Latest News
10.03.10
China's crude oil imports rise in FebruaryView
Chinese crude oil imports increased in February to 4.85m bpd from January’s 4.05m, the second highest monthly level after December’s peak of just above 5m bpd and a 58% increase year-on-year, according to preliminary customs data. China imported 2.89m tonnes of oil products in February, up from the previous month’s 2.54m tonnes, and exported 1.6m tonnes of refined products, or 40.75% down from January’s 2.7m tonnes. China had been a net exporter of oil products for the past two months up until February. Commercial fuel stocks at the end of January were estimated at 26.8m tonnes of crude oil and 18m tonnes of refined products. Meanwhile, China’s National Development and Reform Commission (NDRC) said last week that it expects domestic crude oil output to increase by a meagre 0.3% to 3.816m bpd in 2010 from 3.805m bpd last year. Combined with the country’s rapidly increasing refining capacity that has been estimated at an additional 500,000 bpd – 750,000 bpd for this year, China’s reliance on crude oil imports is set to increase.10.03.10
Australian coal and iron ore exports in JanuaryView
Australian exports of iron ore and coal have made a strong start to the New Year according to official data just released. In essence in January iron ore exports are up to 32.6 Mt, a 22% increase on last year, while coal exports at 25.5 Mt are 27% ahead of the same month a year ago. Whilst any individual month’s trade cannot be assessed as representative of the year as a whole nonetheless this positive start should contribute to reducing congestion and help underpin the massive investment that there has been in infrastructure in the country. The role of China in this expansion cannot be underestimated. Just ten years ago Japan was the biggest market for Australian ore and coal exporting over four times as much to Japan (157 Mt) than it was to China (35 Mt). Today aggregate coal and iron ore exports to China amounted to almost twice as much (313 Mt) as to Japan (160 Mt).09.03.10
BP-led consortium approves new offshore platform in the Caspian SeaView
BP has announced that the partners in the Azeri-Chirag-Gunashli (ACG) oil project have approved a new $6bn development that will boost production of the Chirag Oil Project (COP) in the Caspian Sea, offshore Azerbaijan, by about 72% by the end of 2013. The consortium will build a new offshore platform, between the existing Gunashli and Chirag-1 platforms, that will tap the producing Fasila reservoirs and the shallower Balakhany X, IX and VIII reservoirs and add about 360m barrels of recoverable reserves in total. Production from the Chirag field reached 106,000 bpd in 2009 which is expected to increase to 183,000 bpd when the new platform comes online. The ACG participating partners are BP with 34.1%, Chevron (10.2%), Socar (10%), Inpex (10%), Statoil (8.6%), ExxonMobil (8%), TPAO (6.8%), Devon (5.6%), Itochu (3.9%) and Hess (2.7%).09.03.10
US Petcoke exports hit new recordView
Exports of petcoke from the USA hit a new record in 2009 at 27.2 Mt (2008: 26.3 Mt) consolidating its position as the world's largest exporter. In fact the contrast with the second ranked exporter - Indonesia (exports 3.4 Mt) - is quite stark and accentuates the dominance that the USA has in this trade. Most of the trade from the USA is destined for the European region where it is used, amongst other things, as a power source and for the production of electrodes. However the largest single importer of US petcoke is Japan which took 3.1 Mt last year and was closely followed by China which imported 2.4 Mt. This year exports are expected to remain on a par with 2009's level.08.03.10
Chilean refinery restarts after earthquakeView
Chile’s Enap is restarting one of its two refineries that had been shut down due to the earthquake and tsunami in late February. The 95,000 bpd Aconcagua refinery that was waiting for electrical power to be restored is now ready to return to production, however the larger 116,000 bpd Bio Bio refinery in the city of Concepcion has suffered structural damages and may remain closed for an estimated 60 to 90 days, according to a company spokesman. Nearly 1.5m barrels of crude was off Chile ready for discharge late last week. Enap plans to imports 600,000 barrels of diesel from Asia and the United States by the end of March, although the government has said that there will be sufficient fuel to meet demand. Enap supplies about 80% of Chile’s fuel needs as well as exporting products to Peru, Ecuador and Central America.05.03.10
India may lift ban on wheat exportsView
