Iran struggles to find new oil customers

Iran is struggling to find a buyer for nearly a quarter of its annual oil exports as looming western sanctions targeting the country’s nuclear programme start to bite the world’s third-biggest crude exporter.

Tehran is trying to sell an extra 500,000 barrels a day of oil, or nearly 23 per cent of what it exported last year, to Chinese and Indian refiners, according to two industry executives familiar with the talks.\

“Iran is facing severe problems finding a new buyer,” one of the executives said, explaining that Tehran was not offering discounts for the oil, which is for delivery from the start of April.

If it cannot find customers by mid-March for the oil, which is equal to the amount European refiners bought last year, Iran would be forced to put unsold barrels into floating storage in supertankers, or reduce output. Either measure could push oil prices higher.

Brent crude hit an eight-month high of $120.70 a barrel on Friday, amid worries about Iranian supplies and production disruptions in South Sudan and Yemen. On Monday it rose again, to $121.01 a barrel.

The European Union approved a ban on oil imports from Iran last month but delayed full implementation until July 1 so that Greece, Spain and Italy had enough time to find alternative supplies.

In what appeared to be an effort to pre-empt the embargo, Tehran announced at the weekend it was cutting crude sales to French and British companies.

Alireza Nikzad, a spokesman for Iran’s oil ministry, announced on Sunday that Tehran had replaced the companies from the two countries with “new customers”. He gave no further details.

Both France and Britain have already all but stopped buying Iranian crude, suggesting the move may turn out to be largely symbolic.

Even so, this is the first real action by Tehran after weeks of threats and could still have a psychological impact that may push up oil prices as the market worries that Iran could halt exports to other nations.

The Iran crisis is set to dominate International Petroleum Week, the annual gathering of the oil industry that starts on Monday in London.

The International Energy Agency, the western countries’ oil watchdog, said earlier this month that European refiners “have already curtailed imports of Iranian crude”, and added that some Asian buyers would follow. China, the single-largest buyer of Iranian crude with imports of about 550,000 b/d last year, is now buying half that volume, according to the IEA.

European oil companies including Total of France, Royal Dutch Shell, Repsol YPF of Spain and Eni of Italy have either stopped buying Iranian oil or have halted spot purchases, industry executives said.

Iranian lawmakers have called for an immediate halt in the country’s exports of oil to all EU states to hurt the region’s economy and demonstrate the country’s determination to go ahead with its nuclear ambitions.

Sourced & published by Henry Sapiecha

Share and Enjoy

Share and Enjoy

North Australia to have a liquiefied natural gas plant built by Japan

Japan’s largest energy explorer has today committed to build the $34 billion Ichthys liquefied natural gas project in Australia, which would become one of the world’s biggest LNG facilities with an estimated 40-year life of processing gas from WA’s Browse Basin.

Inpex chair Naoki Kuroda announced the much anticipated final investment decision in Darwin, the site elected to build the project’s onshore gas processing facility after early plans to build the hub north of Broome.

The investment would be the single-largest in Australia from the Asian nation and create an initial 3000 jobs in Darwin with 1000 more off the WA coast. Once the project is fully operational it would shrink to 700 permanent staff.

The project would provide long term stable supply of energy to Japan after the Dai-Ichi nuclear station in Fukushima was crippled from an earthquake and tsunami in March.

Ichthys is among $200 billion worth of LNG developments planned, or under construction, in Australia as the country moves toward the top spot in the global rankings of LNG suppliers.

Australia, with projects led by Chevron, Royal Dutch Shell, Woodside, will “rival” Qatar as the world’s biggest exporter by 2016, Energy Minister Martin Ferguson has said.

“Ichthys will contribute significantly to the growth of the Australian economy while strengthening friendly ties between Japan and Australia,” Mr Kurodo said.

He said construction on the project was expected to begin at the Blaydin Point site in Darwin within the next month.

Mr Karudo said tenders for the project would have to demonstrate how they would maximise use of Australian products and services to be successful.

Share and Enjoy

EXXON BEATS ALL PREVIOUS RECORD OF EARNINGS, TO MANY BILLIONS OF DOLLARS $$$$$$$$$$$ OVER 3 MONTHS

OLI GIExxon earned nearly $US11 billion ($A10.15 billion) in the first quarter, a performance likely to land it in the centre of the national debate over high gasoline prices.

