MAERSK TO PUMP $5 BILLION IN QATAR
Global hydrocarbon Major Maersk Oil
will pump an additional $5bn into Qatar's Al-Shaheen oilfield as part of
strategy to more than double the production to 525,000 barrels a day (bpd) by
With this, the total investment of
Maersk will become $7bn (including the $2bn already invested) and the oil major
said it was open to further enhance its exposure in Qatar, which is aiming to
cross 1mn bpd production by 2010 from around 800,000bpd at present.
An agreement — The 2005 Al-Shaheen
Field Development Plan (2005 FDP) — was signed between Second Deputy Premier
and Energy Minister HE Abdullah bin Hamad al-Attiyah and Maersk Oil's president
and chief executive officer Thomas Thune Andersen last week.
The Al Shaheen oil output will be
gradually increased from 240,000bpd in the first quarter of 2006 to a plateau
level of 525,000bpd from late 2009, while recoverable gases also double from the
Al-Attiyah is optimistic that Qatar
will be able to achieve over 1mn bpd production by the end of the decade because
"priorities have become realities". He said Al Shaheen project was one
of the biggest fields and there would be no let-up for oil production in the
Andersen said the project, which will
start immediately and run for six years, was a milestone because of the sheer
investment and the potential it offered.
The 2005 FDP comprises drilling of over
160 additional production and water injection wells during the six-year period
and establishment of three further offshore platform locations with production
and accommodation facilities.
In addition, a number of appraisal
wells will be drilled to establish the basis of further development activities
in Block 5 offshore, which started production in 1994.
The field will continue to be developed
by utilizing the state-of-the-art horizontal wells, where many wells in the past
have been drilled to world record horizontal length, al-Attiyah said.
Maersk Oil and Qatar Petroleum (QP)
have completed a number of major development phases using the former's
technology including horizontal well technology with wells drilled up to
31,000ft. Fourteen horizontal wells have been drilled by Maersk Oil Qatar, the
latest in May 2004.
"Also, many technical limits are
being exceeded," the minister said referring to the drilling speed which
has been continuously improved to minimize the time it takes to complete a well.
A total of 19 permanent platforms will
be in place with production locations interconnected by pipelines and power
As part of the 2005 FDP, Maersk Oil
will also build and operate additional facilities for gathering and delivery of
associated gas to QP for utilization at their Mesaieed plants.
"This agreement reflects QP's
policy to comply with the guidance of the Emir HH Sheikh Hamad bin Khalifa al-Thani
to increase the country's hydrocarbon reserves base, oil production and
diversify the country's national income and firm up economy," al-Attiyah
He said the project was a big
achievement of Qatar and reminded the audience that HH the Emir had always told
him to concentrate on oil as well, apart from gas and gas-to-liquids.
Starting with just 400,000bpd a decade
ago, the minister said, "Now we are expecting to cross the 1mn mark and we
are confident of achieving it."
Asked about any plans to further
increase its investments in Qatar, which has already become a pride of place in
the hydrocarbon sector, Andersen said, "we will be looking at better
enhancement opportunities as we start getting to know some of the details of
this (the 2005 FDP) project and there might be other projects in the
'SADDAM USED CHEMICAL WEAPONS AGAINST
Iranian Foreign Minister Manuchehr
Mottaki has said that during the war, Saddam used chemical weapons against Iran
200 times, which rendered 100,000 people chemically disabled.
Iranian citizens disabled due to
chemical weapons attacks are the living proof and witnesses of Saddam Hussein's
crimes against humanity, Mottaki said at a press conference after visiting
Iranians injured by chemical weapons in the 1980-1988 Iran-Iraq war in a
hospital in northern Tehran.
"The Islamic Republic was the main
victim of chemical weapons. It is evident that Saddam carried out all the
atrocities against Iran with the help of Western companies and countries,"
He promised that the Foreign Ministry
would struggle to restore the rights of the war disabled, adding that Iran has
prepared a formal complaint, which the Foreign Ministry will present to the
special tribunal trying Saddam in Iraq.
"The court has yet to review
Saddam's crimes abroad. We want his crimes against Iranians to be
investigated," he was quoted as saying.
The formal complaint includes documents
that prove Iraq's use of nerve and mustard gas during the eight-year war,
The foreign minister added that Saddam
had used chemical weapons to kill Iranians during the war, especially in Kurdish
regions in northwestern Iran, flattening entire villages and destroying farms.
Several dozen war veterans injured by
chemical weapons are undergoing treatment in central Tehran's Sassan Hospital,
one of two hospitals in the capital specializing in such wounds. "Western
countries and companies that supplied Saddam with chemicals share the
responsibility for this crime," Mottaki said.
