WASHINGTON, March 15 (UPI) -- During German Chancellor Gerhard Schroeder's visit to the Persian Gulf, a Siemens-led consortium signed a $160.4 million agreement with Yemen's state-owned utility Public Electricity Corporation (PEC) to construct a gas turbine power plant in Yemen in an effort to curb the country's regular power shortages. Yemeni President Ali Abdullah Saleh and Schroeder were present at the signing ceremony. Siemens Power Generation (PG) holds approximately $100 million worth of the contract. The gas turbine power plant is expected to have a capacity of 340 megawatts; the entire plant will have a capacity of 900 megawatts, which will serve approximately half of the population. The plant is expected to be located in Marib, some 124.3 miles east of the capital Sana'a. Saudi consortium partner Arabian BEMCO will be responsible for the electrical and mechanical equipment, and for the civil structures and installation. Project financing will be secured through the Arab Fund for Economic & Social Development, the Saudi Fund for Development and the Yemeni state. The plant will begin commercial operation in the summer of 2007 and feed power into the Yemeni grid. Previously unutilized natural gas from the oil recovery operations of Yemen Hunt Oil Company will be used to fuel the plant. Siemens Power Generation President Klaus Voges said: "Marib is our first project in Yemen. The power plant will make a significant contribution toward improving Yemen's power supply. That is vital for the country's further economic development."
Saudi Minister of Petroleum and Mineral Resources Engineer Ali Al-Naimi announced that the current increase in the prices of the crude oil is unjustified. Al-Naimi emphasized: "The sustained strength in crude oil prices is not supported by current oil fundamentals as both inventories and forward demand cover are within historic ranges.... Notwithstanding the uncertainty prevalent in assumptions about future supply and demand levels, projections show an increase in demand in the latter part of the year which would require additional crude oil to satisfy. Accordingly, to adequately fulfill this year's additional demand, Saudi Arabian output shall be increased from current levels at a later time this year. The Kingdom of Saudi Arabia's current capacity of 11 million barrels per day can and will be made available to meet market requirements. Monitoring of markets will continue on a regular basis to determine if such requirements arise, and accordingly, additional crude oil supplies will be made available. With expansion plans underway for the period 2006-2009 to increase capacity to 12.5 million bpd, the Kingdom of Saudi Arabia remains fully committed to ensuring adequate crude supplies to the world as it has consistently demonstrated during periods of demand surges and supply disruptions."
U.S. Department of Energy has recently awarded a service contract for oil and gas exploration in northwest Palawan, an island near the Philippines, to a consortium composed of Australia's Ottoman Energy Ltd., AustralAsian Energy Limited and RGA Resources Inc. The consortium expects to invest $10.2 million during a seven-year exploration period. Service Contract No. 50 is the sixth to be awarded since the Supreme Court's December ruling allowing foreign businesses to invest in the mining and petroleum exploration sectors of the province. The region covers 425,021 acres in the northwest Palawan basin, which contains the South Calauit oil fields, which contains existing proven oil reserves. A production test conducted in 1997 showed water-free production of 6,500 barrels of oil daily, but the complete exploration and production of the field was later stopped due to the presence of water, according to U.S. Department of Energy reports. Energy Department officials said Australia's Ottoman has exploration activities in the Thrace Basin of Turkey, while AustralAsian is a wholly owned unit of Middle East Petroleum Services Ltd. RGA Resources is a local firm that was organized to provide technical and management services to the consortium.
Russian LUKoil and Kazakh KazMunayGaz recently announced that the companies are establishing a joint venture to develop major mineral deposits in the Caspian Sea. LUKoil Head Vagit Alekperov and KazMunayGaz First Vice President Timur Kulibayev signed an agreement whereby the Caspian Oil and Gas Company will develop the Khvalynskoye and Kurmangazy oil fields. Alekperov said: "Joint investment in the project will exceed $1 billion. Provisionally, the project is expected to be put in operation in 2010. The feasibility report shows that the project is economically sound and highly effective." The Khvalynskoye oil field is located in the northern part of the Caspian Sea, approximately 162 miles from Astrakhan; the field has a capacity of 422 billion cubic yards of natural gas, 17 million tons of condensate and 36 million tons of oil. Alekperov added that he hopes to see a production sharing agreement signed by the end of the year. Alekperov stressed at a news conference that "the Caspian Sea is a special zone which is ecologically vulnerable. We will do everything we can to protect the region from the possible consequences of technological processes connected with oil drilling and other works."
Shell Exploration and Production official Nejib Zaafrani spoke at the 2005 Kuwait Oil & Gas Conference and Exhibition on the role of an international oil company's in helping establish and maintain a skilled national workforce in Gulf Cooperation Council countries. Zaafrani also discussed hiring and training local staff while encompassing active corporate participation in a national skills strategy. Zaafrani said: "For Shell, on-going involvement in skills and knowledge development is a key part of our commitment to work towards sustainable development in everything that we do." Zaafrani emphasized that sustainability must be achieved by working together and that "developing people" was a key element of the social contribution Shell could make in local communities. Shell's recent activities in Kuwait included a two-week training program for Kuwait Oil Company (KOC) planners in Aberdeen, United Kingdom, as well as a shipping standards workshop held in Kuwait in February. Shell has actively worked throughout the GCC with academic institutions, professional bodies, school programs, adult education seminars, and supports individuals through scholarships.
According to Ukraine's new Naftogaz CEO Aleksey Ivchenko, the company intends to invest money borrowed from Deutsche Bank on exploration, oil and gas production, modernization and building new pipelines. Deutsche Bank intends to loan Naftogaz some $133-267 million. Ivchenko added that the German delegation is expected to arrive to Kiev soon to create a trading house, which will sell Russian gas to the European Union.
Closing oil prices, Mar. 15, 3 p.m. London
Brent crude oil: $53.44
West Texas intermediate crude oil: $54.75