The world’s largest publicly traded company on Thursday reported net income of $US10.65 billion ($A9.83 billion), or $US2.14 per share, in the first three months of the year. That compares with $US6.3 billion ($A5.81 billion), or $US1.33 per share a year ago. Revenue increased 26 per cent to $US114 billion ($A105.2 billion).

The results surpassed Wall Street estimates of $US2.04 per share on sales of $US112.6 billion ($A103.91 billion), according to FactSet.

The quarter was Exxon’s best since it earned a record $US14.83 billion ($A13.69 billion) in 2008′s third quarter. It comes at a time when some drivers are paying $US4 or more for gas and President Obama is threatening the oil industry’s multibillion-dollar tax subsidies.

Earnings grew across the company’s business segments. Income from its exploration and production business gained 49 per cent to $US8.7 billion ($A8.03 billion) while the company’s downstream business, which includes refineries, posted a huge 30-fold jump to more than $US1.1 billion ($A1.02 billion).

Anticipating a strong reaction to the results from drivers and politicians, Exxon said on a company blog on Wednesday that it has little control over the price of oil, which has risen to near $US113 per barrel. The company also noted that less than 3 cents of every dollar it earns comes from the sale of gasoline and diesel fuel.

That may not appease many motorists, however. The national average for a gallon of gas is $US3.89, about $US1.02 more than a year ago. It’s above $US4 in 8 states and the District of Columbia. And on Thursday, the Commerce Department said economic growth slowed sharply in the first quarter, partly because of high gas prices.

On the blog, Ken Cohen, Exxon’s vice president of public and government affairs, said the company was anticipating “the inevitable headlines and sound bites about high gasoline prices and what to do about them” after the earnings were reported.

Exxon’s huge profit followed similar results by other oil companies.

Europe’s largest oil company, Royal Dutch Shell PLC, reported $US8.78 billion ($A8.1 billion) in first-quarter profits, up 60 per cent from a year ago. BP PLC’s quarterly earnings rose 16 per cent to $US7.2 billion ($A6.64 billion). ConocoPhillips said net income grew 43 per cent to $US3 billion ($A2.77 billion) and Occidental Petroleum Corp said earnings climbed 46 per cent to $US1.55 billion ($A1.43 billion).

Exxon Mobil Corp increased earnings even though it produced less oil and natural gas liquids. Benchmark crude prices rose 20 per cent from a year ago.

The company has increasingly focused on producing natural gas. Exxon expects natural gas to displace coal as the second most important fuel source within the next decade, and last year it acquired XTO Energy to become the largest US natural gas producer.

Natural gas production increased 24 per cent in the quarter for Exxon, but prices declined as other companies followed Exxon’s lead and rushed to develop underground shale gas deposits in North America. Natural gas prices fell nearly 16 per cent from a year ago.

AP   Sourced & published by Henry Sapiecha

Share and Enjoy

(Reuters) – Rises in fuel prices have led to an increase in the number of used fryer grease rustlers roaming restaurant alleys in the United States.

Grease thefts have spiked whenever fuel prices climbed during the last four years and this spring is no different, according to Tom Cook, president of the National Renderers Association.

“It’s on the rise and it’s because of higher oil prices,” Cook told Reuters in a telephone interview. “I have one member who told me it’s costing his business $1 million a year.”

Recyclers typically contract with restaurants to pick up the waste product. The grease is cleaned and sold for use as biofuel, livestock feed and other products.

An Omaha recycler has filed theft reports with police in Omaha and Lincoln in Nebraska, and Sioux City, Iowa. Thieves recently stole about 4,200 pounds (1,909 kgs) of used grease from six Lincoln fast-food restaurants.

Processed fryer oil is not trash. It is called yellow grease and is traded. Its value is driven by higher prices of gas and ethanol.

Recyclers and collectors pay restaurants about 18 cents a pound for grease. After further processing, it can be sold for 42 to 45 cents a pound, said Cook, who is based in Alexandria, Virginia.

Yellow grease was trading for less than 8 cents a pound in 2000.

Cook said he plans to conduct an industrywide survey to determine the extent of the losses. Many restaurant owners don’t realize what they are losing and local law enforcement agencies have other crime-fighting priorities, he said.

One way to curb demand for stolen grease is to alert potential buyers, especially in the feed industry, to only buy from known sources to ensure the product they receive is free of impurities and moisture, Cook said.

“The price (of yellow grease) is real good right now,” he said, “and those who steal it are really getting a good deal because they’re not paying for it.”

(Editing by Jerry Norton)

Sourced & published by Henry Sapiecha

Share and Enjoy