January 28th, 2006:

By Graeme Davies
29 January 2006
Plan to ramp up CapEx gets mixed response
THE boom in the oil sector over the past three years has helped Anglo-Dutch giant Royal Dutch Shell mask a poor reserves replacement record which could otherwise have sunk its share price.
Fuelled by hefty cash generation, Shell has decided to ramp up its capital expenditure plans for 2006 by $4bn to $19bn in an attempt to correct its falling reserves replacement record, a move which was greeted with a mixed response by analysts.
Oil prices are predicted to remain around $60 a barrel for much of 2006 and this should allow Shell to produce an acceptable performance while returning significant amounts of cash to shareholders. The amalgamation of the UK and Dutch businesses in the middle of last year also helped to significantly boost Shell’s share price. FTSE100 tracker funds were compelled to buy shares in the company as its weighting in the index increased.
Shell shares have been as high as £18.75 since the amalgamation and are currently steady around the £18.35 level. Thursday’s fourth-quarter and full-year results should demonstrate strong performance but will also highlight Shell’s continuing battle on reserve replacement.
Merrill Lynch recently downgraded Shell to neutral and said: “In particular watch for another year of sub-100% reserve replacement (we forecast 70%-80%) and another flat year of exploration and production revenues.” Merrill thinks BP represents better value than Shell because of its superior portfolio mix and better shareholder returns.
The Merrill team is also concerned shareholder returns could disappoint, particularly in contrast to BP’s hefty returns. It said: “The group has the financial clout to release some $30bn and still enjoy gearing below 20%. However, we doubt it will announce a special dividend.” It believes share repurchases will be restricted to $10bn as Shell reserves some firepower for a possible acquisition, which in itself carries risks.
Numis Securities also recently reduced its recommendation on Shell from add to hold following the increase in capital expenditure plans. It said: “The higher level of investment has not been accompanied by higher production or activity levels. It simply reflects a higher cost base.”
Other analysts are more positive, Credit Suisse First Boston’s team has an outperform rating on Shell with a price target of £21.70. It believes reserves replacement levels will witness a “steep rise” from 2006 onwards as the recent investment programme begins to kick in.
JP Morgan’s Gordon Gray is overweight on Shell with a price target of £19.75. Gray believes the increase in capital expenditure will relieve a key overhang on Shell’s share price and “long term volumes are likely to be more stable than most of its peers”.
Goldman Sachs is also overweight on Shell but has cut its price target by 3% to £21. It feels the recent upgrade to spending will not have a significant effect on the shares.
Graeme Davies writes for Investors Chronicle
NOTE: The authors on these pages have been selected for their expertise in various areas of investment. They or the funds they manage may or may not hold positions in the stocks discussed. read more

Saturday January 28th 2006
Pat Boyle
SHELL is expected to downgrade the estimated size of the Corrib gasfield by about $2bn worth of gas to take account of conservative new accounting policies and problems with the gas reservoir.
Oil industry sources said that a quarter of the Corrib reservoir is extremely problematic, and that there is no guarantee the gas contained in this section can be recovered, forcing Shell into a downgrade of recoverable reserves in order to stay in line with conservative new accounting practices.
A spokeswoman for Shell declined to comment, saying the company did not comment on a “field by field basis”.
Early estimates for the Corrib field were that it had one trillion cubic feet of gas.
However, as appraisal work on the find progressed, this was downgraded to about 850 billion cubic feet of recoverable gas reserves, and now that figure could fall towards 600bn cubic feet.
Now Shell is set to downgrade this further, possibly by up to 25pc to take account of the problems with the reservoir.
Downgrade
The downgrade would translate to some €2bn worth of gas at today's prices.
Such a cut will make severe inroads into the profitability of the find, but industry players believe Shell will persevere, even though by the end of 2004 almost half of the estimated $900m development budget had already been spent. Since then development costs have soared by some 40pc, leaving the economics of the project tightly balanced.
The cut in reserves may also call into question estimates which suggested the field would supply the bulk, 60pc, of national demand for 15 years from about 2007.
Shell acquired its 45pc stake in Corrib through its acquisition of Enterprise Oil for about $5.7bn in 2002.
The issue of reserves at Shell came under the spotlight when the company admitted that, under the US Securities and Exchange Commission's 'proven' definition of reserves, it had exaggerated the total by some 20pc.
After a series of corrections the reserves were eventually chopped to 4.47bn from 5.9bn barrels of oil and gas.
According to consultants Wood MacKenzie, Shell now has among the most conservative accounting procedures in the industry, and it is expected that when its next round of reserve estimates are published, they will take account of a cut of about 25pc in the size of Corrib reserves.
One of its partners in the Corrib field, the US firm Marathon, has already reduced the share of Corrib it regards as proven by 145m barrels of oil equivalent (MBOE) or 84bn cubic feet of gas.
Shell has already undertaken a hefty writedown in the value of the assets it acquired when it bought Enterprise Oil – the most recent a $330m downgrade in 2004 and even with its many problems, Corrib is one of the few Enterprise assets it can point to in order to justify Enterprise's $5.7m price tag. read more

Personal Finance: Shell ‘improperly used’ surplus pension money 

January 28, 2006
By Bruce Cameron and Charlene Clayton

A ruling against oil company Shell may force many trustees to reassess whether their funds are in surplus or whether surpluses have been understated.

In the first ruling of its kind, a tribunal appointed by the Registrar of Pension Funds has found that the Southern African arm of petroleum giant Shell should repay millions of rands to its staff defined benefit pension fund. read more

Ronnel W. Domingo
Jan 28, 2006
THE OPERATOR OF THE MULTIBILLION-dollar Malampaya natural gas project has teamed up with the government and two private firms to look for oil and gas in an area near its current production field.
In a joint satement, Shell Philippines Exploration BV said it signed with the Department of Energy, Kuwait Foreign Petroleum Exploration Co. (Philippines), and South China Resources Inc. a deal on Service Contract No. 60, which covers a relatively unexplored area of 1.01 million hectares offshore north of Palawan.
Interest in SC 60 is distributed as follows: Spex, 55 percent; Kufpec Philippines, 30 percent, and SCR, 15 percent.
Kufpec is a subsidiary of state-owned Kuwait Petroleum Corp. while SCR is a local firm listed on the Philippine Stock Exchange and involved mainly in oil exploration.
An SC is a license issued by the energy department allowing explorers and developers to scour oil and gas prospects within the country and continue to the production stage in case petroleum reserves were found.
