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OPEC seen unlikely to cut output despite oil glut

VIENNA (AP) — OPEC oil ministers meeting in Vienna on Thursday are in a bind. Prices are plunging – and in the short term, the cartel may not be able to do much about it. Expectations that the group would not cut output to support the market saw the global price of oil slump another $1.89 on Thursday to $75.86 a barrel, extending its losses since June, when it was as high as $115. That drop has been driven by a boom in shale production in the United States as well as weakness in some major world economies, causing supply to outpace demand. OPEC powerhouse Saudi Arabia can weather such lower prices because its coffers are well-padded and its production costs are relatively low. But poorer OPEC members like Venezuela and Nigeria need levels close to $100 or above to fund national budgets. Saudi rival Iran is suffering, too, […]

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Kirkuk oil facilities damaged in IS battle

The crude pipeline on fire after sabotaged during Tel al-Waridd fights on Nov. 26. (KAMARAN AL-NAJAR/Iraq Oil Report) A pipeline to the Baiji refinery was ablaze amidst a barrage of artillery fired by militants of the so-called Islamic State (IS) as they battled coalition forces in contested areas southwest of Kirkuk. IS militants launched their attacks late Tuesday and into Wednesday, battling Kurdish Peshmerga forces and facing air strikes by coalition planes. In the morning raid, IS militants took control of the Tel al-Warid and Maktab Khaled villages, 20 kilometers southwest of Kirkuk city, according to…

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Libya: Rival Government Wants To Attend Oil Meeting

Both Libya’s internationally recognized government and a rival government want to attend the Nov. 27 OPEC meeting in Vienna, Reuters reported Nov. 26. Libya’s internationally recognized government will send three delegates to the meeting, a spokesman said. The rival government, which operates out of Tripoli, says it will refuse to comply with any production decisions if it is denied access to the meeting. An OPEC representative said the group’s only role is to facilitate the meeting, and it does not send invitations to member countries.

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ConocoPhillips Asks Judge to Probe Secret Citgo Sale

(Updates with arbitration details in fifth paragraph.) Nov. 26 (Bloomberg) –- ConocoPhillips (COP) Petrozuata BV asked a Texas judge to let it investigate claims Venezuela ’s state-owned oil company is secretly liquidating U.S. assets to avoid paying a potential multibillion-dollar arbitration award over the nationalization of ConocoPhillips’ assets in 2007. Petroleos de Venezuela ’s principal U.S. asset is Houston-based Citgo Petroleum Corp., which owns three refineries and a distribution network comprised of numerous pipelines and terminals. The Venezuelan government publicly said in September and October that it was no longer trying to sell Citgo, in deals with price tags estimated from $7 billion to $15 billion, according to court papers. “The available evidence indicates that PDVSA is liquidating its interests in Citgo to remove the proceeds from the United States to Venezuela or elsewhere with the specific intent to hinder, delay or defraud its creditors,” including the company’s “ability […]

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Libya Producing 700,000 B/D of Oil — Energy Official

By Benoit Faucon Libya is currently producing 700,000 barrels a day of oil, a top energy official said Wednesday. The country’s current production, less than half of its normal level of about 1.5 million barrels a day, has been hit by frequent unrest and strikes. Speaking to reporters, Mohamed Oun, a deputy vice-prime minister for energy, also said his government decided to replace the head of the National Oil Co. Mustafa Sanallah with Almabrouk Abuseif Alahirish. Mr. Sanallah couldn’t be reached for comment. It’s unclear how Libya’s internationally recognized government could enforce the decision. A rival rebel cabinet is in control of NOC’s offices in Tripoli. Mr. Oun is part of a team sent to Vienna by the internationally recognized government for a meeting of the Organization of the Petroleum Exporting Countries. Deputy-Prime minister Abdulraman al-Taher Alahirish told reporters he would lead the Libyan delegation at the gathering. Under […]

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Nigeria: Bonga Oil Spill – House Orders Shell to Pay U.S.$3.6 Billion Fine

