Oil prices rise after slump to $46

Oil prices rose slightly Tuesday on bargain-hunting, having slumped to near four-year lows at 46 dollars earlier in the day on concerns over weak energy demand.

Brent North Sea crude for delivery in January hit 46.02 dollars -- the lowest point since February 18, 2005 -- but then recovered to 48.50 dollars a barrel, up 53 cents from the close Monday when the contract had plunged 5.52 dollars.

Oil prices fell sharply on Monday after OPEC decided at a weekend meeting against cutting production, preferring to wait until December before reducing crude exports. The cartel's secretary general Abdalla Salem El-Badri said on Monday that OPEC would decide on a "major" output cut next month if the oil market were deemed to be deteriorating.

"OPEC's attempt to talk prices up by announcing a production cut for the regular summit on December 17 in Algeria and by stating that 75 dollars a barrel would be a fair price, has failed miserably," said Dresdner Kleinwort analyst Peter Fertig.

The Organization of Petroleum Exporting Countries, which pumps 40 percent of the world's crude, met in Cairo on Saturday to assess the state of the oil market but held off from making any decision on cutting production. Instead, energy ministers decided that any output move would be made when they next meet in Oran, Algeria on December 17.

OPEC has already slashed output twice this year by a total of two million barrels per day (bpd) in response to plunging prices but fears remain that a global recession will undercut demand for energy. The OPEC production cuts agreed in September and October failed to stop prices sliding under 50 dollars earlier this month as concern mounted about a global recession.

Prices are now down by more than 60 percent from record highs above 147 dollars in July.

Algerian foreign exchange reserves rose

Algerian foreign exchange reserves rose to $133 billion in June, the OPEC member said on Monday, adding it would spend the money on developing its economy rather than ‘the adventure’ of a sovereign wealth fund.

The north African nation's record reserves at the end of June 2008, reported by state newspaper El Moudjahid, represent a 20 percent rise from $110 billion at the end of calendar 2007, itself a 42 percent increase from the previous year.

The country of 34 million has built up reserves and repaid most of its foreign debt thanks to high oil and gas prices. But Africa's second-largest country by area is struggling to reform a Soviet-style command economy reliant on oil and gas, dominated by loss-making state banks and blighted by red tape, graft, inadequate access to credit and a weak private sector.

Italy to Pay $5 Billion to Libya in Landmark Accord

Italy agreed to pay Libya $5 billion as compensation for its 30-year occupation of the country during the 20th century. The money will be invested by Italy over a 25-year period. For VOA, Sabina Castelfranco reports from Rome.

The Italian Prime Minister Silvio Berlusconi on Saturday signed a "friendship pact" with Libyan leader Moammar Gadhafi in Libya. Under the pact, Italy agreed to compensate Libya for abuses it committed during its colonial rule of the North African country.

Italy will invest $5 billion in Libya in a deal that effectively turns the page on colonial-era disputes that have long tarnished their relations. Prime Minister Silvio Berlusconi made the announcement during a visit to the Mediterranean city of Benghazi where he met Libyan leader Moammar Gadhdafi. He said the accord would provide for $200 million a year over the next 25 years through investments in infrastructure projects in Libya.

The compensation package involves construction projects, student grants, and pensions for Libyan soldiers who served with the Italians during World War II. It also includes a coastal highway stretching across the country from Tunisia to Egypt.

Mr. Berlusconi's office said in a statement that the premier would also hand over to Gadhafi the goddess Venus of Cyrene, an ancient Roman statue taken in 1913 by Italian troops from the ruins of the Greek and Roman settlement of Cyrene, on the Libyan coast.

Prime Minister Berlusconi said this agreement should put an end to 40 years of discord and is a concrete and moral acknowledgment of the damage inflicted on Libya by Italy during the colonial era. But many Libyans who lived under Italy's domination find it difficult to forget. A man says the behavior of Italians was cruel. They treated the Libyans like dogs. Italy is Libya's biggest trade partner with 25 percent of Italian oil imports coming from the North African country. It now also hopes the agreement will open the path to further cooperation.

Italy would like to see Libya crack down further on illegal migrants turning up on Italian shores and will fund $500 million worth of electronic monitoring devices on the Libyan coastline. Relations between the two countries have warmed over the last few years but it has taken years of negotiations for the two sides to hammer out a deal on compensation for Italy's rule over Libya from 1911 to 1943.Following Saturday's agreement, Libya named August 30, Libyan-Italian Friendship Day.

