Article: The International Energy Agency Monday delivered a stark new warning of increasing tightness on world oil markets over the next five years, despite the high oil prices of the past four years.

Global oil demand is now forecast to grow at an average annual rate of 2.2% between 2007 and 2012, accelerating beyond the 2% annual growth rate for the 2006-2011 period projected by the IEA in February this year.

The agency said in its 2007 Medium-Term Oil Market Report that it saw world oil markets becoming increasingly tight beyond 2010, "with OPEC spare capacity declining to minimal levels by 2012." The report projects that OPEC spare capacity could be as low as 1.55 million b/d in 2012.

The IEA forecasts OPEC crude capacity at 38.4 million b/d in 2012, up from an estimated 34.4 million b/d in 2007 but "below OPEC's own estimates of near 40 million b/d for 2010." Of the 4 million b/d increment over the next five years, Saudi Arabia is expected to account for 1.8 million b/d, and the UAE and Angola 500,000 b/d each.

Demand for OPEC crude plus inventory changes is seen rising from 31.3 million b/d in 2007 to 36.18 million b/d in 2012, an increase of 4.88 million b/d.

"OPEC spare capacity, which has steadily recovered from minimal levels at the end of 2004 to almost 3 million b/d at mid-2007, remains relatively constrained through to 2009, but declines sharply thereafter," the IEA said, adding: "These effects could be magnified if the effective level of spare capacity remains close to its historical 1 million b/d below nominal levels."

But the IEA said that while recent history tended to justify a "conservative approach" when calculating OPEC's "usable" spare capacity,

"there is the potential that over time some of the constraints on this inaccessible portion could change, lifting the available reserve."

1b/ World will face oil crunch ‘in five years’ (Financial Times, Mon 09 Jul)

http://www.ft.com/cms/s/2d97d75a-2e0c-11dc-821c-0000779fd2ac.html

Comment: Login required. As an ODAC News subscriber said of this front page FT article: “Make a note 10 July 2007 was the day they announced Peak Oil was real. The IEA has confessed that we have an oil supply crunch by 2012, The Financial Times front page story today is ‘World will face oil crunch ‘in five years’. The media is off the leash and can talk. The politics is fascinating - who said ‘go’ and why?”

Note also that the IEA has published a realistic (dire) forecast for UK oil production, and ignored the nonsense forecasts from the UK government.

Article: The world economy faces a tight oil market in the next five years because of a combination of accelerating consumption and output falls in mature areas, such as the North Sea, and long delays in new production projects. The warning on Monday by the International Energy Agency, the energy watchdog, comes as oil prices surge above $76 a barrel, to $2.50 a barrel below last summer’s all-time high of $78.65. The IEA said in its Medium Term Oil Market Repot that ”oil looks extremely tight in five years time” and there are ”prospects of even tighter natural gas markets at the turn of the decade”... The widening gap between demand and non-Opec supply will force Opec, the oil cartel which controls about 40 per cent of global oil output, sharply to increase its production between 2007 and 2012... ”Despite four years of high oil prices, this report sees increasing market tightness beyond 2010, with Opec’s spare capacity declining to minimal levels by 2012,” the IEA said... UK production is set to decline from today’s 1.7m b/d to just 1m b/d in 2012. That is below the official UK government forecast range of 1.1m-1.6m b/d for 2012. Norway’s oil production will fall to 2m b/d in 2012 from today’s 2.5m b/d. International and national oil companies were not investing enough to compensate for those declines, the watchdog added. ”Substantially higher cash returns to shareholders stand in curious contrast to growing upstream supply tightness and essentially unchanged exploration and production effort,” the report said...

1c/ IEA sees oil supply crunch looming (Washington Post [Reuters], Mon 09 Jul)

http://www.washingtonpost.com/wp-dyn/content/article/2007/07/09/AR2007070900432.html

Comment: The Washington Post has used the Reuters newswire word for word – very unusual for newspapers to do this, at least for lengthy energy articles. I noticed last year that Reuters and Bloomberg both tackled Peak Oil in their newswires, but that they were usually ignored by the media. Not in this case, presumably because it comes directly from the IEA.

