1 March oil and gas round-up

This weekend has been another busy one for the oil and gas sector in the Middle East as Saudi Arabia strengthens its ties with India. Also in Saudi Arabia, oil drilling is expected to remain stable. While Iraq is set to develop the Nassiriya oilfield itself. And finally, the week saw oil prices rise.

Saudi strengthens ties with India

The biggest oil exporter has agreed to nearly double crude shipments to India. Ali al Naimi, oil minister in the biggest Arab economy, agreed to raise crude supply to India to 40 million tons a year, or around 770,000 barrels a day, from 25.5 million tons a year, at a meeting today with counterpart Murli Deora, India's Oil Ministry said in a statement on its website.

Saudi Arabia, which has joint venture refinery projects in China, is seeking to strengthen its role as a supplier to Asia as demand from the US and Europe has slipped with the global financial crisis.

Stable drilling for Saudi

Drilling for oil for Saudi Arabia is expected to remain at the same levels in 2010 as it was in 2009. But while oil is expected to remain stable, state oil giant Aramco is planning to increase gas drilling activity.

Aramco's focus on gas came as the kingdom continues to step up efforts to meet soaring gas demand and after it completed last year a crude expansion project to boost output capacity to 12 million barrels per day, Arabian Business reported.

Falling global oil consumption has left the kingdom sitting on its biggest supply cushion in years and allowed it to shift attention from oil to booming gas demand that is growing by seven percent annually.

Nassiriya talks break down

Following the breakdown of talks with a Japanese group led by Nippon Oil Corp., Iraq has announced that it will develop the Nassiriya oilfield itself.

"Talks with the Nippon group have reached a dead end, and we will start developing the field through national efforts," Dhiya Jaafar, head of the SOC told Reuters in an interview in the southern oil hub of Basra.

The Nassiriya field has reserves of under five billion barrels and Nippon had projected it could pump up to 200,000 bpd within two years, Arabian Oil and Gas reported.

Oil prices rise

Last week saw oil prices rise by more than one percent and top US$80 per barrel, as Iran threatened to cut off energy supplies to Europe.

A senior military official from Iran had been quoted on Sunday that the country could cut supplies to Europe in order to make it suffer, and could also target any of its adversaries with its missiles.

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