Oil Prices cross $50 mark!
Oil prices crossed the $50 mark towards end-September 2004 in spite of the efforts from Washington, Moscow and Riyadh.
Hurricane Ivan and threats to foreign producers in Nigeria had their impact on the market. Spot Brent traded at $46.98 a barrel on September 29,2004.
On September 28, 2004, the US light crude futures moved above $50, with traders proving oblivious to the Energy Department’s offer to lend crude from the strategic petroleum reserve to refiners still suffering from the hurricane-induced shortages.
A rebel group in Nigeria forced the Royal Dutch/Shell Group to shut in a small amount of output,by threatening to target foreign oil workers. Shell and AGIP, Italy were specifically warned. The crises eased off only after the reported ceasefire with the Government by the rebel group on September 29, 2004.
Russia tried to cool down the fears surrounding troubled oil giant Yukos in late September by assuring Beijing that its supplies would not be affected. Yukos accounts for 7 per cent of China’s rampant consumption, but the company warned recently that supplies to China National Petroleum Company would be suspended due to an inability to pay shipment costs. Moscow pledged a quick resolution to the problem.
Saudi Arabia also tried to reassure the concerned market about the global lack of spare capacity. The Saudi Petroleum Minister stated that the country is desirous and will provide adequate production capacity as soon as possible and for this purpose will use the Abu Safah and Qatif fields, which are currently on stream to hike its production capacity to 11 million b/d”.
IMF says “Gulf States must step up monetary union drive”
The oil-rich Gulf Arab States need to tackle the growing challenge of unemployment and step up efforts towards their goal of a monetary union, according to the Head of the International Monetary Fund.
Speaking after talks in Saudi Arabia with the Finance Ministers and Central Bank Governors of the six-nation Gulf Cooperation Council (GCC), the IMF Managing Director Mr. Rodrigo Rato stated “the GCC must also cut dependence on volatile oil revenues. The road to monetary union will require intensified efforts to ensure political consensus on critical economic issues and development of relevant convergence criteria,common data standards and development of relevant institutions”.
The GCC nations set up a unified customs union early last year and plan a common market by 2007 and a single currency three years later.
Their central bankers met in Kuwait in early October 2004 to finalize the agreement on criteria for standardizing measures such as budget deficits, inflation and interest rate. But they ended their meeting with no official comment.
“Increased regional integration culminating in an efficient monetary union will also help the region’s economic prospects”, Rato said.
The GCC states of Saudi Arabia, Oman, United Arab Emirates, Bahrain, Qatar and Kuwait control more than half of the global oil reserves and their economies are booming on the back of record
world crude oil prices.
But they remain highly vulnerable to swings in oil prices. Population growth has outstripped economic development,leaving unemployment as a major headache for most Gulf governments.
“Non-oil growth will need to increase in a sustained fashion to address the intensifying unemployment pressures in the Gulf Cooperation Council countries”, Rato said. “The financial dependence on volatile oil export receipts will have to be reduced”, he added.
Rato, who said in Geneva that rising oil prices posed a growing risk to the world economy,praised what he said was the GCC Government’s “firm commitment to help maintain stability in the oil market by increasing production”.
GCC Ministers stressed the importance of cooperation between producers and consumers to maintain oil market stability.
Saudi Arabia, the largest of the GCC states and the world’s biggest oil exporter, has raised the output to 9.5 million barrels per day and pledged to sell as much oil as its customers want.
.
Tourists urged to respect visa rules
Kuwait’s Immigration Department has urged all those who are visiting Kuwait on tourist visas to stick to the regulations of their visas, including its three month’s validity period. The Department’s press release said that if visitors violate the regulations and overstay, they will be penalized.
Anyone who is found working on a tourist visa will also be penalized and the company employing such person will be punished too. Tourists are also advised to carry their passports with them at all times.
The statement also said that the introduction of tourist visa is meant to compliment the current economic openness in the country and to vitalize the commercial activity..
New Company to manage the proposed mega-oil project
Kuwait is planning to set up a new company to manage the proposed seven-billion-dollar project that has been stalled for over a decade, according to a statement by the State’s Energy Minister. The company will manage the development of the Northern Oilfields in cooperation with international oil firms to double it output to 900,000 barrels per day (bpd).
The project, known as “PROJECT KUWAIT” has been delayed because of the resistance by the MPs who want to make sure that national oil resources will not be surrendered into the hands of international oil companies.
Mr. Ahmed Al-Arbeed is tipped to lead the new company, following his appointment in August to head Project Kuwait. Mr. Al-Arbeed has been handling the project for the past three years in his capacity as the Chairman of Kuwait Oil Company (KOC), the firm responsible for oil exploration and production in the Gulf State. His appointment is seen as a clear signal that the government is determined to speed up the implementation of the project. The Government intends to submit all documents relating to Project Kuwait to parliament in the session starting during the last week of October 2004. The Kuwaiti constitution prohibits any investment in the country’s natural resources without legislation being passed.
Kuwait is currently producing flat out at approximately at approximately 2.5 million bpd and its OPEC quota is 2.167 million bpd, but it plans to raise the output to four million bpd by 2010 and five million bpd by 2015. It has already pre-qualified about 25 operator and non-operator foreign companies for the project, including Shell,ExonMobil, BP Amoco, ENI, Total and Chevron.The companies have formed three consortia which have submitted bids for the project. A selection is not expected before the government finalizes the deal in the parliament.
KOC Crude Export facilities tender re-issued
Kuwait Oil Company (KOC) has re-issued the tender for the EPC (Engineering, Procurement and Construction) job on the Ahmadi Oil Storage and Export Facilities project. The estimated project value is $ 850 Million.
