Oil prices for Western, Central Europe to rise
Russia’s Lukoil said Tuesday it expects to see an increase in oil prices for consumers in Western and Central Europe as supplies have been reduced as it considers securing a venture with Gazprom’s oil unit.
"Talks are ongoing with consumers in Germany, the Czech Republic, Slovakia and Poland on price increases," Vagit Alekperov, chief executive of Lukoil, told reporters.
Alekperov said Lukoil had redirected some Europe-bound oil supplies and reduced supplies to the four countries due to reduced profitability, RIA Novosti reported.
He also told journalists that Gazprom Neft, the gas giant’s oil-producing unit, is considering setting up a joint venture with Lukoil.
"The documents are being prepared. Gazprom Neft's board of directors will consider the issue on Sept. 3," Alekperov said.
OPEC to set unofficial target price
OPEC has decided to set an unofficial target oil price of approximately $70 per barrel, Claude Mandil, director general of the International Energy Agency, said in an interview with the Arab Oil & Gas monthly.
“The market has become aware” that OPEC “has set an implicit new objective of keeping prices at or around $70 per barrel and that the organization is trying to defend this level,” Mandil said.
Mandil said the action “is a factor which could, as we have often said, weigh on global economic growth and constitute a very heavy burden on the poorest populations.”
He also said oil stocks will have to grow as oil consumption rises 2 percent annually and must continue to grow.
“What interests us most is the market of tomorrow, in other words, at the end of 2007,” Mandil said. “It is from now that the refineries must start working harder to satisfy winter demand. We therefore need more crude oil but, unfortunately, signs from OPEC do not give us much hope of this.”
Petrobras to build $4.5B refinery in Pernambuco
Brazil’s Petrobras received a license from Pernambuco state's Agency for Environment and Hydro Resources to construct a giant $4.5 billion oil refinery near Suape port, in northeastern Pernambuco state.
Now that the license has been granted, the next step will be to hire employees of the four companies forming the consortium that won the rights to develop earthworks and install electric and hydraulic systems, according to local reports.
Helio Gurgel, the agency's president, said the first sod of the refinery in Suape will be turned on Sept. 4.
Under the agreement, the refinery will have a processing capacity of 200,000 barrels of crude oil per day.
The refinery, which will come on stream in 2011, is a joint project of Venezuela's state-owned Petroleos de Venezuela and Petrobras. The two sides will extract the oil from the Carabobo I block on the Orinoco River in Venezuela.
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Closing oil prices, Aug. 29, 3 p.m. London
Brent crude oil: $71.40
West Texas Intermediate crude oil: $72.60
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