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I Wish The Board Had A "Trash Can". The Moderators could put what they don't like in the Trash Can. The rest of us could go and visit/read the "Trash" if we chose to do so. The Trash Can would only go back 24 hours.
cayman08 His Alias Born On: Saturday, April 01, 2006
Enter Exxon Stage Left?????
YankeMike
http://www.ngrguardiannews.com/business/article04//indexn2_html?pdate=170309&ptitle=Oil%20prices%20fall%20as%20OPEC%20keeps%20supply%20levels%20steady
I'm On The West Coast & Up Late At Night. So YES article was probably written in the morning.
Oil prices fall as OPEC keeps supply levels steady
OIL prices dropped yesterday after the Organisation of Petroleum Exporting Countries (OPEC) decided to forgo further production cuts in favor of boosting compliance with earlier ones.
Benchmark crude for April delivery fell 88 cents to $45.37 a barrel in morning trading on the New York Mercantile Exchange after dipping as low as $43.62 overnight.
In London, Brent prices lost $1.26 at $43.67 on the ICE Futures exchange.
Members of the OPEC said Sunday they will try to stick more closely to the group's current output quotas but will not make further cuts.
Phil Flynn, an analyst at Alaron Trading Corp., said de-facto OPEC leader Saudi Arabia recognizes that when people aren't buying the oil that's already being pumped, production cuts don't matter.
"I think they're starting to realise that they have to stimulate this economy with lower prices before they can get the long-term demand growth that they're looking for," Flynn said. "They've got to get back in step with the rest of the world that is trying to stimulate the economy as opposed to trying to slow it down by raising prices."
Oil prices rose from less than $35 a barrel last month as investors anticipated the cartel would cut production by up to one million barrels a day on top of 4.2 million barrels of reductions announced since September.
While some of the oil producers at Sunday's meeting said they supported another cut, Saudi Arabia argued instead for stricter compliance with the existing output reductions. OPEC is overshooting its daily target level of just under 25 million barrels a day by about 800,000 barrels.
Flynn said the market should have known that if the Saudis weren't going to cut, no one else would.
A new cut remains an option during a May 28 OPEC special session to review prices and supply.
Saudi Arabia's oil minister said yesterday that petroleum-producing countries need a price of at least $60 a barrel to bring more energy resources on the market.
"If we want all hydrocarbon resources developed worldwide, $40 is not enough," Ali al-Naimi told reporters in Geneva, where he was attending an energy conference.
Analysts noted the presence of Russian Deputy Premier Igor Sechin at the Vienna meeting.
Russia has toyed with the idea of working more closely with OPEC to control the flow of oil to the world and Sechin on Sunday announced that his country is reducing crude sales.
Analyst and trader Stephen Schork said Sechin discussed having a permanent Russian representative at OPEC's Secretariat.
"Is this the first step to Russia joining OPEC? Stay tuned," Schork said.
Oil traders will likely turn their attention to global crude demand and the possibility of a second-half economic recovery.
Federal Reserve Chairman Ben Bernanke said Sunday on CBS' "60 Minutes" broadcast that the U.S. recession "probably" will end this year if the government succeeds in bolstering the banking system.
However, Bernanke said that even if the recession, which began in December 2007, ends this year, the unemployment rate will keep climbing past the current 8.1 per cent, the highest level in 25 years.
Flynn said with continued weak heating demand and below-normal industrial demand, another round of weak prices is in the foreseeable future.
"It's getting harder to get excited about being long oil," he said.
In other Nymex trading, gasoline for April delivery fell 0.66 cent to $1.3463 a gallon, while heating oil dropped 2.87 cents to $1.1685 a gallon. Natural gas for April delivery was down 10.3 cents to $3.829 per 1,000 cubic feet.
Kidnappings: FG Ready to Give Communities Oil Stakes
By Chika Amanze-Nwachuku with agency report, 03.17.2009
The Federal Government plans to give communities in the Niger Delta region stakes in oil projects to discourage attacks that have partially crippled Nigeria’s crude oil production.
Presidential Adviser on Petroleum Matters, Mr. Emmanuel Egbogah, who made the disclosure in Cape Town, South Africa, yesterday, said the stakes would come from the government’s own holdings in the projects.
According to him, government believes that if indigenes of the region become stakeholders in the oil projects, the incidence of attacks on oil installations and abduction of oil workers would be minimised.
“We have the latitude to give them stakes. The property will be theirs so they will have no reason to encourage attacks,” he said.
Nigeria has the largest hydrocarbon reserves in Africa and is the fifth-biggest supplier of oil to the United States.
But the unabated crisis in the oil-rich region has continued to take its toll on the country’s crude oil production and revenue, as about one million barrels per day of production are currently shut in.
The main militant group, the Movement for the Emancipation of the Niger Delta (MEND), has been agitating for control of oil and gas resources in the region.
The group claims to be fighting for the region’s poor who are yet to benefit from its oil wealth. However, the situation has assumed a criminal dimension as armed groups now kidnap oil workers, hijack vessels and then demand ransoms from oil companies.
THISDAY learnt that attackers often warn their victims and their employers not to disclose that they parted with huge amount of money before they regain their freedom.
Last weekend’s attack by suspected militants on a Chevron’s 16-inch Makaraba-Utonana pipeline has forced the company to shut in some 11, 500 barrels from its Makaraba platform in Delta State.
A Reuters report quoted Colonel Rabe Abubakar, spokesman for the military taskforce in the western Niger Delta, as saying that the attack resulted in leakage into four communities in the area.
Abubakar said the attackers were believed to have defected from the camp of Tompolo, a militant leader based in Delta State that had suspended attacks on oil sites.
The group, he said, had threatened to continue with their attacks on installations and facilities unless they receive gratification from the multinationals.
Chevron, the report said, is currently assessing the situation and has reported the incident to relevant government agencies.
Prior to the escalation of the crisis in the region in 2006, Nigeria produced about 2.5 million barrel per day, but violence in the region has reduced production to about 2.2million.
Royal Dutch Shell, the worst hit, was producing about one million barrels of crude oil per day, but attacks have reduced the company’s production to about 400,000 barrels per day.
Recently, the company was forced to shut in about 180,000 barrels per day owing to renewed attacks on its facilities.
The recent shut in means a further reduction in Nigeria’s production, a development which translates to revenue losses for the country.
Nigeria earns over 90 per cent of its foreign income from crude exports. Nigeria had benchmarked its oil at $45 a barrel in the 2009 Budget and the new price of the crude which hovers around $40 per barrel is less than $5 above the budget target.
It is feared that the upsurge in violence in the region, and the falling prices of crude oil in the international market owing to declining world oil demand occasioned by the current global meltdown may deter the country from achieving its vision 20-2020 target.
THISDAY had reported that oil-producing companies operating in the region suspended further redeployment of expatriate staff in the area until normalcy returns.
Oil services companies were also said to have been vacating the region to other sister countries following the recent threat by MEND to lunch swooping attacks on companies operating in the area.
EXCLUSIVE: China stocks up on bargain oil
Benefits from recession-weakened West
Chris O'Brien
Thursday, March 12, 2009
EXCLUSIVE:
BEIJING| -- China is forging ahead with an overseas spending splurge, snapping up resources especially oil at bargain prices and strengthening its long-term prospects for growth before Western economies can bounce back.
A series of high-profile energy deals and mining bids in the past month marked an end to the nervousness that appeared to impinge on Communist Party leaders at the outset of the global financial crisis. Attention has turned from hoarding foreign exchange reserves worth close to $2 trillion to locking up future supplies. Oil has emerged at the top of China's shopping list.
In February, China secured oil supply deals totaling $41 billion with Russia, Brazil and Venezuela.
Among the most lucrative: an agreement reached with Russia, in which China will lend $25 billion to Russian oil giant Rosneft and oil pipeline company Transneft. In return, according to Russian news reports, China will receive 300,000 barrels of crude a day for the next 20 years at a rate of about $20 a barrel less than half the current price of $45.
While touring Latin America, Vice President Xi Jinping signed a deal to lend $10 billion to Brazil's state-owned oil company Petrobras. China will receive up to 160,000 barrels a day, again over a 20-year period.
A subsequent announcement from China's National Energy Administration further clarified Beijing's intentions. China is considering setting up a fund for China's three state-owned energy giants PetroChina, Sinopec and the China National Offshore Oil Corp. (CNOOC) to purchase oil and gas companies overseas. The firms will benefit from low-interest loans and direct capital injections, the announcement said.
The oil deals complement efforts to buy into the Australian mining industry. China's biggest aluminum producer, Chinalco, has submitted a bid of $19.5 billion to buy an 18 percent stake in beleaguered mining company Rio Tinto. Chinese firm Minmetals has offered $1.7 billion for Oz Minerals.
China also is seeking diversification of its foreign exchange reserves, now heavily in dollars. The head of China's energy bureau, Zhang Guobao, said earlier this week that China should accumulate more gold and uranium as well as other strategic commodities.
erdo: Plenty Of Time To Figure Out What Info You Want To Release & What To Cover Up & Keep Quite.
dbernet; Drilling Started On Jan 14th & Ended March 15th. The news came out May 26th.
Afren plc announced that Chevron, the Operator of Block 1 of the Nigeria - S?o Tomé and Pr?ncipe Joint Development Zone ("JDZ"), has confirmed that it has commenced drilling of the first exploration well on this licence on 14th January 2006
The Obo-1 well is located in 1,720 meters of water (5, 640 feet) and the drilling operation was completed in 63 days on March 15th 2006.
Also Higher Than We've Been Since Sept. & Above our 200 Day Moving Average.
Walldog; I Had Worked In The Shipyards For Over 15 Years, But Those Are 2 Of The Most Beautiful Ships I've Ever Seen.
Sao Tome and Principe: PM Rafael Branco to discuss oil cooperation in Brazil [ 2009-03-09 ]
Sao Tome, Sao Tome and Principe, 9 March – The prime minister of Sao Tome and Principe, Rafael Branco, has begun a five-day visit to Brazil with oil, energy and education at the top of his agenda.
Branco travelled to Brazil on a Brazilian air force aircraft that took him to the Sao Paulo airbase where he will begin his five-day visit, travelling Wednesday to Brasilia and later to Salvador.
"For a long time we have been working on a partnership with Brazil in the oil sector. We are going to dicuss that issue and boost that partnership,” the Prime Minister said adding that “education and professional training will also be on my agenda.”
