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Apr-25-2008Strike, rebel attacks hit Nigerian oil output(topic overview)
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A strike by Nigerian workers at Exxon Mobil has forced the company to shut down some 200,000 barrels per day of crude oil output, a senior union official said. Exxon has surpassed Royal Dutch Shell as the top foreign oil producer in Nigeria after Shell was struck by repeated militant attacks on its facilities. Nigerian rebels said on Friday they had sabotaged an oil pipeline in the Niger Delta belonging to Royal Dutch Shell late on Thursday. "Our candid advice to the oil majors is that they should not waste their time repairing any lines as we will continue to sabotage them," the Movement for the Emancipation of the Niger Delta (MEND) said in an emailed statement. [1] Pipeline attacks in OPEC member Nigeria last week shut 169,000 barrels per day (bpd) of Bonny Light production, forcing Royal Dutch Shell Plc to declare force majeure on exports of the crude. Nigerian rebels also attacked two Shell oil pipelines in the Niger Delta on Monday after the raid last week in what they called an act of defiance against major consumer the United States.[2] MEND, which resumed violent attacks on the oil industry last week, sabotaged two Royal Dutch Shell pipelines on Monday, in what it called an act of defiance against the United States, a major oil consumer whose navy is currently conducting joint training with the Nigerian navy. The strikes followed a similar attack last Thursday which forced Shell to shut 169,000 barrels per day of oil output and declare force majeure on Bonny Light crude exports for the rest of April and May -- meaning it could not guarantee to meet its contract commitments. Militants had previously said they wanted to see how Okah's trial was conducted before resuming their armed struggle.[3] Shell has been forced to shut 169,000 barrels per day of Bonny Light crude oil production after a pipeline attack in the Delta a week ago, and has said it is assessing the damage from two further strikes on Monday. It has declared force majeure on Bonny Light exports for the rest of April and May, meaning it cannot guarantee to meet its contract commitments, although it has said some barrels would still be exported while the measure is in place. "Our candid advice to the oil majors is that they should not waste their time repairing any lines as we will continue to sabotage them," MEND said in an emailed statement.[4]
Militant attacks have increased, while production has fallen and global crude prices have spiked. Feeling the sting of recent attacks on its installations in the oil-rich Niger Delta, Royal Dutch Shell said Wednesday it might not be able to honor contracts for April and May because of decreased production levels. The leading foreign oil producer in Nigeria said its output was off by 169,000 barrels per day because of the increased attacks by militant groups.[5] Saboteurs in the region no doubt have rekindled the president's fears with the recent attacks on Shell pipelines. Royal Dutch Shell Plc yesterday said it has lost an output of 169,000 barrels per day following the militants' attacks on its major supply pipelines in the Niger Delta. Shell spokesman, Precious Okolobo, who disclosed this to newsmen, said the loss in production was as a result of an attack with explosives on a pipeline feeding the Bonny exports terminal and two other attacks on the Soku-Buguma and Buguma-Alakiri pipelines which occurred on Monday.[6]
Shell announced a production loss of 169,000 barrels per day following earlier attacks on pipelines in the region. Royal Dutch Shell, Nigeria's largest oil operator accounting for around half of the country's 2.1 million barrels per day output, has seen a wave of attacks on its facilities in recent months.[7]
LAGOS (Reuters) - A strike by workers and attacks by rebels have forced Nigeria's two biggest oil firms, Exxon Mobil and Royal Dutch Shell, to shut in some production, keeping world oil prices near all-time highs on Friday. Exxon Mobil (XOM.N: Quote, Profile, Research ), Nigeria's leading producer, started closing down its output because of a strike by workers over a labor dispute, with one union official saying 200,000 barrels per day of crude were already shut in.[8] An Apr. 18 attack by Nigerian rebels on a pipeline forced Shell Petroleum Development Co., a Royal Dutch Shell PLC joint venture, to declare a force majeure on exports of 169,000 b/d of Bonny Light exports for the rest of April and May. "Shell suffered two further rebel attacks on its pipelines Apr. 21 and while it is unclear yet as to the size of additional output losses, it is apparent the risks of supply-side disruption in Nigeria are very much elevated for the time being," said analysts Barclays Capital Inc., London. In Scotland, workers at Ineos PLC's 196,000 b/d Grangemouth refinery and petrochemical plant, one of the largest in Europe, are threatening to strike over changes to their pension plan. Barclays Capital in London said, "Reports of fuel rationing by farmers in the Scottish market, which will be further compounded by this strike, should add to the current tightness in the European distillates market, which has seen the front-month ICE gas oil contract rise some 24.7% so far this year to reach yesterday's all-time high of $1,057/tonne. On the demand side, the final Chinese trade data confirm the picture traced by preliminary data earlier this month that imports of oil (crude plus refined products) stay very strong.[9]