The partners said the SC 60 project, which used to be covered by Geophysical Survey and Exploration Contract No. 99, involves one of the promising sites for petroleum exploration identified by the Philippine Petroleum Resource Assessment Project Study.
The study, conducted by the Norwegian Agency for Development Cooperation (Norad) and the DOE, provided updated data on the petroleum basins in the country and identified the level of prospectivity of each area.
Under SC 60, the consortium committed to spend at least $24 million or about P1.27 billion during the seven-year exploration period. read more

Davos News Tracker
January 27, 2006 9:32 p.m.
Updated regularly with news from the World Economic Forum in Davos, Switzerland. All times EST.
Friday, Jan. 27
9:30 p.m.: WSJ's Alan Murray reports. When the Oscars roll around in March, the parade of Versace, Dior and Prada gowns will help set fashions for the year ahead. But for the boardroom crowd, Davos is as close as it gets to the red carpet. The forecast? Staid. Read more.
5:55 p.m: New CNBC-Dow Jones video posted. Novartis CEO Dan Vasella discusses his company's pipeline and outlook for 2006.
1 p.m.: Adam Cohen of Dow Jones Newswires reports. Ukraine will pay for all the Russian natural gas it uses, the country's economy minister Arsenii Yatseniuk said. He denied the country was stealing from pipelines that traverse the country, carrying about 25% of Europe's gas supplies. “The situation has returned to normal,” Mr. Yatseniuk said on the sidelines of the World Economic Forum. “Gas is flowing and at the end of the month, Russia will calculate how much gas has traveled through Ukraine and we will calculate how much gas we have used.”
12:30 p.m.: WSJ's Greg Hitt writes in Washington Wire. Major players in global trade talks shouldn't count on the U.S. continuing negotiations after mid-2007, when President Bush's trade-negotiating authority is due to expire. U.S. Trade Representative Rob Portman warned it would be “very difficult in this environment” for the White House to secure congressional approval of even a short-term extension of the trade authority. More.
11:45 a.m.: CNBC-Dow Jones video posted. NYSE CEO John Thain comments on expansion plans, the integration of Archipelago and the impact of hybrid trading. Also, Motorola CEO Ed Zander discusses new handsets and converging technologies.
9 a.m.: Billionaire George Soros said Iran was taking advantage of the U.S.'s engagement in Iraq to build its nuclear arsenal is a global threat. “I'm very worried about the global political situation, the power and influence of the United States has decline precipitously” since the Sept. 11, 2001 attacks, Soros said in a CNBC interview. Soros said Iran was not likely to change its mind after deciding to push ahead with building nuclear capacity. “For Israel and the United States, a nuclear-armed Iran under the present leadership is just simply unacceptable,” Soros said. “So we are heading for a collision course, that is already casting a shadow on the oil market, so people are, I guess, building up reserves for that day.” (See the video.)
8:45 a.m.: Shares of Pfizer rose before the opening bell in New York despite a premature announcement in Davos that the FDA approved its drug Exubera, an inhaled human insulin powder. Pfizer CEO Henry McKinnell appeared on CNBC earlier (see video) and said the drug had gained FDA approval, only to retract it later. Mr. McKinnell said Pfizer expects a decision soon, and that the earlier, incorrect statement was due to a mistake in the company's internal communications.
8:30 a.m.: Global trade talks appeared deadlocked as ministers skirted the main issue of cutting tariffs and subsidies, instead concentrating on setting timetables for more meetings. Six trade ministers, as well as WTO chief Pascal Lamy, held a 90-minute gathering on the sidelines of the World Economic Forum. But discussions centered mainly on the timing of future meetings instead of the issues that have deadlocked the Doha round of talks.
DAVOS 2006
• Framing the Issue: See what issues are on the agenda and who's attending the annual meeting.
• Forum's History: The World Economic Forum grew out of an initiative to bring together Europe's chief executives for an informal gathering in Davos in 1970.
• Complete coverage
8:15 a.m.: With both Davos and the Sundance Film Festival being held this week, the planet's most important people need to make finely calibrated calculations as to which event confers greater status, Slate says. It doesn't help matters that the agendas of the two events are converging and that a fundamental tenet of both conferences is that creative and brainy people do their best thinking while skiing, says the online magazine, which offers a list of attendees, panels and other events at the two gatherings and invites readers to match each with either Davos or Sundance.
8 a.m.: Europe must cut government spending and reform its labor market to revitalize its sluggish economies, the president of the European Central Bank and the EU's economic chief said. “The level of government spending is too high,” ECB President Jean-Claude Trichet told a meeting at Davos. Joaquin Almunia, the EU commissioner for economic and monetary affairs, agreed – saying that European governments should not try to spend their way out of economic doldrums. Instead, he warned, governments need to focus on economic reform. “Imposing services [reform] is the key issue to economic reforms,” Mr. Almunia said, adding that such reform should be pushed through after 2007 elections in France, one of the most vocal opponents of the EU's current services directive.
7:15 a.m.: Sen. John McCain said interrogation techniques at the U.S. prison camp in Guantanamo Bay are still of concern and the cases of the prisoners — some of whom have been held for four years without charge — should be processed. “What I was concerned about and continue to be concerned about is interrogation methods,” Sen. McCain told the Associated Press on the sidelines of the World Economic Forum. “What is critical is we adhere to treaties that we are signatories to and observe basic human rights and obey the law that we just passed concerning cruel and inhumane and degrading treatment.”
Gates
6:30 a.m.: Bill Gates pledged to triple the funding for eradicating tuberculosis and health experts urged renewed caution against the spread of bird flu as the World Economic Forum took aim at eradicating and containing illness. Funding health-care initiatives, at least with private money, has been problematic, Mr. Gates said. “In health, there's real problems in that the people who have these diseases don't have the money to justify the investment,” he said. More.
4:50 a.m.: China is set to become the biggest user of broadband in the world, Bill Gates told Davos delegates. “No one will catch up [except] maybe India in 50 years,” the Microsoft chairman said. He said that despite the disparity between China's urban and rural areas, the country was on track toward reducing poverty, meaning more people would be able to afford broadband Internet access. “The greatest surprise in poverty reduction .. is China,” Mr. Gates said.