"Saddam acquired chemicals from
more than 400 Western companies, including 25 American, 15 German, 10 British, 3
Dutch, 3 Swiss, and 2 French companies."
Iran is deeply concerned about the
influence of its archenemy, the United States, on the trial of Saddam, he added.
"We are concerned about the way
the court is trying these war criminals, and America's pressure on the court (to
ignore Iran's demand).
"Iran is closely observing the
trial," he said.
He also asked the media to help convey
to the world the message that the Iranians disabled due to chemical weapons
attacks have been oppressed.
IRAN SEEKS PURPOSEFUL N-NEGOTIATIONS
On the nuclear issue, Mottaki said that
there must be no preconditions in Iran's nuclear talks with the European Union,
adding that Iran's stance is clearly defined, the Iranian Students News Agency
The nuclear talks are quite serious and
should follow a set timetable, Mottaki added.
"The topics of the talks are
clear, and the talks will proceed if our European friends are determined,"
"We do not want talks just for the
sake of talks.
"Iran's position that its nuclear
activities will not be diverted to the manufacture of weapons and that the
Europeans should reaffirm Iran's right to access to nuclear technology meant for
peaceful purposes are the two main points in the talks," he stressed.
The activities at the Isfahan Uranium
Conversion Facility cannot be classified as uranium enrichment, and activities
there will continue, he declared in response to a question on whether activities
at the Isfahan UCF would continue, given that nuclear talks are underway in
He underlined the necessity of
conducting enrichment and complete nuclear fuel cycle activities on Iranian
territory, saying, "The technology that is to be used has become an
Commenting on the recent European Union
resolution accusing Tehran of systematically violating human rights at home,
Mottaki said that the West constantly issues anti-Iranian resolutions and
statements, which Iran rejects as baseless, while the Westerners themselves are
the main violators of human rights in the world.
IRAN-EU TALKS IN JANUARY
Talks between Iran and the European
Union's big three powers ended on Wednesday with an agreement to hold more
negotiations in January aimed at easing concerns about Iran's atomic program, an
Iranian official said.
'Talks on talks' in Vienna between
France, Britain and Germany and Iran were aimed at determining whether there was
a basis for further discussion between the two sides.
"We agreed to continue our talks
in January. Regarding the location, we have agreed on Vienna," Javad Vaeedi,
head of the Iranian delegation, told reporters.
The head of France's delegation,
Stanislav Laboulaye, was less firm on a meeting next month.
"The two sides agreed to consult
their respective leaderships with a view to holding another round of talks in
January, with the aim of agreeing a framework for negotiations," Laboulaye
"Both sides set out their
positions in an open and frank manner," he added.
The EU wants Iran to abandon uranium
enrichment while Iran insists on its right to enrichment for peaceful purposes.
The talks between foreign ministry
officials from Britain, France and Germany and the Iranian delegation were the
first contact between the two sides since talks broke off in August, when Iran
resumed uranium conversion at Isfahan facility.
Iran on Wednesday reiterated its
position that it will not back down from its right to do enrichment as
guaranteed under the nuclear Non-Proliferation Treaty.
"From Iran's point of view the
subject of the talks is to remove the suspension of the uranium processing
facilities and this must happen within a clear timetable," Hossein Entezami,
spokesman for Iran's Supreme National Security Council, told Iranian state
Iran will insist on the right to enrich
uranium on its own soil during the talks, Iran's Foreign Minister Manuchehr
Mottaki said in Tehran.
An EU-3 diplomat said the Europeans are
ready to be "realistic and distinguish between what is desirable and what
is possible," namely accepting some fuel cycle work but drawing the line at
Iran wants to at least be allowed to do
research on centrifuges that carry out enrichment.
"The real diplomatic work at the
moment is trying to bring the Russians on board so we can take this to the
Security Council," another EU-3 diplomat said.
Russia, which has a veto on the
Security Council, is building Iran's first nuclear power reactor and says there
is no sign Iran seeks atomic weapons. It is almost certain to resist this
KING ABDULLAH ECONOMIC CITY
Dubai real estate giant Emaar and the
Saudi government have unveiled a $26.6billion project to build a residential and
commercial complex near the Red Sea port city of Jeddah.
The project, to be called the King
Abdullah Economic City, is "the single largest private sector
investment" in Saudi Arabia and is expected to create 500,000 new jobs,
Emaar said in a statement.
"The King Abdullah Economic City
will be another jewel in the crown for Saudi Arabia and a shining example of
what can be achieved for the common good when two brotherly nations get together
for ever closer co-operation," said Dubai's Crown Prince Sheikh Mohamed bin
Emaar is majority owned by the Dubai
government and boasts a $7.7bn asset base.
