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Russian, Chinese firms battle for oil in Kazakhstan

Lucie Godeau, Daily Times (Pakistan)
A battle between Russian oil giant Lukoil and China’s CNPC for control of key energy assets in Kazakhstan intensified last week with both sides deploying lawyers to fight for holdings in the energy-rich central Asian country.

Positioned midway between Russia and China, Kazakhstan has the highest proven oil reserves anywhere in the Caspian Sea region and is regarded as one of the most important potential sources of new crude oil supplies to world markets.

The state-run CNPC, spurred by soaring Chinese demand for petroleum, won a key victory when a court in Canada gave approval on Wednesday to CNPC’s purchase of the Canada-registered firm PetroKazakhstan for a price of 4.18 billion dollars. …

He [Valery Nesterov, energy analyst with the Troika Dialogue investment firm in Moscow] noted however that while the government of Kazakhstan is “politically and historically closer to Russia, and is wary of China,” it nonetheless believes that “its interest lies in a diversification of investments and export routes.”

At present, the only pipeline that carries Kazakh crude to the world market is that of the Caspian Pipeline Consortium (CPC), which transits through Russia.

But the launch next year of the Atassu-Alashanku pipeline will reduce this dependence by providing a route for export of Kazakh oil directly to China. Kazakhstan currently produces around 1.3 million barrels per day of crude and the government plans to raise that to 3.5 million barrels per day by 2015. afp
(31 October 2005)

The roots of the Japanese oil victory in Libya

Michael Penn, Japan Focus
In February 2000, Japan began the new century on a sour note when it lost its rights to the Khafji oil field in the Saudi-Kuwaiti neutral zone. Japan’s Arabian Oil Company had held exploration rights in that zone since 1957, and the loss of such a long-term investment was keenly felt.

The problem was that Japan, which is among the world’s most dependent countries on Arab and Iranian oil, had lost all significant presence in the upstream oil market. With the increasing rivalry for energy resources between Japan and China, as well as other countries, Japanese government and business leaders are making a strong effort to gain a toehold in the region. …

However, the most dramatic event involves Libya. This essay reveals the steps that led to this unforeseen event. On October 2nd, the results of the second round of international bidding for exploration and development rights in twenty-six Libyan oil zones were announced. More than sixty oil companies from around the world participated in a fiercely competitive environment. Libya is the world’s number nine country in terms of estimated oil reserves, and many of its rich oil fields remain undeveloped. The results surprised many observers: Japanese companies captured rights to six of the most promising oil zones. As one official told Reuters: “It was quite a tight race. Last night, it was cut-throat competition… The Japanese were the big winners.” …
(30 October 2005)

Western energy majors have been leaving Syria

Middle East News Wire
NICOSIA — Industry sources said that over the last year, Western oil exploration firms have been ending operations in Syria. They said the firms have been disappointed by the failure to find large amounts of crude oil in the Levant state.
Over the last year, most U.S. energy majors left Syria. They included Conoco-Phillips, Devon Energy and Exxon-Mobil.
Several additional companies were expected to follow. The sources said Canada’s Petro-Canada as well as its Western partners were planning to suspend operations at Syria’s Kebibe field. In 2003, the Syrian Oil Ministry awarded a project to develop Kebibe to Petro-Canada, Royal Dutch Shell and the U.S. firm Gulfsands Petroleum.
(30 October 2005)

Chinese oil consumption growth drops 14% Jan-Sept05

BEIJING — China’s refined oil consumption increased only by 5.6 percent year-on-year in the first nine months on stable coal supply, sharply lower than the 19.7 percent growth in the same period last year, a government report said Tuesday.

The country’s coal production increased by 10.2 percent to 1.3 billion tons during this period, said the report from the National Development and Reform Commission. China produced 136 million tons of crude oil in the first three quarters, a year-on-year increase of 4.2 percent.

The crude oil import increased 10.6 percent to 94.86 million tons. Due to the rising global oil prices, China’s petrochemical industry has seen profit rise by 40 percent.
(25 October 2005)