Attacks on Royal Dutch Shell's pipelines there last week lead to a drop in production of about 169,000 barrels per day for shipments in April and May. The company said it would be unable to honour its contractual obligations at the Bonny terminal in Nigeria's Delta region for these two months.[10] Royal Dutch Shell has confirmed an output loss of 169,000 barrels per day in Nigeria, revealed media reports. According to Reuters, the company confirmed its outage in Nigeria after the country's oil minister, Odein Ajumogobia, said the figure was very big. Mr Ajumogobia said that figures for production outage he had accounted for was around 25,000-30,000 barrels per day. He also stated that this could be soon brought back.[11] "The (oil) market is still fairly tight, with OPEC reluctant to hike output, blaming speculators and the broad weakness in the dollar for driving prices higher," said Sucden analyst Andrey Kryuchenkov. Global supply worries were stoked after Anglo-Dutch oil group Royal Dutch Shell reported an output loss of 169,000 barrels per day (bpd) due to acts of sabotage against its key pipelines in southern Nigeria.[12]
LAGOS (Thomson Financial) - The Movement for the Emancipation of the Niger Delta (MEND), the main armed group in the south of Nigeria, confirmed on Friday it was responsible for the sabotage of a Royal Dutch Shell pipeline on Thursday, some four days after its initial attack on the oil major.[13] Shell's share is 30%. This is from the attack that was carried out last week," Shell said in a statement. MEND claimed that since they have been pushed to the background, they have nothing to protect and would fight to destroy all the oil facilities in their region until their demands for "equity" were met. MEND said in its statement: "On Monday, April 21, 2008 at 0100 and 0310 Hrs commandos from the Movement for the Emancipation of the Niger Delta (MEND) in continuation of Operation Cyclone (the crippling of the Nigerian oil export industry) attacked two major oil pipelines in Rivers state of Nigeria located at Isaka River and Abonnema River (close to Idama flow station).[14] The IAEA chief said that the reports suggested that the reactor was not yet operational when it was destroyed in the Israeli air raid in September 2007. "According to this information, the reactor was not yet operational and no nuclear material had been introduced into it," ElBaradei said in the statement. The Movement for the Emancipation of the Niger Delta, the main militant group behind a recent string of attacks in Nigeria's southern oil region, said in a statement that its fighters hit a pipeline late Thursday in southern Rivers State. This is the fourth pipeline the group claimed to have blown up in the past week.[15] The main militant group responsible for a string of recent attacks in Nigeria's southern oil-producing Niger Delta region says it has sabotaged another pipeline belonging to the British-Dutch Shell oil company. In an e-mailed statement, the Movement for the Emancipation of the Niger Delta says its fighters attacked the pipeline late Thursday. It would be the fourth Shell pipeline the group has attacked this month.[16]
In an e-mail to AFP the Movement for the Emancipation of the Niger Delta (MEND) said it had "successfully sabotaged a major crude oil pipeline located at Kula river in Rivers state of Nigeria operated by Shell Petroleum Development Company" on Thursday. The group said after the blast, its "fighters ran into a docked joint military patrol boat but were astonished that instead of a confrontation, the soldiers in the patrol boat urged them on and lamented about having to defend what is unjust."[17] Barely 72 hours after they crippled Adamakri crude flow line belonging to Shell Petroleum Development Company (SPDC), the Movement for the Emancipation of the Niger Delta (MEND) has again carried out a major attack, destroying oil pipelines in Isaka and Abonema, both in Rivers State.[14]
Following the consistency in the attacks which have crippled operations of major oil companies, SPDC has declared a "force majure" for April and May regarding lifting of crude oil from Bonny terminals with effect from 1.00 am today. The implication, according to SPDC spokesman, Precious Okolobo, is that they would defer 169,000 barrels per day, 30 per cent of which belonged to Shell. While MEND said they hit pipelines in Isaka and Abonema Rivers, close to Idama flow station, Shell acknowledged that major pipelines in Soku-Buguma and Buguma-Alakiri were attacked. "Shell Petroleum Devel-opment Company (SPDC) has confirmed attacks on two of its major pipelines, Soku- Buguma and Buguma-Alakiri, in Rivers State yesterday.[14] Unrelenting attacks on its oil installations by militants, sabotage of oil pipelines and increasing shutdown in production may for Shell Petroleum Development Company (SPDC) to relocate its operations out of Rivers State. Already the company is loosing 160,000 barrels of crude oil at its fields at Soku and Abonema Alakiari where some militants struck recently.[18]
In an e-mail to AFP, MEND said it had "successfully sabotaged a major crude oil pipeline located at Kula river in Rivers state of Nigeria operated by Shell Petroleum Development Company" on Thursday.[7]
LAGOS, Nigeria (AP) — Militants say they have sabotaged an oil pipeline in Nigeria's south. The Movement for the Emancipation of the Niger Delta says its fighters hit a pipeline late Thursday in southern Rivers State. That brings to four the number of pipelines the militant group claims to have blown up in the past week.[19] Officials had no firm details on the amount of oil production lost but said the were operating at "partial production." The Movement for the Emancipation of the Niger Delta, or MEND, said its fighters hit a pipeline late Thursday in southern Rivers State, bringing to four the number of pipelines the group claims it has blown up in the past week.[20] The contract had dropped $2.24 in the previous session to settle at $116.06 a barrel. In Nigeria, the Movement for the Emancipation of the Niger Delta, or MEND, said Friday that its fighters hit a pipeline late Thursday in southern Rivers State. That brought to four the number of pipelines the group has attacked in the past week.[21]
