UPI Energy Watch

Shell looks at Iraqi oil deal

Royal Dutch Shell, reportedly the largest oil company in Europe, has said it is looking at oil field projects in Iraq in preparation for when Iraq issues exploration permits next year. The announcement came from Jeroen van der Veer, chief executive officer of Shell.

Last month Iraqi Oil Minister Hussain al-Shahristani announced Iraq would award contracts by June 2009, and Shell is planning to bid on those contracts, Neftegaz reported.

Next year's oil licensing will be the first since the U.S.-led invasion in 2003.

"They've just issued the rules on how to bid," van der Veer said. "It's quite complicated; we will study that, and of course then we'll make up our mind on what we are going to do."

At the same time, some Iraqi lawmakers are questioning the transparency of a preliminary deal that was signed by Iraq's Oil Ministry and Shell in September to explore natural gas in southern Iraq.

The Parliamentary Committee on Oil and Gas said there was no bid for the deal and if Shell were to win contracts in June, it would hold a monopoly on Iraq's oil and gas.

Iraq holds an estimated 112 trillion cubic feet of natural gas reserves and about one-third of the world's oil reserves.

Occidental explores in Oman

U.S.-based Occidental Petroleum Corp. announced it has signed a deal with the Mubadala Development Co. of Abu Dhabi and the Ministry of Oil and Gas in Oman.

According to the terms of the exploration and production-sharing agreement, Occidental and MDC will develop four existing gas fields and explore for potential new discoveries in northern Oman.

Occidental will serve as the operator of the project over the 20-year agreement with 48 percent interest. Mubadala will hold 32 percent interest and the Oman Oil Co. will hold 20 percent interest.

Exploration will begin immediately, and production is expected to begin in 2010 and peak at about 27,500 barrels of oil equivalent per day by the end of 2011.

Cyprus accuses Turkey of meddling in its oil

Cypriot Foreign Minister Markos Kyprianou said grievances were shared with the United Nations and the European Union regarding Turkey.

Kyprianou said Turkey, a longtime rival of Cyprus, has "violated international law" and stopped oil exploration vessels on the Mediterranean Sea belonging to Cyprus, Chinese news agency Xinhua reported.

"These actions by Turkey are illegal on the basis of the international law," Kyprianou said. "They violate the principles of international law, and, of course, they will not be accepted by our side."

Cyprus signed agreements with Egypt and Lebanon expanding undersea borders to allow oil and gas exploration, but Turkey has no diplomatic relations with the Republic of Cyprus. Turkey maintains Cyprus is a breakaway region.

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Closing oil prices, Nov. 26, 3 p.m., London

Brent Crude oil: $49.80

West Texas Intermediate crude oil: $51.96

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(e-mail: energy@upi.com)