4:45 a.m.: Senior Arab business leaders are confident about the region's economic prospects, according to a pan-Arabian survey to be released Friday in Davos. Forty% of 140 top executives in financial-services, health-care and travel companies reported an annual growth rate exceeding 20% for the past three years, according to the Arab Business Leaders Intelligence Report. And 94% expect economic conditions to improve during the next year. The executives pointed to a need to invest in workers' training and development and in information technology. The survey focuses on Algeria, Bahrain, Egypt, Jordan, Kuwait, Lebanon, Morocco, Oman, Qatar, Saudi Arabia, Syria, Tunisia, UAE, and Yemen. The report is being published by PricewaterhouseCoopers and Moutamarat, a conference and research firm that is a joint venture between Dubai Holdings and Saudi Research & Publishing Co.
4:30 a.m.: Europe's biggest challenge if it wants to reduce future dependency on external energy supplies is to cut oil consumption for transport, EU Energy Commissioner Andris Piebalgs told Reuters. Mr. Piebalgs is working on proposals for a common EU energy policy and said he hopes that measures to encourage manufacturers to boost vehicle efficiency will be included. “I think this is the biggest challenge we have,” he said. “Transport consumes a lot of oil. Even if we can't establish a legal framework for it, energy efficiency should really be a Europe-wide policy.”
3:45 a.m.: Microsoft's Bill Gates said that beating software piracy in China and India and getting compliance up to U.S. and European levels would take 10 years, Reuters reports. “In India and China it will be a decade before we get that level,” Mr. Gates told business leaders at Davos. “But as long as there is year-by-year progress, it holds a great opportunity for us in terms of scale, which helps us do more, and it's a great place where we have people working for us,” he said. Mr. Gates said sales of the company's software in both countries were increasing every year and he was optimistic that China and India would come round to licensing as Taiwan and South Korea had done.
2:45 a.m.: Bill Gates is set to join British treasury chief Gordon Brown to announce an initiative for funding efforts to fight tuberculosis in the developing world. The threat from TB and other serious diseases is bidding for equal attention with the Hamas victory in the Palestinian elections, terrorism and Iran at Davos.
1:30 a.m.: John Bogle, founder and former CEO of Vanguard Group, explains in a WSJ commentary why he's skipping Davos. With apologies to Bono, the “other Michael Jordan,” Christo and others, Mr. Bogle says his absence is “mostly because what was once truly a global economic conference has become a “happening'.”
12:45 a.m.: Davos Notebook A publishing slip sparks discomfort and an apology; Bono does his thing; and more.
12:30 a.m.: In Davos to tout his country's economic rebound, Egyptian Prime Minister Ahmed Nazif instead found himself analyzing the Palestinian earthquake that brought Hamas to power, writes WSJ's Frederick Kempe. Mr. Nazif urged the U.S. and Europe not to cut off Palestinian funding, but give Hamas — which did much to popularize suicide terrorism — time to settle into the responsibilities of leadership. “We have to give them some space,” he said. “They have not been tested in this environment.” At the same time, he said Egypt would act as a “mediator” due to its open channels to Hamas.
Thursday, Jan. 26
10:30 p.m.: A human bird-flu pandemic could ground up to 70% of aircraft, Virgin Group boss Richard Branson said. “You're just going to have to be strong enough to keep your head down for a year,” the entrepreneur behind Virgin Atlantic Airways told business leaders at Davos, Reuters reports. “If it happens, an airline is going to have 50% of its planes grounded, maybe more – 60%, 70%,” he said. Air travel, which was crucial in spreading the deadly SARS virus in 2003, is expected to be in the frontline should bird flu become easily transmitted between people. See more in the Bird Flu News Tracker.
5:20 p.m.: CNBC-Dow Jones video posted. Cisco Systems CEO John Chambers talks to CNBC's Maria Bartiromo about the company's business strategies. Also, David Stout of GlaxoSmithKline, Victor Chu of First Eastern Investment Group, Deepak Advani of Lenovo Group and Stephen Roach of Morgan Stanley discuss avian-flu preparedness as well as investment opportunities in China.
4:35 p.m.: Dow Jones Newswires' Adam Smallman reports. Signaling level-jitters about energy security, an annual Davos simulation of a terrorism-prompted oil supply shock filled up with chief executives even before this week's meeting started. In previous years, just government officials have attended. Thursday night's simulation drew executives from Royal Dutch Shell and Petroleo Brasileiro SA, among others. The premise: Leaders of the G-8 have called on the private sector to figure out what to do when terrorists coordinate attacks that throttle key crude supply flows, causing prices to jump. Their answer: oil producers and international reserves could cover a drop of some four million barrels a day for more than a year. The hard part: knowing how markets and consumers would respond.
4:30 p.m.: Dow Jones Newswires' Serena Saitto reports. The business elite took a few jabs at the Sarbanes-Oxley Act, which imposed tougher corporate accounting and other standards in the wake of the Enron fraud scandal. During a dinner with the theme “Escaping Public Tyranny,” private-equity firm executives lamented the time and money spent complying with the law. A few suggested publicly traded companies should go private to escape the law's requirements. David Rubenstein, founder and managing director of Carlyle Group, added an offer for the law's authors — U.S. Sen. Paul Sarbanes and U.S. Rep. Mike Oxley, both of whom are due to retire in January 2007. “We want to hire them and put them on the board of some of our companies so that they would see the mistakes they made,” Rubenstein said to enthusiastic applause. Later the head of one of the world's largest private-equity firms stressed he was joking. “It would be good if they served in a public company,” said Rubenstein. “But we are not hiring them.”
2:05 p.m.: MarketWatch.com's Aude Lagorce reports. Nothing illustrates better India's desire to rival the rising international status of China than the massive charm offensive India is mounting here. A huge Indian delegation consisting of 150 members — including three cabinet members and 41 chief executives — is using every opportunity to tell the movers and shakers that India can be a profitable market for foreign investment and not just a service-sector economy. More.
1:40 p.m.: Sen. John Kerry, who narrowly lost the 2004 election for U.S. president to George W. Bush, said he hasn't ruled out another run. Asked whether he would run again, Kerry told the Associated Press at Davos. “We'll tell you somewhere down the line.” Asked whether he would not rule it out, Kerry said: “No — I haven't.”
Musharaff
12:55 p.m.: Pakistan President Gen. Pervez Musharraf said Thursday that Iran should not be allowed to develop nuclear weapons. “Their security is not threatened,” Musharraf told the World Economic Forum. Video.
