Middle East Oil News Round-Up

Oil Company Spending Highest Since 2008

In a report by Reuters, oil and natural gas companies are likely to eclipse $380 billion in investment in production projects. A consultant for Wood Mackenzie suggested that this increase in spending was driven by spending on drilling on shale gas in the US.

The anticipated rises will are estimated at 5.3 percent, an increase from 2009 of $19 billion.

"The most spectacular recovery has been in the US, where total spend should return close to peak levels by 2011," the consultant said. "This is primarily due to restored confidence and an impressive renewal of activity in unconventional resources, particularly shale gas."

"Record growth in capital spending is already under way in Australia, where new project approvals and major gas developments will see capital expenditure grow three-fold by 2013," Wood Mackenzie said. "In Iraq, upstream investment is likely to climb rapidly to $10bn in the next three years."

Major oil and gas companies have been utilizing the US with new, unconventional methods of drilling for shale gas, primarily drilling horizontally for thousands of feet and fracturing rock with water, sand and chemicals.

One of the beneficiaries to this new expertise in shale extraction is Chevron Corp, who agreed this week to purchase Atlas Energy for $3.2 billion - a strategic move which enables the second-largest US oil company access to the Marcellus Shale formation in Pennsylvania.

Refiners Increase Production in Middle East

Prices for Middle-Eastern crude rose for a second day as demand increased for middle distillates above benchmarks.

Murban, produced by Abu Dhabi National Oil Co, for January loading rose 1 cent to a premium of 21 cents a barrel to its official selling price, according to data compiled by Bloomberg. Qatar Marine rose 3 cents to a premium of 18 cents to its official price, according to Bloomberg.

Oman crude for immediate loading gained 83 cents, or 1 percent, to $86.90 a barrel, according to data compiled by Bloomberg. That's the highest since May 4 when prices reached $87.40, the most this year. Dubai for January rose 83 cents, or 1 percent, to $86.61. Murban increased 1 percent to $88.10.

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