The Prime Minister of Sao Tome and Principe has several meetings scheduled, including at 11 am Wednesday with Brazilian President, Luiz Inácio Lula da Silva.
"I want to boost cooperation between our two countries and I am taking a number of proposals that are fundamental for the execution of the Government’s programme,” said Branco whose government plans to turn Brazil in Sao Tome and Principe's third strategic partner, after Angola and Portugal. (macauhub)
Security Beefed up Around Oil Facilities
From Omon-Julius Onabi in Warri, 03.10.2009
Security has been beefed up around oil and gas facilities particularly in the Escravos waters in Delta State following reports that certain militant groups in the Niger-Delta were planning to blow up facilities in the area.
THISDAY gathered from reliable sources that attack by militants on some Chevron offshore facilities in the area was imminent, and security around Chevron and facilities belonging to other oil multi-nationals operating in the area had to be stepped up.
Confirming the report to THISDAY yesterday, spokesman of the security Joint Task Force (JTF), Col Rabe Abubakar, said the immediate deployment of more men and material to the Escravos waters followed strong intelligence report of an impending attack on Chevron facility in Abiteye.
Abubakar also said that the intelligence revealed that people involved in illegal gathering were behind the planned attack, but noted that the militants were equally responsible for most of the illegal bunkering activities in the Niger-Delta.
An attack was to be launched from Benkrukru riverside community in the state on Chevron’s Abiteye Flow Station and the pipelines blown up, the spokesman said.
He said the increased security presence was mainly pre-emptive as the militants or the criminals nursing the heinous act of economic sabotage against the nation had to be checkmated before any harm was done.
“The whole idea is aimed at preventing crime and other illegal activities in the Niger-Delta and nipping such incidents in the bud rather than wait for them to happen”, he said.
The planned attack “might not be unconnected with the recent seizure of 24 barges by the troops of the security task force in Abiteye”, which involved serious shoot-out between the JTF and militants believed to have been hired by the oil thieves.
The oil thieves were said to have blamed the seizure of the 24 barges on the co-operation given to the JTF by the American oil giant, Chevron, though the JTF denied the allegation,saying the seizure was made possible through the accurate networking and commitments of the JTF leadership.
In a related development, indigenes of Dibi staged a demonstration at the Dibi flow station, barricading the flow station and demanding that it should be shut down.
The protest was apparently sparked by the recent oil spillage around some communities in the area, including Dibi, which the people claimed had polluted their water source and generally disrupted their means of livelihood.
Confirming the report yesterday, Abubakar said the situation was resolved before it got out of control, but added that JTF personnel were however being “stationed in the area to maintain peace and provide protection to workers and oil facilities”.
Oil may rise this week as OPEC cuts curb supplies, survey shows
CRUDE oil prices may rise on speculation that the Organisation of Petroleum Exporting Countries (OPEC) production reductions are beginning to curb U.S. inventories and imports.
Twenty of 40 analysts surveyed by Bloomberg News, or 50 per cent, said futures would increase through March 13. Eleven respondents, or 28 per cent, forecast oil prices will be little changed and nine said that there would be a decline. Last week, 48 per cent of analysts expected prices would rise.
OPEC cut output for a seventh consecutive month in February, according to a Bloomberg News survey of oil companies, producers and analysts. OPEC has agreed on three output reductions since September. Ministers will meet in Vienna to discuss production targets.
"It looks as though the market is finally taking the OPEC production cuts as a more substantial offset to the weakness in petroleum demand," said Tim Evans, an energy analyst with Citi Futures Perspective in New York. Prices of futures may rise before OPEC's March 15 meeting in Vienna, he said.
U.S. crude-oil supplies fell 757,000 barrels to 350.6 million barrels last week, the biggest decline this year, an Energy Department report on March 4 showed. Imports declined 24,000 barrels a day to 8.77 million in the week ended Feb. 20, the lowest since September, when ports were shut in the aftermath of hurricanes Gustav and Ike.
OPEC, the Energy Department and International Energy Agency cut their oil-demand forecasts last month because of the recession in the major consuming countries.
Crude oil for April delivery rose 76 cents or 1.7 per cent, to $44.52 a barrel this week on the New York Mercantile Exchange. Prices have dropped 70 per cent from the record $147.27 a barrel reached on July 11.
The oil survey has correctly predicted the direction of futures 48 per cent of the time since its start in April 2004.
N’Delta Crisis: Shell to Lay off More Workers
By Ejiofor Alike, 03.09.2009
Anglo-Dutch oil major Shell Petroleum Deve-lopment Company Nigeria (SPDC) may have rescinded its decision to put on hold the re-organisation of its Nigerian operations which last year claimed the jobs of over 1,000 workers and resulted in a drastic reduction in its operations in the Niger Delta.
Shell was believed to have soft-pedalled after President Umaru Musa Yar'Adua reportedly met with the company’s out-going Chief Executive Officer, Jeroen van der Veer, and the Dutch Prime Minister, Jan Peter Balkenende, in Davos, Switzerland, during the World Economic Forum last year.
Before the suspension, Shell had concluded plans to reduce its 3,500 work force in the country by 1,500 in order to reduce cost of operations.
But THISDAY gathered at the weekend that the oil major has resumed the restructuring exercise, which it called “downsizing” to reduce its staff strength as part of its cost-cutting efforts in response to the collapse of oil prices and the increasing wave of kidnappings in the Niger Delta, which had shut in a large chunk of its operations in the region.
Competent company sources told THISDAY that the “sack fever” last week hit Shell’s Eastern Operations, claiming the Head of Marine (East), and many workers, mostly in Logistics and Marine Sections.
Shell said in the sack letters post-dated to take effect from March 31st 2009 that it was “downsizing” to reduce cost of operations.
Investigations showed that unlike last year’s exercise, which was not based on any clearly defined criteria, the present exercise was hinged on staff’s annual performance as contained in their Individual Performance Factor (IPF) for 2008.
IPF is a measurement of the annual performance of each staff of the company and it is released in March of every year.
But the workers alleged that the assessment for 2008 was arbitrarily done without any form of fairness.
It was alleged that in order to accord this new exercise credibility and justify the sack, staff were deliberately scored low in their IPF for 2008, to pave the way for their exit from the company.
“IPF ranges between 0.5 and 1.5. The lowest score is 0.5 and the highest score is 1.5. But many people were given 0.00 in their IPF. Does it mean that throughout last year, they did not perform a single task for the company and they were receiving salaries? The truth is that some managers and supervisors were used to do the hatchet job. The supervisor will do the appraisal and submit the report, while the manager will issue the IPF. You cannot question your manager if he gives you low IPF,” said a senior manager.
THISDAY gathered that under the present restructuring, highly-remunerated skilled workers are also being replaced with low cadre manpower as part of the efforts to reduce cost.
A manager, who was privy to the planning of the exercise, told THISDAY that the exercise had swept off all the professional Master Mariners in the Marine Section.
“How can you run Marine without a Master Mariner? Who will inspect the vessels? It is worrisome that we (Shell) are setting aside our own standards in order to cut cost of operations,” he said.
Branch Chairman of the Petro-leum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Mr. Olley Victor, and the Branch Secretary, Mr. Okoloka-Ideh Tony, as well as the Port Harcourt Branch Chairman of PENGASSAN, Mr. Shedrack Ejinwa, could not be reached through their official mobile phones at the weekend.
When contacted over the matter, National President of PENGASSAN, Mr. Babatunde Ogun, told THISDAY that the union had asked the workers to stop collecting sack letters from Shell management.
“We have also directed the branch not to discuss anything with management. We reject what they are doing. Shell management mentioned it but the union rejected it. Now, they are doing it unilaterally. They retrenched 1,200 last year, and within this quarter, they are sending more people away. It is unacceptable. What they are doing is an affront on management-labour relations and we are going to resist it,” he said.
Officials of Shell, who were contacted by THISDAY, refused to comment on the issue.
But Shell’s Head of Exploration and Production Malcolm Brinded was quoted by Reuters report earlier this year as calling for a drastic reduction in costs in a confidential email he sent to some employees.
“We simply need much higher sustainable savings this year and I ask for real actions from all of you... Shed contractor staff, challenge requirements, eliminate consultancy work, reduce travel massively, cut overheads everywhere,” he said.
He also pleaded for fewer meetings and “75 per cent fewer slides”.
“We are still too slow in maturing our hydrocarbon resources and advancing projects,” Brinded said.
Brinded said Shell was not complacent about its 2008 performance, despite reporting a record profit for a European company of $31.4 billion.
“Overall 2008 performance was good, with record earnings and strong operational results, but a disappointing Total Shareholder Return,” he said.
Being the worst hit by the restiveness in the Niger Delta, where its crude oil output has been on steady decline since the crisis escalated, Shell is seen by oil industry analysts as paying for its “years of arrogance” in Nigeria.
The company was alleged to have over the years enjoyed the support of the Federal Government forces to unleash unfriendly environmental practices on the largely impoverished inhabitants of the oil-rich region.
Both criminal and genuine agitators in the region now see the troubled oil giant as the face of the “unwholesome policy of environmental degradation and resource exploitation”.
THISDAY had reported last month that the unabated crisis in the oil-rich Niger Delta had continued to take its toll on SPDC and Nigeria’s oil revenue, as the company had been forced to shut in production of 180,000 barrels per day of oil following renewed attacks on its facilities.
Shell’s Chief Executive, van der Veer, confirmed at a London conference that the lost production was due to the heightened insecurity in the region.
It was also reported that suspected loyalists of Kitikata, a militant leader linked with the recent killing of soldiers in the Niger Delta region, invaded the SPDC’s Nembe Creek flow station in Bayelsa State.
THISDAY had also reported that oil-producing companies operating in the region had suspended further redeployment of expatriate staff in the area pending when normalcy would return.
An official of Shell was last month quoted as affirming that the company had commenced preparations to evacuate its staff from the Niger Delta after a militant group issued a warning to quit the region or risk more attacks.
The spokesman had, however, stated that the company had no plans to leave Nigeria but that at the same time was not prepared to gamble with the safety and well-being of its workers and contractors.
A militant group led by Ateke Tom had accused Shell and other oil operators including Agip, the local subsidiary of Italian oil company Eni, and the Nigeria Liquefied National Gas Com-pany of helping the Nigerian military to carry out attacks on the group’s camps in Rivers State.
The invasion of the multi-billion dollar Nembe Creek flowstation was said to have been repelled by soldiers on guard duties aboard the facility.
