Iran Feels Sanctions Pain as Oil Income Slumps

Iran's state finances have come under unprecedented pressure and the resilience of ordinary people is being tested by soaring inflation as oil income plummets due to tightening Western sanctions and sharply falling oil prices. Tough financial measures imposed by Washington and Brussels have made it ever more difficult to pay for and ship oil from Iran. Its oil output has sunk to the lowest in 20 years, cutting revenue that is vital to fund a sprawling state apparatus. Already down by more than a quarter, or about 600,000 barrels per day, from rates of 2.2 mn bpd last year, shipments of crude oil from Iran are expected to drop further when a European Union oil embargo takes effect on July 1. Tehran is already estimated to have lost more than $10 bn in oil revenues this year. Reuters, 10th June.

US Oil Production

The EIA announced on Friday that US oil production is now above 6.2 mn b/d, the highest since 1998, largely due to increased production of "tight" oil from North Dakota and Texas. This announcement triggered off a round of optimistic press stories that the US is on its way to energy independence. Lost in the hype, however, is any appreciation that tight oil from very expensive to drill tight oil wells declines so rapidly that they must be re-drilled frequently to maintain production. The recent drop in crude prices is not helping the economics of tight oil and many of the less productive wells may be losing money. PO Review, 11th June.

The Iranian Nuclear Talks

The situation took a turn for the worse last week, when negotiations between Tehran and the IAEA broke down over details of the inspections of suspect Iranian nuclear weapons sites. The new hard-line position from Tehran, which includes vows to never give up nuclear enrichment, suggests the Iranians expect to gain little from the next round of talks due to begin in Moscow on 18 June and are willing to let the increased EU sanctions go into effect on July 1st. The selling price of oil coupled with cuts in Iranian oil imports by Tehran's top customers suggests that oil revenues will fall by roughly 40 % this year. Budget and subsidy cuts that fall most heavily on Iranian consumers are endemic. ..The situation is complicated by the Israelis, who talk about bombing Iranian nuclear sites and possibly dragging the US into an unwanted war, and the situation in Syria which continues to deteriorate daily. Washington continues to send a stream of officials to Israel to assure the government that the western position on Iran's nuclear weapons will ultimately prevail and that there is no call for precipitous action. PO Review, 11th June.

Australia's AWE Abandons Atlas-1 Well

Australia's AWE reported Tuesday that it plans to plug and abandon its Atlas-1 exploration well - located offshore east Java Basin, Indonesia - due to a high percentage of CO2. Rigzone, 12th June.

Crude Ends Near Flat Ahead of Greek Vote

U.S. crude futures ended nearly flat (on Friday), as hopes of further central bank stimulus couldn't excite traders ahead of a pivotal election in Greece. Light, sweet crude for July delivery settled 12 cents higher at $84.03 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange for August delivery traded 27 cents lower at $97.61 a barrel....Oil traders are concerned about the economic fallout that could ensue if the country leaves the currency union. Rigzone, 15th June.

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Vattenfall vs. Germany

Vattenfall has filed a case against Germany with an international arbitration service one year after the country tore up a carefully negotiated nuclear policy. The filing lists Vattenfall versus Germany in the subject area of nuclear power. It rests with the autonomous International Centre for Settlement of Investment Disputes (ICSID), which was designed in 1965 by the World Bank and established by a convention now signed by 143 countries. The move marks a new high in efforts by the nuclear utilities that suffered losses from the German government's post-Fukushima actions, which included ordering eight power units to close immediately and limiting the operating lives of the remaining nine. World Nuclear News, 8th June.

San Onofre Nuclear Power Plant

Southern California utility officials are warning that blackouts are possible this summer as a result of the sidelined San Onofre nuclear power plant. The damaged plant is likely to remain inoperative until at least the end of August while investigators probe excessive wear in tubing that carries radioactive water. PO Review, 11th June.

Oi: Restart Our Reactor

The local government has authorised the restart of the two reactors at the Oi nuclear plant, though such a restart would be conditional on the approval of Fukui prefecture, which is by no means certain. All of Japan's nuclear reactors are currently idle. TUNSE/The Chemical Engineer 1st June.

'World's Biggest Float' To Kick-Start Explosion in Nuclear Construction

China's biggest nuclear energy firm, China National Nuclear Power, has given the go-ahead for what could be the world's biggest flotation, the proceeds to fund the USD27 bn cost of five new nuclear reactors. China has ambitious plans to build 100 new reactors over 20 years, and is racing ahead with its programme. This contrasts with developments in Western nations, including Britain, where E.ON and RWE recently pulled out of a new build project; while fears are growing that EDF Energy will scale back or cancel its UK new build plans. TUNSE/The Times, 7th June.

Funding Increased For Yucca Mountain Review

An additional $10 mn in funding has been approved for the Nuclear Regulatory Commission (NRC) to complete its review of the licence application for the Yucca Mountain repository. Last year, the NRC shelved the review after funding was slashed. World Nuclear News, 8th June.

Rosatom Signs International Deals

Nigeria signed a cooperation accord with Russia towards the construction of its first nuclear power plant.....at the AtomExpo event in Moscow. Bangladesh and South Africa also agreed to extend their nuclear cooperation with Russia. World Nuclear News, 12th June.

American Centrifuge Program

USEC and the US Department of Energy (DoE) have signed a raft of new agreements, completely reorganizing the American Centrifuge program. The agreements define the scope, funding and technical goals for the research, development and demonstration program. The DoE is to provide a total of $280 mn towards the program, while USEC will provide $70 mn. The program will support building, installing, operating and testing commercial plant support systems and a 120-machine cascade that would be incorporated in the full commercial American Centrifuge Plant (ACP) in Piketon, Ohio, which is planned to operate 96 identical cascades. World Nuclear News, 14th June.

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