Note that the IEA also has bad news about new refinery capacity, and is not optimistic about a rapid increase in biofuels – “but the fuel will remain marginal as economics hobble further growth.”

Article: World oil demand will rise faster than expected to 2012 while production lags, leading to a supply crunch, the International Energy Agency said on Monday.

... "Despite four years of high oil prices, this report sees increasing market tightness beyond 2010," the IEA said.

"It is possible that the supply crunch could be deferred -- but not by much."

... The Paris-based IEA also said additional global refining capacity over the next five years will lag earlier expectations as rising costs and a shortage of engineers delay construction.

It said world production of biofuels would reach 1.75 million bpd by 2012, more than double 2006 levels, but the fuel will remain marginal as economics hobble further growth.

... "A stronger demand outlook, together with project slippage and geopolitical problems has led to downward revisions of OPEC spare capacity by 2 million bpd in 2009," said the report.

The forecast assumes no net expansion of capacity from Iran, Iraq and Venezuela and that the 500,000 bpd of Nigerian production that has been shut for a year will not reopen during the next five years...

PLATEAU OIL

The IEA trimmed its forecast for supply from non-OPEC producers by 800,000 bpd in 2011, partly because of project delays, and touched on the thorny subject that oil supplies are nearing a peak.

"Certainly our forecast suggests that the non-OPEC, conventional crude component of global production appears, for now, to have reached an effective plateau, rather than a peak," the report said.

Falling output at ageing fields and setbacks such as 2005's hurricanes in the Gulf of Mexico have slowed growth in non-OPEC output in recent years.

Lower supply from non-OPEC countries and rising demand will boost the requirement for OPEC oil.

The IEA said demand for OPEC crude, or the call on OPEC, will rise to 34.7 million bpd in 2011, up 1.3 million bpd from the previous projection.

1d/ IEA Medium Term Oil Market Report, July 2007 (IEA, July 2007)

http://online.wsj.com/public/resources/documents/iea20070707.pdf (1.87 Mb)

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2/ Fish ’n’ chip prices leap as shortages bite (Financial Times, Mon 09 Jul)

http://www.ft.com/cms/s/aca86dfc-2df3-11dc-821c-0000779fd2ac.html

Comment: Food price inflation, according to this article, goes well beyond biofuels and increasing demand in China, at least in the UK.

“Some restaurants said they were considering switching to cheaper ingredients to avoid raising menu prices.” I thought I had seen less strays on the streets of recent. Just kidding.

Article: Fish 'n' chip prices are soaring as shortages of potatoes and mushy peas, typically served with Britain's traditional takeaway, add to increasing food price inflation.

The British Hospitality Association, the trade body for some 11,000 UK restaurants, said restaurants "across the board" had begun to raise menu prices. Bob Cotton, chief executive of the association, said: "Suddenly we've got food price inflation."

Pea prices are expected to increase as the UK faces a 50,000 tonne pea shortage. Crops have been damaged by rain and farmers have also had problems operating harvesting machinery on waterlogged land.

... The increased cost of old potatoes is also due to a shortage of supply, caused in part by a poor harvest last year, while the recent weather has exacerbated worries about the new potato crop.

The bad weather has come on top of the ongoing pressure on food prices, which are rising as high oil prices lift farmers' transport and fertiliser costs, and as demand rises globally for agricultural raw materials.

... The increasing costs of food have served to keep inflation stubbornly high.

Food prices in the UK rose by 4.9 per cent in the year to May - a much higher increase than the Bank of England's 2 percent target for consumer price inflation.

Vegetable prices, including potatoes, were up by 9.6 per cent during the same period, according to the Office for National Statistics, while the price of fish rose by 12.7 per cent.

British bread prices may rise again after the wettest June on record, which has led to flooding in wheat fields.

... The price for top-quality bread-making wheat has increased dramatically during the past two years, rising by 75.3 per cent to £156.50 a tonne projected for the year to July 2008.

Flood damage is also putting pressure on prices of animal feed such as feed wheat and soya. That could act to force up prices of poultry, beef and pork.

Some restaurants said they were considering switching to cheaper ingredients to avoid raising menu prices.