The militants, in the said letter, had accused Shell of “being insensitive to the plight of the people of the area by refusing to implement agreements reached with them in various Memorandum of Understanding signed with the people”.
It was reported that part of their demands was that their militia group should be recognised by the SPDC management as a major interest group and must be placed on a stipend of N3 million monthly.
Shell, which for many years bestrode the Nigerian oil and gas industry like a colossus, and dictated to a large extent the pace of developments in the economy has since lost its influential position as Nigeria’s number one oil producer to the U.S. oil major, Exxon-Mobil, the world’s largest publicly traded oil company.
Statistics show that from a record level of about 999,000 barrels per day of crude oil, nearly half of Nigeria’s total daily average production in 2003, Shell now accounts for less than 500,000 barrels per day of the country’s total production of 1.9 million barrels per day.
ExxonMobil, which currently produces about 800,000 barrels per day of Nigeria’s total crude production, accounted for only about 321,000 barrels per day of the country’s total output as at 2003.
Former Chairman and Managing Director of Mobil Producing Nigeria (MPN), Mr John Chaplin, who was promoted to Vice-President of the ExxonMobil Corporation, had told THISDAY shortly before he left office that with the completion of the company’s East Area Projects at Bonny River Terminal in Rivers State, the company’s daily output was about 800,000 barrels per day.
Chaplin further stated that the figure would have been higher if the Organisation of Petroleum Exporting Countries (OPEC) had not imposed production cuts.
Amaechi Calls For More Troops In N'Delta
From Kelvin Ebiri, Port Harcourt
Smarting from the frustration of the underdevelopment of the Niger Delta allegedly worsened by the activities of Militants, River State Governor Chibuike Amaechi yesterday differed with other stakeholders over the path to peace in the region.
While other stakeholders have canvassed the total demilitarisation of the region, Amaechi wants more soldiers to be deployed in the region to stop the militants form stalling development projects.
Also, the Minister of Niger Delta Affairs, Ufot Ekaette has appealed to the militants to lay down their arms and give the government a chance to prove its sincerity towards the development of the region.
Amaechi made the call during this year's yearly summit organised by the South-South parliamentary caucus of the House of Representatives, which started in Port Harcourt yesterday.
Present at the summit where Governor of Cross River State, Liyel Imoke, the Deputy Governors of Rivers and Bayelsa States, Tele Ikuru and Peremobowei Ebebi, Minister of State for Energy, Odien Ajumogobia, Edwin Clark, Prof. Kimse Okoko, Ledum Mitee, Justice Adolphus Karibi-Whyte and other dignitaries.
According to the governor, while economic activities were thriving in cities like Lagos and Abuja, those of Port Harcourt and other Niger Delta cities were dormant due to the activities of some misguided few who were masquerading as militants.
Amaechi who said he had resolved to bear the political consequences of confronting militants whom he referred to as criminals, said their activities were doing grave harm to the Niger Delta economy.
He said the only way the legislators could contribute to the development programmes of the Niger Delta governors who had decided to integrate their economy, was by prevailing on the Federal Government to deploy more troops in the region to flush out the militants.
Amaechi who described the Niger Delta as a raped and abandoned woman, said if the lawmakers failed to demand for military offensive against the militants, then they would be providing more justification for the region to be deprived.
The governor bemoaned the systematic economic strangulation of the Niger Delta. He cited the neglect of once thriving seaports in Port Harcourt, Warri and Calabar, the location of corporate headquarters of multinational oil companies outside the Niger Delta and the carting away of the region's resources as some indicators.
The governor threatened that the Rivers State Government might be compelled to shut down the operational office of Total if it failed to consider indigenous oil companies based in the state for the award of a multibillion Naira oil facility contract.
He castigated the Petroleum Technology Development Fund (PTDF) for awarding more scholarships to people from other parts of the country and denying the people of the geographical region from which the funds for the programme are derived, such opportunities.
On his part, Ekaette suggested that since the neglect and deprivation of the Niger Delta had been highlighted and the government had begun to address the areas of concern of the people, the militants should lay down their arms to test government's sincerity.
He explained that as a result of continuous molestation of construction and oil workers, Julius Berger had formally written to the Federal Government that it was withdrawing from the construction of a section of the East-West Road. He warned that if the level of violence in the area was not checked, the region might soon be isolated from the rest of the world.
Ekaetta said: "Rather than continue with sermons and militancy, our youths should join hands with us to bring about a coordinated and sustained development of the Niger Delta. Rather than serve as soldiers of destruction, they should be at the vanguard of enlightening their peers on the need to embrace education so as to avail themselves of the opportunities available in the oil and gas industry."
The minister explained that all his ministry had set out to do for the Niger Delta could only become a reality when there was a congenial atmosphere for contractors and other investors to move into the area and work.
He denied allegation that he was opposed to the medical treatment of detained leader of the Movement for the Emancipation of the Niger Delta (MEND), Henry Okah. He said those opposed to his steering the ministry had fabricated the allegation to create disaffection amongst the people of the region.
My Wire Transfers To TD Ameritrade Have Always Been Good As Soon As Received (The Same Day). Even for non marginal ERHE.
Explosion Rocks Shell Pipeline
By Chika Amanze-Nwachuku in Lagos and Omon-Julius Onabu in Warri, 03.04.2009
Crude oil export has suffered a major set back following an explosion that rocked the 24-inch Trans-Escravos Pipeline (TEP) belonging to the Shell Petroleum Development and Production Company (SPDC).
The damaged pipeline conveys crude oil to the flow station where it (oil) is separated from gas and water before the oil is sent to the export terminal.
THISDAY learnt that the incident has forced the company to shut down its flow stations which receive feed crude, a development which has adversely affected crude export.
However a company source said the blasts are suspected to be an act of sabotage, caused some punctures to the TEP. He confirmed that a number of facilities had been shut down to minimise damage to the environment.
It could not be ascertained at press time, whether there was any loss of life or whether some staff sustained injuries, but THISDAY learnt that a Joint Investigation Team has commenced investigation into the matter.
It was learnt that the attackers, believed to be militants, used explosive materials to blow up parts of the SPDC’s crude export channels in the off-shore pipeline.
The special security Joint Task force (JTF) spokesman, Col Rabe Abubukar, when contacted yesterday, said the outfit was “unaware” of any new attack on SPDC facility, but THISDAY learnt that the oil giant had already visited the scene of the incident and taken measures to remedy the situation.
A Shell spokesman, Precious Okolobo, confirmed the incident last night, but declined further comments on ground that the investigation would reveal the cause of the blasts.
He also did not disclose the volume of oil shut-in or whether the company would declare a “force majeure”, which would officially allow it default on supplies to its international customers.
“SPDC can confirm that there have been explosions on the 24-inch Trans Escravos Pileline (TEP) in Delta State. The incident was first reported by surveillance personnel on Saturday February 28 and later confirmed during an assessment visit to the area. The authorities have been notified of the incident and joint investigation is being mobilised,” he said.
Escravos, which is located in Warri South L.G.A. of Delta State, plays host to two major trans national oil companies Shell and Chevron. Shell has three onshore flow stations in the area (Sagara, Otumara and Ogidigben flow stations), while Chevron has its flow stations offshore.
Shell had last month declared force majeure on its Nigerian Bonny oil shipments citing the heightened insecurity in the Niger Delta region.
Okolobo said the action was prompted by the company’s inability to meet contractual obligation owing to the militancy in the area.
He explained that the force majeure was declared due to logistics challenges related to the security situation in the area.
"It will affect the remainder of February and perhaps March offtakes with some deferred to April," he said.
A previous force majeure by the company, covering liquefied natural gas (LNG) shipments from Bonny is still in force.
A previous explosion on the SPDC 24-inche Amukpe left six of its contract staff dead. The contract staff worked for a contractor employed by SPDC at the SPDC trunk line in Delta State which supplies crude oil to the Forcados Export Terminal.
The company had shut down all its flow stations receiving feed crude as a result of the incident.
The 18 contract staff and an SPDC supervisor were said to be working at a “leak repair work-site” when the explosion which resulted in an inferno occurred.
The Movement for the Emancipation of the Niger Delta (MEND) on Saturday threatened to sabotage the multi-billion dollar Trans-Saharan gas pipeline project, a scheme that has attracted the Europoean Union (EU) and Russian energy majors.
The group said the project, which is expected to deliver first gas in 2015 runs contrary to the wish of indigenous oil-producing communities in the Niger Delta region.
Kidnappings: Oil Services Firms Flee Nigeria
By Ejiofor Alike, 03.02.2009
As oil and gas producing companies operating in the Niger Delta suffer declining output forcing them to withdraw expatriate workers from the restive region due to kidnappings and militant attacks, oil field engineering contractors have also continued to flee the country, THISDAY Checks have revealed.
Investigations showed that companies from South Africa, Holland, France and the United States are involved in the latest withdrawal of companies from Nigeria .
Aside Willbross, a United States oil field services contractor, which relocated to North America last year, and Kellogg, Brown & Root (KBR), a leading global engineering, construction and services company, that withdrew few months ago, many other companies have withdrawn from the country and relocated to other countries due to the increasing wave of kidnappings and other violent crimes in the Niger Delta.
KBR is a member of TSKJ Nigeria Limited, a joint venture, which was involved in the construction of the various trains of the Nigerian Liquefied Natural Gas (NLNG) plants in Bonny Island of Rivers State.
According to investigation, Foster-Wheeler, a United States-based global conglomerate, which was incorporated in Bermuda and with its principal executive offices in New Jersey, has also withdrawn its services from the Niger Delta.
The company is focused on Engineering, Construction and Procurement (EPC) and on power projects.
Foster Wheeler's subsidiaries, Foster Wheeler Energy Limited and Foster Wheeler Nigeria Limited, in a joint venture with National Engineering & Technical Company Limited (NETCO), a subsidiary of the NNPC executed a three-year term services contract for Chevron Nigeria Ltd.
The company's subsidiaries in the United Kingdom and Nigeria also executed a $20 million, front-end engineering and design (FEED) contract, for Chevron’s gas-to-liquids (GTL) project in Delta State .
Foster Wheeler was responsible for the FEED and the preparation of the invitation to tender for the engineering, procurement and construction (EPC) contract.
Herrieme, an international company from Holland could also not stay in Nigeria due to the restiveness in the Niger Delta.
THISDAY also gathered that Grinaker, a South African company has also withdrawn from Nigeria due to the increasing volatility of the operating environment.
