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Angola is second-biggest supplier of oil to China between Jan and Oct 2009 [ 2010-01-21 ]
Beijing, China, 21 Jan – Angola was the second-biggest supplier of oil to the People’s Republic of China in the first ten months of last year, behind Saudi Arabia, providing around 15 percent of the country’s oil imports, the China Daily newspaper reported Wednesday.
Between January and October, Saudi Arabia had sales of 32.8 million tons, followed by Angola with 25.6 million tons.
Iran was the third-largest supplier, with 20.2 million tons, followed by Russia (12.9 million tonnes), Oman, Sudan, Kuwait and Iraq.
China imported a total of 204 million tonnes of oil in 2009, accounting for 52 percent of its total consumption and a rise of three percentage points against 2008.
Around 60 percent of the oil consumed each year in China, including the 190 million tons extracted in the country itself, is used to make fuel for vehicles.
Sector analysts project that the level of China’s “foreign dependence” will rise to 65 percent by 2020 and this year, according to an expert cited by China Daily, it is due to rise to 54 percent. (macauhub)
Oil prices fall further to $76.70 a barrel
Oil prices fell yesterday as easing cold weather dented demand for heating fuel, traders said.
Brent North Sea crude for delivery in March fell 93 cents to $76.70 a barrel in midday London trading.
New York's main contract, light sweet crude for February delivery, shed $1.06 to 77.96 a barrel.
Crude futures recovered Tuesday after a five-session losing streak as oil cartel Organisation of Petroleum Exporting Countries (OPEC) had forecast modest growth in world crude demand this year.
"Oil is pulling back and it's part of the volatility," said Victor Shum, an analyst with energy consultancy Purvin and Gertz in Singapore.
"The cold weather is ending in the northern hemisphere," he said.
He added that an upcoming government report on United States (U.S.) energy stockpiles was expected to show an increase, which would indicate weaker demand.
The inventories report is due for release on Thursday, one day later than normal owing to a U.S. bank holiday on Monday.
"The U.S. inventory data ... is likely to show that the demand for oil and oil products in the world's largest oil consuming country continues to be weak," added Commerzbank analyst Carsten Fritsch in a note to clients.
A strengthening greenback also weighed on oil because it makes the dollar-priced commodity more expensive to buyers who hold weaker currencies.
The euro tumbled under $1.42 yesterday as worries mounted over the outlook for the European economy in light of weak German data and Greece's fiscal woes, dealers said.
At 0540 GMT, the European single currency plunged as low as $1.4167, which was the lowest point since August 19. It later stood at 1.4190, which compared with 1.4291 late in New York on Tuesday.
The shared European unit- until recently favoured as a high-yielding currency, is now being shunned in favour of the safe-haven dollar, analysts said.
Elsewhere this week, on Thursday, market participants will digest economic growth data in China, which is the world's second biggest energy consuming nation after the United States.
"We continue to see the market consolidating above $76.50 ahead of the U.S. inventory numbers tomorrow and some macro releases towards the end of the week," said VTB Capital commodities analyst Andrey Kryuchenkov.
"The market is still looking for bottom, while overall sentiment turned slightly negative with the cold snap easing in the northern hemisphere," he added.
The OPEC oil producers' cartel said Tuesday in its January report that world oil demand in 2010 was forecast to grow by 0.8 million barrels per day (bpd) to average 85.1 million bpd.
The OPEC, which is headquartered in Vienna, pumps around 40 per cent of the world's oil supplies.
Oil prices slides as economic optimism wanes
CRUDE oil futures continued to slide yesterday, due to concerns over the economic recovery and continued milder temperatures.
Light, sweet crude for February delivery recently traded 61 cents, or 0.8 per cent, lower at $77.39 a barrel on the New York Mercantile Exchange. Prices had dipped to an intraday low of $76.76 a barrel, the lowest level since December 24. The February WTI contract is due to expire today.
Brent crude on the ICE futures exchange traded $1.02, or 1.3 per cent, lower at $76.08 a barrel.
Waning optimism over the pace of the economic recovery is leading investors to move out of riskier assets such as oil.
Some have shifted into the dollar, typically a safer, but low-yielding, asset, causing the dollar to strengthen.
This is weighing on oil prices with oil tending to fall as the greenback rises, as this makes the dollar-denominated commodity more expensive to purchase by other currency holders.
Unease over the economy remains as unemployment in the U.S. is still at record high levels, while consumers are still reluctant to spend, as evidenced by the lower retail sales reported in the U.S. last week for December.
This helped deflate oil prices alongside signals that China intends to tighten its monetary policy, which could slow its economic growth and demand for commodities.
"With concerns about the economy and the U.S. corporate earnings season, some of the economic optimism appears to have faded," said Gene McGillian, analyst with Tradition Energy in Stamford, Conn.
McGillian notes that oil market participants are also looking at the fundamental picture and seeing persistently weak U.S. oil demand as a reason for oil prices to fall.
The retreat in oil prices from to an intraday and 15-month high of $83.95 a barrel on January 11 has also been due to the evaporation of the frigid conditions that afflicted much of the northern hemisphere in early January and the emergence of milder temperatures.
"We are viewing these fresh recent lows as a portent of lower oil values as this week proceeds, given bearish domestic oil balances that are becoming increasingly burdensome as the weather patterns have shifted," Jim Ritterbusch, president of trading advisory firm Ritterbusch and Associates, in Galena, Ill., said in a note.
The Organization of Petroleum Exporting Countries (OPEC) said yesterday that oil prices remain vulnerable to seasonal demand weakness, reinforcing expectations that the group will keep output steady when it meets in March.
"The persisting stock overhang, low seasonal demand and the start of refining maintenance point to the need for continued caution over the coming months as volatility is expected to remain," said the cartel in its January report.
Traders will be looking ahead to this week's U.S. inventory data to see if stocks will post any declines and change the pattern of heavy builds seen in reports so far this year.
"If we see another build, we could see further pressure on the market," said McGillian.
The data from the American Petroleum Institute will be released a day later today due to Monday's Martin Luther King Jr. holiday while the U.S. Energy Information Administration will issue its report tomorrow.
Front-month February reformulated gasoline blendstock, or RBOB, recently traded 2.01 cents. or one per cent, lower at $2.0253 a gallon. February heating oil recently traded 2.95 cents, or 1.4 per cent, lower at $2.0165 a gallon.
Two million Nigerian vehicles to run on gas by 2015, says minister
From Alemma-Ozioruva Aliu, Benin
AS a way to reduce over dependence on petrol for vehicles, the Minister of Petroleum Resources, Rilwanu Lukeman, said the Federal Government hoped that in the next five years, at least two million vehicles would be running on Condensed Natural Gas (CNG) instead of petrol.
But the challenge would be the ability of Nigerians to afford the cost of converting engines of their vehicles to the use of gas, which cost has been put at N250,000.
Lukman made the projection yesterday in Benin, when he commissioned CNG stations that would dispense gas to vehicles that have been converted to the use of gas.
He lamented that none of the18 private companies granted licence to operate refineries had gone beyond accepting the offers.
The project, the first in Nigeria, was set up by NIPCO Nigeria Plc, a company owned by fuel marketers.
The minister said the use of gas is almost 35 per cent lower than petrol in mile to mile comparism.
He listed the advantages of converting to the use of gas to include reduced importation of refined fuel, reduction in subsidy being paid by the Federal Government, elimination of sole dependence on oil refineries, among others.
He said the CNG also offers dual fuel option to users with an installed switch, which makes vehicles to switch from gas to use petrol at will.
He said the project showed the "commitment of the Federal Government towards resolving the fuel crisis in Nigeria".
According to him, the project would enable Nigeria effectively utilise its gas reserve put at 187 trillion cubit feet, placing it as the seventh largest gas reserve in the world.
The cost of the project in the state, which included three CNG stations, a conversion workshop, was put at over $120 million.
Chairman of the company, Bestman Anekwe appealed for permission from government to build CNG stations along Benin - Lagos highway and Benin - Warri road and allotment of new gas licenses for new cities covering the east, west and northern parts of the country.
He also called on the Federal Government to subsidise the cost of conversion as is being done in other countries, to enable more interested persons who may not afford the cost of the conversion.
FG to Sell 9% Equity in Oil Firms to Nigerians
From Onyebuchi Ezigbo in Abuja, 01.20.2010
The Federal Government has said it is floating an initiative that will have part of its equity in Joint Venture (JV) oil companies thrown open for subscription by Nigerians.
Special Adviser to the President on Petroleum Matters, Dr. Emmanuel Egbogah, in an interview with newsmen in Abuja yesterday, said government plans to sell 9 per cent of its stake holding in oil companies to Nigerians in form of shares.
The presidential adviser also said as part of the post amnesty package for Niger Delta, the Federal Government had decided to cede 10 per cent of the ownership stake in the oil companies to host communities in order to ensure development in the areas.
Egbogah said the shares to be allotted to oil producing communities would be managed on their behalf by a trust company that would be established by government and made up of representatives of the communities, including fund managers who would advise on how to prudently manage the funds.