It has more than 15 major projects
underway in Dubai, including what is projected to be the world's tallest
skyscraper, and has announced over the past four months projects worth about
$10bn in Egypt and Syria.
An Emaar-led consortium made up of
Saudi and Emirati companies, including the Saudi Bin Laden construction company,
will be the main investor in the development.
The Saudi Arabian General Investment
Authority will act as project co-coordinator, Emaar said, adding that a 30%
equity stake in the development company will be later floated on the stock
The Saudi government has earmarked a
55mn sq m (590mn sq ft) Greenfield land and a 35km (22 mile) shoreline close to
the industrial city of Rabegh for the development.
Included in the project are a new port,
an industrial park, a 3,500-unit residential and hotel complex and a facility
that will serve up to half-a million pilgrims arriving by sea each year on their
way to Makkah. Sheikh Mohamed, Saudi King Abdullah and Saudi Crown Prince Sultan
bin Abdul Aziz were among those attending the project's launch ceremony.
Meanwhile, work on the mega economic
city began in Rabigh; a day after Custodian of the Two Holy Mosques King
Abdullah launched the project, the largest ever joint venture in the Kingdom.
The King Abdullah Economic City to be
built at a pristine location off the Red Sea "signals the dawn of a new era
of economic prosperity for the citizens of the Kingdom," said Amr Al-Dabbagh,
governor of Saudi Arabian General Investment Authority (SAGIA).
The new age city will have six distinct
components: A modern world-class seaport, an industrial district, a financial
island, an education zone, resorts and a residential area, the SAGIA chief said.
"Completion of the overall project
will be done in stages with the first batch of businesses and residents moving
into the city within two years," he pointed out.
Emaar Properties, the world's largest
real estate company in terms of market capitalization, is the master developer
of this ambitious project, the biggest outside of its home market of the UAE.
SAGIA, the apex body responsible for inward investments into the Kingdom, is the
prime facilitator for the development.
"SAGIA's Investor Service Center
will facilitate the provision of services to potential investors," Al-Dabbagh
said, adding that companies and investors would get licenses for implementing
their projects in the city within a week after presenting applications.
Central to the mega project is the
creation of a 2.6 million square meter new Millennium Seaport similar in size to
the world's top 10 ports. With its strategic location on the Red Sea and the
instant access to key cities within the Kingdom, the port will have a designated
area for light industry and logistics and be a natural platform for onward
movement of goods to Europe, Africa, and Asia and beyond.
The Industrial District, covering eight
million square meters, will represent sectors such as downstream petrochemicals,
pharmaceuticals, research and development activities as well as a host of
The waterside resort will serve up a
most compelling mix of waterfront hotels and boutique residences. The master
plan envisages 3,500 well-appointed hotel and residential bedrooms and suites,
premium villas, plus an extensive retail element and an international-class
signature 18-hole golf course and an equestrian club.
The Financial Island will offer 500,000
square meters of office space for the leading international and regional
financial services providers, business hotels and a new exhibition and
convention center. There will be two towers reaching up to 160 stories that
offer compelling views of the surrounding city skyline.
OPEC'S MARKET ASSESSMENT
OPEC President Sheikh Ahmad Fahd Al-Sabah
left Kuwait for China and Russia, the world's second-largest oil consumers and
producers, for talks on future supply and demand prospects.
Sheikh Ahmad, who is also Kuwait's
energy minister, said talks would focus on China's future demand and Russia's
plans regarding expanding production capacity.
"Talks in China will focus on
international energy affairs ... It is part of OPEC's strategy to open dialogue
between producers and consumers," Sheikh Ahmad told reporters at the
airport. "We want to know ... China's future requirements for energy and
its investments in refineries and refining capacity."
In China, Sheikh Ahmad said he will
also complete negotiations that began in Kuwait two weeks ago for the
construction of a $5-billion refining and petrochemicals complex in Guangdong
On Dec. 5, the two countries signed a
memorandum of understanding for the project that includes building a refinery
with a capacity of between 200,000 and 400,000 barrels per day (bpd).
In Moscow, meanwhile, Sheikh Ahmad said
"we want to know its (Russia's) future plans for the world oil markets in
order to coordinate ... on securing supplies." He said he will also discuss
the latest developments on a $1-billion loan that Russia owes to Kuwait.
The OPEC chief said that despite recent
fluctuations in oil prices, they remain range-bound. "Prices, as we see
them, remain within a defined range that they have not breached," Sheikh
Ahmad said. He said the 11-nation Organization of Petroleum Exporting Countries
will allow oil stocks to build up to a reserve of 54-55 days over the next
quarter. "We are allowing the stocks to build up... for that we believe the
stocks will build up ... for about 54 to 55 days in the next three months,"
OPEC maintained its production quota at
28 million bpd at a meeting in Kuwait on December 12 and decided not to renew
its offer for emergency extra output of two million bpd.
