WASHINGTON, Jan. 25 (UPI) -- The Ashgabat office of Malaysian Petronas Chirigali (Turkmenistan), a contractor of Turkmenneft state concern under joint production sharing agreement, reports that large oil and natural gas deposits have been discovered in the Turkmen Caspian sector. Malaysian Petronas Chirigali has been exploring its Block-1 concessions, including the Makhtumkuli, Ovez and Diyarbekir fields since 1996. A daily flow of 791 tons of oil and 790 cubic yards of natural gas spewed from the fifth borehole of the Makhtumkuli-3A (former East Livanov 3A) field, according to the company. According to Petronas Chirigali, commercially viable oil flows have also been struck at all earlier drilled holes, including two other contracted offshore fields, Ovez and Diyarbekir. Trident-20 platform rented from the U.S. company Transocean Sedko Forex has carried out the exploration drilling. In 2005 Petronas Chirigali intends to drill another three wells that will allow the company to refine its estimates of the reserves of its concessions and to establish a timetable for extracting oil and natural gas at its concessions. According to U.S. geophysical estimates, the Turkmen sector of the Caspian is estimated to contain 11 billion tons of oil and 7.17 trillion cubic yards of natural gas.
A meeting to discuss a 2005 Lukoil-ConocoPhillips joint venture was held in Russia's Narian-Mar, Nenetsk Autonomous District. Under terms of the joint venture, Lukoil will retain 70 percent and ConocoPhillips 30 percent of the project, organized in the framework of a strategic alliance of the two companies on the basis of the Narianmarneftegaz structure. Lukoil President Vagit Alekperov, Lukoil first Vice-President Ravil Maganov, acting Director General of the joint venture Sergei Gnatchenko along with Russian and American experts participated in the meeting. Initial projections are that the that the Narian-Mar joint venture's production and marketing will reach 200,000 barrels per day by 2008. The crude to be produced at the joint venture's Narian-Mar fields will be transported via pipeline to a Lukoil terminal in Varandey on the Barents Sea coast from where it will be shipped to international markets by tankers. Under terms of the joint venture Lukoil will increase the Varandey terminal's capacity to 240,000 barrels per day with ConocoPhillips participation.
On Jan. 21 three people were slightly injured when their ferry struck an oil tanker in Istanbul's Bosphorus strait. Port authorities said the Liberian-registered tanker was heading to Romania and was not transporting any oil when the accident happened. Port authorities added that poor visibility may have caused the accident; authorities subsequently closed the Bosphorus to maritime traffic during the night of Jan. 21. The injured were passengers on board ferry that shuttle people across the Bosphorus between the eastern and western part of Istanbul, a city of 12 million. The convoluted Bosphorus channel, which connects the Black Sea to the Mediterranean via the Sea of Marmora and the Dardanelles, is one of the busiest shipping lanes in the world, with over 60 thousand passages annually. Turkish authorities have repeatedly warned that the channel can not sustain the increased tanker traffic of increased Caspian oil flows.
Operations at Iraq's Basra Oil Terminal have resumed, after a power cut affecting the southern Iraq end and weather in the area improved on Jan. 23. The total loading rate is back to approx 70,000 barrels per hour. Insurgent attacks sabotaging pipelines according to Iraqi oil officials have cost the country billions of dollars in export earnings since U.S. President George W. Bush declared an end to hostilities in May 2003. Iraq's annual average export level has fallen below the target of 1.85 million barrels a day because of insurgent attacks. In December Iraqi oil officials said exports averaged 1.55 million barrels a day in 2004, only 550 thousand barrels per day above what the regime of deposed President Saddam Hussein was allowed legally to export under the United Nations' "oil for food" program.
The Vice President of the State Oil Company of the Azerbaijan Republic Khoshbakht Yusifzada said that Azerbaijan will never allow Turkmenistan to develop the disputed Sardar-Kapaz Caspian oil fields in waters claimed by both Turkmenistan and Azerbaijan. While Turkmenistan refers to the fields as "disputed," Azerbaijan claims the offshore fields and intends to start developing them, Yusifzada said. On Jan. 20 Turkmenistan stated that it is ready to develop the fields and is in talks with Canadian company Buried Hill energy top exploit what it terms the Serdar offshore Caspian field, which Azerbaijan calls Kapaz.
On January 24, 2005 Russia's Sibneft and Shell Global Solutions signed an agreement to renovate and increase the capacity of Russia's Omsk Refinery. The renovation program will be directed to improving the refinery's management systems and increase the site's economic efficiency. Sibneft will use software designed by Shell Global Solutions to develop long-term investment plans for the refinery. The Omsk refinery in western Siberia is the country's largest producer of refined fuel and petrochemicals, processing 14 million tons of oil annually.
Closing oil prices, Jan. 25, 3 p.m. London
Brent crude oil: $46.06
West Texas intermediate crude oil: $48.70