12:50 p.m.: Dow Jones Newswires' Serena Saitto reports. An embarrassing detail slipped through the normally tight organization of the annual meeting. An article in the forum's glossy and online magazine, The Global Agenda, called on the “global civil society to boycott Israel until it ends its Apartheid-like treatment of Palestinians.” The article, written by former Yale professor Mazin Qumsiyeh, was removed from the online magazine Thursday and WEF executive chairman Klaus Schwab issued an apology. “This article is totally in contradiction to my own, and the forum's, mission and values,” Mr. Schwab said in a written statement. The timing of the incident was particularly uncomfortable as Davos participants discussed the strong showing of militant Islamic group Hamas in this week's Palestinian legislative election.
Mandelson
11:45 a.m.: EU trade chief Peter Mandelson insisted that Europe is “united” in its stand on farm trade and that Brussels wouldn't make any more concessions on agriculture until its trading partners first offer to cut trade barriers in industrial goods and services. “We can't be expected to make a further offer in agriculture in order to pay to keep others at the negotiating table,” Mr. Mandelson said. “Europe is willing to give more than it has offered, but it is not prepared to ask for nothing in return,” he said. Mr. Mandelson suggested that the EU is prepared to risk the current round of trade talks breaking down. “If the talks stopped, we would lose next to nothing,” he said.
11:30 a.m.: News CNBC-Dow Jones video posted. Becton Dickinson Chief Executive Edward Ludwig speaks from Davos about the medical-products company's moves to experiment with stem cells to develop a cure for diabetes.
Portman
11:15 a.m.: U.S. trade chief Rob Portman said new German Chancellor Angela Merkel could help advance stalled global trade talks by offsetting the protective mindset of French officials in EU policy, the Associated Press reports. A key issue holding up talks has been access to EU farm markets. Mr. Portman, speaking on the sidelines at Davos, said Germany could act as a counterweight to France, which has been particularly defensive in wanting to protect its agriculture markets. “I was very impressed with her willingness to engage,” Mr. Portman said of Mr. Merkel. “I'm hopeful that she can help us to come together with an agreement this year.”
9:55 a.m.: News CNBC-Dow Jones video posted. Electronic Arts' Gerhard Florin discusses whether the videogame industry has a negative impact on society.
Brin
9:40 a.m.: News CNBC-Dow Jones video posted. Google founder Sergey Brin talks to CNBC's Becky Quick about doing good in addition to not doing evil. At Davos, “I've been able to meet a number of our existing business partners, form new partnerships .. and also the social entrepreneurs who have fantastic ideas about health, poverty, the environment, and these are all issues we are interested in with our philanthropic arm, Google.org,” Mr. Brin says.
Blatter (right) with soccer champion Pele
8:30 a.m.: Soccer clubs should be docked points if their fans or players use racist abuse because fines don't have enough effect, FIFA President Sepp Blatter told a press conference in Davos. “I am so disappointed. It is a shame for football that in the year 2006, you still have racism,” Mr. Blatter said. “The only way to fight this is to do exactly what we have done when it came to violence. We have to take away the points because it happens in those leagues where the money is sufficient so, even if you gave a fine of $100,000, it would be paid the next day,” he said. “That does not change the attitude, so you have to go into a sporting sanction.” Legal experts at soccer's world governing body will decide in February what measures need to be taken to strengthen FIFA's anti-racism laws.
7:15 a.m.: Royal Dutch Shell Chief Executive Jeroen van der Veer said the oil company would consider making acquisitions or swaps up to a value of $10 billion to increase reserves. He also told Reuters in an interview at Davos that the Anglo-Dutch major would discuss security issues with the Nigerian government after the hostages currently being held by militants were released. He said repairs could not start on damaged oil infrastructure until discussions about ensuring security in the OPEC producer had taken place.
5:15 a.m.: U.S. Trade Representative Rob Portman said he hoped free-trade negotiations could be launched soon with South Korea, Reuters reports. Washington has mentioned South Korea as a possible partner in the past, but this is the firmest indication to date that the start of talks could be imminent. “We are not quite there yet. We still have some issues to discuss,” Mr. Portman told journalists in Davos. “I am hopeful we can do it soon,” he said when asked about the possibility of talks beginning with Seoul. The issue remains sensitive in South Korea, where farmers' groups are strongly opposed to liberalization.
4 a.m.: GlaxoSmithKline expects to start clinical trials of its vaccine against the H5N1 strain of bird flu in early April, David Stout, president of the company's pharmaceutical operations, told Dow Jones Newswires on the sidelines of the WEF meeting. Mr. Stout said the company will test the vaccine with two different boosters, and should have the first results about three months later. Production of the vaccine is expected to start by year end, he said. See more in the Bird Flu News Tracker.
3:45 a.m.: China's foreign-exchange policy is in a good position and requires no changes, People's Bank of China Gov. Zhou Xiaochuan told a Davos session. Mr. Zhou said Beijing's change last July from a fixed exchange rate against the dollar to a managed float linked to a basket of 20 currencies had introduced a great deal of flexibility. But he said China still faces pressure from the international community to let the yuan appreciate. “The floating band now is OK .. but it is not fully used,” Mr. Zhou said. He declined to describe the full details of the currency basket China uses, but said the dollar accounts for “much less than 50%.” In currency trading in Shanghai Thursday, the U.S. dollar closed at 8.0620 yuan. The currency was revalued at 8.11 yuan to the dollar last July.
1:30 a.m.: American Express, Converse, Gap and Giorgio Armani are joining with Bono, the rock star, to sell products under a new brand called “Red” that will dedicate some of its revenues to fight AIDS in Africa, the Financial Times reports. The effort, scheduled to be announced today in Davos, will include the creation of a “Red” American Express credit card that will be marketed first in the U.K. Other “Red” products will include Converse sports shoes made with African mud-cloth; a new line of Gap vintage-style T-shirts; and wraparound Emporio Armani sunglasses embossed with a “Red” logo, the paper says. “Red is a 21st-century idea,” said Bono, the owner of the brand. “I think doing the Red thing, doing good, will turn out to be good business for them.”
12:30 a.m.: WSJ's Jeanne Whalen reports. As concerns mount about a possible avian-flu pandemic, research scientist David Reddy has become the world's point man for a drug seen as the best available treatment for the bird-flu virus. Dr. Reddy is head of pandemic-flu planning at Roche, which has come under intense pressure to increase production of its antiviral Tamiflu and deliver the drug to countries experiencing bird-flue outbreaks. Such challenges are scheduled to be discussed Saturday at a WEF session on “Containing a Global Pandemic.” More.
Wednesday, Jan. 25
11 p.m.: News CNBC-Dow Jones video posted. WSJ's Alan Murray reports from Davos on Carl Icahn's battle with Time Warner. See related column.
