Page 13 - MEOG Week 03

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Greece’s DEPA says wins case against BOTAS
Greece’s state-controlled gas utility DEPA, earmarked for privatization this year, has won a legal case over a supply deal with Turkish state energy company BOTAS, DEPA said on Thursday.
The International Court of Arbitration (ICC) ruled on Wednesday that BOTAS should cut retrospectively the contractual gas prices that DEPA has paid, DEPA said in a statement.
The ruling is the last step in a 10-year legal battle between DEPA and BOTAS and its impact is being assessed by DEPA, it added.
A source with knowledge of the matter said new pricing would apply from 2011 to the present and that DEPA had paid BOTAS $181 million under a previous ruling of the arbitration court as part of the legal case which started in 2009.
BOTAS was not immediately available to comment.
DEPA imports pipeline and liquefied natural gas under long-term contracts with BOTAS, Russia’s Gazprom and Algeria’s Sonatrach. Its outstanding supply contract with BOTAS ends in 2021.
Greece has broken up DEPA and has launched a tender for the sale of a 100%
stake in its distribution network. It plans to kick off the sale of a majority stake in DEPA’s wholesale and retail activities later in January. reuters
oIL
All eyes on US oil
production, Bahrain Oil
Minister
Speaking at the International Petroleum Technology Conference (IPTC) in Dhahran, Saudi Arabia, Bahrain’s Oil Minister Sheikh Mohammed bin Khalifa Al Khalifa explained why OPEC+ had to take the decision to intervene in the oil market beginning in 2016. he said it was justified because the US government had intervened in the credit market first, enabling the shale revolution to get funded.
“We all believe in the dynamics of free markets. So why then was the OPEC+ decision warranted? I think it all started back a decade ago, when the financial crisis hit in 2008, you had quantitative easing in the U.S. and that made cheap credit available. And a lot of that cheap credit when to fuel the shale revolution. So in just a few years, we had four million barrels come out of nowhere. So it was an induced stimulus. It was not a free market action that gave you the oil glut. So either you wait a very long time to for that correct itself or you take necessary action.
I think very few people recognize the importance of that event in 2016 which OPEC and OPEC+, the kingdom of Saudi Arabia, took leadership, and his Royal highness
was there personally in charge of getting everybody to agree. And that decision really saved the oil market for us today. People
will recognize this into the future, maybe
they don’t recognize it today. But it was something that was extremely important to counterbalance what came out of the financial crisis, ended up giving you a glut of shale
oil supply. And hence the balance that came into the market was through the leadership
of that was shown by the kingdom of Saudi Arabia, OPEC, and the non-OPEC members of OPEC+.”
Going forward, all eyes are on U.S. production again. If there is going to be an extra million barrels, yes this will suppress oil prices. But the current indicators of rig counts, frac spreads, are telling you that is going to be a challenge.
So my recommendation is all eyes on U.S. production. If they can hit 14 million, then yes oil prices will extend a bit further, but eventually this sentiment of there is ample supply will shift, there will be a scarcity. When will it happen? In the next few years definitely. Will it happen by the end of this year? We will have to see.”
seekInG aLPha
Protests halt production at Iraqi oilfield
Escalating protests in Iraq have led to a
halt in production at the Al Ahdab oil field, which pumps some 70,000 bpd, Bloomberg reports, citing an unnamed source from the Iraqi government. Another field is at risk of shutting down starting today as well.
Al Ahdab is operated by China’s CNPC, but it has been blockaded by security guards who are protesting against the absence of permanent employment contracts. The other field at risk of closure, Badra, produces about 50,000 bpd. Russia’s Gazprom Neft is the operator of that field.
Iraq is the second-largest oil producer and exporter in OPEC. It has been hit by a series of economic protests that started last year and are not showing any sings of ending any time soon as disgruntled citizens demand better public services and economic reforms and protest against widespread government corruption.
Al Jazeera reports that on Sunday, protesters closed several large roads in cities around the capital Baghdad and demonstrated on the street in anticipation of the deadline they had set for the government to respond to their demands for a new Prime Minister and a new government. The demands were initially made by protesters in the city of Nasiriya,
but others soon joined in, Al Jazeera’s Gareth Browne reports.
Oil prices trended higher early on Monday following the news of the escalation,
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