Nigeria Oil and Gas News in Brief June 2008
Posted on June 12, 2008 – 3:18 pm | by vchris
>>The main militant group in Nigeria’s oil-producing Niger Delta said on Sunday it would observe a unilateral ceasefire from midnight (2300 GMT) on Tuesday after a request from local elders. “We are respecting an appeal by the Niger Delta elders to give peace and dialogue another chance,” the Movement for the Emancipation of the Niger Delta (MEND) said in an e-mailed statement.
President Umaru Yar’Adua ordered the armed forces on Friday to bolster security in the Niger Delta and hunt down militants responsible for an attack which shut down production at Royal Dutch Shell’s main offshore oil facility. In response to Yar’Adua’s order, MEND had warned expatriate oil workers to leave the delta while it “settled its score” with the government, raising the prospect of an upsurge in violence in the region.The attack last Thursday on Shell’s Bonga oilfield, some 120 km (75 miles) off the Nigerian coast, cut Nigeria’s oil output by around a tenth and forced the Anglo-Dutch giant to declare force majeure on Bonga shipments for June and July. The measure means that the firm cannot guarantee to meet its contractual obligations.
>>The House of Representatives has summoned security chiefs and key oil figures, both from government and corporations, to an emergency meeting this week, industry sources said over the weekend. The call reflects Nigeria’s embarrassment over last Thursday’s militant attack on Bonga, the flagship deep offshore oil field of Anglo-Dutch giant Shell. Among those invited to attend the meeting today are the chief of defence staff, General Andrew Azazi, the country’s oil minister, Odein Ajumogobia, top officials from all the oil majors operating in Nigeria and the head of the National Petroleum Corporation (NNPC), Lawal Yar’Adua, the sources said. The House of Representatives noted in a statement that Bonga, which produces around 200,000 barrels per day, accounts for 10 percent of the country’s crude oil production. Violence in the southern Delta region has already reduced Nigeria’s total oil production by a quarter since January 2006. Nigeria was until recently Africa’s largest oil producer but was overtaken in April by Angola, according to Organisation of Petroleum Exporting Countries (OPEC) figures. Angola produced 1.873 million bpd on average in April, trumping the 1.818 million bpd produced by Nigeria.
>> Chevron talks averting strike, Nigeria’s white-collar oil workers’ union said on Wednesday it was optimistic that negotiations to avert a strike at the local unit of Chevron would be productive. The Chevron branch of the PENGASSAN union had threatened to begin a potentially crippling strike last week to press for the transfer of the expatriate managing director out of Nigeria, but the national executive intervened to halt a walkout. “As it is now, there won’t be any strike, we are monitoring the talks and are ready to intervene at anytime if the talks stall,” Lumumba Okugbawa, PENGASSAN’s deputy national secretary, told reporters. He said talks had resumed on Tuesday and would continue later on Wednesday.
The union accused the managing director of Chevron’s local unit of violating basic safety standards, having too many expatriate staff and of a lack of respect for Nigerian workers. Union leaders said PENGASSAN had written to President Umaru Yar’Adua and other relevant stakeholders to intervene.
A strike at the U.S. energy giant would further depress oil output in Africa’s top producer, where a fifth of capacity has been shut in since early 2006, when ethnic militants in the Niger Delta began a violent campaign against the industry. Chevron is Nigeria’s number three oil operator with an estimated output of around 350,000 barrels per day (bpd). The Nigerian unit of Exxon Mobil was forced to shut in about 800,000 bpd oil output for eight days in April due to a strike by the local branch of PENGASSAN.
>> Oil Minister Odein Ajumogobia said on Wednesday he welcomed Saudi Arabia’s call for a meeting of oil producers and consumers to discuss the factors driving record high prices and oil market volatility. “I guess it presents a welcome opportunity to review the pretty much unanimous conclusions of the Rome meeting as to the factors giving rise to the current unprecedented high price and volatility,” Ajumogobia said. “To that extent it is a welcome initiative by OPEC’s largest producer,” he said.
>> Gazprom, has concluded plans to invest 30 billion U.S. dollars on developing a new gas transport pipeline project in Nigeria to ensure capacity expansion in the sector and improve the gas sector of the economy . Gazprom’s Chief Executive Alexei Miller recently disclosed this at a business conference in Lagos, adding that the project would be executed annually to diversify the Nigeria economy. Miller said Gazprom, whose major operation is in gas exploration and production, also has plans to raise its oil output, which is currently 100 million tons per year, by 4 percent per year till 2012. He said the gas price would rise along with oil due to the company ’s long-term gas contracts with European customers that are linked to oil prices.
>> Royal Dutch Shell said on Wednesday it had extended the force majeure on Nigerian Bonny Light crude oil exports through to the end of July. Shell declared the force majeure on the light, sweet crude to free itself from all contract obligations in April following a spate of rebel attacks to its oil facilities. “The original one was for April-May. Now it is June-July,” a spokesman said. He did not specify current production levels. In April, Shell said it had lost about 164,000 barrels per day of the 400,000 bpd Bonny Light output following sabotage attacks in Nigeria’s oil-rich Delta region.
>> Canada’s Addax Petroleum said on Wednesday it had taken a 40 percent interest in the oil prospecting licence (OPL) 227 offshore Nigeria operated by a local energy company. The OPL 227, in shallow water off the western Niger Delta, covers approximately 851 square km (210,300 acres) and is near Royal Dutch Shell’s deep offshore EA field, Addax said. Addax is the technical advisor for the acreage while Nigeria’s Express Petroleum & Gas Ltd. is the operator with 39 percent. Another local firm, Petroleum Prospects International Ltd., holds 21 percent equity.
Tags: Anglo-Dutch, Bonga shipments, House of Representatives, National Petroleum Corporation (NNPC), NIGERIA, Press Releases
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