The organization will meet again in
Vienna on Jan. 31 to assess an expected seasonal drop in demand for energy
between April and September, and a possible cut in output is on the cards.
"I don't want to prematurely anticipate events. Let's wait until the end of
January," Sheikh Ahmad said when asked if OPEC was inclined to cut output
because of forecasts for warmer weather early next year.
OPEC released a report five days ago
saying world demand for oil will increase by 1.9 percent in 2006 to 84.9 mbpd
with booming China accounting for more than one fifth of the increase of 1.6
million over 2005.
Meanwhile, World oil prices climbed
yesterday after US inventories data revealed a heavy fall in distillates,
including crucial heating fuel reserves, due to recent cold weather in the
In London, the price of Brent North Sea
crude for February delivery won 23 cents to 56.40 dollars per barrel in
Crude oil stocks increased by an
unexpected 1.3 million barrels in the week to December 16 to a total 322.5
million barrels, the Department of Energy said, compared with market
expectations of a 1.3-million-barrel decrease.
However, in a reflection of colder US
weather, distillates stocks, including heating fuel and diesel, fell 2.8 million
barrels to 127.7 million ó more than triple analysts' forecasts of an
Gasoline (petrol) inventories decreased
300,000 barrels to 204.1 million barrels, compared with predictions of an
increase of 1.0 million barrels.
KINO EXPORTS TO IRAN
Pakistan has formally resumed kino
(orange) export to Iran after as many as 26 years.
A chartered vessel, carrying 50
containers with 1,000 tons of cargo booked by three exporters, left Karachi Port
for Bandar Bushehr seaport.
The export was resumed following the
signing of a protocol between Pakistan and Iran few months back. The daily
pointed out that Pakistan used to be major exporter of kino to Iran over two
decades ago. This development could be seen in the context of Pakistan-Iran
pledge to increase bilateral trade to U.S. one billion dollars. Presently, the
trade volume is over $700 million.
SAUDI EXPORTS REGISTER RISE
Saudi Arabia's exports registered a
record SR652 billion this year, reflecting positively on the country's balance
of payment, according to Finance Minister Ibrahim Al-Assaf.
Al-Assaf estimated the Kingdom's oil
exports this year at SR580 billion." on-oil exports in 2005 reached SR69
billion, registering a 20 per cent increase, the minister said. The figure
showed Saudi's diversification drive was yielding fruits.
He was speaking to Saudi Television
following the announcement of the national budget for 2006; Saudi Arabia's
current account was projected to record a surplus this year, SR326.5 billion,
compared to SR194.7 billion last year. This represents an increase of 67.7 per
cent. The Kingdom's 2006 budget projected expenditures at SR335 billion and
revenues at SR390 billion, the largest in its history. The country is expected
to post a record budget surplus of SR214 billion this year on the back of
surging crude prices. According to the Finance Ministry, revenues by the end of
2005 will reach SR555 billion while net expenditure will be SR341 billion.
Al-Assaf said the Kingdom's economy was
in good shape, thanks to the wise policies adopted by the government. Custodian
of the Two Holy Mosques King Abdullah has ordered swift implementation of the
welfare projects, for which allocations have been made from the budget surplus.
Increasing government revenues have
allowed the Kingdom to trim public debt all of which is owed to local
institutions. Debt should fall this year to SR475 billion or 40 per cent of GDP.
Al-Assaf said SR141 billion of this
year's surplus would be spent on paying the debt and added that in 2006 debt
would continue to be a priority. Inflation remains tightly controlled despite
the economic boom, with the cost of living index rising just 0.4 percent this
year and non-oil GDP deflator, seen by economists as a more accurate benchmark
for inflation, up 1.14 per cent.
"But we have to be vigilant on
inflation, given the large growth in government and private sector
spending," Al-Assaf cautioned. Asked about the reason for the change in
revenue projections, the finance minister said it was due to fluctuating oil
prices." We initially predicted that revenues will reach SR280 billion this
year but it did not affect implementation of development programs, he said.
Al-Assaf said the Kingdom's oil sector
grew by six to seven per cent this year at fixed prices and 37.5 per cent at
current prices as a result of skyrocketing oil prices. He said the surge in oil
prices had not created any inflation in the country. The ministry estimated the
non-oil industry sector, which the government has targeted for growth to reduce
dependence on oil revenues, would expand by 8.4 per cent this year.
Referring to the effect of WTO
accession on the Saudi economy, the minister said it would reduce the Kingdom's
revenues from customs tariff by SR300 million in the first year. However, the
WTO entry would have a limited effect on the budget.