Grinaker is a multi-disciplinary construction and engineering group, anchored in South Africa and focused on selected infrastructure, energy and mining opportunities in Africa .
The company has an annual turnover in excess of $ 1billion and employs some 15,000 people.
Also last week, Globestar, withdrew its workers from Warri in Delta State, after armed youth invaded its premises and killed its security adviser.
Acergy S.A. recently announced the award of a contract valued at about $50 million for the fabrication, assembly and testing of eight manifolds and support structures, 8 suction piles, 23 well jumpers and other subsea structures for Total's Usan Oilfield located offshore Nigeria on behalf of Cameron Offshore Systems Nigeria Ltd.
THISDAY gathered that this contract is being executed at Globestar Yard in Warri.
Beside kidnapping of oil workers and destruction of oil and gas installations, some chief executives of some indigenous oil services firms, who spoke to THISDAY on the matter, attributed the exodus of these foreign companies partly to lack of jobs in the oil and gas sector.
"Some companies are reluctant to come because of lack of job flow," said a CEO, who spoke on condition of anonymity.
Chairman and Chief Executive Officer of the International Energy Services Limited, Dr. Diran Fawibe, blamed the lack of jobs in the industry to the Niger Delta crisis.
He told THISDAY that the international oil companies have a lot of projects, which could not be executed due to the restiveness in the Niger Delta.
"If the oil companies are postponing projects, there will be no jobs for the oil services contractors. The Niger Delta crisis is responsible for this situation," he said.
It was gathered that the contracts mostly affected are major Engineering Services Agreement (ESA), which are projects that are above 50,000 man hours and a contract ceiling of $80 million per contractor.
THISDAY Checks further showed that Medium and Small Scale Engineering Services Agreements (MSSESA), which falls below 50,000, man hours and has a contract ceiling of $40 million per contractor, were also affected.
MSSESA has contract duration of two years, with an option for one-year extension.
Looks Like We Blew Through The 200 Day Average. eom
Kidnappings: Oil Services Firms Flee Nigeria
By Ejiofor Alike, 03.02.2009
As oil and gas producing companies operating in the Niger Delta suffer declining output forcing them to withdraw expatriate workers from the restive region due to kidnappings and militant attacks, oil field engineering contractors have also continued to flee the country, THISDAY Checks have revealed.
Investigations showed that companies from South Africa, Holland, France and the United States are involved in the latest withdrawal of companies from Nigeria .
Aside Willbross, a United States oil field services contractor, which relocated to North America last year, and Kellogg, Brown & Root (KBR), a leading global engineering, construction and services company, that withdrew few months ago, many other companies have withdrawn from the country and relocated to other countries due to the increasing wave of kidnappings and other violent crimes in the Niger Delta.
KBR is a member of TSKJ Nigeria Limited, a joint venture, which was involved in the construction of the various trains of the Nigerian Liquefied Natural Gas (NLNG) plants in Bonny Island of Rivers State.
According to investigation, Foster-Wheeler, a United States-based global conglomerate, which was incorporated in Bermuda and with its principal executive offices in New Jersey, has also withdrawn its services from the Niger Delta.
The company is focused on Engineering, Construction and Procurement (EPC) and on power projects.
Foster Wheeler's subsidiaries, Foster Wheeler Energy Limited and Foster Wheeler Nigeria Limited, in a joint venture with National Engineering & Technical Company Limited (NETCO), a subsidiary of the NNPC executed a three-year term services contract for Chevron Nigeria Ltd.
The company's subsidiaries in the United Kingdom and Nigeria also executed a $20 million, front-end engineering and design (FEED) contract, for Chevron’s gas-to-liquids (GTL) project in Delta State .
Foster Wheeler was responsible for the FEED and the preparation of the invitation to tender for the engineering, procurement and construction (EPC) contract.
Herrieme, an international company from Holland could also not stay in Nigeria due to the restiveness in the Niger Delta.
THISDAY also gathered that Grinaker, a South African company has also withdrawn from Nigeria due to the increasing volatility of the operating environment.
Grinaker is a multi-disciplinary construction and engineering group, anchored in South Africa and focused on selected infrastructure, energy and mining opportunities in Africa .
The company has an annual turnover in excess of $ 1billion and employs some 15,000 people.
Also last week, Globestar, withdrew its workers from Warri in Delta State, after armed youth invaded its premises and killed its security adviser.
Acergy S.A. recently announced the award of a contract valued at about $50 million for the fabrication, assembly and testing of eight manifolds and support structures, 8 suction piles, 23 well jumpers and other subsea structures for Total's Usan Oilfield located offshore Nigeria on behalf of Cameron Offshore Systems Nigeria Ltd.
THISDAY gathered that this contract is being executed at Globestar Yard in Warri.
Beside kidnapping of oil workers and destruction of oil and gas installations, some chief executives of some indigenous oil services firms, who spoke to THISDAY on the matter, attributed the exodus of these foreign companies partly to lack of jobs in the oil and gas sector.
"Some companies are reluctant to come because of lack of job flow," said a CEO, who spoke on condition of anonymity.
Chairman and Chief Executive Officer of the International Energy Services Limited, Dr. Diran Fawibe, blamed the lack of jobs in the industry to the Niger Delta crisis.
He told THISDAY that the international oil companies have a lot of projects, which could not be executed due to the restiveness in the Niger Delta.
"If the oil companies are postponing projects, there will be no jobs for the oil services contractors. The Niger Delta crisis is responsible for this situation," he said.
It was gathered that the contracts mostly affected are major Engineering Services Agreement (ESA), which are projects that are above 50,000 man hours and a contract ceiling of $80 million per contractor.
THISDAY Checks further showed that Medium and Small Scale Engineering Services Agreements (MSSESA), which falls below 50,000, man hours and has a contract ceiling of $40 million per contractor, were also affected.
MSSESA has contract duration of two years, with an option for one-year extension.
Shell puts cost of crude oil theft in Nigeria at 1.1b yearly
As many as 100,000 barrels of crude oil are being stolen or smuggled from Nigeria every day, representing 5 per cent of national production, according to estimates from Shell.
The Ango-Dutch oil group plans to lend Nigeria more than $3 billion (2.1 billion) in bridging loans to maintain investment and keep production flowing despite political turbulence.
Shell said yesterday that the theft of oil in Nigeria, Africa's largest oil-producing country, ranged from 20,000 to 100,000 barrels per day but may have peaked at more than this. At today's price of slightly more than $40 for a barrel of benchmark Brent crude, this equates to between $300 million and $1.6 billion (1.1 billion) a year.
Nigeria has proven reserves of 36 billion barrels - the seventh highest in the world - but the industry has been wracked by violence, corruption and crime, particularly across the volatile Niger Delta region.
One method for stealing crude oil involves boring holes in the thousands of miles of pipelines that crisscross the Delta and inserting valves - a highly risky practice that often results in explosions and deaths. Crude is also stolen by organised criminals who steal directly from the wellhead.
Stolen Nigerian crude is usually exported by barge for refining in other parts of West Africa. There is also evidence that it is shipped as far afield as Brazil and Eastern Europe.
"A lot of people have died in this illegal activity - they get terrible burns," said a source close to Shell, who estimated that local oil smugglers in Nigeria earned up to $2,000 to $3,000 per shipment. He said that stolen oil was delivered to larger, seagoing barges for onward export. "It is a very high-risk activity and there is huge pollution associated with it," said the source. "Somebody needs to resolve the social issues in the region to come down heavily on crime."
Nigeria produced about 1.9 million barrels of oil per day in January, according to OPEC figures.
The source said that Shell was paying a 30 per cent premium to operate in Nigeria because of the lack of security and the complications of doing business there.
Nigeria's Government was investigating technology to determine the origin of crude oil in an effort to clamp down on theft. "It might not eliminate everything, but it might kill off some of the demand," the source said.
Shell has been active in Nigeria, which provided more than a tenth of its 2007 oil production, since 1958 and is one of the country's largest producers, pumping oil from land and swamps in the Niger Delta and from deep-water reserves off the coast.
According To Rigzone Aban Abraham Is Drilling.
http://www.rigzone.com/data/rig_detail.asp?rig_id=680
Nigeria condemns attack on Equitorial Guinea
* MEND fingers U.S., Washington denies
From Madu Onuorah (Abuja), Kelvin Ebiri (Port Harcourt) and Francis Obinor (Lagos)
THE Federal Government yesterday dissociated itself from "whatever group that took that cowardly action" of attacking the facilities of government of Equatorial Guinea in the early hours of Tuesday.
It said that the government and people of Nigeria condemn in "very strong terms" the attack, which was initially blamed on elements of the Movement for the Emancipation of Niger Delta (MEND).
But MEND, in its response, said it suspects Western powers such as the United States of America (USA) of being behind the attack to create fear in the Gulf of Guinea to justify African Command (AFRICOM), a military project of American government.
However, the U.S. yesterday dismissed the allegations as "groundless and baseless."
American Embassy's spokesperson, Jennifer Dewitt-Walsh, told The Guardian yesterday that the allegations were not only unfounded but also inaccurate". According to her, " they are amazing and baseless."
Minister of Foreign Affairs, Chief Ojo Maduekwe, told journalists after the Federal Executive Council (FEC) meeting in Abuja that the attack "should be condemned."
The attack, he said, shows the imperative for African governments to work together to enhance the security architecture of the continent.
Maduekwe said Nigeria is "in solidarity with the people and government of Equatorial Guinea as they confront this unfortunate threat and this unfortunate action. And we hope they are able to apply the full force of law to deal with the elements that want to create problems."
Nigeria, he said, sends its "message of solidarity and congratulate them as they were able to stem the attack."
The Spanish State news agency EFE, quoted Equatorial Guinean government spokesman, Jeronimo Osa, as blaming the attack on an armed group operating in the oil-rich Gulf of Guinea in the Niger Delta. Gunmen from the region have previously launched sea-borne attacks on Cameroun and Equatorial Guinea. Osa said the attackers had arrived in motorised open wooden boats and had been repelled by Presidential Guards. Soldiers then took up positions in the streets, EFE reported. There were two casualties, but he did not say from which side.
Maduekwe said investigations by Nigeria so far "shows that authorities in Equatorial Guinea themselves are not certain about the identities of those people. But whoever they are, whether they are militants from the Niger Delta or they are mercenaries from outside Africa, this kind of act should be condemned. And it is the latest wake-up call for countries all over Africa, but particularly countries around the Gulf of Guinea, to work more closely to share information, to share facilities, to share our collective strength, in order to confront non-state actors, who wish to destabilise the region. We have the capacity to do so as countries of the Gulf of Guinea. And already, there is a lot of progress in terms of the Gulf of Guinea Commission (GGC).
