

Wati Amir, a legislator at the House of Representatives' Commission VII for energy affairs, urged the administration not be afraid to close down gas stations set up illegally.

"The administration should not be afraid of shutting down a gas station just because it is owned by a state official," said Wati.

"Gas stations shouldn't be built along one of the city's green zones like Pakubuwono."

"Today, children in the area have nowhere to play outside because there are very few parks there. So it's time for the administration to shut down those gas stations and convert them back into parks," said the member of the Golkar Party.

Many business people with political connections and state officials own gas stations around town.

One of the gas stations located on Jl. Jend. Sudirman, near the Semanggi bridge in Central Jakarta, belongs to Taufik Kiemas, former president Megawati's husband.

Wati said the administration should immediately implement its plan because green areas played a very important role in making the city more livable.

READ MORE - Green areas instead of gas stations on city's plan

How can I save money on gas?

With gas prices reaching record levels, it's more important than ever to keep tabs on your gas spending. Although one of the easiest ways to save money on gas is to shop around, by using this web site. But there are a number of other things that you can do to keep some of that hard earned money in your pocket, instead of big oils'.

Change the way in which you drive. Many people burn much more gas than they have to. By making a few small adjustments in the way that you drive, you can see considerable fuel savings. Most vehicles today are set to achieve opimal fuel economy around 55mph. If you drive too fast or too slow, you won't be able to maximize your fuel savings. Also, don't accelerate or brake too hard - this is very hard on fuel economy. See GasBuddy.com's top ten fuel saving tips.

Learn where to find the cheap gas. In most regions, you will find the cheapest gas prices in the same areas. In major metro areas, this seems to be outlying suburbs. It is best to avoid affluent areas when looking for a cheap fill. People in these areas are less price sensitive, and the gas stations realize this fact. Not only that, the gas stations are located on more valuable land, and land taxes will be higher. They pass on these higher costs to customers. Gas stations near major freeway exists can be more expensive that stations further away. It can pay to drive a few blocks from the freeway to find a deal.

Find the right type of station Some stations are always the price leaders in the area. Often times wholesale clubs, grocery stores or department stores with gas stations will sell gas close to cost or at a loss (loss leader), in order to get people into the stores where they may buy other, higher margin items. Some of these places require memberships. The cost of the membership must be factored into the price. Some of these stations also give you a credit for in store purchases when you fill up with gas. This can result in considerable indirect savings. Service stations, with an auto repair shop on site, often have more expensive gas.

Take advantage of discounts available. Many stations have coupons available for discounts on gas purchases. These coupons can be found in various places, like the back side of grocery store receipts, in the mail coupons, internet coupons. Many stations will give you a discount on gas with the purchase of a car wash, or visa versa. A great way to save money on gas is by using a gas rebate credit card. Some of these cards can be used at virtually any gas station, like the Chase Perfect Card (which gives you a 6% rebate on all gas purchases for the first 90 days), and the Discover Gas Card (which gives you a 5% rebate on all gas purchases). Both cards give you a 1% rebate on all other non gas purchases. A number of gas station specific cards are available, but are much more limiting, since you only save money at the same brand station.

Find other ways to get to work. One of the best ways to lower your fuel expenses, is to carpool to work. You can reduce the inconvenience by sharing a ride with someone that works at the same company, and lives near your home. Many companies have a bulletin board, or Intranet web site where you may be able to find someone to carpool with. Another great option is public transporation. Passes are usually available at discounted rates. Although you have to pay to use public transporation, is usually much less expensive than driving to work, and paying for parking (where applicable). Some other options are walking, or riding bike to work. Both of these options have the added benefit of giving you exercise; however, you must live relatively close to work to be able to do this, and you are well advised to ensure that you have access to a shower at work!

Purchase a more fuel efficient vehicle. Many vehicles are getting worse fuel economy than vehicles of the past. Auto manufacturers are putting larger engines in bigger vehicles, which results in unsatisfactory fuel economy. Many SUV's get 15-20 MPG (some even worse). A new wave of hybrid gas/electric vehicles are on the market, and some of them get 45+ MPG. Although their manufacturers say that they get nearly 60MPG, the Honda Insight and the Toyota Prius actually get around 45MPG in real world tests. This is still 3 times the fuel economy on some of the big SUV's and can lead to huge savings. Keep in mind that unless you do a lot of driving, it may be difficult to save enough money to justify paying the premiums that these vehicles command at the dealership. There are a number of other non-hybrid vehicles available that can save you a lot of money at the pump.

READ MORE - How can I save money on gas?