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Brazil dances with OPEC
Steve Hargreaves, CNN Money
The country, likely to become a major exporter of crude, is serious about joining the cartel which – in the long term – could push up prices.
OPEC, the 13-nation cartel that has a huge influence over oil prices, may be expanding farther into South America.
News that the largest economy in Latin America (see correction below) was considering joining OPEC began to swirl late last year shortly after Brazil announced the discovery of huge offshore oil and gas deposits that could turn the country into a major oil exporter.
Politicians, including President Luiz Inacio Lula de Silva, said the country would consider membership in the Organization of Petroleum Exporting Countries as soon as the export potential from the new fields is evaluated.
Analysts say Brazil is serious about joining, and its membership could push crude prices higher as more oil would be under OPEC control, but that membership and significant crude exports from the country won’t happen anytime soon.
(22 February 2008)
Iran warns will hit back at UN sanctions
Iran on Sunday warned it would hit back with an appropriate response to new UN Security Council sanctions over its contested nuclear programme, as Western powers stepped up efforts to punish Tehran.
Britain, France and the United States are pushing for a new sanctions resolution in the coming week after the UN atomic watchdog said it could still not confirm if the Iranian atomic drive was peaceful.
“In the case of the adoption of the resolution, we will make a deserving action. We will announce our decision at the right time based on the content of the resolution,” foreign ministry spokesman Mohammad Ali Hosseini said.
President Mahmoud Ahmadinejad on Saturday warned of “firm reprisals” against any country leading the way to impose new sanctions, adding that Iran was “not joking.”
(24 February 2008)
Russia’s oil taxation to be reformed
Russia’s Economic Development Ministry says it is seeking to create different levels of export duties on refined oil products. The long-awaited announcement, aimed at encouraging domestic oil processing, is set to shake up the oil sector.
… Erik Depoy of Alfa-Capital says for oil giants like Rosneft or Lukoil taxes are weighted towards upstream production. He says they make massive profits on their downstream refining. Even so, if the Ministry implements proposals to cut duties, the stocks of the majors may rocket by 15%.
For now, he says, it’s just talk. Nabiullina’s brief statement was short on details. However, for Depoy the fact that she is talking about it publicly shows promise. “The government is very concerned about the oil industry and declining production. Nabiulina’s out just shows they’re aware and are ready to take some steps to ensure the vitality of the Russian oil industry,” Depoy observed
(23 February 2008)
Jeffrey J. Brown writes:
Alfa Capital issued a report in mid-2007 that warned of rapidly rising water cuts in older Russian oil fields.