"A meeting had just been concluded in Luanda (Angola). What we need to do is to get more action out of those meetings to ensure that the actual operational details of what needs to be done to ensure that this is not just a zone of tremendous prospects and emerging prosperity of oil resources but should also be a zone of peace and security."
On insinuations that the attack was engineered by militants from Niger Delta, Maduekwe said Nigeria is "united with the government of Equatorial Guinea, and indeed any other African country to confront any criminal elements on the continent that disturbs the stability of the continent. If those criminal elements are from Nigeria, that is the more reason why we have the responsibilities, not only to deal with criminal elements within our own laws, but assist any other government that itself is also on the receiving end from that kind of criminality. You also know we are facing challenges from Nigerians, who for their own machinations, for less than noble virtues, have resorted to criminal actions as a way of wanting to make a point..."
MEND was accused by the Equatorial Guinea of launching the attack on the country's presidential palace in Malabo on Tuesday, an allegation which the group has since denied.
MEND spokesperson, Jomo Gbomo, in an online interview with The Guardian, said by the accusation, there is indeed a sinister plot to discredit MEND in order to derail the emancipation of the Niger Delta.
Gbomo said: "We are also suspecting the USA of trying to create fear in the gulf of Guinea to justify AFRICOM. There is indeed a sinister plot to discredit MEND to derail the Niger Delta emancipation.
"The only stake we have in Equatorial Guinea is our feelings for the common citizens of a country still run by a despot kept in power by the oil majors and some Western countries for cheap oil. MEND was not involved in any attack there as our hands are full in the Niger Delta."
Gbomo said MEND has friends from Equatorial Guinea, who wish to see the type of change President Barack Obama of the U.S. is talking about. According to him, MEND shares their vision for change the same way they share theirs for the Niger Delta.
"Giving a dog a bad name is not new to us. If Henry Okah was free in South Africa, he would have been falsely accused. Today, it is MEND because there is no Okah to blame," Gbomo added.
On the withdrawal of the judge handling the case of Henry Okah from the matter, MEND said the best thing for the country to do is to dismiss the case for lack of merit. It added that the case against Henry was an unnecessary distraction that Nigeria cannot afford now.
Meanwhile, United Nations (UN) Assistant Secretary-General, Dr. Charles Lopse, has said that the situation in the Niger Delta is being blown out of proportion and canvassed the need to transmit the right image about the region.
Lopse, who is also the Executive Director of UNITAR, stated this yesterday at the Government House, Port Harcourt, shortly after a closed door meeting with the Rivers State Governor, Chibuike Rotimi Amaechi.
He said: "I think it is important for us to separate speculation from fact, we are on ground in the Niger Delta, so we know exactly what is going on here. There is a lot of rumour about the area but there is also something that need to be taken care of."
He explained that despite the security challenges in the region, its offices in Port Harcourt are functional, because they have assessed the situation and identified areas that are dangerous.
Nigeria Loses $3bn to Gas Flaring Yearly – Ajumogobia
By Chika Amanze-Nwachuku with agency report, 02.18.2009
Minister of State for Petroleum, Mr Odein Ajumogobia, has said Nigeria loses about $3 billion yearly to gas flaring.
Making the disclosure in a speech in Doha, Qatar, yesterday, Ajumogobia said the amount was based on a natural-gas price of $3 per thousand cubic feet, adding that huge additional revenues could have accrued from monetisation of associated gas, and expressed hope that the issue would soon be a thing of the past.
Investigations revealed that over 50 per cent of the gas associated with crude oil extracted in the country is flared. It is estimated that the country flared about 2.5 billion cubic feet daily, but the flare out has reduced to about 1.7 billion cubic feet per day.
The Federal Government had fixed December last year as the deadline to end gas flaring.
However, oil companies operating in the country had ruled out the possibility of achieving the target, and expressed doubt over how zero-gas flare could be achieved.
They listed security issues in the Niger Delta, insufficient funds and capable local fabricator, slow approval process of projects, lack of guarantee of payment for gas supplied and removal of tax holidays, as some of the factors militating against government’s effort to end gas flaring.
In a recent report released by the World Bank, oil companies in Nigeria were said to have in the recent past, been charged a total of between N20 million and N50 million (or US$150,000-370,000) annually for flaring associated gas.
However, Department of Petroleum Resources (DPR) had announced that from January 1, 2009, the penalty would be raised to $3.5 for every 1000 cubic feet of gas flared.
At a public hearing held by the Senate in November 2008 on a proposed Gas Flare bill, Senate President, David Mark, noted that the proposed fine is meager and would not be a deterrent to the companies which have continued their act with impunity.
Industry analysts have however continued to query whether any amount of fine paid by the offending corporations could ever compensate for the lives being cut short by the polluting flares since over 50 years of exploration..The gas that is flared in the oil fields of the Niger Delta is called associated gas, because it comes out of the earth along with the target crude oil and is separated from the crude to make the commodity useful.
Soldiers Repel Attack on Exxon Mobil Facility
From Chika Amanze-Nwachuku and Ejiofor Alike in Lagos, and Okon Bassey in Uyo, 02.18.2009
Government security forces on Tuesday, successfully repelled an attack by suspected militants on an ExxonMobil housing compound in Eket, Akwa Ibom State, the company said yesterday.
The attack on the Mobil Producing Nigeria (MPN)’s compound in Eket, where security measures were beefed up in December, following increasing spate of attacks and kidnapping in Akwa Ibom, reportedly took place around 2200 GMT on Tuesday.
Executive Director of MPN, Mrs Gloria Essien- Danner said in a statement yesterday that no casualties had been reported.“Mobil Producing Nigeria, operator of the Nigerian National Petroleum Corporation, (NNPC)/MPN Joint Venture, confirms that late on Tuesday February 17, government security forces successfully repelled unidentified armed men in the vicinity of the joint venture's Eket compound in Akwa Ibom State.
During the incident shots were fired,” she said.“No casualties have been reported. Investigation of the incident is ongoing. Appropriate government and regulatory agencies are being notified and are providing necessary support,” she added.
Security sources stated that Tuesday’s shooting lasted for about 30 minutes before the attackers were repelled on the waterways around the compound.Militants attacked an MPN platform off Akwa Ibom last month, while in December, the group attacked a convoy belonging to MPN, as it travelled towards the nearby Qua Iboe Terminal (QIT) in a failed kidnap attempt.Insecurity in the Niger Delta is apparent in the three main oil-producing states of Rivers, Delta and Bayelsa, but there have been a growing number of attacks in Akwa Ibom.
Industry stakeholders yesterday expressed concern that except the Federal Government takes more strigent measures to address the problem, Nigeria ’s oil production, which has suffered setback, would reduce drastically in a few years to come.
Shell Petroleum Development and Production Company (SPDC), the worse hit, had been forced to shut in production of 180,000 barrels of oil per day (“bpd) following renewed attacks on its facilities.
Armed militants, suspected to be loyalists to Kitikata, a militant leader linked with the recent killing of soldiers in the region, also on Tuesday, invaded Shell’s Nembe Creek flowstation in Bayelsa State.
They had demanded that their militia group be recognised by SPDC management as a major interest group and must be placed on a stipend of N3million monthly.
N’Delta Crisis: Shell Shuts in 180,000bpd
...As gunmen invade Nembe Creek Flowstation
By Chika Amanze-Nwachuku in Lagos, Segun James in Yenagoa and Gboyega Akinsanmi with agency report, 02.18.2009
The unabated crisis in the oil-rich Niger Delta has continued to take its toll on Shell Petroleum Development and Production Company (SPDC) and Nigeria’s oil revenue, as the company has been forced to shut in production of 180,000 barrels per day (“bpd) of oil following renewed attacks on its facilities.
Suspected loyalists of Kitikata, a militant leader linked with the recent killing of soldiers in the Niger Delta region, yesterday invaded the SPDC’s Nembe Creek flowstation in Bayelsa State.
The Nembe invasion, which took place in the early hours of yesterday, occurred barely one month after heavily armed militants stormed the crude oil loading platform in Bonny, Rivers State and shot at several vessels, which were carrying out legitimate businesses in the area. SPDC spokesman, Precious Okolobo, has, however, denied any attack on the company’s Nembe facility, saying activities were ongoing.
But Shell’s Chief Executive, Jeroen van der Veer, confirmed at a London conference that the lost production was due to the heightened insecurity in the region.
Prior to the attacks on its facilities, owing to the escalation of violence in the region in 2006, Shell was producing about one million barrels of crude oil per day.
The attacks had reduced the company’s production to about 400,000 barrels per day.
The recent shut in means a further reduction in the company’s production, a development which translates to revenue losses for the country.
Nigeria, the eighth largest crude exporter earns over 90 per cent of its foreign income from crude exports. The country had benchmarked its oil at $45 a barrel in the 2009 Budget and the new price of the crude, which stood below $36 per barrel yesterday is less than $9 above the budget target.
The upsurge in violence in the Niger Delta region has already reduced the country’s production to about 2.2 million barrels from 2.5 million barrels per day.
THISDAY had last Friday reported that oil producing companies operating in the region had suspended further redeployment of expatriate staff in the area pending when normalcy would return.
An official of Shell was last week quoted as affirming that the company had commenced preparations to evacuate its staff from the Niger Delta after a militant group issued a warning to quit the region or risk more attacks.
The spokesman had, however, stated that the company had no plans to leave Nigeria but that at the same time was not prepared to gamble with the safety and well-being of its workers and contractors.
A militant group led by Ateke Tom had accused Shell and other oil operators including Agip, the local subsidiary of Italian oil company Eni, and the Nigeria Liquefied National Gas Company of helping the Nigerian military to carry out attacks on the group's camps in Rivers State.
The dreaded Movement for the Emancipation of the Niger Delta (MEND), which threatened swooping attacks on oil companies in the region has issued a three-day ultimatum to Nigeria Agip Oil Company, (NAOC) and its sister company, Saipem, to vacate their operational bases in the region or face the wrath of the militia group.
The invasion of the multi-billion dollar Nembe Creek flowstation was said to have been repelled by soldiers on guard duties aboard the facility.
It was, however, not clear whether there were casualties during the incident, but THISDAY gathered that the gun battle with the attackers lasted several hours before the men escaped in their boats.
