UPI Energy Watch

Oil prices hit new low for OPEC

The Organization of the Petroleum Exporting Countries said that the price of oil produced by its members hit a record-low price for the year so far at less than $39 per barrel.

The previous low was just above $39, according to a statement from the Vienna-based oil cartel, Commodity Online reports.

OPEC used the prices of the 12 brands produced by its members to calculate the total price.

Members have made several attempts to cut production and try to boost prices, but the economy and decreasing demand have kept oil prices from rising much higher than $40 per barrel. The organization has pledged to cut 4.2 million barrels per day, around 5 percent of global oil supply, since September; OPEC is about two-thirds of the way to its goal.

Recently, the oil minister of Venezuela announced he would support enough additional OPEC supply cuts to bring oil prices up to $70 per barrel.

Further cuts have been mentioned as a possibility to be discussed at OPEC's March meeting.

Iran, Total expected to sign contract

A $5 billion deal a long time in the making between the National Iranian Oil Co. and French company Total is now expected to be finalized by March, according to NIOC.

The initial agreement to develop one phase in the South Pars gas project was signed in 2004 but then delayed because of increased costs. Then in July, Iranian media reported that Total had pulled out for political reasons.

Total's chief executive, Christophe de Margerie, denied that the company had withdrawn from Iran in the most recent announcement. NIOC General Manager Seyfollah Jashnsaz said that Total had never abandoned its agreement with NIOC, Tehran Times reports.

"The development of the South Pars gas field Phase 11 in the upstream sector and the construction of an LNG plant in the downstream sector will be Total's responsibility according to the contract," Jashnsaz said.

Iran has struggled to muster the support it needs for the huge South Pars undertaking, though Jashnsaz said there are deals in the works with Royal Dutch Shell, Spain's Repsol and Germany's E.ON.

Bolivia battles with Total over unfulfilled contracts

Bolivian President Evo Morales said he has given French oil company Total an ultimatum to fulfill its investment obligations.

Morales said Total was supposed to invest in Bolivia's natural gas industry. If the company doesn't comply with Morales, he said action will be taken to fix the situation, though he didn't specify what action that might be, the Latin American Herald Tribune reports.

Morales said he has asked Total executives to expedite their investments in Bolivia. Total is a partner in one of Bolivia's largest natural gas fields, along with Bolivia's state-owned YPFB, Brazil's Petrobras and Spain's Repsol.

The companies have said they are uncertain of their investments since Morales nationalized the industry in 2006.

The nationalization and new constitution gave "ownership, possession and total and absolute control" of hydrocarbons to the Bolivian state and mandated that YPFB hold a majority stake in all of the country's natural gas projects.

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

Brent Crude oil: $40.68

West Texas Intermediate crude oil: $38.52

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(e-mail: energy@upi.com)