The Federal Government holds 60 per cent stake in all JV agreements, the International Oil Companies (IOCs) hold 40 per cent, except Shell Petroleum Development Nigeria Limited which holds 45 per cent, while the Nigerian National Petroleum Corporation (NNPC) holds 55 per cent.
NNPC holds 60 per cent interests in the other JV with Mobil Producing Nigeria Unlimited, Nigeria Agip Oil Company, Chevron Nigeria Limited and Elf Petroleum Nigeria Limited.
Under the proposed initiative intended to widen the ownership structure of the oil companies, host communities are to have 10 per cent stake, while nine per cent would be available for Nigerians.
Oil-producing communities are to receive 10 per cent of the net revenue profit from crude oil sales, while 41 per cent goes to the Federal Government. IOCs would receive 40 per cent of the equity in the existing JV, while 9 per cent goes to Nigerians willing to invest in the Incorporated Joint Ventures (7 per cent in the case of SPDC JV).
He said government would approach the stock market at the appropriate time for advice on how to break up the shares as well as modalities for inviting public offers.
Noting that no one would be allowed to acquire more than 0.01 per cent of the shares, he said the idea is to avoid a situation whereby one person would come up to acquire all the shares, leaving nothing to the rest of the people.
The presidential adviser explained that the new arrangement had nothing to do with the 13 per cent derivation, adding that it would serve as additional source of revenue for the oil-producing areas.
“The difference is that this time, no one else would be allowed to have access to the fund except the people for whom it was meant. It would not be run by the Federal Government; it would not be run by the state or local council, but by the people themselves, so as to make sure that the money is deployed for the developmental needs of the people,” he said.
Meanwhile, the Minister of State for Petroleum Resources, Mr. Odein Ajumogobia, yesterday said that the renewal of the shallow water licences of Shell and Chevron had not been stalled by the absence of President Umaru Musa Yar'Adua from the country.
Ajumogobia emphatically said the Minister of Petroleum Resources had the full authority under extant laws to renew leases and licences, and that this does not require any specific authorisation from the Presidency for this purpose.
In a statement signed by the Deputy Director (Press), Mrs. Florence Mohammed-Bolokor, the minister explained that Chevron and Shell were still negotiating with the Federal Government through the office of the Minister of State for Petroleum Resources over the renewal of their expired licences following the renewal of the licences of Mobil Producing Nigeria.
Oil prices rebound on stronger European equities
Crude oil futures rose yesterday, after stronger European equities helped oil prices pare losses incurred earlier in the session and during Asian trade.
The front-month February contract was trading 49 cents higher at $78.49 a barrel in European electronic trading on the on the New York Mercantile Exchange. On Friday, the contract slid $1.39 to settle at $78.
Despite the small gains, market participants remained cautious about the prospects of sustained rises in oil price, with little sign emerging of improving supply and demand fundamentals.
Trade activity is expected to be light yesterday, with a public holiday in the U.S. sidelining many participants. Oil prices garnered some support from European equity markets, which rose as higher gold and other metals prices supported basic resource stocks.
However, many participants were unconvinced that the crude oil market can break its recent bearish trend, which has seen prices retreat by almost $5 a barrel since January 6.
Adding further doubt to bullish hopes is the growth in net long positions by speculative traders, who are expected to liquidate their positions and exit the markets if crude oil prices continue their weakening trend.
"Speculative traders have been increasing their net long positions by over 80,000 contracts, a 15 per cent rise in the past month, and this could put on selling pressure should the oil price continue to drop below $74 a barrel," said Mark Pervan, head of commodity research at ANZ in Melbourne.
Separately, the prospects of increased production by the Organisation of Petroleum Exporting Countries (OPEC) is also damping sentiment. The International Energy Agency last week estimated OPEC compliance to have fallen to 58 per cent in December from 60 per cent a month earlier, indicating a further loosening of compliance by the oil-producer group to their previously agreed 4.2 million barrel-a-day cut in supply.
"We have always reiterated that excessive output is worrying, given overhang stocks and the fact that OPEC remains the key swing producer with significant spare capacity at the moment," said Andrey Kryuchenkov, an analyst at VTB Capital.
"The most important issue for the price outlook is for OPEC not to overproduce this year as swollen stockpiles do not need extra supplies at the moment."
The pricing dispute between Russia and Belarus over export duties continues to put oil flows to Europe at risk, with the latest reports suggesting Russia has diverted an oil shipment earmarked for Belarus to the Polish oil terminal of Gdansk.
The Polish port will load a 100,000-metric-tonne tanker with Russian oil at the end of January, a shipment that hadn't been earlier expected, Naftoport chief executive Dariusz Kobierecki told Dow Jones Newswires.
In other trading, the front-month March Brent contract on London's ICE futures exchange was 33 cents higher at $77.44 a barrel. The ICE gasoil contract for February delivery was $3.25 lower at $626.75 a metric ton, while Nymex gasoline for February delivery was 116 points higher at 205.70 cents a gallon.
Oil prices drop on more signs of a struggling consumer
Oil prices ran up against forecasts for warmer weather, people who won't drive or spend money and a stronger dollar.
Those factors combined for a fifth straight day of losses. Benchmark crude for February delivery slid $1.39 cents Friday to settle at $78 a barrel on the New York Mercantile Exchange. The price was down $4.75 for the week.
Government data raised more concerns about consumer spending power. The Labor Department reported that inflation-adjusted wages fell 1.6 percent last year, the sharpest drop since 1990. Energy costs were an additional burden, shooting up 18.2 percent last year - the biggest jump since 1979 - led by a nearly 54 percent rise gasoline costs.
And even as prospects remain bleak for jobs and income in 2010, energy prices are expected to rise again. On Tuesday, the government said gasoline should average $2.84 per gallon this year, up from $2.35 in 2009. For average motorists using about 50 gallons per month of gasoline, that means spending an extra $294 at the pump this year, or about $25 per month. That means fewer lattes and fast food runs or less driving. Or both.
The optimism traders had earlier in the year has been tempered by "prospects for pretty miserable demand" in January and February, said Tom Kloza of the Oil Price Information Service.
He noted that seasonal factors also hit oil prices Friday.
"Folks don't tend to drive that much or spend too much in January and February," he said.
Meanwhile, temperatures are expected to be above average across nearly all regions of the U.S. for the next 10 days, which should slow demand for heating oil.
In addition, the dollar was stronger, making it more expensive for holders of foreign currencies to purchase oil, which is priced in U.S. dollars.
Gasoline prices rose almost 3.2 cents to $2.757 per gallon to end the work week, according to AAA, Wright Express and Oil Price Information Service. Prices are about 16.3 cents higher than a month ago and about 96 cents higher than last year. Gas prices tend to lag oil prices because oil being traded now won't be delivered until next month.
Kloza predicts gas will peak at around $3 in May as more drivers hit the road in the spring and other economic activities, like construction, pick up. That could be further disincentive to spend.
"$3 is a psychological number," Kloza said. "When prices go above $3 per gallon, people cut back not just on fuel. They tend to have a real sour view of the economy."
"From a consumer perspective, there's no real reason for them to spend more," said William Baker, professor of marketing at San Diego State University. "When you look at the hit consumers have taken, the stagnant salaries and rising energy costs, it's difficult...to see any kind of sharp recovery real soon."
In other Nymex trading in February contracts, heating oil fell 3.69 cents to settle at $2.046 a gallon and gasoline slid 2.84 cents to close at $2.0454. Natural gas futures gained 10.3 cents to settle at $5.691 per 1,000 cubic feet.
In London, Brent crude for February delivery fell 71 cents to $77.11 a barrel on the ICE Futures exchange.
Oil prices hover around $80 as traders eye rising equities
OIL prices crawled up to near $80 a barrel yesterday as rising stock markets cheered crude investors ahead of fourth quarter corporate earnings reports.
By early afternoon in Europe, benchmark crude for February delivery was up 17 cents to $79.82 a barrel in electronic trading on the New York Mercantile Exchange. Earlier in the session, the contract reached $80.36 before retreating.
On Wednesday, the contract gave up $1.14 to settle at $79.65.
Most major Asian and European stock indexes gained yesterday after the Dow Jones industrial average rose 0.5 per cent Wednesday. Companies began reporting fourth quarter earnings this week with chipmaker Intel Corp. is expected to post results Thursday and banking giant JPMorgan Chase & Co. on Friday.
Oil investors often look to stock markets as a measure of overall investor sentiment about the economy.
"The stock market is maintaining its gains of 2009 but the volume traded on the NYSE remains very low and the U.S. oil demand numbers still do not show any confirmation of a demand recovery," said Olivier Jakob of Petromatrix in Switzerland.
Oil has fallen from near $84 a barrel earlier this week on signs of weak U.S. crude demand. The Energy Information Administration said Wednesday that U.S. oil inventories grew more than expected last week, despite a cold weather spell that analysts expected to boost demand for oil products such as heating oil.
"From virtually any perspective, the weekly EIA stats looked bearish," Galena, Illinois-based Ritterbusch and Associates said in a report. "Further price slippage toward the $75 area would appear likely."