The armed groups were said to have left a letter chronicling a number of demands from the Shell management, prompting security agents to believe that the attackers might be local boys from the Nembe area.
The militants, in the said letter, had accused Shell of “being insensitive to the plight of the people of the area by refusing to implement agreements reached with them in various Memorandum of Understanding signed with the people”.
Part of their demands were that their militia group should be recognised by the SPDC management as a major interest group and must be placed on a stipend of N3 million monthly.
The Media Assistant to the Bayelsa State Chairman of the Niger Delta Peace and Conflict Resolution Committee, Alphine Ogoh, however, said yesterday’s incident was not an attack but that the militia group had gone to the platform to drop letter for SPDC.
Following the incident, the Joint military Task Force (JTF) has deployed more men to the facility to prevent another attack even as MEND has distanced itself from the operation.
MEND had earlier indicated its intention to resume hostilities along the creeks of the Niger Delta by ordering two Italian oil companies to move out of the region in three days.
In an ultimatum sent through an e-mail message, the group warned the two companies to take its fore warning seriously or be ready for the consequences of any attack.
MEND, which some months ago suspended attacks on oil installations in the region, had alleged that the Federal Gover-nment, in collaboration with the Italian Government was planning to wipe out the freedom fighters in the region.
Somali pirates attack 6 ships
13/02/2009 18:11 - (SA)
Kuala Lumpur - Heavily armed Somali pirates attacked six ships, including British, Indian and Singapore-managed vessels, earlier this week but all managed to escape, a global maritime watchdog said on Friday.
"In the past two days, pirates have been actively attacking vessels with intent to hijack," Noel Choong, head of the International Maritime Bureau piracy reporting centre in Kuala Lumpur said in a statement.
"It appears that favourable weather conditions in the area and the high number of hijacked vessel that have been released recently may have prompted the pirates to actively seek for new targets," he added.
But the ships - managed by Indian, British, Greek, Singapore and Philippine companies and one unknown - managed to escape from the pirates.
Choong said the strong presence of naval warships in strategic locations had prevented successful hijackings in recent weeks.
"The number of successful hijackings has been reduced due to naval activities," he told AFP.
Choong urged ships to maintain 24-hour visual and radar watches to prevent hijacks.
In one attack on Thursday in the Gulf of Aden, Choong said Somali pirates in a speed boat opened fire on an Indian-managed ship.
Evasive manoeuvres
"The master contacted naval warships. The pirate's boat came close to the vessel but aborted the attempt due to evasive actions taken by the vessel," he said.
In another dramatic attack, pirates fired rocket-propelled grenades (RPGs) at a Singapore ship in the Gulf of Aden.
"The ship's master reported that pirates fired rocket-propelled grenades at the vessel. A military helicopter responded to its distress call," he said.
Choong said six pirates attacked a Philippine ship on Wednesday off Somalia.
"Six pirates armed with RPGs and guns in a speed boat chased and fired their RPG at the bulk carrier. The vessel took evasive manoeuvres and escaped from the pirates," he said.
Choong said since January 2009, there had been 22 attacks, with seven vessels and 123 seamen being held by Somali pirates.
Japanese warships are expected to soon join a growing fleet of foreign navies patrolling what have become the world's most dangerous waters, with more than 130 pirate attacks in 2008 alone.
According to experts, a slightly lower rate of successful pirate attacks since the start of 2009 is due to a combination of weather conditions and increased navy surveillance.
Halliburton's subsidiary admits bribing Nigerian officials
FORMER engineering subsidiary of Halliburton Co, KBR Inc of Unifed States of America on Wednesday, pleaded guilty to federal charges that it paid $180 million in bribes to Nigerian officials in a decade-long scheme to secure $6 billion in contracts, according to Reuters.
Appearing in the U.S. District Court in Houston, KBR General-Counsel, Andrew Farley, admitted that the company paid bribes to high-ranking Nigerian officials between 1994 and 2004 to secure four contracts for a KBR joint venture to build and expand Nigeria's Bonny Island liquefied natural gas terminal.
Under a deal reached with the U.S. Justice Department, Houston-based KBR and Halliburton will pay a $402 million fine, of which Halliburton has agreed to pay $382 million.
The agency also indicated that in a separate settlement with the U.S. Securities and Exchange Commission, Halliburton will disgorge $177 million in profits to settle parallel criminal charges that its former subsidiary violated the Foreign Corrupt Practices Act (FCPA).
Together, the $579 million in sanctions is the highest combined settlement ever paid by U.S. companies under the act, the SEC said.
Halliburton was not directly charged with any crimes, and had agreed, as a condition for the two firms to separate in 2007, to indemnify KBR against potential fines from the federal probe, which was launched in 2003.
"KBR has agreed that Halliburton's indemnification obligations with respect to the DOJ and SEC investigations have been fully satisfied," Halliburton said in a statement.
KBR Chief Executive, William Utt, said the violations were "a regrettable and unfortunate chapter in KBR's rich and storied history," adding that none of the allegations involved current KBR managers or employees.
After a Justice Department attorney summarised the five counts in the government's case, U.S. District Judge Keith Ellison asked KBR's Farley, "Is that true?"
"Yes, your honour," Farley replied, entering a guilty plea on behalf of the company.
The bribes were paid to officials in Nigeria's executive branch as well as the state-owned Nigerian National Petroleum Corporation (NNPC), the Justice Department said.
The scheme involved partner companies from Italy, France and Japan, and huge sums of money were wired through banks in Amsterdam and New York to accounts in Monaco and Switzerland.
KBR also used shell companies in Portugal, referred to by the government as Madeira Companies 1, 2 and 3, in an effort to avoid breaking the FCPA law, the government said.
Albert "Jack" Stanley, a former KBR chief executive, pleaded guilty last September to charges stemming from the bribes and agreed to cooperate with investigators. Stanley, who had worked under former U.S. Vice President, Dick Cheney, when he headed Halliburton, will be sentenced on May 6.
Oil Companies Withdraw Expatriates from N’Delta
•Shell declares force majeure on exports
By Chika Amanze-Nwachuku, 02.13.2009
Citing the heightened insecurity, coupled with the threat by the militant Movement for the Emancipation of the Niger Delta (MEND) to declare “sweeping assault” on the Nigerian oil and gas industry, companies operating in the region may have suspended further deployment of expatriate workers in the area pending when normalcy returns.
Also yesterday, Royal Dutch Shell said it had declared force majeure on its Nigerian Bonny oil shipments owing to insecurity in the oil-rich region.
A top official of one of the major oil companies told THISDAY last night that companies had resolved to “suspend further deployment of expatriates to the area until they are satisfied that their security is guaranteed”.
He said the upsurge in criminal activities in the area has assumed a worrisome dimension and that no company is happy to see its workers abducted or even killed in the process.
According to him, the cost of doing business has since this year tripled as companies now pay more to hire foreigners to work in the area, owing to the level of insecurity.
“The truth about the matter is that foreigners are now scared of going there to work no matter how much they are offered. On our own side, we are not happy about the development and would not want our staff harmed, so we have to monitor the situation for now,” he said.
The source expressed regrets that investigation showed that those behind the dastardly act get the backing of some traditional rulers, who benefit from the ransoms paid by oil companies to free their workers.
“The militants even warn companies not to reveal that they pay to get their abducted workers freed. They threaten us that if we reveal it the next time will be bloody,” he said, asking the government to take more drastic measures to stem the tide.
It was learnt that intelligence report revealed that the militants may have resolved to “go bloody” this time around, following reports that government plans to execute those caught in the act.
To make the state safer for oil and gas operators, Governor Rotimi Amaechi of Rivers State had on Monday revealed that hostage taking would soon be made a capital offence, punishable by death.
He disclosed that the state government planned to pass a bill into law which would make kidnapping a capital offence. The Criminal Code provides a two to 10 years imprisonment for kidnapping and false imprisonment.
Confirming the declaration of the force majeure on its Nigerian Bonny oil shipment, a Shell spokesman, Precious Okolobo, said the action was prompted by the company’s inability to meet contractual obligation owing to the militancy in the area.
“It was declared with effect 1800 hours on Tuesday due to logistics challenges related to the security situation in the area. It will affect the remainder of February and perhaps March offtakes with some deferred to April," he said.
The company said a previous force majeure covering liquefied natural gas (LNG) shipments from Bonny was still in force.
The MEND, the main militant group in the region, had called off a five-month-old ceasefire almost two weeks ago and warned of a "sweeping assault" on the Nigerian oil and gas industry.
Heavily armed militants had last month invaded the crude oil loading platform in Bonny, Rivers State, and shot at several vessels, which were carrying out businesses in the area.
A security source said the gunmen, who came in speedboats, stormed the platform at about 10pm and opened fire on an oil tanker, “Front Chief”, belonging to Total Oil Nigeria Limited.
It was learnt that despite the gunfire that was unleashed on the vessel, the crewmen braved the situation and refused to allow the militants to come on board.
Apparently angry, the militants reportedly went on the rampage and shot at other vessels that were within the precincts of the loading bay.
Some of the vessels and tugboats attacked within the loading terminal vicinity included Premier Njasi, MT Front Chief and two service boats: Wax Bill and MV Gabriel.
It was learnt that some of the militants that were patrolling the area beyond the loading bay, intercepted a tugboat, which was towing a barge from Bonny to Calabar, Cross Rivers State.
The militancy in the Niger Delta started in 2005 and has worsened since 2006. The development has robbed Nigeria of its position in oil production, as the country which had been producing about 2.5 million barrels of oil per day only produces about 2.2 million barrels owing to the violence in the area.
Shell, the worse hit, had prior to attacks on its facilities had been producing about one million barrel per day. But the development has reduced its production to only about 400,000 barrels per day.
Last November 27, the company had declared majeure on Liquefied Natural Gas, following an attack on its Soku gas plant.
Okolobo confirmed last week that the force majeure had not been lifted as the repair of the damaged plant is still ongoing.
"In recent months the number of illegal connections on pipelines has increased significantly and they are encroaching on the Soku plant itself, increasing safety risks to an unacceptable level," Shell Petroleum Development Company (SPDC) said.
SPDC Managing Director Mutiu Sunmonu said the company had had to remove more than 50 illegal valves in August and September last year alone.
"Over the last few weeks, the situation has deteriorated rapidly and resulted in a situation where safety concerns dictated we had to shut in. We also approached a stage where we have questions regarding the integrity of the pipeline which we will check," Sunmonu said.