The self-styled Movement for the Emancipation of the Niger Delta has kidnapped nine western oil workers and attacked several oil production facilities operated by the energy giant Shell over the past month. The Nigerian rebel group Movement for the Emancipation of the Niger Delta (MEND) solicited his help in mediating between it and the Nigerian government in a letter addressed to President Bush sent out earlier this week by the group's spokesman, Jomo Gbomo. "Mr. Carter is not in denial as the rest of you who brand freedom fighters as terrorists, forgetting their integral role in any substantial peace process just as he has demonstrated in his meeting with Hamas," said Gbomo.[22] "The Movement for Emancipation of the Niger Delta (MEND) has once again announced that it sabotaged an oil facility belonging to Royal Dutch Shell, following a series of attacks started at the end of last week."[7] All output (from Exxon's Nigerian oilfields) is affected," an Exxon official, who asked not to be named, said. Rebels in the Niger Delta meanwhile attacked a major oil pipeline belonging to Royal Dutch Shell (RDSa.L: Quote, Profile, Research ) late on Thursday, the fourth such attack in a week.[8] LAGOS, April 25 (Reuters) - Nigerian rebels said on Friday they had sabotaged an oil pipeline in the Niger Delta belonging to Royal Dutch Shell (RDSa.L: Quote, Profile, Research ) late on Thursday, the latest in a series of attacks in the region.[4]
Though the Movement for the Emancipation of the Niger Delta (MEND) is widely reported to have claimed responsibility for the attacks, the security authorities, the Nigerian Police Force and the JTF are yet to make any pronouncement on the recent attacks. Shell said on Monday that it might not be able to honour contracts for April and May as a result of the attacks on its pipelines.[6] The Movement for the Emancipation of the Niger Delta, or MEND attacked two pipelines believed to be run by Chevron Corp. and Shell oil has been attacked on Monday, a statement said. After one of their leaders, Henry Okah, was arrested for terrorism and treason, militants are stepping up their attacks.[23] The Movement for the Emancipation of the Niger Delta (MEND) militant group, active in the west African country's oil-rich south, claimed responsibility for an attack on Shell's key Bonny terminal in an e-mail on Monday.[24] The Movement for the Emancipation of the Niger Delta has claimed responsibility for at least three attacks on Shell installations including a facility at the Bonny terminal, causing the 169,000 bpd shortfall. MEND said it was stepping up its attacks because of the arrest of one of its most prominent leaders, who is facing trial by a secret commission on several charges including weapons trafficking and treason.[5]
Recently, the Movement for the Emancipation of the Niger Delta (MEND) commenced attacks on oil facilities belonging to the SPDC in Rivers State. In an electronic statement signed by its spokesman, Jomo Gbomo, the MEND said it has called off the ceasefire it declared recently and therefore commenced attacks on SPDC oil installations as well as that of other oil companies.[18] The Movement for the Emancipation of the Niger Delta (MEND) said it had used explosives to attack the pipeline at Kula river in Rivers state.[4]
According to the SPDC spokesman, the recent attack on the company's oil field in Asari-Toru Local Government Area of Rivers State would also make lifting of oil at the Bonny terminal impossible, owing to SPDC's position on the matter. The company equally recounted several attacks on its operational oil fields in other states of the Niger Delta, insisting that, "our operations have been affected by militants' activities in the region".[18]
LONDON (AP) — Oil prices rose Friday, largely reversing an earlier $2 a barrel drop, after a militant group behind recent attacks in Nigeria's southern oil region said it had sabotaged another pipeline and a strike hit Exxon Mobil production in Africa's biggest exporter.[21] The development helped push world oil prices to around 120 dollars a barrel. Shell, Nigeria's largest oil operator accounting for around half of the country's 2.1 million barrels per day output, has seen a wave of attacks on its facilities in recent months.[17] Recent Nigeria outage ""not significant"": oil minister ROME (Reuters) - Recent disruption to Nigerian oil production from rebel attacks was not significant, Nigerian Minister of State for Oil Odein Ajumogobia said on Tuesday. ""It's not a significant disruption,"" he told reporters, adding that the latest, more accurate figures he had accounted for around 25,000-30,000 barrels per day affected, which could be brought back quickly.[25]
Shell officials could not immediately confirm the latest attack. Shell announced a production loss of 169,000 barrels per day following the sabotage of its key supply pipelines in the region.[17] Events in Nigeria, where attacks on Royal Dutch Shell's pipelines have led to a drop in production of about 169,000 barrels a day, have underpinned the latest price surge.[26] Last week a Royal Dutch Shell PLC joint venture warned that it may not be able to deliver some 169,000 barrels per day of crude in April and May because militants sabotaged a pipeline.[23] Ajumogobia was asked to comment on the figure of 169,000 barrels per day of Bonny Light crude that a Royal Dutch Shell spokesman said on Monday was shut in by pipeline sabotage last week. ""Initially they said 250,000 but it was not so,"" he said.[25]
Shell has been forced to shut 169,000 bpd of Bonny Light crude oil output after a pipeline attack there a week ago. In the North Sea, BP said it had begun shutting down UK's Forties oil pipeline in preparation for a planned strike at a major Scottish refinery this weekend.[1]