The following international EPC contractors have been invited to bid for the tender, which is closing on 22nd February 2005:
1. AMEC, UK
2. Aker Kavaerner, Oslo
3. Chiyoda Corporation, Japan
4. Toyo Engineering Corporation, Japan
5. JGC Corporation, Japan
6. SNC Lavalin, Canada
7. Technip, France
8. Saipem, Italy
9. Snamprogetti, Italy
10. Lurgi, Germany
11. Tecnicas Reunidas , Spain
12. Kellogg Brown & Root, USA
13. Bechtel, USA
14. Hyundai Engineering, Korea
15. Daelim Engineering, Korea
16. SK Engineering, Korea
17. LG Engineering, Korea
The scope includes construction of 11.4 million barrels of crude storage capacity. The front end engineering and design was carried out by Parsons Engineering Corporation, USA.
KOC announces tender for Telemetry System
Kuwait Oil Company has announced a tender for an EPC contract for installation of a telemetry system for the Southern Oil Fields. The qualified companies to bid are:
1. Tecnicas Reunidas, Spain
2. Petrofac International, Sharjah
3. SK Engineering, Korea
4. Daelim Engineering, Korea
The scope includes installation of a Supervisory Control and Data Acquisition (SCADA) system, a Management Information System (MIS) and control systems for detection of oil and gas leaks.
Kuwaiti Companies team up with Bahraini Company to develop entertainment park in Bahrain
Kuwait Commercial Complexes Company and Global Investment Company have teamed up with Al-Khaleej Development Company in Bahrain to develop the Adhari Entertainment Park in Bahrain.
The team has been awarded a contract worth $23.9 million and the scope includes installation of an additional rollercoaster, water park, monorail, children’s play areas and mini-golf course. The project is expected to be completed in 2006.
Kuwait to modernize Custom Freight Clearance System
Kuwaiti Company PWC LOGISTICS is set to sign a 25-year BOT Contract by the end of this year for modernizing and handling the country’s customs freight clearance system.
This contract is first of its kind in the Middle East and PWC LOGISTICS will work in coordination with the customs staff employed by the government to supply a customs infrastructure and handle inspections by deploying its MicroClear web-based software solution system. The project covers land, sea and air entry points
and applies to all non-passenger traffic. PWC LOGISTICS will earn revenues by collecting a share of import and export tariffs.
Al-Zour North Power Plant Pre-qualifications due this month
Pre-qualification applications are due from international contractors for the $2 375-million EPC (Engineering, Procurement & Construction) package to construct the proposed 2500 MW Al- Zour North Power Plant.
The Client, Ministry of Energy expects the companies to form consortia to bid for the project. The scope includes installation of five steam turbines with capacity of 500 MW each. The invitation for bid will be announced by the end of this year. The first unit is expected to be commissioned with 42 months and the final commissioning of the plant by 2009.
Global warming effects faster than feared!!!
Recent storms, droughts and heat waves are probably being caused by global warming, which means the effects of climate change are coming faster than anyone had feared, climate experts said.
The four hurricanes that bashed Florida and the Caribbean within a five-week period over the summer, intense storms over the western pacific, heat waves that killed tens of thousands of Europeans last year and a continued drought across the US Southwest are only the beginning, experts said.
Ice is melting faster than anyone predicted in the Antarctic and Greenland, ocean currents are changing and the seas are warming, the experts said.
“This year, the unusually intense period of destructive activity, with four hurricanes hitting in a five week period, could be a harbinger of things to come” said Dr. Paul Epstein, Associate
Director of the center for Health and the Global Environment at Harvard Medical School.
Epstein and colleagues called a telephone news conference to raise their concerns, which they have also laid out before the Congress ion recent weeks.
“The weather patterns are changing. The character of the system is changing”, Epstein said. “It is becoming a signal of how the system is behaving and it is not stable” .
Experts have long said that people are affecting the world’s climate, and this is no longer in any real dispute. Fossil fuels such as oil, in particular,release carbon dioxide that forms a blanket that holds in heat from the sun’s rays.
But several experts have disputed the idea that this year’s hurricane season was unique.
“Recent history tells us that hurricanes are not becoming more frequent” , James O’Brien, a professor of meteorology and oceanography at Florida State University and colleague said in a
recent statement.
“According to meteorological measurements, extreme weather is not increasing”.
James McCarthy, a professor of biological oceanography at Harvard University and former co-chair of the impacts group of the Intergovernmental Panel on Climate Change agreed and said that it is impossible to say any one storm or drought is caused by climate cha nge. But, he added, “We know that the earth’s temperature pattern is changing. On every continent, it is now evident that there are impacts from these changes in temperature and precipitation”.
Not even the most anxious scientists had predicted that some of the changes that have occurred would come so soon, he said. For example, several high-profile reports have described the unexpected rapid loss of ice in the Antarctic and Greenland.
“They are really important components of the interactive climate system”, McCarthy said.“They really should serve as a wake-up call”.
Kevin Trenberth, head of the Climate Analysis Section at the National Center for Atmospheric Research in Boulder, Colorado, said carbon dioxide levels are more than 30 per cent higher
than they were in the pre-industrial era.
“Global sea level has risen about an inch and a quarter (3 cm) in the past 10 years”, he added. “Most of this rise in sea level is due to the expansion of the ocean as it warms”, he added,saying that 25 percent to 30 percent was from melting ice.
Insurance companies are taking the trend seriously, said Matthias Weber, Senior Vice President and Chief Property Underwriter of the US Direct Americas division of Insurer Swiss Re.
“It was the first time since 1886 that we had four hurricanes affecting a single state in the same season” Weber said. “More than 22 percent of all homes in Florida were affected by at least one of
the hurricanes”.
|
