February 17th, 2006:

02.17.2006, 10:02 AM
LAGOS (AFX) – Nigerian militants fired machine guns at a military helicopter as it carried out an air strike on barges they were using to smuggle stolen crude oil, a military spokesman said.
A spokesman for the rebels and a local community leader confirmed details of the clash, which took place on the Chanomi Creek in the swamps of the Niger Delta, an area operated by Royal Dutch Shell, 40 kilometres (25 miles) west of the oil city of Warri.
Major Said Hammed, a spokesman for a joint military task force fighting rebels in the oil-rich delta, said that the helicopter was undamaged, despite coming under fire from a GPMG, a powerful belt-fed machine gun.
An ethnic Ijaw militant group opposed to both Shell and the government warned Shell that its airstrip is 'now considered a military facility and we will attempt to shoot down any planes landing or taking off from this facility regardless of which company owns the aircraft.'
Shell built and operates the Osubi airstrip in Warri, although the facilities are also used by several operators, including other oil companies and airlines running scheduled domestic flights.
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afp/ks/jsa read more

17/02/2006 – 13:11:48
Opponents of the Corrib gas pipeline in Co Mayo are protesting outside the Department of Natural Resources and the headquarters of the global oil firm Shell in Dublin today.
The Shell to Sea campaign group claims the company is preparing to resume work on the controversial structure after suspending it last year to allow for mediation talks with local residents. They are also accusing Natural Resources Minister Noel Dempsey of conspiring to ensure that the mediation talks between Shell and the residents would break down.
Earlier this month, the so-called Rossport Five pulled out of the talks after accusing Mr Dempsey of interference.
The five Co Mayo men spent more than 90 days in prison last year for refusing to obey a court injunction ordering them not to obstruct work on the Corrib scheme. read more

February 17, 2006; Page A6
China and Iran are trying to conclude a multibillion-dollar oil-and-gas deal in coming weeks, underscoring how China's appetite for energy could undermine Washington's efforts to isolate Iran.
An agreement would seal a memorandum of understanding signed by China and Iran in October 2004. Under its terms, Iran would allow China Petrochemical Corp., or Sinopec Group, to develop Iran's Yadavaran oil field in exchange for agreeing to buy 10 million tons of Iranian liquefied natural gas annually for 25 years.
Iranian oil-ministry officials familiar with the China talks said the country is trying to conclude any deals before potential sanctions are imposed on Iran for its nuclear ambitions. In a statement issued yesterday, the Iranian Embassy said both Iran and China will “… follow the agreements and contracts and keep in touch through bilateral-exchange delegations in order to fulfill the agreements on energy …”
A Chinese delegation of top economic-policy makers from the National Development and Reform Commission is planning a trip to Iran, possibly as early as next month, an official with the commission's foreign-affairs department said yesterday. Final dates for the trip haven't been set yet, but negotiations on the energy deal are on the agenda, the official confirmed.
The deal could be worth tens of billions of dollars. The field is expected to produce about 300,000 barrels of oil a day at its peak. It is unclear if those terms have changed. Sinopec Group is the state-owned parent company of Hong Kong-listed Sinopec Corp.
The overseas subsidiary of India's state-owned Oil & Natural Gas Corp. would also be a minority partner in the Iran deal, with a 20% stake in the project. India and China recently said they would team up to bid for selected energy assets abroad in an effort to cut the cost of feeding their oil-guzzling economies. But this Iran deal preceded that agreement, and the Indian company isn't directly involved in the current talks.
The signing comes as Iran says it has restarted small-scale enrichment of uranium despite international efforts to stop it. Many countries fear Iran could use the fuel to build nuclear weapons. Iran says it intends to develop only nuclear-power plants. The U.S. has been pressuring its allies to isolate Iran and has threatened sanctions.
U.S. and European diplomats with deep involvement in the Iran standoff said they were surprised Iran and China were pushing ahead with the energy talks. One European diplomat said yesterday that the situation shows how complicated it is to deal with Iran, and that even within governments concerned about Iran there are different constituencies with different priorities.
Indeed, China also has encouraged Iran to drop its nuclear activities and has endorsed diplomatic efforts to resolve the standoff. But Beijing appears willing to put those concerns aside to secure more energy. China has struck oil deals with other countries the U.S. deems unfriendly, including Sudan and Syria.
One Iranian oil-ministry official said the deal is progressing, though its timing remains unclear.
Keun-Wook Paik, an energy researcher at Chatham House, a think tank in London, said Iran is trying to deliver a message to the U.S. and China. “The message to Washington is that Iran still has allies,” Mr. Keun-Wook said. “And Iran wants China to know: 'We need you, we know what you're looking for — you're desperate for oil and natural gas, why not go for our mutual benefit?'”
With its economy expected to grow roughly 9% this year as millions of Chinese buy homes and cars, China is already the world's second-biggest consumer of oil, after the U.S. The nation is expected to need as much as 7% more oil this year than last, and about 40% of that will be met from imports. Iran is already among China's top suppliers.
Officials from Sinopec declined to answer questions about the deal yesterday. Royal Dutch Shell PLC, which has offered technical advice to Sinopec on the project, said that it remains interested in participating in the future development of Yadavaran.
Since the deal was initiated two years ago, both oil and natural-gas prices have continued to rise. Under the preliminary 2004 agreement, Iran would give the Chinese company a 51% stake in the oil field, ONGC would get a 20% stake and the rest would be owned by National Iranian Oil.
—-Cui Rong in Beijing contributed to this article. read more