Leon Restaurants, a London-based chain, said it was considering using more vegetarian ingredients after its organic chicken supplier warned it would raise poultry prices this year...

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3a/ Howard Hits Iraq Oil Slick As Truth Becomes A WMD (The Orstrahyun, Thu 05 Jul)

http://theorstrahyun.blogspot.com/2007/07/howard-hits-iraq-oil-slick-as-truth.html

Comment: Last week John Howard, the Australian prime minister, more or less admitted Australia was in Iraq because of the oil. The Australian media had a [oil] field day. The events are discussed in this Australian blog.

Article: The phone calls from John Howard's office to the head office of Rupert Murdoch's News Limited in Sydney yesterday were less than pleasant.

The News.com.au website, the main portal for Murdoch's network of Australian newspaper websites, reaching some more than 1.5 million Australian readers per day, ran a number of headlines claiming John Howard had said that oil was now a key reason to stay in Iraq. Some of the headlines said the Iraq War was a war for oil. Just like all those protesters back in early 2003 claimed it would be.

By the time Howard moved to deny he said anything such thing, it was too late. The story was out, columns and articles had been written and sent to the printers for today's news racks, and there was no going back.

The furore started early yesterday morning when online news stories began appearing claiming that John Howard was going to unveil a new defence strategy for Australia, and mention would be made that we had to secure oil supplies in Iraq, as part of that strategy.

Yesterday morning, before flying out for a visit to Indonesia, defence minister Brendan Nelson did a radio interview where he reacted to the headlines hitting news stands :

"...obviously the Middle East itself, not only Iraq but the entire region, is an important supplier of energy, oil in particular, to the rest of the world, and Australians and all of us need to think well what would happen if there were a premature withdrawal from Iraq."

The two words "oil" and "Iraq" in the same sentence were enough for Nelson's few words to become the main, and most controversial, story of the day.

By the time John Howard delivered his speech, shortly after Nelson's interview, the thrust of the story for most of the media, including the Murdoch media, was already fixed...

3b/ Australia 'has Iraq oil interest' (BBC News, Thu 05 Jul)

http://news.bbc.co.uk/1/hi/world/asia-pacific/6272168.stm

Comment: How the BBC covered the story.

Article: Australian Defence Minister Brendan Nelson has admitted that securing oil supplies is a key factor behind the presence of Australian troops in Iraq.

He said maintaining "resource security" in the Middle East was a priority.

But PM John Howard has played down the comments, saying it was "stretching it a bit" to conclude that Australia's Iraq involvement was motivated by oil.

The remarks are causing heated debate as the US-led Iraq coalition has avoided linking the war and oil...

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4a/ UK's DTI revamped, renamed; Hutton picked to lead (Oil and Gas Journal, Thu 04 Jul)

http://www.ogj.com/display_article/297089/7/ARTCL/none/none/UK's-DTI-revamped,-renamed;-Hutton-picked-to-lead/?dcmp=OGJ.Daily.Update

Comment: The DTI (Department of Trade and Industry) is/was the dept of the UK government that provides energy statistics. A bit of an odd beast. The website is excellent (Statistics By Energy Source, DTI Oil and Gas), with plenty of production info on every UK oil and gas field, and some good analysis which points to declining reserves and a rapid fall in oil and gas production. Then there is the DTI public relations dept, which typically issues nonsense rosy forecasts about UK oil and gas reserves, future production and future import requirements. It is not the only one, but it ought to know better. It is an odd British habit, when something does not work very well (the DTI), you change its name.

Article: The UK Department of Trade and Industry (DTI) has been revamped and renamed the Department for Business, Enterprise, and Regulatory Reform (DBERR).

Gordon Brown, the new UK prime minister, has appointed John Hutton, previously the pensions secretary, to lead the department. He succeeds Alistair Darling, who has become chancellor of the Exchequer.

The DBERR will continue to handle energy policy. Oil and gas operators had worried that the department might be broken up and that energy policy would move to the Department for Environment and Rural Affairs, the increasing focus of which has been climate change.

There have been several changes over the past couple of years to the minister of the DTI, raising concerns among North Sea operators about consistency of policy and interest from the government in presenting a coherent energy strategy across all departments. Last November, energy policy became a cabinet level issue for the first time in more than a decade (OGJ Online, Nov. 14, 2007).

