Explosions in Iraq, UK and Nigeria and more new refineries elsewhere

This section summarizes downstream developments of the previous month. Exploration & Production are covered in 'Upstream Review'.
Iraq's latest round of elections, on 15th December, returned mainly Shi'ite parties, to protests from Sunnis and some secular parties. The country continued to suffer from high levels of violence. Oil installations were bombed, and road-tanker drivers were attacked in what was clearly a move designed to stop the delivery of refined products to Baghdad. The oil minister, Ibrahim Bahr al-Ulum, resigned in protest against a government decision to increase Iraq's heavily subsidized fuel prices. He has been temporarily replaced by the Deputy Prime Minister, Ahmad Chalabi. Opposition to the price rises led to a 10-day strike at Iraq's main refinery at Baiji. Operations continued to be adversely affected after the strike because of sabotage to the 200,000 bpd pipeline bringing crude oil to Baiji from Kirkuk. Sabotage to a pipeline serving the Daura refinery cut production there, and severe gasoline shortages were reported across the Baghdad region. The export pipeline from Kirkuk to Ceyhan was reopened after being idle for most of 2005, but throughputs are nowhere near capacity levels. Exports of crude oil from Basrah were disrupted by power cuts and bad weather.     

More price records, more unrest and more refineries

This section summarizes downstream developments of the previous month. Exploration & Production are covered in 'Upstream Review'.
Oil prices continued to set new records despite a decision by OPEC to raise production by 0.5 mn bpd to 27.5 mn bpd from 16th March. On 1st April, WTI futures in New York set a new closing high of $57.27 a barrel, having traded earlier in the day at $57.70. IPE Brent remained just below its previous record, touching $56.15. Crude oil's strength pushed the official prices of some Asian crudes to record levels, including Malaysia's benchmark Tapis grade, which was set at $58.89 a barrel. Product prices rose to new highs as well. In New York, May heating oil reached $1.6638/gall and May gasoline settled at $1.7310 on 1st April, while, in Europe, gasoline rose to an all-time high of $558/t. The market's view on OPEC's decision was that the rise in output was too little, too late. Even a statement by the cartel's President, Shaikh Ahmad Fahd Al Sabah, that OPEC would consider a further rise of 0.5 mn bpd for May did nothing to calm fears.     

Iraqi plans, Nigerian violence and more refineries

This section summarizes downstream developments of the previous month. Exploration & Production are covered in 'Upstream Review'.
Iraq has announced several schemes to raise its production of oil, natural gas and LPG, and to upgrade its refinery system. Work on all these projects, however, continues to be hindered by the high levels of violence, despite the arrival of more US forces in some of the worst-affected areas. The only region where reconstruction and new developments can take place is in the Kurdish north of the country, but here, political tensions between the regional government of Kurdistan and Baghdad are threatening plans to develop new oilfields. Baghdad objects to a series of development deals signed between the Kurdish regional government and various oil and gas companies, one of which has led to the development of a new oilfield and associated infrastructure at Tawke, which is expected on-stream shortly with an output of about 20,000 bpd. Baghdad has drawn-up new rules stating that all such deals should be signed with the central government. Kurdistan's regional government is fighting to retain control of its oil and gas industries.     

Cuts from OPEC, violence in Iraq, more biofuel

This section summarizes downstream developments of the previous month. Exploration & Production are covered in 'Upstream Review'.
OPEC's ministers, meeting in Doha on 19th October, decided to cut their production by 1.2 mn bpd from 1st November. The reduction is based on an output total of 27.5 mn bpd, which represents the production of the ten quota-observing countries in the weeks immediately preceding the Doha meeting. The Kuwaiti Oil Minister subsequently observed that the OPEC-10 were unlikely to be at their 26.3 mn bpd target before the second half of November. Venezuela said its 138,000 bpd cut would be concentrated on foreign joint-ventures operating in the Orinoco heavy oil belt. Crude oil prices fell in the wake of OPEC's announcement, prompting the Saudis to speculate that the group might cut production by a further 500,000 bpd at its meeting in the Nigerian capital, Abuja, on 14th December.     

Violence in Iraq, sabotage in Nigeria and strikes in Europe

This section summarizes downstream developments of the previous month. Exploration & Production are covered in 'Upstream Review'.
An upsurge of violence in Iraq threatened a recovery in output that began earlier this year. Production in the northern fields hit a post-invasion high of 620,000 bpd in March, rising by 180,000 bpd in one month. Fighting in the south, however, cut production there by more than 100,000 bpd as government troops tried to subdue Shi'ite militias in and around Basrah. Oil installations damaged in the south included a pipeline and a pumping station. The Iraqi government nevertheless announced that oil production would reach 2.9 mn bpd by the year's end, requiring an increase of nearly 500,000 bpd over April 2008 levels. Foreign help is to be sought via a series of technical service agreements and - later this year - an upstream licensing round. Japan's Ministry of Economy, Trade and Industry says it wants a bigger role for Japanese oil companies in both the upstream and downstream sectors in Iraq. Kurdistan says it is negotiating with Baghdad to export oil produced from new oil fields there. The central government does not recognize production agreements drawn up by the Kurdistan Regional Government. The EU - desperate for gas to fill its Nabucco pipeline - has approached Iraq for up to 1 bn cfd.     