By JOHN J. FIALKA
February 17, 2006; Page A6
WASHINGTON — Hoping to ease gas prices and avoid an election-year fight over drilling off the Atlantic and Pacific coasts, leaders of the Senate Energy Committee are pushing to open 3.6 million acres for oil and gas exploration in the central Gulf of Mexico.
Chairman Pete Domenici (R., N.M.) said such a move would be the “single most important thing that Congress can do” this year to bring a substantial new supply of natural gas to market. Oil-and-gas industry experts consider the area prime territory for exploration because it is close to fields with proven reserves and near an offshore platform and pipeline network being built to bring more natural gas to shore.
The proposal by Mr. Domenici and the committee's ranking Democrat, New Mexico Sen. Jeff Bingaman, is an attempt to forge a bipartisan compromise that would avoid a much broader political fight. Some coastal states, led by Florida, California and New Jersey, want drilling on federal land off their coasts banned forever. A growing coalition of farmers, industries and interior states, who want more natural gas for fertilizer and as a feedstock for plastics and chemicals, want Congress to allow some states to waive existing bans on exploration off their shores and to obtain part of the royalties from production. The drilling moratoriums expire in 2012.
The portion of the Gulf that is in contention is called “Lease Sale 181 Area.” Arguing that potential leaks from oil wells could taint their beaches, Florida's senators want only 1.2 million acres to be opened, leaving a 150-mile “buffer zone.” The Interior Department recently proposed opening two million acres, allowing drilling to within 100 miles of Pensacola.
In testimony before the panel yesterday, Johnnie Burton, director of the Interior Department's Minerals Management Service, said the area has “a huge potential for natural-gas and oil resources.” She estimated production could begin within three or four years.
Sen. Domenici predicted the move to permit drilling would have a prompt impact on market prices. He said the area contains as much as six trillion cubic feet of natural gas and 13 billion barrels of oil. In 2005, according to the Department of Energy, the nation consumed about 20.6 million barrels of oil a day and 61 billion cubic feet a day of natural gas.
The test for his proposal will come later on the Senate floor, where Florida senators will attempt to cut the size of the access area and the industry-farm state coalition, led by Sens. John Warner (R., Va.) and Mark Pryor ( D., Ark.), will try to allow other states with an interest in drilling for natural gas, such as Virginia, to waive existing bans covering the Atlantic and Pacific coasts.
Sen. Robert Menendez (D., N.J.) said almost the entire New Jersey delegation would fight such an expansion which, he said, could create a “domino effect” along the mid-Atlantic coast. “Our beaches are too valuable to play Russian roulette with,” he said.
Shell Exploration & Production, a subsidiary of Royal Dutch Shell PLC, a major Gulf producer, applauded the committee leaders' move. However, the company warned in a statement that the area was “challenging” because of deep water and geological structures that are difficult to image with computerized seismic exploration equipment.
Write to John J. Fialka at [email protected] read more

Feb 17, 2006
BEIJING (AFX) – China and Iran hope to conclude a multi-billion dollar oil-and-gas deal in coming weeks, with a Chinese delegation of top economic-policy makers planning a trip to Iran possibly next month to help finalize the transaction, the Wall Street Journal said.
The report said that an agreement would seal a memorandum of understanding signed in October 2004 under which China's Sinopec would develop Iran's Yadavaran oil field in exchange for buying 10 mln tons of Iranian liquefied natural gas annually for 25 years at a cost of 100 mln usd.
Under the preliminary 2004 agreement, Iran would give the Chinese company a 51 pct stake in the oil field, the overseas subsidiary of India's state-owned Oil & Natural Gas Corp would get a 20 pct stake, and the rest would be owned by National Iranian Oil.
Iranian oil-ministry officials familiar with the China talks said the country is trying to conclude any deals before potential sanctions are imposed on Iran for its nuclear ambitions, according to the Journal.
Iran has restarted small-scale enrichment of uranium despite international efforts to stop it.
The report cited China's National Development and Reform Commission as confirming senior officials would soon be Iran-bound, with negotiations on the energy deal on the agenda.
Caijing magazine last month reported that the Chinese delegation, led by the National Development and Reform Commission director Ma Kai, would visit Iran in March. That report cited a Sinopec board member, Mu Shuling.
Officials from Sinopec declined to answer questions about the deal yesterday, the Wall Street Journal said.
Royal Dutch Shell, which has offered technical advice to Sinopec on the project, said that it remains interested in participating in the future development of Yadavaran.
sr/dk read more

Lorna Siggins, Marine Correspondent
Feb 17, 2006
One of the five Mayo men jailed last year over opposition to the Corrib gas onshore pipeline has accused Minister for the Marine Noel Dempsey of “deceit” over mediation talks with Shell E&P Ireland.
Commenting on the eve of two days of protests in Ireland and Europe over Shell's Corrib project, retired schoolteacher Micheal O SeighIn said the Minister had “either deliberately deceived us in relation to setting up mediation between us and Shell, or he has no idea what mediation is”.
The five men suspended their participation in mediation talks, chaired by former Ictu secretary-general Peter Cassells, several weeks ago after a series of comments by Mr Dempsey.
In a Dail reply on January 25th and a subsequent interview with MidWest Radio on February 1st, the Minister indicated he never intended mediation to be confined to the two parties only.
However, on September 30th last – just hours before the men were released from jail – the Minister told RTE's Morning Ireland he had contacted “both sides” the day before, and “what I've said to them is that we would appoint somebody to mediate between the two of them” and “leave it to that person themselves and the two sides to discuss the format and framework of that”.
Mr Cassells sought a meeting with the five to clarify the situation, while spokesman for the five Dr Mark Garavan called on the Minister for clarification.
Mr O SeighIn told The Irish Times the five men and Shell had entered into mediation “in good faith”, although the men had asked that the Government be involved also.
A spokesman for the Minister said last night Mr Dempsey had referred to the mediator working with “all those concerned” in a press release of September 30th last, and again on October 29th. “What Mr O SeighIn seems to fail to understand is that they are not the only people that have views, concerns and suggestions.”
The mediator had a free hand in his attempt to reach a solution, he added.
Today's pickets in Dublin, Cork, Kerry, Clare and in Scotland, England, Sweden and at Shell headquarters in Holland are being organised by the Rossport Solidarity Camp grouping and the Shell to Sea campaign. read more

