UPI Energy Watch

North Sea oil and gas loses investments

Malcolm Webb, chief executive of Oil and Gas U.K., said the North Sea, which holds strategic oil reserves for Britain, is losing investments due to the downturn of the economy.

He said the oil and gas fields in the North Sea still have about 25 billion barrels of oil and oil equivalent that can be extracted, enough to provide 65 percent of Britain's demand, The Scotsman reports.

However, since 2004, the costs of exploring for and extracting oil and gas in the North Sea have seen significant increases, and taxes on the new developments have increased by about 50 percent.

A group of members of Parliament was urged to take action and offer incentives to help keep the money and the oil flowing.

"The industry is of strategic economic importance, satisfying 70 percent of our primary energy demand, saving on imports worth $58 billion a year, supporting almost half a million jobs and contributing over a third of the (United Kingdom's) corporation tax," Webb said.

Falling investments have already led to falling production, he said, and more investment is needed to keep the industry going. A supportive stance from the government would help, he said.

Iraq seeks more oil investment to boost economy

During its first two rounds of oil and gas lease sales, Iraq received about $35 billion in investment, but it needs to spend about $50 billion over the next five years to increase its capacity.

The Iraqi Oil Ministry received $15 billion in the first round of bids from foreign oil and gas companies and $20 billion in the second round, Oil Minister Hussain al-Shahristani said.

The investment is aimed at increasing Iraq's oil output capacity from 2 million barrels per day to 6 million bpd, the Gulf Times reports.

Japan, Venezuela agree to cooperate on oil, gas

Energy ministers from Japan and Venezuela signed a memorandum of understanding to increase their cooperation on oil and gas development.

The agreement is Japan's first energy deal with a South American country, the Japan Economic Newswire reports.

The effort is part of Japan's efforts to meet growing demand in recent years and diversify its sources to provide more reliable energy.

Right now, Japan gets about 90 percent of its crude oil imports from Middle Eastern countries.

No project details are included in the agreement, but Japan's Economy, Trade and Industry Minister Toshihiro Nikai and Venezuela's Energy Minister Rafael Ramirez both said it is the first step toward oil and gas development projects in Venezuela.

The pair signed the memorandum during a meeting in Tokyo.

Nikai said Japanese companies are interested in participating in Venezuela's energy exploration projects in the Orinoco region.

The region is known for its heavy, tar-like oil deposits.

Ramirez said Venezuela hopes Japan will invest in the country.

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

Brent Crude oil: $50.94

West Texas Intermediate crude oil: $51.97

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(e-mail: energy@upi.com)