UPI Energy Watch

By ANDREA R. MIHAILESCU, Energy Correspondent  |  March 24, 2005 at 4:01 PM
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WASHINGTON, March 24 (UPI) -- Malaysia and Indonesia are looking for ways to avoid military escalation over disputed energy resources. After meeting the with special advisors to the United Nations Lakhnda Brahimi and Iqbal Riza, Malaysian Foreign Minister Minister Datuk Seri Syed Hamid Albar announced on Mar. 18 that the country will reduce its military presence in the Sulawesi Sea where the country maintains a dispute with Indonesia over energy resources. Albar said: "We want to reduce our military presence in disputed areas such as Batuan Unarang as there are overlapping claims but that does not mean we won't continue to patrol the area or keep a watch over it. Malaysia and Indonesia are guarding and monitoring the area but we are doing it cautiously to prevent any untoward incidents. There should not be any activities in areas that are still in dispute." Indonesian President Susilo Bambang Yudyohono said that the country would also like to avoid any escalations and prevent tensions over the maritime border. While the two countries still remain undecided about whether to suspend further oil explorations, Albar said: "The decision lies with the oil companies that have been awarded concessions to either continue or stop the activities."

During the three-day visit to Manila, Saudi Oil Ministry officials held talks with their Philippine counterparts on how the two countries could increase cooperation in the energy, trade and investments sectors. Philippine Foreign Affairs Secretary Alberto Romulo announced on Mar. 20 before the arrival of Saudi officials: "The Philippines stands to benefit from the current invigoration of the Saudi economy, which is attributed mainly to the economic reforms launched by the Kingdom five years ago. It is also a valuable opportunity for timely discussions, especially on cooperation in energy resources. The visit is significant in terms of energy cooperation. The President is expected to express the Philippines' desire to expand bilateral relations with the Kingdom, specifically in the petrochemical and oil industries. Saudi Arabia welcomes investment not only in natural gas, but also in refining crude oil, and in mining." Saudi Arabia currently has approximately 1.1 million Philippine workers in the Kingdom.

Russia finds ways to improve the country's transportation sector. Russian Transport Minister Igor Levitin has proposed on Mar. 21 before the Russian Fuel and Energy Sector forum to utilize funds from the Stabilization Fund to develop the country's transport infrastructure in an effort to increase oil exports. Levitin said: "The current level of financing of transport infrastructure is about 2 percent of the GDP, which is unacceptably low. In other countries, the same as in our country in 2000, this indicator was 4 percent. We pin major hopes on companies of the Russian fuel and energy sphere that are ready to invest in the development of transport infrastructure." Russia is currently constructing the Taishet-Nakhodka oil pipeline, which Levitin said: "The project needs adjustment, first of all in what concerns its efficiency. It's necessary to envisage a possibility of more serious use of the railway component within the framework of this project."

Law-enforcement authorities from Russia and Belarus increase their efforts to decrease crimes committed against their energy facilities. Crimes have involved illegally extracting and transporting oil and gas. Russian Interior Minister Rashid Nurgaliyev said on Mar. 18: "As soon as possible the Russian and Belarusian Interior Ministries should implement a complex of offensive measures combining profound analytical work, operation, and search measures, and investigative actions. As part of a single operation plan, it would be expedient also to involve in this work relevant federal ministries and departments both on the Russian and Belarusian sides. With their participation, special operations should be thoroughly elaborated, prepared, and carried out to expose and cut short the activities of criminal formations that control facilities in the fuel and energy sector."

Foreign oil companies continue to violate laws in Kazakhstan. Kazakh Member Parliament Vera Sukhorukova announced during a plenary session on Mar. 16 that subsidiaries of the Canadian investor PetroKazakhstan, which are currently developing oil fields in southern Kazakhstan and operating the Shymkent oil refinery, are systematically violating the country's laws. Sukhorukova noted that the companies fail to fulfill contract obligations and continue to violate antimonopoly legislation. Energy and Mineral Resources Ministry official carried out inspections and detected cases in which oil products were exported at low prices. Sukhorukova also emphasized that she believes that managers of the subsidiaries evade paying taxes and that PetroKazakhstan intentionally extracts oil from its fields while neglecting environmental requirements.

Azerbaijan government officials urged China to increase investments in various sectors of the economy within this Caspian state, including power generation and petrochemicals. Azeri President Ilkham Aliyev announced on Mar. 18 before a Sino-Azeri business forum in Beijing: "The countries have a good experience in cooperation in the energy sector. Chinese oil companies are present in Azerbaijan, they are investors, and have gained a good reputation." Aliyev noted that Azerbaijan increased the country's export potential by at least three times within the next four years; the Baku-Tbilisi-Ceyhan pipeline will also provide a large volume of Azeri oil. Aliyev emphasized that Azerbaijan is looking to increase Caspian oil exports to China.

Closing oil prices, Mar. 24, 3 p.m. London

Brent crude oil: $53.04

West Texas intermediate crude oil: $50.54

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