Oil Industry Headlines: Week of March 1
The price of crude oil dominated headlines again this week. On Friday, tensions between Columbia and neighboring countries, along with supply concerns, helped push prices to a new record high above $106 in intraday trading. Light, sweet crude for April delivery touched $106.54 before closing at $105.11 on the New York Mercantile Exchange.
With the Iraqi oil law stalled indefinitely, government officials and the oil majors are using a little creativity to help get things going. This week, Iraqi oil minister Hussain al-Shahristani said Iraq is “close to finishing negotiations with several oil majors for two-year technical support contracts,” reported Reuters. The contracts will allow the oil majors to study Iraqi fields while providing equipment to increase production. They will not, however, provide the companies with a share in production. The real benefit to the majors will come when production sharing is possible, but for now they have the opportunity to establish a relationship with Bagdad and gain access to field data.
Mexican President Felipe Calderon is running television ads to garner public support for private investment in Mexico’s state-owned oil company, PEMEX. Private investments are currently under a constitutional ban. The controversial topic is unpopular with many who don’t want to share profits with private firms, but Calderon says private investment is necessary to gain access to expertise needed to exploit deepwater projects in the Gulf of Mexico. Profits from PEMEX have long been used to support government programs, leaving almost no funds available for investment in future exploration efforts. Mexico’s current producing wells are undergoing sharp production declines, which many leaders view as a crisis that demands a new approach.
Published Friday, March 7th, 2008 at 1:33 pm and filed under Industry News.