Geopolitical tensions in the Middle East, this time focussed on Iran, provided the overriding issue in the oil market on Tuesday. Oil traders are turning a blind eye to burgeoning oil stockpiles and demand worries, as America cranks up the pressure on Iran’s nuclear ambitions and Iran in turn threatens Israel. Brent crude futures are up over a dollar changing hands at US$111 per barrel, while US light sweet crude also made up ground to trade at US$93 a barrel. On the stock market, a number of London listed oil firm’s were cashing in some of their chips today, realising some of the locked up value in their portfolio. Cairn Energy (LON:CNE) was the notable example. It is set to bank over US$900 million after it sold an 8 per cent stake in former subsidiary Cairn India – a vehicle listed on the National Stock Exchange of India, which owns oil fields in Rajastan. By the count of Richard Griffith, analyst at Oriel Securities, Cairn will now have US$1.4 billion at its disposal to develop its North Sea projects. He also says that Cairn’s bill for drilling will be in the order of $3 billion, and it is likely that ‘at some stage’ the company will sell its remaining 10 per cent stake in Cairn India. Elsewhere amid a much smaller divestment, analysts pondered whether SOCO International (LON:SIA) may be closer to selling its flagship Vietnamese business. Numis analyst Sanjeev Bahl reckons the asset is ‘progressing towards being ripe for monetisation’ and he says it could attract acquisitive national oil companies. That said, Bahl doesn’t expect a deal to be imminent as ‘a few uncertainties’ remain, such as the ability to maintain the current 50,000 barrel a day production plateau. Today SOCO sold its stake in assets located in the Cabinda area of Angola - the company had no attributable reserves within these assets and they were recently valued at US$32.5 million. Falkland Oil & Gas (LON:FOGL), which struck separate deals recently to sell stakes in its exploration venture, was also in focus today as it started drilling its second and final well of the current programme. The Scotia well will be drilled to a depth of 5,000 metres, which will take 75 days to complete. Analysts say this is a particularly attractive target because it is believed to be oil prone. If that is the case a success will be significant and will help lift hopes for the deep-water campaign in the Falklands. Drilling efforts have so far found gas – which is much harder to commercialise in these isolated projects in the South Atlantic.

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