BAGHDAD – Iraq will auction off 12 mainly gas exploration blocs during a January 2012 bidding round as the country pushes ahead with efforts to beef up its energy sector, the oil minister said Monday.
The January auction will be Iraq's fourth bidding round on its energy assets since the overthrow of Saddam Hussein in 2003. The country's oil and gas sector is struggling to overcome years of neglect and violence by seeking international investment to exploit its below-ground riches.
Oil Minister Abdul-Karim Elaibi told a news conference in Baghdad that interested companies have until May 19 to prequalify to compete for the 12 blocs. No exact date for the bidding was given.
"We hope that the next bidding round will achieve good results and bigger success than the ones before," said Abdul-Mahdi al-Ameedi, general director of the oil ministry's licensing and contracts department.
Iraqi oil officials said the companies will be paid a flat fee for their services rather than a share in the discovered resources. The officials declined to be identified because they were not authorized to brief the media.
Iraq has awarded 15 oil and gas deals since 2008 to international energy companies in the first major investment in the country's energy industry in more than three decades.
Seven of the exploration blocs are gas and the others are oil fields. Five of the blocs are in Iraq's western Anbar province or shared between Anbar and neighboring provinces; one is in the northern Ninevah province; one is shared between central Diyala province and neighboring Wasit province while the rest are scattered throughout southern Iraq.
The Iraqi oil minister also reiterated his belief that $120 per barrel is an acceptable price for oil and would not affect the global economy.
Elaibi first made the comments back in March when oil was hovering around $102 a barrel. Since then oil prices have climbed to almost $113 a barrel as fighting in Libya has shut down almost all the OPEC member's oil output. The jump in oil prices has been a boon for Iraq, also an OPEC member. Baghdad is almost entirely dependent on the price of oil for revenue and rebuilding its war-damaged economy.
The blocs that will be on offer in January are expected to add about 29 trillion cubic feet of natural gas to the current 126.7 trillion cubic feet in reserves, and about 10 billion barrels of oil to the current 143.1 billion barrels of oil.
Iraq plans to increase daily oil production to 6.5 million barrels by 2014 compared to its current production of 2.75 million barrels per day. Output is projected to climb to 3.3 million barrels per day in 2012 and 4.5 million barrels per day in 2013.
TOKYO (AFP) – Standard & Poor's rating agency on Monday revised from "stable" to "negative" its outlook for top Japanese automakers Toyota, Nissan and Honda, citing the impact of the March 11 quake and tsunami.
It made the same revision for three major auto parts suppliers -- Aisin Seiki, Denso, and Toyota Industries -- citing production slowdowns and stoppages, electricity supply disruptions and lower consumer confidence.
S&P said it expects that the six companies will experience "deteriorated operating and financial performance" in fiscal 2011 due to production cuts resulting from parts shortages following the devastating quake.
"The outlook revisions also reflect our opinion that extended production cuts may erode Japanese automakers? market shares and competitive positions in the longer term," the agency said in a statement.
S&P however affirmed its ratings on all the companies because it expected the impact of the disaster to be less than that of the 2008 financial crisis.
"Unlike after the Lehman shock, vehicle demand prospects remain solid in North America and emerging markets, and automakers could partially make up for lost production by increasing output in the latter half," S&P said.
Many key component manufacturers in Japan are based in the worst-hit northeast regions, where facilities were damaged by the 9.0-magnitude earthquake or inundated by the giant wave that followed.
Toyota, the world's biggest automaker, said on Monday that March output in Japan plunged 62.7 percent year-on-year, while Nissan suffered a 52.4 percent domestic decline and Honda Motor a 62.9 percent fall.
Toyota has announced production disruptions at home and in the United States, European Union, China and Australia because of the crisis, temporarily shutting some plants or running them at half-capacity or less.
The company said last week it expects output will start recovering in mid-year but will not be back to normal until the end of 2011.
Toyota ended General Motors' 77-year reign as the world's largest automaker in 2008, but since then the Japanese giant has faced the impact of the global economic crisis, a massive safety recall crisis and a strong yen.
S&P said supply chain disruptions are posing a greater challenge for Japanese automakers than it had initially anticipated and had forced virtually all Japanese automakers to significantly cut output in Japan.
"The impact is also starting to spread to production outside Japan," it said. "At most Japanese automakers, overall domestic and overseas output is currently at about 50 percent of initial production plans."
The agency said that it expected parts shortages to be largely resolved by July but cautioned that "full production is unlikely to recover in the summer" due to power shortages and a time lag for parts to arrive at overseas plants.
"We currently expect automakers to eventually return to full or near full production by around October," it said in a report.
"We also think the timing may vary among automakers by one to two months as Toyota Motor announced that it expects its production to normalise around November or December."
SEOUL (AFP) – South Korea's top automaker Hyundai Motor and the local unit of French automaker Renault SA will recall almost 150,000 cars due to a manufacturing defect and a safety problem, officials said Monday.
The Ministry of Land, Transport and Maritime Affairs said rear reflectors installed in Hyundai's mid-size YF Sonata sedan and its Tucson sport-utility vehicle did not meet safety standards.
From Wednesday Hyundai will offer free repair services to the owners of 19,211 YF Sonatas produced between March 30 and May 17 last year, and 8,050 Tucson SUVs rolled out between February 27 and April 17, it said.
From Friday Renault Samsung will begin recalling 55,648 SM5 cars produced between August 12, 2009 and October 29, 2010 due to defective airbags.
It will also call back 65,157 SM3 compact sedans produced between April 23, 2009 and August 10, 2010 because of faulty rear reflectors and air bags, the ministry said.