By Jim Hansen
Published: 17 February 2006
A satellite study of the Greenland ice cap shows that it is melting far faster than scientists had feared – twice as much ice is going into the sea as it was five years ago. The implications for rising sea levels – and climate change – could be dramatic.
Yet, a few weeks ago, when I – a Nasa climate scientist – tried to talk to the media about these issues following a lecture I had given calling for prompt reductions in the emission of greenhouse gases, the Nasa public affairs team – staffed by political appointees from the Bush administration – tried to stop me doing so. I was not happy with that, and I ignored the restrictions. The first line of Nasa's mission is to understand and protect the planet.
This new satellite data is a remarkable advance. We are seeing for the first time the detailed behaviour of the ice streams that are draining the Greenland ice sheet. They show that Greenland seems to be losing at least 200 cubic kilometres of ice a year. It is different from even two years ago, when people still said the ice sheet was in balance.
Hundreds of cubic kilometres sounds like a lot of ice. But this is just the beginning. Once a sheet starts to disintegrate, it can reach a tipping point beyond which break-up is explosively rapid. The issue is how close we are getting to that tipping point. The summer of 2005 broke all records for melting in Greenland. So we may be on the edge.
Our understanding of what is going on is very new. Today's forecasts of sea-level rise use climate models of the ice sheets that say they can only disintegrate over a thousand years or more. But we can now see that the models are almost worthless. They treat the ice sheets like a single block of ice that will slowly melt. But what is happening is much more dynamic.
Once the ice starts to melt at the surface, it forms lakes that empty down crevasses to the bottom of the ice. You get rivers of water underneath the ice. And the ice slides towards the ocean.
Our Nasa scientists have measured this in Greenland. And once these ice streams start moving, their influence stretches right to the interior of the ice sheet. Building an ice sheet takes a long time, because it is limited by snowfall. But destroying it can be explosively rapid.
How fast can this go? Right now, I think our best measure is what happened in the past. We know that, for instance, 14,000 years ago sea levels rose by 20m in 400 years – that is five metres in a century. This was towards the end of the last ice age, so there was more ice around. But, on the other hand, temperatures were not warming as fast as today.
How far can it go? The last time the world was three degrees warmer than today – which is what we expect later this century – sea levels were 25m higher. So that is what we can look forward to if we don't act soon. None of the current climate and ice models predict this. But I prefer the evidence from the Earth's history and my own eyes. I think sea-level rise is going to be the big issue soon, more even than warming itself.
It's hard to say what the world will be like if this happens. It would be another planet. You could imagine great armadas of icebergs breaking off Greenland and melting as they float south. And, of course, huge areas being flooded.
How long have we got? We have to stabilise emissions of carbon dioxide within a decade, or temperatures will warm by more than one degree. That will be warmer than it has been for half a million years, and many things could become unstoppable. If we are to stop that, we cannot wait for new technologies like capturing emissions from burning coal. We have to act with what we have. This decade, that means focusing on energy efficiency and renewable sources of energy that do not burn carbon. We don't have much time left.
Jim Hansen, the director of the Nasa Goddard Institute for Space Studies in New York, is President George Bush's top climate modeller. He was speaking to Fred Pearce read more

Friday, 17 February 2006,
By Andnetwork .com
The energy giant Shell has put out a fire that broke out on one of its oil wells in the Niger Delta but a nearby plant remains closed with a production loss of 37,800 barrels per day, the firm said Friday.

Company firefighters were deployed on Thursday to the Cawthorne Channel, part of the New Calabar river 30 kilometres (18 miles) south of the oil city of Port Harcourt, a statement from the Anglo-Dutch oil giant said.
The fire erupted shortly after a militant group threatened to attack Shell facilities, sparking fears of sabotage, but the group told AFP on Friday that it had nothing to do with the blaze, which
is being investigated.
“The fire has been extinguished but Cawthorne Channel-1 flowstation is still shut. The cause of the fire is yet to be determined,” a Shell statement said.
Shell was forced to close down four of its Niger Delta flow stations last month, following violent guerrilla attacks, and was already losing 106,000 barrels per day in production before the Thursday's fire.
On Wednesday a Nigerian military helicopter gunship strafed barges belonging to oil smugglers in the delta. Militants accused Shell of allowing the army to use the firm's Warri airstrip as a base for the strike and threatened revenge.
The company would not confirm or deny the airfield had been used, but witnesses at the airport confirmed that the chopper was operating there.
A spokesman for the militants, an ethnic Ijaw separatist group known as the Movement for the Emancipation of the Niger Delta (MEND), said of the fire: “I'm aware, but it had nothing to do with us.”
But he added: “You won't need to ask when we visit Cawthorne Channel.” Last month MEND blew up an oil pipeline, kidnapped for Shell subcontractors and held them for 19 days and killed 14 soldiers and two civilian workers in an attack on one of the company's flow stations.
Source : Sapa-AFP /fws read more