SPDC is in a joint venture with the Nigerian National Petroleum Corporation (NNPC), Total's unit Elf Petroleum Nigeria Limited and Italy's Agip.
The Soku plant, located in the swamps of the southern Rivers State, supplies some 40 per cent of the gas feed to NLNG, a project in which Shell has a 26 per cent stake.
The Nigerian National Petroleum Corporation (NNPC) holds 49 per cent in NLNG. Other significant shareholders in the gas venture are Total and Agip. NLNG supplies liquefied natural gas to markets in Europe and the United States. LNG is natural gas that has been liquefied for easy transportation.
Kidnappers Now to Face Death Sentence
•Rivers House of Assembly debates bill
From Patrick Ugeh in Abuja, 02.10.2009
Rivers State Gvernor Rotimi Amaechi has announced a number of measures to make the Niger Delta safer for operators in the oil and gas industry and others within the region.
Amaechi, who attributed the upsurge of hostage-taking in the state to the withdrawal of the military and police from checkpoints, revealed that the crime would soon be made a capital offence and punishable by death.
Speaking yesterday in Abuja during a courtesy call on the Group Managing Director (GMD) of Nigerian National Petroleum Corporation (NNPC), Mr. Mohammed Sanusi Barkindo, the governor said: “We are going to pass a bill into law against kidnapping. It is going to be a capital offence.”
The current punishment for kidnipping and false imprisonment under the criminal code is two to 10 years imprisonment.
He, however, stated that taking the operational headquarters and key infrastructural facilities in the industry away from the Niger Delta to safer parts of the country had the potential of worsening the situation, as there would be more unemployment and therefore more restiveness.
Noting that the state government did not judge the drop in kidnap cases towards the end of last year correctly, having taken it to mean that the crime had ended, he said that was what informed the withdrawal of security men from the streets.
According to him, road blocks were removed because they were causing traffic jam besides not being relevant in a civil society.
“The criminals exploited the situation and struck ceaselessly,” he said. “But we have learnt our lessons and we are back on the streets. We are doing a lot of roads. In the past, there used to be traffic jam. If it were then, the kidnappers will be stuck in traffic.”
The governor, who stated that curtailing the activities of abductors and other criminals would not be negotiable, appealed to oil companies considering relocating to other parts of the country to have a rethink.
He said relocating to other parts of the country could create a situation where facilities built outside the region would be starved of necessary fuels.
“We should not allow the oil industry economy to move out of the Niger Delta,” he pleaded. “It will intensify the problems. If you want to build an NLNG plant in Lagos and you want to take the gas from Niger Delta, you could have an empty NLNG plant without the gas getting there.”
According to him, “If the economy is located there, you can pipe gas to anywhere you want to.”
Describing the Niger Delta struggle as an issue concerning poverty and unemployment, he said: “You must encourage the oil companies to come back to Niger Delta. That will create employment opportunities, grow the economy and allow businesses to take place and eradicate the criminality that is going on.”
Amaechi called for the inclusion of provisions which will ensure the participation of many Niger Delta indigenes in the ongoing reform in the oil and gas industry.
According to him, the indigenes would be too busy to be involved in kidnapping if they were given contracts by the oil and gas companies.
Amaechi added: "If I am working in Shell, I will have no business kidnapping a white man. I’m not saying that all Niger Delta people must work in Shell, but I’m saying that anybody that is gainfully employed, whether in Shell or other companies, will not get up in the morning to kidnap anyone, the thought will not even cross his mind. It is hunger that leads to all that. This oil whether found in the Niger Delta or somewhere else is for all Nigerians. All we are saying is give us our fair chance."
Responding to a question on the security situation in Port Harcourt, Amaechi reminded Nigerians that it was very bad before he became governor.
"Before we came, they (militants) used to shoot on the streets of Port Harcourt, there was curfew in Port Harcourt, people used to raise their hands to walk the streets of Port Harcourt, there were no nightclubs and nightlife was completely dead. They had shut down the entire city. Hotel occupancy rate was like 20 to 25 per cent, while now they are reporting 60 to 70 per cent.
Barkindo, in his response, told his guest that the oil and gas industry could not employ many people because of its capital intensive nature.
He said the rate of unemployment had risen in Nigeria because schools were producing more graduates than the economy could absorb, adding that unemployment would remain a problem for the oil and gas industry and the society at large until the economy grows sufficiently.
Oil Firms Spent $3.7bn on Security in N’Delta
By Ejiofor Alike, 02.02.2009
Oil companies operating in the country jointly spent an estimated $3.7 billion on the security of their workers and installations against attacks by militants and other criminal elements in the Niger Delta in 2008, THISDAY’s investigation has revealed.
Some security contractors, who spoke to THISDAY last week during the Offshore West Africa (OWA) conference in Abuja, said the escalation of the crisis in the Niger Delta had jacked up security expenditure in the area.
It was gathered that the security situation has become so precarious that oil companies insist on heavy military presence to carry out their operations, while oil and gas workers are resigning their appointments to avoid persistent militant attacks.
However, some stakeholders have argued that if the money being set aside for security is invested in infrastructure, it will reduce militancy and criminality in the oil-rich region.
Addressing chief executives of oil companies in Lagos at the weekend, Mini-ster of State for Niger Delta, Chief Godsday Orubebe, lamented that the money spent on securing pipelines and oil workers through the Joint Task Force (JTF) and other security operatives was enormous.
“If that money is genuinely ploughed into employment generation, it will go a long way in solving the problem of militancy. A situation where only one person is a millionaire in a population of one million is dangerous,” he said.
Orubebe wondered why the oil companies could only employ 2,000 people, while the Nigerian National Petroleum Corporation (NNPC) has around 10,000 workforce.
Country Security Manager, Addax Petroleum Nigeria, Mr. Dennis Amachree, who was silent on the security expenditure for 2008 at the conference, however, admitted in a reamrk that the oil industry jointly spent $3.5 billion on security in 2007.
The Addax security boss, who is also the Chairman of the Oil Producers’ Trade Section (OPTS) Sub-committee on Security, further stated that the industry also lost $3 billion to production shut-in in 2007.
OPTS is the association of oil-producing companies operating in Nigeria.
“PENGASSAN (Petroleum and Natural Gas Senior Staff Association of Nigeria) is saying that its members might stop work if the security situation does not improve. If people are just being kidnapped so that oil companies can negotiate for their release, the situation would have been different, but the problem is that they are being killed. The situation is being worsened by some people who want it to continue because they are benefiting from it. Some people see it as a big enterprise but all of us have a collective burden to end it,” Amachree said.
According to him, the industry recorded 31 maritime attacks in 2007, while the number of attacks recorded between January and October 2008 stood at 66.
Amachree also lamented that within the first nine days of 2009, the country’s oil industry recorded 13 attacks.
Chairman and Managing Director of ExxonMobil, Mr. Mark Ward, also spoke on the security challenges facing oil companies operating in the country
He said: “Our industry has proven time and again that it will accept reasonable risk, even for projects that require massive, multi-billion dollar investments that take decades to pay out.
“But only if measures are taken that allow us operate in a secured environment. Escalating incidents of kidnapping, piracy and other violent attacks on both personnel and facilities offshore Nigeria creates concern and should continue to receive priority attention from government.
“Suffice to say that when governments provide a secure environment, additional investment is encouraged and the IOCs will focus on developing and applying new technologies to meet operational challenges.”
A security contractor in one of the companies had earlier told THISDAY that criminality had taken over the activities of the various armed groups that started as a fight for resource control.
“The companies have both armed and unarmed security operatives in and around their facilities. The armed operatives are seconded from government agencies; they are here to protect our people and installations but they don’t take directives from us. The unarmed security personnel are provided by our security contractors. We also have representatives of our global security to ensure that the local security measures that are put in place conform to international standard,” he said.
However, an Ijaw youth leader, who spoke to THISDAY, said the militarisation of the oil-rich region is not the solution to the crisis.
“There has been increased militarisation of the Niger Delta since 2003 but from Amachree’s statistics, militancy has also been on the increase. So, militarisation seems not to be the solution,” he said.
Increasing security expenditure in the region is also coming on the heels of what some stakeholders called decreasing government’s proposed expenditure for the oil-rich region in 2009 budget.
Out of the 2009 budget, government plans to spend N77 billion on infrastructural development of the Niger Delta, while securing oil workers and installations gulped $3.8 billion (N432.9 billion) in 2008.
Niger Delta Peace Ambassador, Chief Beinmonyo Rufus Spiff, said the money was not enough for the developmental projects yearning for government attention in the area.
Spiff, who is the Chairman and Managing Director of River Creek Specialist Limited, also challenged the government to define the projects it plans to execute with the money.
“The money is not enough; they should define what and what they are going to do with the money. Can the money build a road from Yenagoa to Brass or Kaiagama? Can it build a road from Warri to Forcados or from Buguma to the Swamp area? Let them define what they want to do and they will find out that it is not enough. If NDDC (Niger Delta Development Commission) alone is getting N84 billion in 2008 and the mother ministry (Ministry of the Niger Delta) will get N77 billion in 2009, definitely, that money is not enough,” he said.
O.T. FG Revokes 2 Oil Blocks •OPEC wants crude price at $60 to $80
By Alike Ejiofor, 01.30.2009
The Federal Government has cancelled an oil exploration deal it signed with a Korean Consortium, according to separate statements issued yesterday by the companies that formed the group.
This development came on the day the Secretary-General of the Organisation of Petroleum Exporting Cou-ntries (OPEC), Mr. Abdalla Salem El Badri, said a price range of $60 to $80 per barrel is “ideal” for crude oil,
The Korean consortium is now exploring legal option against the Federal Gover-nment over the cancellation of its exploration rights at two major offshore oilfields awarded to the consortium in 2005.
Korean National Oil Company (KNOC), a member of the consortium, said the Federal Government alleged that the consortium failed to make agreed payments.
But the group, led by KNOC, said they had paid $9 million in cash and offered a letter of credit to pay an additional $231 million to cover their 60 per cent interest in Oil Prospecting Licence (OPL) 321 and OPL 323.
The blocks could hold as much as 1 billion barrels, according to preliminary estimates.
“Nigeria informed our consortium that it will cancel the rights because the consortium failed to fully pay the investment that the group had agreed to honour in 2005 when the rights were awarded,” consortium members Daewoo Shipbuilding and Korea Electric Power Corporation said in a statement.
“We have met our obligations through official negotiations with the Nigerian government and can't understand the decision because the payment issue, which has never been raised in the previous government, suddenly became a matter under the current government,” KNOC also said in a statement.