Algeria tightens rules for foreign investment

Algeria plans to take a majority stake in any future investment project involving foreign capital, Prime Minister Ahmed Ouyahia said yesterday, outlining a measure which already applies to much of the oil and gas sector. "Regarding investment projects involving foreign capital Algeria intends to take a majority of the capital in accordance with its national interests and means," said a statement from the prime minister's office. It did not say when the measure would take effect nor did it define what types of investment the measure would apply to.

In the energy sector, state energy conglomerate Sonatrach has the right to a 51 per cent stake in any exploration and production and downstream activity. The north African country of 34 million is an important oil and gas supplier to Europe. Outside of the oil and gas sector, foreign investors at present can own a majority stake in their Algeria ventures. Until recently, some of these foreign investors could repatriate 100pc of their profits.

The main non-energy foreign investors are Egypt's Orascom Telecom, Orascom Construction Industries and Qatar Telecommunications.

Analysts said yestereday's statement appeared to be in line with comments made on July 26 by President Abdelaziz Bouteflika in which he attacked poor management of foreign investment and said he had been disappointed by its results. Speaking to local government officials, Bouteflika said weaknesses in the implementation of economic policy had allowed some foreign investors to profit at Algeria's expense and not reinvest earnings in the country.

Africa's second-largest country is struggling to reform a Soviet-style command economy dependent on oil and gas, dominated by loss-making state banks and blighted by red tape, corruption, inadequate access to credit and a weak private sector. Yesterday's statement marks a further tightening of the investment regime in Algeria following the imposition of a requirement on investors last month to reinvest locally a part of their profits to the value of any tax breaks they received. Starting this year, investors have four years in which to make the reinvestment, and those which do not comply will have to repay any tax breaks and be subject to a fine.

Guld-daily

Syria slashes gas oil subsidy, tripling price

The Syrian government more than tripled the price of gas oil on Saturday, kicking off a program to remove big subsidies on the fuel.

Pump owners said a liter of gas oil went up to the equivalent of 54 U.S. cents from 15 cents. The state imports large volumes of the fuel at around $1 liter.

Gas oil is used in Syria on a large scale for industry, transport and heating. The gas oil price increase came as the government announced a 25 percent hike in public sector salaries to help the population absorb rising living costs and the impact of subsidy cuts.

The increase, which will take effect this month, covers 2 million public workers and retirees, the state news agency said. Syria has a population of 18 million.
Reuters

Renewables despite 72.3 trillion cubic feet of gas reserves

Egypt natural gas reserves 72.3 trillion cubic feet

Egypt's confirmed reserves of natural gas reached 72.3 trillion cubic feet after increasing by 6.2 trillion cubic feet in the 2006-2007 fiscal year, Oil Minister Sameh Fahmy said on Monday, according to state news agency MENA. Fahmy also said that Egypt's confirmed crude oil and condensate reserves had risen to 3.97 billion barrels, MENA said. It added that Fahmy attributed the rise to increased exploration by global companies, more deep sea and Western desert exploration, and recent oil and gas finds.

Egypt, although a significant natural gas exporter, needs to develop renewable energy including wind generation if it is to power its growing domestic industries, a senior Egyptian official said on Monday.

Egypt has the potential for generating 20,000 MW of power from wind at sites on the Red Sea, Trade and Industry Minister Rachid Mohamed Rachid said during a visit to Madrid to seek foreign direct investment from Spain.

"We are concerned that, although we have reserves in terms of natural gas and oil, we all know that this has a limitation in terms of period," he told Reuters in an interview, although he added that the unpredictability of exploration results meant it was impossible to say how long reserves would last.

"At the same time, we are under the pressure of the growing demand of the industry in Egypt, so the renewable energy is a very important part of our energy equation at the moment," Rachid said.
"If we are able to generate more energy through renewable sources, whether it's wind or water or solar or nuclear, that means that we can also put our natural gas to better usage in the future," he said, explaining that gas also had other industrial uses apart from being burnt for power.
Foreign direct investment has risen sharply in Egypt since the government began an economic liberalisation programme, and should hit $10 billion this year, up from $2 billion three years ago, Rachid said.