Anti-government attacks on the region's oil infrastructure have been escalating for the past few years, threatening future investment in the country's oil output. Shell has said it would be unable to honour its contractual obligations at the Bonny terminal in Nigeria's Delta region for production contracts in April and May. Figures released by Mexico's government showed that output declined nearly 8% in the first quarter of the year, as some key oil fields reach the end of their natural life.[26] Oil prices shot to a record $118.05 dollars on the New York contract as traders seized on the unrest in key producer Nigeria, the weak U.S. currency and OPEC's refusal to increase production.[24] NEW YORK (AFP) — World oil prices jumped to record peaks above 119 dollars on Tuesday in response to the weak U.S. dollar, unrest in Nigeria and OPEC's reluctance to hike output, traders said.[12]
Oil prices accelerated as the euro briefly hit a record 1.60 dollars amid downbeat U.S. economic news, including another dour report on the troubled housing market.[12] Iranian oil minister Gholamhossein Nozari said oil prices were not too high in real terms, even as U.S. pump prices hit a fresh record as the world's top consumer gears up for the summer driving season. Oil prices have more than quadrupled since 2002 as supply struggles to keep pace with surging demand from emerging economies such as China. The rise in fuel costs has added pressure to the struggling U.S. economy, but Energy Secretary Sam Bodman on Monday said he did not favor tapping emergency reserves to help bring down oil prices. The weak U.S. dollar has also contributed to oil's rally, devaluing assets in the U.S. currency and pushing investors to shift part of their money to commodities and oil.[2]
The latest unrest has heightened fears about supply disruption and helped push world oil prices to new record highs.[3]
""I think the figures that I am giving you are more accurate."" The minister, attending the Internation Energy Forum of energy producing and consuming nations, said that oil market fundamentals did not justify record high oil prices at around $118 a barrel ""Clearly nothing has happened in the supply/demand equation to warrant this,"" he said. ""There are factors other than the fundamentals that are driving this -- I think that's the consensus among producers and consumers at this meeting.""[25] Oil prices have paused for breath after a series of steep daily rises which saw them approach $120 a barrel on Tuesday.[26]
At the pump, the average price of a gallon of regular gas rose 0.8 cents Tuesday to a record $3.511, according to a survey of stations by AAA and the Oil Price Information Service.[27] LONDON (AFP) — Oil prices climbed towards this week's record peaks on Friday as traders fretted over threats to global energy supplies in Britain and Nigeria, analysts said.[7]
Since then MEND and other militant groups and gangs have repeatedly pledge to quell the violence only to return to attacking high-valued oil installations, disrupting production in Africa's largest oil producer and contributing to global price increases, according to analysts. Mark Schroeder, regional director for Sub Saharan Africa at the Stratfor consulting firm, noted that the MEND leader's arrest "seems to have riled his loyalist and contributed to the recent violence" in the delta. "They've (MEND) always issued their threats (to disrupt oil production), but this time the focus of the attacks are much more specific," Schroeder told United Press International.[5] Since the 1970s, Nigeria, Africa's No. 1 oil producer, has pumped more than $300 billion worth of crude from the southern delta states, according to estimates. High unemployment in the delta, environmental degradation due to oil and gas extraction, and a lack of basic resources such as fresh water and electricity have angered the region's youth, who have taken up arms, many times supplied by political leaders, and formed militant groups and local gangs.[5] Then finally, to show our way of saying 'welcome' to the U.S. Naval warship, USS Swift which is transiting the Gulf of Guinea." The militant group, which wrote to President George Bush of United States accusing him of conniving with President Obasanjo to hound and violate their human rights in the oil-producing region, told Bush that their action would have a ripple effect on the American economy since they had written an earlier letter to him without any response, adding: "The ripple effect of this attack will touch your economy and people one way or the other and hope we now have your attention". The group expressed its readiness to combat the American naval forces that have been dispatched to the Niger Delta adding that the loss of over 4,000 American troops in Iraq would be "child's play" to what they would face in Nigeria. The group said they were ready for talks only if former President Jimmy Carter would lead the delegation, failing which they would keep "destroying things without let" since they have "nothing to lose" especially in the face of "international conspiracy". They said: "We have nothing to lose because he that is down need fear no fall.[14]
Associated Press - April 25, 2008 11:05 AM ET LAGOS, Nigeria (AP) - A militant group behind a string of recent attacks in Nigeria's southern oil region says it's sabotaged another[28]
The most prominent armed group in Nigeria's southern oil-producing region said Friday it had sabotaged a supply pipeline belonging to Anglo-Dutch oil group Shell, the latest in recent weeks.[17] Last week, militants blew up a Royal Dutch Shell pipeline in Nigeria, Africa's largest supplier of oil.[29] The pipeline belonging to a Royal Dutch Shell joint venture is the fourth to be sabotaged in the past week.[28] The group said in a statement that the pipeline belongs to a Royal Dutch Shell PLC joint venture. A Shell spokesman confirmed one of its pipelines had been hit, but had no more details.[20] MEND said in a statement that the pipeline attacked Thursday belongs to a Royal Dutch Shell PLC joint venture.[21]
