UPI Energy Watch

Bangladesh oil blocks draw major bids

More than two dozen international energy firms have bid on the 28 blocks being offered by Petrobangla, the state-owned oil and gas exploration company, the Bangladesh Daily Star reported.

China's CNPC International, Chevron, BP and India's ONGC Videsh Ltd. all made offers on the rights to explore the oil and gas blocks.

Eight of the 28 blocks are shallow water and 20 are deep sea blocks, each estimated at between 3,000 and 7,000 square kilometers and most of them in the Bay of Bengal.

Petrobangla officials are in the process of meeting with the executives of the prospective bidders.

An estimated 100 trillion cubic feet of gas and 2 billion barrels of oil in place have been discovered in the region so far.

According to Petrobangla, contracts will not include a signature bonus or royalty, but there will be no duty for equipment and machinery imported for exploration, production and development operations. Contractors will be required to give a 10 percent stake to the government for shallow offshore blocks but will get discounts on gas sale, discovery and production bonuses.

Iran announces gas deal with Switzerland

Iran and Switzerland have signed a major energy deal allowing Switzerland to tap Iranian gas and possibly reduce Europe's dependence on Russia for natural gas.

The contract signed between National Iranian Gas Export Co. and Electricite de Laufenburg will allow Switzerland to import 5.5 billion cubic meters of natural gas per year starting in 2011.

Swiss Foreign Minister Micheline Calmy Rey signed the agreement with her Iranian counterpart, Manouchehr Mottaki, in Tehran.

Rey described the deal as a strategic interest as part of the country to diversify its energy sources. Oil Minister Gholam-Hossein Nozari said the plan is that the gas will be pumped to Turkish border and delivered to EGL. Financial details of the deal were not disclosed.

Swiss media reported that the United States has increased pressure following the gas export deal between the two countries and has asked for copies of the contract to find out if it violates the sanctions, but Swiss officials said it doesn't violated the sanction that forbid investments in Iran's oil and gas sector worth more than $20 million.

Iraq's pipelines up and running

Analysts for India's Economic Times reported crude oil's continued slow, but steady, drop may be related to the restart of a crude pipeline system in southern Iraq that was disrupted over the weekend.

Output will at least temporarily be sustained at 2 million barrels per day without disruption, as a reported lull in fighting in the oil-rich province of Basra allowed oil field workers to return to work.

While the flow of Iraqi oil exports from Basra has normalized, analysts said a continuing and general unease about security in the Middle East as well as threats of further supply disruptions in other provinces will likely keep prices from falling much further, at least in the short term.

The continued weakness of the U.S. dollar is also partially to blame for continued high prices, analysts said. The Organization of Petroleum Exporting Countries governor of the United Arab Emirates said that oil markets were well-supplied with inventories of crude oil and refined products and the high price was a result of that weakness.

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Closing oil prices, Mar. 31, 3 p.m. London

Brent crude oil: $104.86

West Texas Intermediate crude oil: $105.84

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(e-mail: energy@upi.com)