Feb. 17, 2006, 1:58AM
© 2006 The Associated Press
LAGOS, Nigeria — Royal Dutch Shell shut down an oil facility pumping 37,800 barrels of crude daily in Nigeria's southern oil-rich delta, following a blaze at a nearby oil well, the company said.
The cause of the fire was unknown and is being investigated, company spokesman Don Boham said in a statement late Thursday. “We have informed the relevant government agencies of the incident,” Boham said.
Tension has been running high in Nigeria's volatile oil region since a new militant group, the Movement for the Emancipation of the Niger Delta, launched a string of attacks on oil company operations in January and seized four foreign oil workers who were freed after 19 days in captivity.
The group claims to be fighting for local control of oil wealth by inhabitants of the impoverished delta, who accuse joint ventures operated by the Nigerian state and Western oil companies of cheating them out of the wealth pumped from their backyards.
Nigeria, with daily exports of 2.5 million barrels, is Africa's leading oil producer. It is also the fifth-biggest source of U.S. oil imports.
Related Archive Article
Dec. 17, 2004, 2:35PM
HIGH COST OF ENERGY:NIGERIA
Oil's legacy in Niger Delta may be pollution, anger
Locals fault spills and burning gas for ruining their land and livelihoods
(Last in a four-part series)
By DUDLEY ALTHAUS
Copyright 2004 Houston Chronicle
PORT HARCOURT, NIGERIA – The smoke — thick, black, menacing — shot like a shaking fist into a hazy blue sky.
Another oil spill. Another fire. Another day in the Niger Delta.
Coming amid a general strike and fears of rebel attacks in Nigeria's oil fields, the spill and pipeline fire Oct. 11 near the town of Mogho, about 30 miles southeast of Port Harcourt, the delta's oil center, gained international notice and contributed to a brief bump in world oil prices.
Other than that, the incident was notable only for its normality.
Environmental crises have defined the delta for decades. After nearly half a century of producing oil, the region is dissected by pipelines, peppered with pumping stations and blazing with hundreds of natural gas flares.
The extent to which oil production damages the environment remains debated by activists, academics, politicians and oil executives. But the perception among the 14 million residents of the delta is what matters. They blame the spills and flares for ruined crops, depleted fishing grounds, lessened lives.
Fury at the contamination kindled sometimes-violent civic resistance 15 years ago to the foreign oil companies that operate here. A leader of that movement, writer Ken Saro-Wiwa, gained worldwide attention in 1995 when he and eight other activists were hanged by a military government on murder charges widely believed to have been fabricated.
Pollution stokes the delta's anger still.
“If this happened in the North Sea, would they treat us like this?” said George Akbagra, 82, who once sailed those oil-rich waters as a merchant seaman.
Akbagra, now the village chief of Biseni, 50 miles west of Port Harcourt, stood ankle deep in oily ooze from a recent spill at the edge of a fresh-water lagoon where he and other villagers fish. The trees around the pond stood barren and blackened, evidence of another spill three years ago.
“This is our business,” Akbagra said, motioning to the pond. “Our livelihood.”
Delta's promise
The Niger Delta, a West Virginia-sized coastal wetland where the Niger River fractures into smaller waterways and empties into the Atlantic Ocean, accounts for nearly all of Nigeria's daily oil production of 2.5 million barrels.
The country is considered a major source of the world's future petroleum supplies, with some seeing it and its neighbors providing about a quarter of U.S. oil imports in a decade. But instability in Nigeria makes many question whether it will fulfill those expectations.
The delta holds one of Nigeria's largest surviving rain forests, the world's third-largest mangrove forest and the greatest extension of freshwater swamps in Africa. The region's brackish creeks, bays and tidal pools are breeding grounds for the marine life upon which many people depend for food and their livelihoods.
Because much of it floods in the rainy season, nearly three quarters of the delta's people live in clusters, increasing their proximity to oil sites.
More than 4,000 spills have occurred in the Niger Delta since oil production began 47 years ago, according to the U.S. Energy Information Administration.
Hundreds of flares burn at any one time. Lit from the natural gas that comes to the surface with extracted oil, the flares spew carbon dioxide and potentially carcinogenic particles.
“They have polluted our water. The creeks are ruined from the oil running into them,” said Robinson Ukalik, 32, a leader in Akala Olo, a delta village about 50 miles west of Port Harcourt, where Agip, the Italian oil company, has been pumping oil for four decades. “The lives of the people are deteriorating.”
The spill near Mogho in October dumped a still-uncalculated amount of crude into a creek, which ran downstream into a brackish estuary and was carried by a rising tide into other streams.
Casava and sweet potato crops in nearby fields were lost. Red snapper and other fish died, according to a report by a local activist group, the Niger Delta Project for Environment, Human Rights and Development.
The subsequent fire — which Royal Dutch/Shell charges was set by someone while its repair crews negotiated with local youths for access to the spill — incinerated fishing boats and mangroves. Local activists deny the fire was intentionally set.
Canvas of blight
From 1,500 feet above on a helicopter flight provided by Shell, which produces a majority of Nigeria's oil, the Mogho spill seemed the newest brush stroke on a canvas of blight.
From the riverfront slums clustered on the edge of Port Harcourt to the seafront oil-storage tanks on Bonny Island, human crowding, industrial refuse and oily film blackened a once-pristine green expanse. Flames from flaring gas licked the horizon to the north, east and west.
Oil spills can have serious consequences in tropical wetlands such as the delta, some scientists say.
Damaged mangrove forests require at least 30 years to recover. In some circumstances, spilled oil can stunt or kill crops, prevent seeds from germinating, suffocate wild plants and aquatic life. Crude contains varying concentrations of polycyclic aromatic hydrocarbons considered carcinogenic.
And the flaring, or deliberate burning, of natural gas has been cited as a leading cause of global warming and a contributing factor to acid rain.
The Nigerian government has vowed to end flaring by 2008 and has claimed to have reduced the amount of gas flared by a third in recent years. Despite efforts to export its gas, use it for local industry or reinject it into oil reservoirs, Nigeria still burns three quarters of its gas by some counts.
All flaring, regardless of how efficient or what petroleum by-products are burned, leaves residue in the air and the soil, said Charles Brandt, a scientist who studies oil production's tropical impact at the U.S. Department of Energy's Pacific Northwest National Laboratory.
Some compounds in that residue are known carcinogens, Brandt said, adding that many of the hundreds of gas flares in the Niger Delta are in or near villages.
Still, oil companies and some studies argue the petroleum industry's environmental impact on the delta may be restrained by the light quality of Nigeria's crude, which evaporates quickly in the tropical sun, and by the torrential rains that regularly flush the delta's landscape.
Other factors at play
A 1995 World Bank study concluded that the environmental impact of oil production in the delta was “widespread and substantial.” But the study also suggested that oil-related pollution was not nearly as threatening as sewage from a rapidly growing population, overuse of farmland and fishing grounds, and unbridled deforestation.
“An oil spill always looks bad. But it wasn't clear (spills) had as much of an impact as other things,” David Moffat, a U.S. environmental specialist who co-wrote the World Bank study, said in an interview. “The (oil-related) pollution itself was not as critical as people made it out to be.”
Robin Lewis, a Florida expert on mangrove ecosystems who has made seven trips to the delta on a ChevronTexaco contract to study the impact of spills, said oil breaks down quickly in tropical terrain.
“It is unscientific to characterize oil as a major impact on mangroves,” Lewis said. “It is not.”
Far greater harm is caused by the delta's demographic explosion, Lewis said, as well as the damming of the Niger River far upstream and the cutting of new canals in the delta, which upend the ecological balance.
Apart from the World Bank report and assessments done for specific projects, few studies have been done on the oil industry's footprint here.
“We don't have any serious scientific studies that would document things that would be pretty easy to document,” said Michael Watts, a geographer at the University of California-Berkeley who studies environmental politics in the delta. “It's astonishing.”
But in the delta's superheated social climate, proof often yields to perception, science to politics.
The widespread awareness of the region's environmental damage has been useful for groups pushing for political and economic change. Leading activists say the real struggle in the delta is for property rights, self-determination and a bigger slice of Nigeria's oil revenues.
“Everything that people want to talk about is a spinoff of these three issues,” said Oronto Douglas, a Port Harcourt lawyer who serves as the deputy director of Environmental Rights Action, the Nigerian affiliate of Friends of the Earth.
“These communities are not supposed to be poor. But their rights are denied them,” Douglas said. “There is a need for those who hold and produce the wealth to have a measure of control over their resources.”
Calls for action
Under pressure from armed militants, Peter Odili, the governor of Rivers state, which includes Port Harcourt and the site of the October spill at Mogho, called last month on Shell to clean up more than 250 spills statewide.
In addition, the president of Nigeria's Senate demanded that Shell pay $1.5 billion in environmental damage compensation that a court had awarded to delta villagers. Shell maintained the Senate had no jurisdiction and that the company and the villagers should settle the matter.
Shell also said that two-thirds of the more than 200 spills in its zone last year resulted from sabotage.
Statistics from the Nigerian National Petroleum Co. — the government agency that holds a majority stake in Shell's and other companies' joint ventures in the delta — show sabotage rising steadily throughout the 1990s and then skyrocketing at the turn of the century. The Nigerian company recorded 581 incidents of vandalism on its pipelines in the first nine months of this year.
Shell acknowledges the need for cleaner oil and gas production. But company executives maintain the real issue is social frustration.
“What has happened is that there has been an increase in the poverty level,” said Precious Omuku, Shell's spokesman in Nigeria. “There has been a lot of want, a lot of deprivation. The development that should have happened in the Niger Delta has not happened.
“So there is a lot of anger.”
[email protected] read more