In other Nymex trading in February contracts, heating oil rose 0.21 cent to $2.0967 a gallon and gasoline gained 0.72 cent to $2.0674 a gallon. Natural gas futures rose 0.3 cent to $5.736 per 1,000 cubic feet.
"Temperatures in the U.S. are expected to normalize this week, limiting the chance of higher heating fuel demand," said JBC Energy in Vienna.
In London, Brent crude for February delivery rose four cents to $78.35 a barrel on the ICE Futures exchange.
Addax Petroleum completes drilling in Nigeria-Sao Tome JDZ bloc [ 2010-01-14 ]
Houston, United States of America, 14 Jan – Addax Petroleum, the operator of bloc 4 of the Nigeria-Sao Tome and Principe joint development zone (JDZ), has completed drilling at the Oki Oriental well, the US company ERHC Energy has announced in Houston.
ERHC Energy has a 19.5 percent stake in the bloc.
The Oki Oriental well was drilled to a depth of 12,600 feet below sea level, fulfilling contract obligations for the period to explore bloc 4 in the JDZ.
The period saw four wells drilled, beginning last August. The company praised the performance of its technical partners, Addax Petroleum and the Chinese Sinopec.
ERHC Energy holds petroleum and gas assets in the Gulf of Guinea, with stakes of 22 percent in bloc 2, 10 percent in bloc 3 and 19.5 percent in bloc 4, all in the Nigeria-Sao Tome and Principe JDZ.
(macauhub)
Construction of deepwater port in Sao Tome and Principe to begin in 2011 [ 2010-01-15 ]
Sao Tome, Sao Tome and Principe, 15 Jan – Construction of the deepwater port in Sao Tome and Principe will only begin in 2011, one year later than planned, Oliver Tretout of the Terminal Link company has announced.
“Despite the downturn due to the international financial crisis, this project remains viable and solid,” Tretout told the Portuguese news agency Lusa on Thursday in Sao Tome, a day after meeting with the island country’s prime minister, Rafael Branco, with whom he discussed the project’s current status.
Preliminary work should begin this February, said Tretout, without providing further details.
Negotiations are still under way with the European Investment Bank, one of the project partners. The Terminal Link representative said “significant progress has been made.”
“Before we enter the construction phase, so to speak, there will be a number of technical jobs to do, besides finishing arrangements with the involved companies and potential project financers so that we can effectively begin the execution phase in 2011,” he added.
The deepwater port in Sao Tome and Principe “has no similarity whatsoever” and is not meant to compete with any other project of that nature in the Gulf of Guinea region, said Tretout, adding that the aim is “to complement other projects.”
The project’s overall price tag of US$570 million is to be “largely” financed by the group Terminal Link belongs to, though also by the African Development Bank (AfDB), French Development Agency (AFD) and World Bank (BM). (macauhub)
U.S. federal budget deficit hits $91.85 bln in December
08:38, January 14, 2010
The U.S. federal budget deficit totaled 91.85 billion U.S. dollars in December, reported the Treasury Department on Wednesday.
The deficit was slightly less than the 92 billion dollars that analysts had expected.
But the red ink of the first three months of fiscal year 2010 beginning from October 2009 is 16.8 percent higher than the same period of the fiscal year 2009 when it hit a record 1.42 trillion dollars.
The Obama administration expects the 2010 deficit will set a new record at 1.5 trillion dollars.
Economists worry the fiscal imbalance could push interest rates higher and raise the cost of borrowing for consumers and businesses, a potential drag on the fragile economic recovery.
The soaring U.S. federal budget has caused widely international concerns. U.S. debt holders worry that the U.S. government has no better way to get out of the debt dilemma but to devalue its currency.
The Federal Reserve has kept the interest rate at the historical low of zero level since December 2008 to tackle the economic recession. Economists do not expect that the Fed will increase the rates until next year.
Source: Xinhua
Oil prices drop before U.S. energy report
WORLD oil prices fell yesterday, dropping under $80 in New York, as traders awaited the traditional weekly snapshot of energy inventories in the United States.
New York's main futures contract, light sweet crude for delivery in February, fell 90 cents to $79.89 per barrel.
Brent North Sea crude for February was down 83 cents at $78.47 in late morning London trading.
Prices had slumped Tuesday on prospects of easing heating fuel demand in the United States due to milder weather and new moves by China to cool off its economy.
"Oil fell for the second consecutive day (on Tuesday) and is now trading below the $80 level," said ODL Markets analyst Marius Paun.
"Analysts are expecting milder weather than previously anticipated, thus denting consumption, but it was moves by the Chinese government to ease their own expansion that sent jitters through the oil markets.
"Following the impressive trade data on Monday, the People's Bank of China lifted their interbank rate for the second time in a week," Paun added.
The news stoked the oil markets because China is the world's second biggest crude consumer after the United States.
Later yesterday, at 1530 GMT, the US Department of Energy (DoE) will publish its report on American oil stockpiles for the week ending January 8.
Distillates -- including heating fuel and diesel -- are expected to drop due to recent freezing weather in the United States, which is the world's biggest energy consuming nation.
Market expectations are also for a one-million-barrel increase in crude reserves and a similar gain in gasoline or petrol inventories, according to analysts polled by Dow Jones Newswires.
Signs of weaker energy demand emerged Tuesday after the American Petroleum Institute (API) reported that US crude stocks rose 1.206 million barrels in the past week.
Gasoline reserves increased by more than six million barrels, it said, with distillate stocks including heating oil up 3.6 million barrels.
"Oil futures came off in choppy trading on Tuesday ahead of the weekly US fuel inventories report expected later today," said VTB Capital commodities analyst Andrey Kryuchenkov.
"Just like in the week before, the cold snap should take its toll on distillate inventories with a potentially hefty draw," he added.
Gas Flare Deadline Now Dec 2012
From Onwuka Nzeshi in Abuja, 01.14.2010
The House of Repre-sentatives yesterday perfected the legislative framework pegging the deadline for gas flaring in Nigeria’s petroleum sector at December 31, 2012 and also imposed stiff penalties on oil firms that may flout the new regulations.
This followed the adoption of the report of its Committee on Gas Resources on a Bill for an Act to Amend the Associated Gas Re-injection Act No. 99 of 1979 Cap. A25, Laws of the Federation of Nigeria. The report was laid before the House on July 22, 2009 but was brought forward for consideration only yesterday and considered at the level of the Committee of the Whole.
Chairman, House Committee on Gas Resources, Honourable Igochukwu Aguma explained that the deadline and accompanying penalties had become necessary in view of the health and environmental challenges posed by the continued flaring of gas in the Niger Delta region. The deadline has been shifted several times from the January 1st 1984 date provided in the principal Act which was later amended to December 31, 2008.
Also adopted was the amendment substituting the earlier penalty fee of N410.00 per standard cubic feet of gas flared. Under the new legislation, all companies are prohibited from engaging in gas flaring whether routine or continuous.
“Any company so involved shall be liable to a fine to be determined at the prevailing international gas market price and such fines shall not be counted as part of Production Sharing Contract or Joint Venture obligations. Such fines shall be in addition to the penalty for flare,” the new law stipulated.
However, a company is permitted to continue to flare gas in a particular filed or fields if the company pays the sum of $5.00 per 1,000 standard cubic feet of gas flared while a processing fee of $1000 shall be payable for every application for permit to flare gas during pre-commissioning and commissioning operations, equipment maintenance and operation upsets.
Such permission, the new said, shall be known as temporary gas flaring permission and therefore temporary gas penalty for any gas flared in excess of approved gas volumes during pre-commissioning and commissioning operations, equipment maintenance and operation upsets.
“Any company that declares an incorrect gas flared volume shall be liable to pay a penalty fee of $100,000 in addition to the payment of the difference of such declared volumes at the prevailing gas market price.
Every emergency gas flared as a result of equipment failure problems or any other reason thereof, must be reported to the regulating agency within 24 hours, failing which a fine of $500,000 shall be imposed on the defaulter,” the new law said.
N’Delta Unrest: Shell Looks Outside Nigeria for Oil Output Growth
By Chika Amanze-Nwachuku, 01.14.2010
Royal Dutch Shell,whose Nigerian operations have been hampered due to years of unrest in the Niger Delta region, said it no longer looks to its Nigerian operations to drive growth in its oil and gas output.
The company’s Chief Executive, Peter Voser in comments posted on the company's website yesterday noted that Nigeria remains a heartland for Shell, but that the company has to shift oil output growth to other region.
“Nigeria is still a heartland for Shell, but we no longer depend on it for our growth aspirations," said Voser. "This gives us more flexibility in deciding when and how to develop oil and gas resources in Nigeria.”
Shell,which has been the dominant force in Nigeria ’s oil industry for decades, may be looking to dramatically reduce its presence in the country. It is seeking buyers for ten of its Nigerian onshore oil producing assets worth between $4 billion and $5 billion in total, people familiar with the matter told the Wall Street Journal last month. China National Petroleum Corporation (CNOOC) is currently talking with the Nigerian government on the possibility of buying the assets.