Violence in Iraq and Nigeria, OPEC cuts output, admits Angola

This section summarizes downstream developments of the previous month. Exploration & Production are covered in 'Upstream Review'.
Iraq ended 2006 with its crude oil exports at zero, its oil industry in need of "urgent attention", according to a report delivered to the US President and Congress, and its domestic security situation spiralling out of control. The execution of former President Saddam Hussain on 30th December failed to pacify the country, as the government appears to have hoped, as more than 2,000 Iraqi civilians died during the month of December and US military casualties passed the 3,000 mark. Crude oil exports ceased as bad weather closed the Persian Gulf terminals of Basrah and Khor al-Amaya. Exports via Ceyhan were already at a standstill, following recent attacks on the pipeline from Kirkuk. The country's main refinery, at Baiji was closed for part of December following threats to workers there and an attack on its main supply pipeline from Kirkuk. The government tried to relieve the resulting shortage of refined products by arranging to import some 6,300 bpd of fuel from Iran. The black-market prices of some refined products were reported by the Arabic newspaper, al-Hayat to have reached record levels. The Oil Ministry estimated that Iraq's oil exports were 1.6 mn bpd during 2006. Iraq has agreed to supply Jordan with 10,000 bpd of crude oil at a discount of around $18/bbl.     

Nymex entertains; Iraq, Nigeria, Kenya and Gaza disappoint

This section summarizes downstream developments of the previous month. Exploration & Production are covered in 'Upstream Review'.
Oil markets started the year on a high note before descending into farce. In the first futures trading session of the new year, with all the screens showing WTI at $99.60/bbl, one Nymex trader - doubtless with an eye on posterity - paid $100 for a contract, thereby ensuring that oil grabbed the next day's newspaper headlines, though doubts were at first expressed over the validity of a trade that was so far off the market. In the ensuing confusion someone tried to replicate the trade, then the markets returned to some form of normality and began to fall steadily for much of the rest of the month until WTI slipped almost unnoticed below $90/bbl.     

Nymex entertains; Iraq, Nigeria, Kenya and Gaza disappoint

This section summarizes downstream developments of the previous month. Exploration & Production are covered in 'Upstream Review'.
After a series of false starts when WTI traded above $100/bbl but failed to remain there ( see 'The Month in Brief', February 2007 ), front-month WTI futures settled above $100 for the first time ever, on 19th February, at a price of $100.01/bbl. The new record was prompted by a continuing fall in the value of the US dollar and rising tensions in Nigeria ( see below). Other records followed. The following day, prompt WTI futures reached $101.32 in day-trading before easing by the close.     

THE MONTH IN BRIEF: Crude prices up on unrest in Ukraine and Libya,Kurdistan exports oil,and US sanctions target Syrian refineries

This section summarizes downstream developments of the previous month. Exploration & Production are covered in “Upstream Review.”     

Violence in Iraq and Nigeria, high prices in Japan and too much Thai ethanol

This section summarizes downstream developments of the previous month. Exploration & Production are covered in 'Upstream Review'.
Violence in Iraq involved the national oil industry when the Deputy Oil Minister Abd al-Jabbar al-Wagga'a was kidnapped at gunpoint in Baghdad, along with four other oil officials. The gunmen, who were wearing uniforms used by the Iraqi security forces, broke into a compound housing the State Oil Marketing Organization (SOMO). All five were released on 28th August after a fortnight in captivity. The government has told Lukoil that it does not recognize the contract the Russian company signed with the government of Saddam Hussain in 1997 to explore the West Qurnah oilfield, one of Iraq's largest. Lukoil has been informed that it must resubmit its bid to develop the field, where it will face competition from other international companies. Another important oilfield, Majnoon, was shut-in for five days in August after nearby inhabitants blockaded the production site in protest against the lack of jobs there for local people. Majnoon's output - at 40,000 bpd - remains well below the field's capacity as a result of violence in the south of Iraq ( see 'Focus'). Despite the unrest across Iraq and the lack of laws covering foreign investment, the government has recently signed deals covering the building of new pipelines and other developments with Turkey, Iran and Syria.     