February 17 2006 at 09:23AM
By Dave Clark
Lagos – The energy giant Shell defended on Thursday the use by the Nigerian military of its airfield in the oil city of Warri as a base from which to launch air strikes in the restive Niger Delta.
A Nigerian helicopter gunship opened fire on Wednesday on eight barges allegedly used by smugglers to transport stolen crude oil from the creeks of the delta to tanker ships waiting offshore, a military spokesperson said.
After the raid, a local militant organisation accused the army of targeting civilians and threatened violent reprisals against Shell to punish the firm for allowing its airstrip to be used for military operations.
Threatened violent reprisals against Shell
Shortly after the warning was issued, a Shell oil well caught fire in another part of the delta, cutting production by 37 800 barrels per day. But it was not immediately clear if this was as a result of sabotage or an accident.
“Armed intervention is always a decision for the proper authorities and not for private companies such as Shell,” a Shell spokesperson told AFP.
“As in any other part of the world, the government has a duty and an obligation to uphold the rule of law, while at the same time respecting the human rights of its people,” she said.
“Any questions about military operations and their use of airstrips during their operations in the Niger Delta should be raised with the appropriate authority,” she added.
Shell did not confirm or deny that its Osubi airstrip in Warri had been the base of the attack but the local military task force's Mi-35P ground attack chopper was seen there on Wednesday by witnesses who spoke to AFP.
Shell was forced to close down four of its Niger Delta flow stations.
Osubi, lying just north of Warri, was built by Shell as the city developed as a centre of Nigeria's oil industry. It is still managed by the Anglo-Dutch giant, but is also used by other military and civilian air operators.
The Mi-35P – a Russian-built armoured gunship also known as a “Hind”, equipped with rockets and twin 30mm cannon – is often to be seen there.
Last month, Shell's activities in the region were targeted by an ethnic Ijaw militant group angered by the arrest of two local leaders. The group blew up a pipeline, kidnapped four foreign workers and killed 14 government soldiers.
After Wednesday's air strike, a statement from an email address used by the gang demanded that Shell stop allowing Osubi be used by the military.
“This airstrip is supposed to be utilised for civilian purposes but is now apparently being utilised by the military with the consent of Shell as a staging ground for attacks on Ijaw settlements in the Niger Delta,” it said.
The group warned “we are very well capable of shooting down aircraft landing and taking off” from Osubi and might do so if “the use of this privately owned civilian airstrip for military operations is not discontinued”.
Meanwhile, firefighters were battling the blaze on an oil well in the Cawthorne Channel, part of the New Calabar river 30km south of the oil city of Port Harcourt, according to the firm.
“The cause of the incident is not known and the company's fire crew and oil spill control as well as technical intervention teams are being mobilised to the site,” Shell's public affairs manager Don Boham said.
While the fire continues, a nearby plant – the Cawthorn Channel-1 flow station – is shut, cutting production equivalent to 37 800 barrels per day.
Shell was forced to close down four of its Niger Delta flow stations last month, following violent guerrilla attacks, and was already losing 106 000 barrels per day in production before the Thursday's fire.
Nigeria is Africa's biggest oil exporter, producing around 2,6 million barrels per day, but most of its 130 million people live in grinding poverty and there is much resentment in the delta of government and the oil firms. – Sapa-AFP read more