THISDAY reported recently that oil majors operating in Nigeria, following what they described as lack of enabling legislation, multiple taxation, issues affecting the Production Sharing Contracts (PSCs) and insecurity in the oil-rich Niger Delta, now channel major investments to Ghana, Angola, Senegal , Gabon , Australia and Brazil.
The companies, which embarked on cost cutting, THISDAY had also reported, have put on hold further investments in major oil and gas projects in Nigeria, pending the passage of the Petroleum Industry Bill (PIB).
Although the Federal Government pledged to modify some areas in the PIB amid serious concerns expressed by stakeholders, industry sources said the multinational oil companies are still counting losses due to the financial crunch and are now interested in investing in countries where they are sure of recouping their money without delay.
Violence, kidnapping and attacks on oil installations in the oil-rich Niger Delta drastically reduced Shell's production capacity for years. Shell and Chevron, the worse hit had been forced to shut some chunk of their crude oil production
in the wake of the attacks, while their expatriates workers flee the country due to the heightened insecurity in the region.
In 2008, production averaged over 850,000 barrels of oil equivalent, according to the Shell's website. The company’s operations in the country include two major oil export terminals at Bonny and Forcados as well as 90 oilfields, 1,000 producing wells, 73 flow stations and eight gas plants.
Also in July last year, the company declared that its crude oil production had further dropped to 140,000 barrels per day,
from 999, 000barrels per day SPDC Joint Venture produced in 2003. SPDC, the largest private oil company in Nigeria operates a joint venture in which the Nigerian National Petroleum Corporation (NNPC) holds 55 per cent, Shell 30 per cent, Total 10 per cent and Agip 5 per cent. Shell’s Joint
Venture operations have the capacity to produce an average of one million barrels of oil equivalent per day.
Voser however, commended the company’s Nigeria staff, but regretted that violence in the country not only declined shell’s production but delayed a scheme to reduce gas flaring.
"Shell staff in Nigeria are doing a great job in this very difficult environment," Voser said.
"During 2009 sabotage and attacks on installations of the Shell Petroleum Development Corporation of Nigeria have again reduced production levels," and delayed a scheme to reduce gas flaring, he said.
Voser said Shell's Nigerian oil output was down to 120,000 barrels per day from 300,000 barrels per day before the,violence erupted; adding that following the amnesty, oil production levels did improve toward the end of the year and its liquefied natural gas business is performing well.
Dow Jones Newswires reports that Shell's output growth in the coming years will be driven by more unconventional energy projects, notably large LNG and gas-to-liquids developments approaching completion in Qatar.
Shell has new developments with a combined output of around one million barrels equivalent of oil and gas per day under construction, although much of this will offset natural output decline in other assets.
These technology driven projects require massive capital expenditure and Voser warned of a looming oil supply crunch if investment in the wider industry does not rebound from a big drop in 2009.
"We've seen a worldwide drop in upstream oil and gas investment of some 20 per cent. And for alternative energies the drop is even steeper, around 40 per cent. Governments and industry must work together to get back to higher investment levels.
Otherwise, we run a risk of a supply-demand imbalance in a few years time”, the Shell Chief warned.
The years of violence in the Niger Delta had reduced Nigeria’s crude oil production to below 1.3 million barrels per day from the
near 2.6 million barrels in February, 2006. But following the October 4, last year implementation of the federal government’s amnesty to thousands of militants who surrendered their weapons, resulting in a ceasefire, crude oil production including condensate had increased to about 2.2 million.
However, three British nationals and a Colombian were last Tuesday morning kidnapped by yet-to-be identified gunmen near
Port Harcourt, Rivers State in the renewed violence in the Niger Delta region. A Nigerian security officer was killed in the incident, which comes four days after an unidentified group blew up Chevron’s Makaraba-Utonana pipeline in Delta State , forcing the company toshut in 20,000 barrels per day of crude oil production.
China has ended America's century-long dominance as the world's biggest car market after vehicle sales jumped 46 per cent last year.
It is a hugely symbolic blow to the standing of the US as a nation renowned for the mass production of cars, which began with the Model T Ford.
China raced into the top spot after selling a record 13.6million cars and trucks last year, according to figures from the China Association of Automobile Manufacturers.
This trounced the US's annual sales of 10.4million - the lowest figure in 27 years. To add insult to injury, America's crown slipped as the annual showcase event for the US auto industry, the Detroit Motor Show, kicked off.
Chinese car manufacturers such as Geely, Shanghai Automotive and Chery may not be household names in the West, but some are beginning to venture on to the global stage for the first time.
Geely is on the verge of snapping up the Volvo marque from Ford, while Sichuan Tengzhong Heavy Industrial, an obscure machinery maker, has agreed to take over Hummer from General Motors.
Oil prices fall to near $81 on reports of warmer weather
OIL prices fell to near $81 a barrel yesterday on expectations that the frigid cold spell in parts of the U.S., Europe and Asia will ease in coming weeks, weakening crude demand.
By early afternoon in Europe, benchmark crude for February delivery was down $1.16 cents to $81.36 a barrel in electronic trading on the New York Mercantile Exchange.
On Monday, a weakening U.S. dollar helped push the contract to a 15-month high near $84 a barrel before it settled down 23 cents at $82.52.
Crude prices have jumped from $69 a barrel a month ago as cold winter weather, especially in the U.S. Northeast, boosted demand for oil products such as heating oil. Forecasters now expect those freezing temperatures to rise the rest of this month.
"The bullish impetus off of the dollar weakness was largely offset by warmer Northeast temperature expectations for the next couple of weeks," Galena, Illinois-based Ritterbusch and Associates said in a report.
The focus on weather patterns seemed to indicate that the basic market forces of supply and demand could be increasing their effect on prices, which have been much more exposed to external factors lately.
"It was both interesting and satisfying to see weather trump last year's trump cards of a weaker dollar and stronger equities," said a report from U.S. energy consultancy Cameron Hanover. "It is premature to proclaim a return to a more fundamental market, but it was nice to see."
Oil prices were also under pressure yesterday from a stronger dollar, which makes oil more expensive for investors holding currencies losing ground to the greenback.
In midday European trading, the euro was down to $1.4475 from $1.4519 late Monday in New York.
In other Nymex trading in February contracts, heating oil fell 1.72 cents to $2.1629 a gallon and gasoline slipped 0.87 cent to $2.1340 a gallon. Natural gas futures lost 4.1 cents to $5.413 per 1,000 cubic feet.
In London, Brent crude for February delivery fell $1.14 to $79.83 a barrel on the ICE Futures exchange.
Dat: Gas Under Pressure Is A Liquid.
Zero in on "into geologic and fluid models. Don't fluid models indicate oil, but not gas? Natural gas is not a fluid. If so, I like fluid models!
Oil prices rise above $83 amid strong Chinese demand. January 12, 2010
OIL prices jumped above $83 a barrel yesterday amid signs of strong Chinese demand for crude, a weakening U.S. dollar and a strong flow of speculative funds into commodities.
By early afternoon in Europe, benchmark crude for February delivery was up $1.09 to $83.84 a barrel in electronic trading on the New York Mercantile Exchange. On Friday, the contract rose nine cents to settle at $82.75.
China said Sunday that oil imports rose 14 per cent last year to a record high in December, part of a 56 per cent surge in overall imports last month. The better than expected Chinese figures helped investors brush off Friday's disappointing U.S. jobless report, which showed the economy lost 85,000 jobs in December and the unemployment rate was steady at 10 per cent.
A weaker dollar also helped boost oil prices, as investors buy commodities as a hedge against inflation while crude priced in dollars becomes cheaper in other currencies.
The euro rose to $1.4522 yesterday from $1.4430 on Friday while the British pound advanced to $1.6163 from $1.6032 and the dollar fell to 92.39 Japanese yen from 92.64 yen.
Crude prices have spiked 20 per cent in the last month as a rash of cold winter weather in parts of the U.S., Europe and Asia boost demand for oil products such as heating oil.
Amplifying the effects of the frigid climate was a surge into commodities of speculative money with little regard for the basics of supply and demand.
"Investors might be overvaluing and thereby multiplying the impact of cold temperatures," said JBC Energy in Vienna. "To make a significant impact the chilly weather will have to remain with us for months and not weeks."
Analysts at Britain's KBC Market Services said that rising oil prices were the result of speculative decisions, not market fundamentals.
"If prices continue to rise next week, it will be tempting to conclude that we are back in the casino-like oil market conditions we saw in 2008," KBC said in a report. Oil hit a record high of $147 a barrel in July 2008.
Supplies were threatened in Nigeria, where unidentified gunmen attacked a Chevron Corp. crude oil pipeline, cutting production by 20,000 barrels a day, a company spokesman said Saturday.
"While this highlights that Nigeria is still a volatile environment, we are not back to the previous scheme of militancy," said Olivier Jakob of Petromatrix in Switzerland.
In other Nymex trading in February contracts, heating oil rose 2.66 cents to $2.2269 a gallon and gasoline gained 3.58 cents to $2.1911 a gallon. Natural gas futures were down 19.1 cents to $5.558 per 1,000 cubic feet.
