HYDROCARBONS DAILY RECORD

05 May 2006

 

Mayo de 2006

By J. Brock

 

Morales of Bolivia will be in Vienna next week to meet with European Oil Authorities and Companies.

At 1800 LMT on Friday, 05 May 2006, prices reflected a slight rise in the price per barrel with Light Sweet Crude .25 Cents higher at £70.19 and Brent Crude .66 Cents higher at $70.95. This reflects cautious patience in analysing indicators that normally would cause nervousness.

Contributing factors seem to be the sabre rattling between the US and its allies through the UN Security Council and Iran over uranium enrichment. Iran has been firm in its denial of accusations that the enrichment is for Military means. The naturally reticent Iranians, playing their cards close to the chest, remain firm in their argument that enrichment is for power generation and nothing more. Even though Iran has offered the IAEA access for surprise inspections, the US views Iran’s nuclear fuel enrichment programme with suspicion.

In South America there was an impromptu meeting between the presidents of Argentina, Brazil, Bolivia and Venezuela on Thursday. President Kirchner of Argentina and President Lula of Brazil advised Bolivia’s President that unpalatable contracts will not do Bolivia any good. They did, however, agree that it was good that Bolivia took control over its natural gas reserves. Analysts say that unpalatable contracts lead to the decline in Venezuela’s production from 3.3 Million barrels per day to approximately 2.5 Million barrels per day. The take-over has already put on hold a planned expansion of a gas pipeline by the Brazilian Oil Company, Petrobas and it is possible that if the contracts are too harsh other investment will be sized down or cut off completely.

Next Week President Alvo Morales of Bolivia will travel to Vienna, where he will meet with oil industry officials in the European Union. With dialogue he may be able to allay fears that those contracts will not be workable. We wait and see.


LOCAL IMPLICATIONS:

Local companies with oil interests are looking with caution on the events in South America. It is hopeful that contracts for Bolivian Gas will follow along professional, rather than political lines, in that the industry should help to offer alternatives as well as governments. A purely political solution may not benefit the industry or the people of Bolivia, who desperately need more support from their hydrocarbons industry.

Buchanan will be acting as ongoing media advisors to Desire. Basic plans include introductions to the financial media and oil and gas trade journals, extensive introductions to City analysts who cover the oil and gas space and further introduction to retail brokers.

Desire are presently working on the media materials and hopefully will advise on some changes to the format of the website – so over the next few months they hope to build up the profile of Desire in a consistent, clear way.

 

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