Nigerian army says 14 killed in Niger Delta violence

Nigeria's Army Chief of Staff Onyeabo Ihejirika has spoken out about the recent clashes between Nigeria's armed forces and the militants in the oil rich Niger Delta. Ihejirika said that eight soldiers and six civilians were killed in a recent army raid on militant camps, thought to belong to the militant leader John Togo.

The violence taking place in Warri, has spread to neighbouring communities. The International Committee of the Red Cross (ICRC) and the Nigerian Red Cross Society are on hand to provide assistance to those affected by the fighting. ICRC spokesman in Abuja, Robin Waudo, has said that many people displaced by the violence have been left homeless. Waudo pointed out that it is imperative for the Red Cross to have access to those in need further adding, “We continue to have a good ongoing dialogue with the military hierarchy of the joint task force, but we also need to be able to talk to the other side, in order to be able to access places that are out of the reach of the military as well.”

Several local human rights groups have said that the armed forces have targeted civilians and burned down homes during an outbreak of violence in Ayakoromo, nearby Togo's suspected hideaway. But the army has countered the accusation by saying that it followed Togo's followers into Aykaoromo when they opened fire.

"We lost a total of eight soldiers in the cross-fire and we also received reports from those on the ground that six civilians were killed during that operation," said Ihejirika. Speaking about the fires, Ihejirija said that President Goodluck Jonathan had asked the army to rebuild homes that were destroyed in the attack.

In other Niger Delta news, the commanding officer of the Nigerian Navy Ship (NNS), Henry Babalola, has said that there has been a significant drop in illegal oil bunkering in the Delta. He noted that oil bunkering was on the decline compared to two/three years ago, when as much as 200,000barrels of crude were being misplaced on a daily basis.

“As I have always said, we are watchdogs to the oil industry and the national economy. We may not be telling you in detail, this is what we are able to do; but our joy is that from statistics from oil companies like Shell and Chevron, illegal bunkering activities have actually declined,” added Ihejirija.

Sources: Reuters, Vatican Voice, Nigerian Compass

For more news and expert analysis about Nigeria, please see Nigeria Focus and Nigeria Politics & Security.

Nigeria: Mend claims Warri-Escravos pipeline attack

The Movement for the Emancipation of the Niger Delta (Mend) has claimed responsibility for a weekend attack on the Warri-Escravos pipeline in the Niger Delta. The attack on the pipeline, supplying a large refinery, was confirmed by the Nigerian National Petroleum Corporation (NNPC).

Over the past year, Mend's activities in the oil-rich Delta subsided following a ceasefire agreement but a small faction of the group's activists have recently resumed criminal activity. The group, fighting for equal distribution of oil wealth, issued a warning to the media, saying, "This attack and similar attacks on pipelines which will take place within the next few days is a reminder to the Nigerian government of the futility of wasting the nation's resources in combating militancy without addressing the underlying causes of agitation in the Niger Delta".

The Nigerian authorities believe that the breakaway faction is also responsible for the twin car bombings which killed 12 people during a celebration of Nigeria's 50 years of independence last month.

Over the weekend, the army said it had arrested 63 militants in connection with the recent kidnapping of ExxonMobil, Afren and Shell oil workers released last Wednesday [17th November]. The operation was the first successful rescue of foreign captives in the Delta without any of the hostages being killed in the process.

Source: BBC News

For more news and expert analysis about Nigeria, please see Nigeria Focus and Nigeria Politics & Security.

Security for companies working in Libya of interest to local authorities

The level of security for companies working in Libya remains a matter of acute interest to the local authorities. The likely withdrawal of a number of IOCs at the end of unsuccessful exploration programmes is recognised by Libya's senior planning agencies as an unwelcome setback to the economic development programme.

This will negatively affect Libya's principal economic sector, and considerably more exploration will need to be undertaken to ensure that reserve-to-production ratios do not fall significantly. The past six months - including the news of IOC withdrawals and soft world oil demand - have reinforced the pessimism for a strong surge in oil income for the immediate future.

It is interesting that NOC head, Dr Shukri Ghanem, was very sharp in making clear that the departure of IOCs was nothing unusual and that Occidental would remain for the time being. He was also at pains to assert that the long-term hydrocarbon development programmes are still on course. As noted last week, Shell's and BP's current exploration operations will be crucial. So far, BP remains convinced that its vitally important offshore drilling programme will begin before the end of the year. According to Ghanem, care has been taken to ensure that a repeat of the Gulf of Mexico oil spill will not occur.

The negative impact of the withdrawal of some IOCs should not be over emphasised. Indeed, the simultaneous presence of 47 IOCs in Libya was – because of many reasons, including its inadequate infrastructure and NOC's insufficient numbers of senior personnel who are able to negotiate with the IOCs – placing a severe strain on the country to cope with the influx. The income flows from oil ought, however, to be adequate to sustain the present level of activity both in oil and other key areas.

It must be expected that the security for the oil industry will continue to be enforced. Libya is well aware that its oil reserves position is fair but not good and that it needs to protect those overseas companies which remain inside the country.

For more news and expert analysis about Libya, please see Libya Focus and Libya Politics & Security.

© 2010 Menas Associates

Iraq, Shell and Petronas award a 15 well contract to Halliburton

Iraq, Shell and Petronas has awarded Halliburton a contract to drill 15 oil wells in Iraq's Majnoon oil field, while Petrofac secured a contract to develop two new crude processing plants with a capacity of 50,000 b/d each and to rehabilitate the existing crude oil plant.