... A DBERR spokesman said it was unclear who would assume the position of parliamentary undersecretary of state for energy.

... According to Jim Hannon, founding partner of North Sea consultancy Hannon & Westwood LLP, it is difficult to envisage any major financial changes in the oil industry under Brown's new regime as he was previously the chancellor. Investors are being lured to the UKCS because of high oil prices, and exploration is at its highest since the 1980s. "The Treasury is therefore enjoying the best of both worlds: increased tax take and no adverse effect on exploration," he said.

In its recent Energy White Paper, the government said oil and gas from the UK North Sea will remain important in meeting the country's energy needs but stressed that nuclear power may have a role in diversifying the energy mix (OGJ Online, June 23, 2007).

According to the paper, the oil and gas share of UK primary energy supply is expected to rise to 80% in 2020 from 70% in 2006.

4b/ North Sea output continues to drop despite record investment (The Herald [Scotland], Tue 03 Jul)

http://www.theherald.co.uk/business/other/display.var.1514064.0.0.php

Comment: Whilst the RBS message is essentially correct, I would take their figures with a pinch of salt. Much more reliable is the DTI oil and gas info. The RBS tends to update its data later so that it is similar to the DTI data.

Article: The decline in oil and gas production in the UK North Sea continued in April, despite record investment in 2006, in what economists at Royal Bank of Scotland said was another sign that the province is maturing rapidly.

The latest oil and gas index from Royal Bank shows that combined average daily oil and gas production for the UK Continental Shelf stood at 2,823,141 barrels of oil equivalent per day (boe/d) in April. This was about 2.3% lower than in March, ending a run of six consecutive monthly increases. The underlying rate of production continued on a firmly downward trend, falling 7.8% compared with April last year.

The decline occurred ahead of the summer maintenance season, when production usually falls as operators have work done on rigs.

Against the backdrop of a continuing surge in investment in response to buoyant energy markets, the figures show that operators are having to work increasingly hard to try to maintain production.

An increasing share of output on the UKCS is coming from fields that have come off plateau production levels and from smaller fields.

Oil production was down 0.8% on the month at 1,384,740 (bpd) and down 12.1% on the year.

UK natural gas production decreased 3.8% to 8170 million standard cubic feet per day (mmcfd) compared to March and fell 3.2% on the year. Prices rose in the month with Brent crude fetching $67.53 per barrel in April, up $5.34/bbl on March but down $2.76/bbl on the year.

4c/ Tullow Oil cuts North Sea plans as Africa finds grow (Reuters, Wed 11 Jul)

http://africa.reuters.com/business/news/usnBAN134740.html

Comment: Interesting that a mid-size oil company prefers Africa to the North Sea. How long are the other companies prepared to go on looking for and finding minnows before they pack up?

Article: London-based oil explorer Tullow Oil Plc said it was cutting back drilling plans in the UK North Sea so it can boost exploration activities in Ghana and Uganda, where earlier finds are proving bigger than expected.

The shift will see Tullow miss its 2007 production guidance by 7-8 percent but Chief Financial Officer Tom Hickey said that with a recent oil discovery in Ghana turning into the company's biggest ever, capital was better spent accelerating drilling there...

4d/ Luton airport drops expansion plan (Financial Times, Fri 06 Jul)

http://www.ft.com/cms/s/505c630a-2bc3-11dc-b498-000b5df10621,_i_nbePage=87ef6c98-3018-11da-ba9f-00000e2511c8,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F505c630a-2bc3-11dc-b498-000b5df10621%2C_i_nbePage%3D87ef6c98-3018-11da-ba9f-00000e2511c8.html&_i_referer=

Comment: Login required for full article. Luton airport is referred to as a ‘London’ airport, even although it is quite some distance from London. But you have to wonder if the Spanish owners have cottoned on to the fundamental fuel supply problems ahead – they have cancelled all major expansions of the airport.

Article: London Luton Airport has abandoned its ambitious plan to triple in size by 2030 as part of a £1.5bn scheme that would have delivered a new full-length runway in time for the 2012 London Olympics.