Loses N295m per day
By Mike Oduniyi, 02.17.2006
Barely 24 hours after the Joint Military Task Force in the Niger Delta, Operation Restore Hope, bombarded illegal oil bunkerers’ facilities in Okorenkoko, an Ijaw Community in Warri, a Shell Petroleum Develop-ment Company (SPDC) facility in Rivers State went up in flames yesterday, leading to the closure of a flow station with a daily production capacity of 37, 800 barrels.
The huge fire, which will cost the oil company about $2.27 million (N295 million) daily in revenue, forced the closure of a flow station identified as Cawthorne Channel field, said to be close to the ill-fated facility.
Although the SPDC in a statement said it was unsure of the cause of the fire that did extensive damage to the facility, there were speculations that the damage might have been done by militant Ijaw youths in retaliation for Wednesday’s bombardment of bunkerers’ barges in Okorenkoko, a stronghold of the militants.
“A fire incident was reported at a well at SPDC’s Cawthorne Channel field early this morning (yesterday). The cause of the incident is not known and the company’s fire crew and oil spill control as well as technical intervention teams are being mobilised to the site,” Shell said in the statement made available to THISDAY.
Explaining the possible cause of the fire, it said, “an overfly showed some oil leakage, but the fire appeared contained within the wellhead area. A nearby flow station, Cawthorne Channel-1 has been shut down as part of efforts to contain the blaze. This has resulted in a deferment of some 37, 800 bpd,” the company added.
Shell said further that while the fire was extinguished last night, the Cawthorne Channel- 1 flow station would remain shut until the cause of the incident was determined. “We have informed the relevant government agencies of the incident,” it stated.
Following the bombardment of Okorenkoko by the military task force, Okorenkoko community leaders had claimed that the community was the target of the attack, a claim the military rejected as it insisted that the aerial raid was to stamp out the facilities of criminals that were using the community as their base for illegal oil bunkering.
Angered by the military’s action, militant youths had issued threats that the attack would not go without a response from them.
The SPDC was forced to shut down the production of 106,000 bpd of oil last month following a similar attack on its crude oil pipeline in Rivers State. A militant group, Movement for the Emancipation of Niger Delta (MEND), later claimed responsibility for the attack. The group also masterminded the kidnap of four expatriate oil workers last month.
The Federal Government had approached the militancy of the youths of the Niger Delta with a carrot and stick strategy, warning that it would not hesitate to use force to terminate the circle of violence in the restive oil-rich region.
The Federal Government’s patience with communities suspected to be harbouring the militant youths was, however, stretched beyond its limit on Wednesday as the military task force in the Niger Delta bombarded Okorenkoko, leaving, according to the community’s leaders, about 20 civilians dead and several others injured.
Although the military said the action was targeted at illegal oil bunkerers at the community believed to be a stronghold of Ijaw militant youths, community leaders claimed that about 20 persons died while several others sustained serious injuries.
An Ijaw community leader, Comrade Joseph Evah, later told THISDAY that the hope of resolving the crises in the oil producing region did not lie in the Federal Government’s deployment of troops, but in the immediate implementation of recommendations made by several Ijaw leaders on the even development of the impoverished region.
Evah said as part of efforts to end the crises, stakeholders in the Niger Delta held a meeting in the Bayelsa State capital of Yenagoa last weekend, where solutions to the problems were suggested.
“We have made it known that the youths of the Niger Delta will continue to fight back when provoked by the military. We want the soldiers withdrawn, in their place let the Federal Government set up industries to provide jobs,” he said. read more