7 p.m.: MarketWatch.com's Aude Lagorce reports. Economists at the meeting said the dollar is on a downward slope. “I see a substantial amount of dollar decline in store in the medium term, perhaps as much as 30%,” said Laura Tyson, dean of the London Business School, suggesting the fall would likely be triggered by a switch to lower interest rates in the U.S. Min Zhu, executive assistant to the president at the Bank of China, was less of a Cassandra, saying he sees the dollar depreciating no more than 3% to 5%. More in Davos Notebook.
4:15 p.m: Intel Chairman Craig Barrett, speaking to CNBC from Davos, said India and China and their emerging economies are the big story around the world today. “I think the big issues are the availability of IT capability to the emerging economies,” Barrett said. Barrett also pointed to the health-care industry, which he said lags in using information technology to improve efficiency and provide better quality care.
Musharraf
2:30 p.m.: WSJ's Marc Champion and Frederick Kempe report. Pakistan's President Pervez Musharraf said his country would build a planned gas pipeline from Iran alone if three-way talks with India continue to produce no result. The remarks came at a delicate time for Musharraf, when he is having to balance domestic public opinion and relations with the U.S., India and Iran. Musharraf also said a U.S. missile attack on a Pakistani village that killed civilians earlier this month “probably” killed five to six al Qaeda operatives, but had “harmed our interests” by violating his country's sovereignty and feeding domestic unrest. More.
Merkel
2 p.m.: German Chancellor Angela Merkel said Wednesday she would like to see Germany's growth among the top three in Europe within a decade, adding that tackling unemployment and slow growth would take measured and creative actions.
1:45 p.m.: Dell Chairman and founder Michael Dell, in remarks on the sidelines of the conference, didn't rule out the use of Advanced Micro Devices semiconductors for the company's personal computers and servers. Asked if the company is going to use AMD chips, Dell said, “We don't have an exclusive relationship” with Intel, adding: “We have used [AMD chips] in the past, we might use them again.”
12:15 p.m.: Merck Chief Executive Richard Clark said the U.S. drug maker would consider the takeover of relatively big biotech companies if they bring in late-stage products and revenue. Merck would continue focusing on entering alliances with biotech firms and buying the marketing rights to products such partners developed, he said in an interview with Dow Jones Newswires here. “The other thing we are focusing on is targeting organizations that — if they are larger biotech companies — could not only help from the research point of view with late-stage products, but also with revenue,” he said. Mr. Clark said he was reassured that investors have understood the company's initiatives to turn Merck around following the withdrawal of Vioxx.
11:45 a.m.: French Finance Minister Thierry Breton said there were no signs of inflation in France, and he is confident that oil prices would not reduce the country's economic growth rate. “Inflation is extremely well-contained in France, and was extremely low in 2005,” Mr. Breton said. His comments come as European finance ministers are pressuring the European Central Bank to keep interest rates on hold, after notching them higher in December. Mr. Breton said that he was confident that, despite rising oil prices, France's GDP growth rate in 2006 would be 2.0%-2.5%.
11:15 a.m.: Intel Chairman Craig Barrett announced plans to train an additional 10 million teachers in developing nations over the next five years in the use of technology to enhance learning. The plan significantly expands an Intel initiative that has trained three million teachers in 35 countries since 2000.
10:15 a.m.: Under the headline “Why Davos is necessary,” Guardian economics editor Larry Elliott writes that “Davos – however inadequately and however incompletely – fulfills a need. Even a couple of hours spent in Davos reveals what this need is. There is a political reality gap between the avalanche of problems, global in their scope, precariously poised to descend on the unwitting citizens of the world, and the creaking, nation-focused machinery for coping with them,” Mr. Elliott says.
Schwab
9:15 a.m.: This year, the World Economic Forum has decided to focus on chief executives rather than cinematic celebrities in response to feedback that business has been overshadowed by politics and important, but sometimes intangible, global “big issues.” So while politics will remain prominent, this year's program brings fewer set-piece “messages” from the world's political elite, the Financial Times reports. “We are moving away from broad global issues. But you always need something structured at the start,” WEF founder Klaus Schwab tells the FT. “And there's big interest to meet and hear Angela Merkel.” The new German chancellor will address the 2,340 delegates in Davos with this year's opening speech, to be followed by Zeng Pelyan, the Chinese deputy premier. Other important newcomers include Paul Wolfowitz in his capacity as president of the World Bank, and Ellen Johnson Sirleaf, the Liberian president, the paper notes.
5:45 a.m.: Indian drug maker Ranbaxy Laboratories is actively pursuing a handful of acquisition opportunities in the U.S. and elsewhere to boost its generics drugs business, its new chief executive tells Reuters.
4:30 a.m.: Failure to reform the IMF will leave it ill-equipped to handle future financial crises, according to working papers and a report prepared for the World Economic Forum, Reuters reports. Two major reform proposals have been outlined in a broader review of the IMF's role by academics and market participants for the WEF: 1) the IMF should adopt a foreign-exchange reference rate system to measure countries” progress in redressing macro-economic policies that threaten the global economy; and 2) the IMF should open a liquidity window so that it can act unconditionally as lender of last resort to countries.
Roach
4:15 a.m.: A gloomy forecast about the world economy greeted Davos delegates as the annual meeting got under way, as Stephen Roach, chief economist of Morgan Stanley, said markets and officials had developed “a dangerous degree of complacency,” assuming that an unbalanced world economy could continue without correction, the Associated Press reports. Asian central banks have helped to keep things going so far by supporting the U.S. economy much longer than could be expected, and the American consumer has continued to spent, Mr. Roach said. But the U.S. real-estate market is showing signs of slowing down, he said. More.
3:30 a.m.: The number of WEF delegates from India jumped to 80 this year from 30 last year – the latest sign of India's rapid integration into the world economy. And to judge from the Davos program, India is the country of the moment, the Financial Times says. Of the 244 scheduled sessions, a dozen are devoted to India, twice as many as last year, while 60 feature Indian speakers. India's high-profile “India Everywhere” campaign is a tacit recognition that the nation may have only a limited window to translate today's unprecedented interest into hard investment, the FT says. The government has dispatched what it calls its “dream team” of economic reformers – led by P. Chidambaram, finance minister, Kamal Nath, commerce minister, and Montek Singh Ahluwaliah, deputy chairman of the Planning Commission. They will carry a simple message: trust us and invest, the paper says.