In London, Brent crude for February delivery rose 99 cents to $82.32 a barrel on the ICE Futures exchange.
Oil prices hit 15-month high
Tue, 05 Jan 2010 00:14:34 GMT
Oil prices have surged to the highest level in 15 months, hitting $81 a barrel due to the cold weather in the United States and Europe.
US sweet oil for February delivery rose $2.15 to $81.51 on Monday while London Brent crude increased $2.19 to settle at $80.12.
New projections estimate a 21 percent increase in US heating demand compared to normal consumption because of the current frigid temperatures.
"Cold temperatures in the US, part of a global cold front, and a weak dollar are driving oil prices higher," Phil Flynn, an expert at PFGBest Research in Chicago, told Reuters on Monday.
In addition, oil dealers said a report about a halt in Russia's oil supply to Belarus also helped push prices higher — a claim denied by Minsk.
DB/HGL
Sao Tome and Principe’s GDP rises 4 to 5 pct in 2009 [ 2009-12-31 ]
Sao Tome, Sao Tome and Principe, 31 Dec - The governor of the central bank of Sao Tome and Principe said that the Sao Tome Gross Domestic Product (GDP) had seen growth of between 4 and 5 percent in 2009.
Luis de Sousa said that the construction, retail and communications sectors, along with foreign direct investment, had driven the archipelago’s economic growth, which was still considered to be “insufficient to ensure quality and social well being,” of the population.
The governor of the central bank noted, however, that “the contribution of the agricultural sector to national economic growth remains quite weak."
According to Luis de Sousa, inflation was at it lowest for the last seven years, at between 15 and 16 percent.
For 2010 the Sao Tome banking authority projects economic growth of between 4 and 5 percent, a drop in annual inflation to between 10 and 11 percent and maintenance of national reserves at a minimum of four months of goods and services imports.
“The exchange rate of the dobra, via fixed parity with the euro, which will come into force on 1 January, 2010, is a way of providing greater confidence, stability and opportunities to the Sao Tome economy,” the governor said. (macauhub)
Opec oil output hits a 2009 high in Dec
Compliance with supply curbs slips to 58%; Total Opec oil output highest since December 2008; Nigeria, Saudi, Angola, UAE seen pumping more
Reuters/London
Opec oil supply rose in December to a 2009 high led by Nigeria and smaller rises elsewhere in the group, further eroding compliance with agreed output targets, a Reuters survey showed yesterday.
Supply from the 11 members of the Organization of the Petroleum Exporting Countries with output targets, all except Iraq, rose to 26.62mn barrels per day (bpd) from a revised 26.53mn bpd in November, according to the survey of oil firms, Opec officials and analysts.
The survey implies Opec has made 58% of promised supply cutbacks, down from 60% in November. Opec’s compliance is unlikely to improve for as long as members can pump out more oil without denting the rally in prices.
“We have no change in our attitude that Opec is producing too much,” said Paul Tossetti, senior energy adviser at PFC Energy. “They have asked for more adherence to the targets but they are unlikely to get it from Nigeria or Angola.”
Opec kept its official output limits unchanged at a meeting on Dec. 22 in Angola and called for more compliance. A year ago, it agreed to cut supply by 4.2mn bpd in response to lower demand and prices.
Supply from the Opec-11 was 1.78mn bpd higher in December than their target of 24.84mn bpd, the survey found, meaning the group lowered output by 2.42mn bpd of the promised curbs.
That gave the 58% compliance rate, which brings the group’s level of adherence with its output limits below its historical average of 60% and far short of its peak of 81% in April and March this year.
Output from all 12 Opec members rose to 29.12mn bpd, the highest since December 2008 according to Reuters estimates because of a small increase in supply from Iraq.
Nigerian supply rose by 60,000 bpd as exports continued to recover after a lull in disruptions caused by militant attacks.
January’s output was expected to be even higher based on shipping schedules.
Output from Angola resumed its rising trend in December, but loading programmes suggested supply in January will be lower. The country is the least compliant in percentage terms with Opec output targets.
Saudi Arabia, Opec’s top producer, nudged supply up to 8.16mn bpd, the survey found. Buyers of the its crude said Riyadh allocated more to Asia but maintaining steady to lower volumes to Europe and the US.
The United Arab Emirates raised supply to some customers in December, according to the survey.
Iran’s output was 410,000 bpd above target in December, the most in absolute terms of any member.
Venezuelan output was lower, reflecting technical problems at some of its crude upgrading plants.
The 12 Opec members together pump more than a third of the world’s oil.
Yesterday, oil steadied above $79 a barrel in thin holiday trade, poised for the biggest annual climb in a decade, a year after posting huge falls as the global economic crisis sapped demand.
Crude prices were supported by data from the US Energy Information Administration (EIA) that showed declines in crude oil stockpiles last week, boosting expectations of demand recovery in the world’s largest energy user.
US crude for February delivery rose 34¢ to $79.62 a barrel by 11:18 1618 GMT, its seventh straight session of gains. Prices have risen 14% in just over two weeks. London Brent crude rose 31¢ to $78.34.
“Momentum seems to run out near $80 as market participants ponder the conundrum of whether or not a sustainable recovery is actually underway,” Mike Fitzpatrick, vice president at MF Global in New York, said in a note.
US oil futures were on track for the sharpest annual percentage gain since 1999 but remained almost half the all-time high of $147.27 hit in July 2008.
After sliding to a five-year low under $33 at the end of 2008, oil prices staged a steady climb to a high of $82 in October this year, making the annual average $62.
Oil’s near 80% rise this year was part of a broad-based rally across commodities and equities as investment returned to markets drained by the global economic recession.
“While it was nominally a very strong year for commodities, it was a relative weak year for passive investors,” said Olivier Jakob, oil analyst at Petromatrix.
Nigeria's capital market records world's worst performing index in 2009
By Femi Adekoya
The All-Share Index on the Nigerian Stock Exchange (NSE) ended the year yesterday with 20,827.17 points, making it the worst performing equity index worldwide, despite a bullish rally on the New Year eve.
The assessment was contained in a Bloomberg report, which reviewed 91 largest indexes across the globe.
At a time when other economies were recovering from the global economic downturn, the Nigerian capital market was still struggling within the crisis.
Although, a lot of reasons have been attributed to the slow pace of the nation's capital market's growth, prominent ones among the events that almost dragged the economy to its knees included the fall in the global oil prices, the effects of the just concluded audit in the banking industry by the Central Bank of Nigeria, declining rate of Foreign Direct Investments (FDIs) in the country, sagging confidence of investors in the capital market, systemic failure on the part of regulators and wrong fundamentals presented by some listed equities on the Exchange.
Giving a review on capital market activities in 2009, the Chairman, Association of Stockbroking Houses of Nigeria (ASHON), Mr Rasheed Yussuff said that Nigeria was still recording a slow pace in the growth of its capital market because proactive measures were not taken when the economic downturn hit the country.
According to him, "while other countries were busy addressing the issues affecting their economies, Nigeria was indulging in trading blames, thus worsening the market situation in 2009. Our expectations for 2009 were high, but events did not really favour the capital market".
He added that there is need for government to pass into law a bill that will help revive the economy, saying, "in developed countries, the governments have taken proactive steps in reviving their economies and their capital markets. I can only pray that our policy makers and government pass into law a bill that would help revive the economy. Instead of taking proactive approaches, the government in Nigeria has been placing blames and diagnosing the problem of the economy".
He however warned that the impact of neglecting the capital market is being felt across all sectors of the economy and may linger on if the government does not address it immediately.
Sao Tome and Principe’s GDP rises 4 to 5 pct in 2009 [ 2009-12-31 ]
(Merry New Year Everybody R.M.)
Sao Tome, Sao Tome and Principe, 31 Dec - The governor of the central bank of Sao Tome and Principe said that the Sao Tome Gross Domestic Product (GDP) had seen growth of between 4 and 5 percent in 2009.
Luis de Sousa said that the construction, retail and communications sectors, along with foreign direct investment, had driven the archipelago’s economic growth, which was still considered to be “insufficient to ensure quality and social well being,” of the population.
The governor of the central bank noted, however, that “the contribution of the agricultural sector to national economic growth remains quite weak."
According to Luis de Sousa, inflation was at it lowest for the last seven years, at between 15 and 16 percent.
For 2010 the Sao Tome banking authority projects economic growth of between 4 and 5 percent, a drop in annual inflation to between 10 and 11 percent and maintenance of national reserves at a minimum of four months of goods and services imports.
“The exchange rate of the dobra, via fixed parity with the euro, which will come into force on 1 January, 2010, is a way of providing greater confidence, stability and opportunities to the Sao Tome economy,” the governor said. (macauhub)
Nigeria to raise crude oil exports by 1.7 per cent in February
* Govt bans sale of unwholesome lubricants
From Collins Olayinka, Abuja, with Agency Reports
Nigeria, a favoured supplier of crude oil to refiners in United States of America (USA) has unfolded plans to increase its export volume by about 1.7 per cent a day in February, against the January profile, going by preliminary loading schedules obtained from online sources yesterday.