In a message to Agence France-Presse, MEND said it successfully attacked a pipeline run by Shell Petroleum Development (nasdaq: PETD - news - people ) Company on the Kula River in Rivers state on Thursday.[13] MEND had already claimed responsibility for the sabotage of two Shell pipelines at Isaka River and Abonnema River, also in Rivers state, as part of 'Operation Cyclone', which is aimed at destroying Nigeria's oil export industry.[13] The attack, in Rivers State, was part of MEND's 'Operation Cyclone' which the group said was "aimed at crippling Nigeria's oil export industry".[24]
"We can confirm there was an attack on our pipeline around the Kula area in Rivers state," Precious Okolobo, a spokesman for Shell in Nigeria, said.[8]
The attacks on Shell's pipelines, no doubt, have a huge economic implication for Nigeria, as Shell is the oldest and largest oil operator in the country.[6] A spokesman for Shell confirmed the incident without divulging any details. Shell, one of the main operators in the country, announced after the previous three attacks that it may not be able to meet its obligations to ship about 169,000 barrels per day from Nigeria over the next few weeks.[15] Since Okahs arrest, the group has not launched any of the coordinated, military-style armed raids on staffed facilities that originally made it notable. Shell confirmed three attacks over the past week, and announced it may not be able to meet its obligations to ship some 169,000 barrels per day from Nigeria over the next few weeks.[20]
Before stepped-up hostilities by militant and other armed groups in the Niger Delta beginning in late 2005, Nigeria produced about 2.5 million barrels per day.[5]
The decision to try Henry Okah in secret has angered militants of the Movement for the Emancipation of the Niger Delta (MEND), who have launched a series of attacks in recent days.[3] Shell had no immediate comment. "Our candid advice to the oil majors is that they should not waste their time repairing any lines as we will continue to sabotage them," the Movement for the Emancipation of the Niger Delta said in an emailed statement.[30]
"Today's attack was prompted by the continuous injustice in the Niger Delta region of Nigeria where the root issues have not been addressed by the illegal and insincere government of Umaru Yar'Adua and Goodluck Jonathan. "It also dispels the false impression that peace and security have been restored in order to gain the confidence of potential investors in the oil and gas sector; to protest the continuous detention and secret trial of Henry Okah who was taken hostage during a supposed truce and who must be a key participant in any ongoing peace process to make it acceptable to us.[14] The group is responsible for kidnapping more than 100 foreign oil workers last year, and has repeatedly attacked oil facilities in the Niger Delta region since late 2005.[22]
White-collar workers at Exxon Mobil Corp. — one of the largest producers in Nigeria, with an output of about 2 million barrels a day of crude oil — have "commenced a safe and orderly shut-in of production" to push for more pay, the company said in a statement.[21] LONDON (Reuters) - Oil climbed above $119 a barrel on Friday after a workers strike cut production in Nigeria and tensions rose between the United States and Iran.[1] LONDON (Reuters) - Oil rose to nearly $118 a barrel on Friday as strikes by workers caused major supply disruptions in Nigeria and the North Sea.[30]
Oil also found support from a significant cut in Nigerian production due to a workers strike and rebel attacks.[1] A threatened strike by Scottish oil refinery workers has also stirred supply concerns.[2]
HOUSTON, Apr. 22 -- Crude and products futures continued climbing to record-high intraday and closing prices Apr. 21 as attacks on pipelines in Nigeria and a pending strike at a refinery in Scotland reminded traders of thinly stretched supply lines.[9] London's Brent crude peaked at $116.75 a barrel on fears of further attacks on pipelines in Nigeria, falling output in Mexico and the continued weak dollar.[26] An Exxon Mobil local joint venture is 1 of the largest producers in Nigeria with an output of about 2 million barrels a day in crude oil.[28] Outsiders can't travel there without the consent of authorities. In a new wave of militancy, youths occupied an oil installation in southern Nigeria on Friday, shutting down its production of 5,000 barrels a day, officials said.[31]
New York's main oil futures contract, light sweet crude for delivery in May, closed at a record 119.37 dollars a barrel, up a hefty 1.89 dollars compared with Monday's closing level.[12] Global supply jitters have seen oil contracts traded in New York spike by more than 57 dollars in the past year, sparking concerns that sky-high prices could harm U.S. economic growth which has already slowed sharply.[12] Energy prices The May contract for benchmark U.S. sweet, light crudes hit an intraday record of $117.83/bbl before closing at a record $117.48/bbl, up 79¢ Apr. 21 on the New York Mercantile Exchange.[9]
New York crude jumped close to 120 dollars, hitting a record high 119.90 dollars on Tuesday, before dipping in line with the strengthening U.S. currency.[7]