DAVOS 2006
• Framing the Issue: See what issues are on the agenda and who's attending the annual meeting.
• Forum's History: The World Economic Forum grew out of an initiative to bring together Europe's chief executives for an informal gathering in Davos in 1970.
• Complete coverage
3:15 a.m.: The atmosphere at Davos is a decent barometer of economic and political stability in the world, and this year, WEF founder Klaus Schwab predicts, the mood on economics will hover somewhere between hope and foreboding. “If you look at national economic forecasts, there was a feeling that this would be a good year,” Mr. Schwab tells the New York Times. “Now, there are suddenly question marks. People are really concerned about what will happen,” he says.
2:45 a.m.: India's new “India Everywhere” campaign isn't everywhere yet, but it's definitely in Davos, writes India's Business Standard newspaper. The campaign, which promotes India as the world's fastest-growing market democracy, is spearheaded by Infosys Chief Executive Nandan Nilekani, the paper points out. “As India becomes increasingly prominent in the global economic context, the WEF at Davos is the ideal place for us to project ourselves,” Mr. Nilekani tells the paper. The second and the third phase of the communication campaign will be unveiled during the Davos meeting, it says.
1:30 a.m.: It's already clear who is pulling out all stops to be this year's star attraction at Davos: India. Driving into the snow-covered village, one can't avoid the onslaught of Indian advertising that's been plastered across buses and along roadsides, writes The Wall Street Journal's Frederick Kempe. And India chose the eve of the meeting to announce a long-awaited partial liberalization of foreign-direct-investment rules. More.
12:30 a.m.: When China joined the WTO in 2001 – committing to open its then-struggling banking sector to full competition by 2007 – skeptics predicted the country's banks would be swamped by better-capitalized foreign institutions. This week, as leaders at the World Economic Forum's annual meeting debate the fiscal fitness of China's banks, it appears the doomsayers have been wrong, or at least premature, The Wall Street Journal's Rick Carew writes. China has injected fresh capital into its biggest banks, set up corporate boards with independent directors and pushed them to list abroad. Foreign investors have responded by putting up more than $16 billion for pieces of Chinese banks. More.
Tuesday, Jan. 24
Schwab
6:15 p.m.: Klaus Schwab has been the idea man behind the World Economic Forum since its founding. In an interview with Anita Greil of Dow Jones Newswires, he reflects on the past and future of the global gabfest, his best and worst Davos moments and inviting celebrities. More. (Read the transcript.)
6 p.m.: When 2,000 businesspeople, politicians, celebrities and journalists from around the world gather in the Swiss ski resort of Davos to network next week, the buzz probably will center on energy security, The Wall Street Journal's Marc Champion writes. More.
5:30 p.m.: The World Economic Forum is considering holding a major meeting in China, as the nation is generally underrepresented at the Davos summit, which conflicts with the Lunar New Year, Goran Mijuk and Anita Greil of Dow Jones Newswires report. More. read more

Nigel Watson-Clark, Harry Ebanks, Patrick Landry and Milko Nichev (Cannot display photograph at present)
By Jenny Booth and agencies
Nigerian militants today broke off talks over the release of four kidnapped western oil workers who have been held for 16 days on the Niger delta.
A message from the kidnappers stated bluntly that the government was failing to respond to its demands for a $1.5 billion ransom from the Shell oil company which employed the men, and the release of two local ethnic leaders held by the Nigerian authorities.
“Those guys are not going anywhere. The Nigerian Government still fails to understand that this is different,” said a statement from an e-mail account which has previously been used by the kidnap gang.
“They will not be released for any reason other than that specified in all our statements. We are not discusing with anyone for a while. This is in reaction to the Nigerian Government’s non-appreciation of the situation at hand,” it added.
Today Nigerian security sources released the first photo of the four hostages to be seen since their kidnap, showing Nigel Watson-Clark, a British security expert, Harry Ebanks, a Honduran engineer, Patrick Landry, a US boat skipper, and their Bulgarian colleague Milko Nichev.
The four were kidnapped on January 11 by heavily armed ethnic Ijaw militants who stormed their supply vessel, the Liberty Service, as it worked in the EA offshore oilfield for the energy giant Shell off the delta coast.
The picture is thought to be at least four days old. It shows the men sitting on plastic chairs in a palm oil grove guarded by three Nigerian guerrilla fighters, one of whom is equipped with an assault rifle.
The men appear to be uninjured. Three are wearing the shorts and polo shirt combination favoured by westerners working in the field, while Nichev sports blue overalls. All four have a bottle of orange liquid at their feet.
Various e-mailed statements identify the hostage-takers as hardline elements of the 14-million-strong Ijaw ethnic group seeking to seize control of the oil resources lying under their land in the delta region.
The gang has demanded the huge ransom from Shell to compensate Ijaw communities polluted by the oil industry. A series of attacks on oil facilities over the past two weeks has killed at least 22 members of the security forces and three Nigerian oil workers, and shut down more than eight percent of the country’s oil production.
In the southern city of Yenagoa, a ramshackle boom town surrounded on three sides by the winding creeks of the Niger Delta, government spokesman Ekiyor Welson continued to predict a rapid end to the hostage drama.
“The hostages are safe. We’re almost getting there. The negotiators have been able to make an agreement and very soon they will be released,” he claimed.
Since the kidnapping, armed gangs have blown up a major oil pipeline and attacked two oil facilities, killing a total of 22 police and soldiers and three Nigerian oil workers. It is not clear if the attacks are linked.
Shell has cut production by 221,000 barrels since the start of the crisis and has warned that tankers arriving to pick up crude at its Forcados export terminal might have to wait for up to two weeks to load.
Oil prices today surged past $67 for the second time since the start of the crisis, after the militants threatened more attacks on foreign workers.
Nigeria is Africa’s biggest oil exporter, producing 2.6 million barrels of highly prized sweet light crude per day, and accounting for ten percent of the United States’ oil imports. read more

Site claiming al-Qaida affiliation; nonprofit translated information in December; security agencies, Alyeska, aware of posting
The Associated Press
A Web site claiming to be affiliated with al-Qaida has called for attacks against the trans-Alaska oil pipeline.
The posting calls on jihadists to shower the pipe with bullets or hide and detonate explosives along its length, the Anchorage Daily News reported. It also calls for attacks on the Valdez tanker dock.
The unknown author encourages small cells of four or five mujahedeen, or Muslim guerrillas, living in the United States or in Canada or Mexico to mount the attacks.
