UPI Energy Watch

Dubai will invest big in Nigerian oil and gas

Dubai Natural Resources World has signed a $16 billion agreement with Nigeria's government to develop oil and gas infrastructure in Nigeria.

Nigeria is Africa's largest crude oil producer, putting out 2 million barrels of crude oil per day, but in recent years has suffered from violence that has deterred investment in oil and gas.

The lack of development due to militant strikes in the Niger Delta has led to about a fifth of Nigeria's crude oil output being shut down since 2006.

This agreement will focus on upstream oil and gas and the development of natural gas projects, Gulf News reports.

The large-scale investment is the first of its kind for Dubai Natural Resources World, part of Dubai World.

"Given the credit crisis, a lot of oil companies are not rushing in to invest, and so there is a role for companies with access to cash to expend at the moment," Kate Dourian, editor of Platts Middle East, told Gulf News.

Dubai Natural Resources World and other companies with money are looking at countries in Africa and Central Asia for investment opportunities.

The current economic climate has not lent itself to large investments but to investments in smaller companies.

Michael Aondoakaa, Nigeria's justice minister, and Sultan Ahmed bin Sulayem, chairman of Dubai World, signed the agreement in Abuja, the Nigerian capital.

"Nigeria is a land of considerable opportunity, and it is entirely appropriate that Dubai World will partner with the government of Nigeria to help harness this enormous potential over time," bin Sulayem said.

The agreement also includes investment in agriculture and power.

Despite economy, CNOOC will increase investment in 2009

China National Offshore Oil Co. Ltd., the largest oil producer in the country, announced it will increase its 2009 capital spending by 19 percent over 2008.

CNOOC will invest $6.76 billion in 2009 in an effort to increase output and grow reserves, Xinhua reports.

In its 2009 budget $4.38 billion will go toward development, $1.11 billion will go toward exploration and $1.12 billion will go toward production, CNOOC said.

CNOOC expects its production to reach between 225 million and 231 million barrels of oil equivalent this year compared with 195 million barrels in 2008.

Even though oil prices dropped significantly in the second half of 2008, CNOOC has kept its business stable, said Fu Chengyu, chairman and chief executive officer of the company.

The oil and gas giant will focus its new exploration offshore this year, and there are already 10 new projects expected to come online this year.

Oil-rich Middle East invests in green energy

Abu Dhabi announced it will get 7 percent of its power from renewable sources by 2020.

The announcement came from Khalifa bin Zayed al-Nahyan, ruler of Abu Dhabi, at a summit of world leaders on renewable energy.

The announcement is particularly pertinent as the Middle East nation holds about 8 percent of the world's oil reserves and its budget relies on revenues from oil and natural gas, The Guardian reports.

State-owned energy company Masdar will oversee the green energy push, and Sultan Ahmed al-Jaber, Masdar's chief executive officer, said it is a natural move for Abu Dhabi to invest in renewable energy.

Masdar expects to use solar energy to reach the majority of its 7 percent target but also is looking at wind and geothermal power.

The firm will work with companies like Germany's E.ON and Denmark's DONG.

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Closing oil prices, Jan. 20, 3 p.m., London

Brent Crude oil: $41.76

West Texas Intermediate crude oil: $33.51

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(e-mail: energy@upi.com)