INTERNATIONAL BITS AND PIECES - PART 1
Iran hints at oil shift, Rushdie flap no threat
By William Maclean
LONDON, Oct 14 (Reuters) - Iran may show flexibility in negotiating key aspects of foreign investment in oil and gas development ventures that have proved unpopular with foreign energy companies, an Iranian oil official said on Wednesday.
In remarks indicating a possible easing of Iran's approach to outside energy involvement, he said Iran would be prepared to discuss widening the range of possible repayment models for investors planning to upgrade existing oil and gas fields.
"There is room for flexibility in this regard. It's a question of collecting information and addressing a range of related issues over the next few months," the official, who asked not to be named, told Reuters.
He said investors should not fret over political turbulence such as Iran's rocky ties with neighbouring Afghanistan and fresh statements attacking British author Salman Rushdie, or over oil sector changes such as a planned onshore reshuffle.
"The Salman Rushdie case is over. There are some conservatives who raise this issue but for domestic consumption only. But 70 to 80 percent of those who voted for President Khatami do not subscribe to their views," he said.
On Iran's confrontation with Afghanistan's ruling Taleban Islamic movement, he said: "This should not be a cause for concern. It is being allowed to calm down."
Foreign energy companies are elbowing for position in Iran in an $8 billion oil and gas investment race that has attracted European and Asian firms long starved of Gulf upstream ventures.
The country, which holds the world's second largest gas and fifth largest oil reserves, has offered 43 so-called buy-back ventures where investors are repaid in production under its largest energy opening since the 1979 Islamic revolution.
Iran has already signalled the possibility of easing terms on exploration deals which make up 16 of the offered ventures.
But on development deals on established fields, Iran has so far been determined to restrict the use of so-called alternative oil for repayment in cases where a field's output is insufficient to repay capital recovery and remuneration.
Asked to comment on a demand by some foreign companies to have a right either to raise production or take production from other fields if their own output was inadequate, the official said without elaborating that flexibility was a possibility.
Iranian analysts based in London have said they expect any such flexibility to emerge only in final phases of negotiation -- which for most projects lies months, if not years away.
Asked whether Iran preferred approaches by consortiums, the official said there was no rigid rule but ventures involving several foreign companies were usually able to draw on more resources than those involving only one.
The official added the oil ministry was pressing ahead with plans to reorganise the onshore sector of the National Iranian Oil Company to allow a role for private Iranian companies.
These small, semi-private business units would act as state owned NIOC's prime onshore contractors and would link up with foreign "buy back" partners to develop one or two fields each.
A separate Iranian source said 30 of such firms had been or were being created for both onshore and offshore sectors.
Some foreign firms dislike the development, arguing it could lead to delays and complications if it is carried out in tandem with buy-back negotiations on onshore fields.
But the official said foreign investors should not be deterred, and those foreign companies that had worked with such semi-private companies in the offshore sector would be at an advantage in seeking opportunities onshore. "They can use their experience and contacts built up in their dealings with Iranian private companies," he said.
He said Iranian officials would attend a conference in January in London to review bids. Iran has said it hopes to finalise an "appreciable" amount of the ventures by late March.
Bangladesh sets date for gas talks with foreign firms
Bangladesh will begin negotiations with foreign oil firms on the awarding of gas blocks later this month, energy ministry officials said on Thursday.
"We will start negotiating with the foreign companies for awarding the rest of the blocks," said a senior official with Petrobangla, the state-owned oil and gas company.
The talks will start on October 25.
Petrobangla awarded only five blocks (3,5,7,6 and 8) on July 26, more than a year after the bidding took place on 15 blocks.
Petrobangla officials said the delay was due the need to set up certain conditions for exploration work and to remove any ambiguities that might have existed.
"The award of the blocks will be made as per the analysis and that will be based on the best offer," the Petrobangla official who declined to be identified told Reuters.
He said the negotiations for the blocks would take about a month.
The officials said blocks 9 and 11 may go to Irish oil company Tullow Oil Plc <TLW.L> in a joint venture with American companies Chevron/Texaco <CHV.N> <TX.N>.
Block 10 might be awarded to joint venture British Cairn Energy Plc <CNE.L> and Royal/Dutch Shell Group <SHEL.L> <RD.AS>.
They said American firm Unocal Corp <UCL.N>, which also bid for block 10, might get a share of the block along with Cairn and Shell.
Energy ministry officials said the three companies vying for the block were negotiating between themselves for jointly exploring blocks 5, 7 and 10.
Petrobangla has already awarded block 5 to Cairn/Shell and block 7 to Unocal.
Petrobangla officials said the state-owned company had already found gas at Shahbajpur in block 10. It tested gas after drilling one exploratory well in 1992.
Cairn/Shell had already won exploration rights to blocks 15 and 16. The company has struck gas in the offshore block 16 and started to supply gas to the national grid from the Bay of Bengal.
Bangladesh has proven gas reserves of 10.5 trillion cubic feet, but experts say that could rise to 50 trillion cubic feet.
Mobil Australia<MOB.N>hopes for Asia upturn in '99
An economic recovery in Asia from 1999 would help reduce the oil products surplus that has eroded refinery margins, Mobil Oil Australia Ltd chairman and managing director P.C. Tan said on Thursday.
