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world’s biggest exporter seeks to benefit from rising demand from Japan to China and South Korea. Arab Light for October, the country’s biggest crude export, may rise to $1.30 a barrel more than the Oman and Dubai grades when Saudi Arabian Oil Company sets prices this month, according to the median estimate of six refiners and analysts surveyed. That compares to 75 cents a barrel for September cargoes, the lowest level since last year. Extra Light, Arab Heavy and Arab Medium may also increase, the survey showed. Asian refiners are consuming more crude as growing demand for oil products prompts them to cut maintenance and boost processing rates. Japan, the world’s third-biggest crude user, increased Saudi purchases by 33 per cent last month. China’s July imports jumped 5.9 per cent, while South Korea’s rose 7 per cent. Saudi Arabia pumped more crude in August than at any time in 30 years as demand pushed up the cost of earliest-delivery oil. High premium “Saudi Arabia will surely raise the price across all their barrels,” said Osamu Fujisawa, an independent oil economist in Tokyo who worked for 30 years at Saudi Aramco, as the state-owned producer is known. An ‘acute’ increase in near-term benchmark prices will encourage the company to charge a higher premium for deliveries to compensate for lower-priced future cargoes, he said. The difference between near-term Dubai prices and cargoes for loading in three months shifted to a so-called backwardation, or premium, from contango, or discount, on August 17. Prompt-delivery Dubai oil cost 56 cents more than future contracts on Thursday, compared to 75 cents less on July 15, according to data.
“If the market is in backwardation, producers have to increase prices to make up for the loss,” said Ehsan Ul Haq, a senior market analyst with KBC Energy Economics in Walton-on- Thames, England. “Japan has to prepare itself for the winter and buy more barrels.” Saudi Aramco prices its exports relative to the average of Dubai and Oman crudes, which are benchmark grades for the Middle East. Those markers averaged $109.30 a barrel on Thursday, according to data. Middle East oil exporters such as Iraq, Kuwait and Iran set their official prices based on changes to Saudi levels. 04/Sep/2011 Bloomberg
According to Iranian news media, PetroChina will invest USD 8.4 billion to develop the Azadegan oilfield. The site is 80 kilometers west of Ahvaz close to the border with Iraq. Iran Oil Engineering general manager Alireza Zeiqami says PetroChina will begin first phase development of the Azadegan oilfield this year. Its 2011 target is to drill 185 wells. The Azadegan oilfield has reserves of 3.2 billion barrels of oil, including recoverable reserves of 5.3 billion barrels. Daily capacity of crude oil is expected to reach 600,000 barrels after construction is complete. Total investment in the Azadegan oilfield is USD 12 billion. PetroChina will invest USD 8.4 billion while Iran Oil Engineering and Tokyo based Inpex Corporation will respectively provide the remaining 20% and 10% of total investment. (Sourced from China Business News)