The move is a blow to the government’s hopes for increasing airport capacity in the highly congested south-east of England.

In 2005 the Spanish-owned airport put forward a plan in response to the government’s December 2003 air transport white paper, which envisaged the airport growing to 15m passengers by 2012, which would have exhausted facilities within the airport’s present boundaries.

Volumes were forecast to grow further, to more than 30m a year by 2030, supported by the building of the new runway and a second terminal building.

“We will not be pursuing this option further,” Demetrio Ullastres, chairman of TBI, the holding company for the airport, said on Friday…

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5a/ Fidelity chief Bolton warns packaged loans market echoes split-cap trusts (The Times, Wed 04 Jul)

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article2023039.ece

Comment: Another warning that all is not well in the Finance sector.

Article: One of Britain’s leading fund managers said yesterday that the $1 trillion (£500 billion) institutional packaged-loans market was flawed and posed significant risks to investors.

Anthony Bolton, the founder of the fund manager Fidelity International, likened the so-called Collateralised Debt Obligation (CDO) market to the UK’s split-capital investment trust sector, which collapsed in 2001 and 2002.

The warning came as souring sentiment in the credit market spilt over into the financing of private equity-backed buyouts. Private equity bosses such as Jon Moulton, of Alchemy Partners, told MPs that “overenthusiastic” lending could lead to casualties...

5b/ Huge increase in those forced to default on mortgages payments (The independent, Wed 11 Jul)

http://money.independent.co.uk/property/mortgages/article2753390.ece

Comment:

Front Page of today’s newspaper

Mortgage Madness

Buyers are being forced to borrow record amounts of money to finance their property purchases

Mortgage Misery

Number of people defaulting on their payments this year has doubled to 77,000 each month

Mortgage meltdown?

Fears are growing of a dramatic increase in the number of houses that are repossessed

Article: Britain faces a mortgage crisis with payment arrears rising sharply as 18 million homeowners struggle to meet the fifth rise in interest rates in less than a year.

It is being predicted that high earners who have stretched themselves to buy a home will join less prosperous social groups in experiencing problems as they juggle finances to adjust to rises in monthly payments.

Research suggests that twice as many borrowers as last year have missed mortgage payments in the past six months. A website, MoneyExpert.com said that, while 36,000 borrowers a month fell into arrears last year, this year that figure will be 77,000...

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6a/ Horton to Report Net Loss After Orders Plunge (Bloomberg, Tue 10 Jul)

http://www.bloomberg.com/apps/news?pid=20601087&sid=a2BKGssI3.EQ&refer=home

Comment: The meltdown in the USA property market continues.

Article: D.R. Horton Inc., the second-largest U.S. homebuilder, will report a third-quarter loss after orders plunged 40 percent, and said it sees no sign of a housing rebound.

``We expect the housing environment to remain challenging,'' Chairman Donald Horton said today in a statement. The Fort Worth, Texas-based company is planning a ``significant'' writedown in the value of its real estate, and the shares fell to a three-year low.

D.R. Horton said orders dropped in every region, with the steepest declines in California and the northeast. The average price for its houses slid 12 percent to $233,672. Ryland Group Inc., a Calabasas, California-based homebuilder, said today it will report a second-quarter loss of as much as $1.35 a share. Lennar Corp., the biggest homebuilder by revenue, last month reported a loss along with falling revenue.

``All these companies face a lot of pressure,'' said Thomas Smith, an equity analyst at Standard & Poor's in New York. ``It's a tidal wave of trouble.''

... D.R. Horton took 8,559 home orders in the fiscal third quarter, compared with 14,316 in the year earlier. The cancellation rate was 38 percent. The value of houses ordered plunged 47 percent to $2 billion.

The number of net sales orders fell 53 percent in California and Reno, Nevada, the most of any region. In Horton's northeast region, containing Illinois, New Jersey and Pennsylvania, orders tumbled 42 percent. Orders dropped 41 percent each in its south central and southwest regions. Orders in the southeast fell 25 percent, the least of the company's regions.