In India a combination of high buffer stocks and forecasted record wheat production may lift the ban on wheat exports. India's harvest this year is forecast at 80.0 million tonnes just above last year's 78.6 Mt and exports to Nepal of 0.25 Mt have already been permitted. It is this assessment that domestic supplies are more than adequate that has brought about the change of heart. Heavy rains eased the heat stress that threatened supplies and had the effect of improving crop development. While the forecast for rice production is lower than last year the overall picture is still judged not prejudicial to lifting the ban on wheat exports which has been in place since early 2007. Official Indian government sources describe supplies as "ample" so clearly there is a belief that this can be sustained through the current year.04.03.10
45% of Carabobo-1 heavy oil field production destined for IndiaView
Reliance Industries and Mangalore Refinery and Petrochemical (MRPL) have agreed to purchase 45% of the output from the potential 485,000 bpd Carabobo-1 heavy oil field. The field is being developed by a consortium which holds 40%, comprising Repsol YPF, Petronas, OVL (the upstream arm of ONGC) and a joint venture between IOC and Oil India – PDV holds the remaining 60%. Repsol has indicated it will take 165,000 bpd and Petronas will take 100,000 bpd of production. OVL and the IOC-Oil India JV plan to split the remaining 220,000 bpd, but as neither owns a refinery, MRPL (another subsidiary of ONGC) agreed to take the OVL share, with Reliance taking the IOC-Oil India share for at least 10 years from the start up date, potentially 2016-17, after an upgrader is built to convert the crude into a higher quality. The crude is 8° API, however the upgrader will convert some production to 32° API, which will then be blended with the remainder to achieve crude with an API of around 16-22°.04.03.10
Steel trade hit hard in 2009View
While global coal and iron ore trade saw increases in tonnage moved in 2009 one of the hardest hit areas was in steel. In 2008 ICAP's tracking of the major steel exporters showed that shipments amounted to 236 Mt; last year shipments from the same countries fell to 190 Mt. However just as China was responsible for much of the increase in iron ore and coal trade so it was the reduction in the country's exports of steel that made the biggest impact on world trade. Total exports from China collapsed from 59.23 mt to 24.60 Mt according to official Chinese customs statistics. The remainder of the 10 Mt reduction was spread around most areas with the only regional increase in exports being recorded in the FSU mainly due to the much better performance from Russia from where exports increased by 28% to 14.5 Mt.03.03.10
Chinese companies to sign Iraqi oil complex dealView
A joint venture between China National Offshore Oil Corp. (CNOOC) and Sinochem is waiting for governmental approval for the development of the Iraqi Fakka, Buzurgan and Abu Ghirab oil fields in the 2.5bn barrel Missan complex, according to Iraq’s Oil Minister Hussein Al Shahristani. The joint venture had bid for the complex last June, offering to increase production to 450,000 bpd from the current 100,000 bpd, for a remuneration fee of $21.40 per barrel which they then reduced to $18.09 per barrel. Following these unsuccessful offers, the companies had to eventually agree with Iraq’s proposed remuneration fee of $2.30 per barrel. CNOOC will hold a 60% stake in the project while Sinochem will own 15% and an Iraqi state firm will own the remainder. The fields are situated in south-eastern Iraq, close to the Iranian border. Missan adds to the previously awarded ten contracts, as part of the two Iraqi post-war licencing rounds. The country’s production could reach 12m bpd by 2017 from the current 2.5m bpd with the additions of the awarded fields, and presuming that the nominated operators will manage to reach their promised production rates.03.03.10
Chilean trade hit by earthquakeView
The consequences of the devastating earthquake that hit Chile two days ago will undoubtedly impact imports and exports from the country. The long coast line suggests that disruption will transmit to many of the ports but that also many ports far from the epicentre could be unaffected. The country is an exporter of many bulk commodities including, in 2009, iron ore 6.9 Mt, copper ore 5.9 Mt (the world’s largest), wood chips 3.7 Mt, and salt 6.6 Mt. In addition, the country is an importer of coal 5.9 Mt, maize 0.73 Mt, cement 0.7 Mt, wheat 0.68 Mt, soya 0.54 Mt, steel 0.5 Mt and urea 0.2 Mt. While all of these commodities will be affected to a greater or lesser extent depending upon the full effects of the disruption to the logistical chain there are already encouraging reports that Santiago port has resumed operations. While aid is the first priority the rebuilding work will be extensive and on-going for a considerable time.
