UPI Energy Watch

Sinopec, Iran finalize oil deal

China's Sinopec Group and the Iranian Oil Ministry signed a contract to develop the Yadavaran oil field in southwestern Iran, China's official Xinhua news agency reported Sunday.

"The initial estimation of the project's cost is about $2 billion," said Iranian Oil Minister Hossein Nozari" class="tpstyle">Gholam Hossein Nozari.

The multibillion-dollar project is expected to be completed in two phases.

"The first phase to produce 85,000 barrels per day will be carried out in four years and the second phase to produce another 100,000 bpd will be carried out in another three years," Nozari said.

According to estimates, the field has about 18.3 billion barrels of oil reserves and 12.5 trillion cubic feet of gas reserves.

Belarus hopes to extract more than 900,000 tons of oil in Venezuela

Venezuelan President Hugo Chavez promised Saturday to supply oil to Belarus and signed an agreement with President Alexander Lukashenko, the Budapest Business Journal reported.

The joint venture will extract oil from a Venezuelan oil field. Venezuela's PDVSA will hold 60 percent and Belarus' Belorusneft will hold the rest.

"The oil your nation needs is here, as much as you need for 100 years, 200 years," Chavez said. "In a few years, we will be able to produce nearly 50,000 barrels of oil a day between us, and that oil will go to Belarus."

Lukashenko, who has been trying to reduce his country's dependence on Russian energy, also pledged military cooperation with Venezuela.

Analysts mull oil below $88

Opening at about $88 in Asian trading markets, a decline in oil prices that began Friday continued.

The price dip was, in part, due to a U.S. jobs report in November that was less robust than expected. A slowing economy means reduced demand; the price of crude has fallen more than 10 percent since it hit a nearly $100 high in November.

Others say the decline is caused by slowing trade in the Asian markets as well as the pending interest rate freeze in the United States.

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Closing oil prices, Dec. 10, 3 p.m. London

Brent crude oil: $90.23

West Texas Intermediate crude oil: $90.20

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(e-mail: energy@upi.com)