UPI Energy Watch

WASHINGTON, Dec. 29 (UPI) -- Iran's Oil Minister, Bijan Namdar Zanganeh, announced on Dec. 27 that Iran intends to become one of the world's major producers of petrochemical products. Iran's petrochemical production is expected to reach 35 million tons by the end of the Third Five-Year Economic Development Plan (2000-2005) from 160,000 tons in 1965. Zanganeh said that due to the Iran's immense oil and gas reserves, the country's petrochemical industry could influence world markets and the development of the petrochemical industry could play an important role in employment and job creation. Zanganeh added that the country needs to improve its infrastructure and train specialized workers to meet capacity. Zanganeh emphasized that the country will consider supporting private sector investment in the petrochemical industry. Mohammad-Reza Nematzadeh, deputy oil minister for petrochemical affairs and managing director of Iran's National Petrochemical Company, also noted that under a 10-year plan for development of the petrochemical industry, Iran will become the tenth largest producer by 2014; the country is currently the eightieth. Nematzadeh also added that the value of exportable petrochemical products would increase to $20 billion once a series of petrochemical projects become available.

According to Cuba's President Fidel Castro, two Canadian companies, Sherritt International Corp. and Pebercan Inc., have discovered an oil deposit offshore Cuba with an estimated reserve capacity of 100 million barrels. Castro said that this is the first oil discovery since 1999. In 2003, Cuba produced 26 million barrels and 854 cubic yards of gas. The country consumes a minimum of 150,000 barrels per day and imports fuel from Venezuela. Until the discovery, Cuban crude came from onshore wells that dotted the northwest coast along Havana and Matanzas provinces. Foreign companies have tried before to drill for oil in Cuba. In April, Spain's Repsol-YPF began exploring for oil offshore by drilling several wells. According to Repsol Chairman Alfonso Cortina, the Castro-led government had granted Repsol rights to explore five blocks in the Gulf of Mexico off the west of Cuba. Cortina said: "We have done the seismic studies ... and we are going to start the first survey at the end of Marsh or at the start of April. These are high-risk areas ... but we are optimistic." Sherritt and Pebercan currently have joint ventures and production sharing agreements with state-owned Cubapetroleo, accounting for approximately 60 percent of Cuba's oil and gas production.

Lu Chang Jin, China's economic counselor, announced on Dec. 27 that the Chinese government is ready to cooperate with Iran in the country's oil and gas sectors. Iran and China signed a memorandum of understanding in late October whereby China's Sinopec will develop Yadavaran oil field. Under the agreement, Sinopec will purchase 10 million tons of LNG from Iran for a period of 25 years; the National Iranian Oil Company meanwhile has agreed to sell 150,000 barrel per day of crude oil to China at the market price for the 25-year period once Yadavaran becomes fully operational. Chang Jin noted that China currently imports 300,000 bpd of crude oil from Iran.

Addressing a group at a conference on the future of oil and petrochemical industries in Arab countries on Dec. 27, Sameh Fahmi, Egypt's minister of petroleum and mineral wealth, said: "Oil is the backbone of economic and social growth in Egypt." Fahmi noted that Egypt's oil refinery capacity stood at 35 million tons while exports reached 18.6 million tons at $4.2 billion in 2003. Fahmi emphasized that oil export levels have yet to reach the country's aspired capacity. The three-day conference will address 75 research possibilities on the future challenges of the oil and petrochemical industries in the Arab world.

A spokesperson for Serbia's Naftna Industrija Srbije expressed his concern on Dec. 27 over the possible escalation of protests by private oil retailers against state-owned oil company Naftna Industrija Srbije installations and warehouses. A complete halt on fuel delivery could threaten the proper functioning of refineries and place Serbia in a general collapse. Entering the sixth day of a blockade, the spokesperson added that the barricade of the Pancevo and Novi Sad refineries has seriously jeopardized the market supply of oil derivatives.

Bulgaria's Regional Development, Minister Valentin Tserovski, Albania's Industry and Energy Minister Viktor Doda, Macedonia's Economy Minister Fatmir Besimi and AMBO Corporation President Edward Ferguson signed a memorandum of understanding on December 28 in Sofia to construct a trans-Balkan oil pipeline from Burgas in Bulgaria to Vlore in Albania. The pipeline from Burgas to Vlore will have a total length of some 567 miles, of which 298 miles will be on Bulgaria's territory. Initial discussions about the pipeline's construction began in 1994. The pipeline will have a capacity of approximately 35 million tons of oil annually.

Closing oil prices, Dec. 29, 3 p.m. London

Brent crude oil: $39.65

West Texas intermediate crude oil: $42.54