UPI Energy Watch

OPEC may delay production cuts

Word that the Organization of Petroleum Exporting Countries ministers decided at their meeting in Cairo to wait before further cutting oil production, along with a further drop in oil demand, pushed oil prices lower.

"This is a consultative meeting. We would prefer some data. Maybe the final decision will be made in Algeria," said Iranian Oil Minister Gholamhossein Nozari.

Saudi Oil Minister Ali al Naimi said he would like to wait to be certain all of the other member countries have completed the first round of production cuts before implementing further cuts, The National Reported. According to analysts, OPEC has cut only half of the 1.5 million barrels per day production cut previously pledged.

Iran, though Nozari agreed to keep OPEC's options open, needs higher oil prices in order to balance its budget.

Crude prices have been declining since reaching a record high of about $147.27 a barrel in July.

Shokri Ghanem, chairman of Libya's National Oil Corp., agreed with Nozari about waiting for complete compliance before attempting to stabilize the oil market.

Greenland controls its own oil

The people of Greenland voted in a referendum to end their ties with Denmark this week -- a step toward complete independence.

About 39,000 Greenlanders voted to expand their ability to self-govern, including the country's untapped oil and gas resources, the Sydney Morning Herald reported.

Greenland is estimated to hold as much as 31 billion barrels of oil off its northeast coast alone. Tapping those resources could make Greenland the 19th-largest oil and gas producer in the world, according to the U.S. Geological Survey.

Finding additional resources off other coasts could put Greenland even higher up on the list. Greenland and Denmark will likely debate who has the rights to those offshore revenues, however, which could be as high as $600 million a year.

Onshore oil found in Greenland and whatever revenues are earned from it will belong to Greenland.

The governing package also includes legislation making Greenlandic, the Eskimo-inuit tongue, the national language instead of Danish and allows the people there to be viewed as separate under international law.

Nigeria cuts its LNG output on violence

Royal Dutch Shell announced it is closing one of its Liquefied Natural Gas facilities after attacks by thieves caused damage that needs to be repaired.

Shell closed its Niger Delta plant, adversely affecting Nigeria Liquefied Natural Gas, which claims to deliver about 10 percent of all the LNG in the world and a large percentage of Europe's LNG, the Financial Times reported.

NLNG issued a statement announcing that with the closing of the plant, it will not be able to fulfill all of its export commitments while the plant is temporarily closed.

Over the past several years, attacks from gun-wielding militant groups have forced plants to close and force Nigeria to cut its production and imports of LNG, oil and natural gas.

Shell said it was forced to temporarily shut down its Soku gas plant, which provides 40 percent of NLNG's gas, to repair damage caused by illegal siphoning of fuel from connecting pipelines.

"Over the last few weeks the situation has deteriorated rapidly and resulted in a situation where safety concerns dictated we had to shut it down," said SPDC Managing Director Mutiu Sunmonu.

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Closing oil prices, Nov. 28, 3 p.m., London

Brent Crude oil: $50.55

West Texas Intermediate crude oil: $53.41

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(e-mail: energy@upi.com)