And come next month, engine lubricants would no longer be sold or retailed from bulk containers. Rather, approved branded packaged products would be offered end-users.
The initiative was aimed at outlawing unwholesome products in outlets throughout the country.
Shipments of Nigeria's 14 biggest crude grades will average about 1.965 million barrels a day, or a total of 55 million barrels a day.
The schedules include at least four cargoes of Forcados, delayed from January, or 1.931 million barrels a day will load in that month.
Nigerian crude is the light, sweet variety of oil favoured by refiners for the quantity of gasoline it produces.
Production is rising as the country restores output shuttered by rebel attacks earlier this year.
The schedules for Pennington, Okono, EA and Abo crude exports in February are not available.
In January, exports of those grades are scheduled to average 203,226 barrels a day. Loading programmes are subject to change.
Nigeria has an Organisation of Petroleum Exporting Countries' production target of 1.673 million barrels a day.
The Minister of Petroleum Resources, Dr. Rilwan Lukman, gave the directive on lubricants' sale yesterday, in Abuja, in an address to the Ministerial Committee charged with the responsibility of sanitising the lubricant market.
Already, the minister said he has directed the Department of Petroleum Resources (DPR) to ensure that all marketers comply with the directive and the department has been mandated to ensure that all lubricant-dispensing tanks are disposed of appropriately.
He equally maintained that any marketer who fails to comply will be made to face the full wrath of the law.
The minister explained that the directives were in the nation's interest as it had become necessary to protect equipment, engines and machinery against unwholesome handling of base oils, which serve as raw materials for lubricant production.
Lukman therefore said it was imperative for government to address these issues in order to safeguard the lifespan of engines and equipment, which are used for production of the nation's wealth.
He also noted that the unwholesome disposal of these lubricants by some retailers posed danger to the environment and ultimately could endanger human health in the long run.
The ministerial committee comprises DPR, Standard Organization of Nigeria (SON), major and independent lubricant manufacturers, automotive technicians association and the lubricants marketers.
In line with its mandate, the committee would soon embark on an awareness campaign to educate the public on the expected changes in the market.
In a related development, the minister disclosed that the Federal Government has fashioned out a new strategy for the development of the Liquefied Petroleum Gas (LPG) otherwise known as 'cooking gas' market in the country, owing to the low usage of domestic gas the country.
He stated this recently at the first Nigerian Summit on Liquefied Petroleum Gas (cooking gas), in Abuja.
Lukman revealed that the new initiative is premised on the primary objective of incorporating LPG in the nation's energy mix, with view to using it as the main driver of our new deregulation policy in the downstream sector.
The new plan, according to him, will result in growing LPG consumption in the country from the current low level of about 80,000 metric tonnes yearly to over five million metric tonnes yearly in the next five years.
Lukman noted that LPG is an important component of the energy mix of many countries in the world.
In Nigeria, particularly in the late 80s and early 90s, demand grew rapidly from 34,000 metric tonnes in 1980 to about 129,000 metric tonnes in 1990. Subsequent years however witnessed significant decline at an average of about 13 per cent yearly, reaching a trough of 43,000 metric tonnes currently.
LPG is used mostly in Nigeria as a domestic cooking fuel. The per capita yearly consumption for the country is put as 0.5 kilogram, which is believed to be the lowest in the West African sub-region, which has an average of 3.7 kilogram. The low per capita LPG consumption in Nigeria, reputed as one of the lowest in Africa, is an issue of great concerns to the government.
Happy Christmas & Merry New Year To Everybody.
Streamer Still Showing $.49 Bid & $.70 Ask. But these numbers have a tendency to become askew at closing time.
IMHO This Would Be The Wrong Time To Get Any Good News. Look at shares traded today & the chart for the last 5 or 10 years. This is a lackluster time of year for ERHE. Better for us to get our good news late Jan or Feb when interest normally picks back up again. Returning interest + good news will take us over a dollar & beyond.
China eyes Shell's Nigerian oil fields
Daily Mail
22 December 2009, 9:52am
A state-owned oil company from China has been identified as the most likely buyer of Royal Dutch Shell's Nigerian oil fields.
Analysts believe the China National Offshore Oil Corporation is the frontrunner for Shell's onshore assets which are expected to be auctioned off early next year for £3bn.
Shell, which has made public its concern about safety in the resource-rich but volatile nation, will not comment and Nigerian officials said yesterday they were unaware of any sales process.
CNOOC has identified 23 oil licences in Nigeria in which it would like to buy stakes, including some owned by Shell.
Panmure Gordon energy analyst Peter Hitchens said CNOOC's first priority was to secure supplies of crude on behalf of the Chinese nation while Shell's shareholders were concerned by return on capital.
Hitchens said: 'Shell have had a torrid time onshore in Nigeria to get reserves out. CNOOC has less of a reputation to protect and is more able to take a longer view and even sit on the reserves for a few years knowing they are there.'
A spokesman for CNOOC would not comment.
Asia's biggest refiner, Sinopec - also from China - is believed to be another contender while local company Oando and UK-listed Afren have also been identified along with a number of Indian oil companies.
OPEC Maintains Output, Seeks Better Compliance with Quotas
By Chika Amanze-Nwachuku with agency report, 12.23.2009
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For the fourth time this year, the Organisation of Petroleum Exporting Countries (OPEC) agreed yesterday at its ministerial meeting in Launda, Angola to keep its production quotas steady, with a call to members to improve their compliance with production cuts agreed upon last year. Most OPEC ministers had prior to the meeting noted that they expected the group to keep production targets unchanged in view of the current oil prices, which they said are at comfortable levels.
The 12-member organisation wants to trim the oil inventories, which has remained at high levels by encouraging members to improve their compliance with the combined 4.2 million barrels a day of output cuts they agreed upon late last year. The agreement, they believe, would stop a steep plunge in oil prices as economic recession eroded demand for petroleum products. The groupfs initial compliance with tightened quotas was strong, but it has slipped this year as oil prices have returned to historically high levels.
Dow Jones Newswires reported that the OPEC ministers after a review of the oil market outlook resolved to work to improve their discipline with existing quotas. The Newswires also quoted OPEC Secretary General Abdalla El-Badri as saying that he wants to see members increase their compliance to more than 75 per cent of the agreed output curbs. In a release issued at the end of the meeting, the group noted that although asset market prices had rebounded and economic growth had resumed in some parts of the world, it is not yet clear how strong or durable the recovery might be.
It however resolved that gwith the world still faced by shrinking industrial production, low private consumption and high unemployment, the conference once again decided to maintain current oil production levels unchanged for the time beingh. gHaving reviewed the oil market outlook, including the overall demand/supply projections for the year 2010, in particular the first and second quarters, the conference observed with great concern that, whilst the worst of the recession appears to be over, the world economy remains confronted with the deepest, most wide]spread contraction since the 1940fs.
For the first time since the early 1980s, world oil demand has declined for the second successive year. gMoreover, although asset market prices have rebounded and economic growth has resumed in some parts of the world, it is not yet clear how strong or durable the recovery might be. With the world still faced by shrinking industrial production, low private consumption and high unemployment, the conference once again decided to maintain current oil production levels unchanged for the time being. gIn taking this decision, member countries repeated their commitment to the individually agreed production allocations, as well as their readiness to rapidly respond to any developments which might place oil market stability and their interests in jeopardy.
The secretariat is to continue closely monitoring the market, keeping member countries abreast of developments as they occur. The situation will be reviewed at the next ordinary meeting of the conference,h the statement read. However, heads of delegation reiterated OPECfs statutory commitment to providing an economic and regular supply of petroleum to consuming nations whilst stabilising the market and realising the organisationfs objective of maintaining crude oil prices at fair and equitable levels, for the future well]being of the market and the benefit of both producers and consumers.
The group also renewed its call on non]OPEC producers/exporters to cooperate with the organisation to support oil market stabilisation, the restoration of market equilibrium being a burden which OPEC member countries are unable to bear alone. OPECfs next ordinary meeting comes up on March 17, 2010 in Vienna, Austria.
"rich resources of their Joint Development Zone (JDZ), particularly the Gulf of Guinea"
"and to further explore the rich natural resources in their JDZ"
Which They're Going To Protect With Military. Sounds To Me Like They Know What's Down There.
Nigeria, Sao Tome Plan Joint Military Commission
From George Oji in Abuja, 12.22.2009
Nigeria and the Republic of Sao Tome and Principe have agreed to set up a Bilateral Military Commission (BMC) to safeguard the joint exploration of the rich resources of their Joint Development Zone (JDZ), particularly the Gulf of Guinea.
Vice President Goodluck Jonathan on behalf of President Umaru Musa Yar’Adua came to this agreement with the visiting Prime Minister of Sao Tome and Principe, Joachim Rafael Branco, at the Presidential Villa, Abuja at the end of Branco’s two-day official visit to Nigeria.
A communique issued at the end of the closed-door talks indicated that, apart from the BMC, both countries are to also establish a bi-national Commission and will strengthen their relations through joint commission meetings.