The 10-page posting includes numerous links to Web sites providing maps and other information about the pipeline.
Attacking oil and gas targets in the United States and other countries is key to bringing down the economy of the “American devils,” the author wrote, saying the message was posted in response to calls from Osama bin Laden and his top al-Qaida deputy, Ayman al-Zawahri.
The Arabic posting was discovered and translated in late December by the SITE Institute, a Washington, D.C., nonprofit organization that tracks international terrorists.
There is no way to identify the author or know whether it could inspire an attack, said SITE director Rita Katz.
Security agencies aware of posting
Spokesmen for the FBI and other security agencies said they were aware of the posting. None would say whether it had prompted extra measures in Alaska.
Curtis Thomas, a spokesman for the Alyeska Pipeline Service Co., the oil company consortium that runs the 800-mile pipeline, said his company also was aware of the posting.
“We’re not aware at this time of any imminent threat,” he said.
Company policy prohibits discussion of security procedures, staffing levels or other issues, he said.
FBI spokesman Eric Gonzales said the posting did not seem to contain information beyond what is readily available to anyone with a little digging.
“I don’t think it’s a secret to anyone that the trans-Alaska pipeline, the terminal at Valdez, is a critical asset not only to the state but the country,” Gonzales said. “It’s stating the obvious — that this pipeline plays a critical role in this nation’s economy.”
Line carries about one-eighth of U.S. production
The Alaska pipeline carries more than 800,000 barrels of crude a day from the North Slope oil fields to the Valdez tanker port, about one-eighth of the U.S. production. The author notes that 300,000 gallons of crude oil spewed out of a bullet hole in 2001 and that the pipeline is largely above ground, exposed and close to a highway.
A Livengood man was sentenced to 16 years in state prison after his conviction for oil pollution, criminal mischief, handling a firearm while drunk and other charges. Authorities say he shot the pipeline with a .338-caliber hunting rifle.
Pipeline operators have found numerous other bullet strikes over the years that did not puncture the pipeline’s steel wall.
Security for the pipeline and Valdez tanker dock was heightened after the Sept. 11, 2001, terror attacks in New York City and Washington, D.C. One of the biggest changes was creation of a security zone the Coast Guard enforces around the dock. The zone remains in effect.
Posting contains errors
The posting includes numerous errors, including a sentence saying the pipeline starts at the North Pole and ends at Valdez “on the Atlantic Ocean.”
Katz, the SITE director, said her organization has analyzed and translated many terrorism-related Web postings for its clients, including oil companies, and this one stood out.
“When I saw this message, I was shocked,” Katz said. It was much longer, more thoughtful and more fully researched than the normal posting, she said.
The posting might have come from anyone. What’s more important than the source is the influence it might have.
“Once there’s an idea there, then you don’t know who saw that idea and might take the initiative and go forward,” she said.
“We take all of these matters quite seriously,” said John Madden, state Homeland Security director. However, the posting was “not any great, analytical document,” but rather a collection of information available from open sources.
In December federal pipeline regulators ordered Alyeska to develop new spill cleanup drills with “terrorist attack scenarios” in mind. read more

Additional income will come from return of 32 privately operated fields to state control; government has also audited companies
Natalie Obiko Pearson
Associated Press Business Writer
President Hugo Chavez said Jan. 20 that Venezuela expects to reap an additional US$1.5 billion this year in oil income with the return of 32 privately operated oil fields to state control.
This “shows how important it is that a country manages its strategic resources,” Chavez said in a nationally broadcast speech.
Chavez’s government has declared as illegal contracts under which foreign oil companies like Royal Dutch Shell PLC, Chevron Corp., BP PLC, and Brazil’s Petrobras S.A. independently pumped oil at the Venezuelan fields.
He said Jan. 20 that those contracts allowed foreign companies to extract oil at US$4 a barrel then sell it to the national oil company, Petroleos de Venezuela SA, or PDVSA, at US$20. The contracts also required PDVSA to pay the related royalties.
New state-controlled JVs required
The government recently made all companies sign agreements to give up those contracts and form new state-controlled joint ventures, known as “mixed companies,” with PDVSA.
“Now this perverse mechanism is over,” Chavez declared as he promised to divert the additional revenues from the mixed companies to social programs.
In its effort to squeeze more money from the industry amid high oil prices, the government conducted an audit of the companies and claimed they owe billions of dollars in unpaid taxes.
On Jan. 20, the tax agency, however, sharply revised downward its tax bill for Royal Dutch Shell, saying the company owed US$13 million instead of US$130 million for the tax period from 2001 to 2004 — a 90 percent cut.
The agency said in a statement that it reached the figure after reviewing tax documents that the company submitted following the original bill last year.
Chavez: foreign companies have looted Venezuela
Chavez, who accuses foreign oil companies of having looted Venezuela, has promised his socialist “revolution” is freeing the country from “imperialist” interests and restoring its sovereignty.
On Jan. 20 he also said that Venezuela plans to replace domestic fuel consumption with natural gas in order to export an extra US$9 billion worth of petroleum a year.
“We are consuming in fuel — gasoline, gas oil, fuel oil — about 50,000 barrels a day of petroleum. When there comes a point in the coming years that we are able to substitute that internal consumption with gas, we can export (that oil),” he said.
Venezuela would earn an extra US$25 million a day or US$9 billion a year with those sales, Chavez said.
Venezuela is the world’s fifth-largest exporter of oil. It has the largest proven oil reserves outside of the Mideast and the second-largest gas reserves in the Western Hemisphere. read more

Experts: oil prices could rise producing economic slowdown if Iran cuts oil exports in response to action against nuclear program
Brad Foss & George Jahn
Associated Press Writers
A surge in oil prices in mid-January to almost $70 a barrel on concerns about the restart of Iran’s nuclear program only hints at what may lie ahead.
Prices could soar past $100 a barrel, experts say, if the U.N. Security Council authorizes trade sanctions against the Middle Eastern nation, which the West accuses of trying to make nuclear bombs, and Iran curbs oil exports in retaliation. A sharp global economic slowdown could follow.
That’s the dilemma the United States and European nations face as they decide whether to act. But Iran would also pay a hefty price if the petro-dollars that now represent 80 percent of export revenues are reduced, potentially stirring civil unrest in a nation with a 14 percent unemployment rate.
“They would shoot themselves in the foot,” said Mustafa Alani, director of national security and terrorism studies at the Dubai-based Gulf Research Center. “It’s one thing to test the market psychology, it’s another to take the actual step and stop oil exports.”