`Likely to Get Worse'

``We believe housing operating fundamentals are likely to get worse before they get better given still-significant levels of oversupply, coupled with first full-quarter impact from the subprime debacle and the corresponding tightening in underwriting standards,'' Robert Stevenson, an analyst at Morgan Stanley, said in a report today. He rates D.R. Horton shares ``equal weight.''

6b/ S&P fears credit crunch as mortgage crisis hits house prices (The Times [UK], Wed 11 Jul)

http://business.timesonline.co.uk/tol/business/economics/article2056501.ece

Article: Fears of a global credit crunch grew yesterday after Standard & Poor’s predicted that house prices in the United States would plunge 8 per cent this year, dragging down America’s capital markets and hitting economic growth.

The ratings agency’s pessimistic forecast will make it much harder for all but the most credible companies to raise debt, making it more expensive to finance investment and threatening America’s economic growth.

The declining outlook for the US housing market forced S&P to unveil plans to cut its credit ratings yesterday on up to $12 billion (£5.92 billion) of bonds backed by sub-prime mortgages after predicting that the home loans crisis sweeping America will “continue to decline before it improves”. Separately, Moody’s announced it had cut its rating on $5.2 billion of bonds backed by sub-prime mortgages.

... David Weiss, S&P’s global chief economist, said that the price declines would easily outstrip the record set in the last housing market crash in 1991, when property values fell by 6.5 per cent.

Mr Weiss predicted the housing market would bottom out early next year but that losses relating to home-loan investments, such as mortgage-backed bonds, would not peak until the end of 2008 or the start of 2009.

The crisis stems from a dramatic rise in house prices in recent years, to represent 3.4 times average household income in 2006, which has left borrowers struggling to meet their repayments after a series of rate rises.

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7/ Iran begins Azadegan oil production (Press TV, Mon 09 Jul)

http://www.presstv.ir/detail.aspx?id=15881&sectionid=351020103

Comment: One of the last very large Middle East oil fields to come onstream. Not an easy field. Its reserves seem to range from 10-30 billion barrels, depending as usual on who you ask / believe. 30B barrels is roughly the total amount of oil that will be produced from the UK sector of the North Sea, peak production from which was about 2.6 Mb/d crude oil (+ LNG). Peak production from Azadegan is a bit over one tenth of that, 340,000 b/d. A very good example of where the oil reserves are allegedly massive but production relatively low. This particular article seems to confuse reserves (amount extractable) and resources (total amount in place).

Article: Iran has started the preliminary stages of extraction from its Azadegan Oilfield estimated to contain reserves of 31 billion barrels.

The National Iranian South Oil Company announced it had been successful in preparing an exploratory well for extraction on Sunday, Shana news reported.

"In this oilfield, six exploratory wells had been previously drilled and now after some preparation, one has entered the production cycle in a depth of 2,770 meters," the company's Deputy for Drilling and Technical Affairs, Hamid Bourad, told reporters in a press conference on Sunday afternoon.

Two days before the announcement, the company had kicked off production by extracting 3,000 barrels of oil for test.

The other five wells will come into operation over the next four months.

"This is part of our company's plan to have all six wells operational in four months' time," said Bourad.

Expectations are that around 300 wells will be drilled over Azadegan's three phases of development, he added.

Azadegan is considered to be one of Iran's largest oil reserves and is thought to hold as much as 13 billion barrels of extractable reserves. Once completed, it will have a production capacity of 340,000 barrels a day of oil.

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8/ Prime Numbers: Pain at the Pump (Foreign Policy, July/Aug 2007)

http://www.foreignpolicy.com/story/cms.php?story_id=3862

Comment: Gasoline/petrol prices around the world, how they have increased over the last few years, and who pays and who extracts from the tax man. Very interesting.

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9a/ Kuwait seems finally to be starting to come to grips with the true level of its oil reserves (Energy Intelligence, Wed 11 Jul)

From e-mail alert. No link.

Comment: Kuwaiti oil reserves returning to the news again.

