UPI Energy Watch

Iran announces oil supply cuts

Iran has announced which of its oil customers will experience a decrease in services as a result of the production cuts mandated by the Organization of Petroleum Exporting Countries in December.

Iran has told 21 of its Asian and European customers that it will reduce oil sales to them, Far News Agency reports.

"Twenty-one Asian and European companies have been told that there will be a cut in part of their oil intake level proportionate to their contracts," Iran's representative to OPEC Mohammad Ali Khatibi said.

Iran is working to lower its oil output by 545,000 barrels per day, part of OPEC's decision to reduce production by 2.2 million bpd. The December cuts were in addition to earlier cuts of 2 million bpd.

Iran has long advocated cuts in production as the most effective way to increase global oil prices.

As the downturn in the global economy has pushed down the demand for oil, oversupply has caused the price to drop. Now the International Energy Agency is predicting demand will fall even further before rebounding.

Petrobras' oil output increased in 2008

Brazil's state-owned oil and gas company recently announced its production increased to about 2.4 million barrels per day in 2008.

The increase accounts for both domestic and foreign production. It equates to about 100,000 bpd more than in 2007, an increase of about 4.3 percent, the Latin American Herald Tribune reports.

When the total increase is broken down, it is about 1.98 million bpd of oil and 421,000 barrels of oil equivalent of natural gas per day.

Despite the current economic climate, Petrobras plans to spend $112 billion through 2012.

Last year Petrobras extracted an average of 123,000 bpd from foreign fields in Argentina, Bolivia, Peru, Colombia, Ecuador and Venezuela.

Stocks are up for Cairn, Isramco

The Cairn India energy company and Israel's Isramco both experienced a boost in their stock after recent approvals and discoveries.

India's Cairn rose following approval from the government for the firm to explore its three most recent discoveries, The Hindu reports.

The Declaration of Commerciality for the three discoveries made in Kameshwari West 2, 3 and 6 was approved.

"The Kameshwari West 2 and 3 discoveries have opened up a new play in the Barmer Hill/Lower Dharvi Dungar sands on the western margin of the Rajasthan basin," Cairn said.

The firm has made 25 oil and gas discoveries in the Rajasthan block in the last year, which are being developed so crude output can start this year.

Israel's Isramco stocks jumped on the news that it has found what is believed to be Israel's largest offshore natural gas field, the Economic Times reports.

The field is about 55 miles off Israel's Mediterranean coast near Haifa and is estimated to hold reserves worth up to $15 billion, Isramco said.

"This is a historic discovery that will change the future of the Israeli (energy) industry," Infrastructure Minister Binyamin Ben-Eliezer said.

Isramco holds a 28.9 percent stake in the venture, U.S. oil company Noble Energy holds 36 percent and Delek Drilling and Avner Oil and Gas Exploration hold a total of 31.3 percent.

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Closing oil prices, Jan. 19, 3 p.m., London

Brent Crude oil: $45.84

West Texas Intermediate crude oil: $35.65

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(e-mail: energy@upi.com)