THE MONTH IN BRIEF: Prices continue falling, no oil policy change from new Saudi king, and EU considers sanctions on Libya
| Published date | 01 February 2015 |
| DOI | http://doi.org/10.1111/oet.12224 |
| Date | 01 February 2015 |
THE MONTH IN BRIEF
is section summarizes downstream developments of the previous month. Exploration & Production are covered in
“Upstream Review.”
Prices continue falling, no oil policy change from new Saudi king, and EU
considers sanctions on Libya
Crude oil prices continued to fall, taking prompt Brent
futures below $48.50/bbl at the end of January: a fall of
$8 compared with the beginning of the year, as global
production remained high and demand weak despite
thelowerpricelevels.Stocklevelsalsoincreasedin
several major markets, putting oil prices under further
downward pressure. Saudi Aramco’s chief executive,
Khalid al-Falih, said that oil prices were “too low”; but
the kingdom’s Oil Minister, Ali Naimi, indicated that
Saudi Arabia would not cut its oil production what-
ever the price. Saudi Arabia’s King Abdallah died and
was replaced by his half-brother Salman. In one of a
series of moves to indicate that the kingdom’s oil pol-
icy was unchanged, Salman reappointedAli Naimi as Oil
Minister.
As widespread violence continued to aect Libya,
cutting oil product ion and exports, diplomatic sources
in Brussels indicated that Foreign Ministers from Euro-
pean Union (EU) member-countries were planning
todiscusspossiblewaysofendingtheconictand
that “one option” was the imposition of s ome form of
sanctions. e situation in Libya meanwhile continued
to deteriorate. Oil production was reported to be as
low as 200,000 bpd in early-January, with most oilelds
shut down and the main export terminals closed by
ghting between the Libyan army and rebel troops.
Output was reported slightly higher –at 350,000 bpd –by
the end of the month, but many tanker owners were
put-o loading at Libyan ports aer the Libyan air force
bombed a Greek-owned tanker, apparently because it
was “suspicious” about the tanker’s activities.
Oil and gas production and exports were aected
by violence and unrest in a number of other countries,
including South Sudan, where rebel forces destroyed a
production facility in Unity state, and in Yemen, where
tribal groups pre vented the repair of the export pipel ine
serving the Marib and Shabwa oilelds, which had
been damaged and was leaking. e Nigerian National
Petroleum Corporation (NNPC) said it had been able
to increase crude oil deliveries to its two Port Harcourt
reneries by using ships and so avoiding having to use
crude oil pipelines that have been subject to constant
attack by thieves. NNPC is also to rehabilitate renery
units at its two other reneries–Kaduna and Warri– in
order to boost output and reduce imports of rened
products. Shell agreed to pay $55 mn to compensate the
Bodo people for oil spills in the Niger Delta in 2008.
Iraq announced that crude oil exp orts had reache d a
record post-invasion level of 2.94mn bpd in December
despitetheclosureofitsnorthernexportpipelineby
forces belonging toIslamic State. e Kurdistan Regional
Government said it would increase crude oil to the US
despite an unresolve d dispute with Bag hdad over its
right to sell oil in its own name rather than through
the federal State Oil Marketing Organization. Mexico’s
Pemex said it wanted to import light oil f rom the US in
return for heavy cr ude from Mexico, suggesting the deal
be set-up as a swap in order to circumvent US rules that
tightly restrict the export of crude oil.
Libya’s Tamoil said it was considering the tempo-
rary closure of its 72,000 bpd Collombey renery in
Switzerland. In Croatia, Indus trija nae (I NA) sus-
pended operations at its 44,000 bpd Sisak renery in
order to concentrate its pro duction on its 90, 000 bpd
renery at Rijeka. Fears that ENI’s 84,000 bpd Leghorn
renery would be closed eased when the company said
it would keep the Italian plant going for now. Shell
scrapped plans for a petro chemical plant in Qatar and
said that it was considering the future of its 156,000bpd
Port Dickson renery in Malaysia. e Omani govern-
mentindicatedthatitwouldprivatizethestaterener,
Orpic.
© 2015 John Wiley& Sons Ltd
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