UPI Energy Watch

Nigeria signs MOU with Gazprom

The Nigerian National Petroleum Corp. reportedly signed a memorandum of understanding with Russia's Gazprom on oil and gas exploration, according to Nigerian newspaper This Day.

The agreement was signed in Moscow by Gazprom Chief Executive Officer Alexei Miller and NNPC Group Managing Director Abubakar Yar'Adua.

The deal reportedly focuses on exploration, production, transportation and construction projects in Nigeria through a newly created joint venture company.

Nigeria has had problems keeping its foreign investors around and consistently producing because of violence surrounding its resources.

NNPC General Manager of Public Affairs Livi Ajuonuma said in an announcement that the company is hopeful that its new partnership with Gazprom will fulfill the country's natural gas potential.

Financial details have not been released, but the deal is not completely finalized either, an NNPC representative told This Day.

Russia is estimated to have the largest natural gas reserves in the world with 1,700 trillion cubic feet, while Nigeria has an estimated gas reserve of about 187 trillion cubic feet.

Australia's BHP Billiton Ltd. still closed in the Gulf of Mexico

The Australian oil and gas producing giant told The Sydney Morning Herald that production from its Neptune project in the Gulf of Mexico has only partially resumed since Hurricane Gustav.

BHP Billiton had evacuated its personnel at that rig and shut in output from operations before Gustav hit the Gulf of Mexico earlier this week.

Other major oil and gas exploration and production companies, including ExxonMobil Corp. and Royal Dutch Shell, also evacuated and shut down and are also reporting partial production is being resumed.

BHP had shut in gross production of about 37,000 barrels a day of oil and 600 million cubic feet a day of natural gas.

"We're continuing to monitor the storm," BHP spokeswoman Emma Meade said.

In total, there are about 717 platforms in the Gulf producing 1.3 million barrels of oil and 7 billion cubic feet of gas per day.

The majority of production in the Gulf was shut down over the weekend, though with damage less extensive than expected, oil prices were not nearly as affected as when Hurricane Katrina hit three years ago.

Full service in the Gulf is expected to resume by the end of the week.

Zion Oil and Gas Inc. to drill in Israel

The company, which has headquarters in both Dallas and Caesarea, Israel, announced it will enter a drilling contract with Aladdin Middle East.

Zion Chief Executive Officer Richard Rinberg and President and Chief Operating Officer Glen Perry will sign the deal in Ankara, Turkey.

A 2,000-horsepower rig will be used to drill Zion's Ma'anit-Rehoboth No. 2 well in Israel.

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Closing oil prices, Sept. 4, 3 p.m. London

Brent crude oil: $106.58

West Texas Intermediate crude oil: $107.93

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(e-mail: energy@upi.com)