Iraq continued to export crude oil via Ceyhan following repairs to the bomb-damaged pipeline. State trader SOMO was even able to agree term contracts with 11 buyers for 300,000 bpd for the first quarter of 2008. December’s crude oil production was reported at just over 2.5 mn bpd: the highest since the US-led invasion of March 2003. The government has announced that it expects production to be “approaching 3 mn bpd” by the end of 2008. It is also planning to reopen a 250,000 b/d crude export pipeline to the Syrian port of Banias to provide an additional export outlet for its northern fields at Kirkuk. The line has been closed since it was attacked by US forces in March 2003. The output of natural gas is to be increased as well. The 50 mn cfd Akas field is to be expanded to 500 mn cfd with a view to exporting the gas. There are also plans for enhanced oil recovery from existing fields. Iraq nevertheless still does not have any comprehensive legislation covering foreign oil investment, which may delay several of its production plans.

Violence returned to the oil sector in Nigeria following the jailing of a former governor of the main oil-producing region. One rebel group called for all organizations opposed to the federal government to “unite and cripple the oil industry in Nigeria”. A gas pipeline supplying the Port Harcourt refinery was attacked and damaged along with a nearby oil-loading jetty. Government proposals to reduce subsidies to the state-owned Nigerian National Petroleum Corporation (NNPC) and to end its monopoly powers in the downstream sector have been attacked by NNPC’s supporters. Unrest in Kenya following a disputed presidential election interrupted fuel supplies both to Kenya and neighbouring Uganda, which imports fuel from Kenya’s Mombassa refinery. A rebel group from Darfur protesting against attacks by the Sudanese government on the region occupied the Chinese-operated Rahaw field in southern Sudan.

Mexico’s Energy Ministry warned that exports might fall from 1.9 mn bpd to less than 0.3 mn bpd by 2016 unless there were major reforms at state oil company, Pemex. In a report of 11th December, it predicted that Pemex would even have to import nearly 0.2 mn bpd of light crude oil in order to meet the growth in demand for white products. The Ministry also forecasts a rise in gasoline imports, which are currently running at 0.3 mn bpd. Russia and Serbia have signed an energy partnership under which Russia would route its South Stream export gas pipeline to Europe via Serbia and obtain a shareholding in Serbia’s national oil company, NIS. The EU is proposing to ban the cultivation of crops for biofuels on sensitive sites such as wetlands and primary woodlands.

China has announced that it has filled its first strategic petroleum stockpile, at Zhenhai. The reserve holds 33 mn bbl. Further stockpiles are planned. South Korea is to privatize state energy companies, including the Korea National Oil Corporation and Kogas. It is also to ban single-hull tankers from 2010 following an oil spill in December. Despite the deregulation of domestic oil markets in Indonesia, state-owned Pertamina has been nominated as the only company to sell subsidized fuel there during 2008. Five foreign companies also bid for the role. Brazil’s Petrobras is to buy ExxonMobil’s 87.5% shareholding in Japanese refiner Tonen. North America’s largest refiner, Valero, has said it may sell six of its 16 refineries in order to improve its profitability. China National Petroleum Corporation is to build two refineries in Shandong and Yunnan provinces, each with a capacity of 200,000 bpd.