London's Brent North Sea crude for June rose 1.57 dollars to 115.91 dollars. This week, prices rocketed to historic highs as investors seized on mounting supply worries and the weak U.S. currency, which makes dollar-priced crude cheaper for foreign buyers and tends to encourage demand.[7] Some North Sea oil and natural gas output will have to be shut in if the union halts the refinery, operator Ineos said. Despite oil's rise to fresh peaks, OPEC officials reiterated their insistence that markets have enough crude. "OPEC has put the maximum supply in the market -- this is not a problem of supply, it's a problem that is very connected to the financial problems in the U.S. economy," Venezuelan Oil Minister Rafael Ramirez told Reuters at the International Energy Forum in Rome.[2]
The group's 2006 campaign of bombings of oil facilities and kidnappings of foreign oil workers forced the closure of a fifth of crude output from Nigeria, home to the world's eighth biggest oil industry.[3] Violent attacks on oil installations have increased in recent weeks, raising concerns that Nigeria's militants are aiming to make good on a promise to cripple the country's petroleum industry.[5] MEND, which claims it is fighting for a more just distribution of the country's billions of dollars of oil revenue, has attacked two pipelines in the past week.[22] No official at Shell was available for comment on MEND's latest claim on Friday. MEND advised oil companies 'not to waste their time' repairing oil pipelines, warning it will continue to sabotage them.[13] Available statistics show that the oil giant accounts for almost half of the entire daily oil production. The militants, knowing the strategic importance of Shell's operations to the nation, have targeted its major pipelines.[6] The 700,000 barrel-a-day Forties pipeline carries about half of Britain's North Sea oil production.[1]
Mexico's oil production slipped 7.8% in the first quarter to 2.91 million b/d as output at the country's traditional oil fields wanes, state oil company Petroleos Mexicanos said.[9] MEND says it is fighting to force the government to give more oil industry revenue it controls to its region, which remains deeply poor despite four decades of oil production in the area.[20] MEND emerged in early 2006 as the leading group calling for a greater share of Nigeria's oil revenue for the producer region.[17]
In Nigeria on Friday, the most prominent armed group in the southern oil-producing region sabotaged a supply pipeline belonging to Anglo-Dutch energy giant Shell.[7]
"Generally, we have a shut-in of 169,000 bpd as a result of the recent attacks on our pipelines," Shell spokesman Precious Okolobo told AFP. He said the production loss followed a weekend attack on a pipeline feeding the Bonny exports terminal and damage wrought on Monday against the Soku-Buguma and Buguma-Alakiri pipelines. Okolobo said efforts were being made to "assess the extent of damage to the pipelines with a view to fixing them."[12] A company spokesperson maintained that the first attack led Shell to declare force majeure on Bonny Light exports for the rest of April and May. The spokesperson said that he had no idea about the possible impact on Soku-Buguma and Buguma-Alakiri pipelines from the second attack which occurred on April 21, 2008.[11]
NIGERIAN oil minister Odein Ajumogobia said on Tuesday that there would be "no significant" interruptions to oil supply following a pipeline attack in Africa's top oil producer.[24] The continued rally was supported by comments by Opec secretary general Abdalla Salem el-Badri that real demand was being well matched by current supply with no immediate need to lift production levels before 2012. He said he did not expect to discuss whether prices were too high or too low at an energy forum in Rome attended by government ministers and oil firm bosses.[26] Violence in the southern Delta region has cut Nigeria's total production by a quarter since January 2006. The price rises also came despite news that the Organization of the Petroleum Exporting Countries (OPEC) plans to increase its production capacity by five million bpd by 2012, the cartel's secretary general Abdalla Salem El-Badri said Tuesday.[12] Overall, violence in the Niger Delta has reduced Nigeria's total production by a quarter in the past two years.[17] Even journalists from your country cannot visit the region to report the truth without being arrested and embarrassed. "If the root issues such as the control of our resources continue to be swept under the carpet, and the government's deception of the Niger Delta people continues, including holding sons of the Niger Delta hostage in Northern Nigeria, then, like Otto von Bismarck once remarked, 'the great questions of the time will be decided, not by speeches and resolutions, but by iron and blood.'"[14]
"Crude futures recovered (on Friday). after news emerged that Nigerian rebels attacked a pipeline in the Niger Delta," said Sucden analyst Andrey Kryuchenkov.[7] The southern Niger Delta, where the crude is pumped in Africas biggest oil industry, is traversed with pipes that carry oil from well heads via transfer stations and on to export terminals.[20]
The fears expressed by Yar'Adua for opting for the use of international forces, according to LEADERSHIP sources, is that the militants have access to sophisticated arms and fund which may make it difficult for the Nigerian government alone to handle the situation. This is coupled with the fact that the international community are stakeholders in the Niger Delta.[6] LAGOS (Reuters) - A Nigerian court will decide next week whether authorities can try a rebel leader from the oil-producing Niger Delta in secret, a court source said.[3]
President Umaru Musa Yar'Adua has directed that the Joint Task Force currently helping in the security of the volatile Niger Delta region be strengthened with a view to repositioning it to meet the growing security demands of the region.[6] The attack was prompted by "continuous injustice" in the Niger Delta, according to the letter, which said the "root issues" in the Delta have not been addressed by the "illegal and insincere government." "The ripple effect of this attack will touch your economy and people one way or the other and hope we now have your attention," the letter said.[22]