“Both leaders expressed optimism that the Joint Development Authority would continue to constitute a platform for development cooperation between both countries and to further explore the rich natural resources in their JDZ,” it added.
They also underscored the need for more high-level official visits, facilitation of trade missions and exhibitions as well as exchange of information as part of confidence building measures.
In response to Branco’s request, Nigeria agreed to collaborate with Sao Tome and provide assistance in agricultural research and exchange of information and agricultural materials.
In the communique, Branco expressed appreciation for Nigeria’s sustained friendship, solidarity and partnership for Sao Tomean socio-economic development while thanking the Nigerian authorities for the warm reception he was accorded on the two-day visit.
The communique was signed by Nigeria’s Minister of sate II for Foreign Affairs, Bagudu Hirse and the Foreign Affairs Minister of Sao Tome and Principe, Carlos Alberto Tiny.
Shell Can’t Sell Oil Fields, FG Declares
By Ejiofor Alike with agency report, 12.22.2009
The Federal Government has said Royal Dutch Shell Plc has no powers to sell the assets it owns jointly with the Nigerian National Petroleum Corporation (NNPC). The Shell/NNPC Joint Venture covers 90 oil fields, spanning 30,000 square kilometres, 72 oil-pumping stations, 10 gas plants and two major oil export terminals at Bonny and Forcados, according to a company fact-sheet. Sunday Times of London had reported that Shell planned to sell fields valued at up to $5 billion as Nigeria prepares to impose harsher terms on foreign operators and hand greater control to domestic oil firms, through the Petroleum Industry Bill (PIB), currently before the National Assembly. Potential buyers may include China’s Sinopec and Nigeria’s Oando Plc, the newspaper said. But the Minister of Petroleum, Dr. Rilwanu Lukman, said yesterday that the company would need government’s approval to sell the oilfields. “It’s not theirs to sell,” Bloomberg news agency quoted Lukman as saying by phone from Abuja yesterday.
“They’re holding concessions given them by the government,” Lukman added. The minister insisted that Shell would require government’s approval before pressing ahead with a sale, adding that no such request had been made, as far as he is aware. Wendel Broere, a spokesman at The Hague-based Shell, declined to comment, according to Bloomberg. Minister of State for Petroleum, Mr. Odein Ajuomogobia, also told journalists in Lagos yesterday that government was not concerned over plans by other oil companies to sell their assets in the country owing to the harsh terms contained in the PIB. He argued that the world is a big place; as one company is leaving the country, another one is coming into the country.
“You know we are a sovereign country; we make our laws for ourselves and for those foreigners, who wish to do business with us. We will take account of international norms and practices to ensure that our laws are favourable for investment. It is in our own interest to have laws that attract investment. So, we will do everything we can to make sure that the PIB, when it is passed into law, is a law that makes Nigeria destination for foreign investment. Now, if there is any group of investors, who feel that the laws we make do not serve their interests – the world is a very big place and as one goes, another comes. So, I am not really concerned about that,” he said. Ajumogobia also told Reuters yesterday that Shell, Europe’s largest oil company, had not informed the government of any such plans.
“It is indeed curious, if the reports making the rounds in this regard are true, that Shell seem so keen on renewing their expired shallow water leases. We certainly intend to make a formal inquiry,” he said. Shell’s operations were the worst hit by the activities of militants in the oil-producing Niger Delta that started in 2006. The reform bill presented by President Umaru Musa Yar’Adua to the National Assembly seeks to give the government greater powers over oil concessions while raising taxes paid by energy companies. Licences for 16 fields operated by Shell, Exxon Mobil Corporation, Total and Chevron Corporation in the past four decades are currently up for renewal.
Only ExxonMobil, world’s largest publicly-traded oil company, has so far obtained a renewal for three licences while Shell and Chevron are continuing negotiations with the government. THISDAY reported that worried by uncertainty in the PIB, more International Oil Companies (IOCs) had suspended new investments, especially in deep offshore, where the controversial PIB imposes stiffer conditions on the operators. It was gathered that the unresolved issues in the bill and the uncertainty over its passage have forced the IOCs to adopt a “wait – and – see” attitude on new projects, with some of the companies making moves to relinquish some of their assets.
Uncertainty over the content of the PIB was also a source of worry to both local and foreign operators, who identified the circulation of many versions of the bill, provision for higher royalty payments, multiple taxes on profits and revenue sharing as main areas of dispute. The operators are also opposed to the provisions, which allow the government to renegotiate old contracts, impose higher costs on oil companies and retake oil fields that oil companies are yet to explore. With these provisions, the deep offshore assets of Shell, Chevron, ExxonMobil and Total are being threatened.
Shell to sell Nigerian oilfields
(UKPA) – 18 hours ago
Oil giant Royal Dutch Shell is set to sell oilfields worth up to 5 billion US dollars in Nigeria as part of a shake up of operations in the country, it has been reported.
The sale comes as the Nigerian Government prepares to impose harsher terms on foreign operators from next month in a bid to hand greater control to domestic companies, according to the Sunday Times newspaper.
The oilfields in question, which are thought to have been valued at up to 5 billion US dollars (£3.09 billion), are mainly in the western part of the country, and include fields that are producing oil, as well as development ones and ones that have been shutdown due to violence.
It is understood that the group is not planning to sell its offshore fields, which are less vulnerable and have more generous royalty terms.
Sinopec, a state-owned Chinese oil group, is reported to have requested information on the fields, while Nigeria's largest independent oil group Oando and London-listed Afren are also thought to be interested.
The move to reduce its operations in Nigeria represents a significant policy shift for Shell, which is the largest western oil firm in the country, where it has had operations for 70 years.
However, it has encountered significant problems there, including illegal tapping, piracy, the sabotage of pipelines and a campaign of violence against foreign workers.
As a result, it has invested billions of pounds in other locations in recent years to reduce its dependence on Nigeria.
No-one from Shell could be contacted to comment on the report.
Meanwhile, Reuters reported that a group led by Shell had signed a deal to develop Iraq's giant Majnoon oilfield.
OPEC to hold quota as prices near $75
ORGANISATION of Petroleum Exporting Countries (OPEC), the producer of 40 per cent of the world's oil, will probably maintain its output quotas at next week's meeting as prices trade close to members' $75-a- barrel target, a Bloomberg News survey showed.
All 36 analysts surveyed said that the Organisation of Petroleum Exporting Countries would decide for a fourth time this year to maintain its formal limit of 24.845 million barrels a day. The 12-member group meets December 22.
Record supply cuts OPEC announced in late 2008 led to a 61 per cent jump in prices this year and the group forecasts oil demand will climb one per cent in 2010 as the economy recovers. With International Energy Agency statistics showing supplies still "well above" their five-year average in North America and Europe, analysts doubt OPEC members would approve an increase in supplies. Oil in New York traded near $73 recently.
"The economy appears to be improving, so nobody wants to rock the boat," said Adam Sieminski, chief energy economist at Deutsche Bank AG in Washington. "Most OPEC members are happy with oil in the $70- to $80-a-barrel level." Officials from Kuwait, Algeria, Libya and Qatar said during the past two weeks they want OPEC to maintain production targets at its gathering in Luanda, the Angolan capital. Saudi Arabia, OPEC's biggest producer, said earlier this month that current prices near $75 are "close to the target."
"What they will do is to rollover and to wait for 2010 to see very closely what is the reaction of the market," Qatari Oil Minister Abdullah bin Hamad al-Attiyah said in Kuwait City on December 14. "We have always said a price between $70 and $80 is suitable."
OPEC expects demand for crude from its 12 members will rise by 30,000 barrels a day next year to 28.61 million a day as the global economy shakes off its worst crisis since World War II, the group's Vienna-based secretariat said in a monthly report on December 15.
"OPEC is feeling flush with success," said John Kilduff, a partner at Round Earth Capital, a New York-based hedge fund. "I would expect the typical rhetoric urging members to adhere to their quotas and threats of further cutbacks in the first quarter."
The group kept production targets unchanged in 2009, saying that it didn't want to upset the economic recovery by further restricting oil supply. U.S. crude oil inventories have fallen 11 per cent from their peak in May to 332 million barrels, according to the Energy Department.
"Inventories are coming down, the price is perfect, and all investors, consumers, producers, they're all very happy," Saudi Arabian Oil Minister Ali al-Naimi said recently in Cairo, where Arab oil ministers held an annual meeting.
Oil futures on the New York Mercantile Exchange closed at $75.47 on December 4, the day before al-Naimi spoke, and have fluctuated between $68.59 and $79.04 so far this month.
"The Saudis aren't interested in prices that are materially higher than what we have now, which could choke off the economic recovery," said Addison Armstrong, director of market research at Tradition Energy in Stamford, Connecticut. "I doubt they have much sympathy for members such as Venezuela and Iran that need higher prices for budgetary reasons."
The rebound in prices since April has encouraged members to pump in excess of their targets, even as ministers urge stricter adherence to cuts of 4.2 million barrels a day announced last year. Last month the group delivered only 58 per cent of the planned reductions, according to the Paris-based International Energy Agency.