"What we are hoping is that there will be some recovery in the economies in 1999 and that will help tighten up supplies," Tan told reporters after a speech to the Committtee for Economic Development of Australia business group.
He said an additional two to three percentage points of growth would equate to increased uptake of half a million barrels a year. "If we can pick up a couple of percentage growth a year, that takes up the surplus quite easily."
He noted that that refineries had cut capacity and mothballed some production due to the depressed market.
The Asian economic crisis and the excess refining capacity in the region has sharply eroded refiner margins and led to increased pressure on Australian refineries from imports.
But Tan said he disagreed with forecasts that some Australian refineries would be forced to close in the next decade.
Tan told the luncheon the refineries would survive by becoming more flexibile and increase their focus on export markets including niche markets in South America.
He said South American was already importing lubricant base stock from Mobil's South Australian refinery.
"What we would like to do is extend that to fuels," he said.
Tan also flagged the possibility of supplying the U.S. defence forces, which already buy from refineries around the region, but set stringent specifications.
"Once we can get the flexibility we can go after that market," he said.
Mobil and the Australian unit of Shell <RD.AS><SHEL.L> have announced they will merge their four Australian refineries next year in a move to increase efficiency.
The refineries have an average capacity each of around 100,000 barrels per day.
Russia president orders PM to act on Rosneft/Purneft
Russian President Boris Yeltsin on Wednesday instructed Prime Minister Yevgeny Primakov to ensure that state oil holding company Rosneft got back its stake in one of its key assets, oil and gas producer Purneftegaz <PFGS.RTS>, the Kremlin said.
The Kremlin press office also said in a statement that Yeltsin formally instructed Primakov to make sure state assets were protected in the case of any legal action and when issues of shares were made in companies in which the state had a stake.
Yeltsin instructed Primakov to "take measures to guarantee the return to the ownership of OAO Rosneft the stake in OAO Rosneft-Purneftegaz and to punish officials guilty of causing a loss of state property," he said.
Rosneft owned 38 percent of Purneftegaz, its most profitable and valuable asset, but lost it in a court action when it was seized by creditors. The stake, valued by Rosneft at $400 million to $500 million, was later sold for $10 million to an unknown buyer.
The Russian prosecutor's office has opened a criminal investigation into the deal on the grounds of negligence.
Briefing - Asia Energy
Thu, 15 Oct 1998 03:56 EST
JAPAN'S TEC GAINS DESULFURIZATION TECHNOLOGY FROM EBARA
TOKYO - Toyo Engineering Corp. (TSE:6330) has obtained a 10-year
non-exclusive license to use electronic beam-based desulfurization and denitration technology from Ebara Corp. (TSE:6361), with the aim of marketing gas-emission disposal equipment primarily in China, company officials said Wednesday.
The new technology employs electronic beams to eliminate harmful
substances from gas emissions at power stations and industrial plants, with ammonium sulfate and ammonium nitrate recovered as by-products that can be used as fertilizer.
INDONESIA STATE GAS COMPANY TO BUILD FIVE NEW PIPELINES
JAKARTA - State-run gas company, PT Perusahaan Gas Negara (PGN) plans
to build five new gas pipelines worth US$936 million until 2002, and in 2003 the company could fulfil the target to produce around 1.4 billion metric standard cubic feet per day (mmscfd), officials said.
The five pipelines were the first stage towards creating an integrated gas transmission system in Indonesia, PGN Managing Director Abdul Qoyum told a hearing with Commission V at the House of Representatives here Tuesday.
PHILIPPINE CITY MAY SET UP GREEN CHARCOAL PLANT
DUMAGUETE CITY - Plans are now being eyed for the establishment of a
plant to produce the environment-friendly charcoal-based fuel known as Green Charcoal.
Gonzalo D. Catan, a Dumaguete-born scientist and technical director of the National Committee on Urban Pest Control, met with the city's
Environment and Natural Resources Council Tuesday to discuss the zero-waste management program.
INDIA SET TO DRAW UP COMPREHENSIVE ENERGY POLICY
NEW DELHI - The Indian government would soon announce a comprehensive
energy policy to stimulate private and foreign investments in the power sector to mitigate shortages, the country's power secretary said today.
A comprehensive energy policy was on the anvil and all the states would have regulatory commissions in another two years, he told a seminar.
PETRONAS, AGL SIGN DEAL FOR AUSTRALIA/PNG GAS PROJECT
MELBOURNE, Australia - Malaysia's national oil corporation Petronas and the Australian Gas Light Company (AGL) (ASX:AGL) Wednesday signed a natural gas pipeline development agreement with the Papua-New Guinea Gas Supply Consortium, headed by Chevron Services Australia.
The agreement finalises all the relevant commercial terms associated
with the development of the A$3.5 billion Gladstoe pipeline and sets
out the roles and obligations of the parties up to financial close
which is planned for next June.
IOC PLANS SEPARATE JOINT VENTURE MARKETING COMPANY
NEW DELHI - Indian Oil Corporation Ltd (IOC), country's state-owned oil major, is considering a proposal to set up a separate marketing company to sell products of private refiners like Reliance and Essar, IOC chairman M A Pathan has said.
"The proposal is under our serious consideration and the finer details of such a venture are being worked out," he told newsmen on Tuesday.
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