“We are seeking various counter-measures including legal steps and diplomatic solutions to restore the rights or get refunded,” the statement added.
The cancellation of the rights is a gain for India’s top energy explorer, Oil and Natural Gas Corp (ONGC), as the Federal Government restored its right as the winning bidder for the two highly prospective deep-water oil exploration rights in the Gulf of Guinea.
ONGC lost out to the Korean consortium in 2005 as South Korea promised the Federal Government massive investment in infrastructure.
South Korea promised to build a 1,200-km (745-mile) gas pipeline from Port Harcourt to Abuja and 2,250 megawatts of power generation in return for the exploration rights.
The two oil fields oil are also 30 per cent owned by British-listed firm Equator Exploration and 10 per cent by a local Nigerian firm.
Equator said earlier last week that it had been also informed of the decision to restore the status of the ONGC consortium as the winning bidder, subject to their payment in full of a $485 million signature bonus within 60 days of Jan. 6, 2009.
Yesterday at the World Economic Forum Annual Meeting holding in Davos, Switzerland, the Secretary-General of OPEC hinted that OPEC would make further production cuts at its March 15 meeting in a renewed bid to shore up the price
OPEC’s argument for higher crude oil prices was supported by the Group Chief Executive of British Petroleum, Dr. Tony Hay-ward.
Oil currently hovers around $40 a barrel after hitting a record $147 June last year, putting the economies of many oil-producing countries at risk, with Nigeria’s 2009 budget in jeopardy because of the $45 benchmark. Oil revenues account for around 80 per cent of Nigeria’s income and 95 per cent of foreign exchange earnings.
“We are not happy with even $50 [a barrel] oil,” said El Badri. “We don’t want a repeat of the 1980s when we didn’t invest, had to lay off high-skilled people, didn’t invest in new capacity. We have to be ready to meet rising demand. The most important thing is the ability to invest through the downturn.”
El Badri argued that the current price would hurt oil producers and at the same time hurt investment, adding: “If we don't invest now, then we will store up a problem in three years from now when your demand picks up.”
He said a similar crisis in the early 1980s prevented investment and led to shortages when the global economy eventually recovered.
The BP boss agreed with him, saying the price of oil “has to be high enough to motivate investment going forward. When the economy picks up, demand will pick up very fast and we will quickly run into supply problems. We do need a price that allows us to continue to invest in the downturn.”
The Chief Executive of French energy giant EDF, Mr. Pierre Gadonneix, agreed with the proposed price range, but said investments would have to be made with or without the economic downturn.
O.T. Shell’s Oil Output Falls by 64 Percent
By Alike Ejiofor, 01.31.2009
Nigeria’s largest oil producer, Shell, which until a few years ago was producing about 1 million barrels of crude oil a day from its operations in the Niger Delta, saw its output decline drastically to some 360,000 b/d in 2008.
Confirming the fall in production, a company spokesman said the Shell Petroleum Development Company’s output averaged 360,000 b/d in 2008, down from 409,000 b/d a year earlier, owing to increased militancy and disruptions to its operations in the region.
The revelation is coming on the heels of a suspension of the unilateral cease-fire declared by militants in the Niger Delta after the military Joint Task Force (JTF) raided one of their hideouts yesterday in Port Harcourt, River State.
The oil major's output in the country, particularly in the Eastern region of the Niger Delta, has been severely hampered by attacks on its facilities by local militant groups in the last year.
It is believed that the Bonny Light and Sea Eagle and Forcados crude fields alone, operated by Shell in Nigeria, can produce around 800,000 b/d between them when running at full capacity.
SPDC’s company website says together with its joint venture partners it is capable of producing some 1 million b/d from Nigeria, which accounts for some 43% of the nation’s total output.
The company's output averaged 361,000 b/d in the fourth quarter of 2008 compared with an average of 409,000 b/d a year earlier.
The peak in the fourth quarter of 2007 coincided with a respite in violence between Niger Delta militant groups and the government, which allowed Shell time to carry out necessary repairs to infrastructure and ramp up production.
This calmer period was brief and attacks on facilities resumed last year forcing the company to declare force majeure - which provides legal protection for the company not meeting its contractual obligations with customers - at several locations.
“We made good progress in increasing security in the Western Delta area (in 2008) but there were some difficulties in the Eastern area," said Rainer Winzenried, company spokesman. “We hope for a return to more normal circumstances.”
Output from Shell’s Eastern and Western operations, which concentrate on onshore and shallow water concessions, precludes the company’s deepwater oil fields such as Bonga which produces 225,000 b/d.
In a related development, new security measures that have been introduced at Nigeria's offshore oil export terminals in the Niger Delta are leading to delays in the shipment of crude oil from the country, a shipping agent and industry sources have confirmed.
The enhanced security measures have been put in place by the Department of Petroleum Resources along with security agencies in the country to thwart attacks on vessels lifting oil from the terminals.
The security measures, which restrict oil loading onto shipping vessels at the terminals to only daylight hours, were imposed at the beginning of the year amid a spike in attacks on oil services vessels.
According to news agency reports, Nigeria has one of the world's highest incidence of piracy, second only to Somalia, with 10 attacks reported so far this year.
“The loading time has doubled since you can only load during half of the day,” said a shipping agent in Nigeria, who wished not to be named.
He said the terminals affected included Brass which belongs to Agip and Okwori in the Niger Delta, one of the world's largest wetlands and the heart of Nigeria's oil and gas operations.
The new regulations mean that at some terminals, vessels being loaded are required to disconnect by 1800 hours, drift a safe distance out to sea and return the following morning.
“There are tighter security operating measures going in as we speak," one industry source said, adding that loading in daylight hours was one of the steps being taken.
“The industry as a whole is looking at enhanced security at oil installations generally and export terminals specifically in Nigeria,” he said.
Violence in the Niger Delta has cut a fifth of Nigeria's oil output in the last three years. Nigeria is currently pumping about 2 million barrels of crude a day, according to Minister of Petroleum, Rilwanu Lukman.
The unilateral cease-fire, meanwhile, declared by militants in the troubled Niger Delta broke down yesterday when the JTF raided one of their hideouts in Port Harcourt.
The Niger Delta Vigilante, which has links to the Movement for the Eman-cipation of the Niger Delta (MEND), claimed that soldiers in gunboats attacked one of its camps.
In a swift reaction to the raid by the JTF, MEND called off its cease-fire and promised to resume hostilities today, warning all oil companies and their workers to vacate the region.
“The battle lasted for almost one hour 30 minutes and we were able to sink one of the double-engine boats with all the occupants,” said the faction's spokesman, who goes under the pseudonym Tamunokuro Ebitari.
There was no independent confirmation of the fighting. A military spokesman said he was making checks but did not get back as at press time. This is the first outbreak in hostilities since the start of the New Year.
Observers say the raid yesterday by JTF may be connected to the search for the militants who on Thursday killed an 11 year-old girl who was escorting her brother, eight-year-old Samuel Awolesun to school. The boy was abducted after the girl was shot dead.
The father of the kidnapped boy was identified as Mr. Samuel Awolesun and is an employee of Shell in Port Harcourt.
The killing of the girl and kidnapping of her brother occurred around 7.30 a.m. The girl allegedly tried to resist the abduction of the boy raising an alarm, which prompted her shooting. The gunmen then forced the boy into a red Honda car and sped off.
MEND declared a unilateral cease-fire last September but has repeatedly warned that it will resume attacks if provoked by the military.
It has been holding two British oil workers hostage for more than four months partly in an effort to dissuade the security forces from attacking them.
US to send pirates to Kenya
27/01/2009 09:00 - (SA)
Nairobi - The United States will hand over any suspected pirates its forces capture off the coast of Somalia to Kenya for trial, the American ambassador to Kenya said on Monday.
The US is leading anti-piracy patrols off the coast of Somalia, where piracy is flourishing off the lawless coast.
The question of where to bring pirates to justice is among the many issues frustrating naval forces struggling to curb rising attacks on merchant vessels off Somalia, where pirates made more 100 attacks on ships last year and took away millions of dollars in ransom.
US Ambassador Michael Ranneberger said it is "a little early to say how (the deal) will be implemented".
Kenyan Prime Minister Raila Odinga said Kenya signed a memorandum on the US-Kenya agreement on the pirates because the hijackings had made it riskier for ships coming to Kenya's main port, Mombasa, which is south of Somalia.
"Because of this piracy the insurance premiums for goods that are coming into our country have gone up substantially," Odinga told journalists at a joint news conference with the US ambassador.
Somalia has not had a functioning government for 18 years and does not have a coast guard or navy. The country's weak, UNbacked government has been battling an Islamic insurgency for two years.
Britain has already agreed to hand over captured suspects to Kenya.
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The first test wells in two offshore blocks in the Joint Development Zone (JDZ) shared with Nigeria are expected later this year.
The JDZ blocks in question, 2 and 4, are operated by China's Sinopec and Swiss-Canadian Addax, respectively.
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Sao Tome and Principe: Petrobras, Galp and Sonangol consortium created “soon”, says foreign minister [ 2009-01-22 ]
Brasilia, Brazil, 22 Jan - The creation of an oil consortium in Sao Tome involving Brazil’s Petrobras, Galp of Portugal and Angola’s Sonangol could soon go ahead, the archipelago’s foreign minister, Carlos Tiny, said Wednesday.
Tiny told the Lusa news agency at the end of a Brazil visit that the petroleum joint venture “is on the table and is being worked on to be wrapped up shortly.”
Previous Sao Tome governments have planned the creation of a consortium of firms from Portuguese-speaking states for exploration ventures in the islands’ exclusive economic zone.
In April 2008, Sao Tome’s then prime minister, Patrice Trovoada, said the close cultural ties between the Lusophone states would “facilitate the deal.”
Carlos Tiny said a number of Brazilian oil sector delegations are expected in Sao Tome in the first half of this year. Sao Tomean Prime Minister Rafael Branco will also travel to Brazil during the same period.
Tiny held talks in Brasilia with counterpart Celso Amorim and the minister of the special secretariat for fisheries, Altemir Gregolin, as well as officials from other ministries and bodies.
Two bilateral accords were inked during Tiny’s visit, including one to fund another stage of the Solidarity Literacy program that has already benefited over 10,000 islanders in Sao Tome since 2001.
Another pact was signed in the fisheries sector to give new impetus to three strategic sectors in Sao Tome – food security, infrastructures, water and power, and tourism. (macauhub)