Angola, whose oil minister Jose Maria Botelho de Vasconcelos holds OPEC's rotating presidency, is among the countries violating their quotas the most.
"We will keep the decisions that were taken in the past about production quotas and maintain the quotas unchanged," Botelho de Vasconcelos told Angolan broadcaster Radio Ecclesia recently, referring to next week's meeting.
Africa's two largest oil producers, Angola and Nigeria, haven't implemented any of their promised OPEC cuts, according to IEA estimates of November output. Iran, the group's second- largest producer, has completed 20 per cent. The United Arab Emirates was the only nation last month to adhere to its pledge, IEA data show.
Should expectations of higher interest rates support the U.S. dollar next year and choke off investments into alternative assets such as commodities, OPEC's extra oil may frustrate the group's efforts to maintain $75 oil, said Eugen Weinberg, an analyst at Commerzbank AG in Frankfurt.
OPEC's oil-export revenue will fall 40 per cent to $575 billion this year, according to the U.S. Energy Department. After Luanda, the organisation's next conference is scheduled for March 17 in Vienna, when Ecuador, its newest member, will hold the rotating presidency.
"There are concerns about compliance and inventories, but they will probably wait until March to address those issues," Sieminski said.
The Bloomberg survey comprised 36 energy analysts, brokers and investors from Singapore to New York. OPEC's members are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela.
Climate Change: Nigeria Ready to End Gas-flaring
From Onyebuchi Ezigbo and Idowu Sowunmi in Denmark, 12.16.2009
Nigerian delegation to the 15th Conference of Parties(COP15) at the United Nations Framework Climate Change Convention (UNFCCC) in Copenhagen, Denmark, has assured that the Federal Government will make a realistic and final commitment to end gas flaring, as part of effort to save the earth.
Speaking yesterday during the Nigerian Climate Change Investment Forum, Minister of Foreign Affairs, Chief Ojo Maduekwe, said issues related to climate change have reached a climax and world leaders have realised the need “to do something, adding that we must also be part of the solution”.
Maduekwe, who represented President Umaru Yar’Adua at the conference, said the Federal Government will be making amajor commitment on the vexed issue of ending gas flaring in the Niger Delta, an issue that has for some time been subject of international criticism against the country.
“We are going to make a strong commitment about gas-flaring. Some skeptics may say we have heard this in the past. But the difference this time around, is that the commitment is going to be made in COP15. There are no excuses this time around. The political will is there and the economy is right to make it work."
He said the future belongs to African market, and challenged experts from Nigeria to rise up to the challenge ofdeveloping local means of adapting and mitigating against the impacts of climate change, adding that regardless of the outcome of the Copenhagen conference, Nigeria must be ready to address impacts of the phenomenon and developing capacity to deal with the crisis.
Also speaking, Minister of Petroleum, Dr. Rilwan Lukman, said the world has responsibility to ensure sustainability of the environment not only for the survival of mankind, but also for the unborn generations, adding that “environment is the common heritage of mankind.”
Meanwhile, COP15 negotiators could not agree yesterday on how much financial aid industrialised nations such as the U.S.A. and Japan will give to the developing world for coping with climate change.
While G77 and China, Africa and Least Developed Countries are demanding at least $200 billion a year for developing states, negotiators are considering various options for funding beginning from 2012. However, no amount was pledged inyesterday’s draft document.
Drilling in Sao Tome and Principe’s offshore area finds oil and gas [ 2009-12-15 ]
(Same News, But Reads A Little Clearer R.M.).
Lisbon, Portugal, 15 Dec – The first phase of drilling in the Sao Tome and Principe-Nigeria Joint Development Zone (JDZ) has resulted in oil being found in the “expected” quantities and “a lot of gas” in one of the blocks, according to the Sao Tome National Oil Agency.
Luís Prazeres, the agency's director, told Lusa that the results had been presented to the oil ministers of the two neighbouring countries by the JDZ and by the oil companies responsible, during the last meeting of the Joint Ministerial Council.
“Gas was found, particularly in Block 2, and there is also oil. (…) The discovery offers good prospects,” Prazeres said.
Field work in the JDZ, which was re-launched in the Summer, had been on hold since US company Chevron had drilled a single test well in 2006, in block 1.
The results are currently being interpreted and official information will be provided at the end of January, with a new phase of drilling scheduled for May, 2010, he said.
In the last few months a test well was drilled in block 2 (operated by China’s Sinopec), and one in block 3 and block 4 (operated by Addax).
“In block 2 some oil and a lot of gas was found. And there are hydrocarbons in the other blocks. Now the companies are analysing the data in a laboratory and may drill more test wells to confirm,” Prazeres said.
“They said it was an expected quantity [of oil in blocks 3 and 4]. Now they are carrying out more analyses to establish quantity. They did not mention if it was a lot or only a little. The companies are very conservative at this stage of the surveying and hold back information,” he said.
In 2006 traces of hydrocarbons were found in block 1, but had no guarantee of commercial viability. (macauhub)
FG: Oil Market Now Stable
•Russia emerges Sec-Gen of gas exporters
By Ejiofor Alike with agency report, 12.10.2009
Lagos
After months of uncertainty over the implementation of the 2009 budget owing to the dwindling oil prices, the Federal Government has said the global oil markets are now stable and there is no need for the Organisation of Petroleum Exporting Countries (OPEC) to supply more crude oil to the international market.
This is coming as the 11-member Gas Exporting Countries Forum (GECF), which controls 70 per cent of the world’s gas reserves, has chosen a candidate from Russia, the world’s biggest gas exporter, as its Secretary General.
According to Reuters report, the group, which include Nigeria and 10 others yesterday picked Leonid Bokhanovsky, Vice President of Russian energy engineering and construction company, Stroytransgaz, as its Secretary General at a meeting in Qatar.
Russia exports over four times more gas each year than the next biggest country in the group, Algeria.
Other GECF members are Bolivia, Equatorial Guinea, Egypt, Iran, Libya, Nigeria, Qatar, Russia, Trinidad and Tobago and Venezuela.
Speaking to reporters on the sideline of the gas exporters forum in the Qatari capital, Minister of State for Petroleum, Mr. Odein Ajumogobia, canvassed the views expressed earlier by President Musa Yar’Adua’s Special Adviser on Petroleum Matters, Dr. Emmanuel Egbogah.
Egbogah had said on Monday that OPEC was likely to keep its oil output targets unchanged when it meets in Angola on December 22, as prices were at a good level.
“The market is reasonably stable, so no, I don’t think so,” Ajumogobia said in response to a question if OPEC needs to pump more oil.
The volatility of the oil price earlier in the year had jolted President Yar’Adua, who told the National Assembly that “the changing international oil market poses great concerns for our fiscal outlook”.
He had said: “The international financial crisis has led to slowing growth across the world economy, resulting in lower demand for our commodities, in particular crude oil.”
The budget made conservative assumptions on oil revenues, setting the benchmark oil price at $45 against $59 in 2008 and forecasting oil output of 2.29 million barrels per day down from 2.45 million bpd in the 2008 budget.
But the crisis in the Niger Delta reduced daily output to 1.4 million barrels per day, threatening the ability of the government to implement the 2009 budget.
However, with oil price hovering around $73 a barrel, and daily oil output, including condensates at 2.4million barrels, the government wants OPEC to maintain the current output quota.
Also, several oil ministers of the OPEC member nations, including Saudi Arabia, have said there was no need for the producers' group to change its output targets at the next meeting.
Oil prices are still far below the July 2008 peak of almost $150 a barrel.
OPEC has held its formal output targets steady all year after a decision announced last December to cut supplies by a record of 4.2 million barrels per day compared with September 2008.
China’s Sinopec may be granted oil block in Angola [ 2009-12-11 ]
Beijing, China, 11 Dec – The China Petroleum and Chemical Corp (Sinopec), one of Asia's largest oil refiners, may be granted an oil field in Angola by its parent company China Petrochemical Corp (Sinopec Group), the China Business News newspaper reported.
The paper, which cites non-identified sources, said it was the start of the transfer of assets from the Sinopec Group to Sinopec, a listed company, which should be followed by the transfer of assets in Nigeria.
In 2006, Sonangol Sinopec International, a partnership between the Sinopec Group and Angolan state oil company Sonangol, offered the best price in bidding for 27.5 percent, 40 percent and 20 percent of oil blocks 17, 18 and 15 in Angola, respectively.
Currently, the Sinopec Group controls over 5 million tonnes of oil in the region, but analysts cited by the newspaper said that it was unlikely that all those assets would be transferred to the listed company. (macauhub)
Groovy Granny Hits
"You Don't Know Me" http://www.singsnap.com/snap/watchandlisten/play/b3dd8e75
"Goody Goody" http://www.singsnap.com/snap/watchAndListen/play/c011933b7
"Que Sera Sera http://www.singsnap.com/snap/watchAndListen/play/bcf7b89b
"Don't It Make My Brown Blues" http://www.singsnap.com/snap/watchAndListen/play/c0128c441