The militants have called for a more equitable distribution of the country's oil wealth. Hoping to quell the violence, Nigerian President Umaru Yar'Adua reached out to the rebels following his April election asking for them to give his administration time to tackle the problems of the delta. Those proposed reforms include changes to the Nigerian economy, particularly its petroleum sector, which generates up to 95 percent of the country's revenue.[5] Increased violence against oil operations in the delta has caused significant drops in the country's oil output, according to the Nigerian government and independent accounts.[5]
The multinational oil concerns should emphasize direct community partnerships and "collaborative networking rather than individual corporate efforts", which have not paid significantly in checking illegal oil bunkering in the Niger-Delta." Two-time commissioner in Delta State, Barrister Bolatsi Dudu (occasion's chairman) delved into the positive role of the Nigeria media in the country's development since pre-colonial times, urging for its sustenance especially at this crucial period in Nigeria's development.[32]
The attacks have reduced Nigeria's daily oil output by an estimated 20 percent.[16] Shell said on Monday that it might not be able to honour oil contracts for April and May after the attacks.[12] Heating oil for May hit an intraday record of $3.33 and closed up 1.91¢ at a record $3.31/gal on NYMEX. The May contract for reformulated blend stock for oxygenate blending (RBOB) had an intraday high of $3/gal, but closed at $2.98/gal, down 1.02¢ for the day.[9] The May gas oil contract hit a record $1,071/tonne in intraday trade before closing at a record $1, 057/tonne, up $6 for the day.[9]
In London, the June IPE contract for North Sea Brent crude registered intraday and closing records of $114.86/bbl and $114.43/bbl, respectively, up 51¢ for the day.[9] Brent North Sea crude for June delivery hit a record 116.75 dollars a barrel in intra day activity before settling at an all-time high of 115.95, marking a 1.52 dollar gain from Monday.[12]
Experts say the cost of gas is directly related to the record cost of crude oil. Something I read the other day made me stop and wonder just how related these prices are.[29] International oil prices are quoted in dollars, so crude becomes cheaper for purchasers holding foreign currencies that have jumped in value against the ailing dollar.[12] Regarding soaring crude oil prices, the minister said the price is what consumers are prepared to pay, and that demand is not showing any sign of weakness at the moment.[24]
The loss of production has contributed to the spike in world oil prices. Some information for this report was provided by AP and Bloomberg.[16] LONDON, April 22 (KUNA) -- Oil prices reached fresh hights Tuesday as traders bet that violence in key producing nations would hurt supply.[10]
The 13-nation group, which produces 40 percent of the world's oil, insists there is no global shortage of oil, and has blamed record prices on market speculators.[12] Further support came as OPEC officials said the market had enough oil and that the producer group would not ramp up output to help bring down prices despite calls for more oil from some consumer nations.[2] Opec has shown itself disinclined to raise quotas to curb rising prices. This stance by the oil cartel, allied to the weak dollar and persistent worries about whether supplies can meet global demand in the long term, has pushed up prices 24% this year.[26]
Natural gas futures rose 11.5 cent to $10.905 per 1,000 cubic feet. Oil seemed poised to hit $120 a barrel this week but stalled in its march there on Thursday after the dollar gained against the euro.[21] Olivier Jakob at Petromatrix, Zug, Switzerland, said, "The recent rise in oil is not purely a dollar play. The dollar has been a main market maker, but crude oil is trading above the dollar correlation and has shown last week its capacity to decouple itself from the dollar." He said.[9] Brent crude, meanwhile, set a high of 116.87 dollars on Thursday as fears grew over a looming strike at Grangemouth, one of Britain's biggest oil refineries.[7]
Crime and militancy are intermingled in the region, with gunmen stealing crude oil for resale or robbing banks one day and battling security forces or blowing up oil infrastructure the next.[20] Crude net oil imports soared to an all-time high of 3.99 million b/d in March, almost 400,000 b/d above February's level, whereas at 470,000 b/d, net imports of refined products were also stronger year-over-year (up by 104,000 b/d)." The analysts said, "Such strong trade figures, coupled with healthy refinery production levels, have pushed Chinese apparent oil demand growth in March above 500,000 b/d, its highest level since May 2007."[9] The company, one of the main operators in the country, has yet to report any production outages from the other attacks. Those attacks helped send crude prices to historic highs on international markets.[20] Workers at Exxon Mobil Corporation's local joint venture have begun 'a safe and orderly shut-in of production' demanding a pay hike, the company said in a statement on Friday.[15]
