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Exclusive: Oil companies offer to cut 2015 spending in Iraq

BAGHDAD (Reuters) – Oil companies have proposed millions of dollars of cuts in development spending in Iraq, a senior oil ministry official said, after Baghdad told them low oil prices and its fight against Islamic State had made payments difficult. In a series of letters sent to companies such as Royal Dutch Shell, BP and Exxon Mobil since January, seen by Reuters, the oil ministry set out the need for change in response to "the rapid drastic decrease in crude oil prices". The slump in crude prices to below $60 a barrel from $115 in June has slashed government revenues in Iraq, OPEC’s second biggest exporter, just as it faces economic crisis triggered by Islamic State’s seizure of north and western provinces and surging expenditure to fund a military counter-offensive. In view of the fact that a significant proportion of development costs are passed on to Iraq, the oil […]

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Libya Warns Against Attempts to Sell Its Crude Illegally

By Benoit Faucon Libya’s National Oil Co. on Thursday warned against attempts to sell its crude oil illegally, amid mounting chaos in the oil industry. The news come after a string of attacks by purported members of the Islamic State against oil fields in the center of the country, which has already been rocked by a civil war between two rival governments. In a statement posted on its website, NOC said it had obtained "reliable sources of information in the oil market that some middlemen and brokers of unknown orientation were offering amounts of Libyan crude oil" without its approval. The state-run company, which has remained neutral in the conflict, threatened legal action at home and abroad against any buyer, referring to existing export bans from shutdown terminals Ras Lanuf and Sidra. The two eastern Libyan ports are controlled by oil guards loyal to warlord Ibrahim Jadran. Libya, once […]

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Egypt: Petroleum Ministry Pumps 43 Thousand Tonnes of Diesel Oil to Over Come Fuel Shortage – Statement

Cairo — Egypt’s ministry of petroleum pumped on Wednesday 43 thousand tonnes of diesel oil nationwide, Petroleum Minister Sherif Ismail said on Thursday, to overcome a fuel crisis which has persisted this week. Ismail said in a statement that the amount of diesel oil pumped is 110 percent more than the planned amount, describing it as "unprecedented". Egypt’s capital witnessed this week long queues outside gas stations and recurring power cuts due to fuel shortage, alongside other governorates. Ismail urged citizens to refrain from overcrowding gas stations, stressing that the amount of diesel oil pumped is proof of its availability within the domestic market. Egypt’s fuel crisis, ongoing for the past three years, usually surges during the summer, when power cuts occur with the highest frequency.

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On the River Nile, a Move to Avert a Conflict Over Water

Ethiopia’s plans to build Africa’s largest hydroelectric dam on the Nile have sparked tensions with Egypt, which depends on the river to irrigate its arid land. But after years of tensions, an international agreement to share the Nile’s waters may be in sight. For thousands of years, Egyptians have depended on the waters of the Nile flowing out of the Ethiopian highlands and central Africa. It is the world’s longest river, passing through 11 countries, but without its waters the most downstream of those nations, Egypt, is a barren desert. So when, in 2011, Ethiopia began to build a giant hydroelectric dam across the river’s largest tributary, the Blue Nile, it looked like Egypt might carry out its long-standing threat to go to war to protect its lifeline. But last weekend, all appeared to change. Ministers from Egypt, Ethiopia, and Sudan agreed on the basis for a deal for […]

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Brazil Protests Signal Return of Risk in Region as Boom Fades

Brazilian President Dilma Rousseff. Photographer: Evaristo SA/AFP via Getty Images (Bloomberg) — From pot-banging on the streets to defeats in Congress, Brazil’s President Dilma Rousseff hasn’t had a good week defending austerity measures she hopes will fix a broken economy. And it’s about to get worse. Brazilians in several cities plan to demonstrate on Sunday against corruption and growing economic hardship, demanding Rousseff’s impeachment. More than a quarter of a million people signed up on social media to participate. On Friday, pro-government unions intend to protest labor and pension cuts. Brazil is one of several Latin American countries where a cocktail of corruption scandals, slowing growth, falling currencies and accelerating inflation is eroding leaders’ popularity as a decade-long commodities boom comes to an end, said Joao Augusto de Castro Neves, Latin America analyst at Eurasia Group. It’s a hard time for Rousseff to be pushing through an austerity package. […]

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Mexico Cuts Production and Reserve Forecasts After Prices Slid

