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North Sea is running too dry to meet target

Terry Macalister, The Guardian
· Oil and gas production will slip further, report says
· Rising costs and tax increases squeeze output
The energy industry warned yesterday that government targets of keeping Britain’s oil and gas production at 3m barrels a day by 2010 look like being missed. North Sea competitiveness is falling and financial backers are losing confidence in the wake of tax increases introduced 18 months ago.

Civil servants have been working with oil companies to find ways to boost output offshore, but the 2007 Economic Report issued by the industry organisation Oil & Gas UK says the goal looks like being missed after five years of rising hopes.
(4 July 2007)

Iraq oil legislation advances

Tina Susman and Saif Hameed, Los Angeles Times
The Cabinet OKs a key bill, but factional disagreements pose a hurdle. A second measure still requires approval.
Legislation to manage Iraq’s oil industry won Cabinet approval Tuesday and could go before the parliament for ratification within days, but political wrangling raised the possibility of delays in passing the long-stalled measure.

The legislation is the less controversial of two measures covering Iraq’s oil wealth. The second measure would set up the mechanism for ensuring that oil profits are distributed properly. It still requires passage by the Cabinet, which is expected to consider it this week, government spokesman Ali Dabbagh said.

The reform of Iraq’s oil industry is considered the most important of several benchmarks that Washington says are crucial to proving that Iraqi politicians can overcome religious and sectarian divisions to pass laws beneficial to all Iraqis. With the parliament due to begin its monthlong recess at the end of this month and U.S. officials scheduled to present an Iraq progress report to Congress in September, time is running short for the measure to become law.

The two oil measures together are considered the only benchmark likely to be met, and officials involved in drafting the legislation have made no secret of its importance. Passage would be “a platinum-level sign that these guys can in fact make decisions,” said a U.S. Embassy official.
(4 July 2007)
A very important part of the Iraq story, but which is receiving superficial analysis. Interesting conflicting headlines :
Iraqis make progress on crucial oil law (Intl Herald Tribune & NY Times)
Sectarian row stalls Iraq oil bill (Guardian)

Iran, Low on Gasoline, to Be Supplied by Venezuela

Nazila Fathi, NY Times
Venezuela agreed to sell Iran gasoline on Tuesday, less than a week after Iran unveiled a rationing program to limit its dependence on gasoline imports.

“The Iranian government has asked to buy gasoline from us, and we have accepted the request,” Rafael Ramírez, Venezuela’s energy minister, told the newspaper Shargh. He declined to specify the quantity of gasoline Venezuela would sell to Iran or at what price.

Iran, a major oil exporter, imports 40 percent of its gasoline because of high consumption and limited refining capacity. While gasoline costs about $2 a gallon on world markets, the government sells it for 34 cents, a subsidy that costs it about $5 billion a year.

Iran imports gasoline from 16 countries, including India, the Netherlands, France and the United Arab Emirates.

Energy analysts say Tehran began rationing gasoline last week primarily in an effort to cut gasoline consumption in anticipation of possible sanctions over its nuclear program. The United States Congress is considering a bill that would impose sanctions on any company selling gasoline to Iran, and the United Nations Security Council will meet in September to discuss tougher sanctions against Tehran.
(3 July 2007)

Venezuela’s Oil Nationalization Tests Chinese Oil Companies

Asia Pulse Pte Ltd via Rigzone
Will Chinese oil companies survive from Venezuela’s move of nationalizing its oil industry? Or will they get more benefits from such kind of move? Venezuelan President Hugo Chavez on May 1 announced the nationalization of his country’s oil industry. The Venezuelan government has reclaimed oil resources of the Orinoco Belt, the world’s biggest heavy oil deposit, from companies such as BP, ExxonMobil and Total.

On the one hand, the Venezuelan state oil company PdVSA, which replaces these big oil majors, assumes at least a 60 per cent stake in any heavy crude projects. On the other, Chavez is seeking to do more business with China, Russia and Iran.
(3 July 2007)

Analysis: Oil-rich Nigeria short on fuel

Carmen J. Gentile, UPI via Middle East Times
LAGOS, Nigeria — Fuel shortages will persist in oil-rich Nigeria, with no end in sight, as long as gasoline lines form and refineries slow production.

Funso Kupolokun, group managing director of the state-run Nigerian National Petroleum Corp. (NNPC), blamed the long-term problem on the recent cessation of operations in some of the country’s refineries.

Refining of Nigeria’s locally produced and imported oil was hampered earlier this month amid a nationwide strike. Though the work stoppage lasted only four days, the refining industry was hard hit as the process was already suffering due to continuing protests and attacks by militant groups in the Niger Delta, home to the country’s petroleum industry.
(4 July 2007)