Officials had no firm details on the amount of oil production lost but said the were operating at "partial production."[28] No further details were immediately available. The United States in January said Iranian boats threatened its warships along a vital route for crude oil shipments.[1] Cioffi was reportedly gathering footage for 'Sweet Crude', a critical film examining the oil industry's impact on Nigeria's economy and environment.[31] Bonny along with the terminal at Forcados east are Shell's most important installations in Nigeria which is Africa's biggest oil producing nation.[12] Exxon Mobil (nyse: XOM - news - people ) rose 0.2% and Chevron (nyse: CVX - news - people ) lifted 1.4%, but Marathon Oil (nyse: MRO - news - people ) dropped 2.0% and Shell slipped 0.4%.[27] Oil's rise had a mixed, but largely positive effect on oil stocks, as the Energy Select Sector SPDR (amex: XLE - news - people ), an ETF that tracks energy shares, rose 4 cents to $84.85.[27] Before news of the pipeline attack, it had fallen as low as $114.51 a barrel.[21] London Brent crude traded $2.98 higher at $117.32 a barrel, after hitting a new record of $117.51 earlier in the session.[1] Light, sweet crude for June delivery climbed $1.89 to $117.95 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe.[21]
Gasoline prices rose 3.14 cents to $2.9895 a gallon on the Nymex, while heating oil futures rose 2.57 cents to $3.2840 a gallon. [21] Oil was flirting with $120 on Tuesday, driven by a familiar theme: overseas supply concerns.[27]
British energy giant BP may have to close the Forties pipeline, that brings in oil from the North Sea and delivers a third of the country's daily output.[7] It would be recalled that the president had recently approved the use of the International Marine Force in monitoring and securing the nation's oil pipelines.[6]
MEND promised more attacks on oil targets in the restive region. "Our candid advice to the oil majors is that they should not waste their time repairing any lines as we will continue to sabotage them," it added.[17] Anti-government attacks on the region's oil infrastructure have been escalating for the past few years.[10]
According to the militants, U.S. President George W Bush has also been contacted. In a statement, the militants hoped the ripple effect of this attack would bring the world's attention to the crisis. They also said it launched the attacks as a "welcome" message to a U.S. Navy vessel visiting the oil-rich Gulf of Guinea, which includes Nigeria. [23] Fresh off his controversial meetings with Hamas, former President Jimmy Carter appears to be in hot demand among rebel groups around the world. Nigerian separatist militants pose in their war boat 24 February 2006 on the Escravos River in southern Nigeria.[22] MEND and other militant groups have been blamed for hundreds of kidnappings since violence in the delta began in 2005.[5] Militants and gangs began attacking oil facilities in the Delta in late 2005 to demand that more oil revenue be directed to impoverished local residents.[16]
A higher dollar also makes oil more expensive to investors overseas. Associated Press writer Edward Harris in Lagos, Nigeria, contributed to this report.[21] The dollar benefited from speculation that the Federal Reserve is growing concerned about inflation and may not cut interest rates as much as once thought. Higher U.S. interest rates tend to stabilize or strengthen the dollar, and investors see commodities such as oil as a less effective hedge against inflation when the dollar is stronger.[21]
I figure the way things are going, for just a few bucks more than a tank of gas, you will soon be able to buy your own oil company. It's no surprise when the 2008 Fortune 500 list of the nation's top corporations was released Monday, four of the top 20 were oil companies. [29] "There is no significant disruption, between 25,000-30,000 barrels per day. It is being fixed and it could be back online quickly," Ajumogobia told reporters on the sidelines of the International Energy Forum here.[24]
Several supply pipelines owned by Shell and Chevron have been destroyed in recent weeks. [17] Shell confirmed the attack and said it was trying to assess the extent of the damage to the pipeline.[1] The rises were supported by fears of further attacks on pipelines in Nigeria and OPEC's refusal to raise quotas to curb rising prices.[10]
Irving, Texas-based ExxonMobil reports white-collar workers in Nigeria have gone on strike urging more pay.[28]
SOURCES
1. Investing | Africa - Reuters.com
2. Oil hits record near $118 on supply worries
3. News | Africa - Reuters.com
4. UPDATE 1-Nigeria rebels say attack Shell oil pipeline | Markets | Reuters
5. Analysis: Unrest hits Nigeria production - UPI.com
6. allAfrica.com: Nigeria: FG Strengthens Joint Military Task Force (Page 1 of 1)
7. AFP: Oil prices move higher on supply tensions
8. Strike, rebel attacks hit Nigerian oil output | Reuters
9. MARKET WATCH: Energy prices climb to new highs - Oil & Gas Journal
10. Khabrein.info
11. Shell Stands By Nigerian Oil Outage of 169,000bpd - Business - redOrbit
12. AFP: World oil prices strike record peaks above 119 dlrs
13. Armed Nigerian group confirms attack on Shell pipeline, warns of more sabotage - Forbes.com
14. Garowe Online - Home
15. RTTNews - Market Sensitive Global News, Broker Ratings, News&Analysis;, Global Markets News.
16. VOA News - Nigerian Militants Claim Another Attack on Shell Oil Pipeline
17. IC Publications
18. BusinessDay. the voice of business - Shell considering relocating from Rivers
19. The Associated Press: Oil pipeline bombing reported in Nigeria
20. Nigerian militants report another oil pipeline bombing - International Herald Tribune
21. The Associated Press: Oil prices rise after Nigeria pipeline attack
22. ABC News: Nigerian Rebels Call on Carter to Mediate
23. Latest News - SomaliNet
24. Vanguard Online Edition
25. tehran times : Recent Nigeria outage ""not significant"": oil minister
26. BBC NEWS | Business | Oil pauses for breath near $120
27. Supply Scare Sends Oil Toward $120 - Forbes.com
28. KLTV 7 News Tyler, Longview, Jacksonville |Report: Oil pipeline bombed in Nigeria
29. The Times-Journal
30. Oil rises to $118 on Nigeria output cut | Reuters
31. Amsterdam News - Article - international news
32. allAfrica.com: Nigeria: Make Peace, Devt Your Watchword, Djebah Urges Media (Page 1 of 1)
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