By Jeremy Howell
BBC News business reporter in Oman
Oil is almost never found in convenient places.
The huge oilfield of Qarn Alam is no exception.
From Muscat, Oman's capital, you have to hitch a ride in one of Petroleum Development Oman's propeller planes, and fly 350 kilometres over the mountains to the edge of the “Empty Quarter” desert.
Here, underneath a landscape of flat sands studded with wellheads, lie more than a billion barrels-worth of oil.
In oil industry parlance, it is a “giant”.
International oil companies spend decades, and hundreds of millions of dollars, in the search for fields like this.
Heavy oil
Qarn Alam was discovered in the 1970s.
For the first decade, oil flowed freely to the surface from where it lay, 500 metres below the surface.
But now, the flow has diminished to a trickle; only 1,000 barrels a day, which makes Qarn Alam a disappointing under-achiever.
“The oil here is very heavy'” says Sami Baqi, the project manager at Qarn Alam.
“It doesn't flow freely from the rocks.
“There's a very slight oil rim from which we are producing. If we continue to produce the way we are producing, it will take hundreds of years to deplete this field.”
Oman cannot afford to wait this long. It needs more oil now.
Over the past five years, national oil production has fallen from 800,000 barrels a day to 633,000 barrels a day.
Recovering more oil
Petroleum Development Oman has been spending hundreds of millions of dollars on developing new ways of boosting output from reluctant giants like Qarn Alam.
Heavy oil is tricky to recover, says Sami Baqi. When oil wells are first drilled, the oil normally flows up freely under its own pressure. When it stops doing so, the usual fix is to pump water into the well, to increase the oil pressure. But that does not work in fields like Qarn Alam or in other fields where the oil is viscous.
Most of it stays trapped in a criss-cross of rock seams known as the “matrix”, and you cannot get to it with a drill-bit.
To be collected, the oil must be made to flow into open channels underground called “fractures”.
Petroleum Development Oman has recently completed a pilot project at Qarn Alam in which engineers injected steam into the oil well, thus heating the oil and making it thinner, which made it flow out of the matrix and down into the fractures.
“You know when it has worked,” says Sami Baqi, “because on the surface, the ground crumples as the oil underneath suddenly flows out of the rocks.”
“If we were to carry on producing the way we are producing, we will recover only 3% of the oil down there, but the pilot project shows that if we use steam injection we can recover 25% to 30%.”
That equates to between 250 million and 300 million barrels of oil, which at current prices would yield Oman an extra $18bn (£10bn) in revenue.
Difficult investment decisions
The Qarn Alam steam recovery project is set to become the largest of its kind anywhere in the world.
In other fields, Petroleum Development Oman is experimenting with injecting gas, and polymers, into oil wells.
These techniques, which are one stage up in technology from water injection, are known as “enhanced oil recovery”.
The company plans to introduce them in about a third of Oman's oil wells.
On average, it is estimated this could increase the amount of recoverable reserves in the fields from between 10 or 20% of the total to 40%.
“These projects are very expensive,” says John Malcolm, managing director of Petroleum Development Oman.
“Together, they will cost billions of dollars.
“The fact that oil prices are high now helps our shareholders take these very difficult investment decisions.”
The shareholders include the Oman government, which is the majority owner, as well as Shell and other international oil companies.
Maximising recovery
It seems tough on Oman that it has to spend so much money, and do so much science, to extract its oil when in neighbouring countries like Saudi Arabia and the UAE, oil flows readily to the surface.
New oil recovery techniques could be exported
But over time, this could work to Oman's advantage.
Enhanced recovery could become a major export technology in its own right, when other countries in the region find their oilfields are also beginning to run low.
“We have never had easy oil in Oman”, says Abdullah Lamki, deputy managing director at Petroleum Development Oman.
“Compared to Saudi and the Emirates, our productivity is low; our reservoirs are more challenging. We have had to embark on enhanced recovery. But I expect some of the other Gulf states may be following our lead in maybe 10 or 20 years time.”
The most obvious candidates are Bahrain, where crude oil output has shrunk in recent years to 40,000 barrels per day, and Kuwait, which is planning to increase recovery in its northern field, where the oil is known to be hard to extract.
As oil recovery techniques are developed and spread across countries, it may change the economics of the oil industry.
“There is always a balance between finding new fields and maximising recovery from the existing, mature fields,” says Mr Malcolm.
“But in the future, you will see a greater emphasis on maximising recovery, and that will require enhanced recovery techniques”. read more

