UPI Energy Watch

Europe tries to avoid gas shortages

The European Union and Ukraine are working on political reforms and repairs to Ukraine's natural gas network in order to stabilize Europe's natural gas supply.

Ukraine's President Viktor Yushchenko and Prime Minister Yulia Tymoshenko are meeting with the head of the European Commission, Jose Manuel Barroso, along with officials from the World Bank, European Investment Bank and Brussels-based energy companies, Deutsche Welle reports.

Discussions are expected to lead to an agreement that would require Ukraine to change its gas laws as well as help to generate investment in the ailing network.

The talks stem from recent spats between Russia and Ukraine. The European Union relies on Russia for most of its natural gas, and much of that gas is transported through Ukraine.

One-fifth of all the European Union's natural gas reportedly flows through Ukraine.

Ukraine has 8,400 miles of gas pipelines, but those pipes are estimated to need about $3.4 billion of investments to keep them in working condition.

South Korea, Venezuela sign oil and gas deal

Leaders from South Korea and Venezuela met in South Korea and signed an agreement to cooperate on oil and natural gas development.

South Korea's Knowledge Economy Minister Lee Youn-ho and Venezuela's Energy and Venezuelan Oil Minister Rafael Ramirez signed the memorandum of understanding, The Wall Street Journal reports.

The two countries will cooperate on exploration, development and production of oil and gas.

The ministers also discussed strategic cooperation between Venezuela's state-owned PDVSA and South Korea's state-run Korea National Oil Corp. and Korea Gas Corp.

The two Korean companies were invited to develop oil fields in Venezuela.

The fields, in the Orinoco region, are estimated to hold reserves of more than 200,000 barrels oil per day.

Mexico's oil reserves decrease

Mexico's oil reserves reportedly decreased by 2.9 percent in 2008, down from the reserves reported in 2007.

According to a report from state-owned Petroleos Mexicanos, Mexico had reserves totaling 14.3 billion barrels of oil in 2008, Prensa Latina reports.

Mexico uses the reserves to meet its demand and exports the rest.

In addition to decreases in Mexico's actual oil reserves, the country's potential oil reserves also fell by 3.9 percent year-over-year.

Those potential oil reserves are reserves that have yet to be recovered and would require investments in infrastructure.

Carlos Morales, director of Pemex Exploration and Production, said the nation's potential resources are now estimated at 1.482 billion barrels.

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Closing oil prices, March 23, 3 p.m., London

Brent Crude oil: $53.51

West Texas Intermediate crude oil: $53.69

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(e-mail: energy@upi.com)