WASHINGTON, Feb. 28 (UPI) -- For a total of $19 billion, Qatar Petroleum signed two separate liquefied natural gas (LNG) agreements with ExxonMobil and Royal Dutch/Shell Group on Feb. 27 to develop LNG for European and U.S. markets. Qatar Petroleum and ExxonMobil announced that the two companies signed off on the world's largest LNG project, which is worth $12.8 billion as well as the biggest energy financing project. The project involves $7.6 billion in investments from 57 different institutions, including Islamic banks. Holding 30 percent in the $6 billion Qatargas 4 project, Royal Dutch/Shell Group also signed an agreement with Qatar Petroleum, who will hold the remaining 70 percent, to construct a plant in Qatar's Ras Laffan city. The plant will produce 7.8 million tons of LNG over a 25 year period to start in 2010. Dubai-based Strategic Energy Investment Group Director Youssef M. Ibrahim said that the increasing LNG shipments are "absolutely crucial" in helping gas replace oil as a fuel in heating and electrical power plants. Sitting on one of the world's largest natural gas reserves, Ibrahim said referring to Qatar's undertakings: "It will make Qatar, on a per-capita basis, probably the richest country on the earth." The U.S. government projects that LNG from Qatar, Algeria, Russia and elsewhere to account for 20 percent of the gas used by 2025.
Ukrainian President Viktor Yushchenko has extended the country's offer to cooperate with the European Union on the Odessa-Brody oil pipeline project. Yushchenko said: "The Odessa-Brody pipeline is one of the remarkable energy projects that can become an essential part of the energy market." Yushchenko had met European Commission President Jose Manuel Barroso in Brussels on Feb. 23 to discuss the project. Yushchenko said that the project "would allow Ukraine to supply more fuel and talk about its security." Constructed in 2001 to transport Caspian oil to European markets, the Odessa-Brody pipeline ran empty for two years as the country sought to obtain contracts to pump oil to western markets. Because Ukraine could not find suppliers, the country approved a project to transport Russian oil in the reverse direction. Russia and Ukraine signed a long-term agreement in early 2004 on the pipeline's oil transit. Ukraine's oil transport company Ukrtransnafta and the Russian-British joint venture TNK-BP signed a three year agreement to transport 9 million tons of Russian oil annually via the pipeline eastward. Yushchenko meanwhile announced in January his support to transport Caspian oil through the Odessa-Brody pipeline.
By investing $2.4 billion by 2008, British Petroleum intends to increase the company's oil and natural gas production from Trinidad & Tobago by 48 percent. BP's Trinidad & Tobago Head Robert Riley announced that production will increase from 405,000 bpd to approximately 600,000 bpd; in late 1998, BP produced some 100,000 bpd of oil equivalent. Riley noted that Trinidad & Tobago currently accounts for 10 percent of BP's overall output. Holding a presence in the Caribbean since 1961, new offshore discoveries assisted BP increase company reserves and production. Riley stressed: "By 2010, Trinidad & Tobago will be our largest unit by volume, excluding Russia."
Russian Deputy Minister of Natural Resources Anatoliy Temkin announced that the country will allow subsidiaries of foreign companies registered in Russia to partake in open auctions for 40 deposits in east Siberia in 2006. Temkin emphasized that while these fields currently possess only minor deposits, the presence of significant hydrocarbons cannot be ruled out as these deposits are further explored. Russian Minister of Natural Resources Yuri Trutnev said on Feb. 15: "Without foreign investment it will be difficult to develop the shelf." The fields currently have a reserve capacity of 24 million tons of oil and 184 cubic yards of gas.
According to National Iranian Oil Company Financial Manager Ali Kardur, Iran's profits from the swap of oil from the Caspian littoral is expected to reach approximately $40 million annually. Although oil transit volume from Caspian countries to Iran decreased over the past four months, a greater volume of their oil was exported to Mediterranean markets due to the fluctuations of global crude oil prices. Through the first phase of the scheduled program, Iran is looking to swap oil from the Caspian littoral for a transit capacity of 120,000 bpd. The second phase expected to begin in the middle of 2006 will increase transit to 370,000 bpd.
Lukoil Head Vagit Alekperov announced on Feb. 25 that the company will begin holding talks with the new Iraqi government to develop the West Qurna oil field, located in southern Iraq. Alekperov said: "The talks will begin as soon as the government is formed." Under Saddam Hussein's regime, Lukoil had a 68.5 percent stake in the West Qurna project which has a reserve capacity of 20 billion barrels; the Iraqi government had a 25 percent share in the project. Lukoil and ConocoPhillips are currently looking to negotiate production sharing rights for West Qurna.
Closing oil prices, Feb. 28, 3 p.m. London
Brent crude oil: $50.45
West Texas intermediate crude oil: $52.03