Article: From the section: World Watch -- Comment & Interpretation on Today's News

It has taken over a year, but Kuwait seems finally to be starting to come to grips with the true level of its oil reserves, following a Petroleum Intelligence Weekly article in early 2006 that indicated that reserves were half the official level of just over 100 billion barrels. The PIW story was based on an internal national oil company report. Now an opposition member of parliament has come forward with another internal document indicating that reserves may be only 24 billion. The government may be forced to provide a full accounting of reserves on a field-by-field basis in order to restore confidence. Some of the oil reserves fiasco is due to the problems of the massive Burgan field, which was not only torched by retreating Iraqi troops in the Gulf War but also seems to have been poorly managed. Fortunately for Kuwait, the damage done to Burgan may be able to be at least partly compensated for by fields in the north. Tom Wallin, New York.

9b/ Kuwait may disclose size of its oil stock (Gulf Daily News, Tue 10 Jul)

http://www.gulf-daily-news.com/Story.asp?Article=187395&Sn=BUSI&IssueID=30112

Comment: There have been recent press reports that the Kuwaiti ex-Oil Minister, who resigned a week or two, did in fact admit Kuwaiti oil reserves were about 50B barrels. But other reports have contradicted this.

Article: Kuwait studying a request by legislators to disclose the size of its oil reserves, a minister said yesterday, as doubts lingered that they could be sharply lower than official estimates.

The issue could delay approval for the emirate's budget.

"The issue is still under study. There will be discussions between the finance minister and parliament on it," Minister of State for Cabinet Affairs Faisal Al Hajji said in parliament.

The scale of reserves in the country remains sensitive since industry newsletter Petroleum Intelligence Weekly (PIW) said in January last year it had seen internal records showing reserves were about 48 billion barrels - half the officially stated 99bn.

The difference is equal to over four percent of global proved oil reserves, according to data in BP's annual statistical review.

Legislators threatened not to pass this year's budget if reserves are not disclosed, a local newspaper reported on Monday.

Kuwait's budget was scheduled for approval in parliament by the end of its final session tomorrow before a summer break.

"We cannot make the correct future plans without knowing the size of the reserves... so this should be made clear to parliamentarians before the session to pass the state budget," legislator Ahmad Lari said.

MP Daifallah Buramya said he would not support approval of the state's budget if the reserves size is not disclosed.

An official source as saying the government is prepared to disclose the reserves size in a closed-door session but will require time to do so since it has to collect data.

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10/ Growth in Car Sales, Russia (FC Novosti, July 2007)

http://www.fcinfo.ru/themes/basic/materials-rfcm-index.asp?folder=3306

Comment: Impressive numbers

10a/ Ford to Produce More Cars and Models in Russia (FC Novosti, Tue 10 Jul)

Article: US Ford will start producing Ford Mondeo in Russia in late 2008 at its plant in Vsevolozhsk in the Leningrad Region. In 2009, the plant’s capacity will be increased from 72,000 to 125,000 a year…

10b/ Skoda Sales Up 120% in 1H07 (FC Novosti, Tue 10 Jul)

Article: Skoda Auto increased its sales through a network of official dealers in Russia by 120%, to 13,035, in the first half of 2007. The sales leaders are Skoda Octavia Tour (7,543 cars, up 150%) and Skoda Fabia (2,560, up 60%).

10c/ Peugeot Rus Avto Increases Sales by 60% in 1H07 (FC Novosti, Tue 10 Jul)

Article: Peugeot Rus Avto, a division of French automaker Peugeot based in Russia, sold 10,400 cars in the first six months of this year, increasing the sales by 57% compared with 1H06. The sales of Peugeot 206 and Partner grew 130% and 79%, respectively, and the sales of Peugeot 307 went up 17%.

10d/ Toyota Sales in Russia Up 77% in 1H07 (FC Novosti, Fri 06 Jul)

Article: Japanese carmaker Toyota increased its sales in Russia through a network of authorised dealers by 77%, to 72,331 cars, in the first half of this year. Sales leaders were Corolla (22,584), Camry (11,921), and RAV4 (10,744).

10e/ Nissan Sales Doubled in 1H07 (FC Novosti, Thu 05 Jul)

Article: Japanese automaker Nissan sold 50,500 cars through its official dealers in Russia in the first half of this year, or 81.7% more than in 1H06 (28,600). The best selling model was Nissan Almera Classic (9,542).

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