DOHA, 1 December 2004 — Oil exporting nations have suffered a 30 percent drop in revenue because of the slump in the dollar, Qatar’s Energy Minister Abdullah ibn Hamad Al-Attiya said yesterday. He told AFP on the sidelines of a gas conference in Qatar however that the sharp oil price increase of recent months was not being caused by shortages of supply on the international market. “The current supply exceeds demand,” he said.
The minister, whose country is a member of OPEC (Organization of Petroleum Exporting Countries), said the organization at its meeting in Cairo on Dec. 10 should look at the market situation and price movements to draw up its policy for next year.
Last month, the International Energy Agency forecast that oil prices, which reached historic highs in 2004, should drop back under $30 a barrel and hit $22, at 2000 values, in real terms by 2006.
According to analysts, with inflation taken into account this would mean a figure today of some $27 a barrel. “We must study the IEA figures... and adopt a clear strategy” to adapt to the way the market is going during the Cairo meeting. He told delegates to the Doha conference that Qatar, whose natural gas reserves are third largest in the world, was negotiating “other projects for liquefaction of natural gas with major oil and gas firms”.
The US Phillips-Conoco group, South Africa’s Sasol company, Chevron and Marathon Oil Corporation were among the company he named, without giving details on any potential deals.
Meanwhile, oil prices yesterday in Asian trade hovered just below $50 a barrel with dealers saying heating stocks for the northern winter remained a prime concern. Prices have risen from around $45 in the middle of the month.
In New York, oil prices rose briefly above $50 yesterday, supported by supply disruptions to operations in the North Sea, making markets nervous heading into the northern hemisphere winter.
New York’s main oil contract, light sweet crude for January delivery, climbed to $50.40 a barrel in early trading, the highest level since early November.
But the rally later petered out. By about 1700 GMT the US contract stood at $49.60 a barrel, down 16 cents from Monday’s close.
In London, Brent North Sea crude oil for January rose by 25 cents to $46.00 per barrel in late afternoon deals.
Norwegian oil major Statoil said it had yet to resume production on two of its platforms in the North Sea after the leak over the weekend, cutting Norway’s total oil output by 200,000 barrels per day. “We are still working on securing the well,” Statoil spokesman Kristofer Hetland told AFP. “This will take time... It’s complicated work,” he added.
Production was suspended and 180 of 216 employees were evacuated after a gas leak appeared at the Snorre A platform in the North Sea on Sunday, giving rise to fears of an explosion. The gas leak, which Statoil said was “unusual and serious”, came from an injection well used to pump gas and water into a layer of oil to extract as much oil as possible. A team of about 60 workers is currently trying to seal the leak with cement.
Until repairs are completed production has been halted on the Snorre A platform, causing losses of 130,000 barrels per day (bpd) and on neighboring platform Vigdis, entailing losses of 75,000 bpd.
“We do not want to speculate on when we can resume production,” Hetland said.
Norway is the world’s third-largest oil exporter after Saudi Arabia and Russia, with an average daily production of three million barrels.