(Bloomberg) — Mexico’s National Hydrocarbons Commission lowered the country’s estimates for proven oil reserves and state-run Petroleos Mexicanos cut its 2015 production forecast after crude prices collapsed and its budget was reduced. Pemex cut its 2015 output forecast by more than 100,000 barrels to 2.288 millon barrels a day, Gustavo Hernandez, exploration and production director, said Thursday at a builders congress in Mexico City. Mexico’s proven oil reserves slid 3.1 percent to 13.02 billion barrels from a year earlier, Hydrocarbons Commissioner Juan Carlos Zepeda said Thursday in an interview at Bloomberg’s Mexico City offices. Pemex’s failure to boost reserves and drilling activity shows that opening the oil industry to outsiders is needed, Zepeda said. Mexico is opening its energy industry to foreign producers for the first time since 1938. Pemex drilled 120 wells in the fourth quarter, 36 percent less than a year earlier. “These numbers are distant from […]

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Rio Governors to Be Investigated in Petrobras Probe

ENLARGE Rio de Janeiro state Gov. Luiz Fernando Pezão will be investigated for money laundering and public-administration violations. Photo: Felipe Dana/Associated Press RIO DE JANEIRO—A Brazilian high-court judge cleared federal prosecutors Thursday to investigate the current governor and a former governor of Rio de Janeiro state, as a probe into alleged corruption surrounding state oil company Petróleo Brasileiro SA widened. Current Gov. Luiz Fernando Pezão and his predecessor, Sérgio Cabral, will be investigated for money laundering and public-administration violations. Federal prosecutors suspect them of soliciting and receiving 30 million Brazilian reais ($9.5 million) in 2010 from construction firms contracted by Petrobras to build a large refinery in Rio state. Petrobras’s former refining director, Paulo Roberto Costa, detailed the alleged payments last year as part of a cooperation agreement with prosecutors. But because of special rules guiding the prosecution of public officials, Brazil’s vice attorney general had to request authorization […]

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Its red shirts fading, Venezuela’s oil giant embraces pragmatism

CARACAS/HOUSTON (Reuters) – A subtle change in office attire may be the most telling symbol of a quiet revolution taking place inside Venezuela’s troubled economic engine, giant oil firm PDVSA. For years, PDVSA employees were encouraged to wear red shirts in support of late President Hugo Chavez’s socialist movement. Rafael Ramirez, the former oil czar famously vowed the state-owned firm would be "redder than red" and sent workers to state rallies. Over the past few months, however, the company’s new management – led by president Eulogio del Pino, a low-profile Stanford-educated engineer – has eased up on revolutionary garb and attendance at militant gatherings, according to sources within and outside the company. New posters inside its Caracas headquarters request employees don normal office wear, visitors say, a telltale sign of what could be the most sweeping changes in over a decade at a firm that controls the world’s largest […]

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Pemex Plans To Compete In Mexico’s First Two Oil Tenders

MEXICO CITY, March 12 (Reuters) – Mexican state-owned oil company Pemex plans to take part in the first two public tenders of the so-called Round One opening of the country’s oil and gas industry, a senior executive said on Thursday. Mexico has already announced terms and conditions for the first phase of the sector opening, which follows a reform finalized last year that ended Pemex’s 75-year-old oil and gas monopoly in a bid to attract more private investment. Gustavo Hernandez, Pemex’s head of exploration and production, said the firm would take part in the "first two tenders" – one for 14 production and exploration areas and the second for five contracts spread over nine production fields. "A lot of companies have approached Pemex because we have knowledge of the shallow water basin with more than 40 years of exploration and 35 years of production," Hernandez told reporters after an […]

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Venezuela’s loss is Africa’s gain in Latam crude game

HOUSTON Mar 12 (Reuters) – Shrinking crude exports from Venezuela to its neighbors has allowed African oil producers to gain a foothold among Latin American buyers, according to traders and data, and sales to one of the world’s few regions with strong demand will keep growing. Only months ago, African producers were scrambling to find new clients in the Western Hemisphere, having largely been pushed out of the U.S. market by the onshore shale oil revolution. African exports are also growing as Mexico and Brazil lack spare capacity to increase sales to neighbors. U.S. companies, which dominate refined products trade in the Americas, cannot export crude because of a decades-old ban imposed by Washington. Africa sent at least 8 million barrels to South America in the first two months of this year, double the amount in the year-ago period, according to Reuters Dirty Tanker Fixtures data. While African crude […]

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