Oil and Gas Press

Oil News Highlights June 13

>>The chairman of oil major BP rejected as “apocalyptic” a prediction by the head of Russian gas giant Gazprom of oil prices soaring to $250 a barrel by the end of next year.  BP chairman Peter Sutherland told the European Policy Centre on Wednesday there was no problem with available supplies of fossil fuels in the medium term, but there was a need for more investment to develop those resources. “(I) personally don’t believe in some of the more apocalyptic predictions,” Sutherland said when asked about Tuesday’s forecast by Gazprom CEO Alexei Miller. “I don’t believe we’re in for a spike to $250 as suggested in price per barrel.”

>>Oil traded at just above $132 a barrel in Asia on Wednesday. Sutherland also said he did not believe speculation was a major cause of the quadrupling of the oil price in the last five years, contrary to recent comments by Saudi Oil Minister Ali al-Naimi. The main factors were increased demand, a shortage of investment in developing new oil and gas resources and political instability risks in production areas such as Iraq, Venezuela and Nigeria, Sutherland said. “I’m hopeful that we won’t have dramatic further escalations in the price per barrel,” the former European Commission and World Trade Organisation chief said. Speaking in Deauville, France, on Tuesday, Gazprom’s Miller said he expected the price of crude oil to almost double within 18 months and to take gas prices hither with it. “We think it will reach $250 a barrel in the foreseeable future,” he said. 

>>Niger Delta peace summit

Nigeria’s vice president is drawing up plans for a long-awaited summit on the Niger Delta, where attacks on oil facilities have cut output and helped push world oil prices to record highs, his office said on Thursday. Top U.N. official Ibrahim Gambari, a Nigerian who is a special adviser to U.N. chief Ban Ki-moon and best known for his role as envoy to Myanmar, would head a committee to prepare the peace summit, Vice President Goodluck Jonathan’s office said in a statement. “The inclusion of Professor Gambari as chairman of the summit steering committee fulfils the need to give the Niger Delta issue a global perspective,” the statement said. It gave no timeframe for the planned meeting. The steering committee will include governors, international oil firms, civil society groups and national security agencies. The bombing of pipelines and kidnapping of oil workers in the labyrinthine creeks of the Niger Delta, whose oil output makes Nigeria the world’s eighth biggest exporter, have cut production by a fifth since early 2006.

>>The unrest, which has forced international oil firms including Royal Dutch Shell to repeatedly shut in production while they make repairs, has helped push world oil prices to record highs of over $130 a barrel. Five decades of oil extraction from the delta by foreign firms have polluted its land and water, leaving villagers impoverished while corrupt local politicians and criminal gangs enrich themselves with a lucrative trade in stolen crude. Militant group the Movement for the Emancipation of the Niger Delta (MEND) launched a violent campaign against the industry more than two years ago, saying it was fighting for fairer control of the region’s natural resources. The year-old administration of President Umaru Yar’Adua has repeatedly promised to address the root causes of the arrest. Yar’Adua moved swiftly after taking office to engage the Niger Delta militants, freeing two jailed rebel leaders and pledging formal talks. But the peace process has made little real progress since then and MEND has said any initial goodwill when Yar’Adua came to power has since evaporated, accusing the government of “insincerity” in its promises. The group has also made the release of its suspected leader, Henry Okah — who is currently on trial for treason and gun-running and could face execution if convicted — a precondition for suspending its campaign of violence. 

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