Pastor Christian Lekoya Kpandei’s hand covered in oily mud, Bodo Creek, in 2011 (file photo). Photo: Amnesty International Abuja — The House of Representatives has directed Shell Nigerian Exploration Company (SNEPCo) to pay the sum of $3.6 billion or N604.832 billion for the damage caused by oil spill from its equipment failure almost four years ago in Bayelsa State The House Committee on Environment gave the directive during an investigative public hearing on Wednesday, citing the breakdown of an independent value analysis it adopted, which totalled N63.6 billion, payable for direct losses (irreversible damages) the community incurred. According to a breakdown of the damage, N103.192 billion is for loss of income, N85.785 billion is for water provision while N27.399,520,512 is for forestry and NTFP. For the indirect losses, SNEPCO is to pay N14.350 billion for health hazard; N8.089 million is for injurious affection while the sum of N302.416 billion […]

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Petrobras Woes Scaring Away Investors

SÃO PAULO—A corruption investigation involving Brazilian state-controlled energy firm Petroleo Brasileiro SA is now being viewed as a liability to investors, who just a few months ago snapped up some of the company’s shares in the wake of the scandal. Petrobras confirmed this week it is being investigated by the U.S. Securities and Exchange Commission in relation to Brazilian prosecutors’ allegations that it was at the heart of a vast money-laundering and kickback scheme. The share price has dropped more than 40% since hitting an 18-month high in early September, and the company delayed its third-quarter earnings report because of auditors’ doubts. “No one knows how big the hole is (in the company’s numbers),” said Carlos Gribel, head of fixed income at Andbank Brokerage in Miami. “A lot of people think that worse things could start to come out.” According to prosecutors and suspects arrested in the case, a […]

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China ramps up crude buying, reserves purchases far ahead of schedule

BEIJING/SINGAPORE (Reuters) – China is estimated to be holding double the amount of crude in its strategic reserves than its official plan has revealed, as the world’s top energy consumer takes advantage of a dive in prices to strengthen its position in the global oil market. Based on data compiled by industry and consulting sources, China now has nearly 30 days of stocks to cover crude imports, far ahead of its official schedule showing 15 days. In the next few years, China’s cover could reach 90 days, equivalent to the target reserves for the West’s main oil importers, including the United States, particularly if prices stay weak. After a 30 percent drop in oil prices since June, the OPEC producer club meets in Vienna on Thursday to consider whether to cut output to shore up prices. Beijing rarely publishes its oil stocks for fear that the knowledge will give […]

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South Korea’s October product exports rise 16% to 21-month high

Seoul (Platts)–27Nov2014/438 am EST/938 GMT South Korea’s exports of refined oil products rose 16% year on year by volume in October, the biggest increase in 21 months. However, many of the sales were done on a spot basis, at lower prices than in previous months, as the country’s refiners drew down their inventories and as lower margins and refinery runs in China saw the country import more products from South Korea, industry sources said Thursday, November 26. The 16% rise — the biggest since January 2013’s 18.7% year-on-year increase — saw South Korea’s product exports reach 41.34 million barrels in October, or an average 1.33 million b/d, up from 35.64 million barrels a year earlier, according to data released earlier this week by state owned Korea National Oil Corp. The October total was also up 7.7% from 38.38 million barrels in September, and marked the fourth consecutive month of […]

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Oil Bust of 1986 Reminds U.S. Drillers of Price War Risks

The last time that U.S. oil drillers got caught up in a price war orchestrated by Saudi Arabia, it ended badly for the Americans. In 1986, the Saudis opened the spigot and sparked a four-month, 67 percent plunge that left oil just above $10 a barrel. The U.S. industry collapsed, triggering almost a quarter-century of production declines, and the Saudis regained their leading role in the world’s oil market. So while no one expects the Saudis to ramp up output now like they did then and U.S. shale oil companies are pledging to keep drilling regardless, the memory of that bust looms large for American industry executives on the eve of OPEC’s meeting tomorrow. As the Saudis gather with officials from the 11 other OPEC nations in Vienna, analysts are split on whether the group will cut output to lift prices or leave production unchanged to fight for market […]

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