Oil producers 'will meet demand if Iran supply is cut'

Published February 8th, 2012 - 05:25 GMT
Crude oil prices are currently healthy and fair to producers, Al Rumhy said
Crude oil prices are currently healthy and fair to producers, Al Rumhy said

Oil producers will meet demand if supply from Iran is reduced, Mohammed Al Rumhy, Oman's oil and gas minister, said at an energy conference in Bangkok yesterday. It is still unclear how the situation in Iran will develop, the minister added. Crude oil prices are currently healthy and fair to producers, Al Rumhy said, adding that uncertainty over prices hurts suppliers. He said oil market conditions are a major challenge.

PTT Exploration & Production plans to sign an agreement with Myanmar in the next two months to explore for oil and gas in the Block G and Block EP2 concession areas, Asdakorn Limpiti, the company's executive vice-president, said yesterday. The company expects revenue to increase this year if the average oil price remains at $100 a barrel, said Penchun Jarikasem, the company's executive vice-president.

Sales volume may average 284,000 barrels of oil equivalent a day this year. Cambodia may grant oil concession. Meanwhile, Cambodia may grant Chevron Corporation an offshore production license this year to begin pumping hydrocarbons, said Deputy Prime Minister Sok An. The company found oil and gas in waters off the country in 2005. Cambodia expects oil production to start in the offshore Block A by the end of this year, the minister noted. The country is reviewing the field operator Chevron's offshore production license this year. The company found oil and gas in waters off the country in the year 2005.

Iran's production

Iran, in the meanwhile, yesterday began preliminary production in the Yadavaran oil field in the southwest, shared with neighbouring Iraq, with the opening of a first well, the oil ministry's Shana news agency said. Head of the Oil Engineering and Development Company, Naji Saadouni, said production would reach 20,000 barrels per day by mid-March, Shana reported. Iran plans to increase the total production of the field to 180,000 barrels per day within three years, Shana said. Sinopec, China's largest oil refining firm, has been involved since 2007 in exploiting the Yadavaran oil field, estimated to hold 3.2 billion barrels of recoverable crude, as part of a contract worth $3.6 billion.

Sinopec, like many other Chinese companies, was strongly criticised last year by Iran for delays in starting production in Yadavaran, which is already being exploited by Iraq. China in recent years has signed contracts worth more than $40 billion, following the withdrawal of Western companies in the face of economic sanctions against Iran. However, analysts say that so far only a fraction of that investment has been realised, and Iran last year warned it would punish Chinese companies if they did not speed up the pace of implementation. Iran, struggling to attract annual investment of nearly $50 billion to develop its oil and gas field capacity, decided last year to give priority to shared fields already being depleted by other countries. Thus the Yadavaran and Azadegan oil fields, shared with Iraq, and the giant South Pars gas field, shared with Qatar, have been fast-tracked. Iran is the second biggest producer in the Organisation of Petroleum Exporting Countries (OPEC) with 3.5 million barrels per day, 2.5 million of which are exported, bringing in up to $100 billion last year. It also ranks second in the world in terms of natural gas reserves after Russia.

© Muscat Media Group

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