OPEC abandons quotas, more violence in Nigeria and British give away gas

This section summarizes downstream developments of the previous month. Exploration & Production are covered in 'Upstream Review'.
OPEC ministers meeting in Vienna on 11th September agreed to leave the production ceiling unchanged at 28 mn bpd. The cartel, however, is to move away from formal quotas to a system of adjusting total production to world demand. The change recognizes the fact that many OPEC countries cannot produce their full quota allowances. The new policy is described by OPEC as trying "to ensure that supply and demand (remain) in balance with prices at reasonable levels". "Reasonable levels" were not defined in the communiqué, but most ministers agreed they should be in the region to $60-65/bbl. The oil markets were sceptical and prices fell below $60, reaching a seven-month low at the start of October. Nigeria announced a production cut of 120,000 bpd, though this may be a recognition of the difficulty of producing oil there at present. During September, the country was plagued by further violence in the Niger Delta, including attacks on oil workers, kidnappings and sabotage to oil installations. Oil workers went on strike for two days, threatening further walk-outs. By late September, nearly 875,000 bpd of production was estimated shut-in as a result of the current unrest. Shell said it had suspended plans to repair damaged facilities in the Niger Delta because of the continuing high level of violence.     

Another hurricane, more refineries and strikes

This section summarizes downstream developments of the previous month. Exploration & Production are covered in 'Upstream Review'.
Another hurricane - this time called Wilma - interrupted oil supplies to the US. Whilst the storm itself generally avoided the US, it damaged marine installations at the Bahamas Oil Refining Company's terminal which supplies up to 200,000 bpd of low sulphur fuel oil (LSFO) to the US and Puerto Rico. The loss of supplies from BORCO comes at a bad time for US electricity generators, several of which have been switching out of gas into LSFO following the spike in gas prices caused by damage to US Gulf production following previous hurricanes ( see 'The Month in Brief', September 2005 ). Another major supplier of LSFO, Brazil, has cut deliveries to the US, diverting 45,000 bpd to Argentina, where a shortage of natural gas has increased demand for fuel oil. LSFO is not the only concern for US consumers. Refinery shutdowns in the US Gulf mean that the US is short of middle distillate going into the winter heating season. The Bush administration is now considering the establishment of a series of regional product reserves across the United States. The stocks would be held at refineries and would be sufficient to cover a loss of gasoline and middle distillate supplies lasting for five days.     

THE MONTH IN BRIEF: Fuel shortage probe in Nigeria,Libyan deal to raise output,and Iraq revives Jordan pipeline plan

This section summarizes downstream developments of the previous month. Exploration & Production are covered in “Upstream Review.”     

THE MONTH IN BRIEF: Oil prices down; further violence in Iraq,Libya, and Yemen; and Iran denounces OPEC's quota policy

This section summarizes downstream developments of the previous month. Exploration & Production are covered in “Upstream Review.”     

Assessment of n-alkanes and acyclic isoprenoids (geochemical markers) in crudes: A case study of Iraq and Niger delta,Nigeria

This study was designed to determine the ratios of the isoprenoids and n-alkanes in an imported crude oil sample (Bassrah from Iraq) and four crude oil samples (Bodo, Bonny-Export, Escravos and Penningston) from the Niger Delta region of Nigeria to ascertain the levels of maturity and as an indicator of the depositional environment of the crudes. The physical properties of the crudes: viscosity, density and °API gravity were also determined. Fractionation of the crudes was done using a new approach coded NAASAR, (n-alkanes, asphaltenes, aromatics and resins) comprising urea adduction followed by gas chromatographic analyses (for n-alkanes), n-heptane precipitation (for asphaltenes) and column chromatography (for resins). Results showed °API gravities Bassrah 28.03°, Bodo 31.89°, Bonny-Export 33.8°, Escravos 33.8°, and Penningston 33.8° indicating that Escravos, Penningston and Bonny-Export crudes are light crudes while Bodo and Bassrah crudes are medium crudes. The n-alkanes profiles of the five crudes were determined by gas chromatography ranged from n-C₈H₁₈ to n-C₄₀H₈₂ with total weight percent n-alkane yield Bassrah 11.2, Bodo 47.41, Bonny-Export 32.47, Escravos 5.58, Penningston 30.75 were obtained by urea adduction. The pristane to phytane ratios were computed, Bassrah 1.51, Bodo 1.48, Bonny-Export 1.08, Escravos 1.01 and Penningston 2.41. Isoprenoids to n-alkane ratios Pr/n-C₁₇ in the same order of the crudes were 0.85, 0.83, 0.67, 0.65, 0.95 while phytane to n-C₁₈ ratios were 0.61, 0.55, 0.62, 0.61 and 0.43. The results established the increasing level of maturity as obtained from Pr/n-C₁₇ ratio in the order: Penningston < Bassrah < Bodo < Bonny-Export < Escravos. The result of Pr/Ph ratios show the same trend in the level of maturity. Penningston crude with Pr/Ph ratio 2.41 shows that the crude is deposited in fluviomarine and coastal swamp environment while Bassrah, Bodo, Bonny-Export and Escravos crudes indicate aquatic depositional environment (anoxia) condition.