UPI Energy Watch

By JOHN C.K. DALY, International Correspondent  |  July 14, 2004 at 2:58 PM
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WASHINGTON, Conn., July 14 (UPI) -- According to Libyan Prime Minister Shokri Ghanem, Libya has begun oil exports to the United States. Ghanem said that U.S.-Libyan relations improved, noting, "Many of the obstacles between Libya and the U.S. have been removed and many problems between us solved." Libya is attempting to attract foreign investment to revive its moribund economy and has announced its intention to privatize over 360 state-run companies. Libya invited foreign investors to "contribute to the ownership of these companies. One hundred and sixty public companies have been transferred to the private sector and major international firms have been invited to take part in this privatization." Libya and the United States restored diplomatic ties after President George W. Bush lifted economic sanctions against Libya in April, rewarding the country for dismantling its weapons of mass destruction program. U.S. companies were barred from Libya after the United States imposed sanctions in 1986.

Russia's Gazprom Deputy Chief Executive Officer Aleksandr Ananenkov and China's Sinopec Supervisory Committee Chairman Wang Zuoran met in Moscow to discuss Russian gas deliveries to China. Ananenkov and Zuoran discussed prospects for forming a single production, transport, and gas supply system in eastern Siberia and the Far East, while with organizing deliveries of Russian natural gas from this system to China. Ananenkov said, "Setting up a single gas supply system in Eastern Russia and signing a Russian-Chinese intergovernmental agreement on cooperation in the gas sphere will create favorable conditions for dependable and long-term deliveries of Russian natural gas to the Chinese market along the same lines as organizing Russian gas exports to European countries today."

Kazakhstan will increase its uranium production nearly 500 percent to 16,000 tons annually by 2015, according to Mukhtar Dzhakishev, president of Kazakhstan's national atomic company "Kazatomprom." Dzhakishev announced that the increase will result from beginning production at seven new sites at the Budenovskoe and Mynkuduk uranium fields in southern Kazakhstan. Kazatomprom estimates the development costs of the seven new sites at $420 million, $60 million per site. Dzhakishev said, "Kazatomprom has several potential foreign investors as well as partners from Russia, China and Japan to help develop these sites." Kazatomprom estimates it will produce 3,330 metric tons in 2004 with an export value of $100 million. In 2001, owners and operators of U.S. civilian nuclear power reactors purchased a total of 21,300 tons of uranium from U.S. and foreign suppliers; U.S indigenous production of uranium in 2001 totaled 1,018 tons extracted from seven mines.

Rotterdam's port authority has suggested to Russian companies that they consider the possibility of terminal construction in Rotterdam, either as joint ventures or as their own facilities. This suggestion arose during a meeting between the port authority of Rotterdam and the head of the Russian Federation Federal Energy Agency Sergei Oganesyan. Oganesyan told the Rotterdam officials that Russia intends to develop its northern oil export route via the Kola peninsula around Norway's North Cape that will give Russian companies a possibility to transport oil directly to Europe bypassing the Dutch port. Russian strategic planning is elaborated in the agency's publication, "Russia's Energy Strategy to 2020."

Russian oil shipping company Volgotanker JSC intends to issue three-year credit notes to raise money to renovate its tanker fleet. The renovations will allow Volgotanker JSC to extend the ships' service term by 10 years. The chief executive of Volgotanker JSC'sadministrative policy, Olga Gustovasaid, said the company intends to renovate at least 14 tankers of "Volgoneft" type within the next three years. Volgotanker's feasibility studies concluded that while the renovation of a single tanker costs $1.2 million to 2.5 million it remains a significantly cheaper alternative than constructing new vessels.

The Volgograd water reservoir had a 109.36-square-yard oil spill near the town of Kamyshin. Investigations are still underway to determine who spilled oil into the reservoir. The oil spill stretched more than 18 miles approaching Volgograd. Local authorities found that plant workers are not to blame. Prosecutors believe that a ship cleaning its bilges dumped waste into its waters; others investigators believe that the spill could have drifted to Volgograd from the neighboring Saratov region. A clean up of the reservoir's bank began and observation posts were installed to monitor the drifting spill.

Closing oil prices, July 15, 3 p.m. London

Brent crude oil: $37.03

West Texas intermediate crude oil: $39.61

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