"These contracts are part of implementing the preliminary plan to develop Majnoon oilfield for the next two years," said an Iraq oil industry official.

Shell and Petronas, who signed a contract to develop Majnoon oil field earlier this year, hope that their current output of 45,000 b/d will eventually increase to 1.8 million b/d.

Petrofac was awarded a two-year contract to build and develop Iraq's oil and gas infrastructure, as well as build new storage and export turbines for the oil field.

The contracts awarded to a number of international oil companies are expected to boost Majnoon's output capacity to 12 million b/d within seven years.

Source: Reuters

For more news and expert analysis about Iraq, please see Iraq Focus.

Iraq to alter signature bonus for Rumaila oil field

Iraqi government has implored BP and its Chinese partner CNPC to turn their signature bonus for Rumaila oil field into an unrecoverable, lower payment rather than a soft loan.

"We have asked from them (BP and CNPC) to convert the $500 million recoverable to $100 million unrecoverable... in line with the rest of the contracts. If it stayed as a soft loan, we have to get parliament's approval for it, and there is no (functioning) parliament right now," said, director of Iraq's oil ministry's licensing office, Abdul-Mahdy al-Ameedi.

Additionally, Iraqi oil minister Hussein al-Shahristani urged international oil producers to honour the contracts they have signed, and said that they needed to,"prove to the whole world that your are able and committed to implement these deals".

BP and CNPC paid a $500 million signature bonus due on the contract they won last year, to develop Iraq's Rumaila oil field. There were 11 contracts awarded in total, several to other international oil companies including Shell and Exxon Mobil who promised to add around 10 million b/d of capacity to Iraq's existing 2.5 million b/d by 2017.

Source: Reuters

For more news and expert analysis about Iraq, please see Iraq Focus.

Egypt launches spill containment exercise

The oil spill in the Gulf of Mexico and the recent spill affecting the Egyptian tourist destination of Hurghada have prompted Egypt and the Saudi oil company Aramco to launch an oil spill containment exercise in an Alexandria port in November 2010.

Other sponsors of the exercise included BP, Shell, Aramco's shipping subsidiary Vela, and Egypt's Arab Petroleum Pipeline Company (SUMED).

The exercise will aim to test response to a big shipping spill in the Mediterranean Sea, and ensuring that Egypt has the right equipment and personnel to deal with any potential disaster.

There has been criticism of Egypt's response to the spill that affected Hurghada, pressuring the government to put in place measures and procedures to respond effectively to a larger spill if such an accident were to occur in the future.

BG Egypt said on Tuesday 6th July that it will invest US$2 billion to install a pipeline and drill new wells off Egypt's Mediterranean coast to help meet Egypt's growing demand for gas.

It expects the new offshore pipeline, its third in the West Delta concession, to be operational by the end of this year, allowing the firm to maintain its current production levels.

BG was one of six firms that won offshore oil and gas blocks in the Egyptian bidding process in the Mediterranean in February 2010.

For more news and expert analysis about Egypt, please see Egypt Politics & Security.

© 2010 Menas Associates

Shell to award contract for new oil wells in Majnoon

The head of Iraq's, state owned, South Oil Co, Dhiaa Jaafar, has announced that Shell and its partner, Petronas, are in the process of awarding a deal to drill new oil wells in one of Iraq's largest oil fields, Majnoon. The field located in Basra's governance is estimated to hold up to 12.6 billion barrels of proven oil reserves.

The two groups, who partnered up to develop the field, are believed to be in talks about awarding other tenders, including engineering and construction contracts. According to several industry sources, the two groups have invited a number of well established oil companies including Halliburton, Weatherford International and Petrofac to submit bids.

The former two have an established presence in Southern Iraq, while Petrofac said that it is currently in the process of making an entry in to the country's oil industry. Shell and Petronas, who were awarded the Majoon contract, back in December, own 45 per cent and 30 per cent of the stake respectively, with the other 25 per cent belonging to Iraq's state-run Missan Oil Co.

Source: Wall Street Journal

For more news and expert analysis about Iraq, please see Iraq Focus.

Total stops gasoline supply to Tehran

Total has issued an official statement, saying that it has stopped gasoline sales to Iran, as a show of support for the international community's efforts to curtail Iran's nuclear programme. Total is the fourth western oil company, who has ceased doing business with the Islamic Republic.

The decision is thought to be linked to the fourth set of sanctions, approved by the US Congress, which constrict US companies supplying Iran with gas and conducting financial business transactions with key Iranian banks.

Industry experts have suggested that international suppliers of gas to Iran could be faced with curt restrictions to the US banking system, property transactions and foreign exchange, and are therefore intent to safeguard their own business interests.

Iran's dependency on gas imports is immense, due to insufficient refining capacity, and the impact of gasoline shortage has already been felt by the Iranian capital.

Shell, LUKOIL, BP, Reliance Industries and Glencore, are some of the companies that have either stopped fuel sales to Iran or intend to do so upon expiration of trading agreements. Repsol said it had pulled out of a contract it won with Shell to develop part of the South Pars gas field in Iran, and has no further plans to do business with the Islamic Republic.

Total who, up till recently, was still in negotiations with Tehran to take part in South Pars phase 11, has said that despite its, “interest in the South Pars 11 project,” the group “has not moved ahead with it” or sees any possibility to do so in the near future.

Source: Reuters

For more news and expert analysis about Iran please see Iran Strategic Focus.