Today.Az » World news » Iran to fight cheap oil&gas
11 October 2011 [09:50] - Today.Az
Iran says attempting to keep oil production ceiling at OPEC meeting
and discussing the gas price at the upcoming Gas Exporting Countries
Forum (GECF) are Iran's top agenda.
The 160th OPEC meeting, headed by Iran, will be held in the Austrian
capital, Vienna, on December 14 and the 11th ministerial meeting of GECF
will open in Doha, Qatar on December 2.
Iranian oil minister Rostam Ghasemi says maintaining OPEC output due to stable oil prices is major topic to be reviewed in OPEC.
Iran's pale clout on international oil market
According to the U.S. Energy Information Administration (EIA) report,
OPEC members' oil income was $780 billion in 2010 and this figure would
hit up US $1 trillion in 2011.
The International Energy Agency released 60 million barrels of oil
from its 4 billion emergency stocks four months ago to decrease the oil
price.
Opposing this action by the IEA Iran came out with a strict
statement, accusing the western countries of setting 'unfair oil price'.
But what does Iran's "unfair oil price" statement imply and how can Iran make it fair?
The 12-member OPEC holds 80 percent of the world's proven oil
reserves, but its production meets only 35 percent of the global demand.
So, OPEC's role in fact is not so great in price formation in the
world.
Meanwhile, OPEC's annual report indicated that Iran's oil production
has downed from 4.07 to 3.54 million barrels since 2006 and Nigeria
surpassed Iran as OPEC's second major oil export in 2010.
Executive director of the National Iranian South Oil Company Hormoz
Ghalavand said earlier Iran's oil production reduces by around 300,000
barrels per year because about 80 percent of oil wells in the country
are in their second half-life.
According to OPEC's report, Iran's active oil wells decreased in number by 10 wells to 2064 in 2010.
Iran has the world's third largest proven reserves (after Saudi
Arabia and Venezuela) in the amount of 137.6 billion barrels, but
produces about 11 percent of OPEC's output and 5 percent of world's oil
production because of lacking investments and withdrawing two to third
foreign companies from Iran's oil projects due to UN, EU and U.S.
sanctions.
Iran must inject about 280 million cubic meters of gas to old oil
wells to keep oil production level, but it is able to inject only 60
million cubic meters of natural gas per day.
Saudi Arabia with 2.5 million barrels of excess oil production
capacity is producing around 9.8 million b/d (1.8 million b/d more than
its quota), which has raised OPEC output to 30.13 million b/d since
August.
Therefore, Iran's call on reducing OPEC output to keep oil prices up
is just a noise, without any effect. Iran wants to keep OPEC output
unchanged because Tehran's oil production capacity is under its quota
determined by OPEC and because of probable $15 billion shortage in
general budget with the oil price below $100.
Iran to raise international gas price
Iran as the world's second gas-holder with 33 trillion cubic meters
of gas reserves is unable to export gas. Iran's gas production is about
138.5 bcm with a consumption rate of 136.5 bcm.
However, Iran's oil minister Rostanm Ghasemi says the gas price will be GECF's first topic at December meeting.
At the same it is almost impossible to define a protecting package
for gas prices because gas price depends on oil price, the gas contracts
are regional and long term (20-30 years), and there are various types
of gas (LNG, CNG, natural gas and etc
LNG (liquid natural gas), which is the only type of "blue fuel"
similar to oil, has the price differing from the region to region. For
instance, the LNG price in Japanese market differs from Pacific basin.
So, could Iran defeat the giant participants on the global in its
ambition to set new prices for the world number strategic natural
resources - oil and gas? Let's be patient by the end of the year.
Dalga Khatinoglu /Trend/
|