DUBAI (Dow Jones)–Royal Dutch Shell PLC (RDSA) has approached the Iraqi oil ministry to explore options for a contract to help the country double output at a field in the oil-rich south, oil officials told Dow Jones Newswires.
Since last year the Anglo-Dutch major has been working on technical studies on the Maysan oil field in the south and the large Kirkuk field in the north, as well as helping draw up a natural gas master plan, officials said, adding that BP PLC (BP) is carrying out a study of the Rumeila oil fields in the south.
“Shell is eyeing a service contract to carry out oil field development in Iraq,” said one ministry official.
Maysan oil field currently contributes 50,000 barrels of oil a day to the country's total estimated production of around 1.5 million-1.9 million b/d, but Shell has detailed plans of how to boost the field's output to around 100,000 b/d, the officials said.
“We are currently involved in three studies, one of which is Maysan. They are a service to the oil ministry,” spokeswoman Caroline Wittgen said, declining to comment further.
Iraqi oil officials said the most complete information on Iraqi fields is on Maysan, hence Shell's interest in contractual options there.
Shell's targeting of the Maysan field, officials said, puts the company ahead of its peers when it comes to development activity in Iraq, where a tough security situation precludes operations for most oil companies.
Small firms are operating in the Kurdish region, where good security provides a relatively stable operating environment, but contracts awarded by the regional goverment there remain in a precarious position in terms of what the country's final constitutional will allow.
Now, as Middle Eastern banks rush to open branches in Iraq to position themselves for a potential business boom, oil companies, too, are jockeying for position.
Iraq aims to become one of the world's leading oil producers, with output exceeding 5 million b/d.
Oil officials said firms besides Shell are already closing in on deals with the Iraqi government, or setting up shop in Baghdad.
Norsk Hydro ASA (NHY) Chief Executive Eivind Reiten said the Norwegian firm is planning to open a very small, third-party-operated representative office in Baghdad soon.
Reiten said the company has “no plans to open a bureau for some time,” and the decision is based on overall business conditions in Iraq rather than just security concerns.
Like Shell and BP, Hydro is studying several existing reservoirs in partnership with the oil ministry, said spokeswoman Kama Holte Strand, but she declined to name the fields being examined.
Exploration and development is the logical progression for Hydro, Strand added.
“Of course, we are interested in doing things there in time, and we are studying to see what is possible (with the reservoirs),” she said.
CEO Reiten added the company is making “good progress” on a memorandum of understanding on the reservoirs, and emphazised that it is part of a broader agreement between Iraq and Norway.
He wouldn't comment on possible development plans or a timeframe for the deal to be finalized. Asked if Norsk Hydro had approached the Iraqi government to sign an oil services deal similar to Russia's Shtokman, Reiten said the company wouldn't exclude that scenario, “but it's not a priority.”
An Iraqi oil official said Statoil ASA (STO) is also set to sign a new memorandum of understanding, building on the firm's field studies.
Shell, as it presses the ministry for a development contract, is about to move its base for Iraqi operations from its regional Dubai headquarters to Amman in Jordan to smooth its path into Iraq.
For some Iraqi officials, foreign investment can't come fast enough.
One senior official said the country's oil development stalled last year, when the ministry failed to drill new wells, start projects or even complete repairs.
“There has been a hiccup in oil reconstruction in general,” he told Dow Jones Newswires.
The official said the Shell and BP studies are almost complete and the oil majors will soon give the ministry detailed assessments of what is needed to boost crude production.
The oil ministry plans to achieve a marked increase in investment in development activity, said Assem Jihad, a spokesman for the oil ministry.
It plans to award contracts for oil-field development in both the north and south of Iraq, and has budgeted for the drilling of between 100 and 200 wells.
The ministry has a budget of $4.5 billion for development this year, but most of this cash goes into fuel subsidies, so the government will have to tap foreign capital to meet its plans to boost output capacity by 1 million b/d to total 3 million b/d this year.
Many of the estimated 30 firms that are carrying out studies of Iraq's fields are expected to follow Shell's lead and bid for development contracts, but all will depend on the new government.
Last week's reappointment of incumbent Prime Minister Ibrahim al-Jaafari should reignite the search for a government two months after Shi'ite groups won most votes in the general election.
The ministry has yet to decide if the fields currently under study will be offered on a service contract basis, which would still need some form of parliamentary approval, or whether the contracts will be similar to the development contracts awarded last year for the Khormala, Himreen and Subba/Luhais fields, in which foreign firms provided equipment to local engineers.
Oil companies and officials said contracts to boost productivity at existing fields will be able to sidestep the legal framework that the new government is expected to draw up to regulate investment in new fields.
That will be needed to turn Iraq into an oil superpower.
The oil officials say these contracts are now bearing fruit as the ministry's engineers have just started work on boosting output at these fields, with equipment provided by the foreign firms. read more

16 February 2006
Author:
Provider: Fuel Cell Today
With effect from 1 January 2006 Duncan Macleod has been appointed Vice President of Shell Hydrogen.
Duncan brings to Shell Hydrogen a wealth of international experience and the skills and knowledge necessary to lead the business to the next stage of its development. With nearly 30 years of international Shell experience and most recently in Shell Hydrogen, as General Manager Strategy and European Business Development, Duncan has the exceptional skills in the development and execution of various new growth opportunities. Prior to joining Shell Hydrogen he was extensively involved in the integration and growth of other Shell Group businesses into Shell Global Solutions, the setting-up of an Alliance, Mergers & Acquisition capability and the commercialisation of Biofuels. In addition, Duncan has significant expertise in Supply & Trading, Strategy and the Upstream business in the Americas, Africa and Japan.
“I'm happy to lead this dynamic, young, entrepreneurial company at a crucial moment in its existence – transition from demonstration to a pre-commercial stage. I believe we have the right mix of resources, skills and capabilities to create a business, which will become a substantial contributor to the Shell group portfolio of new and alternative energies. These integrate Shell's leading technologies, global experience and commercial customer understanding to build a sustainable energy future”, says Macleod. “I am also fortunate that the forward-looking thinking, professionalism and enthusiasm which I see in the team provide the necessary enablers to the success of our business”.
Duncan Macleod has replaced Jeremy Bentham who was appointed Vice President Global Business Environment in Shell International. read more

By Dino Mahtani in Abuja
Published: February 16 2006 19:35 | Last updated: February 16 2006 19:35
A Nigerian militant group has threatened to escalate its campaign against the government and oil producers after the country’s military launched an attack on targets in the oil-producing Niger Delta.
Military officials said a helicopter gunship equipped with rocket launchers attacked about eight barges used to smuggle stolen crude oil on Wednesday after spotting them on a routine flight in the western delta. The government says it is trying to cut down on oil theft, known locally as “bunkering”.
Militants said local villages had been randomly sprayed with machine gun fire. No casualty figures are available. The operation coincided with a visit by Jack Straw, UK foreign minister, to the delta, where he met oil industry officials to discuss security issues.
The operation followed a recent surge in militant attacks against oil facilities in the delta that forced a ten per cent cut in Nigerian production and killed several soldiers. Four foreign oil workers were also taken hostage, though later released.
The Movement for the Emancipation of the Niger Delta (Mend), a group which claimed responsibility for recent attacks and the kidnapping, denounced the military operation.
Mend claims to be fighting for the rights of the delta’s majority tribe, the Ijaw. Many Ijaw leaders say they have been politically marginalised while their oil wealth has been stolen from them. But some security analysts believe MEND could be acting on behalf of shadowy but influential political figures.
Industry officials suspect the recent sabotage to a crude pipeline supplying a major refinery in the delta could have been linked to the attack on the barges.
The delta is awash with armed groups who sustain their arsenals on the proceeds of stolen crude. But many armed groups are mixed up in bunkering cartels that involve security officials and political figures, industry officials say.
In a separate development Nigeria’s largest oil producer Shell was on Thursday forced to close an oilflow station in the eastern Delta after a fire broke out in a nearby oil well forcing the closure of a platform handling almost 38,000 barrels per day. read more