Iran exports 2.5 million bpd
Iran, the second-largest oil producer within the Organization of Petroleum Exporting Countries, exports roughly 2.5 million barrels per day — 1 million barrels more than current excess production capacity worldwide. It also controls the strategic Strait of Hormuz, a critical shipping lane in the Middle East.
“Even if Iran pulled a small amount of its oil off the market, say it pulled a half million barrels a day, I could see oil prices literally jumping over the $100 per barrel mark,” said James Bartis, a senior researcher at Rand Corp.
But other oil analysts say prices would likely not climb much higher than $75 a barrel before strategic reserves would be released and demand would begin to taper off as economic activity slowed around the world.
So who would be hurt more? The United States and other nations say it would be Tehran and argue against succumbing to economic blackmail in any case. “We cannot be intimidated by economic threats from their side,” Sen. Trent Lott, a Mississippi Republican told CNN.
DOE: exports finance half of Iranian budget
The U.S. Department of Energy estimates that oil exports finance about half of the Iranian government’s budget. And while high oil prices have boosted the annual growth rate to about 5 percent, Iran has never really recovered from its 1980-1988 war against Iraq and trade restrictions on sensitive technologies. The Iran Nonproliferation Act, which the U.S. Congress passed in 2000, deters international support for Iran to develop nuclear, chemical and biological weapons programs and missile-delivery systems.
For weeks, Iran’s state television has sought to show a people united behind the leadership, showing passers-by on Tehran city streets expressing their support for the country’s strivings for nuclear independence.
Still, Alani of the Gulf Research Center questioned “whether the ordinary citizens will be willing to risk sanctions and endure a lot of suffering like the Iraqis suffered for 13 years” under U.N. sanctions.
Consuming nations have reserves
Oil consuming nations, meanwhile, have at least one ace up their sleeves — crude reserves. The United States and other members of the International Energy Agency have a combined 1.48 billion barrels of oil in their emergency stocks. That’s equivalent to about 600 days of Iran’s net oil exports of 2.4 million barrels per day.
OPEC might be able to add 1.5 million barrels per day to world production, mostly from Saudi Arabia. And oil analyst Fadel Gheit at Oppenheimer & Co. in New York said Russia might be able to crank up exports by about 500,000 barrels once its domestic home-heating demand eases.
Gregory L. Schulte, chief U.S. delegate to the International Atomic Energy Agency, accused Iran the week of Jan. 16 of deceiving the world about its atomic program, declaring that moves to haul it before the U.N. Security Council were meant to deny “the most deadly of weapons to the most dangerous of countries.”
His comments were part of increasing international pressure on Iran since it removed seals from uranium enrichment equipment earlier in January and said it would start small scale work on the process that can make both fuel and the fissile core of nuclear warheads.
Who will blink first?
“It’s a very difficult situation where you don’t know which side is going to blink first,” said Leonard Spector, deputy director of the Monterey Institute of International Studies’ Center for Nonproliferation Studies.
It’s also not clear the United States could win a referral on sanctions at the Security Council, where members Russia and China are Iran’s main allies. Both have strong economic and strategic ties to Iran, with China a large oil consumer and drilling partner and Russia a key supplier of arms and nuclear technology and services for what Tehran says is a peaceful program. Additionally, oil-rich Russia would benefit from higher prices and increased demand for its crude if Iran’s oil were off the market.
Influential India, which imports 75 percent of the crude it consumes, some from Iran, is a wild card in the referral struggle.
It joined the U.S., Britain, France and Germany in September to back an IAEA resolution that set the stage for reporting Iran for violating the Nuclear Nonproliferation Treaty. But pressure is building on the Indian government not to vote against Iran when the 35-nation IAEA board meets Feb. 2 to consider actual referral.
“India must not allow itself to be dragooned into joining the Washington-led nuclear lynch mob against Iran,” The Hindu, one of India’s most influential newspapers, cautioned Jan. 19. “Aside from the lack of any legal basis for threatening Iran with sanctions, India should consider what the U.S. pressure on Tehran will do to international oil prices as well as to the overall security scenario in West Asia.”
The United States and its allies are thought to have the majority behind them on any vote for referral. Still they would like to see India, China and Russia on board — all three countries carry weight among other IAEA board nations, and Moscow and Beijing both have the power to veto any resolution before the Security Council on what to do about Iran, once it is referred. read more

Onyema Godwin
Associated Press Writer
Camouflage-clad attackers raided an Italian oil company’s riverside offices in Nigeria, sparking a gunfight that left nine people dead before assailants fled by speedboat into the oil-rich delta’s waterways, police said.
The Jan. 24 attack on Agip’s offices in the southern oil center of Port Harcourt was the latest in a recent rash of violence across the restive Niger Delta that has killed nearly two dozen people, cut petroleum production in Africa’s largest oil exporter and helped push up prices of crude worldwide.
The attackers, wearing army-style uniforms, cruised up behind Agip’s riverbank facility in their boat, forced their way into the compound and stole about US$28,000 in cash before the shoot-out with security forces, said Samuel Adetuyi, the head of the police in the city.
Seven uniformed police, a plainclothed security official and one company employee died in the gunfight that ended when the attackers fled in their speedboat back into the region’s labyrinth of creeks and swamps, he said.
Eni has temporarily evacuated staff
Agip’s parent company Eni SpA said in Italy that it “has temporarily evacuated staff and contractors from the area of the base affected by the incident and the situation is currently under control.”
The company said there were others injured, but it was unclear how many. Italy said none of its citizens were among the dead.
A rash of attacks and kidnappings in recent weeks by militia groups demanding the release from prison of local leaders have cut Nigeria’s daily exports of 2.5 million by nearly 10 percent and claimed at least 23 lives.
But Adetuyi said there was no immediate evidence that the Jan. 23 attack on Agip was linked to that.
“I can’t confirm whether there is any link with militiamen,” Adetuyi said.
Much of Nigeria in poverty
Despite the massive amounts of crude pumped from southern Nigeria, much of the region remains in abject poverty and activist groups have been agitating for President Olusegun Obasanjo’s federal government to provide them with a greater share of state oil revenues.
At least 14 other people have been killed in oil-platform attacks and other violence since earlier this year.
Meanwhile, militants claiming to hold four foreign hostages elsewhere in the Niger Delta said the oil workers are in decent health but had been moved deeper into the region of swamps and creeks after the government failed to meet the captors’ demands. read more